EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of June 12, 1997, by and among THE SAFE SEAL COMPANY, INC., a
Texas corporation ("Safe Seal"), INNOVATIVE VALVE TECHNOLOGIES, INC., a Delaware
corporation ("Invatec"), and each person listed on the signature pages hereto
under the caption "Noteholders" (each a "Noteholder" and, collectively, the
"Noteholders").
WHEREAS, pursuant to that certain Stock and Real Estate Purchase
Agreement dated May 22, 1997 (the "Purchase Agreement"), executed by and among
Safe Seal which is an Affiliate (as such term is defined in the Purchase
Agreement) of Invatec, the Noteholders, and Plant Specialties, Inc., a Louisiana
corporation, each of the Noteholders has received on the date hereof a 5.0%
Convertible Subordinated Promissory Note (each a "Note," and collectively the
"Notes") convertible on the terms set forth therein into shares of common stock
("Common Stock") of Safe Seal, Invatec or any successor thereto which first
conducts an initial public offering of its common stock, as further described in
the Notes (such entity first conducting such initial public offering is
hereinafter sometimes referred to as the "Issuer"); and
WHEREAS, to induce the Noteholders to enter into the Purchase Agreement,
Safe Seal and Invatec have agreed to provide registration rights on the terms
set forth in this Agreement for the benefit of the Noteholders;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
1. DEFINITIONS. The following capitalized terms shall have the meanings
assigned to them in this Section 1 or in the parts of this Agreement referred to
below:
CODE: The term "Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor thereto.
COMMISSION: The term "Commission" shall mean the Securities and Exchange
Commission, and any successor thereto.
EXCHANGE ACT: The term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and any successor thereto, and the rules and
regulations thereunder.
EXEMPT OFFERING: The term "Exempt Offering" shall mean a registration
under the Securities Act of Common Stock by the Issuer for its own account
relating to the offering or issuance of shares in connection with (i) employee
compensation or benefit plans or (ii) one or more acquisition or exchange offer
transactions under a Registration Statement on Form S-4 under the Securities Act
(or a successor to Form S-4).
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REGISTRABLE COMMON: The term "Registrable Common" shall mean shares of
Common Stock issued to a Noteholder upon conversion of a Note, and any
additional shares of Common Stock issued or distributed in respect of any other
shares of Registrable Common by way of a stock dividend or distribution or stock
split or in connection with a combination of shares, recapitalization,
reorganization, merger, consolidation or otherwise. For purposes of this
Agreement, shares of Registrable Common will cease to be Registrable Common when
and to the extent that (i) a registration statement covering such shares has
been declared effective under the Securities Act and such shares have been
disposed of pursuant to such effective registration statement, (ii) such shares
are sold pursuant to Rule 144 or (iii) such shares have been otherwise
transferred to a person or entity that is not a Noteholder, other than pursuant
to Section 10 hereof.
REGISTRATION NOTICE: The term "Registration Notice" shall have the
meaning ascribed thereto in Section 2.
RULE 144: The term "Rule 144" shall mean Securities Act Rule 144 (or any
similar or successor provision under the Securities Act).
SECURITIES ACT: The term "Securities Act" shall mean the Securities Act
of 1933, as amended, and any successor thereto, and the rules and regulations
thereunder.
SELLING STOCKHOLDER: The term "Selling Stockholder" shall have meaning
ascribed thereto in Section 11.
2. PIGGYBACK REGISTRATION RIGHTS. If the Issuer proposes to register any
Common Stock for its own account under the Securities Act for a public offering
for cash at any time after the underwritten initial public offering of the
Common Stock of the Issuer and before March 31, 1999, other than an Exempt
Offering, the Issuer will give each Noteholder written notice of its intent to
do so (a "Registration Notice") at least 20 days prior to the filing of the
related registration statement with the Commission. Such notice shall specify
the approximate date on which the Issuer proposes to file such registration
statement and shall contain a statement that the Noteholders are entitled to
participate in such offering and shall set forth the number of shares of
Registrable Common that represents the best estimate of the lead managing
underwriter (or if not known or applicable, the Issuer) that will be available
for sale by the holders of Registrable Common in the proposed offering. If the
Issuer shall have delivered a Registration Notice, each Noteholder shall, upon
conversion of his or her Note, be entitled to participate on the same terms and
conditions as the Issuer in the public offering to which such Registration
Notice relates and to offer and sell shares of Registrable Common therein only
to the extent provided in this Section 2. Each Noteholder desiring to
participate in such offering shall, no later than ten days following receipt of
the Registration Notice, (i) effective immediately prior to the closing of the
offering, convert his or her Note into Registrable Common, if such Note has not
previously been converted and (ii) notify the Issuer of the aggregate number of
shares of Registrable Common that such Noteholder then desires to sell in the
offering. Each Noteholder desiring to participate in such public offering may
include shares of Registrable Common in the registration statement relating
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to the offering to the extent that the inclusion of such shares shall not reduce
the number of shares of Common Stock to be offered and sold by the Issuer to be
included therein. If the lead managing underwriter selected by the Issuer for a
public offering (or, if the offering is not underwritten, a financial advisor to
the Issuer) determines that marketing factors require a limitation on the number
of shares of Registrable Common to be offered and sold in such offering, there
shall be included in the offering only that number of shares of Registrable
Common, if any, that such lead managing underwriter or financial advisor, as the
case may be, reasonably and in good faith believes will not jeopardize the
success of the offering, provided that if the lead managing underwriter or
financial advisor, as the case may be, determines that marketing factors require
a limitation on the number of shares of Registrable Common to be offered and
sold as aforesaid and so notifies the Issuer in writing, then the number of
shares of Registrable Common to be offered and sold by holders desiring to
participate in the offering shall be allocated among such holders on a pro rata
basis based on their holdings of Registrable Common. The Issuer shall have the
right at any time to reduce the number of shares requested by any Noteholder to
be included in such registration to the extent that the Issuer reasonably
concludes that inclusion of such shares is likely to jeopardize the
non-recognition status under the Code of the transaction consummated pursuant to
the Purchase Agreement; provided that any determination to exclude shares from
any such registration pursuant to this provision shall be based on advice of tax
counsel to the Issuer or its independent accountants.
3. REGISTRATION PROCEDURES. In connection with any piggyback
registration under Section 2 hereof, and subject to the terms and conditions
contained therein, the Issuer shall (a) use its best efforts to prepare and file
with the Commission as soon as reasonably practicable after delivery of the
Registration Notice, a registration statement with respect to the Registrable
Common, and use its best efforts to cause such registration to promptly become
and remain effective for a period of at least 120 days (or such shorter period
during which holders shall have sold all Registrable Common which they requested
to be registered); provided, however, that such 120-day period shall be extended
for a period equal to the period that a Noteholder agrees to refrain from
selling any securities included in such registration in accordance with Section
7 hereof; (b) prepare and file with the Commission such amendments (including
post-effective amendments) to such registration statement and supplements to the
related prospectus to appropriately reflect the plan of distribution of the
securities registered thereunder until the completion of the distribution
contemplated by such registration statement or for so long thereafter as a
dealer is required by law to deliver a prospectus in connection with the offer
and sale of the shares of Registrable Common covered by such registration
statement and/or as shall be necessary so that neither such registration
statement nor the related prospectus shall contain any 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 and so that such
registration statement and the related prospectus will otherwise comply with
applicable legal requirements; (c) provide to any Noteholder requesting to
include shares of Registrable Common in such registration statement, and to a
single counsel for all holders of Registrable Common requesting to include
shares of Registrable Common in such registration statement (which counsel shall
be selected by the holders of a majority of shares of Registrable Common
requested to be included in such registration
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statement and shall be reasonably satisfactory to the Issuer), an opportunity to
review and provide comments with respect to such registration statement (and any
post-effective amendment thereto) prior to such registration statement (or
post-effective amendment) becoming effective; (d) use its best efforts to
register and qualify the Registrable Common covered by such registration
statement under applicable securities or "Blue Sky" laws of such jurisdictions
as the holders shall reasonably request for the distribution of the Registrable
Common; (e) take such other actions as are reasonable and necessary to comply
with the requirements of the Securities Act; (f) furnish such number of
prospectuses (including preliminary prospectuses) and documents incident thereto
as a Noteholder from time to time may reasonably request; (g) provide to any
Noteholder requesting to include Registrable Common in such registration
statement and any managing underwriter participating in any distribution
thereof, and to any attorney, accountant or other agent retained by such
Noteholder or managing underwriter, reasonable access to appropriate officers
and directors of the Issuer to ask questions and to obtain information
reasonably requested by any such Noteholder, managing underwriter, attorney,
accountant or other agent in connection with such registration statement or any
amendment thereto; provided, however, that (g-i) in connection with any such
access or request, any such requesting persons shall cooperate to the extent
reasonably practicable to minimize any disruption to the operation by the Issuer
of its business and (g-ii) any records, information or documents shall be kept
confidential by such requesting persons, unless (A) such records, information or
documents are in the public domain or otherwise publicly available or (B)
disclosure of such records, information or documents is required by a court of
competent jurisdiction, by administrative order or by applicable law (including,
without limitation, the Securities Act); (h) notify each Noteholder and any
managing underwriter participating in the distribution pursuant to such
registration statement promptly (h-i) when the Issuer is informed that such
registration statement or any post-effective amendment to such registration
statement becomes effective, (h-ii) of any request by the Commission for an
amendment or any supplement to such registration statement or any related
prospectus, (h-iii) of the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or of any order
preventing or suspending the use of any related prospectus or the initiation or
threat of any proceeding for that purpose, (h-iv) of the suspension of the
qualification of any shares of Registrable Common included in such registration
statement for sale in any jurisdiction or the initiation or threat of a
proceeding for that purpose, (h-v) of any determination by the Issuer that any
event has occurred which makes untrue any statement of a material fact made in
such registration statement or any related prospectus or which requires the
making of a change in such registration statement or any related prospectus in
order that the same will not contain any 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 and (h-vi) of the completion of the
distribution contemplated by such registration statement if it relates to an
offering by the Issuer; (i) in the event of the issuance of any stop order
suspending the effectiveness of such registration statement or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any shares of Registrable Common included in such registration
statement for sale in any jurisdiction, use its best efforts to obtain its
withdrawal; (j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, but not later than fifteen months
after the effective date of such
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registration statement, an earnings statement covering the period of at least
twelve months beginning with the first full fiscal quarter after the effective
date of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act; (k) use reasonable diligence
to cause all shares of Registrable Common included in such registration
statement to be listed on any securities exchange (including, for this purpose,
the Nasdaq National Market) on which the Common Stock is then listed at the
initiation of the Issuer; (l) use reasonable diligence to obtain an opinion from
legal counsel (which may include the General Counsel of the Issuer) in customary
form and content reasonably acceptable to any managing underwriter, if any; (m)
provide a transfer agent and registrar for all such Registrable Common not later
than the effective date of such registration statement; (n) enter into such
customary agreements (including an underwriting agreement in customary form) as
the underwriters, if any, may reasonably request in order to expedite or
facilitate the disposition of such shares of Registrable Common; and (o) use
reasonable diligence to obtain a "comfort letter" from the Issuer's independent
public accountants in customary form and content reasonably acceptable to the
underwriters, if any. As used in this Section 3 and elsewhere herein, the term
"underwriters" does not include any Noteholder.
4. UNDERWRITING AGREEMENT. In connection with each piggyback
registration pursuant to Section 2 covering an underwritten registered public
offering, the Issuer and each participating Noteholder agree to enter into a
written agreement with the managing underwriter in such form and containing such
provisions as are customary in the securities industry for such an arrangement
between such underwriter and companies of the Issuer's size and investment
stature, including provisions for indemnification by the Issuer and each Selling
Noteholder as more fully described in Section 11 hereof.
5. AVAILABILITY OF RULE 144. Notwithstanding any provision contained
herein to the contrary (including without limitation Section 2 hereof), the
Issuer shall not be obligated to register shares of Registrable Common held by
any Noteholder when the resale provisions of Rule 144(k) are available to such
Noteholder or such Noteholder is otherwise entitled to sell the shares of
Registrable Common held by him or her in a brokerage transaction without
registration under the Securities Act and without limitation as to volume or
manner of sale.
6. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
shares of Registrable Common held by the Noteholders to the public without
registration, the Issuer agrees to:
(a) make and keep public information available (as those terms are
understood and defined in Rule 144) at all times from and after 90 days
following the effective date of the registration statement;
(b) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Issuer under the Securities Act
and the Exchange Act at any time that it is subject to such reporting
requirements; and
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(c) so long as a Noteholder owns any shares of Registrable Common,
furnish to the Noteholder forthwith upon request a written statement by the
Issuer as to its compliance with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act (at any time that it is subject to such
reporting requirements), a copy of the most recent annual or quarterly report of
the Issuer, and such other reports and documents filed in accordance with such
reporting requirements as a Noteholder may reasonably request in availing itself
of any rule or regulation of the Commission allowing a Noteholder to sell any
such securities without registration; and
(d) if required by the transfer agent and registrar for the Common
Stock, use reasonable diligence to obtain an opinion from legal counsel (which
may include the General Counsel of the Issuer) addressed to such transfer agent
and registrar, with respect to any sale of shares of Registerable Common
pursuant to Rule 144 (or, at the option of the Issuer, pay the reasonable fees
and expenses of legal counsel retained by a Noteholder to provide such an
opinion).
7. MARKET STANDOFF. In consideration of the granting to Noteholders of
the registration rights pursuant to this Agreement, each Noteholder agrees that,
for so long as such Noteholder holds shares of Registrable Common, except as
permitted by Sections 2 and 3 hereof, such Noteholder will not sell, transfer or
otherwise dispose of, including without limitation through put or short sale
arrangements, shares of Common Stock in the ten days prior to the effectiveness
of any registration (other than relating to an Exempt Offering) of Common Stock
for sale to the public and for up to 180 days following the effectiveness of
such registration.
8. REGISTRATION EXPENSES. All expenses incurred in connection with any
registration, qualification and compliance under this Agreement (including,
without limitation, all registration, filing, qualification, legal, printing and
accounting fees) shall be borne by the Issuer. All underwriting commissions and
discounts applicable to shares of Registrable Common included in the
registrations under this Agreement shall be borne by the holders of the
securities so registered pro rata on the basis of the number of shares so
registered. Subject to the foregoing, all expenses incident to the Issuer's
performance of or compliance with this Agreement, including, without limitation,
all filing fees, fees and expenses of compliance with securities or Blue Sky
laws (including, without limitation, fees and disbursements of counsel in
connection with Blue Sky qualifications of the Registrable Common), printing
expenses, messenger and delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of the Issuer's officers and employees
performing legal or accounting duties), the fees and expenses applicable to
shares of Registrable Common included in connection with the listing of the
securities to be registered on each securities exchange (including, for this
purpose, the Nasdaq National Market) on which similar securities issued by the
Issuer are then listed at the initiation of the Issuer, registrar and transfer
agents' fees and fees and disbursements of counsel for the Issuer and its
independent certified public accountants, securities act liability insurance of
the Issuer and its officers and directors (if the Issuer elects to obtain such
insurance), the fees and expenses of any special experts retained by the Issuer
in connection with such registration and fees and expenses of other persons
retained by the Issuer and incurred in connection with each registration
hereunder (but not
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including, without limitation, any underwriting fees, discounts or commissions
attributable to the sale of Registrable Common, fees and expenses of counsel and
any other special experts retained by the holders of Registrable Common in
connection with a registration required hereunder, and transfer taxes, if any),
will be borne by the Issuer.
9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No holder of Registrable
Common may participate in any underwritten registration hereunder unless such
holder (a) agrees to sell such holder's securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements, and (b) completes and executes all questionnaires, powers of
attorney, custody agreements, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangements.
10. TRANSFER OF REGISTRATION RIGHTS; ADDITIONAL GRANTS OF REGISTRATION
RIGHTS. The registration rights provided to the holders of Registrable Common
under Section 2 hereof may not be transferred to any other person or entity,
except to another Noteholder or pursuant to the laws of descent and
distribution; provided that such transferees are bound by and subject to, and
upon the request of the Issuer shall agree to and assume, the terms, obligations
and conditions contained herein. The Company, Invatec or any successor may,
without the prior consent of the Noteholders, extend the registration rights
provided for in this Agreement to additional persons or entities who become
holders of Common Stock, or other instruments or securities convertible into
Common Stock, subsequent to the date of this Agreement by entering into one or
more addenda to this Agreement with any such holders, and, upon execution of any
such addenda, any such holder that is a party thereto shall thereafter be a
"Noteholder" for purposes of this Agreement and any shares of Common Stock
referred to therein as such shall be shares of "Registrable Common" for purposes
of this Agreement. Nothing herein shall limit the ability of Safe Seal, Invatec
or any successor to grant to any person or entity any registration or similar
rights of any type in the future with respect to Common Stock or other
securities (whether pursuant to the foregoing provision or otherwise).
11. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE ISSUER. To the extent permitted by law, the
Issuer agrees to indemnify and hold harmless each Noteholder who sells shares of
Registrable Common in a registered offering pursuant to Section 2 hereof (a
"Selling Stockholder"), from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable legal expenses) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus relating to the
Registrable Common or in any amendment or supplement thereto or in any related
preliminary prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of, or are based
upon, any such untrue statement or omission or allegation thereof based upon
information furnished in writing to the Issuer by such Selling Stockholder or on
such Selling Stockholder's behalf expressly for use therein. In
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connection with an underwritten offering of shares of Registrable Common, the
Issuer will indemnify any underwriters of the Registrable Common, their
partners, officers and directors and each person who controls such underwriters
(within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act) on substantially the same basis as that of the indemnification
of the Selling Stockholders provided in this Section 11(a). Notwithstanding the
foregoing, the Issuer indemnification obligations with respect to any
preliminary prospectus shall not inure to the benefit of any Selling Stockholder
or underwriter with respect to any loss, claim, damage, liability (or actions in
respect thereof) or expense arising out of or based on any untrue statement or
alleged untrue statement or omission or alleged omission to state a material
fact in such preliminary prospectus, in any case where (i) a copy of the
prospectus used to confirm sales of shares of Registrable Common was not sent or
given to the person asserting such loss, claim, damage, liability or expense at
or prior to the written confirmation of the sale to such person, and (ii) such
untrue statement or alleged untrue statement or omission or alleged omission was
corrected in such prospectus.
(b) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt by a
Selling Stockholder of notice of any claim or the commencement of any action or
proceeding brought or asserted against such Selling Stockholder in respect of
which indemnity may be sought from the Issuer, such Selling Stockholder shall
notify the Issuer in writing of the claim or the commencement of that action or
proceeding; provided, however, that the failure to so notify the Issuer shall
not relieve the Issuer from any liability that it may have to the Selling
Stockholder otherwise than pursuant to the indemnification provisions of this
Agreement. If any such claim or action or proceeding shall be brought against a
Selling Stockholder and such Selling Stockholder shall have duly notified the
Issuer thereof, the Issuer shall have the right to assume the defense thereof,
including the employment of counsel. Such Selling Stockholder shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Selling Stockholder unless (i) the Issuer has agreed to pay such
fees and expenses or (ii) the named parties to any such action or proceeding
include both such Selling Stockholder and the Issuer, and such Selling
Stockholder shall have been advised in writing by counsel that there may be one
or more legal defenses available to such Selling Stockholder which are different
from or additional to those available to the Issuer, in which case, if such
Selling Stockholder notifies the Issuer in writing that it elects to employ
separate counsel at the expense of the Issuer, the Issuer shall not have the
right to assume the defense of such action or proceeding on behalf of such
Selling Stockholder; it being understood, however, that the Issuer shall not, in
connection with any one such action or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together with appropriate
local counsel) at any time for all Selling Stockholders. The Issuer shall not be
liable for any settlement of any such action or proceeding effected without the
Issuer written consent.
(c) INDEMNIFICATION BY HOLDERS OF REGISTRABLE COMMON. In connection with
any registration in which a Selling Stockholder is participating, such Selling
Stockholder will furnish
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to the Issuer in writing such information and affidavits as the Issuer
reasonably requests for use in connection with any related registration
statement or prospectus. To the extent permitted by law, each Selling
Stockholder agrees to indemnify and hold harmless the Issuer, its directors and
officers who sign the registration statement relating to shares of Registrable
Common offered by such Selling Stockholder and each person, if any, who controls
the Issuer within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Issuer to such Selling Stockholder, but only with respect to
information concerning such Selling Stockholder furnished in writing by such
Selling Stockholder or on such Selling Stockholder's behalf expressly for use in
any registration statement or prospectus relating to shares of Registrable
Common offered by such Selling Stockholder, or any amendment or supplement
thereto, or any related preliminary prospectus. In case any action or proceeding
shall be brought against the Issuer or its directors or officers, or any such
controlling person, in respect of which indemnity may be sought against such
Selling Stockholder, such Selling Stockholder shall have the rights and duties
given to the Issuer, and the Issuer or its directors or officers or such
controlling persons shall have the rights and duties given to such Selling
Stockholder, by the preceding paragraph. Each Selling Stockholder also agrees to
indemnify and hold harmless any underwriters of the Registrable Common, their
partners, officers and directors and each person who controls such underwriters
(within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act) on substantially the same basis as that of the indemnification
of the Issuer provided in this Section 11(c). Notwithstanding any provision to
the contrary set forth herein, in no event shall the amount paid or payable by
any Selling Stockholder under this Section 11(c) exceed the amount of proceeds
received by such Selling Stockholder from the offering of the Registrable
Common.
(d) CONTRIBUTION. If the indemnification provided for in this Section 11
is unavailable to any indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to herein, 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 and expenses in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and the indemnified
parties in connection with the actions that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnified party or indemnified parties and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The Issuer and the Selling Stockholders agree
that it would not be just and equitable if contribution pursuant to this Section
11(d) were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in this Section 11(d). No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. If indemnification is available under this Section 11, the
indemnifying parties shall indemnify each indemnified party to the full extent
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provided in Sections 11(a) and (c) without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 11(d).
12. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Issuer has obtained the written consent of holders of at least 51% of
the shares of Registrable Common (or Notes convertible into 51% of the
Registrable Common) then outstanding.
(b) NOTICES. All notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by telex or telecopy, or registered or
certified mail (return receipt requested), postage prepaid, or courier to the
parties at the following addresses (or at such other address for any party as
shall be specified by like notice), provided that notices of a change of address
shall be effective only upon receipt thereof. Notices sent by mail shall be
effective on the fourth business day after mailing in accordance with the
preceding sentence, notices sent by telecopier shall be effective when receipt
is acknowledged or otherwise confirmed, and notices sent by courier delivery
shall be effective the business day upon which the notice is actually delivered
to the proper location (provided that notices delivered after 5:00 p.m. local
time shall not be effective until the next following business dy). Notices shall
be sent to the following addresses:
(i) if to a Noteholder, at the most current address given by
such Noteholder to the Issuer in a writing making specific reference to
this Agreement;
(ii) if to Safe Seal, Invatec or any successor, at the following
address:
00000 Xxxxxxx Xxxxx
Xxxxx X-000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
with copies to:
Xxxx X. Xxxxx, Xx.
Xxxxx, Xxxxx & Xxxxxx Incorporated
Nine Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
(c) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the heirs, executors, administrators, successors and assigns
of each of the parties.
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(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(e) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) GOVERNING LAW. This agreement shall be governed by and construed in
accordance with the laws of the state of Texas applicable to contracts made and
to be performed wholly within that state.
(g) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all the rights and privileges of the Noteholders
shall be enforceable to the fullest extent permitted by law.
(h) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
THE SAFE SEAL COMPANY, INC.
By:_______________________________
XXXXXXX X. XXXXXX
President & CEO
INNOVATIVE VALVE TECHNOLOGIES, INC.
By:____________________________
Xxxxxxx X. Xxxxxx, President
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NOTEHOLDERS:
__________________________________
XXXXX X. XXXXXX
__________________________________
XXXXXXX XXXXXX XXXXXXX
__________________________________
XXXXX X. XXXXXX III
__________________________________
XXXXXX XXXX XXXXXX
__________________________________
XXXXX XXX XXXXXX
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