EXHIBIT 6.1(j)
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") dated as of December
30, 2004, by and between Michelex Corporation, a Utah corporation (the
"Company"), and Highgate House, LLC, whose address is 0000 Xxxxxxxxxx Xxxx
Xxxx., Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000 (the "Purchaser").
On or prior to the date hereof, the Company has assumed the obligations
from Hindsight Records, Inc. of certain Convertible Debentures (the
"Debentures") issued to the Purchaser on the date hereof that may be converted
to common stock of the Company (the "Underlying Shares"), all as more
particularly provided therein.
The Company and the Holder hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition only, the term "control," when
used with respect to any Person, means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government actions to close
between the hours of 9:30 a.m. and 5:00 p.m. New York Time.
"Commission" means the United States Securities and Exchange Commission.
"Common Stock" means the Company's common stock, par value $.001 per share.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Holders" means the Purchaser and any other holder or holders,
as the case may be, from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section 5(c)
hereof.
"Indemnifying Party" shall have the meaning set forth in Section 5(c)
hereof.
"Inspectors" shall have the meaning set forth in Section 4(a)(ix) hereof.
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"Losses" shall have the meaning set forth in Section 5(a) hereof.
"New York Courts" shall have the meaning set forth in Section 9(e) hereof.
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"Registrable Securities" means the Underlying Shares and any other shares
of Common Stock issued 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
Underlying Shares, excluding in all cases, however, any Registrable Securities
sold by a Person in a transaction in which the seller's rights under this
Agreement are not assigned.
"Registration" shall have the meaning set forth in Section 2(a) hereof.
"Registration Expenses" means all expenses incurred in effecting any
registration pursuant to this Agreement, including, without limitation, all
registration, qualification, and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
and expenses of any regular or special audits incident to or required by any
such registration, but shall not include selling expenses, fees and
disbursements of counsel for the Holders and the compensation of regular
employees of the Company, which shall be paid in any event by the Company.
"Registration Statement" means each registration statement, contemplated by
Section 2(a) hereof, including the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
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"Rule 144" means Rule 144 promulgated by the Commission under the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such rule.
"Rule 144A" means Rule 144A promulgated by the Commission under the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such rule..
"Rule 415" shall mean Rule 415 promulgated by the Commission under the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Holders" means each Holder any of whose Registrable Securities are
being registered pursuant to a Registration Statement.
"Underwritten Offering" means a registration in connection with which
securities of the Company are sold to an underwriter for sale to the public
pursuant to an effective registration statement.
2. "Piggy-back" Registrations.
(a) If the Company decides to register any of its Common Stock or
securities convertible into or exchangeable for Common Stock under the
Securities Act (a "Registration") on a form that is suitable for an offering of
shares of Common Stock by the Company or by third parties and that is not a
registration solely to implement an employee benefit plan on Commission Form
S-8, a registration statement on Commission Form S-4 (or successor form) or a
transaction to which Rule 145 or any other similar rule of the Commission is
applicable (such form, a "Registration Statement"), the Company shall give
written notice to the Holders of its intention to effect such a Registration.
Subject to Section 2(b) below, the Company shall use all reasonable efforts to
effect Registration under the Securities Act of all Registrable Securities that
the Holders request be included in such Registration by a written notice
delivered to the Company within thirty (30) days after the notice given by the
Company. Each of the Holders agrees that any Registrable Securities which such
Holder requests to be included in a Registration pursuant to this Section 2
shall be included by the Company on the same form of Registration Statement as
selected for the Registration.
(b) If a Registration involves an Underwritten Offering, the Company shall
not be required to register securities in excess of the amount that the
principal underwriter reasonably and in good faith recommends in writing for
inclusion in such offering (a "Cutback"), a copy of which recommendation, and
supporting reasoning, shall be delivered to each Holder. If such a Cutback
occurs, the number of shares that are entitled to be included in the
Registration and underwriting shall be allocated in the following manner: (i)
first, to the Company for any securities it proposes to sell for its own
account, (ii) second, to any Person with demand registration rights requiring
such registration, and (iii) third, to the Holders and other holders of Company
securities with piggy-back registration rights requesting inclusion in the
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Registration, pro rata among the respective holders thereof on the basis of the
number of shares for which each such requesting holder has requested
registration.
(c) If the Registration of which the Company gives notice is for an
underwritten public offering, the Company shall so advise the Holders as a part
of the written notice given pursuant to Section 2(a). In such event, the right
of any Holder to have its Registrable Securities included in the Registration
pursuant to this Section 2 shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of such Holder's Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and its other security holders with registration rights to participate
therein distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriters or the managing underwriter selected by the Company.
(d) If the Company elects to terminate any Registration after a
Registration Statement for such Registration shall have been filed, the Company
will have no obligation to register the Registrable Securities that the Holders
sought to have included in such Registration. The Company shall bear all
Registration Expenses of the Holders in connection with any Registration.
3. Representations and Warranties.
(a) The Company hereby makes the following representations and
warranties to the Purchaser:
(i) The Company has the requisite corporate power and authority to
enter into, execute and deliver this Agreement, and to consummate the
transactions contemplated hereby and to carry out its obligations hereunder. The
execution and delivery of this Agreement by the Company and the consummation by
it of the transactions contemplated hereby have been duly authorized by all
necessary action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights or by other equitable principles of general application;
(ii) The execution, delivery and performance of this Agreement, and
the consummation by the Company of the transactions contemplated hereby do not
and will not (i) conflict with or violate any provision of its or any of its
subsidiaries's articles of incorporation, resolutions or bylaws or (ii) require
the consent of any third party, conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company is
a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company is subject (including federal and state
securities laws and regulations), or by which any property or assets of the
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Company or any of its Subsidiaries is bound or affected, except in the case of
each of clauses (ii) and (iii), such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a material adverse effect on the Company;
(iii) Neither the Company nor any of its subsidiaries is required to
obtain any consent, permit, waiver, authorization or order of, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of this Agreement;
(iv) Neither the Company nor any of its subsidiaries (i) is in default
under or in violation of any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, except such conflicts or defaults as do not have a material
adverse effect on the Company, (ii) is in violation of any order of any court,
arbitrator or governmental body, except for such violations as do not have a
material adverse effect on the Company, or (iii) is in violation of any statute,
rule or regulation of any governmental authority which could (individually or in
the aggregate) (x) adversely affect the legality, validity or enforceability of
this Agreement, (y) have a material adverse effect on the Company or (z)
adversely impair the Company's ability or obligation to perform fully on a
timely basis its obligations under this Agreement;
(b) The Purchaser hereby represents and warrants to the Company as
follows:
(i) Such Purchaser has the requisite capacity or, as the case may be,
authority to enter into and to consummate the transactions contemplated hereby
and otherwise to carry out its obligations hereunder. The execution and delivery
of this Agreement have been duly authorized by all necessary action or corporate
action, as the case may be, on the part of such Purchaser. This Agreement has
been duly executed and delivered by such Purchaser or on its behalf and
constitutes the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms; except as such
enforceability may be limited by applicable bankruptcy, insolvency, liquidation,
fraudulent transfer, reorganization, moratorium laws and remedies or by other
equitable principles of general application or similar laws relating to or
affecting generally the enforcement of creditors' rights.
(iii) Purchaser is acquiring the Debentures and Underlying Shares for
its own account for investment purposes only and without a view toward the
resale or distribution thereof, without prejudice, however, to the Purchaser's
right, subject to the provisions of this Agreement, at all times to sell or
otherwise dispose of all or any part of such Debentures or Underlying Shares in
compliance with applicable federal and state securities laws.
4. Procedures for Registration.
(a) Whenever the Company is required to register Registrable
Securities under this Agreement, it agrees to do the following at its sole cost
and expense:
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(i) advise the underwriter(s), if any, and the Selling Holders
promptly and, if requested by such Persons, to confirm such advice in writing:
(A) when the Prospectus, or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to the Registration Statement or any
post-effective amendment thereto, when the same has become effective; (B) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information
relating thereto; (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Securities
Act or of the suspension by any state securities commission of the qualification
of the Registrable Securities for qualification, offering or sale in any
jurisdiction, or the initiation of any Proceeding for any of the preceding
purposes; and (D) of the existence of any fact or the happening of any event
that makes any statement of a material fact made in the Registration Statement,
the Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in the Registration Statement or the Prospectus in order
to make the statements therein not misleading. If, at any time, the Commission
issues any stop order suspending the effectiveness of the Registration Statement
or any state securities commission or other regulatory authority issues an order
suspending the qualification or exemption from qualification of any Registrable
Securities under state securities or blue sky laws, the Company shall use its
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;
(ii) if requested by any Selling Holder or the underwriter(s), if any,
incorporate in the Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information as such
Selling Holder and the underwriter(s), if any, may reasonably request to have
included therein, with respect to the number of Registrable Securities, if any,
being sold to such underwriter(s), the purchase price being paid therefor and
any other terms of the offering of the Registrable Securities to be sold in such
offering, and the Company shall make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the Company
is notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment;
(iii) furnish to the Selling Holders and each of the underwriter(s),
if any, without charge, before filing with the Commission, at least one copy of
the Registration Statement, as first filed with the Commission, and of each
amendment thereto, including the Prospectus and all documents incorporated by
reference therein and all exhibits (including exhibits incorporated therein by
reference);
(iv) consult with the Selling Holders and the underwriter(s), if any,
prior to the filing of such Registration Statement or Prospectus;
(v) deliver to each of the Selling Holders and underwriter(s), if any,
without charge, as many copies of the Prospectus (including each preliminary
Prospectus) and any amendment or supplement thereto as such Persons may
reasonably request, the Company hereby consenting to the use of the Prospectus
and any amendment or supplement thereto by each of the Selling Holders and each
of the underwriter(s), if any, in connection with the offering and the sale of
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any Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
(vi) use its best efforts, prior to any public offering of Registrable
Securities, to register or qualify the Registrable Securities under the
securities or blue sky laws of such jurisdictions as the Holder or
underwriter(s), if any, may reasonably request and do any and all other acts or
things necessary or advisable to enable the disposition in such jurisdictions of
the Registrable Securities covered by the Registration Statement; provided,
however, that the Company shall not be required to register or qualify as a
foreign corporation where it is not now so qualified or to take any action that
would subject it to the service of process in suits or to taxation, other than
as to matters and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(vii) cooperate with the Selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities covered by a Registration Statement and not
bearing any restrictive legends, except as required by law, and enable such
Registrable Securities to be in such denominations and registered in such names
as the Holders may request prior to any sale of Registrable Securities made by
the underwriter(s), if any;
(viii) in connection with the preparation and filing of each
Registration Statement under the Securities Act pursuant to this Agreement, the
Company shall give Selling Holders, their underwriters, if any, and one counsel
or firm of counsel and one accountant or firm of accountants representing all
Selling Holders the opportunity to participate in the preparation of such
Registration Statement, each Prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto.
(ix) make available for inspection by the Selling Holders, any
underwriter participating in any disposition pursuant to a Registration
Statement, and any attorney, accountant or other agent retained by any Holder or
underwriter (collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company necessary to enable
them to exercise their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such Inspector in connection with such Registration Statement;
(x) notify each seller of Registrable Securities covered by a
Registration Statement at any time when a Prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the Prospectus included in the Registration Statement, as
then in effect, includes and untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and, at the request of any such seller, prepare and
furnish to such seller a reasonable number of copies of a supplement to be an
amendment of such Prospectus as may be necessary so that, as thereafter
delivered to the purchasers of any 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 or incomplete in the light of the circumstances then existing;
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(xi) keep such registration effective for a period of one hundred
eighty (180) days or until the Selling Holders have completed the distribution
described in any Registration Statement relating thereto, whichever first
occurs; provided, however, that (A) such 180-day period shall be extended for a
period of time equal to the longer of (1) the period the Holder refrains from
selling any securities included in such registration at the request of an
underwriter of securities of the Company and (2) the period ending on the date
on which Rule 144(k) first becomes available for transfers of Registrable
Securities and (B) in the case of any Registration of Registrable Securities on
Form S-3 which are intended to be offered on a continuous or delayed basis, such
180-day period shall be extended, if necessary, to keep the Registration
Statement effective until all such Registrable Securities are sold, however in
no event longer than one year from the Effective Date of the Registration
Statement and provided that Rule 415 permits an offering on a continuous or
delayed basis;
(xii) cause all such Registrable Securities registered hereunder to be
listed on each securities exchange on which similar securities issued by the
Company are then listed;
(xiii) provide a transfer agent and registrar for all Registrable
Securities registered pursuant to a Registration Statement and a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such Registration Statement;
(xiv) 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, an earnings statement covering the
period of at least 12 months, but not more than 18 months, beginning with the
first month after the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act; and
(xv) at such time as a Registration Statement covering a resale of any
Registrable Securities has been declared effective by the Commission, cause its
counsel to deliver to the transfer agent for the Common Stock an opinion,
subject to the making by Selling Holders of such representations and warranties
to Company counsel as it may reasonably require, certifying that such
Registrable Securities may be sold by the Selling Holders pursuant to such
Registration Statement with the purchasers thereof receiving share certificates
without restrictive legend, which opinion shall remain effective so long as such
Registration Statement remains in full force and effect;
(b) Each Selling Holder shall, upon receipt of notice from the Company
of the occurrence of any event of the kind described in Section 4(a)(x),
forthwith discontinue disposition of Registrable Securities following the
effective date of a Registration Statement covering Registrable Securities until
such Holder's receipt of copies of the Prospectus supplement and/or
post-effective amendment or until it is advised in writing by the Company that
the use of the applicable Prospectus may be resumed and, in either case, has
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received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such Prospectus or Registration
Statement.
(c) Each Holder covenants and agrees that (i) it will not offer or
sell any Registrable Securities being registered pursuant to any Registration
Statement until such Holder shall have received copies of the related Prospectus
and notice from the Company that such Registration Statement has become
effective and (ii) such Holder and its officers, directors and Affiliates, if
any, will comply with the Prospectus delivery requirements of the Securities Act
as applicable to them in connection with sales of Registrable Securities
pursuant to any Registration Statement.
5. Indemnification.
(a) Indemnification by the Company. The Company shall, notwithstanding
termination of this Agreement and without limitation as to time, indemnify and
hold harmless each Holder, the officers, directors, agents (including any
underwriters retained by the Holders in connection with the offer or sale of
Registrable Securities), brokers, investment advisors and employees of each of
them, each Person who controls any such Holder (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling Person, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, costs of preparation and attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or relating to any untrue
or alleged untrue statement of a material fact contained in such Registration
Statement, any Prospectus or any form of Prospectus or in any amendment or
supplement thereto or in any preliminary Prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus or form of Prospectus or amendment or supplement thereto, in light of
the circumstances under which they were made) not misleading, except solely to
the extent that (I) such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by or on
behalf of such Holder expressly for use therein, which information was relied on
by the Company for use therein or (ii) such information relates to such Holder
or such Holder's proposed method of distribution of Registrable Securities and
was furnished in writing to the Company by or on behalf of such Holder expressly
for use therein. The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding of which the Company is aware
in connection with the transactions contemplated by this Agreement.
(b) Indemnification by Holders. In connection with each Registration
Statement, each Selling Holder shall furnish to the Company in writing such
information as the Company reasonably requests for use in connection with such
Registration Statement or the related Prospectus and agrees, severally and not
jointly, to indemnify and hold harmless the Company, their directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses (as
determined by a court of competent jurisdiction in a final judgment not subject
to appeal or review) arising solely out of or based solely upon any untrue
statement of a material fact contained in such Registration Statement, such
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Prospectus, or any form of Prospectus, or arising solely out of or based solely
upon any omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading solely to the extent that (I) such
untrue statement or omission is contained in any information furnished in
writing by such Holder to the Company specifically for inclusion in such
Registration Statement or such Prospectus and such information was relied upon
by the Company for use in such Registration Statement, such Prospectus or such
form of Prospectus, or (ii) such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
furnished in writing by or on behalf of such Holder to the Company specifically
for inclusion in such Registration Statement or such Prospectus and such
information was relied upon by the Company for use in such Registration
Statement, such Prospectus or such form of Prospectus; provided, however, that
anything contained herein to the contrary notwithstanding, no Holder shall be
liable for any claims hereunder in an amount in excess of the net proceeds
received by such Holder from the sale of its Registrable Securities pursuant to
a Registration Statement. In addition, the foregoing shall not inure to the
benefit of any Holder if a copy of such Prospectus (as then amended or
supplemented) was furnished by the Company to such Holder and was not sent or
given by or on behalf of such Holder to such Holder's purchaser of Registrable
Securities if required by law to have been so delivered.
(c) Conduct of Indemnification Proceedings. If any Proceeding is
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided that the
failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it is finally determined by a court of
competent jurisdiction (which determination is not subject to appeal or further
review) that such failure shall have proximately and materially adversely
prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (I) the Indemnifying Party has agreed to pay such fees and
expenses; or (ii) the Indemnifying Party shall have failed to assume promptly
the defense of such Proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in such Proceeding; or (iii) the named parties to any
such Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense of
the claim against the Indemnified Party but shall retain the right to control
the overall Proceedings out of which the claim arose, and counsel employed by
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the Indemnified Party shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party to which the Indemnified
Party is entitled hereunder (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten (10) Business Days after the
Indemnified Party gives written notice thereof to the Indemnifying Party.
(d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) of this Agreement is unavailable to an Indemnified Party or is insufficient
to hold such Indemnified Party harmless for any Losses in respect of which this
Section would apply by its terms (other than by reason of exceptions provided in
this Section), 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, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying Party
on the one hand and the Indemnified Party on the other from the distribution of
the Registrable Securities or (ii) if the allocation provided by clause (i)
above in this paragraph is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in such
clause (i) but also the relative fault of the Indemnifying Party and Indemnified
Party in connection with the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c) hereof, any attorneys' or other
fees or expenses incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of its Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. 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
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fraudulent misrepresentation.
(e) The indemnity and contribution agreements contained in this
Section 5 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Holder or any Person
controlling Holder, the Company, its directors or officers or any Person
controlling the Company.
(f) No Indemnifying Party shall, without the prior written consent of
the Indemnified Party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.
6. Rule 144. The Company shall file the reports required to be filed by it
under the Securities Act and the Exchange Act in a timely manner and, if at any
time the Company is not required to file such reports, it will, upon the request
of any Holder, make publicly available other information for as long as
necessary to permit sales of its securities pursuant to Rule 144. The Company
further covenants that it will take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144. Upon the
request of any Holder, the Company shall deliver to such Holder a written
certification of a duly authorized officer as to whether it has complied with
such requirements.
7. Rule 144A. The Company agrees that, upon the request of a Holder or any
prospective purchaser of Registrable Securities designated by a Holder, the
Company shall promptly provide (but in any case within fifteen (15) days of a
request) to such Holder or potential purchaser, the following information:
(a) a brief statement of the nature of the business of the Company and
any subsidiaries and the products and services each of them offers;
(b) the most recent consolidated balance sheets and profit and losses
and retained earnings statements, and similar financial statements of the
Company for the two (2) most recent fiscal years (such financial information
shall be audited, to the extent reasonably available); and
(c) such other information about the Company, any subsidiaries, and
their business, financial condition and results of operations as such Holder or
purchaser of such Registrable Securities shall request in order to comply with
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Rule 144A, as amended, and in connection therewith the anti-fraud provisions of
the federal and state securities laws.
The Company hereby represents and warrants to the Holders and any
prospective purchaser of Registrable Securities from a Holder that the
information provided by the Company pursuant to this Section 7 will, as of the
dates of such information, not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.
8. Consent to be Bound; Assignability of Registration Rights. Each
subsequent holder of Registrable Securities must consent in writing to be bound
by the terms and conditions of this Agreement in order to acquire the rights
granted pursuant to this Agreement. Subject to the foregoing sentence, the
registration rights set forth in this Agreement are assignable to each assignee
of Registrable Securities conveyed in accordance herewith who agrees in writing
to be bound by the terms and conditions of this Agreement.
9. Miscellaneous.
(a) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless made in a writing signed by the Company and
all of the Persons who are then Holders of Registrable Securities;
(b) The Company and the Holders agree that the rights created by this
Agreement are unique, and that the loss of any such right is not susceptible to
monetary quantification. Consequently, the parties agree that an action for
specific performance (including for temporary and/or permanent injunctive
relief) of the obligations created by this Agreement is a proper remedy for the
breach of the provisions of this Agreement, without the necessity of proving
actual damages. If the parties hereto are forced to institute legal proceedings
to enforce their rights in accordance with the provisions of this Agreement, the
prevailing party shall be entitled to recover its reasonable expenses, including
attorneys' fees, in connection with any such action;
(c) Except as otherwise specifically provided herein, all notices,
requests, demands and other communications provided for hereunder shall be in
writing and shall be deemed duly given to the Person for whom intended (i) upon
receipt when personally delivered, (ii) one (1) day after being sent by a
nationally recognized overnight courier for next day delivery or telecopy
providing confirmation or receipt of delivery, or (iii) three (3) days after
being sent by certified or registered mail, postage and certified or registered
mail fees prepaid, return receipt requested, if sent to such Person at the
address for such Person indicated below or to such other address as may be
designated by such Person in writing sent by such Person in the manner required
by this Section:
If to the Company: Michelex Corporation
00 Xxxxx Xxxx
Xxxxxxx, Xxx Xxxx 00000
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Attn: CEO
Tel: (000) 000-0000
Fax: (000) 000-0000
If to the Holder: Highate House, LLC
0000 Xxxxxxxxxx Xxxx Xxxx.
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
With a copy to: Gottbetter & Partners
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
(d) This Agreement may be executed in any number of 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. In the event that
any signature is delivered by facsimile transmission, such signature shall
create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof; (e) This Agreement shall be
governed by and construed in accordance with the laws of the state of New York
without regard to principles thereof relating to the conflict of laws. Each of
the Company and each Holder hereby irrevocably submits to the jurisdiction of
any New York state court or any federal court sitting in the city and county of
New York (collectively, the "New York Courts") in respect of any Proceeding
arising out of or relating to this Agreement and irrevocably accepts for itself
and in respect of its property, generally and unconditionally, jurisdiction of
the New York Courts. Each of the Company and each Holder irrevocably waives, to
the fullest extent it may effectively do so under applicable law, any objection
that it may now or hereafter have to the laying of the venue of any such
Proceeding brought in any New York Court and any claim that any such Proceeding
brought in any New York Court has been brought in an inconvenient forum;
(f) The remedies provided herein are cumulative and not exclusive of
one another or of any remedies provided by law;
(g) If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
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provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(h) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
COMPANY
MICHELEX CORPORATION
By: /S/ Xxxxxxx Xxxxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President
Purchaser
HIGHGATE HOUSE, LLC
By: HH Advisors, LLC, its managing
member
By: Xxxxxxx Investment Group, Inc.,
its managing member
By: /S/ Xxxx X. Xxxxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxxxx
Title: President
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