Exhibit 4.19
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of the 9th day
of December, 2003, is by and between Xxxxx X. Xxxxxxx ("Seller"), each of the
persons listed on Schedule B to this Agreement (collectively, the "Purchasers"),
and Decorize, Inc., a Delaware corporation (the "Company"). Decorize is a party
to this Agreement solely for purposes of granting the registration rights set
forth in Section 5 of this Agreement.
WHEREAS, Seller desires to sell to Purchasers, and each of the Purchasers
desire to purchase from Seller, an aggregate 267,000 shares, in the respective
amounts as set forth on Schedule B hereto (the "Shares"), of the common stock,
$0.001 par value per share, of the Company, which represent approximately 2.4%
of the currently issued and outstanding shares, in the aggregate, of the
Company; and
WHEREAS, Seller and Purchasers have agreed to provide for the sale of the
Shares in the manner set forth in this Agreement; and
WHEREAS, the Company has agreed to grant Purchasers certain registration
rights with respect to the resale of his Shares, on the terms set forth in this
Agreement, in order to provide for an orderly disposition of the Shares if
Purchasers choose to do so in the future;
NOW, THEREFORE, in consideration of the promises and the mutual covenants
and agreements herein contained, the parties hereto agree as follows:
1. PURCHASE AND SALE.
1.1 Sale of Shares. Upon the terms and subject to the conditions set forth
in this Agreement, Seller hereby agrees, upon the receipt of the aggregate
consideration set forth on Schedule B hereto, to sell the Shares to Purchasers,
and to execute and deliver such documents of transfer as reasonably requested by
Purchasers for the sale of such Shares, and each of the Purchasers hereby agree
to purchase from Seller, all right, title, and interest in and to all of the
Shares, free of all liens, claims and encumbrances.
1.2 Consideration. The aggregate purchase price for the Shares is the sum
of $200,250 (the "Purchase Price"). In consideration of the sale of the Shares
by Seller, Purchasers shall deliver to Seller concurrent with the execution of
this Agreement immediately available funds in the amount of the Purchase Price.
1.3 Closing Procedure. Concurrent with the execution of this Agreement,
Seller shall deliver to Purchasers the stock certificates representing the
Shares, duly endorsed to each Purchaser in the amounts set forth on Schedule B
hereto, and Purchasers shall deliver to Seller the Purchase Price. All actions
taken on the date hereof with respect to the transactions contemplated hereunder
shall be deemed to have been taken place simultaneously, at the time the last of
any such actions is taken or completed.
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2. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and
warrants to Purchasers as follows:
2.1 Due Authorization. Seller has full capacity and is authorized to enter
into this Agreement and to carry out its obligations hereunder. This Agreement
has been duly executed and delivered by Seller and constitutes the legal, valid,
and binding obligations of Seller, enforceable against him in accordance with
its terms.
2.2 No Conflicts or Consents. The execution and delivery by Seller of this
Agreement, and the performance of its obligations hereunder, including, without
limitation, the transfer and sale of the Shares from Seller to Purchasers, do
not and will not (a) conflict with any agreement, judgment, license, order or
permit applicable to or binding upon Seller, (b) result in the acceleration of
any indebtedness owed by Seller, or (c) result in or require the creation of any
lien upon any assets or properties of Seller, except as expressly contemplated
herein. No consent, approval, authorization or order of, and no notice to or
filing with, any tribunal or third party is required in connection with the
execution, delivery or performance by Seller of this Agreement, the transfer and
sale of the Shares from Seller to Purchasers or the consummation by Seller of
the transactions contemplated hereby.
2.3 Title to Shares. Seller has sole legal, nominal and beneficial
ownership and title of the Shares, free and clear of all adverse interests,
liens, claims and encumbrances, and has the sole right to vote or direct the
voting of the Shares. The delivery of the certificate or certificates
representing the Shares owned by the Seller, duly endorsed or accompanied by
duly executed stock xxxxxx, xxxx transfer to Purchasers good and indefeasible
title to such shares, free and clear of all liens, proxies, encumbrances and
claims of every kind, and Seller will forever warrant and defend (with counsel
reasonably acceptable to Purchasers) such title, and indemnify Purchasers for
all adverse claims, damages, or liability with respect to the validity of such
title or transfer thereof, against any claimants thereto. There are no pending
or threatened notices, suits, claims or judgments relating to violations of laws
or any other matters, which may result in an obligation or liability on
Purchasers after the closing of this transaction or which have created or might
in the future create a lien or adverse claim against the Shares, that have not
been corrected or disclosed in writing to Purchasers, nor are there any threats
thereof known to Seller.
2.4 Threatened Litigation. There is no litigation or proceeding pending or
threatened against or relating to the Shares that has not been disclosed to
Purchasers in writing.
2.5 Other Agreements. Other than this Agreement, Seller is not a party to
any contract or agreement of any kind or nature whatsoever which will be
enforceable against Purchasers after the close of this transaction.
2.6 Update to Representations. Prior to the close of this transaction,
Seller shall give Purchasers immediate notice of the occurrence of any event or
the receipt by Seller of any notice or knowledge, the effect of which would be
to make a representation or warranty of Seller herein untrue or misleading if
made on or immediately following the occurrence of such event or the receipt of
such notice or knowledge. Seller hereby agrees to protect, indemnify, and defend
Purchasers, and Purchasers' nominees, against and to hold Purchasers, and
Purchasers' nominees,
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harmless from any and all costs, claims, losses, attorneys' fees, liabilities,
and other expenses that Purchasers, or Purchasers' nominees, may incur or to
which Purchasers, or Purchasers' nominees, may be exposed as a result of
Seller's breach of or the falsity of any of Seller's representations or
warranties in this Agreement or as a result of Seller's breach of or failure to
perform or observe any of Seller's covenants in this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASERS. Each Purchaser represents and
warrants to Seller as follows:
3.1 Due Authorization. Such Purchaser has full capacity to enter into this
Agreement and to carry out its respective obligations hereunder. This Agreement
has been duly executed and delivered by such Purchaser and constitutes the
legal, valid, and binding obligations of such Purchaser, enforceable against
such Purchaser in accordance with its terms.
3.2 Investment Representations. Such Purchaser further represents and
warrants as follows:
(a) The undersigned is purchasing the Shares for his own account and not
with a view to resale or redistribution in a manner which would
require registration under the Securities Act of 1933, as amended (the
"Act"), or any state securities laws, or for sale in connection with a
"distribution," as that term is used in Section 2(11) of the Act, of
the Shares.
(b) The undersigned understands that the Shares are not registered under
the Act or the securities laws of any state and may not be disposed of
in whole or in part in the absence of registration under the Act or
any state securities laws, unless an exemption from registration is
available.
(c) The undersigned understands that there will be no public market for
the Shares, and that even if such a market were to develop, it may not
be possible for the undersigned to readily liquidate his investment.
As a consequence, the undersigned may never be able to sell or dispose
of such securities and may thus have to bear the risk of investment in
such securities for a substantial period of time. The undersigned has
adequate means of providing for his current and future contingencies
and has no need for liquidity with regard to his investment in the
Shares.
(d) The undersigned has been informed and understands that the Shares,
upon issue, will have such restrictive legends as are required by law
or as the Company may otherwise deem appropriate.
(e) The undersigned has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks
of an investment in the Shares and making an informed decision with
respect to the purchase of the Shares. Such Purchaser is not relying
upon any representation or warranty by
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Seller with respect to the value of the Shares, and accordingly no
such representations or warranties are made.
(f) The undersigned has had an opportunity to ask questions of and receive
satisfactory answers from the Company, or any person or persons acting
on the Company's behalf, concerning the terms and conditions of this
investment, and all such questions have been answered to the full
satisfaction of Purchaser.
4. ASSUMPTION. By entering into this Agreement, none of the Purchasers are
assuming or agreeing to assume or are discharging any liability or obligation of
the Seller whatsoever, whether now existing or hereinafter incurred, including
without limitation, any liability or obligation relating to the Shares or the
sale thereof.
5. REGISTRATION RIGHTS. The Company hereby grants to Purchasers, with respect
to the Shares, registration rights as described in Schedule A to this Agreement.
Each of the Purchasers acknowledges and agrees to the terms of such
registrations and Purchasers' rights and obligations with respect thereto, as
set forth on Schedule A.
6. MISCELLANEOUS PROVISIONS
6.1 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs, and
assigns.
6.2 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.3 Entire Agreement. This Agreement and the documents referred to herein
contain the entire understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties,
conveyances or undertakings other than those expressly set forth herein. This
Agreement supersedes any prior agreements and understandings between the parties
with respect to the subject matter of this Agreement.
6.4 Notices. Any notice or communication under this Agreement must be in
writing and given by (a) deposit in the United States mail, addressed to the
party to be notified, postage prepaid and registered or certified with return
receipt requested, (b) delivery in person or by courier service providing
evidence of delivery, or (c) transmission by telecopy. Each notice or
communication that is mailed, delivered, or transmitted in the manner described
above shall be deemed sufficiently given, served, sent, and received, in the
case of mailed notices, on the third business day following the date on which it
is mailed and, in the case of notices delivered by hand, courier service, or
telecopy, at such time as it is delivered to the addressee (with the delivery
receipt or the affidavit of messenger) or at such time as delivery is refused by
the addressee upon presentation. Any notice or communication under this
Agreement must be addressed as set forth on the signature pages to this
Agreement. Any party may change its address for notice by written notice to the
other parties hereto.
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6.5 Expenses. The parties shall pay their own respective expenses and the
fees and expenses of their respective counsel and accountants and other experts.
6.6 Survival of Representations and Warranties. Each party hereto
covenants and agrees that each of the representations, warranties, covenants,
agreements and indemnities in connection therewith contained in this Agreement
and in any ancillary document shall survive the closing of this transaction.
6.7 Waivers. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action, or compliance with any representation,
warranty, covenant or agreement contained herein. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach. The waiver by any party hereto at or
before the closing of this transaction of any condition to its obligations
hereunder which is not fulfilled shall preclude such party from seeking redress
from the other party hereto for breach of any representation, warranty, covenant
or agreement contained in this Agreement.
6.8 Governing Law. This Agreement shall be construed as to both validity
and performance and enforced in accordance with and governed by the laws of the
state of Delaware, without giving effect to the choice of law principles
thereof.
6.9 Prevailing Party. In the event of any dispute among the parties hereto
with respect to any of the terms or provisions of this Agreement, the
non-prevailing party shall pay or reimburse the prevailing party for all fees
and expenses incurred with respect thereto, including without limitation any
legal and attorneys fees and expenses incurred by the prevailing party in
connection therewith.
6.10 Amendments. This Agreement may not be modified or changed except by an
instrument or instruments in writing signed by the party against whom
enforcement of any such modification or amendment is sought.
[signatures appear on following page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SELLER:
/s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxx
PURCHASERS:
H. Xxxxxx Xxxxxx Trust of 1983
By: /s/ X. Xxxxxx
--------------------------------------
Name: X. Xxxxxx
------------------------------------
Title: Trustee
-----------------------------------
/s/ Xxxxxxx Xxxxx Weiner
-----------------------------------------
Xxxxxxx Xxxxx Xxxxxx
/s/ Xxxxxxxx Xxxxxx Xxxxxx
-----------------------------------------
Xxxxxxxx Xxxxxx Xxxxxx
/s/ Xxxxx May Essers
-----------------------------------------
Xxxxx May Essers, a married woman
as her sole and separate property
COMPANY (solely for purposes of Sections 5
and 6 of the Agreement:
DECORIZE, INC.,
A Delaware Corporation
By: /s/ Xxxx Xxxxxxxxx
--------------------------------------
Xxxx Xxxxxxxxx
Executive Vice President And
Chief Financial Officer
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Schedule A to Stock Purchase Agreement
REGISTRATION RIGHTS
In connection with the Stock Purchase Agreement dated December 9, 2003
("Purchase Agreement"), by and between Xxxxx X. Xxxxxxx, a 10% stockholder of
Decorize, Inc., a Delaware corporation (the "Company"), as Seller (herein so
called), and the Purchasers listed on the signature page thereto, as Buyers
(herein so called), the Company has agreed to grant Buyers registration rights
with respect to the shares acquired in connection with the Purchase Agreement as
follows:
ARTICLE I
DEFINITIONS
The terms defined in this Article I shall have for all purposes of this
Schedule A the respective meanings set forth below:
"Board" shall mean the Board of Directors of the Company.
"Common Stock" shall mean the Common Stock, $0.001 par value, of the
Company, and any other class of capital stock of the Company that is duly
authorized and issued from time to time that does not have preferential rights
as to dividends or distributions of the Company's assets over any other class of
capital stock of the Company, including any shares issued in exchange for shares
of Common Stock upon any recapitalization by the Company.
"Exchange Act" shall mean the Securities and Exchange Act of 1934, as it
may be amended from time to time.
"Misstatement" shall mean an untrue statement of a material fact or an
omission to state a material fact required to be stated in a Registration
Statement or Prospectus or necessary to make the statements in a Registration
Statement or Prospectus not misleading.
"Person" shall mean a natural person, partnership, corporation, business
trust, association, joint venture or other entity or a government or agency or
political subdivision thereof.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as supplemented by any and all prospectus supplements and as amended
by any and all post-effective amendments and including all material incorporated
by reference in such prospectus.
"Registrable Security" shall mean (a) an outstanding share of Common Stock
obtained by a Buyer pursuant to the Purchase Agreement, and (b) any security
issued or issuable with respect to such Common Stock by way of a stock dividend
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or reorganization; provided, that, any such share or
security shall be deemed to be Registrable Security only if and so long as it is
a Transfer Restricted Security.
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"Registration" shall mean a Demand Registration described in Section 2(a)
and a Piggyback Registration described in Section 2(b) hereof.
"Registration Expenses" shall mean the out-of-pocket expenses of a
Registration, including without limitation the following:
(1) all registration and filing fees (including fees with respect to
filings required to be made with the National Association of Securities
Dealers, Inc.) and any securities exchange on which the Common Stock is
then listed;
(2) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the Registrable
Securities);
(3) printing, messenger, telephone and delivery expenses;
(4) reasonable fees and disbursements of counsel for the Company; and
(5) reasonable fees and disbursements of all independent certified
public accountants of the Company incurred specifically in connection with
such Registration.
"Registration Statement" shall mean any registration statement which covers
Registrable Securities pursuant to the provisions of this Schedule A, including
the Prospectus included in such registration statement, amendments (including
post-effective amendments) and supplements to such registration statement, and
all exhibits to and all material incorporated by reference in such registration
statement.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Transfer Restricted Security" shall mean an issued and outstanding
security that has not been sold to or through a broker, dealer or underwriter in
a public distribution or other public securities transaction or sold in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act under Rule 144(k) promulgated thereunder (or any successor
rule other than Rule 144A). A security shall cease being a Transfer Restricted
Security if (i) all stop transfer instructions or notations and restrictive
legends with respect to such security are eligible to be removed, and (ii) the
Buyer of such security has received an opinion of counsel to the Company, to the
effect that such shares in Buyer's hands are freely transferable in any public
or private transaction without registration under the Securities Act (or such
Buyer has waived receipt of such opinion).
"Underwritten Registration" or "Underwritten Offering" shall mean a
Registration in which securities of the Company are sold to an underwriter for
distribution to the public.
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ARTICLE II
REGISTRATIONS
2.01 Demand Registration. Subject to the restrictions set forth below, if
at any time after the thirty (30th) day following the date of the Purchase
Agreement the Company shall receive from Buyers a written request to register
all of the Registrable Securities owned by Buyers (or their respective
successors and permitted assigns) as of the date of such request, then the
Company shall effect as soon thereafter as practicable the Registration under
the Securities Act of all Registrable Securities which Buyers request to be
registered. The Company shall not be obligated to effect, or to take any action
to effect, any such registration pursuant to this Section 2.01:
(a) during the period starting with the date sixty (60) days prior to
the Company's good faith estimate of the date of filing of, and ending on a
date one hundred eighty (180) days after the effective date of, a
Company-initiated Registration; provided that the Company has delivered
notice of such Registration to Buyers prior to its receipt of Buyers'
written request for a demand Registration, and it continues to actively
employ in good faith all reasonable efforts to cause such Registration
Statement to become effective; or
(b) if the offering cannot be made on Form S-3 for any reason other
than the Company's failure to timely file its period reports under the
Exchange Act; or
(c) if in the good faith judgment of the Board of Directors of the
Company, such Registration would be seriously detrimental to the Company
and the Board of Directors of the Company concludes, as a result, that it
is essential to defer the filing of such Registration Statement at such
time, and the Company shall furnish to Buyers a certificate signed by the
President of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company for such Registration Statement to be filed in the near future and
that it is, therefore, essential to defer the filing of such Registration
Statement. In such event, the Company shall have the right to defer such
filing (except as provided in subparagraph (a) above) for a period of not
more than one hundred eighty (180) days after receipt of the request of
Buyers; provided, that the Company shall not defer its obligation in this
manner more than twice in any 12-month period.
2.02 Piggyback Registration. Each time the Company decides to file a
Registration Statement under the Securities Act with respect to its Common
Stock, including any Registration Statement filed on behalf of stockholders of
the Company exercising registration rights granted by the Company with respect
to such shares, the Company shall give written notice thereof to Buyers. The
Company shall include in such Registration Statement such shares of Registrable
Securities for which it has received written requests to register such shares
within ten (10) days after such written notice has been given. If in the good
faith judgment of the managing underwriter in any Underwritten Offering, the
inclusion of all of the shares of Registrable Securities and any other Common
Stock requested to be registered by third parties holding similar registration
rights would interfere with the successful marketing of a smaller number of such
shares, then the number of Registrable Securities and other Common Stock to be
included in the offering shall be reduced as provided herein. The Company shall
advise
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Buyers of securities requesting registration of the underwriters' decision, and
the number of shares or securities that are entitled to be included in the
Underwritten Registration shall be allocated first to the Company for securities
being sold for its own account and thereafter as set forth in Section 2.03
below. If any person does not agree to the terms of any such underwriting, he
shall be excluded therefrom by written notice from the Company or the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration. If
shares are so withdrawn from the registration or if the number of shares of
Registrable Securities to be included in such registration was previously
reduced as a result of marketing factors, the Company shall then offer to all
persons who have retained the right to include securities in the registration
the right to include additional securities in the registration in an aggregate
amount equal to the number of shares so withdrawn, with such shares to be
allocated among the persons requesting additional inclusion in accordance with
Section 2.03 below.
2.03 Registration Cutback. In any circumstance in which all of the
Registrable Securities and other shares of Common Stock of the Company
(including shares of Common Stock issued or issuable upon conversion of any
currently unissued securities of the Company) with registration rights (the
"Other Shares") requested to be included in a registration on behalf of Buyers
or other selling stockholders cannot be so included as a result of limitations
of the aggregate number of shares of Registrable Securities and Other Shares
that may be so included, the number of shares of Registrable Securities and
Other Shares that may be so included shall be allocated among Buyers and other
selling stockholders requesting inclusion of shares pro rata on the basis of the
number of Registrable Securities and Other Shares that would be held by Buyers
and other selling stockholders, assuming conversion or exercise of all
convertible securities. If Buyers or any other selling stockholders do not
request inclusion of the maximum number of Registrable Securities and Other
Shares allocated to him or it pursuant to the above-described procedure, the
remaining portion of such stockholder's allocation shall be reallocated among
those other selling stockholders whose allocations did not satisfy their
requests pro rata on the basis of the number of Registrable Securities and Other
Shares which would be held by Buyers and other selling stockholders, assuming
conversion, and this procedure shall be repeated until all of the Registrable
Securities and Other Shares which may be included in the registration on behalf
of Buyers and other selling stockholders have been so allocated.
ARTICLE III
COMPANY PROCEDURES
3.01 General Procedures. If and whenever the Company is required to
register Registrable Securities, the Company will use its best efforts to effect
such registration to permit the sale of such Registrable Securities in
accordance with the intended plan of distribution thereof, and pursuant thereto
the Company will as expeditiously as possible:
(a) prepare and file with the SEC as soon as practicable, but not
later than thirty (30) days after the request for registration, a
Registration Statement with respect to such Registrable Securities and use
its reasonable best efforts to cause such Registration Statement to become
effective and remain effective until the Registrable Securities covered by
such Registration Statement have been sold;
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(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement, and such supplements to the
Prospectus, as may be requested by Buyers or any underwriter of Registrable
Securities or as may be required by the rules, regulations or instructions
applicable to the registration form used by the Company or by the
Securities Act or rules and regulations thereunder to keep the Registration
Statement effective until all Registrable Securities covered by such
Registration Statement are sold in accordance with the intended plan of
distribution set forth in such Registration Statement or supplement to the
Prospectus;
(c) deliver to Buyers and the underwriters, if any, without charge,
as many copies of each Prospectus (and each preliminary prospectus) as such
Persons may reasonably request [the Company hereby consents to the use of
each such Prospectus (or preliminary prospectus) by Buyers and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Prospectus (or preliminary
prospectus)] and a reasonable number of copies of the then-effective
Registration Statement and any post-effective amendments thereto and any
supplements to the Prospectus, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
(d) prior to any public offering of Registrable Securities, register
or qualify or cooperate with, the underwriters, if any, and their
respective counsel in connection with the registration or qualification of
such Registrable Securities for offer and sale under the securities or blue
sky laws of such jurisdictions as Buyers or such underwriters may designate
in writing and do anything else necessary or advisable at its sole cost and
expense to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement; provided, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which
would subject it to general service of process in any such jurisdiction
where it is not then so subject;
(e) cause all such Registrable Securities to be listed on each
securities exchange or automated quotation system at its sole cost and
expense on which similar securities issued by the Company are then listed;
(f) provide a transfer agent and registrar at its sole cost and
expense for all such Registrable Securities not later than the effective
date of such Registration Statement;
(g) advise each seller of such Registrable Securities, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance of any
stop order by the SEC suspending the effectiveness of such Registration
Statement or the initiation or threatening of any proceeding for such
purpose and promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order
should be issued; and
(h) notify Buyers at any time when a prospectus relating to such
Registration Statement is required to be delivered under the Securities
Act, of the
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happening of any event as a result of which the prospectus included in such
Registration Statement, as then in effect, includes a Misstatement, and
then to correct such Misstatement as set forth in Section 3.05.
3.02 Registration Expenses. The Registration Expenses of all Registrations
shall be borne by the Company. It is acknowledged by Buyers that Buyers will
bear all incremental selling expenses relating to the sale of the Registrable
Securities, such as underwriters' commissions and discounts, brokerage fees,
underwriter marketing costs and all fees and expenses of any legal counsel
representing Buyers.
3.03 Requirements for Participation in Underwritten Offerings. No person
may participate in any Underwritten Offering for equity securities of the
Company pursuant to a Registration initiated by the Company hereunder unless
such Person (a) agrees to sell such Person's securities on the basis provided in
any underwriting arrangements approved by the Company and (b) completes and
executes all questionnaires, powers of attorney, indemnities, lock-up
agreements, underwriting agreements and other documents required under the terms
of such underwriting arrangements.
3.04 Suspension of Sales. Upon receipt of written notice from the Company
that a Registration Statement or Prospectus contains a Misstatement, Buyers
shall forthwith discontinue disposition of Registrable Securities until it has
received copies of a supplemented or amended Prospectus correcting the
Misstatement (it being understood that the Company hereby covenants to prepare
and file such supplement or amendment as soon as practicable after the time of
such notice), or until it is advised in writing by the Company that the use of
the Prospectus may be resumed.
3.05 Reporting Obligations. As long as any Buyer shall own Registrable
Securities, the Company, at all times while it shall be reporting under the
Exchange Act, covenants to file timely (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to Section 13(a) or 15(d) of the
Exchange Act and to promptly furnish Buyers with true and complete copies of all
such filings. The Company further covenants that it will take such further
action as Buyers may reasonably request, all to the extent required from time to
time to enable Buyers to sell shares of Common Stock held by Buyers without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 promulgated under the Securities Act ("Rule 144"),
including providing any legal opinions. Upon the request of Buyers, the Company
shall deliver to Buyers a written certification of a duly authorized officer as
to whether it has complied with such requirements.
3.06 Indemnification.
(a) The Company agrees to indemnify, to the extent permitted by law,
each Buyer, its officers and directors and each Person who controls such
Buyers (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses (including attorneys' fees)
caused by any untrue or alleged untrue statement of material fact contained
in any Registration Statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar
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as the same are caused by or contained in any information furnished in
writing to the Company by such Buyer expressly for use therein or by such
Buyer's failure to deliver a copy of the Registration Statement or
prospectus or any amendments or supplements thereto after the Company has
furnished such Buyers with a sufficient number of copies of the same. The
Company will indemnify the underwriters, their officers and directors and
each Person who controls such underwriters (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
indemnification of Buyer.
(b) In connection with any Registration Statement in which a Buyer of
Registrable Securities is participating, such Buyer will furnish to the
Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such Registration
Statement or prospectus and, to the extent permitted by law, will indemnify
the Company, its directors and officers and agents and each Person who
controls the Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses (including without
limitation reasonable attorneys' fees) resulting from any untrue statement
of material fact contained in the Registration Statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or
any omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that
such untrue statement or omission is contained in any information or
affidavit so furnished in writing by such Buyer expressly for use therein;
provided, that the obligation to indemnify will be several, not joint and
several, among such Buyer of Registrable Securities, and the liability of
each such Buyer of Registrable Securities will be in proportion to and
limited to the gross amount received by such Buyer from the sale or
Registrable Securities pursuant to such Registration Statement. Each Buyer
of Registrable Securities will indemnify the underwriters, their officers,
directors and each Person who controls such underwriters (within the
meaning of the Securities Act) to the same extent as provided above with
respect to indemnification of the Company.
(c) Any person entitled to indemnification herein will (i) give
prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified
and indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent (but such
consent will not be unreasonably withheld). An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim will not
be obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party or the counsel a
conflict of interest may exist between such indemnified party and any other
of such indemnified parties with respect to such claim.
(d) The indemnification provided for under this Schedule A will
remain in full force and effect regardless of any investigation made by or
on behalf of the
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indemnified party or any officer, director or controlling person of such
indemnified party and will survive the transfer of securities. The Company
and each Buyer of Registrable Securities participating in the offering also
agrees to make such provisions as are reasonably requested by any
indemnified party for contribution to such party in the event the Company's
or such Buyer's indemnification is unavailable for any reason.
Restrictions on Public Sales. In consideration of the agreements contemplated
herein, each Buyer further agrees that if the Company or the managing
underwriters so request in connection with any underwritten registration of the
Company' securities, will not, without the prior written consent of the Company
or such underwriters, effect any sale of the Registrable Securities to the
public pursuant to a public offering or otherwise or other distribution of any
equity securities of the Company, including any sale pursuant to Rule 144 (each
of the foregoing, a "Prohibited Sale"), during the seven (7) days prior to, and
during the one hundred eighty (180) day period commencing on, the effective date
of such underwritten registration, except in connection with such underwritten
registration; provided, that the restrictions regarding a Prohibited Sale shall
not apply to restrict the sale by any Stockholder who together with any of its
Affiliates, as such term is defined in the Securities Act, holds less than one
percent (1.0%) of the Common Stock on a fully diluted basis.
ARTICLE IV
MISCELLANEOUS
4.01 Notices. All notices and other communications provided for or
permitted hereunder shall be made in accordance with the notice provisions
contained in the Purchase Agreement.
4.02 Successors and Assigns. The rights granted under this Schedule A shall
inure to the benefit of and be binding upon the successors and assigns of the
Company. No rights under this Schedule A may be assigned by any Buyer without
the prior written consent of the Company.
4.03 GOVERNING LAW; VENUE. NOTWITHSTANDING THE PLACE WHERE THE STOCK
PURCHASE AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES
EXPRESSLY AGREE THAT THIS SCHEDULE A SHALL BE GOVERNED BY AND CONSTRUED UNDER
THE LAWS OF THE STATE OF DELAWARE AS APPLIED TO SCHEDULE AS AMONG DELAWARE
RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN DELAWARE, WITHOUT
REGARD TO THE CONFLICT OF LAW PROVISIONS OF SUCH JURISDICTION. VENUE FOR ANY
ACTION TO ENFORCE, INTERPRET, OR RESOLVE ANY DISPUTE WITH RESPECT TO ANY
PROVISION OF THIS SCHEDULE A SHALL BE EXCLUSIVELY IN XXXXXX COUNTY, MISSOURI,
AND ALL PARTIES HERETO AGREE THAT ANY LITIGATION DIRECTLY OR INDIRECTLY RELATING
TO THIS SCHEDULE A MUST BE BROUGHT BEFORE AND DETERMINED BY A COURT OF COMPETENT
JURISDICTION WITHIN SUCH COUNTY AND STATE. EACH OF THE PARTIES FURTHER
ACKNOWLEDGE THAT SUCH VENUE IS APPROPRIATE AND AGREE NOT TO RAISE ANY ARGUMENT
THAT SUCH VENUE IS IN ANY WAY UNDULY INCONVENIENT FOR ANY OF THEM, WITH THEIR
EXECUTION HEREOF BEING
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EVIDENCE OF THEIR AGREEMENT TO SUBMIT TO THE JURISDICTION OF SUCH COURTS.
4.04 Amendments and Modifications. Upon the written consent of Buyer,
compliance with any of the provisions, covenants and conditions set forth in
this Schedule A may be waived, or any of such provisions, covenants or
conditions may be modified. No course of dealing between Buyer or the Company
and any other party hereto or, amended or deleted any failure or delay on the
part of Buyer or the Company in exercising any rights or remedies under this
Schedule A shall operate as a waiver of any rights or remedies of Buyer or the
Company. No single or partial exercise of any rights or remedies under this
Schedule A by a party shall operate as a waiver or preclude the exercise of any
other rights or remedies hereunder or thereunder by such party.
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Schedule B
Purchaser No. of Shares Aggregate Price (price per
share)
H. Xxxxxx Xxxxxx Trust of 1983 200,000 $199,580.00 ($.9979)
Xxxxxxx Xxxxx Xxxxxx 33,500 $335 ($0.01)
Xxxxxxxx Xxxxxx Xxxxxx 16,750 $167.50 ($0.01)
Xxxxx May Essers, a married 16,750 $167.50 ($0.01)
woman, as her sole and separate
property
TOTAL 267,000 $200,250.00 ($0.75)
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