AMENDMENTS TO ASSET PURCHASE AGREEMENT
November 23, 1999
The following amendments dated November 23, 1999 are made to the Asset Purchase
Agreement among Compu-Xxxx, Inc., GPC Acquisition Corp., Global PC, Inc., Xxxx
Xxxxxxx and Xxxxx Xxxxxxxxx, dated July 30, 1999, as amended on September 24,
1999 and September 26, 1999.
_____________________________________________________________________
SECTION AMENDMENT
________________________________________________________________________
1. Heading Change "Xxxxx" Xxxxxxxxx to "Xxxxx" Xxxxxxxxx.
2. Section 2 Change paragraph to read "Seller is engaged in the business of
Recitals, First developing and marketing certain proprietary user interface and
Paragraph application computer and Internet software (the "Business"), including
a Graphical Operating System called GEOS(R) ("GEOS(R)") which,
together with user interface and application software is utilized in a low
cost Internet and computing appliance (the "Global PC Device") and
associated web portal ("Global PC Online")".
3. Section 2.3.1 The following sentence is added at the end of the Section:
Additionally, the Purchaser or Compu-XXXX shall pay Seller an
amount not to exceed the total tax liability amount set forth on
Schedule 3.9 plus $10,000 (the "Cash Purchase Price"), which proceeds
shall be used by Seller only and specifically to satisfy the tax liabilities
set forth on Schedule 3.9.
4. Section 2.3.2(b) Reference to delivery of Common Shares and/or Warrants at Closing
shall be changed to delivery of Common Shares and/or Warrants within
thirty (30) days after Closing.
5. Section 2.3.2 A new Section 2.3.2(c) is added as follows: 2.3.2(c) the Cash Purchase
Price shall be delivered to the Seller at the Closing.
6. Section 3.10.1 December Balance Sheet refers to December 1998 in all cases.
7. Section 3.11 and Insurance Schedule is complete, but policies have lapsed due to the
Section 5.1(c) length required to close the asset purchase agreement amendments.
Cancelled insurance policies and lapsed policies are listed in Schedule
3.11.
8. Section 3.23(a) Change the phrase "To the best of Sellers' and/or either Principal
Shareholder respective knowledge, Seller is in compliance" to "To the
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best of Seller's and/or either Principal Shareholder's
respective knowledge, except as set forth in Schedule
3.9, Seller is in compliance".
9. Section 5.1(i) Change the opening phrase from "For as long as this Agreement shall
remain in effect and until terminated in accordance with its terms" to
"for as long as this Agreement and any amendments thereto shall
remain in effect and until the earlier of (A) the closing of this
Agreement as amended and as may be amended, or (B) it is terminated
in accordance with its terms".
10. Section 8.5 Change reference from "without limitation the GEOS(R) License
Agreement" to "without limitation a new GEOS(R) License Agreement".
11. Section 8.9 Change phrase from "Seller shall be satisfied with the amounts" to
"Except as set forth in Schedule 3.9, Purchaser shall be satisfied with
the amounts".
12. Section 8.12 Paragraph should be changed to read "Seller shall have agreements
with a sufficient number of its creditors such that its total trade and
accounts payable and other liabilities can be liquidated by the amount
approved by Compu-XXXX.
13. Section 8.23 Paragraph should be changed to read:
Escrow Agreement. Seller and the Representative shall have executed
and tendered to Compu-XXXX an escrow agreement (the "Escrow
Agreement") in the form and substance reasonably acceptable to
Compu-XXXX, Purchaser, Seller and the Principal Shareholders,
providing for, among other things, that the Common Shares and
Warrants of Compu-XXXX issuable to the Persons set forth on
Schedule 8.23 on account of a portion of the Purchase Price as provided
in Section 2.3.2(a) hereof, as provided for below (the "Escrow
Securities"), will be placed in escrow with an escrow agent satisfactory
to Compu-XXXX and held in accordance with the terms set forth
below and shall be held as security for the indemnification obligations
of the Principal Shareholders pursuant to Section 12.2.1 hereof for a
period of eleven (11) months from the Closing Date.
14. Section 10.1 Change the date September 30, 1999 (as amended to November 30,
1999) to December 31, 1999.
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15. Section 10.3 (b) These sections are deleted (because the Closing Common Shares and
and (c) Closing Warrants will be delivered within thirty (30) days after
Closing).
16. Section 10.3(e) Replace the reference to "Schedule 10.3(e)" with "Schedule 9.7".
17. Section 11.4 Paragraph should be changed to read:
Board Position. The Board of Directors of Compu-XXXX shall be
comprised of seven (7) directors following the Closing. The two (2)
vacancies currently on the Board shall be filled by Xxxxx Xxxxxxxxx
and Xxxx Xxxxxxx at the Closing. Compu-XXXX will use best efforts
to cause seat to be vacated by a current Compu-XXXX employee
board member and cause such seat to be filled by a new qualified and
valuable outside board member in the future which would thereafter
make the composition of the board two Compu-XXXX employees, two
former Global PC employees and three outside board members.
18. Section 11.5(ii)(A) For the purposes of this restrictive clause, a Competitive Business will
be defined as any Business developing and/or selling a non
Windows/Macintosh PC combined with Internet Portal connectivity
that targets the home market.
For the purposes of this restrictive clause and all other restrictive
clauses in this Agreement, the definition of Competitive Business will
exclude Wink Communications and PlanetWeb. It was disclosed prior
to the signing of the Letter of Intent that Xxxxx Xxxxxxxxx is currently
on the Board of Directors and has active participation in both Wink
Communications and PlanetWeb.
19. Section 11.5(B) Change restrictive period from "two (2) years" to "one (1) year".
20. Section 11.7 Change the phrase "fund the pre-rollout market to "rollout market".
21. Section 15.1 The term "Subscription Agreement" in this Section and where
referenced throughout the Agreement is changed to "Subscription and
Registration Rights Agreement".
22. Section 16.7 Change Compu-XXXX address to read:
000 Xxxxx 0xx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Chairman of the Board
Telecopier: (000) 000-0000
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23. New Article XVII A new Article XVII is added to the Asset Purchase Agreement, which
shall read in its entirety as follows:
Registration Rights. The Subscription and Registration Rights
Agreements shall have the following provisions relating to registration
of the Common Shares and Warrant Shares in, or substantially in, the
form annexed hereto as Schedule 23.
24. Schedule 2.3.2(a)(i) Replace original Schedule 2.3.2(a)(i) with Schedule 2.3.2(i) dated Nov.
23, 1999.
25. Schedule 2.3.2(a)(ii) Replace original Schedule 2.3.2(a)(ii) with Schedule 2.3.2(a)(ii) dated
Nov. 23, 1999.
26. Schedule 2.4.1 Replace original Schedule 2.4.1 with Schedule 2.4.1 dated Nov. 23, 1999.
27. Schedule 3.1 Replace original Schedule 3.1 with Schedule 3.1 dated Nov. 23, 1999.
28. Schedule 3.2 Replace original Schedule 3.2 with Schedule 3.2 dated Nov. 23, 1999.
29. Schedule 3.3 Replace original Schedule 3.3 with Schedule 3.3 dated Nov. 23, 1999.
30. Schedule 3.5 Replace original Schedule 3.5 with Schedule 3.5 dated Nov. 23, 1999.
31. Schedule 3.6 Replace original Schedule 3.6 with Schedule 3.6 dated Nov. 23, 1999.
32. Schedule 3.7 Replace original Schedule 3.7 with Schedule 3.7 dated Nov. 23,1999.
33. Schedule 3.8 Replace original Schedule 3.8 with Schedule 3.8 dated Nov. 23, 1999.
34. Schedule 3.9 Replace original Schedule 3.9 with Schedule 3.9 dated Nov. 23, 1999.
35. Schedule 3.10.1 Replace original Schedule 3.10.1 with Schedule 3.10.1 dated Nov. 23,
1999.
36. Schedule 3.10.2 Replace original Schedule 3.10.2 with Schedule 3.10.2 dated Nov. 23,
1999.
37. Schedule 3.11 Replace original Schedule 3.11 with Schedule 3.11 dated Nov. 23,
1999.
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38. Schedule 3.12 Replace original Schedule 3.12 with Schedule 3.12 dated Nov. 23,
1999.
39. Schedule 3.13 Replace original Schedule 3.13 with Schedule 3.13 dated Nov. 23,
1999.
40. Schedule 3.14 Replace original Schedule 3.14 with Schedule 3.14 dated Nov. 23,
1999.
41. Schedule 3.16 Replace original Schedule 3.16 with Schedule 3.16 dated Nov. 23,
1999.
42. Schedule 3.19 Replace original Schedule 3.19 with Schedule 3.19 dated Nov. 23,
1999.
43. Schedule 3.23 Replace original Schedule 3.23 with Schedule 3.23 dated Nov. 23,
1999.
44. Schedule 3.25 Replace original Schedule 3.25 with Schedule 3.25 dated Nov. 23,
1999.
45. Schedule 4.3 Replace original Schedule 4.3 with Schedule 4.3 dated Nov. 23, 1999.
46. Schedule 8.11 Replace original Schedule 8.11 with Schedule 8.11 dated Nov. 23,
1999.
47. Schedule 8.23 Replace original Schedule 8.23 with Schedule 8.23 dated Nov. 23,
1999.
48. Schedule 9.7 Replace original Schedule 9.7 with Schedule 9.7 dated Nov. 23, 1999.
49. Exhibit 2.3.1(a) Replace original Exhibit 2.3.1(a) with revised Exhibit 2.3.1(a) (Form of
Class A Warrant) attached hereto.
50. Exhibit 2.3.1(b) Replace original Exhibit 2.3.1(b) with revised Exhibit 2.3.1(b) (Form of
Class B Warrant) attached hereto.
51. Exhibit 2.3.1(c) Replace original Exhibit 2.3.1(c) with revised Exhibit 2.3.1(c) (Form of
Class C Warrant) attached hereto.
52. All other terms of the Asset Purchase Agreement as amended on September
24,1999 and September 26, 1999 shall remain and continue in full force and
effect as amended hereby.
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WITNESS the execution of these Amendments as of the date first above
written.
COMPU-XXXX, INC.
By: /s/ Xxxx X. Theale
----------------------
GPC ACQUISITION CORP.
By: /s/ Xxxx X. Theale
----------------------
GLOBAL P.C.
By: /s/ Xxxx Xxxxxxx
--------------------
/s/ Xxxx Xxxxxxx
----------------
XXXX XXXXXXX
/s/ Xxxxx Xxxxxxxxx
-------------------
XXXXX XXXXXXXXX
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AMENDMENTS TO ASSET PURCHASE AGREEMENTS
November 23, 1999
SCHEDULE 23
5.1 Registration Rights
(a) Compu-XXXX Obligations.
i. Registration.
A. If at any time after the date hereof Compu-XXXX shall
file with the Securities and Exchange Commission (the
"SEC") a registration statement (a "Piggy-back
Registration Statement") under the Securities Act
relating to an offering for its own account or the
account of others under the Securities Act of any of
its equity securities (other than on Form S-4 or Form
S-8 or their then equivalents relating to equity
securities to be issued solely in connection with any
acquisition of any entity or business or equity
securities issuable in connection with stock option or
other employee benefit plans), Compu-XXXX shall send to
the Subscribers written notice of such determination
and, if within fifteen (15) days after the date of such
notice, any Subscriber shall so request in writing,
Compu-XXXX shall include in such Piggy-Back
Registration Statement all or any part of the Common
Shares and/or Warrant Shares (collectively the
"Registrable Securities") such Subscriber requests to
be registered, except that if, in connection with any
underwritten public offering, the managing
underwriter(s) thereof shall impose a limitation on the
number of Registrable Securities which may be included
in the Piggy-Back Registration Statement (the
"Underwriter Cutback") because, in such underwriter(s)'
judgment, marketing or other factors dictate such
limitation is necessary to facilitate public
distribution, then Compu-XXXX shall be obligated to
include in such Piggy-Back Registration Statement only
such limited portion of the as the underwriter shall
permit (limited to zero if necessary).
B. The provisions of Section 5.1(a)(i)(a) notwithstanding,
if Compu- XXXX has not previously filed one or more
Piggy-back Registration Statements covering the resale
of all of the Registrable Securities then, if (I)
Compu-XXXX receives a request from Subscribers who are
holders of at least 100,000 Registrable Securities, or
(II) if all the Subscribers hold in the aggregate less
than 199,999 Registrable Securities, Compu-XXXX
receives a request from Subscribers who are holders of
a majority of the Registrable Securities, Compu-XXXX
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shall on no more than two (2) occassions in each
calendar year, commencing on May 15, 2000, prepare
and file with the SEC a registration statement (a
"Mandatory Registration Statement" and singly and
collectively with any Piggyback Registration
Statement(s) sometimes referred to as the "Registration
Statement") covering the resale of the Registrable
Securities. The Company may register the resale of any
other of its securities on any such Mandatory
Registration Statement. The Company shall use
reasonable best efforts to cause the Mandatory
Registration Statement to become effective as soon as
is practicable after the filing thereof, but in no
event later than the one hundredth and twentieth
(120th) day following the date of the filing thereof,
provided however, that in no event shall Compu-XXXX be
required to file a Mandatory Registration Statement if
it is undertaking an underwritten public offering which
has not closed, and in such case, the date that
Compu-XXXX is required to file the Mandatory
Registration Statement hereunder shall be extended
until the thirtieth (30th) day after the underwritten
offering is closed and the distribution of the
securities in such underwritten public offering is
complete.
C. If an offering in connection with which an Subscriber
is entitled to registration under this Section
5.1(a)(i) is an underwritten offering, then such
Subscriber shall, unless otherwise agreed by
Compu-XXXX, offer and sell such Registrable Securities
in an underwritten offering using the same underwriter
or underwriters and, subject to the provisions of the
Subscription and Registration Rights Agreement relating
to the applicable Subscriber, on the same terms and
conditions as other like securities included in such
underwritten offering.
ii. Amendments and Supplements; Maintain Effectiveness.
Compu-XXXX shall prepare and file with the SEC such
amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus
used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at
all times for a period of six (6) months following the
effective date thereof (the "Registration Period"), except
during any Disclosure Delay Period (as defined in Section
5.1(a)(iii), and, during such period, comply with the
provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by the
Registration Statement until such time as all of such
Registrable Securities have been disposed of in accordance
with the intended methods of disposition by the Subscriber
who is the holder thereof (for the purposes of this Section
5 each a "Holder") as set forth in the Registration
Statement.
iii. Disclosure Delay Period. If, at any time prior to the
expiration of the
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Registration Period, in the good faith reasonable judgment
of Compu-DAWN's Board of Directors, the disposition of
Registrable Securities would require the premature
disclosure of material non-public information which may
reasonably be expected to have an adverse effect on
Compu-XXXX, then Compu-XXXX shall not be required to
maintain the effectiveness of or amend or supplement the
Registration Statement for a period (a "Disclosure Delay
Period") expiring upon the earlier to occur of (A) the date
on which such material information is disclosed to the
public or ceases to be material or (B) subject to Section
5.1(a)(iv) hereof, up to sixty (60) calendar days after the
date on which Compu-XXXX provides a notice to the Holders
under Section 5.1(a)(iv) hereof stating that the failure to
disclose such non-public information causes the prospectus
included in the Registration Statement, as then in effect,
to include an untrue statement of a material fact or to omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
iv. Notice of Disclosure Delay Period. Compu-XXXX will give
prompt written notice, to each Holder of each Disclosure
Delay Period. Each Holder agrees that, upon receipt of such
notice prior to such Holder's disposition of all such
Registrable Securities will forthwith discontinue
disposition of such Registrable Securities pursuant to the
Registration Statement, and will not deliver any prospectus
forming a part thereof in connection with any sale of such
Registrable Securities until the expiration of such
Disclosure Delay Period. Notwithstanding anything in this
Section 5.1 to the contrary, there shall not be more than an
aggregate of One Hundred Twenty (120) calendar days in any
twelve (12) month period during which Compu-XXXX is in a
Disclosure Delay Period.
v. Copies of Filings and Correspondence. Compu-XXXX shall
furnish to Holder (A) promptly after the same is prepared
and publicly distributed, filed with the SEC, or received by
Compu-XXXX, one copy of the Registration Statement and any
amendment thereto, each preliminary prospectus and
prospectus and each amendment or supplement thereto, and
each item of correspondence from the SEC or the staff of the
SEC which comments upon or requests information relating to
such Holder and/or the Registrable Securities (including,
without limitation, the resale and plan of distribution
hereof), in each case relating to such Registration
Statement (other than any portion, if any, thereof which
contains information for which Compu-XXXX has sought
confidential treatment), (B) on the date of effectiveness of
the Registration Statement or any amendment thereto, a
notice stating that the Registration Statement or amendment
has been declared effective, and (C) such number of copies
of a prospectus, including a preliminary prospectus, and all
amendments and supplements thereto and such other documents
as such Holder may reasonably
9
request in order to facilitate the disposition of the Common
Shares by Holder.
vi. Blue Sky. Compu-XXXX shall use its best efforts to (A)
register and qualify the Registrable Securities covered by
the Registration Statement under such other securities or
"blue sky" laws of such jurisdictions in the United States
as Holders of a majority of the Registrable Securities
reasonably request, (B) prepare and file in those
jurisdictions such amendments (including post- effective
amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (C)
take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times
during the Registration Period, and (D) take all other
actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions;
provided, however, that Compu-XXXX shall not be required in
connection therewith or as a condition thereto to (A)
qualify to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section
5.1(a)(vi), (B) subject itself to general taxation in any
such jurisdiction, (C) file a general consent to service of
process in any such jurisdiction, (D) provide any
undertakings that cause Compu-XXXX undue expense or burden,
or (E) make any change in its charter or bylaws, which in
each case the Board of Directors of Compu-XXXX determines to
be contrary to the best interests of Compu-XXXX and its
stockholders.
vii. Events Affecting Prospectus. As promptly as practicable
after becoming aware of such event, Compu-XXXX shall notify
the Holders of the happening of any event, of which
Compu-XXXX has knowledge, as a result of which the
prospectus included in the Registration Statement, as then
in effect, includes an untrue statement of a material fact
or omission to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and if such Registration Statement is
supplemented or amended to correct such untrue statement or
omission, to deliver such number as such Holders may
reasonably request.
viii.Notification of Amendment or Supplement. Compu-XXXX shall,
as promptly as practical after becoming aware of such event
described in Section 5.1(vii), notify the Holders of the
issuance of such order and the resolution thereof (and if
such Registration Statement is supplemented or amended,
deliver such number of copies of such supplement or
amendment to such Holders as they may reasonably request).
ix. Review by Holders' Counsel. Compu-XXXX shall permit a single
firm of counsel designated by the Holders holding a majority
of the Registrable Securities to review the Registration
Statement and all amendments and
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supplements thereto a reasonable period of time prior to
their filing with the SEC.
x. Holders' Due Diligence; Confidentiality of Compu-XXXX
Information. Compu-XXXX shall make available for inspection
by (A) the Holders, (B) one firm of attorneys and one firm
of accountants or other agents retained by the Holders
holding a majority of the Registrable Securities
(collectively, the "Inspectors") all pertinent financial and
other records, and pertinent corporate documents and
properties of Compu-XXXX (collectively, the "Records"), as
shall be reasonably deemed necessary by each Inspector to
enable each Inspector to exercise its due diligence
responsibility, and cause Compu- DAWN's officers, directors
and employees to supply all information which the Holders
holding a majority of the Registrable Securities may
reasonably request for purposes of such due diligence;
provided, however, that each Inspector shall hold in
confidence and shall not make any disclosure (except to the
Holders) of any record or other information which Compu-XXXX
determines in good faith to be confidential, and of which
determination the Inspector so notified, unless (A) the
disclosure of such records is necessary to avoid or correct
a misstatement or omission in any Registration Statement,
(B) the release of such records is ordered pursuant to a
subpoena or other order from a court or government body of
competent jurisdiction, or (C) the information in such
records has been made generally available to the public
other than by disclosure in violation of this or any other
agreement. Compu- XXXX shall not be required to disclose any
confidential information in such records to any Inspector
until and unless such Inspector shall have entered into a
confidentiality agreements with Compu-XXXX with respect
thereto, substantially in the form of this Section
5.1(a)(x). ATS agrees that it shall, upon learning that
disclosure of such records is sought in or by a court or
governmental body of competent jurisdiction or through other
means, give prompt notice to Compu-XXXX and allow
Compu-XXXX, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order
for, the records deemed confidential. Nothing herein shall
be deemed to limit the Holder's ability to sell Common
Shares in a manner which is otherwise consistent with
applicable laws and regulations.
xi. Confidentiality of the Holder's Information. Compu-XXXX
shall hold in confidence and not make any disclosure of
information concerning any Holder provided to Compu-XXXX
unless (A) disclosure of such information is necessary to
comply with federal or state securities laws, (B) the
disclosure of such information is necessary to avoid or
correct a misstatement or omission in any Registration
Statement, (C) the release of such information is ordered
pursuant to a subpoena or other order from a court or
governmental body of competent jurisdiction, (D) such
information has been made generally
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available to the public other than by disclosure in
violation of this or any other agreement, or (E) the
applicable Holder consents to the form and content of any
such disclosure. Compu-XXXX agrees that it shall, upon
learning that disclosure of such information concerning such
holder is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt
notice to such Holder prior to making such disclosure, and
allow such Holder, at its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective
order for, such information.
xii. Compliance with Laws. Compu-XXXX shall comply with all
applicable laws related to a Registration Statement and
offering and sale of securities and all applicable rules and
regulations of governmental authorities in connection
therewith (including, without limitation, the Securities Act
and the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the SEC.)
(b) Obligations of the Holders. In connection with a registration
of the Registable Securities the Holders shall have the following
obligations:
i. Holder's Information. It shall be a condition precedent to the
obligations of Compu-XXXX to complete the registration pursuant
to Section 5.1 that each Holder shall furnish to Compu-XXXX such
information regarding itself, the Registrable Securities and the
intended method of disposition of the as shall be required to
effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as
Compu- XXXX may reasonably request. At least five (5) business
days prior to the first anticipated filing date of the
Registration Statement, Compu-XXXX shall notify the Holders of
the information Compu-XXXX requires from the Holders.
ii. Cooperation. Each Holder agrees to cooperate with Compu-XXXX as
requested by Compu-XXXX in connection with the preparation and
filing of the Registration Statement hereunder, unless such
Holder does not include any of his, hers or its Registrable
Securities in the Registration Statement.
iii. Underwritten Offering. In the event a Holder determines to engage
the services of an underwriter, such Holder agrees to enter into
and perform its obligations under an underwriting agreement, in
usual and customary form, including, without limitation,
customary indemnification and contribution obligations, with the
managing underwriter of such offering and take such other actions
as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities.
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iv No Disposition of Registable Securities. Each Holder agrees that,
upon receipt of any notice from Compu-XXXX of the happening of
any event of the kind described in Sections 5.1(a)(vii) or
5.1(a)(viii), such Holder will immediately discontinue
disposition of Registrable Securities pursuant to the
Registration Statement covering the resale of such Registrable
Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Sections
5.1(a)(vii) or 5.1(a)(viii) and, if so directed by Compu-XXXX,
each Holder shall deliver to Compu-XXXX or destroy (and deliver
to Compu-XXXX a certificate of destruction) all copies in such
Holder's possession, of the prospectus covering such Common
Shares current at the time of receipt of such notice.
v. Method of Underwritten Distribution. Each Holder may not
participate in any underwritten distribution of the Common Shares
unless such Holder (A) agrees to sell the Common Shares on the
basis provided in any underwriting arrangements in usual and
customary form entered into by Compu-XXXX, (B) completes, in a
manner reasonably acceptable to Compu-XXXX, and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the
terms of such underwriting arrangements, and (C) agrees to pay
its pro rata share of all underwriting discounts and commissions
and any expenses in excess of those payable by Compu-XXXX
pursuant to Section 5.1(c) below.
(c) Expenses of Registration. All reasonable expenses, other than
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications, relating to two (2)
Registration Statements pursuant to Section 5.1, except that if a
portion of ATS Shares are not permitted to be included in two (2)
Registration Statements by an underwriter as provided in Section
5.1(a)(i), then relating to the least number of Registration
Statements which will cover the resale of all the Registrable
Securities, including all registration, listing and qualifications
fees, printers and accounting fees, the fees and disbursements of
counsel for Compu-XXXX hereof, shall be borne by Compu-XXXX.
(d) Indemnification. In the event any Registrable Securities are
included for resale in a Registration Statement under this Agreement:
i. Compu-XXXX Indemnification. To the extent permitted by law,
Compu- XXXX will indemnify, hold harmless and defend (A) the
Holder and (B) the directors, officers, partners, members,
employees, agents and each person who controls any non-individual
holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, if any, (each, an "Indemnified
Person"), against any joint or several losses, claims, damages,
liabilities or expenses (collectively, together with actions,
proceedings or inquiries by any regulatory or self-regulatory
organization, whether
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commenced or threatened, in respect thereof, "Claims") to which
any of them may become subject insofar as such Claims arise out
of or are based upon: (A) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or the
omission or alleged omission to state therein a material fact
required to be stated or necessary to make the statements therein
not misleading, (B) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary
prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as
amended or supplemented, if Compu-XXXX files any amendment
thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances
under which the statements therein were made, not misleading, or
(C) any violation or alleged violation by Compu-XXXX of the
Securities Act, the Exchange Act, any other applicable securities
law, including, without limitation, any state securities law, or
any rule or regulation thereunder relating to the offer or sale
of the Common Shares (the matters in the foregoing clauses (A)
through (C) being, collectively, "Violations"). Subject to the
restrictions set forth in Section 5.1(d)(iii) with respect to the
number of legal counsel, Compu-XXXX shall reimburse the Holder
and each other Indemnified Person, promptly as such expenses are
incurred and are due and payable, for any reasonable legal fees
or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification
agreement contained in this Section 5.1(d)(i): (A) shall not
apply to a Claim arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information
furnished in writing to Compu-XXXX by such Indemnified Person
expressly for use in the Registration Statement or any such
amendment thereof or supplement thereto; (B) shall not apply to
amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of Compu-XXXX; and (C)
with respect to any preliminary prospectus, shall not inure to
the benefit of any Indemnified Person if the untrue statement or
omission of material fact contained in the preliminary prospectus
was corrected on a timely basis in the prospectus, as then
amended or supplemented, if such corrected prospectus was timely
made available by Compu-XXXX pursuant to Section 5.1(a)(v)
hereof, and the Indemnified Person was promptly advised in
writing not to use the incorrect prospectus prior to the use
giving rise to a Violation and such Indemnified Person,
notwithstanding such advice, used it. Such indemnity shall remain
in full force and effect regardless of any investigation made by
or on behalf of the Indemnified Person and shall survive the
transfer of the Registrable Securities by the Holder.
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ii. Holder's Indemnification. In connection with any Registration
Statement in which the Holder is participating, each Holder
agrees to indemnify, hold harmless and defend, to the same extent
and in the same manner set forth in Section 5.1(d)(i),
Compu-XXXX, each of its directors, each of its officers who signs
the Registration Statement, its employees, agents and each
person, if any, who controls Compu-XXXX within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act, and any other stockholder selling securities pursuant to the
Registration Statement or any of its directors or officers or any
person who controls such stockholder within the meaning of the
Securities Act or the Exchange Act (collectively and together
with an Indemnified Person, an "Indemnified Party"), against any
Claim to which any of them may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such
Claim arises out of or is based upon any Violation, in each case
to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information
furnished to Compu- XXXX by such Holder expressly for use in
connection with such Registration Statement, and subject to
Section 5.1(d)(iii), such Holder will reimburse any legal or
other expenses (promptly as such expenses are incurred and are
due and payable) reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 5.1(d)(ii)
shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of
such Holder, which consent shall not be unreasonably withheld.
Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of such Indemnified
Party and shall survive the transfer of the Registrable
Securities by such Holder.
iii. Procedure. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 5.1(d) of notice of the
commencement of any action (including any governmental action),
such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to made against any indemnifying party under
this Section 5.1(d), deliver to the indemnifying party a written
notice of the commencement thereof, and the indemnifying party
shall have the right to participate in, and, to the extent the
indemnifying party so desires, to assume control of the defense
thereof with counsel mutually satisfactory to the indemnifying
party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that such indemnifying party
shall not be entitled to assume such defense and an Indemnified
Person or Indemnified Party shall have the right to retain its
own counsel with the reasonable fees and expenses to be paid by
the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such
counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or
potential conflicts of interest between
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such Indemnified Person or Indemnified Party and any other party
represented by such counsel in such proceeding or the actual or
potential defendants in, or targets of, any such action include
both the Indemnified Person or the Indemnified Party and the
indemnifying party and any such Indemnified Person or Indemnified
Party reasonably determines that there may be legal defenses
available to such Indemnified Person or Indemnified Party which
are different from or in addition to those available to such
indemnifying party. The indemnifying party shall pay for only one
separate legal counsel for the Indemnified Persons or the
Indemnified Parties, as applicable, and such legal counsel shall
be selected by such Holder, if such Holder or any Indemnified
Person is entitled to indemnification hereunder, or by
Compu-XXXX, if Compu-XXXX or an Indemnified Party is entitled to
indemnification hereunder, as applicable. The failure to deliver
written notice to the indemnifying party within a reasonable time
of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section 5.1(d), except to the extent
that the indemnifying party is actually prejudiced in its ability
to defend such action. The indemnification required by this
Section 5.1(d) shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as
such expense, loss, damage or liability is incurred and is due
and payable.
(e) Contribution. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying
party agrees to make the maximum contribution with respect to any
amounts for which it would otherwise be liable under Section 5.1(d) to
the fullest extent permitted by law; provided, however, that no
contribution shall be made under circumstances where the indemnifying
party would not have been liable for indemnification under the fault
standards set forth in Section 5.1(d).
(f) Exemption from Registration. The provisions of Section 5.1(a)
through (e) notwithstanding, Compu-XXXX shall have no obligation to
register the resale of the Common Shares to the extent the Common
Shares may be resold without registration without violating Section 5
of the Securities Act pursuant to Rule 144 promulgated thereunder or
any other exemption or exception from registration under the
Securities Act.
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