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EXHIBIT 10.1
(FORM OF)
INVESTMENT AND DISTRIBUTION AGREEMENT
This INVESTMENT AND DISTRIBUTION AGREEMENT ("Agreement") is entered
into as of _______, 1999, by and between ▇▇▇▇▇▇ CORPORATION, a Nevada
corporation ("▇▇▇▇▇▇"), and ▇▇▇.▇▇▇ CORPORATION, a Nevada corporation ("▇▇▇.▇▇▇"
or the "Company").
R E C I T A L S:
▇. ▇▇▇▇▇▇, a public company whose common shares are traded on the New
York Stock Exchange, owns 1,000 shares of ▇▇▇.▇▇▇'s common stock, no par value,
constituting all of the issued and outstanding common stock of ▇▇▇.▇▇▇.
▇. ▇▇▇▇▇▇ desires to pursue Internet related opportunities through
▇▇▇.▇▇▇ and has determined to invest $8,000,000 in ▇▇▇.▇▇▇ to fund its start-up
costs and anticipated operating losses and for general corporate purposes,
provided that ▇▇▇.▇▇▇ first recapitalizes by (a) increasing its authorized
capital stock to 1,650,000,000 shares, consisting of 1,500,000,000 shares of
$0.001 par value common stock, and 150,000,000 shares of preferred stock
(including 10,000 shares of Series A Preferred Stock and 100,000 shares of
Series B Preferred Stock), all as more particularly set forth in the Restated
Articles of Incorporation (the "Articles") annexed hereto as Exhibit A and (b)
effecting a 50,000-for-one share stock split and exchange (with $0.001 par value
common stock being exchanged for outstanding no par value common stock) which
shall be accompanied by a $50,000 additional contribution of capital to ▇▇▇.▇▇▇
by ▇▇▇▇▇▇.
C. In consideration for ▇▇▇▇▇▇'▇ $8,000,000 investment, ▇▇▇.▇▇▇ will
issue to ▇▇▇▇▇▇ 10,000 shares of Series A Preferred Stock and 70,000 shares of
Series B Preferred Stock simultaneously with the closing of a rights offering
being conducted by its wholly-owned subsidiary, ▇▇▇.▇▇▇, to holders of record of
▇▇▇▇▇▇ common stock as of , 1999 (the "Rights Offering"), all as
described in a registration statement on Form S-1 (registration no. 333-76135)
filed with the Securities and Exchange Commission on April 13, 1999, as amended
(the "Registration Statement").
D. Each ▇▇▇▇▇▇ stockholder shall receive, at no cost, one right
("Right) for each share of ▇▇▇▇▇▇ common stock owned by such stockholder as of
the applicable record date.
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E. If the number of shares being issued to stockholders who are not
affiliates of ▇▇▇.▇▇▇ pursuant to exercised Rights or the market value of such
shares or the number of record holders who will receive such shares is
insufficient to meet the listing requirements of the Nasdaq National Market,
then ▇▇▇▇▇▇ will distribute not less than an aggregate of 150,000 shares of
▇▇▇.▇▇▇ Common Stock and up to a maximum of 3,000,000 shares of Common Stock to
persons owning ▇▇▇▇▇▇ Common Stock as of the applicable record date (the "Stock
Distribution").
F. The parties hereto have determined that it is necessary and
desirable to set forth certain agreements and undertakings between ▇▇▇▇▇▇ and
▇▇▇.▇▇▇ that will govern certain matters pertaining to and following the Rights
Offering and, if made, the Stock Distribution.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 GENERAL. As used in this Agreement, the following terms shall have
the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Affiliate" means a ▇▇▇.▇▇▇ Affiliate or a ▇▇▇▇▇▇ Affiliate, as the
case may be.
"Agent" means American Stock Transfer & Trust Company, the Subscription
Agent appointed by ▇▇▇.▇▇▇ to distribute the Rights and the shares purchased
pursuant to the exercise of the Rights.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banking institutions located in the State of New York are
authorized or obligated by law or executive order to close.
"Closing Date" means the second business day after the Rights
expire and the Agent issues shares of ▇▇▇.▇▇▇ Common Stock pursuant to Rights
that have been exercised and paid for.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
"Distribution Record Date" means the date established as the date
for taking a record of the Holders of ▇▇▇▇▇▇ common stock entitled to
participate in the Rights Offering and, if made, the Stock Distribution, which
date has been established as _______, 1999, subject to certain conditions.
"Group" means the ▇▇▇▇▇▇ Group or the ▇▇▇.▇▇▇ Group.
"Holders" means the holders of record of ▇▇▇▇▇▇ common stock as of
the Distribution Record Date.
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"Indemnifiable Losses" means all losses, liabilities, damages,
claims, demands, judgments or settlements of any nature or kind, known or
unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated,
including, without limitation, all reasonable costs and expenses (including,
without limitation, attorneys' fees, and defense and accounting costs) as such
costs are incurred relating thereto, incurred or suffered by an Indemnitee.
"Indemnifying Party" means a Person who or which is obligated
under this Agreement to provide indemnification to another Person under this
Agreement.
"Indemnitee" means a Person who or which is entitled to
indemnification under this Agreement.
"Indemnity Payment" means an amount that an Indemnifying Party
is required to pay to an Indemnitee pursuant to Article 3.
"Insurance Proceeds" means those monies received by an insured
from an insurance carrier or paid by an insurance carrier on behalf of the
insured, in either case, to the extent mutually agreed upon by ▇▇▇.▇▇▇ and
▇▇▇▇▇▇ acting reasonably, net of any applicable premium adjustment.
"Person" means an individual, a partnership, a joint venture,
a corporation, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency thereof.
"Registration Rights Agreement" means the Registration Rights
Agreement in the form of Exhibit B annexed hereto to be entered into by ▇▇▇▇▇▇
and ▇▇▇.▇▇▇.
"Representative" means with respect to any Person, any of such
Person's directors, officers, employees, agents, consultants, advisors,
accountants and attorneys.
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"Rights Offering" shall have the meaning set forth in the
recitals to this Agreement and is further described as the offering by ▇▇▇.▇▇▇
to ▇▇▇▇▇▇ stockholders to subscribe for and purchase shares of ▇▇▇.▇▇▇ common
stock pursuant to the exercise of Rights issued to such stockholders pursuant to
the Registration Statement after it has been declared effective under the
Securities Act.
"Rights Offering Documents" means collectively: (a) the
Registration Statement, including the Prospectus contained therein, (b) any
Prospectus subject to completion or any Prospectus filed with the SEC under Rule
424 under the Securities Act or any Term Sheet first filed pursuant to Rule
424(b)(7) under the Securities Act together with the preliminary Prospectus
identified therein which such Term Sheet supplements, used, in each case, in
connection with the offering of the Common Stock under the Registration
Statement, (c) any other filing made with the SEC by a member of the ▇▇▇.▇▇▇
Group in connection with the Rights Offering or (d) any amendment or supplement
to any of the documents described in clauses (a) through (c) of this definition.
"Securities Act" means the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Services Agreement" means the Services Agreement in the form
of Exhibit C annexed hereto to be entered into by ▇▇▇▇▇▇ and ▇▇▇.▇▇▇.
"Subsidiary" means, with respect to any specified Person, any
corporation or other legal entity of which such Person or any of its
subsidiaries Controls or owns, directly or indirectly, more than fifty percent
(50%) of the stock or other equity interest entitled to vote on the election of
members to the board of directors or similar governing body; provided, however,
that for purposes of this Distribution Agreement, neither ▇▇▇.▇▇▇ nor any
Subsidiary of ▇▇▇.▇▇▇ shall be deemed to be a Subsidiary of ▇▇▇▇▇▇ or of any
Subsidiary of ▇▇▇▇▇▇.
"Stock Distribution" shall have the meaning set forth in the
recitals to this Agreement.
"Tax" means as defined in the Tax Sharing and Indemnification
Agreement.
"Tax Sharing and Indemnity Agreement" means the Tax Sharing
and Indemnification Agreement in the form of Exhibit D annexed hereto to be
entered into by ▇▇▇▇▇▇ and ▇▇▇.▇▇▇.
"Third-Party Claim" means any claim, suit, arbitration,
inquiry, proceeding or investigation by or before any court, any governmental or
other regulatory or administrative agency or commission or any arbitration
tribunal asserted by a Person who is not a member of the ▇▇▇▇▇▇ Group or the
▇▇▇.▇▇▇ Group.
"▇▇▇.▇▇▇ Affiliate" means a Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by
▇▇▇.▇▇▇, provided, however, that for purposes of this Agreement none of the
following Persons shall be considered ▇▇▇.▇▇▇ Affiliates: (i) ▇▇▇▇▇▇ or any
Subsidiary of ▇▇▇▇▇▇ and (ii) any corporation less than fifty-one percent (51%)
of whose voting stock is directly or indirectly owned by
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▇▇▇.▇▇▇ and (iii) any partnership or joint venture less than fifty-one percent
(51%) of whose interests in profits and losses is directly or indirectly owned
by ▇▇▇.▇▇▇.
"▇▇▇.▇▇▇ Group" means, collectively, ▇▇▇.▇▇▇ and the ▇▇▇.▇▇▇
Affiliates, or any one or more of such companies.
"▇▇▇▇▇▇ Affiliate" means a Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by ▇▇▇▇▇▇;
provided, however, that for purposes of this Agreement none of the following
Persons shall be considered ▇▇▇▇▇▇ Affiliates: (i) ▇▇▇.▇▇▇ and any Subsidiary of
▇▇▇.▇▇▇, (ii) any corporation less than fifty-one percent (51%) of whose voting
stock is directly or indirectly owned by ▇▇▇▇▇▇ and (iii) any partnership or
joint venture less than fifty-one percent (51%) of whose interests in profits
and losses is directly or indirectly owned by ▇▇▇▇▇▇.
"▇▇▇▇▇▇ Group" means, collectively, ▇▇▇▇▇▇ and the ▇▇▇▇▇▇
Affiliates, or any one or more of such companies.
ARTICLE 2
▇▇▇▇▇▇'▇ INVESTMENT
2.1 PRELIMINARY ACTION.
(a) Registration Statement and Prospectus. ▇▇▇.▇▇▇ has
prepared and filed the ▇▇▇.▇▇▇ Registration Statement with the Commission.
Subject to the conditions set forth herein, ▇▇▇.▇▇▇ shall use reasonable efforts
to cause the Registration Statement to become effective under the Securities
Act. ▇▇▇.▇▇▇ has prepared and shall cause to be mailed, the Prospectus to the
Holders in connection with the Rights Offering and, if made, the Stock
Distribution, provided that a supplement shall be added to the Prospectus if
necessary prior to the completion of the Rights Offering and if necessary, in
connection with the Stock Distribution.
(b) Form 8-A. ▇▇▇.▇▇▇ has prepared and filed with the
Commission a Form 8-A which includes or incorporates by reference relevant
portions of the Registration Statement. Subject to the conditions set forth
herein, ▇▇▇.▇▇▇ shall use reasonable efforts to cause the Form 8-A to become
effective under the Securities Exchange Act of 1934.
(c) Blue Sky. ▇▇▇.▇▇▇ shall take all such action as may be
necessary or appropriate under the securities or blue sky laws of states or
other political subdivisions of the United States in connection with the Rights
Offering and Stock Distribution to permit such transactions to effected as
described in the Prospectus.
(d) Listing. ▇▇▇.▇▇▇ has prepared and filed an application to
effect the listing of the shares of common stock to be issued in connection with
the Rights Offering and, if made, the Stock Distribution on the Nasdaq National
Market. ▇▇▇.▇▇▇ shall use reasonable efforts to
cause the ▇▇▇.▇▇▇ shares to be so listed.
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(e) No Representations or Warranties; Consents. Each party
hereto understands and agrees that no party hereto is, in this Agreement or in
any other agreement or document contemplated by this Agreement or otherwise,
representing or warranting in any way that the obtaining of any consents or
approvals, the execution and delivery of any agreements or the making of any
filings or applications contemplated by this Agreement will satisfy the
provisions of any or all applicable laws. Notwithstanding the foregoing, the
parties shall use reasonable efforts to obtain all consents and approvals, to
enter into all agreements and to make all filings and applications which may be
required for the consummation of the transactions contemplated by this
Agreement, including, without limitation, all applicable regulatory filings or
consents under federal or state laws and all necessary consents, approvals,
agreements, filings and applications.
2.2 RECAPITALIZATION, AUTHORIZATION AND SALE OF SHARES AND RIGHTS.
(a) Recapitalization. The Company's Board of Directors and
sole stockholder has approved a plan of recapitalization pursuant to which (i)
▇▇▇.▇▇▇'s authorized capital stock shall be increased to 1,650,000,000 shares,
consisting of 1,500,000,000 shares of common stock, par value $.001, and
150,000,000 shares of preferred stock, par value $.01 per share (including
10,000 shares of Series A Preferred Stock and 100,000 shares Series B Preferred
Stock) and (ii) the company's 1,000 shares of common stock, no par value, which
will be split and exchanged for 50,000,000 shares of the Company's, par value
$.001, common stock, provided that ▇▇▇▇▇▇ first contributes to the Company
$50,000 in order to meet stated capital requirements under Nevada law.
(b) Authorization. The Company has authorized the sale and
issuance to Zapada of up to 10,000 shares of Series A preferred stock and 70,000
shares of Series B Preferred Shares, each series having the rights, preferences,
privileges and restrictions as set forth in the Articles. The Company has also
authorized the issuance of the Rights to holders of ▇▇▇▇▇▇ Common Stock as of
the applicable record sale as well the issuance of up to 13,612,000 shares of
common stock pursuant to exercised Rights. Each Right entitles the holder to
purchase one share of the Company's common stock at a price of $8.00 per share.
(c) Sale and Issuance of Shares. On the terms and subject to
the conditions set forth herein, the Company will issue and sell to ▇▇▇▇▇▇, and
▇▇▇▇▇▇ will purchase from the Company, 10,000 Series A Preferred Shares and
70,000 shares Series B preferred shares.
(d) Closings. The closing of the purchase and sale of the
Series A Preferred Shares and the Series B Preferred Shares (the "Closing")
shall be held at the Company's offices immediately prior to the closing of the
rights offering. At the Closing, the Company shall deliver to ▇▇▇▇▇▇
certificates, registered in ▇▇▇▇▇▇'▇ name, evidencing all such securities and
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ARTICLE 3
CERTAIN TRANSACTIONS IN CONNECTION WITH THE RIGHTS OFFERING
3.1 EXECUTION AND DELIVERY OF CERTAIN AGREEMENTS. Contemporaneously
with the closing of the Rights Offering, ▇▇▇.▇▇▇ and ▇▇▇▇▇▇ shall execute and
deliver to one another the Tax Sharing and Indemnity Agreement, the Registration
Rights Agreement and the Services Agreement (collectively, the "Other
Agreements").
3.2 RIGHTS OFFERING AND STOCK DISTRIBUTION EXPENSES. ▇▇▇.▇▇▇ shall be
responsible for and shall pay all of the expenses incurred by ▇▇▇▇▇▇ and ▇▇▇.▇▇▇
to effect the Rights Offering and, if made, the Stock Distribution (including
the fees of counsel and accountants) (the "Selling Expenses"), as well as all of
the costs of producing, printing, mailing and otherwise distributing the
Prospectus.
3.3 ▇▇▇▇▇▇ BOARD ACTIONS; CONDITIONS PRECEDENT TO THE STOCK
DISTRIBUTION.
(a) The ▇▇▇▇▇▇ Board shall, in its discretion, establish any
appropriate procedure in connection with the Stock Distribution.
(b) In no event shall the Rights Distribution or the Stock
Distribution occur unless the following conditions have been satisfied:
(i) The Registration Statement shall have been declared
effective by the Commission; and
(ii) ▇▇▇▇▇▇ and ▇▇▇.▇▇▇ shall have entered into the Other
Agreements.
3.4 EFFECTING THE STOCK DISTRIBUTION.
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(a) If as of the Closing, the number of record Holders who
will receive Common Shares Pursuant to exercised Rights have exercised their
Rights are insufficient for the Company to qualify for listing for quotation on
the Nasdaq National Market, then, simultaneously with the issuance of shares in
connection with the Rights Offering, ▇▇▇▇▇▇ will distribute to Holders an
aggregate of 150,000 shares of ▇▇▇.▇▇▇ common stock.
(b) If as of the Closing of the Rights Offering, the number of
shares that have been purchased either by Holders or Company Designated Persons
is insufficient to qualify for listing on the Nasdaq National Market, then,
simultaneously with the issuance of shares in connection with the Rights
Offering, ▇▇▇▇▇▇ will distribute to Holders a sufficient number of shares so
that the common stock qualifies for such listing, provided that the number of
shares distributed shall not be less than 150,000 shares nor more than 3,000,000
shares.
(c) ▇▇▇.▇▇▇ shall take all steps required by ▇▇▇▇▇▇ to effect
the Stock Distribution. Prior to the Stock Distribution ▇▇▇.▇▇▇ shall cause to
be issued to the Agent a certificate or certificates representing a sufficient
number of shares of common stock so that the Stock Distribution can be effected.
3.6 RESERVED SHARES.
The Company shall reserve from its authorized but unissued
shares of common stock a sufficient number of shares of common stock so that if
▇▇▇▇▇▇ transfers its Series A preferred stock, there is available a sufficient
number of shares of common stock available for issuance upon conversion of such
stock into common stock.
3.7 ADDITIONAL CONTRIBUTIONS AND CONSIDERATION
(a) At the closing, ▇▇▇▇▇▇ will also contribute and assign the
▇▇▇.▇▇▇, without representation or warranty of any kind, all of ▇▇▇▇▇▇'▇ right,
title and interest in and to (i) Pixeltime, which is a Java-based proprietary
drawing system, (ii) a license agreement with ▇▇. ▇▇▇▇▇▇/7Up, Inc. pursuant to
which ▇▇▇▇▇▇ has licensed ▇▇. ▇▇▇▇▇▇/7Up, Inc. to use the Pixeltime software and
(iii) a publishing agreement with Crown Publishing pursuant to which ▇▇▇▇▇▇ is
obligated to publish Gig: Real-Life People Talking About Their Jobs. ▇▇▇.▇▇▇
agrees to license the Pixeltime software to ▇▇▇▇▇▇ on terms and conditions to be
agreed by the parties. The parties shall determine the appropriate amount to be
paid ▇▇▇.▇▇▇ for these assets at the time of transfer.
(b) At the closing, ▇▇▇▇▇▇ will also execute such agreements
and instruments as ▇▇▇.▇▇▇ may reasonably require pursuant to which ▇▇▇▇▇▇ shall
agree to participate in the ▇▇▇.▇▇▇ Network for its Word and Charged Websites
and any other Web sites that it may acquire in the future. Such agreements shall
obligate ▇▇▇▇▇▇ to permit the ▇▇▇.▇▇▇ banner to be perpetually displayed
throughout all of these Web sites. The parties shall determine the appropriate
consideration to be paid for this commitment.
ARTICLE 4
SURVIVAL, ASSUMPTION AND INDEMNIFICATION
4.1 ASSUMPTION AND INDEMNIFICATION.
(a) Subject to Section 4.1(c), from and after the Closing
Date, ▇▇▇▇▇▇ shall indemnify, defend and hold harmless each member of the
▇▇▇.▇▇▇ Group, each of their Representatives and each of the heirs, executors,
successors and assigns of any of the foregoing from and against all
Indemnifiable Losses of any such member or Representative relating to, arising
out of or due to any untrue statement or alleged untrue statement of a material
fact contained in any Rights Offering Document or the omission or alleged
omission to state in any of the Rights Offering Documents a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only insofar as any such statement or omission was made with
respect to (i) a matter of historical fact relating to a member of the ▇▇▇▇▇▇
Group or (ii) the present or future intentions of ▇▇▇▇▇▇ or any member of the
▇▇▇▇▇▇ Group, in reliance upon and in conformity with information furnished by
▇▇▇▇▇▇ in writing specifically for use in connection with the preparation of the
Rights Offering Documents and designated in such writing as having been so
furnished.
(b) Subject to Section 4.1(c), from and after the Closing
Date, ▇▇▇.▇▇▇ shall indemnify, defend and hold harmless each member of the
▇▇▇▇▇▇ Group, each of their Representatives and each of the heirs, executors,
successors and assigns of any of the foregoing from and against all
Indemnifiable Losses of any such member or Representative relating to, arising
out of or due to any untrue statement or alleged untrue statement of a material
fact contained in any Rights Offering Document or the omission or alleged
omission to state in any of the Rights Offering Documents a material fact
required to be
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stated therein or necessary to make the statements therein not misleading;
provided that ▇▇▇.▇▇▇ will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made with respect to (i) a matter of historical fact relating to a member of the
▇▇▇▇▇▇ Group or (ii) the present or future intentions of ▇▇▇▇▇▇ or any member of
the ▇▇▇▇▇▇ Group, in reliance upon and in conformity with information furnished
by ▇▇▇▇▇▇ in writing specifically for use in connection with the preparation of
the Rights Offering Documents and designated in such writing as having been so
furnished.
(c) If an Indemnitee realizes a Tax benefit or detriment by
reason of having incurred an Indemnifiable Loss for which such Indemnitee
receives an Indemnity Payment from an Indemnifying Party or by reason of
receiving an Indemnity Payment, then such Indemnitee shall pay to such
Indemnifying Party an amount equal to the Tax benefit, or such Indemnifying
Party shall pay to such Indemnitee an additional amount equal to the Tax
detriment (taking into account any Tax detriment resulting from the receipt of
such additional amounts), as the case may be. If, in the opinion of counsel to
an Indemnifying Party reasonably satisfactory in form and substance to the
affected Indemnitee, there is a substantial likelihood that the Indemnitee will
be entitled to a Tax benefit by reason of an Indemnifiable Loss, the
Indemnifying Party promptly shall notify the Indemnitee and the Indemnitee
promptly shall take any steps (including the filing of such returns, amended
returns or claims for refunds consistent with the claiming of such Tax benefit)
that, in the reasonable judgment of the Indemnifying Party, are necessary and
appropriate to obtain any such Tax benefit. If, in the opinion of counsel to an
Indemnitee reasonably satisfactory in form and substance to the affected
Indemnifying Party, there is a substantial likelihood that the Indemnitee will
be subjected to a Tax detriment by reason of an Indemnification Payment, the
Indemnitee promptly shall notify the Indemnifying Party and the Indemnitee
promptly shall take any steps (including the filing of such returns or amended
returns or the payment of Tax underpayments consistent with the settlement of
any liability for Taxes arising from such Tax detriment) that, in the reasonable
judgment of the Indemnitee, are necessary and appropriate to settle any
liabilities for Taxes arising from such Tax detriment. If, following a payment
by an Indemnitee or an Indemnifying Party pursuant to this Section 3.1(c) in
respect of a Tax benefit or detriment, there is an adjustment to the amount of
such Tax benefit or detriment, then each of ▇▇▇▇▇▇ and ▇▇▇.▇▇▇ shall make
appropriate payments to the other, including the payment of interest thereon at
the federal statutory rate then in effect, to reflect such adjustment. This
Section 3.1(c) shall govern the matters discussed in this Section and shall
control over any conflicting language in the Tax Sharing and Indemnification
Agreement.
(d) The amount which an Indemnifying Party is required to pay
to any Indemnitee pursuant to this Section 3.1 shall be reduced (including
retroactively) by any Insurance Proceeds and other amounts actually recovered by
such Indemnitee in reduction of the related Indemnifiable Loss. ▇▇▇▇▇▇ and
▇▇▇.▇▇▇ shall use their respective best efforts to collect any Insurance
Proceeds or other amounts to which they or any of their Subsidiaries are
entitled, without regard to whether they are the Indemnifying Party hereunder.
If an Indemnitee receives an Indemnity Payment in respect of an Indemnifiable
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Loss and subsequently receives Insurance Proceeds or other amounts in respect of
such Indemnifiable Loss, then such Indemnitee shall pay to such Indemnifying
Party an amount equal to the difference between (i) the sum of the amount of
such Indemnity Payment and the amount of such Insurance Proceeds or other
amounts actually received and (ii) the amount of such Indemnifiable Loss,
adjusted (at such time as appropriate adjustment can be determined) in each case
to reflect any premium adjustment attributable to such claim.
4.2 PROCEDURE FOR INDEMNIFICATION.
(a) If any Indemnitee receives notice of the assertion of any
Third-Party Claim with respect to which an Indemnifying Party is obligated under
this Agreement to provide indemnification, such Indemnitee shall give such
Indemnifying Party notice thereof promptly after becoming aware of such
Third-Party Claim; provided, however, that the failure of any Indemnitee to give
notice as provided in this Section 4.2 shall not relieve any Indemnifying Party
of its obligations under this Article 4, except to the extent that such
Indemnifying Party is actually prejudiced by such failure to give notice. Such
notice shall describe such Third-Party Claim in reasonable detail.
(b) An Indemnifying Party, at such Indemnifying Party's own
expense and through counsel chosen by such Indemnifying Party (which counsel
shall be reasonably satisfactory to the Indemnitee), may elect to defend any
Third-Party Claim. If an Indemnifying Party elects to defend a Third-Party
Claim, then, within ten (10) Business Days after receiving notice of such
Third-Party Claim (or sooner, if the nature of such Third-Party Claim so
requires), such Indemnifying Party shall notify the Indemnitee of its intent to
do so, and such Indemnitee shall cooperate in the defense of such Third-Party
Claim. After notice from an Indemnifying Party to an Indemnitee of its election
to assume the defense of a Third-Party Claim, such Indemnifying Party shall not
be liable to such Indemnitee under this Article 4 for any legal or other
expenses subsequently incurred by such Indemnitee in connection with the defense
thereof; provided, however, that such Indemnitee shall have the right to employ
one law firm as counsel to represent such Indemnitee (which firm shall be
reasonably acceptable to the Indemnifying Party) if, in such Indemnitee's
reasonable judgment, either a conflict of interest between such Indemnitee and
such Indemnifying Party exists in respect of such claim or there may be defenses
available to such Indemnitee which are different from or in addition to those
available to such Indemnifying Party, and in that event (i) the reasonable fees
and expenses of such separate counsel shall be paid by such Indemnifying Party
(it being understood, however, that the Indemnifying Party shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) with respect to any Third-Party Claim (even if against multiple
Indemnitees)) and (ii) each of such Indemnifying Party and such Indemnitee shall
have the right to conduct its own defense in respect of such claim. If an
Indemnifying Party elects not to defend against a Third-Party Claim, or fails to
notify an Indemnitee of its election as provided in this Section 4.2 within the
period of ten (10) Business Days described above, such Indemnitee may defend,
compromise and settle such Third-Party Claim; provided, however, that no such
Indemnitee may compromise or settle any such Third-Party Claim without the prior
written consent of the Indemnifying Party, which consent shall not be withheld
unreasonably. Notwithstanding the foregoing, the Indemnifying Party shall not,
without the
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prior written consent of the Indemnitee, (i) settle or compromise any
Third-Party Claim or consent to the entry of any judgment which does not include
as an unconditional term thereof the delivery by the claimant or plaintiff to
the Indemnitee of a written release from all liability, damage or claims of any
nature or kind in respect of such Third-Party Claim or (ii) settle or compromise
any Third-Party Claim in any manner that may adversely affect the Indemnitee.
4.3 REMEDIES CUMULATIVE. The remedies provided in this Article 4 shall
be cumulative and shall not preclude assertion by any Indemnitee of any other
rights or the seeking of any other remedies against any Indemnifying Party.
ARTICLE 5
ACCESS TO INFORMATION
5.1 PROVISION OF CORPORATE RECORDS. Prior to or as promptly as
practicable after the Closing Date, ▇▇▇▇▇▇ shall use reasonable efforts to
accommodate ▇▇▇.▇▇▇ with respect to the delivery to ▇▇▇.▇▇▇ of all corporate
books and records of the ▇▇▇.▇▇▇ Group, including in each case copies of all
active agreements, active litigation files and government filings. From and
after the Closing Date, all books, records and copies so delivered shall be the
property of ▇▇▇.▇▇▇.
5.2 ACCESS TO INFORMATION. From and after the Closing Date, each of
▇▇▇▇▇▇ and ▇▇▇.▇▇▇ shall afford to the other, and shall cause the members of
their respective Groups to so afford, reasonable access and duplicating rights
during normal business hours to all information within such party's possession
relating to such other party's businesses, assets or liabilities, insofar as
such access is reasonably required by such other party. Without limiting the
foregoing, information may be requested under this Section 5.2 for audit,
accounting, claims, litigation and Tax purposes, as well as for purposes of
fulfilling disclosure and reporting obligations, as ▇▇▇.▇▇▇ may reasonably
request and which are directly related to the ▇▇▇.▇▇▇ Business.
ARTICLE 6
MISCELLANEOUS
6.1 TERMINATION. Notwithstanding any other provision hereof, this
Agreement may be terminated if the Rights Offering is abandoned, which decision
can be made at any time by and in the sole discretion of the ▇▇▇▇▇▇ Board of
Directors without the approval of ▇▇▇.▇▇▇ or by the ▇▇▇.▇▇▇ Board of Directors
without the approval of ▇▇▇▇▇▇.
6.2 COMPLETE AGREEMENT. This Agreement and the exhibits hereto and the
agreements (including the Other Agreements) and other documents referred to
herein and therein shall constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and shall supersede all
previous negotiations, commitments and writings with respect to such subject
matter.
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6.3 AUTHORITY. Each of the parties hereto represents to the other that
(a) it has the power and authority to execute, deliver and perform this
Agreement and the Other Agreements, (b) the execution, delivery and
performance of this Agreement and the Other Agreements by it has
been duly authorized by all necessary corporate action, (c) it has duly and
validly executed the Agreement, (d) this Agreement and
the Other Agreements, when executed, will be the valid and binding obligation of
such party, enforceable against it in accordance with its terms subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and general equity principles.
6.4 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (other than the
laws regarding choice of laws and conflicts of laws) as to all matters,
including matters of validity, construction, effect, performance and remedies.
6.5 NOTICES. All notices, requests, claims, demands and other
communications hereunder (collectively, "Notices") shall be in writing and shall
be given (and shall be deemed to have been duly given upon receipt) by delivery
in person, by cable, telegram, telex, telecopy or other standard form of
telecommunications, or by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to ▇▇▇▇▇▇:
▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer
If to ▇▇▇.▇▇▇:
▇▇▇.▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President Finance
or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section 6.5.
6.6 AMENDMENT AND MODIFICATION. This Agreement may be amended or
modified in any material respect only by a written agreement signed by both of
the parties hereto.
6.7 SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARIES. This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto, their successors and permitted assigns, and
the members of their respective Groups, but neither this Agreement nor any of
the rights, interests
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and obligations hereunder shall be assigned by either party hereto without the
prior written consent of the other party (which consent shall not be
unreasonably withheld). Except for the provisions of Sections 4.2 and 4.3
relating to Indemnities, which are also for the benefit of the other
Indemnitees, this Agreement is solely for the benefit of the
parties hereto and their Subsidiaries and Affiliates and is not intended to
confer upon any other Persons any rights or remedies hereunder.
6.8 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.9 NO WAIVER. No failure by either party to take any action or assert
any right hereunder shall be deemed to be a waiver of such right in the event of
the continuation or repetition of the circumstances giving rise to such right,
unless expressly waived in writing by the party against whom the existence of
such waiver is asserted.
6.10 HEADINGS. The Article and Section headings contained in this
Agreement are solely for the purpose of reference, are not part of
the agreement of the parties hereto and shall not in any way affect the meaning
or interpretation of this Agreement.
6.11 ENFORCEABILITY. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. Each party
acknowledges that money damages would be an inadequate remedy for any breach of
the provisions of this Agreement and agrees that the obligations of
the parties hereunder shall be specifically enforceable.
6.12 SURVIVAL OF AGREEMENTS. All covenants and agreements of the
parties hereto contained in this Agreement shall survive the
Closing Date.
In WITNESS WHEREOF, the undersigned have exercised and
delivered this Agreement as of the date first set forth above.
▇▇▇▇▇▇ CORPORATION
By:_________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
▇▇▇.▇▇▇ CORPORATION
By:_________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President - Finance
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