SHARE PURCHASE AGREEMENT dated as of this
31st day of May, 2001 between GRAPHON
CORPORATION, a Delaware corporation (the
"Company"), and MENTA SOFTWARE LTD., an
Israeli corporation (the "Purchaser")
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The Company and the Purchaser are simultaneously herewith entering into a
Technology License Agreement (the "Technology License Agreement") whereby the
Purchaser may acquire up to 2,940,000 shares of the Common Stock of the Company
(the "Shares"). The Company and the Purchaser wish to set forth certain terms
and conditions for the Purchaser's acquisition of the Shares.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereafter set forth, the parties hereby agree as follows:
1. PURCHASE OF SHARES
1.1 ___ Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby subscribes for and agrees to purchase from the Company, and the
Company agrees to issue and sell to the Purchaser, 2,500,000 shares of Common
Stock of the Company as the "License Fee" pursuant to the Technology License
Agreement, upon satisfaction of the terms and conditions provided in the
Technology License Agreement; provided that such number of shares shall be
equitably adjusted to reflect any stock dividend, stock split, combination or
exchange of shares, merger, consolidation or recapitalization of the Company
after the date hereof, such adjustment to be made by the Board of Directors of
the Company in its reasonable discretion.
1.2 ___ Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby subscribes for and agrees to purchase from the Company, and the
Company agrees to issue and sell to the Subscriber, 440,000 shares of Common
Stock of the Company (the "Additional Shares") as the "Acquisition Fee" pursuant
to the Technology License Agreement, upon satisfaction of the terms and
conditions provided in the Technology License Agreement; provided that such
number of shares shall be equitably adjusted to reflect any stock dividend,
stock ___ split, ___ combination ___ or exchange of shares, ___ merger,
consolidation or recapitalization of the Company, such adjustment to be made by
the Board of Directors of the Company in its reasonable discretion.
1.3 ___ Each date upon which the Purchaser purchases Shares pursuant to
this Agreement is referred to herein as a "Closing Date."
1.4 ___ The Company shall deliver to the Purchaser a certificate or
certificates evidencing that Shares purchased on a Closing Date as soon as
practicable after the Closing Date, but in no event later than seventy five (75)
days after such Closing Date.
2. REPRESENTATIONS AND COVENANTS OF THE PURCHASER
2.1 ___ The Purchaser represents and warrants that it has all requisite
corporate power and authority to enter into this Agreement and perform its
obligations hereunder. All necessary corporate action on the part of the
Purchaser in connection with the execution, delivery and performance of this
Agreement by the Purchaser has been taken.
2.2 ___ The Purchaser represents that the Shares are being purchased for
its own account, for investment and not for distribution or resale to others,
other than as a dividend or other distribution to its shareholders and others,
in connection with the liquidation or dissolution of the Purchaser; provided
however that no dividend or other distribution of the Shares shall be made prior
to August 15, 2001 or until registration of the Shares in accordance with
Section 5(a) of Schedule 2.4.
2.3 ___ The Purchaser ___ acknowledges ___ that it has been afforded the
opportunity to make, and has made, all inquiries as it deemed appropriate with
respect to the Company's affairs and prospects.
2.4 ___ The Purchaser agrees to be bound by the restrictions on transfer,
and the procedures for registration of the Shares and the other agreements
applicable to the Purchaser set forth in Schedule 2.4 hereto; provided, however,
that the Purchaser and its successors and permitted assigns agree,
notwithstanding the registration of the Shares under the Act, as contemplated by
Section 5 of Schedule 2.4, not to sell, transfer or dispose of in a public
transaction, (a) more than two and one-half (2 1/2 %) percent of the Shares then
owned by the Purchaser during each of the first six (6) months after the first
Closing Date and (b) more than ten (10%) per cent of the Shares then owned by
the Purchaser during each month of the following six (6) months. The Purchaser
further consents that the certificates representing the Shares may bear a
restrictive legend to such effect.
3. REPRESENTATIONS AND COVENANTS OF THE COMPANY
3.1 ___ The Company represents and warrants that it has all requisite
corporate power and authority to enter into this Agreement and perform its
obligations hereunder. All necessary corporate action on the part of the Company
in connection with the execution, delivery and performance of this Agreement by
the Company has been taken. This Agreement, when executed and delivered by or on
behalf of the Company, shall constitute the valid and legally binding
obligations of the Company, legally enforceable against the Company in
accordance with its respective terms.
3.2 ___ The Shares and the Additional Shares, when issued and allotted in
accordance with this Agreement, will be duly authorized, validly issued, fully
paid, non-assessable, and free of any preemptive rights, liens, claims,
encumbrances or third party rights of any kind and duly registered in the name
of each Purchaser in the Company's share transfer register.
3.3 ___ The Company agrees that it will be bound by the provisions of
Schedule 2.4 hereto, with respect to registration rights for the Common Stock.
4. MISCELLANEOUS
4.1 ___ Any notice, request, advice, consent or other communication given
hereunder shall be given in writing and sent by overnight delivery service or
registered or certified mail, return receipt requested, and addressed as
follows: if to the Company, to it at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ___ Chief Financial Officer, with a copy to
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention, ▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.; and if to the Purchaser, to it at ▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Israel, Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇.
Notice so given shall be deemed to have been given on the earlier to occur of
actual receipt or five business days after the date of such mailing, except for
notices of change of address, which shall be deemed to have been given when
received.
4.2 ___ This Agreement shall not be changed, modified or amended except by
a written agreement signed by all the parties hereto.
4.3 ___ This Agreement shall be binding upon and inure to the benefit of
the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement and the Technology License Agreement set
forth the entire agreement and understanding between the parties as to the
subject matter thereof and merge and supersede all prior discussions, agreements
and understandings of any and every nature among them.
4.4 ___ This Agreement shall be governed in all respects by the law of the
State of New York, without regard to its principles of conflicts of law.
4.5 This Agreement may be executed in counterparts.
4.6 ____ This Agreement is subject to the approval of the Board of Directors and
the Shareholders of the Purchaser. If such approval has not been obtained on or
before June 18, 2001, this Agreement shall not take effect ab initio.
4.7 ___ This Agreement or any portion hereof, including the registration rights
granted by the Company to the Purchaser herein, may be transferred or assigned
by the Purchaser to any of its Affiliates, shareholders and Directors, including
by way of liquidation or dissolution of the Company.
IN WITNESS WHEREOF, the parties have executed this Share Purchase
Agreement as of the day and year first written above.
GRAPHON CORPORATION
By:
-------------------------------
Name:
Title:
MENTA SOFTWARE LTD.
By:
-------------------------------
Name:
Title:
2.4.9
17095480\V-1
SCHEDULE 2.4
REGISTRATION RIGHTS, PROCEDURES
AND
RESTRICTIONS UPON TRANSFER
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1. ____ Restriction ___ on ___ Transfer. ___ The ___ Restricted ___
Securities ___ (as hereinafter defined), and any shares of capital stock
received in respect thereof, whether by reason of a stock split or share
reclassification thereof, a stock dividend thereon or otherwise, shall not be
transferable except upon the conditions specified in this Schedule, which
conditions are intended to insure compliance with the provisions of the
Securities Act in respect of the transfer thereof.
2. Definitions. As used in this Schedule, the following terms shall
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have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or
any other Federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Common Stock of the Company, together
with any other equity securities that may be issued by the Company in addition
thereto or in substitution therefor.
"Company" shall mean GraphOn Corporation, a Delaware corporation,
and its successors and assigns.
"Closing Date" shall mean each date on which shares of Common Stock
are sold to the Purchaser pursuant to the Share Purchase Agreement to which this
Schedule is attached (the "Share Purchase Agreement").
"Person" shall mean and include an individual, a Company, a
partnership, a trust, an unincorporated organization and a government or any
department, agency or political subdivision thereof.
"Purchaser" shall mean Menta Software Ltd., an Israeli
corporation, and its permitted successors or assigns.
"Restricted Securities" shall mean the shares of Common Stock issued
pursuant to the Share Purchase Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Transfer" ___ shall include any disposition of any Restricted
Securities or of any interest therein which would constitute a sale thereof
within the meaning of the Securities Act.
3. ____ Restrictive ___ Legend. ___ Each ___ certificate ___ for the ___
Restricted Securities and any shares of capital stock received in respect
thereof, whether by reason of capital stock received in respect thereof, a stock
dividend thereon or otherwise, and each certificate for any such securities
issued to subsequent transferees of any such certificate shall (unless otherwise
permitted by the provisions of Sections 4 or 11 hereof) be stamped or otherwise
imprinted with a legend in substantially the following form:
"The shares of common stock represented by this certificate have not
been registered under the Securities Act of 1933, as amended, ___
and may not be sold, offered for sale, assigned, transferred or
otherwise disposed of, unless registered pursuant to the provisions
of that Act or such disposition is in compliance with an available
exemption from such registration."
4. ____ Notice of Transfer. The holder of any Restricted Securities, by
acceptance thereof ___ agrees, ___ prior to any transfer of any Restricted
Securities, to give written notice to the Company of such holder's intention to
effect such transfer and to comply in all other respects with the provisions of
this Section 4. Each such notice shall describe the manner and circumstance of
the proposed transfer and shall be accompanied by the written opinion, addressed
to the Company, of counsel for the holder of Restricted Securities, as to
whether in the opinion of such counsel (which opinion shall be reasonably
satisfactory to counsel for the Company) such proposed transfer involves a
transaction requiring registration of such Restricted Securities under the
Securities Act; provided, however, that no such opinion shall be required in
connection with a transaction complying with the requirements of Rule 144,
promulgated under the Securities Act, or successor Rule thereto ("Rule 144"). If
in the opinion of such counsel (if such opinion is required hereunder), the
proposed transfer of Restricted Securities may be effected without registration
under the Securities Act, the holder of Restricted Securities shall thereupon be
entitled to transfer Restricted Securities in accordance with the terms of the
notice delivered by it to the Company. Each certificate or other instrument
evidencing the securities issued upon the transfer of any Restricted ___
Securities (and each certificate or other instrument evidencing any
untransferred balance of such securities) shall bear the legend described in
Section 3 hereof unless (a) in the opinion of such counsel ___ registration of
future transfer is not required by the applicable provisions of the Securities
Act or (b) the Company shall have waived the requirement of such legend;
provided, however, that such legend shall not be required on any certificate or
other instrument evidencing the securities issued upon such transfer in the
event such transfer shall be made in compliance with the requirements of Rule
144. The holder of Restricted Securities shall not transfer such Restricted
Securities until such opinion of counsel has been given to the Company (unless
waived by the Company or unless such opinion is not required in accordance with
the provisions of this Section 4) or until registration of the Restricted
Securities involved in the above-mentioned request has become effective under
the Securities Act. In addition to the above provisions of this Section 4, ___
transfer of the Restricted Securities is also subject to the restriction
contained in Section 2.4 to the Share Purchase Agreement.
5. ____ Registration. (a) ______ No later than 30 days after each Closing
Date, the Company shall file a registration statement on Form S-3 (or other then
available form) under the Securities Act covering the Restricted Securities
purchased on such Closing Date and will thereafter exert its best efforts to
promptly effect the registration of the Restricted Securities under the
Securities Act. The Company may include in such registration statement any of
its securities for its own account or for the respective accounts of others.
(b) ___ Whenever the Company ___ proposes to file a registration
statement (other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation or business entity), it will prior
to such filing, give written notice to each holder of Restricted Securities of
its intention to do so and, upon the written request of the holders of no less
than 20% of the then issued and outstanding Restricted Securities given within
thirty (30) days after the Company provides such notice (which request shall
state the intended method of disposition of such Restricted Securities), the
Company shall use its best efforts to cause all Restricted Securities which the
Company has been requested to register to be registered under the Securities Act
to the extent necessary to permit their sale or other disposition in accordance
with the specified intended methods of distribution, provided that the Company
shall have the right to postpone or withdraw any registration effected pursuant
to this Section 5(b) without obligation to such holders. The Company shall not
be required to effect more than two (2) registrations pursuant to this Section
5(b).
(c) ___ In connection with any registration under Section 5(b)
involving an underwritten offering, the Company shall not be required to include
any Restricted Securities in such registration unless the holders of such
Restricted Securities accept the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it, subject to the
provisions of the last sentence of Section 7 of this Schedule. If in the opinion
of the managing underwriter it is desirable because of marketing factors to
limit the number of Restricted Securities to be included in the offering, then
the Company shall be required to include in the registration only that number of
Restricted Securities, if any, which the managing underwriter believes should be
included therein; provided that no persons or entities other than the Company,
the holders of Restricted Securities and other persons or entities holding
registration rights shall be permitted to include securities in the offering. If
the number of Restricted Securities to be included in the offering in accordance
with the foregoing is less than the total number of shares which the holders of
Restricted Securities have requested to be included, then such holders and other
holders of securities entitled to include them in such registration shall
participate in the registration pro rata based upon their total ownership of
shares of Common Stock (giving effect to the conversion into Common Stock of all
securities convertible thereinto). If any holder would thus be entitled to
include more securities than such holder requested to be registered, the excess
shall be allocated among other requesting holders pro rata in the manner
described in the preceding sentence.
(d) ___ Notwithstanding the foregoing, the Company shall not be
required, pursuant to this Section 5(b), to include any Restricted Securities in
a registration statement if such Restricted Securities can then be sold pursuant
to Rule 144(k) under the Securities Act and represent less than 1% of the then
outstanding shares of Common Stock.
6. Preparation and Filing. If and whenever the Company is under an
-----------------------
obligation pursuant to the provisions of this Schedule to use its best
efforts to effect the registration of any Restricted Securities, the Company
shall, as expeditiously as practicable:
(a) ___ Prepare and file with the ___ Commission a ___ registration
statement with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective;
(b) ___ Prepare and file with the Commission such amendments and
supplements to such registration statements and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for a period of two years from the Closing Date and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of all Restricted ___ Securities covered by such registration statement and will
furnish to each selling stockholder prior to the filing thereof a copy of any
amendment or supplement to such registration statement to which any such selling
stockholder shall have reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the requirements of the
Securities Act or the rules and regulations thereunder;
(c) ___ Furnish to each selling stockholder such number of copies of
such registration statement and of each such amendment or supplement thereto (in
each case including all exhibits) a summary prospectus or other prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as such seller may reasonably request
in order to facilitate the public sale or other disposition of such Restricted
Securities;
(d) ___ Use its best efforts to register or qualify the Restricted
Securities covered by such registration statement under the securities or blue
sky laws of such states or jurisdictions as each such seller shall reasonably
request ___ but in no event ___ more than three (3) states or jurisdictions in
the aggregate (provided, however, that the Company shall not be required to
consent to general service of process for all purposes in any state or
jurisdiction where it is not then qualified) and do any and all other acts or
things which may be necessary or advisable to enable such seller to consummate
the public sale or disposition in such jurisdictions of such securities;
(e) ___ Notify each seller of Restricted Securities covered by such
registration statement, at any time when a prospectus relating thereto covered
by such registration statement is required to be delivered under the Securities
Act within the appropriate period mentioned in clause (b) of this Section 6, ___
of the happening of any event as a result of which the Registration Statement,
the prospectus or any document incorporated therein by reference, includes an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
and at the request of such seller, prepare and furnish to such seller a
post-effective amendment or supplement to the registration statement or the
related prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
such shares, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading;
(f) ___ Otherwise ___ use its best ___ efforts to comply ___ with
all applicable rules and regulations of the Commission, and make generally
available to its securities holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first month of the first fiscal quarter
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act;
and
(g) Notify each selling stockholder and the managing
underwriter or underwriters, if any, promptly, and confirm such advice in
writing
(i) ___ when ____ the ____ registration ____ statement, ____
any pre-effective amendment, ___ the ___ prospectus or any prospectus
supplement or ___ post-effective ___ amendment to the registration
statement has been filed, and, with respect to the registration statement
or any post-effective amendment, when the same has become effective;
(ii) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration statement
or the initiation of any proceedings for that purpose;
(iii) of ___ the ___ receipt ___ by the ___ Company ___ of any
qualification of the Restricted Securities for sale under the securities
or "Blue Sky" laws of any ___ jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(iv) of the existence of any fact which results in the
registration statement, ___ the prospectus or any document incorporated
therein by reference containing an untrue statement of material fact or
omitting to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(h) ___ Make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the registration statement at the earliest
possible moment;
(i) ___ Use its best efforts to cause all Restricted Securities
covered by the registration statement to be listed on each securities exchange
on which the Company's Common Stock is listed, if any; and
(j) ___ Provide and cause to be maintained a transfer agent for all
Restricted Securities covered by such registration statement from and after a
date not later than the effective date of such registration statement.
7. ____ Underwritten Offerings. If requested by the underwriters for any
underwritten offering of Restricted Securities pursuant to this Schedule, the
Company will enter into an underwriting agreement with such underwriters for
such offering, such agreement to contain such representations and warranties by
the Company and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities as to the effect and to the extent provided in
Section 10 hereof. The holders of Restricted Securities on whose behalf
Restricted Securities are to be distributed by such underwriters shall be
parties to any such underwriting agreement and the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters, shall also be made to and for the benefit of
such holders of Restricted Securities. Such holders of Restricted Securities
shall not be required by the Company to make any representations or warranties
to or agreements with the Company or the underwriters other than reasonable
representations, warranties or agreements regarding such holder, such holder's
Restricted Securities and such holder's intended method or methods of
disposition as are customarily contemplated by underwriting agreements with ___
respect ___ to ___ secondary ___ distributions ___ and any other representation
required by law.
8. ____ Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement including Restricted
Securities under the Securities Act, the Company will give the holders of
Restricted Securities on whose behalf such Restricted Securities are to be so
registered and their underwriters, if any, and their respective counsel and
accountants, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, each document incorporated by reference therein or filed with the
Commission, each document ___ incorporated by reference therein and each
amendment thereof or supplement thereto, and will give each of them such access
to its books and records and such opportunities to discuss the business of the
Company with its officers and the independent public accountants who have
certified its financial ___ statements as shall be necessary, in the opinion of
such holders and such underwriters or their respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
9. ____ Expenses. All expenses incurred by the Company in complying with
its obligations under Section 5 hereof, including, without limitation, all
registration and filing fees, fees and expenses of complying with securities and
blue sky laws, printing expenses and fees and disbursements of counsel to the
Company and of independent certified public accountants shall be paid by the
Company; provided, however, that fees and disbursements of counsel to the
Purchaser shall be paid by the Purchaser and all underwriting discounts and
selling commissions and stock transfer taxes applicable to the Restricted
Securities covered by the registration effected pursuant to Section 5 hereof
shall be borne by the seller or sellers thereof in proportion to the number of
Restricted Securities sold by such seller or sellers.
10. Indemnification.
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(a) ___ In the event of any ___ registration ___ of any Restricted
Securities under the Securities Act pursuant to this Schedule, the Company shall
indemnify and hold harmless the seller of such shares, each underwriter of such
shares, if any, each broker or any other person acting on behalf of such seller
and each other person, if any, who controls any of the foregoing persons, within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which any of the foregoing persons may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such Restricted Securities
were registered under the Securities Act, final prospectus contained therein,
any document incorporated by reference therein or any amendment or supplement
thereto, or any document prepared and/or furnished by the Company incident to
the registration of any Restricted Securities pursuant to Section 5 hereof, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading or, with respect to any prospectus, necessary
to make the statements therein in light of the circumstances under which they
were made, not misleading, or any violation by the Company of the Securities Act
or state securities or blue sky laws applicable to the Company and relating to
action or inaction ___ required of the Company in connection ___ with such
registration or qualification under such state securities or blue sky laws; and
shall reimburse such seller and each such controlling person for any legal or
any other expenses reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to the
extent that such loss, claim, damage or liability arises out of or is based upon
an untrue statement or omission made in said registration statement, said
prospectus or said amendment or supplement or any document incident to the
registration of any Restricted Securities pursuant to Section 5 hereof in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller or such underwriter
specifically for use in the preparation thereof.
(b) ___ Before Restricted Securities held by any prospective seller
shall be included in any registration statement pursuant to this Schedule, such
prospective seller and any underwriter acting on its behalf shall have agreed to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in the preceding paragraph (a) of this Section 10) the Company, each
director of the Company, each officer of the Company who shall sign such
registration statement and any person who controls the Company within the
meaning of the Securities Act, with respect to any untrue statement or omission
from such registration statement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, if such untrue
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by such
seller or such underwriter specifically for use in the preparation of such
registration statement, final prospectus or amendment or supplement; provided,
however, that the maximum amount of liability in respect of such indemnification
shall be limited, in the case of each prospective seller of Restricted
Securities, to an amount equal to the gross proceeds actually received by such
prospective seller from the sale of Restricted Securities effected pursuant to
such registration.
(c) ___ Promptly after receipt by an indemnified party of notice of
the commencement of any actions involving a claim referred to in paragraph (a)
or (b) of this Section 10, such indemnified party will, if a claim in respect
thereof is made against an indemnifying party, give written notice to the latter
of the commencement of such action. In case any such action is brought against
an indemnified party, the indemnifying party will be entitled to participate in
and to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be responsible for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof; provided, however, that if any indemnified party shall have
reasonably concluded that there may be one or more legal defenses available to
such indemnified party which are differed from or additional to those available
to the indemnifying party, or that such claim or litigation involves or could
have an effect upon matters beyond the scope of the indemnity ___ agreement ___
provided in this ___ Section 10, ___ the indemnifying party shall reimburse such
indemnified party for that portion of the fees and expenses of any counsel
retained by the indemnified party which are reasonably related to the matters
covered by the indemnity agreement provided in this Section 10.
(d) ___ The failure to notify an indemnifying party promptly of the
commencement of any such action, if materially prejudicial to the ability of the
indemnifying party to defend such action, shall relieve such indemnifying party
of any liability to the indemnified party under this Section 10, but the
omission so to notify the indemnifying party will not relieve the indemnifying
party of any liability that it may have to any indemnified party otherwise than
under this Schedule.
(e) ___ The indemnifying party shall not make any settlement of any
claims indemnified against hereunder without the written counsel of the
indemnified party or parties, which consent shall not be unreasonably withheld.
(f) ___ If the indemnification ___ provided for in Section 10 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received from the offering by the Company, the holders of
Restricted Securities and any underwriter; but if such allocation is not
permitted by applicable law or if the indemnified party failed to give the
notice required under paragraph (c) above, each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportions as are appropriate to reflect not only such relative benefits but
also relative fault of the Company, the holders of Restricted Securities and any
underwriter in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The parties agree that the
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged untrue statement of a material fact relates to information supplied by
the Company, the holders of Restricted Securities or underwriter and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission; that it would not be just and
equitable if contribution pursuant to such agreement were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable consideration referred to above in this paragraph (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim; that the holders of Restricted Securities shall not be required to
contribute any amount in excess of the dollar amount by which the proceeds to be
received by such holders from the sale of their respective Restricted Securities
exceeds the amount of damages such holders of Restricted Securities would have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no underwriter shall be required
to contribute any amount in excess of the amount by which the total price at
which the shares of securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission; and that no person
guilty of fraudulent ___ misrepresentation ___ (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
11. ___ Removal of Legends. Whenever the restrictions imposed by this
Schedule shall terminate, as herein provided, the holder of any Restricted
Securities as to which such restrictions have terminated shall be entitled to
receive from the Company, without expense, a new certificate not bearing the
restrictive legend referred to in Section 3 hereof and not containing any other
reference to the restrictions imposed by this Schedule.
