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EXHIBIT 10.65
FORM OF
COMMON STOCK
REGISTRATION RIGHTS AGREEMENT
This Common Stock Registration Rights Agreement ("Agreement"), dated as
of June ___, 1999, is made by and among Denali Incorporated, a Delaware
corporation ("Company"), and those certain holders listed on the signature
page(s) hereto (individually a "Holder" and collectively the "Holders"), who
hereby agree as follows:
1. INTRODUCTION.
For purposes of this Agreement, the following terms shall have the
meanings ascribed to them below:
(i) "Common Stock" means the Company's common stock, par value
$0.01 per share.
(ii) "Effective Date" means the date of the closing of the
private placement transaction by the Company and the Holders pursuant
to a Subscription Agreement effective June _____, 1999.
(iii) "Holder's Shares" means the number of shares of Common
Stock specified opposite the Holder's respective name on the signature
page(s) of this Agreement and any Common Stock issued or issuable to
any such Holder upon any stock split, stock dividend, recapitalization
or similar event.
2. PIGGYBACK REGISTRATION.
(a) Right to Piggyback. Whenever the Company proposes to register any
of its Common Stock for its own account under the Securities Act of 1933, as
amended (the "Securities Act") (other than pursuant to a registration statement
relating to warrants, options or shares of capital stock granted, to be granted,
sold or to be sold exclusively to employees or directors of the Company, a
registration statement filed pursuant to Rule 145 under the Securities Act or a
shelf registration statement pursuant to Rule 415 under the Securities Act), the
Company will give prompt written notice to the Holders of its intention to
effect a registration and will, subject to Section 2(b) below, include in such
registration Holder's Shares with respect to which the Company has received
written requests for inclusion therein within 15 days after the giving of notice
by the Company. All registrations requested pursuant to this Section 2(a) are
referred to herein as "Piggyback Registrations."
(b) Priority on Piggyback Registrations. If a Piggyback Registration
involves the registration of shares of Common Stock offered in a firm commitment
underwritten offering and
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the managing underwriter(s) for the offering advises the Company that in its
opinion the number of shares of Common Stock requested to be included in such
registration exceeds the number of shares of Common Stock which can be sold in
such offering without adversely affecting the offering of the shares of Common
Stock to be included therein, the Company will so advise the Holders in writing
and will include in such registration that number of shares of Common Stock
which the managing underwriter(s) has advised the Company, in its opinion, will
not adversely affect the shares of Common Stock to be offered by the Company,
such number of shares to be included in such registration in accordance with the
following priorities: (i) first, the Common Stock and other securities, if any,
that the Company proposes to sell; and (ii), second, on a pro-rata basis, (A)
the Holder's Shares requested to be included in such registration pursuant to
Section 2(a) above and (B) any other Common Stock owned by persons other than
the Holders having rights to participate in an underwritten registered offering
of Common Stock and who have notified the Company of their intention to
participate in such registration.
(c) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the Company will select a managing underwriter(s) of
nationally recognized standing.
3. REGISTRATION PROCEDURES.
Whenever a Holder has requested that any Holder's Shares be registered
pursuant to this Agreement, and subject to Section 2(b) above, the Company will
use its reasonable efforts to effect the registration of such Holder's Shares
and pursuant thereto the Company will:
(a) prepare and file with the Securities and Exchange Commission (the
"Commission") under the Securities Act a registration statement with respect to
such Holder's Shares, which registration statement will state that the Holders
of Holder's Shares covered thereby and the holders of any other shares of Common
Stock to be included therein may sell such Shares under such registration
statement, and use its reasonable efforts to cause such registration statement
to become effective and to remain effective as provided herein;
(b) prepare and file with the Commission such amendments and
supplements, if any, to such registration statement and the prospectus used in
connection therewith as may be necessary to (i) keep such registration statement
effective for a period which is the earlier of (A) 90 days or (B) until the
completion of the distribution under such registration statement and (ii) comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement in accordance with the
intended methods of disposition by the sellers thereof set forth in such
registration statement;
(c) furnish to each seller of Holder's Shares such number of copies of
such registration statement (including exhibits), each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) as such seller may reasonably request in order to
facilitate the disposition of such shares;
(d) use its reasonable efforts to register or qualify such Holder's
Shares under such securities or blue sky laws of such jurisdictions as any
seller reasonably requests and do any and
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all other acts and things which may be reasonably necessary or advisable to
enable such seller to consummate the disposition in such jurisdictions of the
Holder's Shares owned by such seller; provided, however, that the Company will
not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this subsection,
(ii) subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction;
(e) notify each seller of Holder's Shares at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, when it
becomes aware of the happening of any event as a result of which the prospectus
included in such registration statement (as then in effect) contains any untrue
statement of a material fact or omits any fact necessary to make the statements
therein not misleading in light of the circumstances then existing, and, as
promptly as practicable thereafter, prepare in sufficient quantities a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Holder's Shares, such prospectus will not contain an
untrue statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading in light of the circumstances then
existing;
(f) enter into customary agreements relating to the registration
(including an underwriting agreement in customary form);
(g) subject to the execution of confidentiality agreements in a form
satisfactory to the Company, make reasonably available for inspection by any
seller of Holder's Shares, any underwriter participating in any disposition
pursuant to such registration statement, the Representative Counsel (as
hereinafter defined) and any attorney, accountant or other agent retained by any
such Representative Counsel or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such seller, underwriter, Representative Counsel, attorney,
accountant or agent in connection with such registration statement to the extent
such information is reasonably necessary to satisfy any of its obligations under
applicable law;
(h) use reasonable efforts to obtain an appropriate opinion from
counsel for the Company and a cold comfort letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by opinions of counsel and cold comfort letters in similar
registrations as the Holders of a majority of the Holder's Shares covered by
such registration statement reasonably request; provided, however, that failure
to provide such opinion or letter, or the provision of any such opinion or
letter in a form not satisfactory to any Holder whose Holder's Shares are
covered by such registration statement shall not give rise to any action, at law
or in equity, for damages or injunctive or other relief , but rather, shall only
entitle such Holder to withdraw his Holder's Shares from such registration
statement pursuant to Section 3(k) below;
(i) upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 3(e), such Holder will forthwith
discontinue such Holder's disposition
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of Holder's Shares pursuant to the registration statement covering such Holder's
Shares until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(e) and, if so directed by the Company, will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such holder's possession of the prospectus
covering such Holder's Shares current at the time of receipt of such notice. In
the event the Company shall give any such notice, the period mentioned in
Section 3(b) shall be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
each seller of any Holder's Shares and other shares of Common Stock covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by Section 3(e);
(j) in connection with the preparation and review pursuant to this
Agreement of any registration statement or prospectus or any amendments or
supplements thereto, the Holders of a majority of the Holder's Shares included
in such registration will choose one counsel ("Representative Counsel") who
shall participate in the registration process on their behalf, coordinate
requests by sellers of Holder's Shares for information from the Company and act
as liaison between such selling stockholders or their individual counsel,
accountants and agents and the Company; and
(k) if any Holder disapproves of the terms of any offering, such
Holder's sole remedy shall be to withdraw therefrom by written notice to the
Company and the underwriter (if any) and all other participants in such
offering, and the Holder's Shares so withdrawn will also be withdrawn from
registration.
4. REGISTRATION EXPENSES.
Whether or not any registration pursuant to this Agreement shall become
effective, all expenses incident to the Company's performance of or compliance
with this Agreement, including without limitation all registration and filing
fees, National Association of Securities Dealers' fees, fees and expenses of
compliance with state securities or blue sky laws, printing and engraving
expenses and fees and disbursements of counsel for the Company, the
Representative Counsel, the independent certified public accountants for the
Company, underwriters (excluding discounts and commissions) and other persons
retained by the Company (all such expenses being herein called "Registration
Expenses"), will be borne by the Company; provided, however, that (i) if other
holders of Common Stock who have included shares in the registration statement
are required to pro-rate any Registration Expenses which are to be paid by the
Holders hereunder, then each Holder will also pro-rate such Registration
Expenses with such other holders and (ii) each seller of Holder's Shares shall
pay (A) any underwriting discounts and selling commissions applicable to
Holder's Shares sold by such Holder and (B) all fees and disbursements of
counsel for such Holder (other than the Representative Counsel); provided,
however, that the Company's obligation to pay the fees, expenses and
disbursements of Representative Counsel on the Piggyback Registrations shall be
limited to reasonable fees, expenses and disbursements.
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5. INDEMNIFICATION.
(a) Indemnification by the Company. The Company agrees to indemnify,
with respect to any registration statement filed by it, to the full extent
permitted by law, each Holder, its officers, directors and agents and each
person who controls such Holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of a prospectus or
preliminary prospectus, in the light of the circumstances under which they were
made) not misleading, except insofar as the same are caused by or contained in
any information with respect to such Holder furnished in writing to the Company
by such Holder expressly for use therein.
(b) Indemnification by Holders. In connection with any registration
statement in which a Holder is participating, each such Holder will furnish to
the Company in writing such information with respect to such Holder as the
Company reasonably requests for use in connection with any such registration
statement or prospectus and agrees to indemnify, to the fullest extent permitted
by law, the Company, its directors and officers and each person who controls the
Company (within the meaning of the Securities Act) against any losses, claims,
damages, liabilities and expenses resulting from any untrue or alleged untrue
statement of a material fact or any omission or alleged omission of a material
fact required to be stated in the registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or
necessary to make the statements therein (in the case of a prospectus or
preliminary prospectus, in the light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that such untrue
statement or omission is caused by or contained in any information with respect
to such Holder so furnished in writing by such Holder expressly for use therein.
(c) Conduct of Indemnification Proceedings. Promptly after receipt by
an indemnified party under subsection (a) or (b) above of notice of the
commencement of any action, suit, proceeding, investigation or threat thereof
made in writing for which such person will claim indemnification pursuant to
this Agreement, such indemnified party shall notify the indemnifying party in
writing of the commencement thereof or of such involvement, as the case may be,
but the omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party, except to the extent
that such failure prejudices the rights and defenses of the indemnifying party.
In case any such action referred to under subsection (a) or (b) shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
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 liable to such indemnified party under such subsection for any legal
expenses of counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense
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thereof other than reasonable costs of investigation. The indemnifying party
shall not be required to indemnify the indemnified party with respect to any
amounts paid in settlement of any action, proceeding or investigation entered
into without the written consent of the indemnifying party.
(d) Contribution. If the indemnification provided for in this Section 5
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect or as a result of any losses, claims,
damages, liabilities or expenses (or actions in respect thereof) referred to
therein, then 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 by the indemnifying party on the one
hand and the indemnified party on the other hand, the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense and any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) 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.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
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.
If indemnification is available under this Section 5, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Sections 5(a) and (b) without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 5(d).
(e) Indemnification and Contribution of Underwriters. In connection
with any underwritten offering contemplated by this Section 5, the Company, with
respect to any registration statement filed by it, will agree to customary
provisions for indemnification and contribution in respect of losses, claims,
damages, liabilities and expenses of the underwriters by the Company.
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6. PARTICIPATION IN UNDERWRITTEN REGISTERED OFFERINGS.
No person may participate in any underwritten offering hereunder unless
such person (a) agrees to sell such person's securities on the basis provided in
any underwriting arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.
7. ELIGIBILITY UNDER RULE 144.
With a view to making available to the Holders the benefits of Rule 144
under the Securities Act and the rules and regulations of the Commission which
may permit the sale of the Common Stock to the public without registration, the
Company will so long as the Common Stock is a part of a class of securities
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), (i) make and keep public information available
as contemplated by Rule 144(c) at all times until the Holder's Shares have been
sold or otherwise distributed to the public and (ii) file with the Commission in
a timely manner all reports and other documents required of the Company under
the Exchange Act.
8. MISCELLANEOUS.
(a) Termination. This Agreement and all rights and obligations
hereunder with respect to any Holder's Shares (except for the indemnification
rights provided in Section 5 hereof which shall survive forever) will terminate
upon the earlier to occur of (i) three years from the date of this Agreement,
(ii) the date on which such shares of Common Stock covered by this Agreement
have been disposed of pursuant to the Securities Act or (iii) the date on which
such shares of Common Stock covered by this Agreement may be distributed to the
public pursuant to Rule 144(k) under the Securities Act.
(b) Waivers. Except as otherwise provided herein, the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the prior written consent of
Holders of a majority of all of the Holder's Shares.
(c) Amendments. Except as otherwise provided herein, this Agreement may
be amended only with the written consent of the Company and the Holders of a
majority of all of the Holder's Shares.
(d) Subsequent Holders of Holders' Shares. The right of the Holders
pursuant to this Agreement may be assigned and transferred to any transferee
purchasing Holders' Shares, other than in a public offering pursuant to a
registration statement, in an amount equal to at least 1% of the outstanding
Common Stock of the Company; provided, however, that the Company is given
written notice by the Holder at the time of such transfer stating the name and
address of the
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transferee and identifying the Holder's Shares with respect to which the rights
are being assigned.
(e) Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all counterparts taken together will constitute one and the
same Agreement.
(g) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(h) Governing Law. All questions concerning the construction, validity
and interpretation of this Agreement and the exhibits and schedules hereto will
be governed by the internal law, and not the law of conflicts, of the State of
Texas.
(i) Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally or
mailed by certified or registered mail, return receipt requested and postage
prepaid, to the recipient. Such notices, demands and other communications will
be sent to each of the Holders or subsequent holders of the Holders' Shares as
the case may be, at their respective addresses on the books of the Company, and
to the Company at the address indicated below:
If to Company: Denali Incorporated
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Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy (which
shall not constitute
notice) to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
2300 First City Tower
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Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: T. ▇▇▇▇ ▇▇▇▇▇
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
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(j) Benefit of Agreement. No person not a party to this Agreement shall
have rights under this Agreement as a third party beneficiary or otherwise.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the Effective Date.
DENALI INCORPORATED
By:
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