Exhibit 4.1
EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and entered
into as of June 28, 2000, among iExalt, Inc., a Nevada corporation ("iEXALT"),
and each person listed on the signature pages of this Agreement under the
caption "Stockholders" (each a "STOCKHOLDER" and, collectively, the
"STOCKHOLDERS").
WHEREAS, pursuant to the Agreement and Plan of Reorganization dated
June 28, 2000 entered into with iExalt ("REORGANIZATION AGREEMENT"), each of the
Stockholders has received as of the date hereof shares of common stock, par
value $.001 per share, of iExalt ("COMMON STOCK"); and
WHEREAS, to induce the Stockholders to enter into the Reorganization
Agreement, iExalt has agreed to provide registration rights on the terms set
forth in this Agreement for the benefit of the Stockholders.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. DEFINITIONS. The following capitalized terms shall have the meanings
assigned to them in this Section 1 or in the parts of this Agreement referred to
below:
CODE: the Internal Revenue Code of 1986, as amended, and any successor
thereto.
COMMISSION: the Securities and Exchange Commission, and any successor
thereto.
EXCHANGE ACT: the Securities Exchange Act of 1934, as amended, and any
successor thereto, and the rules and regulations thereunder.
EXEMPT OFFERING: as defined in Section 2.
REGISTRABLE COMMON: the shares of Common Stock set forth opposite each
Stockholder's name on SCHEDULE I attached hereto, for an aggregate of 100,000
shares, and which represent a portion of the shares of Common Stock that were
issued to the Stockholder in connection with the Reorganization Agreement, and
any additional shares of Common Stock issued or distributed in respect of any
other shares of Registrable Common by way of a stock dividend or distribution or
stock split or in connection with a combination of shares, recapitalization,
reorganization, merger, consolidation or otherwise. For purposes of this
Agreement, shares of Registrable Common will cease to be Registrable Common when
and to the extent that (i) a registration statement covering such shares has
been declared effective under the Securities Act and such shares have been
disposed of pursuant to such effective registration statement, (ii) such shares
are sold pursuant to Rule 144 or become saleable under Rule 144(k), or (iii)
such shares have been otherwise transferred to a person or entity other than
pursuant to Section 11.
REGISTRATION NOTICE: as defined in Section 2.
RULE 144: Securities Act Rule 144 (or any similar or successor provision
under the Securities Act).
SECURITIES ACT: the Securities Act of 1933, as amended, and any successor
thereto, and the rules and regulations thereunder.
SELLING STOCKHOLDER: as defined in Section 11.
2. REGISTRATION RIGHTS AND RELATED PUT RIGHT.
(a) PIGGYBACK REGISTRATION RIGHTS. At any time after the date hereof
and before the fifth anniversary of such date, whenever iExalt proposes to
register any Common Stock for its own account (or for the account of any
Stockholder of iExalt) under the Securities Act in a public offering for
cash, other than a registration relating to the offering or issuance of
shares in connection with (i) employee compensation or benefit plans or
other transactions under a Registration Statement on Form S-8 (or any
successor to Form S-8) or (ii) one or more acquisition transactions under
a Registration Statement on Form S-4 or Form S-1 under the Securities Act
(or a successor to Form S-4 or Form S-1) (any such offering or issuance
being an "EXEMPT OFFERING"), iExalt will give each Stockholder written
notice of its intent to do so (a "REGISTRATION NOTICE") at least 20 days
prior to the filing of the related registration statement with the
Commission. Such notice shall specify the approximate date on which iExalt
proposes to file such registration statement and shall contain a statement
that the Stockholders are entitled to participate in such offering and
shall set forth the number of shares of Registrable Common that represents
the best estimate of the lead managing underwriter (or if not known or
applicable, iExalt) that will be available for sale by the holders of
Registrable Common in the proposed offering. If iExalt shall have
delivered a Registration Notice, each Stockholder shall be entitled to
participate on the same terms and conditions as iExalt in the public
offering to which the Registration Notice relates and to offer and sell
shares of Registrable Common therein only to the extent provided in this
Section 2(a). Each Stockholder desiring to participate in such offering
shall notify iExalt no later than ten days following receipt of the
Registration Notice of the aggregate number of shares of Registrable
Common that such Stockholder then desires to sell in the public offering.
Each Stockholder desiring to participate in the public offering may
include shares of Registrable Common in the registration statement
relating to such offering, to the extent that the inclusion of such shares
shall not reduce the number of shares of Common Stock to be offered and
sold by iExalt to be included therein. If the lead managing underwriter
selected by iExalt for a public offering (or, if the offering is not
underwritten, a financial advisor to iExalt) determines that marketing
factors require a limitation on the number of shares of Registrable Common
to be offered and sold in such offering, there shall be included in the
offering only that number of shares of Registrable Common, if any,
requested to be included in the offering that such lead managing
underwriter or financial advisor, as the case may be, reasonably and in
good faith believes will not jeopardize the success of the offering,
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PROVIDED, HOWEVER, that if the lead managing underwriter or financial
advisor, as the case may be, determines that marketing factors require a
limitation on the number of shares of Registrable Common to be offered and
sold as aforesaid and so notifies iExalt and any requesting Stockholder in
writing, the number of shares of Registrable Common to be offered and sold
by holders desiring to participate in the offering, shall be allocated
among such holders on a PRO RATA basis based on their holdings of
Registrable Common.
Notwithstanding anything herein to the contrary, the Company shall
have the right to terminate or withdraw any registration statement
initiated by it under this Section prior to the effectiveness of such
registration whether or not any Stockholder has elected to include any
shares of Registrable Common in such registration.
(b) PUT RIGHT. If within 120 days after the closing of the
transactions contemplated in the Reorganization Agreement (the "CLOSING
DATE"), iExalt fails to file a registration statement (that is not later
withdrawn by iExalt prior to effectiveness) in which each of the
Stockholders were provided the opportunity to register for resale their
respective shares of Registrable Common, any Stockholder shall have the
right to put (the "PUT OPTION"), from time to time during the Put Period
(as defined below), all or any portion of the Registrable Common owned by
such Stockholder, to iExalt (or, in iExalt's sale discretion, any of its
affiliates) for the purchase in cash by iExalt (or its affiliate, as the
case may be) at the Put Price per share (as defined below). The Put Period
shall be the 60-day period commencing on the 120th day after the closing
date (the "CLOSING DATE") of the transactions contemplated in the
Reorganization Agreement. The Put Price shall be the average Market Price
(as defined below) of a share of Common Stock during the 120-day period
after the Closing Date, but in no event less than $1.50 per share or
greater than $2.28 per share.
A Stockholder shall exercise the Put Option by delivering written notice
to iExalt (the "PUT NOTICE") within the Put Period, after which time the
Put Option shall lapse and be of no further force and effect. If the Put
Notice is timely given by any Stockholder, the closing of the purchase as
to that Shareholder shall occur within 10 business days after iExalt's
receipt of the Put Notice. At closing, (i) iExalt (or its affiliate, as
the case may be) shall pay to the Stockholder(s) the cash purchase price
for the Registrable Common with respect to which such Stockholder(s) have
exercised the Put Option (the "PUT SHARES") such Stockholder(s) and (ii)
the Stockholder(s) shall deliver to iExalt the stock certificates
representing the Put Shares duly endorsed for transfer to iExalt (or its
affiliate as the case may be) or accompanied by blank stock powers.
For purposes of this Section 2(b), "MARKET PRICE" of a share of Common
Stock on any given date means (i) the closing sales price of a share of
Common Stock as reported on the principal securities exchange on which
shares of Common Stock are then listed or admitted to trading or (ii) if
not so reported, the average of the closing bid and asked prices for a
share of Common Stock as quoted on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or (iii) if not quoted on
NASDAQ, the average of the closing bid and asked prices for a share of
Common Stock as quoted by the National Quotation Bureau's "PINK SHEETS" or
the National Association of Securities Dealers OTC Bulletin Board
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System. If the price of a share of Common Stock shall not be so reported,
the Market Price of a share of Common Stock shall be determined in good
faith by the iExalt's board of directors in its absolute discretion.
3. REGISTRATION PROCEDURES. In connection with registrations under Section
2(a), and subject to the terms and conditions contained therein, iExalt shall:
(a) use its best efforts to prepare and file with the Commission as
soon as reasonably practicable, a registration statement with respect to
the Registrable Common and use its best efforts to cause such registration
to promptly become and remain effective for so long as is necessary to
complete the offering contemplated in such registration statement;
(b) prepare and file with the Commission such amendments (including
post-effective amendments) to such registration statement and supplements
to the related prospectus to reflect appropriately the plan of
distribution of the securities registered thereunder until the completion
of the distribution contemplated by such registration statement or for so
long thereafter as a dealer is required by law to deliver a prospectus in
connection with the offer and sale of the shares of Registrable Common
covered by such registration statement and/or as shall be necessary so
that neither such registration statement nor the related prospectus shall
contain any 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 and so that such registration statement
and the related prospectus will otherwise comply with applicable legal
requirements;
(c) provide to any Stockholder requesting to include shares of
Registrable Common in such registration statement and a single counsel for
all holders of Registrable Common requesting to include shares of
Registrable Common in such registration statement, which counsel shall be
selected by the holders of a majority of shares of Registrable Common
requested to be included in such registration statement and shall be
reasonably satisfactory to iExalt, an opportunity to review and provide
comments with respect to such registration statement (and any
post-effective amendment thereto) prior to such registration statement (or
post-effective amendment) becoming effective;
(d) use its best efforts to register and qualify the Registrable
Common covered by such registration statement under applicable securities
or "Blue Sky" laws of such jurisdictions as the Stockholders requesting to
include shares of Registrable Common in such registration statement shall
reasonably request for the distribution of the Registrable Common;
(e) take such other actions as are reasonable and necessary to
comply with the requirements of the Securities Act;
(f) furnish such number of prospectuses (including preliminary
prospectuses) and documents incident thereto as a Stockholder from time to
time may reasonably request;
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(g) provide to any Stockholder requesting to include Registrable
Common in such registration statement and any managing underwriter
participating in any distribution thereof, and to any attorney, accountant
or other agent retained by such Stockholder or managing underwriter,
reasonable access to appropriate officers and directors of iExalt to ask
questions and to obtain information reasonably requested by any such
Stockholder, managing underwriter, attorney, accountant or other agent in
connection with such registration statement or any amendment thereto;
PROVIDED, HOWEVER, that (i) in connection with any such access or request,
any such requesting persons shall cooperate to the extent reasonably
practicable to minimize any disruption to the operation by iExalt of its
business and (ii) any records, information or documents shall be kept
confidential by such requesting persons, unless (A) such records,
information or documents are in the public domain or otherwise publicly
available or (B) disclosure of such records, information or documents is
required by court or administrative order or by applicable law (including,
without limitation, the Securities Act);
(h) notify each Stockholder requesting to include shares of
Registrable Common in such registration statement, and the managing
underwriters participating in the distribution pursuant to such
registration statement, promptly (i) when iExalt is informed that such
registration statement or any post-effective amendment to such
registration statement becomes effective, (ii) of any request by the
Commission for an amendment or any supplement to such registration
statement or any related prospectus, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of such
registration statement or of any order preventing or suspending the use of
any related prospectus or the initiation or threat of any proceeding for
that purpose, (iv) of the suspension of the qualification of any shares of
Registrable Common included in such registration statement for sale in any
jurisdiction or the initiation or threat of a proceeding for that purpose,
(v) of any determination by iExalt that any event has occurred which makes
untrue any statement of a material fact made in such registration
statement or any related prospectus or which requires the making of a
change in such registration statement or any related prospectus in order
that the same will not contain any 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, and (vi) of the completion
of the distribution contemplated by such registration statement if it
relates to an offering by iExalt;
(i) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, but not later than
fifteen months after the effective date of such registration statement, an
earnings statement covering the period of at least twelve months beginning
with the first full 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;
(j) use reasonable diligence to cause all shares of Registrable
Common included in such registration statement to be listed on any
securities exchange on which the Common Stock is then listed at the
initiation of iExalt;
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(k) use reasonable diligence to obtain an opinion from legal counsel
(which may include the General Counsel of iExalt) in customary form and
covering such matters of the type customarily covered by opinions as the
underwriters, if any, may reasonably request;
(l) provide a transfer agent and registrar for all such Registrable
Common not later than the effective date of such registration statement;
(m) enter into such customary agreements (including an underwriting
agreement in customary form) as the underwriters, if any, may reasonably
request in order to expedite or facilitate the disposition of such shares
of Registrable Common; and
(n) use reasonable diligence to obtain a "comfort letter" from
iExalt's independent public accountants in customary form and covering
such matters of the type customarily covered by comfort letters as the
underwriters, if any, may reasonably request. As used in this Section 3
and elsewhere herein, the term "underwriters" does not include any
Stockholder.
4. UNDERWRITING AGREEMENT. In connection with each registration pursuant
to Section 2(a) covering an underwritten registered public offering, iExalt and
each participating Stockholder agree to enter into a written agreement with the
managing underwriter or underwriters in such form and containing such provisions
as are customary in the securities business for such an arrangement between such
underwriter and companies of iExalt's size and investment stature, including
provisions for indemnification by iExalt and each Selling Stockholder as more
fully described in Section 11.
5. AVAILABILITY OF RULE 144. Notwithstanding anything contained herein to
the contrary, (including Section 2), iExalt shall not be obligated to register
shares of Registrable Common or maintain effectiveness of any registration
statement covering Registrable Common held by any Stockholder when the resale
provisions of Rule 144(k) are available to such Stockholder or such Stockholder
is otherwise entitled to sell the shares of Registrable Common held by him, her
or it in a brokerage transaction without registration under the Securities Act
and without limitation as to volume or manner of sale or both.
6. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
shares of Registrable Common held by the Stockholders to the public without
registration, iExalt agrees that from and after the date hereof it will:
(a) make and keep public information available (as those terms are
understood and defined in Rule 144) at all times from and after 90 days
following the effective date of the registration statement;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of iExalt under the
Exchange Act at any time that it is subject to such reporting
requirements;
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(c) so long as a Stockholder owns any shares of Registrable Common,
furnish to the Stockholder forthwith upon request a written statement by
iExalt as to its compliance with the reporting requirements of the
Exchange Act (at any time that it is subject to such reporting
requirements), a copy of the most recent annual or quarterly report of
iExalt, and such other reports and documents filed in accordance with such
reporting requirements as a Stockholder may reasonably request in availing
itself of any rule or regulation of the Commission allowing a Stockholder
to sell any such securities without registration; and
(d) if required by the transfer agent and registrar for the Common
Stock, use reasonable diligence to obtain an opinion from legal counsel
(which may include the General Counsel of iExalt) addressed to such
transfer agent and registrar, with respect to any sale of shares of
Registrable Common pursuant to Rule 144 (or, at the option of iExalt, pay
the reasonable fees and expenses of legal counsel retained by a
Stockholder to provide such an opinion).
7. MARKET STANDOFF. In consideration of the granting to Stockholders of
the registration rights pursuant to this Agreement, each Stockholder agrees
that, for so long as such Stockholder holds shares of Registrable Common which
are not part of a registration as permitted by Section 2(a), such Stockholder
will not sell, transfer or otherwise dispose of, including without limitation
through put or short sale arrangements, such shares of Registrable Common in the
ten days prior to the effectiveness of any registration (other than relating to
an Exempt Offering) of Common Stock for sale to the public and for 90 days
following the effectiveness of such registration.
8. REGISTRATION EXPENSES. All expenses incurred in connection with any
registration, qualification and compliance under this Agreement (including,
without limitation, all registration, filing, qualification, legal, printing and
accounting fees, and including all reasonable fees of one counsel acting on
behalf of all holders of the securities being registered in such registration)
shall be borne by iExalt. All underwriting commissions and discounts applicable
to shares of Registrable Common included in the registrations under this
Agreement shall be borne by the holders of the securities so registered PRO RATA
on the basis of the number of shares so registered. Subject to the foregoing,
all expenses incident to iExalt's performance of or compliance with this
Agreement, including, without limitation, all filing fees, fees and expenses of
compliance with securities or Blue Sky laws (including, without limitation, fees
and disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Common), printing expenses, messenger and delivery expenses,
internal expenses (including, without limitation, all salaries and expenses of
iExalt's officers and employees performing legal or accounting duties), the fees
and expenses applicable to shares of Registrable Common included in connection
with the listing of the securities to be registered on each securities exchange
on which similar securities issued by iExalt are then listed at the initiation
of iExalt, registrar and transfer agents' fees and fees and disbursements of
counsel for iExalt and its independent certified public accountants, Securities
Act liability insurance of iExalt and its officers and directors (if iExalt
elects to obtain such insurance), the fees and expenses of any special experts
retained by iExalt in connection with such registration and fees and expenses of
other persons retained by iExalt and incurred in connection with each
registration hereunder (but not including,
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without limitation, any underwriting fees, discounts or commissions attributable
to the sale of Registrable Common, and transfer taxes, if any), will be borne by
iExalt.
9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No holder of Registrable
Common may participate in any underwritten registration hereunder unless such
holder (a) agrees to sell such holder's securities on the basis provided in any
underwriting arrangements approved by iExalt and (b) completes and executes all
questionnaires, powers of attorney, custody agreements, indemnities, lock-up
agreements, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements.
10. TRANSFER OF REGISTRATION RIGHTS; ADDITIONAL GRANTS OF REGISTRATION
RIGHTS. The registration rights and put rights provided to the holders of
Registrable Common under Section 2 hereof may not be transferred to any other
person or entity, except by will or pursuant to the laws of descent and
distribution; PROVIDED, HOWEVER, that such transferees agree to be bound by and
subject to the terms and conditions contained herein. iExalt may, without the
consent of the Stockholders, extend the registration rights provided for in this
Agreement to additional persons or entities who become holders of Common Stock
subsequent to the date of this Agreement by entering into one or more addenda to
this Agreement with any such persons or entities, and, upon execution of any
such addenda, any person or entity that is a party thereto shall thereafter be a
"Stockholder" for purposes of this Agreement and any shares of Common Stock
referred to therein as such shall be shares of "Registrable Common" for purposes
of this Agreement; PROVIDED, HOWEVER, iExalt may in such addenda specifically
exclude any such additional holders of Common Stock from being entitled to the
put rights set forth in Section 2(b). Nothing herein shall limit the ability of
iExalt to grant to any person or entity any registration or similar rights in
the future with respect to Common Stock or other securities of iExalt (whether
pursuant to the foregoing provision or otherwise).
11. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. To the extent permitted by law,
iExalt agrees to indemnify and hold harmless each Stockholder who sells
shares of Registrable Common in a registered offering pursuant to Section
2(a) (a "SELLING STOCKHOLDER"), from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable legal
expenses) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any registration
statement or prospectus relating to the Registrable Common or in any
amendment or supplement thereto or in any related preliminary prospectus,
or arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses arise out of, or are based upon,
any such untrue statement or omission or allegation thereof based upon
information furnished in writing to iExalt by such Selling Stockholder or
on such Selling Stockholder's behalf expressly for use therein.
Notwithstanding the foregoing, iExalt's indemnification obligations with
respect to any preliminary prospectus shall not inure to the benefit of
any Selling Stockholder or underwriter with respect to any loss, claim,
damage, liability (or actions in respect thereof) or expense arising out
of or based on any untrue statement or alleged untrue statement or
omission or alleged omission to state a
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material fact in such preliminary prospectus, in any case where (i) a copy
of the prospectus used to confirm sales of shares of Registrable Common
was not sent or given to the person asserting such loss, claim, damage or
liability at or prior to the written confirmation of the sale to such
person and (ii) such untrue statement or alleged untrue statement or
omission or alleged omission was corrected in such prospectus.
(b) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt
by a Selling Stockholder of notice of any claim or the commencement of any
action or proceeding brought or asserted against such Selling Stockholder
in respect of which indemnity may be sought from iExalt, such Selling
Stockholder shall notify iExalt in writing of the claim or the
commencement of that action or proceeding; PROVIDED, HOWEVER, that the
failure to so notify iExalt shall not relieve iExalt from any liability
that it may have to the Selling Stockholder otherwise than pursuant to the
indemnification provisions of this Agreement. If any such claim or action
or proceeding shall be brought against a Selling Stockholder, except to
the extent iExalt is damaged by the failure to be so notified, iExalt
shall have the right to assume the defense thereof, including the
employment of counsel. Such Selling Stockholder shall have the right to
employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Selling Stockholder unless (i) iExalt has agreed to pay
such fees and expenses or (ii) the named parties to any such action or
proceeding include both such Selling Stockholder and iExalt, and such
Selling Stockholder shall have been advised by counsel that there may be
one or more legal defenses available to such Selling Stockholder which are
different from or additional to those available to iExalt, in which case,
if such Selling Stockholder notifies iExalt in writing that it elects to
employ separate counsel at the expense of iExalt, iExalt shall not have
the right to assume the defense of such action or proceeding on behalf of
such Selling Stockholder; it being understood, however, that iExalt shall
not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of
attorneys (together with appropriate local counsel) at any time for all
Selling Stockholders. iExalt shall not be liable for any settlement of any
such action or proceeding effected without iExalt's written consent.
(c) INDEMNIFICATION BY HOLDERS OF REGISTRABLE COMMON. In connection
with any registration in which a Selling Stockholder is participating,
such Selling Stockholder will furnish to iExalt in writing such
information and affidavits as iExalt reasonably requests for use in
connection with any related registration statement or prospectus. To the
extent permitted by law, each Selling Stockholder agrees to indemnify and
hold harmless iExalt, its directors and officers who sign the registration
statement relating to shares of Registrable Common offered by such Selling
Stockholder and each person, if any, who controls iExalt within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from iExalt to
such Selling Stockholder, but only with respect to information concerning
such Selling Stockholder furnished in writing by such Selling Stockholder
or on such Selling Stockholder's behalf expressly for use in any
registration statement or prospectus relating to shares of Registrable
Common offered
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by such Selling Stockholder, or any amendment or supplement thereto, or
any related preliminary prospectus. In case any action or proceeding shall
be brought against iExalt or its directors or officers, or any such
controlling person, in respect of which indemnity may be sought against
such Selling Stockholder, such Selling Stockholder shall have the rights
and duties given to iExalt, and iExalt or its directors or officers or
such controlling persons shall have the rights and duties given to such
Selling Stockholder, by the preceding paragraph. Each Selling Stockholder
also agrees to indemnify and hold harmless any underwriters of the
Registrable Common, their partners, officers and directors and each person
who controls such underwriters (within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act) on substantially the
same basis as that of the indemnification of iExalt provided in this
Section 11(c). Notwithstanding anything to the contrary herein, in no
event shall the amount paid or payable by any Selling Stockholder under
this Section 12(c) exceed the amount of proceeds received by such Selling
Stockholder from the offering of the Registrable Common.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 11 is unavailable to any indemnified party in respect of any
losses, claims, damages, liabilities or expenses referred to herein, then
each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities and expenses in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified parties in connection with the
actions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by such indemnified party or indemnified parties and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. iExalt and the Selling
Stockholders agree that it would not be just and equitable if contribution
pursuant to this Section 11(d) were determined by PRO RATA allocation or
by any other method of allocation that does not take account of the
equitable considerations referred to in this Section 11(d). 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 11, the indemnifying
parties shall indemnify each indemnified party to the full extent provided
in Sections 11(a) and (c) without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 11(d).
12. MISCELLANEOUS
(a) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not
be given, unless iExalt has
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obtained the written consent of holders of at least 51% of the shares of
Registrable Common then outstanding.
(b) NOTICES. All notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally or sent by telex or telecopy, or
registered or certified mail (return receipt requested), postage prepaid,
or courier to the parties at the following addresses (or at such other
address for any party as shall be specified by like notice), PROVIDED that
notices of a change of address shall be effective only upon receipt
thereof. Notices sent by mail shall be effective when receipt is
acknowledged, notices sent by telecopier shall be effective when receipt
is confirmed, and notices sent by courier guaranteeing next day delivery
shall be effective on the next business day after timely delivery by the
courier. Notices shall be sent to the following addresses:
(i) if to a Stockholder, at the most current address given by such
Stockholder to iExalt in a writing making specific reference to this
Agreement;
(ii) if to iExalt, at the following address:
iExalt, Inc.
4103 Windfern
Houston, Texas 77042
Attn: Jack I. Tompkins
Telecopy: (713) 462-1950
with copies to:
Porter & Hedges, L.L.P.
700 Louisiana Street, Suite 3500
Houston, Texas 77002
Attn: Chris A. Ferazzi
Telecopy: (713) 228-4935
(c) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the heirs, executors, administrators,
successors and assigns of each of the parties as permitted herein.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(e) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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(f) SECTION REFERENCES. Unless the context requires otherwise,
references in this Agreement to "Sections" are to Sections of this
Agreement.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED WHOLLY WITHIN THAT STATE.
(h) SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all the rights and privileges of
the Stockholders shall be enforceable to the fullest extent permitted by
law.
(i) ENTIRE AGREEMENT; TERMINATION. This Agreement is intended by the
parties as a final expression of their agreement and a complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the parties
with respect to such subject matter. This Agreement, except the provisions
of Section 11 (which shall survive until the expiration of the applicable
statutes of limitations) and this Section 12, shall terminate and be of no
further force or effect on June 28, 2003.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
iExalt:
iEXALT, INC.
By: /s/ JACK I. TOMPKINS
Jack I. Tompkins,
Chief Executive Officer
STOCKHOLDERS:
/s/ STEVE E. HICKS
Steve E. Hicks
/s/ DANIEL M. CAIN
Daniel M. Cain
/s/ BARBARA H. CLAIBORN
Barbara H. Claiborn
/s/ JOHN H. SHORT
John H. Short
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/s/ DEBRA WHITE LOCKWOOD
Debra White Lockwood
/s/ DONALD W. SAPAUGH
Donald W. Sapaugh
/s/ M. STEPHEN MAY
M. Stephen May
/s/ CHARLES H. CAPERTON
Charles H. Caperton
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