INVESTOR RIGHTS AGREEMENT

 

                                                                    EXHIBIT 10.2

 

                            INVESTOR RIGHTS AGREEMENT

 

 

         THIS INVESTOR RIGHTS AGREEMENT (this "Agreement") is dated as of

November 12, 2004 by and among (i) NxtPhase T&D Corp., a Canadian corporation

(the "Company"), (ii) Perseus 2000, L.L.C., a Delaware limited liability company

("Perseus"), (iii) El Dorado Investment Company, an Arizona corporation ("El

Dorado"), (iv) GE Capital Equity Holdings, B.V., a company incorporated under

the laws of Netherlands ("GE"), (v) Working Opportunity Fund (EVCC) Ltd., a

British Columbia corporation ("WOF"), (vi) Hydro-Quebec Capitech Inc., a Quebec

corporation ("HQC"), (vii) Canadian Science and Technology Growth Fund Inc., a

Canadian corporation ("CSTGF"), and (viii) OPG Ventures Inc., an Ontario

corporation ("OPG"). Each of Perseus, El Dorado, GE, WOF, HQC, CSTGF and OPG are

sometimes referred to herein as a "Stockholder" and collectively as the

"Stockholders." Certain terms used in this Agreement are defined in Exhibit A

hereto.

 

                                 R E C I T A L S

 

A. Each of the Stockholders has made an investment in the Company by acquiring,

by payment of cash consideration or the exchange of debt, or both, the Company's

Class A Preferred Shares (the "Class A Preferred").

 

B. In connection with such purchase of the Class A Preferred, and to induce the

Stockholders to consummate such purchase of the Class A Preferred, the Company

has agreed to enter into this Agreement and to grant to the Stockholders the

rights set forth herein.

 

                                    AGREEMENT

 

         NOW, THEREFORE, in consideration of the foregoing and of the mutual

promises and covenants contained herein, the Stockholders and the Company

(collectively, the "Parties") agree as follows:

 

1. MANAGEMENT OF THE COMPANY.

 

1.1. Representation. From and after the date hereof, each Stockholder shall vote

all of the voting securities of the Company over which such Stockholder has

voting control so as to effect the following:

 

(a) The authorized number of directors of the Company's Board of Directors (the

"Board") shall be established at five members.

 

(b) The following persons shall be elected to the Board at each election of

directors, which shall occur annually, during the term of this Agreement:

 

                           (i) Three persons (the "Perseus Designees")

designated by Perseus;

 

(ii)      One person designated by El Dorado ("El Dorado Designee"); and

 

(iii)     One person designated by the holders of the Company's capital stock, on

         an as-converted basis, which person shall be the incumbent Chief

         Executive Officer of the Company.

 

(c)       At any time, any Perseus Designee or El Dorado Designee may be removed

          from the Board (and thereupon from all committees thereof), with or

         without cause, at the written request of the Stockholder or

         Stockholders that designated such director in accordance herewith.

 

(d)       In the event that any person designated to serve on the Board hereunder

         for any reason ceases to serve as a director of the Board or any

         committee thereof during such director's term of office, the resulting

         vacancy on the Board or any Committees shall be filled by a person

         designated by the Stockholder or Stockholders that designated the

         director vacating the office in accordance herewith.

 

1.2.      Insurance. The Company shall at all times maintain insurance for its

         officers and directors, in an amount equal to or greater than

         US$1,000,000.

 

2.        REGISTRATION RIGHTS.

 

2.1.      Definitions. For purposes of this Section 2:

 

                  "Commencement Date" means the 180th day after the date on

which the Company consummates its initial public offering of securities under

the Securities Act.

 

                  "Commission" means the Securities and Exchange Commission or

any successor thereto.

 

                  "Demand Holder" means (i) a Stockholder, (ii) the partners,

members or stockholders of a Stockholder collectively provided that such

partners, members or stockholders act through such Stockholder or its successor,

and (iii) any person or entity to whom a Stockholder or any person or entity

identified in clause (ii) of this definition sells, transfers or assigns at

least 100,000 shares of the Company's Registrable Securities as adjusted for

stock dividends, stock splits, recapitalizations and the like, other than in a

sale pursuant to Rule 144 under the Securities Act or a registration effected

pursuant to this Agreement.

 

                  "Exchange Act" means the Securities Exchange Act of 1934, as

amended, or any successor statute.

 

                  "Holder" means (i) a Stockholder, (ii) the partners, members

or stockholders of a Stockholder collectively provided that such partners,

members or stockholders act through such Stockholder or its successor, and (iii)

any person or entity to whom a Stockholder or any person or entity identified in

clause (ii) of this definition sells, transfers or assigns at least 100,000

shares of the Company's Registrable Securities as adjusted for stock dividends,

stock splits, recapitalizations and the like, other than in a sale pursuant to

Rule 144 under the Securities Act or a registration effected pursuant to this

Agreement.

 

                  "Long-Form Registration" means a registration effected on any

form approved by the Commission other than a Form S-3 or any other form that

provides for future incorporation by reference of information from reports filed

by the registrant under the Exchange Act, and qualification for distribution of

all or part of the Registrable Securities by long-form prospectus in each of the

provinces of Canada.

 

                  "Register," "registered," and "registration" refer to an

underwritten registration effected by preparing and filing with the Commission a

registration statement or similar document in compliance with the Securities

Act, and the declaration or ordering by the Commission of effectiveness of such

registration statement or document, and in Canada the filing and receipt of a

prospectus in each province of Canada.

 

                  "Registration Expenses" means all expenses incurred in

connection with the Company's performance of or compliance with its obligations

under this Section 2, including, without limitation, all (i) registration,

qualification and filing fees; (ii) fees, costs and expenses of compliance with

securities or blue sky laws (including reasonable fees, expenses and

disbursements of counsel for the underwriters in connection with blue sky

qualifications of the Registrable Securities under the laws of such

jurisdictions as the managing underwriter or underwriters in a registration may

designate, subject to the limitation as set forth in subsection (h) of Section

2.5 hereof); (iii) printing expenses; (iv) messenger, telephone and delivery

expenses; (v) fees, expenses and disbursements of counsel for the Company and of

all independent certified public accountants retained by the Company (including

the expenses of any special audit and "cold comfort" letters required by or

incident to such performance); (vi) Securities Act liability insurance if the

Company so desires; (vii) fees, expenses and disbursements of any other

individuals or entities retained by the Company in connection with the

registration of the Registrable Securities; (viii) fees, costs and expenses

incurred in connection with the listing of the Registrable Securities on each

national securities exchange or automated quotation system on which the Company

has made application for the listing or quotation of its Common Stock; and (ix)

internal expenses of the Company (including, without limitation, all salaries

and expenses of its officers and employees performing legal or accounting duties

and expenses of any annual audit). Registration Expenses shall not include

selling commissions, discounts or other compensation paid to underwriters or

other agents or brokers to effect the sale of Registrable Securities, or counsel

fees and any other expenses incurred by Holders in connection with any

registration that are not specified in the immediately preceding sentence.

 

                  "Registrable Securities" means (i) any shares of Common Stock

of the Company owned by any Holder or that may be acquired by any Holder upon

the conversion of any convertible security or the exercise of any warrant or

option owned by any Holder, but only to the extent such shares constitute

"restricted securities" under Rule 144 under the Securities Act, and (ii) any

shares of Common Stock issued or issuable pursuant to securities issued with

respect to or in exchange for the securities referenced in section (i) above

upon any stock split, stock dividend, recapitalization, substitution, or similar

event, but only to the extent such shares constitute "restricted securities"

under Rule 144 of the Securities Act, or in Canada, only to the extent a trade

of those shares of Common Stock by the Holder would constitute a distribution or

deemed distribution for the purposes of the securities laws of a province of

Canada, excluding in all cases, however, any Registrable Securities sold in a

transaction in which the rights under this Section 2 are not assigned.

 

                  "Requestor" means the Demand Holder or Demand Holders

requesting the registration in question. Actions taken by the Requestor shall be

taken by those Demand Holders making such request who hold a majority of the

Registrable Securities held by such Demand Holders.

 

                  "Securities Act" means the Securities Act of 1933, as amended,

or any successor statute.

 

                  "Short-Form Registration" means a registration effected on a

Form S-3 or any other form that provides for future incorporation by reference

of information from reports filed by the registrant under the Exchange Act, or

if available, a short-form prospectus in each province of Canada under the rules

for pricing of offerings after the prospectus is receipted or otherwise.

 

2.2. Demand Registrations.

 

(a) Request for Registration. If at any time after the Commencement Date one or

more Demand Holders (who in the case of a Long-Form Registration hold in the

aggregate at least 50% of the Registrable Securities then held by all Demand

Holders) submits a written request (a "Demand Notice") to the Company that the

Company register Registrable Securities under and in accordance with the

Securities Act (a "Demand Registration"), then the Company shall:

 

                           (i) within five days after receipt of such Demand

Notice, give written notice of

the proposed registration to all other Holders; and

 

                           (ii) as soon as practicable, use diligent efforts to

effect such registration as

may be so requested and as would permit or facilitate the sale and distribution

of all or such portion of such Registrable Securities as are specified in such

request, together with all or such portion of the Registrable Securities of any

Holders joining in such request as are specified in written requests received by

the Company within 20 days after the date the Company mails the written notice

referred to in clause (i) above.

 

             Notwithstanding the foregoing, if the Company shall furnish to the

Holders a certificate signed by the president of the Company stating that in the

good faith judgment of the Board, it would be seriously detrimental to the

Company or its stockholders for a registration statement to be filed on or

before the date filing would be required in connection with a Demand

Registration and it is therefore essential to defer the filing of such

registration statement, the Company shall have the right to defer such filing or

delay its effectiveness for a reasonable period not to exceed 120 days provided

that such right shall not be exercised more than once with respect to a request

for registration hereunder during any period of twelve consecutive months. The

Company will pay all Registration Expenses in connection with such withdrawn

request for registration.

 

             Notwithstanding the foregoing, the Company shall not be required to

effect (i) more than one Long-Form Registration, (ii) any registration where the

anticipated aggregate gross proceeds from the sale of the Registrable Securities

to be included in such registration is less than $1,250,000, (iii) any

Short-Form Registration unless the Company is eligible to effect a Short-Form

Registration of the Registrable Securities proposed to be sold thereby, or (iv)

any registration requested within less than six months after the filing of

another registration pursuant to this Section 2 in which all of the Registrable

Securities requested to be included in such registration by participating

Holders were so included.

 

(b) Underwriting. In connection with any registration under this Section 2.2, if

so requested by the Requestor, the Company and the participating Holders shall

enter into an underwriting agreement with one or more underwriters selected by

the Requestor having terms and conditions customary for such agreements;

provided, however, that none of the Holders shall be required to make any

representations or warranties or provide indemnification except as relates to

such Holder's Registrable Securities, including such Holder's ownership of

shares and authority to enter into the underwriting agreement and to such

Holder's intended method of distribution, and the liability of such Holder shall

be limited to an amount equal to the net proceeds from the offering received by

such Holder, except in the case of willful fraud. Notwithstanding any other

provision of this Section 2.2, if the managing underwriter determines that

marketing factors require a limitation of the number of shares to be

underwritten, the managing underwriter may limit the number of Registrable

Securities to be included in such registration. The Company shall so advise all

Holders distributing Registrable Securities through such underwriting, and there

shall be excluded from such registration and underwriting, to the extent

necessary to satisfy such limitation, shares held by the Demand Holders. As

among the Demand Holders as a group, the number of Registrable Securities that

may be included in the registration and underwriting shall be allocated in

proportion, as nearly as practicable, to the respective amounts of Registrable

Securities required to be included (determined without regard to any requirement

of a request to be included in such registration) in such registration held by

all Demand Holders at the time of filing the registration statement. To

facilitate the allocation of shares in accordance with the above provisions, the

Company may round the number of shares allocated to any Demand Holder to the

nearest 100 shares. No securities to be sold by the Company or any Person that

is not a Holder may be included in any registration effected pursuant to this

Section 2.2 unless such inclusion is approved by the Holders of a majority of

the Registrable Securities to be included in such registration.

 

(c) Shelf Registration. If the Company effects a Short-Form Registration

pursuant to this Section 2.2, unless otherwise directed by the Requestor, such

Short-Form Registration shall be effected as a "shelf" registration pursuant to

Rule 415 under the Securities Act (or any successor rule). Any such shelf

registration shall cover the disposition of all Registrable Securities included

in such registration in one or more underwritten offerings, block transactions,

broker transactions, at-market transactions and in such other manner or manners

as may be specified by the Requestor. The Company shall use its best efforts to

keep such "shelf" registration continuously effective as long as the delivery of

a prospectus is required under the Securities Act in connection with the

disposition of the Registrable Securities registered thereby and in furtherance

of such obligation, shall supplement or amend such registration statement if, as

and when required by the rules, regulations and instructions applicable to the

form used by the Company for such registration or by the Securities Act or by

any other rules and regulations thereunder applicable to shelf registrations. On

one occasion during each twelve consecutive months such shelf registration

statement remains effective, upon their receipt of a certificate signed by the

Chief Executive Officer of the Company in accordance with Section 2.2 hereof,

the Holders will refrain from making any sales of Registrable Securities under

the shelf registration statement for a reasonable period not to exceed 120 days;

provided that this right to cause the Holders to refrain from making sales shall

not be exercised by the Company during the one year period following any

exercise of the Company's right to defer the filing or delay its effectiveness

of a registration statement under Section 2.2(a).

 

2.3. Company Registration.

 

(a) Notice of Registration. If at any time or from time to time, the Company

shall determine to register any of its Common Stock, whether or not for its own

account, other than a registration relating to employee benefit plans or a

registration effected on Form S-4, the Company shall:

 

(i) provide to each Holder written notice thereof at least 15 Business Days

prior to the filing of the registration statement by the Company in connection

with such registration; and

 

                            (ii) include in such registration, and in any

underwriting involved therein, all

those Registrable Securities specified in a written request by each Holder

received by the Company within 10 Business Days after the Company mails the

written notice referred to above, subject to the provisions of Section 2.3(b)

below.

 

(b) Underwriting. The right of any Holder to registration pursuant to this

Section 2.3 shall be conditioned upon the participation by such Holder in the

underwriting arrangements specified by the Company in connection with such

registration and the inclusion of the Registrable Securities of such Holder in

such underwriting to the extent provided herein. All Holders proposing to

distribute their Registrable Securities through such underwriting shall

(together with the Company) enter into an underwriting agreement in customary

form with the managing underwriter selected for such underwriting by the Company

and take all other actions, and deliver such opinions and certifications, as may

be reasonably requested by such managing underwriter; provided, however, that

none of the Holders shall be required to make any representations or warranties

or provide indemnification except as relates to such Holder's Registrable

Securities, including such Holder's ownership of shares and authority to enter

into the underwriting agreement and to such Holder's intended method of

distribution, and the liability of such Holder shall be limited to an amount

equal to the net proceeds from the offering received by such Holder, except in

the case of willful fraud. Notwithstanding any other provision of this Section

2.3, if the managing underwriter determines that marketing factors require a

limitation of the number of shares to be underwritten, the managing underwriter

may limit the number of Registrable Securities to be included in such

registration. The Company shall so advise all Holders distributing Registrable

Securities through such underwriting, and there shall be excluded from such

registration and underwriting, to the extent necessary to satisfy such

limitation, first shares held by the Demand Holders and, thereafter, to the

extent necessary, shares which the Company wishes to register for its own

account. As among the Demand Holders as a group, the number of Registrable

Securities that may be included in the registration and underwriting shall be

allocated in proportion, as nearly as practicable, to the respective amounts of

Registrable Securities required to be included (determined without regard to any

requirement of a request to be included in such registration) in such

registration held by all Demand Holders at the time of filing the registration

statement. To facilitate the allocation of shares in accordance with the above

provisions, the Company may round the number of shares allocated to any Demand

Holder to the nearest 100 shares.

 

(c) Right to Terminate Registration. The Company shall have the right to

terminate or withdraw any registration initiated by it under this Section 2.3

prior to the effectiveness of such registration whether or not any Holder has

elected to include Registrable Securities in such registration.

 

2.4. Expense of Registration. All Registration Expenses incurred in connection

with the registration and other obligations of the Company pursuant to Sections

2.2, 2.3 and 2.5 shall be borne by the Company. Notwithstanding the foregoing,

in the event that Demand Holders cause the Company to begin a registration

pursuant to Section 2.2, and the request for such registration is subsequently

withdrawn by the Demand Holders or such registration is not completed due to

failure to meet the net proceeds requirement set forth in such section or is

otherwise not successfully completed due to no fault of the Company, all Demand

Holders shall be deemed to have forfeited their right to one registration under

Section 2.2 unless the Demand Holders pay for, or reimburse the Company for, all

of the Registration Expenses incurred in connection with such withdrawn or

incomplete registration, provided further, however, that if at the time of such

withdrawal, the Demand Holders have learned of a material adverse change in the

condition, business or prospects of the Company from that known to the Demand

Holders at the time of their request and have withdrawn the request with

reasonable promptness following disclosure by the Company of such material

adverse change, then the Demand Holders shall not be required to pay any of such

expenses and shall retain their rights pursuant to Section 2.2. Unless otherwise

stated, all Selling Expenses relating to securities registered on behalf of the

Holders and all other expenses of the registration that are not Registration

Expenses, shall be borne by the Holders of such securities pro rata on the basis

of the number of shares so registered or proposed to be so registered.

 

2.5. Registration Procedures. If and whenever the Company is required by the

provisions of this Section 2 to effect the registration of Registrable

Securities, the Company shall:

 

(a) promptly prepare and file with the Commission a registration statement with

respect to such Registrable Securities on any form that may be utilized by the

Company and that shall permit the disposition of the Registrable Securities in

accordance with the intended method or methods of disposition thereof, and use

its reasonable diligent efforts to cause such registration statement to become

effective as promptly as practicable and remain effective thereafter as provided

herein, provided that prior to filing a registration statement or prospectus or

any amendments or supplements thereto, including documents incorporated by

reference after the initial filing of any registration statement, the Company

will furnish to each of the Stockholders whose Registrable Securities are

covered by such registration statement, their counsel and the underwriters

copies of all such documents proposed to be filed sufficiently in advance of

filing to provide them with a reasonable opportunity to review such documents;

 

(b) prepare and file with the Commission such amendments (including

post-effective amendments) and supplements to such registration statement and

the prospectus used in connection therewith as may be necessary to keep such

registration statement effective and current and to comply with the provisions

of the Securities Act with respect to the sale or other disposition of all

Registrable Securities covered by such registration statement, including such

amendments (including post-effective amendments) and supplements as may be

necessary to reflect the intended method of disposition by the prospective

seller or sellers of such Registrable Securities, provided that, except in the

case of a shelf registration, such registration statement need not be kept

effective and current for longer than 120 days subsequent to the effective date

of such registration statement;

 

(c) provide customary indemnity and contribution arrangements to any qualified

independent underwriter or qualified independent pricer (a "Qualified

Independent Underwriter/Pricer") as defined in Schedule E of the Bylaws of the

NASD, if requested by such Qualified Independent Underwriter/Pricer, on such

reasonable terms as such Qualified Independent Underwriter/Pricer customarily

requires;

 

(d) subject to receiving reasonable assurances of confidentiality, for a

reasonable period after the filing of such registration statement, and

throughout each period during which the Company is required to keep a

registration effective, make available for inspection by the selling Holders of

Registrable Securities being offered, and any underwriters, and their respective

counsel, such financial and other information and books and records of the

Company, and cause the officers, directors, employees, counsel and independent

certified public accountants of the Company to respond to such inquiries as

shall be reasonably necessary, in the judgment of such counsel, to conduct a

reasonable investigation within the meaning of Section 11 of the Securities Act;

 

(e) promptly notify the selling Holders of Registrable Securities and any

underwriters and confirm such advice in writing, (i) when such registration

statement or the prospectus included therein or any prospectus amendment or

supplement or post-effective amendment has been filed, and, with respect to such

registration statement or any post-effective amendment, when the same has become

effective, (ii) of any comments by the Commission, by the NASD, and by the blue

sky or securities commissioner or regulator of any state with respect thereto or

any request by any such entity for amendments or supplements to such

registration statement or prospectus or for additional information, (iii) of the

issuance by the Commission of any stop order suspending the effectiveness of

such registration statement or the initiation or threatening of any proceedings

for that purpose, (iv) if at any time the representations and warranties of the

Company cease to be true and correct in all material respects, (v) of the

receipt by the Company of any notification with respect to the suspension of the

qualification of the Registrable Securities for sale in any jurisdiction or the

initiation or threatening of any proceeding for such purpose, or (vi) at any

time when a prospectus is required to be delivered under the Securities Act,

that such registration statement, prospectus, prospectus amendment or supplement

or post-effective amendment, or any document incorporated by reference in any of

the foregoing, contains an untrue statement of a material fact or omits to state

any material fact required to be stated therein or necessary to make the

statements therein, in light of the circumstances under which they are made, not

misleading;

 

(f) furnish to each selling Holder of Registrable Securities being offered, and

any underwriters, prospectuses or amendments or supplements thereto, in such

quantities as they may reasonably request and as soon as practicable, that

update previous prospectuses or amendments or supplements thereto;

 

(g) permit selling Holders of Registrable Securities to rely on any

representations and warranties made to any underwriter of the Company or any

opinion of counsel or "cold comfort" letter delivered to any such underwriter,

and indemnify each such holder to the same extent that it indemnifies any such

underwriter;

 

(h) use reasonable diligent efforts to (i) register or qualify the Registrable

Securities to be included in a registration statement hereunder under such other

securities laws or blue sky laws of such jurisdictions within the United States

of America as any selling Holder of such Registrable Securities or any

underwriter of the securities being sold shall reasonably request, (ii) keep

such registrations or qualifications in effect for so long as the registration

statement remains in effect and (iii) take any and all such actions as may be

reasonably necessary or advisable to enable such holder or underwriter to

consummate the disposition in such jurisdictions of such Registrable Securities

owned by such holder; provided, however, that the Company shall not be required

for any such purpose to (x) qualify generally to do business as a foreign

corporation in any jurisdiction wherein it would not otherwise be required to

qualify but for the requirements of this Section 2.5(h), (y) subject itself to

taxation in any such jurisdiction or (z) consent to general service of process

in any such jurisdiction;

 

(i) cause all such Registrable Securities to be listed or accepted for quotation

on each securities exchange or automated quotation system on which the Company's

Common Stock then trades;

 

(j) file with the applicable securities regulatory authorities in each province

of Canada a copy of the prospectus to be included as part of the registration

statement; and

 

(k) otherwise use reasonable diligent efforts to comply with all applicable

provisions of the Securities Act, and rules and regulations of the Commission,

and make available to its security holders, as soon as reasonably practicable,

an earnings statement covering a period of at least twelve months which shall

satisfy the provisions of Section 11(a) of the Securities Act and Rule 158

thereunder.

 

2.6. Indemnification. In the event any of the Registrable Securities are

included in a registration statement under this Section 2:

 

(a) the Company will indemnify each Holder who participates in such

registration, each of its officers and directors and partners and such Holder's

separate legal counsel and independent accountants, and each person controlling

such Holder within the meaning of Section 15 of the Securities Act, and each

underwriter, if any, and each person who controls any underwriter within the

meaning of Section 15 of the Securities Act, against all expenses, claims,

losses, damages or liabilities (or actions in respect thereof), including any of

the foregoing incurred in settlement of any litigation, commenced or threatened,

arising out of or based on any untrue statement (or alleged untrue statement) of

a material fact contained in any registration statement, prospectus, offering

circular or other document, or any amendment or supplement thereto, incident to

any such registration, qualification or compliance, or based on any omission (or

alleged omission) to state therein a material fact required to be stated therein

or necessary to make the statements therein, in light of the circumstances in

which they were made, not misleading, or any violation by the Company of any

rule or regulation promulgated under the Securities Act applicable to the

Company in connection with any such registration, qualification or compliance,

and the Company will reimburse each such Holder, each of its officers and

directors and partners and such Holder's separate legal counsel and independent

accountants and each person controlling such Holder, each such underwriter and

each person who controls any such underwriter, for any legal and any other

expenses reasonably incurred in connection with investigating, preparing or

defending any such claim, loss, damage, liability or action, provided that the

Company will not be liable in any such case to the extent that any such claim,

loss, damage, liability or expense arises out of or is based on any untrue

statement or omission or alleged untrue statement or omission, made in reliance

upon and in conformity with written information furnished to the Company by an

instrument duly executed by such Holder or underwriter and stated to be

specially for use therein.

 

(b) Each Holder will, if Registrable Securities held by such Holder are included

in the securities as to which such registration, qualification or compliance is

being effected, indemnify the Company, each of its directors and officers and

its legal counsel and independent accountants, each underwriter, if any, of the

Company's securities covered by such a registration statement, each person who

controls the Company or such underwriter within the meaning of Section 15 of the

Securities Act, and each other such Holder, each of its officers and directors

and each person controlling such Holder within the meaning of Section 15 of the

Securities Act, against all claims, losses, damages and liabilities (or actions

in respect thereof) arising out of or based on any untrue statement (or alleged

untrue statement) of a material fact contained in any such registration

statement, prospectus, offering circular or other document, or any omission (or

alleged omission) to state therein a material fact required to be stated therein

or necessary to make the statement therein not misleading, and will reimburse

the Company, such Holders, such directors, officers, persons, underwriters or

control persons for any legal or any other expenses reasonably incurred in

connection with investigating or defending any such claim, loss, damage,

liability or action, in each case to the extent, but only to the extent, that

such untrue statement (or alleged untrue statement) or omission (or alleged

omission) is made in such registration statement, prospectus, offering circular

or other document in reliance upon and in conformity with written information

furnished to the Company by an instrument duly executed by such Holder and

stated to be specifically for use therein.

 

(c) Each party entitled to indemnification under this Section 6 (the

"Indemnified Party") shall give notice to the party required to provide

indemnification (the "Indemnifying Party") promptly after such Indemnified Party

has actual knowledge of any claim as to which indemnity may be sought provided

that failure to give such prompt notice shall not relieve the Indemnifying Party

of its obligations hereunder unless it is materially prejudiced thereby, and

shall permit the Indemnifying Party to assume the defense of any such claim or

any litigation resulting therefrom, provided that counsel for the Indemnifying

Party, who shall conduct the defense of such claim or litigation, shall be

approved by the Indemnified Party (whose approval shall not unreasonably be

withheld). The Indemnifying Party shall not assume the defense for any matters

as to which there is a conflict of interest between the Indemnifying Party and

any Indemnified Party or as to which any Indemnified Party may have one or more

available defenses that are separate or different from the defenses available to

the Indemnifying Party. As to any matter where the Indemnifying Party is not

permitted to, or does not, assume the defense, the Indemnified Parties may

assume the defense and the Indemnifying Party shall pay, on an as-incurred

basis, the reasonable legal fees and expenses of one principal la