Document:

EXHIBIT 10.2

 

“Confidential
Treatment Requested.  Confidential
portions of this document have been omitted and have been separately filed with
the Commission.  Confidential treatment
has been requested with respect to the omitted portions.”

 

 

 

Committed Account Receivable Purchase
Agreement

 

 

Dated April 1, 2005

 

 

Sanmina-SCI Magyarorszag Elektronikai
Gyarto Kft

(Supplier)

 

Citibank International Plc

(Bank)

 

 

	
  Contents

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1

  	
  Definitions and
  Interpretation

  	
  1

  
	
   

  	
   

  	
   

  
	
  2

  	
  The Facility

  	
  3

  
	
   

  	
   

  	
   

  
	
  3

  	
  Conditions Precedent

  	
  3

  
	
   

  	
   

  	
   

  
	
  4

  	
  Purchase and
  Sale of Account Receivable

  	
  3

  
	
   

  	
   

  	
   

  
	
  5

  	
  Representations and
  Warranties

  	
  4

  
	
   

  	
   

  	
   

  
	
  6

  	
  Undertakings

  	
  4

  
	
   

  	
   

  	
   

  
	
  7

  	
  Buy back of Account
  Receivable

  	
  6

  
	
   

  	
   

  	
   

  
	
  8

  	
  Indemnities

  	
  7

  
	
   

  	
   

  	
   

  
	
  9

  	
  Termination Events

  	
  7

  
	
   

  	
   

  	
   

  
	
  10

  	
  General

  	
  8

  
	
   

  	
   

  	
   

  
	
  11

  	
  Termination

  	
  9

  
	
   

  	
   

  	
   

  
	
  12

  	
  Commitment Fee

  	
  9

  
	
   

  	
   

  	
   

  
	
  13

  	
  Notices

  	
  9

  
	
   

  	
   

  	
   

  
	
  14

  	
  Assignments

  	
  10

  
	
   

  	
   

  	
   

  
	
  15

  	
  Governing Law

  	
  10

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1
  – Supplier Pricing Schedule

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  Schedule 2 –
  Purchase Pack

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  Schedule 3
  – Condition Precedent Documents

  	
   

  	
  16

  
				

 

 

Committed Account Receivable Purchase
Agreement made on April 1, 2005

 

Between

 

(1)                                 Sanmina-SCI Magyarorszag Elektronikai Gyarto Kft (the Supplier) of  with court registered number 11-09-006625
; and

 

(2)                                 Citibank International Plc (the Bank) acting
through its office at Citigroup Centre, Canada Square, Canary Wharf, London E14
5LB.

 

Whereas

 

A                                     From time to time the Supplier enters into commercial trade
transactions with IBM Singapore Pte Ltd 
of 9 Changi Business Park Central 1, The IBM Place, Singapore 486048 (the
Buyer) for the sale of goods
and/or services, resulting in Account Receivables (as hereinafter defined) owed
by the Buyer to the Supplier; and

 

B                                       The Supplier wishes to assign to the Bank from time to time, and the
Bank shall have assigned to it, such Account Receivables subject to the terms
and conditions set forth in this Agreement.

 

Now, therefore, the Supplier and the
Bank agree as follows:

 

It is agreed:

 

1                                        Definitions and Interpretation

 

Account
Receivable
means any indebtedness of the Buyer to the Supplier, evidenced by an invoice,
which indebtedness shall include the right to receive payment of interest or
finance charges or other liabilities of the Buyer under the relevant contract
to which such invoice relates.

 

Alternative Sanmina Agreement means the committed account
receivable purchase agreement entered into between the Bank and Sanmina-SCI UK
Limited and dated on or about the date of this Agreement;

 

Bankruptcy Event means, in relation to the Buyer, that any of the following has
occurred:

 

(a)                                 any
formal corporate action, legal proceedings or other procedure is taken in
relation to (i) the suspension of payments, a moratorium of any
indebtedness, winding-up, dissolution, administration or reorganisation (by way
of voluntary arrangement, scheme of arrangement or otherwise) of the Buyer
other than a solvent liquidation or reorganisation of the Buyer; (ii) a
composition, assignment or arrangement with the creditors of the Buyer as a
whole; (iii) the appointment of a liquidator (other than in respect of a
solvent liquidation of the Buyer), receiver, administrator, administrative
receiver, compulsory manager or other similar officer in respect of the Buyer
or any of its assets; or

 

(b)                                any
procedure analogous to any of the foregoing is taken in any jurisdiction.

 

Business
Day means
a day on which banks are open for business in London and the principal
financial centre of each relevant currency.

 

Charge
Over Account means the charge over Collection Account granted by the Supplier in
favour of the Bank and dated on or about the date of this Agreement;

 

1

 

Collection
Account means
the interest bearing (at the overnight rates) account of the Supplier held at
Citibank N.A. with account number [***] and which has been charged by way of first
fixed charge in favour of the Bank;

 

Commercial
Contract means
the contract or contracts entered into between the Supplier and the Buyer in
respect of commercial trade transactions, the Account Receivables of which have
been or will be purchased by the Bank pursuant to this Agreement;

 

Commitment
Fee means the commitment fee payable in
accordance with clause 12;

 

Cut
Off Date
means in respect of any Account Receivable purchased by the Bank which has not
been paid in full on the Maturity Date for such Account Receivable the earlier
of:

 

(a)                                 the date falling 28 days after
such Maturity Date (or if such a day is not a Business Day the next following
Business Day);  or

 

(b)                                the date falling on which the
Buyer makes a payment in full of such Account Receivable.

 

Default
means

 

(a)                                  a Termination Event; or

 

(b)                                 any event or circumstance which
would (with the expiry of a grace period, the giving of notice, the
satisfaction of any condition, the making of any determination or any combination
of any of them) become a Termination Event;

 

Discount
Rate means
the rate used by the Bank from time to time to calculate the Purchase Price of
any Account Receivable.

 

Material
Adverse Change means any event or circumstance which (when taken alone or together with
any previous event or circumstance) has, or (in the opinion of the Bank formed
in good faith) could reasonably be expected to have, a material adverse change
on all or any of:

 

(a)                                  the assets, business or financial
condition of the Supplier or the Buyer;

 

(b)                                 the ability of the Supplier and
the Buyer to perform their obligations under this Agreement and the Commercial
Contract;

 

(c)                                  the validity or enforceability of
this Agreement, the Commercial Contract or the Purchase Pack or the rights of the
Bank under any of them.

 

Maturity
Date
means, in respect of an Account Receivable, the date on which such Account
Receivable becomes due and payable by the Buyer as specified in the Purchase
Pack

 

Pricing
Schedule shall have the meaning set out in Clause 4.2.

 

Purchase
Date means in relation to any Account
Receivable the date when the Bank is due to pay the Purchase Price in respect
of that Account Receivable.

 

Proposed
Purchase Date means in relation to any Account Receivable the date specified as “Purchase
Date” in any Purchase Pack in relation to such Account Receivable.

 

Purchase
Pack
means, in relation to each Account Receivable, a document in the form set out
in Schedule 2, duly executed by the parties thereto.

 

2

 

Purchase Price
means in relation to any Account Receivable to be purchased by the Bank at any
time, the purchase price thereof as calculated in accordance with the Pricing Schedule in
force at the time of the purchase of such Account Receivable by the Bank.

 

Saleable Account Receivable means an Account Receivable the subject of a Purchase Pack whose
Maturity Date falls at least [***] after the Proposed Purchase Date in respect
of such Account Receivable.

 

Termination Date means
the date falling 12 months from the date of this Agreement.

 

Termination Event means any event or circumstance described in
Clause 9 (Termination Events);

 

Total
Amount means
[***] minus an
amount equal to the Purchase Amount of all Account Receivables purchased by the
Bank pursuant to the Alternative Sanmina Agreement (as each such term is
defined in the Alternative Sanmina Agreement).

 

Unused
Purchasing Amount means the Total Amount minus an amount equal to the Purchase Amount of
all Account Receivables purchased by the Bank but not
yet paid by the Buyer.

 

2                                        The Facility

 

Subject to the terms and conditions of this Agreement, the Supplier may
from time to time offer to assign and sell Account Receivables to the Bank by
submitting a Purchase Pack to the Bank and the Bank shall acquire such Account
Receivables.

 

3                                        Conditions Precedent

 

3.1      Initial conditions precedent

 

The Supplier
may not deliver a Purchase Pack to the Bank unless the Bank has received all of
the documents and other evidence listed in Schedule 3 (Conditions Precedent) in form and
substance satisfactory to the Bank.  The
Bank shall notify the Supplier promptly upon being so satisfied.

 

3.2      Further conditions precedent

 

The Bank will
only be obliged to comply with Clause 4 (Purchase
and sale of Account Receivable) if on the date of the submission of
the Purchase Pack and on the Proposed Purchase Date for the relevant Account
Receivables:

 

(a)                                 no Default is continuing or would result from the proposed purchase
of the Account Receivables;

 

(b)                                the representations to be made by the Supplier and repeated under
Clause 5 (Representations and Warranties)
are true in all material respects; and

 

(c)                                 each of the Account Receivables the subject of the relevant Purchase
Pack is a Saleable Account Receivable.

 

4                                        Purchase and Sale of Account Receivable

 

4.1      The Bank shall
(subject to the terms of the Pricing Schedule from time to time in force)
purchase and the Supplier shall, as legal and beneficial owner, sell such
Account Receivable and the Bank shall pay the Purchase Price in respect of such
Account Receivable to the Supplier into the following account:- [***] or to such other account
or accounts with any such bank or banks as the Supplier may notify the Bank in
writing from time to time, on the date specified in the Purchase Pack as the
Proposed Purchase Date for such Account Receivable.

 

3

 

4.2      The Bank will
provide to the Supplier a pricing schedule from time to time that sets out
the method used to calculate Purchase Prices and other fees and charges (the Pricing Schedule).  The Bank’s
agreement to purchase Account Receivable hereunder shall be subject to the
terms of the Pricing Schedule.  Each
Pricing Schedule shall be valid for 12 months from the effective date
specified therein.  The initial Pricing Schedule is
set forth as Schedule 1 hereto; provided that, in the event that there is
an adverse or beneficial change  to the
credit rating of International Business Machines Corporation, the ultimate
parent of the Buyer, as determined by either Standard & Poors or Moody’s,
the Bank may at any time, upon 30 days written notice to the Supplier, amend
the terms of the Pricing Schedule, provided that any such change shall not
affect the Purchase Price applicable to purchases of Account Receivable whose
Proposed Purchase Date falls within such notice period and further provided
that in the event of any such change to the Pricing Schedule the Supplier
may at any time, upon 30 days written notice to the Bank, terminate this
Agreement.

 

5                                        Representations and Warranties

 

The Supplier hereby makes the following representations and warranties
as of the date hereof, as of each day a Purchase Pack is delivered hereunder
and as of each proposed date for the purchase of an Account Receivable by the
Bank as if made on each such date with reference to the facts and circumstances
then existing (it being understood that representations and warranties with
respect to Account Receivable are made only with respect to the Account
Receivable that are the subject of the applicable Purchase Pack):

 

(a)                                 it is duly organised and validly existing under the laws of Hungary
and possesses the capacity to sue or to be sued in its own name and the power
to own its property and assets and carry on its business as it is now being
conducted and it has taken all necessary steps to authorise the execution of
this Agreement and each Purchase Pack and the transactions contemplated
thereby;

 

(b)                                the contract relating to each Account Receivable assigned to the
Bank is in full force and effect and legal, valid and binding on the Buyer and
the Supplier is not in breach thereof or in default thereunder that would
result in the Buyer being entitled to exercise any set off rights or
counterclaim or to withhold, extend or delay payment of any such Account
Receivable;

 

(c)                                 this Agreement and each Purchase Pack constitute or will, when
executed, constitute its legal, valid and binding obligations enforceable in
accordance with its terms and each Purchase Pack when duly executed is effective
to assign the Account Receivables referred to therein to the Bank;

 

(d)                                each Account Receivable assigned to the Bank is freely assignable
and constitutes amounts due and payable by the Buyer on the relevant Maturity
Date and each Account Receivable assigned to the Bank pursuant to a Purchase
Pack constitutes an unconditional, legal, valid and binding obligation of the
Buyer  and has not, to any extent, been
prepaid;

 

(e)                                 immediately prior to the execution of each Purchase Pack by the
Supplier, the Supplier was the legal and beneficial owner of each Account
Receivable assigned in such Purchase Pack and it has not assigned, transferred
or otherwise disposed of, or created any encumbrance or security interest over
any such Account Receivable, other than to the Bank; and

 

(f)                                   it is not aware of any reason why the Bank should not receive, the
amount due in respect of any Account Receivable assigned to the Bank in each
Purchase Pack.

 

6                                        Undertakings

 

6.1      The Supplier
hereby agrees and undertakes:

 

(a)                                 not to create or permit to subsist any encumbrance over any of the
Supplier’s rights, title and interest in and to any Account Receivable the
subject of a Purchase Pack and not to assign, transfer or otherwise deal with
any of its rights in respect of any Account Receivable 

 

4

 

the
subject of a Purchase Pack;

 

(b)                                in relation to the Commercial Contract:

 

(i)            to use reasonable and
usual care, skill and forethought in the performance of its obligations under
the Commercial Contract;

 

(ii)           to take all practical
measures to prevent or minimise loss arising in connection with the Commercial
Contract;

 

(iii)          to promptly notify the Bank
upon becoming aware of any material breach of any Commercial Contract or of any
event materially affecting the performance of the Commercial Contract;

 

(c)                                 forthwith to pay any amount received by it in respect of an Account
Receivable to the Bank and pending such payment hold that amount on trust for
the Bank;

 

(d)                                to assist the Bank in every way to recover each Account Receivable
assigned to the Bank and/or to assist the Bank to perfect the assignment to the
Bank of any Account Receivable in respect of which the Bank has made payment to
the Supplier;

 

(e)                                 (i) to maintain and implement administrative and operating
procedures and to keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of all Account
Receivable purchased by the Bank or in order to comply in all material respects
with applicable laws and regulations; (ii) to retain all such records and
information relating thereto so long as any Account Receivable purchased by the
Bank remains outstanding; and (iii) to hand copies of such records and
documentation to the Bank promptly on request; and

 

(f)                                   not to amend (other than by way of extension on substantially the
same terms), cancel or terminate any contract to which any Account Receivable
assigned to the Bank relates and not to, or purport to, terminate, revoke or
vary any term or condition of or extend the Maturity Date of any Account
Receivable assigned to the Bank and to refrain from any action which might in
any way prejudice or limit the Bank’s rights under or in respect of any Account
Receivable assigned to the Bank;

 

(g)                                to act as agent for the Bank in the collection of the sums owing
under the Account Receivable and to procure that payments from the Buyer in
respect of Account Receivable are made into the Collection Account.

 

6.2      The Supplier
hereby irrevocably authorizes the Bank, in its sole discretion, to file any
document or financing statements, and any amendments thereto, in relation to
all or any Account Receivable purchased by the Bank, without the signature of
Supplier, to the extent permitted by applicable law.  If not so permitted by applicable law, or in
such other circumstances as the Bank may reasonably request, the Supplier will execute and file any such document, financing statements,
or amendments thereto, and such other instruments or notices, as may be
necessary or appropriate to perfect and maintain the perfection of the Bank’s
ownership interest in such Account Receivable.

 

6.3      The Supplier
and the Bank hereby acknowledge and agree that:

 

(a)          irrespective of the assignment of each Account Receivable to the
Bank, the Supplier remains liable to perform all obligations under the
Commercial Contract and the Bank has assumed no liability to do so;

 

(b)         the Bank is and shall be irrevocably and unconditionally authorised
to operate the Collection Account as it sees fit and in accordance with the
terms of the Charge Over Account, subject to the terms of Clause 6.3(c);

 

(c)          no withdrawal may be made by the Supplier  from the Collection Account.  If  the
Supplier provides the Bank with an analysis of a remittance advice from the
Buyer (as may be supported by an allocation prepared by the Supplier showing
the breakdown in such remittance advice between sums in relation to Account
Receivables and sums in

 

5

 

relation to
other debts owed by the Buyer to the Supplier), 
the Bank shall, upon reviewing and being satisfied with such analysis of
the remittance advice and allocation, withdraw from the Collection Account for
its own benefit such sums paid by the Buyer by way of discharge of the Account
Receivables and undertakes to immediately thereafter and on the same day
release to an account designated by the Supplier from time to time all monies
from the Collection Account, which do not relate to the Account Receivables, as
evidenced by such agreed analysis of the remittance advice and allocation; and

 

(d)         interest accruing on credit balances in the Collection Account shall
be for the benefit of the Supplier.

 

7                                        Buy back of Account Receivable

 

7.1                              Failure to Pay

 

7.1.1     Notwithstanding the terms of Clause 4 of this Agreement (Purchase
and Sale of Account Receivable) the Supplier and the Bank agree that, in the
event that the Buyer fails to pay any Account Receivable by the Cut Off Date
for such Account Receivable, provided that no Bankruptcy Event has occurred and
is continuing, the Bank shall be entitled to require the Supplier to purchase
such Account Receivable from the Bank. 
The provisions of Clause 7.2 shall apply during the period from the
Maturity Date to the Cut Off Date for each such Account Receivable.

 

7.2      Treatment of Overdue Account Receivable

 

Provided that no Bankruptcy Event has occurred and is
continuing:

 

7.2.1        If the Buyer, for any reason whatsoever fails to pay on the Maturity
Date for any Account Receivable purchased by the Bank, in whole or in part, the
amount of such Account Receivable, the Supplier shall pay charges (Discount Rate Charge) at the Discount Rate applicable
pursuant to the most recent Pricing Schedule on the unpaid amount of any
such Account Receivable (as notified by the Bank to the Supplier), subject as
provided in this Clause. Such Discount Rate Charges shall:

 

(i)            accrue from day to day
during the period from (and including) such Maturity Date to (but excluding)
the Cut Off Date in respect of such unpaid Account Receivable; and

 

(ii)           be calculated as if the
unpaid amount of such Account Receivable was repaid on the earlier of (i) the
date of actual payment and (ii) the relevant Cut Off Date.

 

Discount Rate Charge in relation to any unpaid Account
Receivable shall only accrue up to the Cut Off Date for such Account Receivable
and it shall only be payable by the Supplier on such Cut Off Date.

 

7.2.2        at any
time on or after the Cut Off Date and to the extent that any Account Receivable
remains unpaid, the Bank may sell, as legal and beneficial owner, to the
Supplier and the Supplier shall purchase such Account Receivable and the Bank
shall (at the cost and expense of the Supplier) execute such documents as may
be necessary to re-assign any rights the Bank may have in relation to such
Account Receivable to the Supplier and the Supplier shall pay to the Bank in
respect of such Account Receivable  an
amount equal to and in the same currency as the unpaid amount of such Account
Receivable together with the Discount Rate Charge calculated in accordance with
Clause 7.2.1. Such Cut Off Date shall be notified by the Bank to the Supplier,
but failure to notify shall not affect the payment obligations of the Supplier
hereunder.

 

7.3                              Default
Interest

 

7.3.1        In the event that any amount
payable by the Supplier pursuant to Clause 7.2 or this Clause 7.3 remains
unpaid on the date on which it becomes due and payable the Bank shall charge
and the Supplier shall pay interest from time to time on any such unpaid amount
due from the Supplier to the Bank during the period from (and including) the
due date thereof to ( but excluding) the date payment is received by the Bank
in full, at a rate equal to the aggregate of (i) the Discount Rate

 

6

 

applicable pursuant to the most recent
Pricing Schedule (calculated by reference to such calculation periods
ending on or before the date payment is made in full as the Bank may select and
notify to the Supplier from time to time ) and (ii) [***]% per annum

 

7.3.2     Such interest calculated pursuant
to Clause 7.3.1 shall be payable by the Supplier at the end of each calculation
period selected and notified by the Bank (as referred to above) by reference to
which interest is calculated and shall be billed to the Supplier and paid
separately from any other amounts owing under this Agreement.

 

8                                        Indemnities

 

8.1      The Supplier
shall pay to the Bank on demand on a full indemnity basis:

 

(a)                                 all reasonable costs, charges and expenses including legal costs, in
relation to the enforcement of this Agreement and any Purchase Pack;

 

(b)                                all stamp, documentary, registration or other like duties or taxes
(other than taxes based on Bank’s income), including withholding taxes and any
penalties, additions, fines, surcharges or interest relating thereto, or any
notarial fees which are imposed or chargeable on or in connection with this
Agreement or any Purchase Pack or the purchase by the Bank of any Account
Receivable.

 

8.2      The Supplier
agrees to indemnify the Bank on demand against any loss or expense (including,
but not limited to, any loss of the margin or any other loss or expense
sustained or incurred by the Bank in liquidating or employing deposits acquired
or contracted for to effect its acquisition of an Account Receivable) which the
Bank has sustained or incurred as a consequence of a purchase of an Account
Receivable not being made following the service of a Purchase Pack for any
reason whatsoever.

 

9                                        Termination Events

 

9.1      Each of these
events or circumstances is a Termination Event:

 

(a)                                 Non-payment –
the Buyer does not pay on the due date any amount payable pursuant to the
Commercial Contract at the place and in the currency in which it is expressed
to be payable unless:

 

(i)                                    its failure to pay is caused by administrative or technical error;
and

 

(ii)                                 payment is made within twenty eight days of its due date; or

 

(iii)                              the Supplier repurchases the relevant Account Receivable,

 

(b)                                Other obligations – the Buyer or the Supplier does not comply with any material
provision of the Commercial Contract (other than those referred to in sub
clause (a) (Non-payment) and
such failure (if capable of remedy) is not remedied within thirty days.

 

(c)                                 Misrepresentation – any representation or statement made or deemed to be made by the
Supplier in this Agreement is or proves to have been incorrect or misleading in
a material respect in the context of this Agreement when made or deemed to be
made.

 

(d)                                Insolvency

 

(i)            The Supplier or the Buyer
is unable or admits inability to pay its debts as they fall due, suspends
making payment on any of its debts or, by reason of actual or anticipated
financial difficulties, commences negotiations with one or more of its
creditors with a view to rescheduling any of its indebtedness.

 

(ii)           A moratorium is declared in
respect of any financial indebtedness of the Supplier or the Buyer.

 

7

 

(e)                                 Insolvency proceedings – any corporate action, legal proceedings or other procedure is taken
in relation to:

 

(i)            the suspension of
payments, a moratorium of any indebtedness, winding-up, dissolution,
administration, examinership or reorganisation (by way of voluntary
arrangement, scheme of arrangement or otherwise) of the Supplier or the Buyer;

 

(ii)           a composition, assignment
or arrangement with the creditors as a whole of either the Supplier or the
Buyer;

 

(iii)          the appointment of a
liquidator, receiver, administrator, administrative receiver, examiner,
compulsory manager or other similar officer in respect of the Supplier or the
Buyer or any its assets; or

 

(iv)          enforcement of any
encumbrance over any of the Supplier or the Buyer assets,

 

or any analogous procedure or step is taken
in any jurisdiction.

 

(f)                                   Material Adverse Change – the occurrence of a Material Adverse Change.

 

9.2      If a Termination Event occurs and
is continuing unremedied or unwaived for 30 days the Bank may, by notice to the
Supplier, terminate the operation of Clause 2 (The
Facility) or suspend the operation of that clause for such period as
the Bank may specify; provided that for the avoidance of doubt the Bank shall
be obliged to acquire all Account Receivable with a Purchase Date prior to the
receipt of such notice by the Supplier.

 

10                                 General

 

10.1     Any amounts which but for this Clause 10.1 would
fall due for payment by the Bank or the Supplier on a day other than a Business
Day shall be payable on the succeeding Business Day and the Purchase Price (or
as the case may be, the amount payable by the Supplier) shall, where necessary,
be adjusted accordingly.

 

10.2     The Supplier agrees and acknowledges that it has
taken independent legal and accounting advice in relation to the accounting
treatment to be applied to the transactions contemplated herein and the
Purchase Pack.  It is agreed that the
Supplier has not relied on any representation of the Bank in this regard.

 

10.3     The Bank shall be entitled to rely on any
communication sent by the Supplier 
irrespective of any error or fraud contained in the communication or the
identity of the individual who sent the communication, and shall not be liable
for any action taken or omitted in reliance on any notice, direction, consent,
certificate, affidavit, statement, designation or other paper or document
reasonably believed by it to be genuine and to have been duly and properly
signed and presented to it by the Supplier.

 

10.4     In no event shall the Bank be liable for any loss of
profits, business, data or information or for any incidental, indirect, special
or consequential damages whether arising from negligence, breach of contract or
otherwise, even if informed of the possibility of those losses or damages.  The Bank shall not be liable for any losses
arising out of or relating to any of its actions or omissions to act hereunder,
except to the extent that any such losses are caused by the Bank’s wilful
misconduct, fraud or gross negligence.

 

10.5     This Agreement may be executed in any number of
counterparts (including by facsimile transmission) and all of such counterparts
taken together shall be deemed to constitute one and the same instrument.

 

10.6     The Supplier shall remain liable to perform all
obligations assumed by it under any Commercial Contract and the Bank shall be
under no obligation of any kind whatsoever under such contract or be under any
liability whatsoever in the event of any failure by the Supplier to perform its
obligations under any such contract.

 

8

 

10.7     If there is any conflict between the
provisions of this Agreement and the provisions of the Target Balancing
Agreement entered into between, amongst others, Citibank NA and Sanmina-SCI
(UK) Limited and Sanmina-SCI Magyarorszag Elektronikai Gyarto Kft dated on or
around the date of this Agreement, the provisions of this Agreement shall
prevail.”

 

11                                 Termination

 

11.1     On the
Termination Date the Bank shall have no further obligation to purchase Account
Receivables from the Supplier,

 

12                                 Commitment Fee

 

12.1     The Supplier shall pay to the Bank a Commitment Fee
of [***] basis points
per annum on the Unused Purchasing Amount for the period starting on the date
of this Agreement and ending on the Termination Date.

 

12.2     The Supplier
shall pay the accrued Commitment Fee by the third Business Day of each calendar
quarter after receipt of invoice from the Bank.

 

13                                 Notices

 

13.1     All notices, requests and demands given or made
under this Agreement shall be given or made in writing and unless otherwise
stated shall be made by telefax or letter using the address as specified below
or such other address as the party may designate to the other party:

 

	
  13.1.1

  	
   

  	
  To the Supplier:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Treasury Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  7 West Nile Street, Glasgow, G1 2PR

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
  44 141 245 2882

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:-

  	
  Sanmina-SCI Corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Corporate Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  2700 North First Street, San Jose, CA 95134

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
  (408) 964 3644

  
	
   

  	
   

  	
   

  	
   

  
	
  13.1.2

  	
   

  	
  To the Bank

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Trade Services

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  4th Floor. 68 Molesworth Street, Lewisham, London, SE13 7EU

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
  0207 500 8063

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Trade Finance/Dror Polak

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
  44 207 500 2624

  
					

 

9

 

13.2                          All notices or
other communication shall be deemed to have been received:

 

(i)                                    if sent by fax with a confirmed receipt of transmission from the
receiving machine, on the day on which transmitted;

 

(ii)                                 in the case of a notice given by hand, on the day of actual
delivery;

 

(iii)                              if sent by post, 5 Business Days after being deposited in the post
with first class prepaid postage,

 

provided that a notice given in accordance
with the above but received on a day which is not a Business Day or after
normal business hours in the place of receipt shall be deemed to have been
received on the next Business Day.

 

14                                 Assignments

 

The Bank may at any time assign, transfer or sub participate (including
by way of novation) any of its rights hereunder or under any Purchase Pack to
another bank or financial institution. The Supplier may not assign or otherwise
transfer its rights, benefits or obligations or any of them hereunder.

 

15                                 Governing Law

 

15.1     This Agreement shall be governed by and construed in
accordance with English law.

 

15.2     The Supplier irrevocably agrees for the exclusive
benefit of the Bank that the courts of England shall have jurisdiction to hear
and determine any suit, action or proceeding and to settle any dispute which
may arise out of or in connection with this Agreement and for such purposes
irrevocably submits to the jurisdiction of such courts.  The Supplier irrevocably waives any objection
which it may have now or in the future to the courts of England being nominated
for the purpose of this Clause on the ground of venue or otherwise and agrees
not to claim that any such court is not a convenient or appropriate forum.

 

15.3     The Supplier
hereby authorises and appoints Sanmina-SCI UK Limited of 9th Floor, Northwest
Wing, Bush House, Aldwych, London, WC2B 4EZ with registered number 04370464 (or
such other person as it may from time to time substitute by not less than
fifteen days written notice to the Bank) to accept service of all legal process
arising out of or connected herewith or any Purchase Pack and service on such
person (or substitute) shall be deemed to be service on the Supplier.  Except upon such a substitution the Supplier
shall not revoke any such authority or appointment and shall at all times
maintain an agent for service of process in England and if any such agent
ceases for any reason to be an agent for this purpose, shall forthwith appoint
another agent and advise the Bank accordingly.

 

As
witness the hands of the authorised
signatories of the parties hereto the day and year first above written.

 

The Supplier

 

 

	
  Executed for and

  	
  )

  	
   

  
	
  on behalf of
  Sanmina-SCI Magyarorszag

  	
  )

  	
   

  
	
  Elektronikai
  Gyarto Kft

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  by   /s/
  MONIKA BARTHA and

  	
   

  	
   

  

 

10

 

 

The Bank

 

	
  Executed for and on behalf of

  	
  )

  	
   

  
	
  Citibank
  International Plc

  	
  )

  	
   

  
	
  By /s/ DROR POLACK and

  	
  )

  	
   

  

 

11

 

Schedule 1– Supplier Pricing Schedule

 

 

Supplier Name: Sanmina-SCI Magyarorszag
Elektronikai Gyarto Kft

 

	
  Control

  	
   

  	
  Number:

  

(to be completed by the Bank)

 

 

A.                                   Licensing Fees and Charges

 

Unused Purchasing Amount is [***]% per
annum

 

B.                                   Fees and Charges in connection with purchase of Receivables

 

Discount Charge for each Account
Receivable means the Payment Amount of such Account Receivable multiplied by
the Discount Rate;

 

Discount
Charge = Payment Amount   X  Discount Rate

 

Where:

 

Discount Rate means the
rate per cent per annum calculated as the sum of LIBOR for the Discount Period
and the Spread, multiplied by the Discount Period and divided by 360:

 

Discount
Rate =(LIBOR + Spread)  X  (Discount Period / 360)

 

Each
Discount Rate is identified on the Purchase Date for each respective Purchase
Pack and will apply to any Account Receivable from that respective Purchase Pack
for the period from the Purchase Date until paid by Buyer or repurchased by
Supplier.

 

Discount Period means the number of
days in the period starting from (and including) the Purchase Date for any
Account Receivable to (but excluding) the Maturity Date of such Account
Receivable.

 

LIBOR means
:

 

(a)                                   the applicable Screen Rate; or

 

(b)                                  (if no Screen Rate is available) the rate at which the Bank was
offering deposits for the relevant period in an amount comparable to the
Account Receivable in the relevant currency to leading banks in the London
interbank market.

 

Payment Amount in respect of any
Account Receivable means the face amount of such Account Receivable (including
VAT) due from a Buyer on the Maturity Date of such Account Receivable.

 

Purchase Price means, in respect of
any Account Receivable, the Payment Amount less the Discount Charge applicable
to such Account Receivable.

 

Screen
Rate means in relation to LIBOR the interest
rate for Dollar deposits for the relevant period which is displayed on the
screen displays designated “LIBOR01” and “ICAP01” of the Reuters service (or
such other page which may replace them for the purpose of displaying
British Bankers’ Association Interest Settlement Rates for Dollar deposits in
the London interbank market) at or about 11.00am London time on the applicable
day;and

 

Spread is equal to [***]% per annum.

 

Transaction Fee of $[***] will be
charged for each purchase of Account Receivables offered in a Purchase Package

 

12

 

C.            Effective Date:

 

(1)           Effective
Date is the date of the Agreement.

 

(2)           Subject
to Clause 4.2, the above pricing is valid from the Effective Date until (and
including) the first anniversary of the Effective Date.

 

13

 

Schedule 2 – Purchase Pack

 

[Has
to be adapted  for local law and covered
by local legal opinion]

 

 

To:          Citibank International Plc

 

and

 

< > (“Buyer”)

 

Date:

 

Dear Sirs,

 

1.                                      [**                    ] (the Supplier) as
legal and beneficial owner, hereby assigns absolutely with full title guarantee
to Citibank International Plc (the Bank)
with effect from **                    (this date must fall at least [•] Business Days after the date of the Purchase Pack) [the “Purchase Date”] all its right, title and interest in and to the amounts payable
to the Supplier by **                    
(Buyer) in relation to and
evidenced by the following Account Receivables:

 

	
  Invoice

  Number

  	
   

  	
  Invoice Date

  	
   

  	
  Amount of

  Invoice

  	
   

  	
  Maturity

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  
	
  **

  	
   

  	
  **

  	
   

  	
  **

  	
   

  	
  **

  

 

2.                                      Assignment

 

This
Assignment shall have the effect of assigning to the Bank all of our right,
title, benefit and interest in and to all monies due to us from time to time in
relation to each Account Receivable referred to above including, in each case,
all rights to demand, receive or dispose of any such monies or claims, all
rights to sue for or in relation thereto and all rights of action against any
person in connection therewith or otherwise to enforce the same.

 

3.                                      Representations

 

3.1      The
Supplier confirms that all representations and warranties set out in the
agreement between the Supplier and the Bank dated **                    
as amended from time to time (the Agreement)
are correct as at the date hereof and as of the Proposed Purchase Date in
respect of each Account Receivable referred to above and the circumstances
existing on the date hereof now and as of the Proposed Purchase Date.

 

3.2      The
Supplier hereby represents and warrants that a copy of this Purchase Pack has
been delivered to the Buyer and (a) the Buyer has been notified of the
assignment by the Supplier to the Bank of the Account Receivables referred to
in this Purchase Pack and (b) the Buyer has been instructed to pay all
sums becoming due and payable under or by virtue of each Account Receivable to
the Collection Account held at the Bank.

 

4.                                      Notice

 

4.1      The Supplier hereby notifies the Buyer of the assignment set out
above.  As assignee of each Account
Receivable referred to above, the Bank is therefore entitled to collect or
recover for its own account the sums due by the Buyer in respect of such
Account Receivable and each of the Supplier and the Bank hereby irrevocably
instruct the Buyer to pay all sums becoming due and payable under or by virtue
of the above Account Receivable to [Account Details] (the “Collection Account”)
held at the Citibank N.A..

 

14

 

6                                         No Implied Duties

 

The Bank shall
be obliged to perform such duties and only such duties as are specifically set
forth herein, and no implied duties or responsibilities shall be read or
implied into this agreement. 
Notwithstanding any other provision elsewhere contained, the Bank does
not assume any obligation or relationship of agency or trust hereunder for, or
with, the Supplier, the Buyer, or any other person.

 

7                                         Counterparts

 

This agreement may be executed in any number of counterparts (including
by facsimile transmission) and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.

 

8.                                      Governing law and jurisdiction

 

9.1      This agreement shall be
governed by and shall be construed in accordance with English law.

 

8.2      The Supplier  irrevocably
agrees for the exclusive benefit of the Bank that the courts of England shall
have jurisdiction to hear and determine any suit, action or proceeding and to
settle any dispute which may arise out of or in connection with this agreement
and for such purposes irrevocably submits to the jurisdiction of such courts.  The Supplier irrevocably waive any objection
which it may have now or in the future to the courts of England being nominated
for the purpose of this Clause on the ground of venue or otherwise and agrees
not to claim that any such court is not a convenient or appropriate forum.

 

Dated:

 

 

	
  Signed for
  and on behalf of

  	
   

  	
  Sanmina SCI-UK Ltd

  
	
   

  	
  [

  	
   

  

 

15

 

Schedule 3 –  Condition Precedent
Documents

 

(A)          For the Supplier

 

(a)           a copy of its
constitutional documents

 

(b)           a certificate of an
authorised signatory certifying that each copy document relating to it
specified in this Schedule is correct, complete and in full force and
effect as at a date no earlier than the date of this Agreement.

 

(c)           Certified copies of resolutions
of the Supplier’s board of directors authorising the acceptance and execution
of this agreement and each Purchase Pack and authorising a person or persons to
sign this agreement and each Purchase Pack from time to time.

 

(B)          Other

 

(a)           An original first fixed
charge over the Collection Account granted by the Supplier in favour of the
Bank.

 

(b)           An original guaranty
granted by Sanmina-SCI Corporation in favour of the Bank.

 

(c)           Account opening mandate for
the Collection Account.

 

(d)           Such other documents,
opinions, consents, licences, assurance or evidence as the Bank considers
relevant and may request.

 

16Exhibit 4.6

 

REGISTRATION RIGHTS AGREEMENT

 

THIS
REGISTRATION RIGHTS AGREEMENT is made and entered into as of April 1, 2005, by and between
Petrohawk Energy Corporation, a Delaware corporation (the “Company”), on the one hand, and each of
the parties identified on Exhibit A (collectively, the “Purchasers”), on
the other hand.

 

W I T N E S S E T H:

 

WHEREAS, PHAWK, LLC, a
Delaware limited liability company (“PHAWK”) and
each of the Purchasers have entered into Stock Purchase Agreements as
identified on Exhibit A (the “Stock Purchase Agreements”), in connection with which PHAWK sold 1,830,000
shares (the “Common Shares”) of
the Company’s common stock, par value $0.001 (the “Common Stock”); and

 

WHEREAS, the Company has agreed to provide the
registration rights provided for in this Agreement (as defined below) for the
holders of Registrable Shares (as defined below); and

 

NOW,
THEREFORE, in
consideration of the premises and the mutual covenants of the parties hereto,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.             Definitions.    As used herein, the
following terms shall have the following meanings:

 

”Additional Shares” means shares or other securities issued
in respect of the Common Shares by reason of or in connection with any stock
dividend, stock distribution, stock split or similar issuance.

 

”Agreement” means this Registration Rights Agreement made and
entered into as of April 1, 2005.

 

”Affiliate” means, as to any specified Person, (i) any
Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the specified
Person, (ii) any executive officer, director, trustee or general partner
of the specified Person and (iii) any legal entity for which the specified
Person acts as an executive officer, director, trustee or general partner. For
purposes of this definition, “control” (including the correlative meanings of
the terms “controlled by” and “under common control with”), as used with
respect to any Person, shall mean the possession, directly, or indirectly
through one or more intermediaries, of the power to direct or cause the
direction of the management and policies of such Person, whether by contract,
through the ownership of voting securities, partnership interests or other
equity interests or otherwise.

 

”Business Day” means each Monday, Tuesday, Wednesday,
Thursday and Friday that is not a day on which banking institutions in Houston,
Texas are authorized or obligated by applicable law, regulation or executive
order to close.

 

“Closing Date” means April 5, 2005.

 

“Commission” means the Securities and Exchange Commission.

 

“Common Shares” is defined in the first recital clause of
this Agreement.

 

“Common Stock” is defined in the first recital clause of this
Agreement.

 

“Company” is defined in the introductory paragraph of this
Agreement, and any successor thereto.

 

“Controlling Person” is defined in Section 6(a) hereof.

 

“End of Suspension Notice” is defined in Section 5(b) hereof.

 

1

 

“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission
pursuant thereto.

 

“Holder” means each record owner of any Registrable Shares
from time to time, including, but not limited to, each of the Purchasers for
such time as they are the record owner of any of the Registrable Shares.

 

“Indemnified Party” is defined in Section 6(c) hereof.

 

“Indemnifying Party” is defined in Section 6(c) hereof.

 

“Liabilities” is defined in Section 6(a) hereof.

 

“Mandatory Registration Statement” means the Mandatory Shelf
Registration Statement or any Subsequent Shelf Registration Statement.

 

“Mandatory Shelf Registration Statement” is defined in Section 2(a) hereof.

 

“NASD” means the National Association of Securities Dealers, Inc.

 

“Person” means an individual, limited liability company,
partnership, corporation, trust, unincorporated organization, government or
agency or political subdivision thereof, or any other legal entity.

 

“Piggyback Registration Statement” is defined in Section 2(b) hereof.

 

“Prior Holder” means PHAWK and any other investor a party to
or beneficiary of the Registration Rights Agreement dated May 26, 2004 by
and between the Company and PHAWK.

 

“Prospectus” means the prospectus included in any
Registration Statement, including any preliminary prospectus, and all other
amendments and supplements to any such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such prospectus.

 

“Purchaser Indemnitee” is defined in Section 6(a) hereof.

 

“Purchasers” is defined in the first recital clause of this
Agreement.

 

“Registrable Shares” means each of the Common Shares and
any Additional Shares in respect thereof, upon original issuance thereof, and
at all times subsequent thereto, including upon the transfer thereof by the
original holder or any subsequent holder, until, in the case of any such Shares
or Additional Shares, as applicable, the earliest to occur of:

 

(i)            the date on which they have been sold
pursuant to a Registration Statement or sold pursuant to Rule 144;

 

(ii)           the date on which they are saleable, in the
opinion of counsel to the Company, without registration under the Securities
Act pursuant to Rule 144(k);

 

(iii)          the date on which they are saleable, without
restriction, pursuant to an available exemption from registration under the Securities
Act; or

 

(iv)          the date on which they are sold to the
Company or its subsidiaries.

 

“Registration Expenses” means any and all expenses incident
to the performance of or compliance with this Agreement, including, without
limitation: (i) all Commission, securities exchange, NASD registration,

 

2

 

listing, inclusion and filing fees, (ii) all fees and expenses
incurred in connection with compliance with international, federal or state
securities or blue sky laws (including, without limitation, any registration,
listing and filing fees and reasonable fees and disbursements of counsel in
connection with blue sky qualification of any of the Registrable Shares and the
preparation of a blue sky memorandum and compliance with the rules of the
NASD), (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, duplicating, printing, delivering and distributing
any Registration Statement, any Prospectus, any amendments or supplements thereto,
any underwriting agreements, securities sales agreements, certificates and any
other documents relating to the performance under and compliance with this
Agreement, (iv) all fees and expenses incurred in connection with the
listing or inclusion of any of the Registrable Shares on the NASDAQ Stock
Market pursuant to Section 4(n) of this Agreement, (v) the fees and
disbursements of counsel for the Company and of the independent public
accountants of the Company (including, without limitation, the expenses of any
special audit and “cold comfort” letters required by or incident to such
performance), and (vi) any fees and disbursements customarily paid in
issues and sales of securities (including the fees and expenses of any experts
retained by the Company in connection with any Registration Statement), provided, however, that Registration
Expenses shall exclude brokers’ or underwriters’ discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of Registrable
Shares by a Holder and the fees and disbursements of any counsel to the
Holders.

 

“Registration Statement” means any Mandatory Registration
Statement or Piggyback Registration Statement.

 

“Rule 144”, “Rule 158”,
“Rule 415”, or “Rule 424”, respectively, means such
specified rule promulgated by the Commission pursuant to the Securities
Act, as such rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

 

“Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations promulgated by the Commission
thereunder.

 

“Shares” means the Common Shares.

 

“Subsequent Shelf Registration Statement” is defined in Section 2(c) hereof.

 

“Suspension Event” is defined in Section 5(b) hereof.

 

“Suspension Notice” is defined in Section 5(b) hereof.

 

“Underwritten Offering” means a sale of securities of the
Company to an underwriter or underwriters for reoffering to the public.

 

2.             Registration Rights.

 

(a)           Mandatory Shelf
Registration.    As
set forth in Section 4, the Company agrees to file with the Commission as
soon as reasonably practicable, but in no event later than 15 days
following the Closing Date, a shelf registration statement on Form S-3 or
such other form under the Securities Act then available to the Company
providing for the resale pursuant to Rule 415 from time to time by the
Holders of any and all Registrable Shares consisting of (i) Common Shares
and all Additional Shares in respect thereof (in each case including for the
avoidance of doubt any Additional Shares that are issued prior to the
effectiveness of such shelf registration statement) (including the Prospectus,
amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto and all
material incorporated by reference or deemed to be incorporated by reference,
if any, in such registration statement, the “Mandatory
Shelf Registration Statement”).

 

(i)            Effectiveness and Scope.    The Company shall use its
commercially reasonable efforts to cause any Mandatory Registration Statement
to be declared effective by the Commission as soon as reasonably practicable
following such filing, and to remain effective until the earlier of (A) the

 

3

 

second anniversary of the
effective date of the initial Mandatory Shelf Registration Statement (subject
to extension pursuant to Section 5(c)) (provided that in such case each
Holder shall have received a certificate with all restrictive legends removed
as a result of the applicable Registrable Shares being freely transferable
under Rule 144(k)), or (B) the date on which all Shares and any
Additional Shares in respect thereof cease to be Registrable Shares. The
Company may include any shares of Common Stock owned by a Prior Holder in a
Mandatory Shelf Registration Statement. Any Mandatory Shelf Registration
Statement shall provide for the resale from time to time, and pursuant to any
method or combination of methods legally available (including, without
limitation, an Underwritten Offering, a direct sale to purchasers, a sale
through brokers or agents, or a sale over the internet) by the Holders of any
and all Registrable Shares.

 

(ii)           Underwriting.    If any Holder proposes to
conduct an Underwritten Offering under a Mandatory Shelf Registration
Statement, such Holder shall advise the Company, all other Holders, and any
Prior Holders whose securities are included in the Mandatory Shelf Registration
Statement, of the managing underwriters for such proposed Underwritten
Offering, such managing underwriters to be subject to the approval of the
Company, not to be unreasonably withheld. In such event, the Company shall
enter into an underwriting agreement in customary form with the managing
underwriters, which shall include, among other provisions, indemnities to the
effect and to the extent provided in Section 6, and shall take all such
other reasonable actions as are requested by the managing underwriter in order
to expedite or facilitate the registration and disposition of the Registrable
Shares included in such Underwritten Offering. All Holders proposing to
distribute their Registrable Shares through such Underwritten Offering and, if
a Prior Holder elects to distribute its shares of Common Stock through such
Underwritten Offering, such Prior Holder, shall enter into an underwriting
agreement in customary form with the managing underwriters selected for such
underwriting and complete and execute any questionnaires, powers of attorney,
indemnities, securities escrow agreements and other documents reasonably
required under the terms of such underwriting, and furnish to the Company such
information in writing as the Company may reasonably request for inclusion in
the Registration Statement; provided,
however, that neither any Holder nor any Prior Holder shall be
required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or
agreements as are customary and reasonably requested by the underwriters.
Notwithstanding any other provision of this Agreement, if the managing
underwriters determine in good faith that marketing factors require a
limitation on the number of shares to be included in such Underwritten
Offering, then the managing underwriters may exclude shares (including
Registrable Shares) from the Underwritten Offering, and any shares included in
the Underwritten Offering shall be allocated first,
to each of the Holders requesting inclusion of their Registrable Shares in such
Underwritten Offering on a pro rata basis
based on the total number of Registrable Shares then held by each such Holder
which is requesting inclusion, and second,
to any Prior Holders requesting inclusion of their shares in such Underwritten
Offering.

 

(iii)          Selling Stockholder
Questionnaires.    Each
Holder agrees, by its acquisition of Registrable Shares, that if such Holder
wishes to sell Registrable Shares pursuant to the Mandatory Shelf Registration
Statement and related Prospectus, it will do so only in accordance with this Section 2(a)(iii).
Each Holder wishing to sell Registrable Shares pursuant to a Mandatory Shelf
Registration Statement and related Prospectus agrees to deliver a written
notice, substantially in form and substance of Annex A (a “Notice and Questionnaire”), to the
Company. The Company shall mail the Notice and Questionnaire to the Holders no
later than the date of initial filing of the Mandatory Shelf Registration
Statement with the Commission. No Holder shall be entitled to be named as a
selling securityholder in the Mandatory Shelf Registration Statement as of the
initial effective date of the Mandatory Shelf Registration Statement, and no
Holder shall be entitled to use the Prospectus forming a part thereof for
resales of Registrable Shares at any time, unless such Holder has returned a
completed and signed Notice and Questionnaire to the Company by the deadline
for response set forth therein; provided, however, Holders shall have at least
20 calendar days from the date on which the Notice and Questionnaire is first
mailed to such Holders to return a completed and signed Notice and
Questionnaire to the Company. Notwithstanding the foregoing, (x) upon the
request of any Holder that did not return a Notice and Questionnaire on a
timely basis

 

4

 

or did not receive a Notice
and Questionnaire because it was a subsequent transferee of Registrable Shares
after the Company mailed the Notice and Questionnaire, the Company shall
distribute a Notice and Questionnaire to such Holders at the address set forth
in the request and (y) upon receipt of a properly completed Notice and
Questionnaire from such Holder, the Company shall use all commercially
reasonable efforts to name such Holder as a selling securityholder in the
Mandatory Shelf Registration Statement by means of a pre-effective amendment,
by means of a post-effective amendment or, if permitted by the Commission, by means
of a Prospectus supplement to the Mandatory Shelf Registration Statement;
provided, however, that the Company will have no obligation to add Holders to
the Shelf Mandatory Registration Statement as selling securityholders more
frequently that one time per every 30 calendar days.

 

(b)           Piggyback Registration.    If, after the date hereof,
the Company proposes to file a registration statement under the Securities
Act providing for a public offering of the Company’s securities, other than a
registration statement on Form S-8 or Form S-4 or any similar form
hereafter adopted by the Commission as a replacement therefor (including the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto
and all material incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement, the “Piggyback Registration Statement”), the
Company will notify each Holder of the proposed filing and afford each Holder
an opportunity to include in such Piggyback Registration Statement all or any
part of the Registrable Shares then held by such Holder. Each Holder desiring
to include in any such Piggyback Registration Statement all or part of the Registrable
Shares held by such Holder shall, within ten (10) days after delivery of
the above-described notice by the Company, so notify the Company in writing,
and in such notice shall inform the Company of the number of Registrable Shares
such Holder wishes to include in such Piggyback Registration Statement and
provide, as a condition to such inclusion, such information regarding itself,
the Registrable Shares held by it and the intended method of disposition of
such securities as is required pursuant to Regulation S-K promulgated
under the Securities Act to effect the registration of the Registrable Shares.
Any election by any Holder to include any Registrable Shares in such Piggyback
Registration Statement will not affect the inclusion of such Registrable Shares
in the Mandatory Shelf Registration Statement until such Registrable Shares
have been sold under the Piggyback Registration Statement; provided, however, that at such time, the
Company shall have the right to remove from the Mandatory Shelf Registration
Statement the Registrable Shares sold pursuant to the Piggyback Registration
Statement.

 

(i)            Right to Terminate
Piggyback Registration.    At
any time, the Company may terminate or withdraw any Piggyback Registration
Statement referred to in this Section 2(b), and without any obligation to
any such Holder whether or not any Holder has elected to include Registrable
Shares in such registration. The Company shall also have the right to suspend
the effectiveness and use of any Piggyback Registration Statement at any time
for an unlimited amount of time whether or not any Holder has elected to
include Registrable Shares in such registration.

 

(ii)           Underwriting.    The Company shall advise
the Holders of the managing underwriters for any Underwritten Offering proposed
under the Piggyback Registration Statement. The right of any such Holder’s
Registrable Shares to be included in any Piggyback Registration Statement
pursuant to this Section 2(b) shall be conditioned upon such Holder’s
participation in such Underwritten Offering and the inclusion of such Holder’s
Registrable Shares in the Underwritten Offering to the extent provided herein.
All Holders proposing to distribute their Registrable Shares through such
Underwritten Offering shall enter into an underwriting agreement in customary
form with the managing underwriters selected for such underwriting and complete
and execute any questionnaires, powers of attorney, indemnities, securities
escrow agreements and other documents reasonably required under the terms of
such underwriting, and furnish to the Company such information in writing as
the Company may reasonably request for inclusion in the Registration Statement;
provided, however, that no Holder
shall be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements as are customary and reasonably requested by the underwriters.
Notwithstanding any other provision of this Agreement, if the managing
underwriters determine in good faith that marketing factors require a
limitation on the number of shares to be included, then

 

5

 

the managing underwriters
may exclude shares (including Registrable Shares) from the Piggyback Registration
Statement and the Underwritten Offering, and any Shares included in the
Piggyback Registration Statement and the Underwritten Offering shall be
allocated, first, to the Company,
and second, to each of the
Holders and the Prior Holder(s) requesting inclusion of their Registrable
Shares in such Piggyback Registration Statement on a pro rata basis based on the total number of Registrable
Shares then held by each such Holder which is requesting inclusion. If any
Holder disapproves of the terms of any Underwritten Offering, such Holder may
elect to withdraw therefrom by written notice to the Company and the
underwriter, delivered at least 10 Business Days prior to the effective date of
the Piggyback Registration Statement. Any Registrable Shares excluded or
withdrawn from such Underwritten Offering shall be excluded and withdrawn from
the Piggyback Registration Statement.

 

(iii)          Hold-Back Agreement.    By electing to include
Registrable Shares in the Piggyback Registration Statement, if any, the Holder
shall be deemed to have agreed not to effect any sale or distribution of
securities of the Company of the same or similar class or classes of the
securities included in the Registration Statement or any securities convertible
into or exchangeable or exercisable for such securities, including a sale
pursuant to Rule 144 under the Securities Act, during such periods as
reasonably requested (but in no event for a period longer than 60 days
following the effective date of the Piggyback Registration Statement, provided
each of the executive officers and directors of the Company that hold shares of
Common Stock of the Company or securities convertible into or exchangeable or
exercisable for shares of Common Stock of the Company are subject to the same
restriction for the entire time period required of the Holders hereunder) by
the representatives of the underwriters, if an Underwritten Offering.

 

(iv)          Mandatory Shelf
Registration not Impacted by Piggyback Registration Statement.    The Company’s obligation to
file any Mandatory Shelf Registration Statement shall not be affected by the
filing or effectiveness of the Piggyback Registration Statement.

 

(c)           Subsequent Shelf
Registration for Additional Shares Issued after Effectiveness of the Mandatory
Shelf Registration Statement.    If
any Additional Shares are issued or distributed to Holders after the
effectiveness of the Mandatory Shelf Registration Statement, or such Additional
Shares were otherwise not included in a prior Registration Statement, then the
Company shall as soon as practicable file an additional shelf registration
statement (including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement,
a “Subsequent Shelf Registration Statement”)
covering such Additional Shares on behalf of the Holders thereof in the same
manner, and subject to the same provisions in this Agreement as the Mandatory
Shelf Registration Statement.

 

(d)           Expenses.    The Company shall pay all
Registration Expenses in connection with the registration of the Registrable
Shares pursuant to this Agreement. Each Holder participating in a registration
pursuant to this Section 2 shall bear such Holder’s proportionate share
(based on the total number of Registrable Shares sold in such registration) of
all discounts and commissions payable to underwriters or brokers and all transfer
taxes in connection with a registration of Registrable Shares pursuant to this
Agreement and any other expense of the Holders not specifically allocated to
the Company pursuant to this Agreement relating to the sale or disposition of
such Holder’s Registrable Shares pursuant to any Registration Statement.

 

3.             Rule 144 Reporting.

 

With a view to making
available the benefits of certain rules and regulations of the Commission
that may permit the sale of the Registrable Shares to the public without registration,
the Company agrees to, so long as any Holder owns any Registrable Shares:

 

(a)           make and keep public information available,
as those terms are understood and defined in Rule 144(c) under the
Securities Act;

 

6

 

(b)           use its commercially reasonable efforts to
file with the Commission in a timely manner all reports and other documents
required to be filed by the Company under the Securities Act and the Exchange
Act; and

 

(c)           furnish to any Holder promptly upon request a
written statement by the Company as to its compliance in all material respects
with the reporting requirements of Rule 144 and of the Exchange Act, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents of the Company, and take such reasonable further
actions consistent with this Section 3, as a Holder may reasonably request
in availing itself of any rule or regulation of the Commission allowing a
Holder to sell any such Registrable Shares without registration.

 

4.             Registration Procedures.

 

In connection with the
obligations of the Company with respect to any registration pursuant to this
Agreement, the Company shall:

 

(a)           prepare and file with the Commission, as
specified in this Agreement, each Registration Statement, which Registration
Statement shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the Commission to be filed therewith, and use its commercially
reasonable efforts to cause any Mandatory Registration Statement to become and
remain effective as set forth in Section 2(a)(i) hereof; provided, however, that the Company shall
not be required to cause any Piggyback Registration Statement to become or
remain effective;

 

(b)           subject to Section 4(i) hereof, (i) prepare
and file with the Commission such amendments and post-effective amendments to
each such Registration Statement as may be necessary to keep such Registration
Statement effective for the period described in Section 4(a) hereof, (ii) cause
each Prospectus contained therein to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 or any
similar rule that may be adopted under the Securities Act, and (iii) comply
in all material respects with the provisions of the Securities Act with respect
to the disposition of all securities covered by each Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the selling Holders thereof;

 

(c)           furnish to the Holders, without charge, as
many copies of each Prospectus, including each preliminary Prospectus, and any
amendment or supplement thereto and such other documents as such Holder may
reasonably request, in order to facilitate the public sale or other disposition
of the Registrable Shares; the Company hereby consenting to the use of such
Prospectus, including each preliminary Prospectus, by the Holders, if any, in
connection with the offering and sale of the Registrable Shares covered by any
such Prospectus;

 

(d)           use its commercially reasonable efforts to
register or qualify, or obtain exemption from registration or qualification
for, all Registrable Shares by the time the applicable Registration Statement
is declared effective by the Commission under all applicable state securities
or “blue sky” laws of such domestic jurisdictions as any Holder covered by a
Registration Statement shall reasonably request in writing, keep each such registration
or qualification or exemption effective during the period such Registration
Statement is required to be kept effective pursuant to Section 4(a) and
do any and all other acts and things that may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Shares owned by such Holder; provided, however, that the Company shall
not be required to (i) qualify generally to do business in any
jurisdiction or to register as a broker or dealer in such jurisdiction where it
would not otherwise be required to qualify but for this Section 4(d), (ii) subject
itself to taxation in any such jurisdiction, or (iii) submit to the
general service of process in any such jurisdiction;

 

(e)           use its commercially reasonable efforts to
cause all Registrable Shares covered by such Registration Statement to be
registered and approved by such other domestic governmental agencies or
authorities, if any, as may be necessary to enable the Holders thereof to
consummate the disposition of such Registrable Shares;

 

7

 

(f)            notify each Holder with Registrable Shares
covered by a Registration Statement promptly and, if requested by any such
Holder, confirm such advice in writing (i) when such Registration
Statement has become effective and when any post-effective amendments and
supplements thereto become effective, (ii) of the issuance by the
Commission or any state securities authority of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose, (iii) of any request by the Commission or
any other federal or state governmental authority for amendments or supplements
to such Registration Statement or related Prospectus or for additional
information, and (iv) of the happening of any event during the period such
Registration Statement is effective as a result of which such Registration
Statement or the related Prospectus or any document incorporated by reference
therein contains any 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 not misleading (which information shall be accompanied by an
instruction to suspend the use of the Registration Statement and the Prospectus
until the requisite changes have been made);

 

(g)           during the period of time referred to in Section 4(a) above,
use its commercially reasonable efforts to avoid the issuance of, or if issued,
to obtain the withdrawal of, any order enjoining or suspending the use or
effectiveness of a Registration Statement or suspending the qualification (or
exemption from qualification) of any of the Registrable Shares for sale in any
jurisdiction, as promptly as practicable;

 

(h)           upon request, furnish to each requesting
Holder with Registrable Shares covered by a Registration Statement, without
charge, at least one conformed copy of such Registration Statement and any
post-effective amendment or supplement thereto (without documents incorporated
therein by reference or exhibits thereto, unless requested);

 

(i)            except as provided in Section 5, upon
the occurrence of any event contemplated by Section 4(f)(iv), use its
commercially reasonable efforts to promptly prepare a supplement or
post-effective amendment to a Registration Statement or the related Prospectus
or any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the Registrable
Shares, such Prospectus 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, in the light of the circumstances
under which they were made, not misleading, and, upon request, promptly furnish
to each requesting Holder a reasonable number of copies of each such supplement
or post-effective amendment;

 

(j)            if requested by the representative of the
underwriters, if any, or any Holders of Registrable Shares being sold in
connection with an Underwritten Offering, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such material information as
the representative of the underwriters, if any, or such Holders indicate
relates to them or otherwise reasonably request be included therein and (ii) make
all required filings of such Prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment;

 

(k)           in the case of an Underwritten Offering, use
its commercially reasonable efforts to furnish or caused to be furnished to
each Holder of Registrable Shares covered by such Registration Statement and
the underwriters a signed counterpart, addressed to each such Holder and the
underwriters, of: (i) an opinion of counsel for the Company, dated the
date of each closing under the underwriting agreement, reasonably satisfactory
to the underwriters; and (ii) a “comfort” letter, dated the effective date
of such Registration Statement and the date of each closing under the
underwriting agreement, signed by the independent public accountants who have
certified the Company’s financial statements included in such Registration
Statement, covering substantially the same matters with respect to such
Registration Statement (and the Prospectus included therein) and with respect
to events subsequent to the date of such financial statements, as are
customarily covered in accountants’ letters delivered to underwriters in
underwritten public offerings of securities, and such other financial matters
as the underwriters may reasonably request and customarily obtained by
underwriters in underwritten offerings; provided that, in order to be an
addressee of the comfort letter, each Holder may be required to confirm that it
is in the category of persons to whom a comfort letter may be delivered in
accordance with applicable accounting literature;

 

8

 

(l)            enter into customary agreements (including in
the case of an Underwritten Offering, an underwriting agreement in customary
form) and take all other action in connection therewith in order to expedite or
facilitate the distribution of the Registrable Shares included in such
Registration Statement and, in the case of an Underwritten Offering, make
representations and warranties to the underwriters in such form and scope as
are customarily made by issuers to underwriters in underwritten offerings
consistent with representations and warranties made by the Company in public or
private offerings and confirm the same to the extent customary if and when
requested;

 

(m)          in connection with an Underwritten Offering,
use its commercially reasonable efforts to make available for inspection by the
representative of any underwriters participating in any disposition pursuant to
a Registration Statement, all financial and other records, pertinent corporate
documents and properties of the Company and cause the respective officers,
directors and employees of the Company to supply all information reasonably
requested by any such representatives, the representative of the underwriters,
counsel thereto or accountants in connection with a Registration Statement; provided, however, that such records,
documents or information that the Company determines, in good faith, to be
confidential and notifies such representatives, representative of the
underwriters, counsel thereto or accountants are confidential shall not be
disclosed by the representatives, representative of the underwriters, counsel
thereto or accountants unless (i) the disclosure of such records,
documents or information is necessary to avoid or correct a misstatement or
omission in a Registration Statement or Prospectus, (ii) the release of
such records, documents or information is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, or (iii) such records,
documents or information have been generally made available to the public; provided further, that to the extent
practicable, the foregoing inspection and information gathering shall be
coordinated on behalf of the Holders and the other parties entitled thereto by
one counsel designated by and on behalf of the Holders and the other parties,
which counsel the Company determines in good faith is reasonably acceptable;

 

(n)           use its commercially reasonable efforts
(including, without limitation, seeking to cure in the Company’s listing or
inclusion application any deficiencies cited by the exchange or market) to list
or include all Registrable Shares on any securities exchange or the Nasdaq
Stock Market on which the Common Stock is then listed or included;

 

(o)           prepare and file in a timely manner all
documents and reports required by the Exchange Act and, to the extent the
Company’s obligation to file such reports pursuant to Section 15(d) of
the Exchange Act expires prior to the expiration of the effectiveness period of
the Registration Statement as required by Section 4(a) hereof, the
Company shall register the Registrable Shares under the Exchange Act and shall
maintain such registration through the effectiveness period required by Section 4(a) hereof;

 

(p)           (i) otherwise use its commercially
reasonable efforts to comply in all material respects with all applicable rules and
regulations of the Commission, (ii) make generally available to its
stockholders, as soon as reasonably practicable, earnings statements covering
at least 12 months that satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder, and (iii) delay filing
any Registration Statement or Prospectus or amendment or supplement to such
Registration Statement or Prospectus to which any Holder of Registrable Shares
covered by any Registration Statement shall have reasonably objected on the
grounds that such Registration Statement or Prospectus or amendment or
supplement does not comply in all material respects with the requirements of
the Securities Act, such Holder having been furnished with a copy thereof at
least two Business Days prior to the filing thereof, provided that the Company
may file such Registration Statement or Prospectus or amendment or supplement
following such time as the Company shall have made a good faith effort to resolve
any such issue with the objecting Holder and shall have advised the Holder in
writing of its reasonable belief that such filing complies in all material
respects with the requirements of the Securities Act;

 

(q)           cause to be maintained a registrar and
transfer agent for all Registrable Shares covered by any Registration Statement
from and after a date not later than the effective date of such Registration
Statement; and

 

9

 

(r)            in connection with any sale or transfer of
the Registrable Shares (whether or not pursuant to a Registration Statement)
that will result in the securities being delivered no longer constituting
Registrable Shares, cooperate with the Holders and the representative of the
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing the Registrable Shares to be sold, which certificates
shall not bear any transfer restrictive legends (other than as required by the
Company’s charter), and to enable such Registrable Shares to be in such
denominations and registered in such names as the representative of the
underwriters, if any, or the Holders may request at least three Business Days
prior to any sale of the Registrable Shares.

 

The Company may require the
Holders to furnish to the Company such information regarding the proposed
distribution by such Holder as the Company may from time to time reasonably
request in writing or as shall be required to effect the registration of the
Registrable Shares, and no Holder shall be entitled to be named as a selling
stockholder in any Registration Statement and no Holder shall be entitled to
use the Prospectus forming a part thereof if such Holder does not provide such
information to the Company. Each Holder further agrees to furnish promptly to
the Company in writing all information required from time to time to make the
information previously furnished by such Holder not misleading.

 

Each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event of
the kind described in Section 4(f)(ii), 4(f)(iii) or 4(f)(iv) hereof,
such Holder will immediately discontinue disposition of Registrable Shares
pursuant to a Registration Statement until (i) any such stop order is
vacated or (ii) if an event described in Section 4(f)(iii) or
4(f)(iv) occurs, such Holder’s receipt of the copies of the supplemented
or amended Prospectus. If so directed by the Company, such Holder will deliver
to the Company (at the reasonable expense of the Company) all copies in its
possession, other than permanent file copies then in such Holder’s possession,
of the Prospectus covering such Registrable Shares current at the time of
receipt of such notice.

 

5.             Suspension Period.

 

(a)           Subject to the provisions of this Section 5
and a good faith determination by a majority of the Board of Directors of the
Company that it is in the best interests of the Company to suspend the use of
any Mandatory Registration Statement, following the effectiveness of such
Mandatory Registration Statement (and the filings with any international,
federal or state securities commissions), the Company, by written notice to each
of the Holders, may direct the Holders to suspend sales of the Registrable
Shares pursuant to such Mandatory Registration Statement for such times as the
Company reasonably may determine is necessary and advisable (but in no event
for more than 45 days in any 90-day period or more than 60 days in
any 12-month period), if any of the following events shall occur: pending discussions
relating to, or the consummation of, a transaction or the occurrence of an
event (x) that would require additional disclosure of material information
by the Company in the Mandatory Registration Statement (or such filings) and
which has not been so disclosed, (y) as to which the Company has a bona
fide business purpose for preserving confidentiality, or (z) that renders
the Company unable to comply with Commission requirements, in each case under
circumstances that would make it impractical or inadvisable to promptly amend
or supplement the Mandatory Registration Statement on a post-effective basis,
as applicable. Upon the earlier to occur of (i) the Company delivering to
the Holders an End of Suspension Notice, as hereinafter defined, or (ii) the
end of the maximum permissible suspension period, the Company shall use its
commercially reasonable efforts to promptly amend or supplement the Mandatory
Registration Statement on a post-effective basis, if necessary, or to take such
action as is necessary to make resumed use of the Mandatory Registration
Statement compatible with the Company’s best interests, as applicable, so as to
permit the Holders to resume sales of the Registrable Shares as soon as
possible. The Company shall have the right to suspend the effectiveness and use
of any Piggyback Registration Statement at any time for an unlimited amount of
time.

 

(b)           In the case of an event that causes the
Company to suspend the use of a Registration Statement (a “Suspension Event”), the Company shall give
written notice (a “Suspension Notice”)
to the Holders to suspend sales of the Registrable Shares, and such notice
shall state that such suspension shall continue only for so long as the
Suspension Event or its effect is continuing and the Company is taking all
reasonable steps to terminate suspension of the effectiveness of the
Registration Statement as promptly as possible.

 

10

 

The Holders shall not effect any sales of the Registrable Shares
pursuant to such Registration Statement (or such filings) at any time after it
has received a Suspension Notice from the Company and prior to receipt of an
End of Suspension Notice (as defined below). If so directed by the Company,
each Holder will deliver to the Company (at the expense of the Company) all
copies other than permanent file copies then in such Holder’s possession of the
Prospectus covering the Registrable Shares at the time of receipt of the
Suspension Notice. The Holders may recommence effecting sales of the
Registrable Shares pursuant to the Registration Statement (or such filings)
following further notice to such effect (an “End
of Suspension Notice”) from the Company, which End of Suspension
Notice shall be given by the Company to the Holders in the manner described
above promptly following the conclusion of any Suspension Event and its effect.

 

(c)           Notwithstanding any provision herein to the
contrary, if the Company shall give a Suspension Notice pursuant to this Section 5
with respect to any Mandatory Registration Statement, the Company agrees that
it shall extend the period of time during which such Mandatory Registration
Statement shall be maintained effective pursuant to this Agreement by the
number of days during the period from the date of the giving of the Suspension
Notice to and including the date when Holders shall have received the End of
Suspension Notice and copies of the supplemented or amended Prospectus
necessary to resume sales; provided such period of time shall not be extended
beyond the date that Shares or Additional Shares are not Registrable Shares.

 

6.             Indemnification and
Contribution.

 

(a)           The Company agrees to indemnify and hold
harmless (i) each Holder, (ii) each Person, if any, who controls
(within the meaning of Section 15 of the Securities Act or Section 20(a) of
the Exchange Act) any of the foregoing (a “Controlling
Person”), and (iii) the respective officers, directors,
partners, members, employees, representatives and agents of each Holder or any
Controlling Person (any Person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as a “Purchaser
Indemnitee”) from and against any and all losses, claims, damages,
judgments, actions, reasonable out-of-pocket expenses, and other liabilities
(the “Liabilities”), including,
without limitation and as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing or defending any claim or action, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of outside counsel to
any Purchaser Indemnitee, joint or several, directly or indirectly related to,
based upon, arising out of or in connection with any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus (as amended or supplemented if the Company shall have
furnished to such Purchaser Indemnitee any amendments or supplements thereto),
or any preliminary Prospectus or any other document prepared by the Company
used to sell the Registrable Shares, 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, in light of the
circumstances under which they were made), not misleading, except insofar as
such Liabilities arise out of or are based upon (i) any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and
in conformity with information relating to any Purchaser Indemnitee furnished
to the Company or any underwriter in writing by such Purchaser Indemnitee
expressly for use therein, (ii) any untrue statement contained in or
omission from a preliminary Prospectus if a copy of the Prospectus (as then
amended or supplemented, if the Company shall have furnished to or on behalf of
the Holder participating in the distribution relating to the relevant
Registration Statement any amendments or supplements thereto) was not sent or
given by or on behalf of such Holder to the Person asserting any such
Liabilities who purchased Shares, if such Prospectus (or Prospectus as amended
or supplemented) is required by law to be sent or given at or prior to the
written confirmation of the sale of such Shares to such Person and the untrue
statement contained in or omission from such preliminary Prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented), or (iii) any
sales by any Holder after the delivery by the Company to such Holder of a
Suspension Notice and before the delivery by the Company of an End of
Suspension Notice. The indemnity provided for herein shall remain in full force
and effect regardless of any investigation made by or on behalf of any
Purchaser Indemnitee.

 

(b)           In connection with any Registration Statement
in which a Holder is participating, such Holder agrees, severally and not
jointly, to indemnify and hold harmless the Company, each Person who controls

 

11

 

the Company within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act, and the respective officers,
directors, partners, members, representatives, employees and agents of such
Person or Controlling Person to the same extent as the foregoing indemnity from
the Company to each Purchaser Indemnitee, but only with reference to (i) untrue
statements or omissions or alleged untrue statements or omissions made in
reliance upon and in strict conformity with information relating to such Holder
furnished to the Company in writing by such Holder expressly for use in any
Registration Statement or Prospectus, any amendment or supplement thereto, or
any preliminary Prospectus and (ii) any sales by any Holder after the
delivery by the Company to such Holder of a Suspension Notice and before the
delivery by the Company of an End of Suspension Notice. The liability of any
Holder pursuant to clause (i) of the immediately preceding sentence
shall in no event exceed the net proceeds received by such Holder from sales of
Registrable Shares giving rise to such obligations. If the Holder elects to
include Registrable Shares in an Underwritten Offering, the Holder shall be
required to agree to such customary indemnification provisions as may
reasonably be required by the underwriter in connection with such Underwritten
Offering.

 

(c)           If any suit, action, proceeding (including
any governmental or regulatory investigation), claim or demand shall be brought
or asserted against any Person in respect of which indemnity may be sought
pursuant to Section 6(a) or 6(b), such Person (the “Indemnified Party”), shall promptly notify
the Person against whom such indemnity may be sought (the “Indemnifying Party”), in writing of the
commencement thereof (but the failure to so notify an Indemnifying Party shall
not relieve it from any liability which it may have under this Section 6,
except to the extent the Indemnifying Party is materially prejudiced by the
failure to give notice), and the Indemnifying Party, upon request of the
Indemnified Party, shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may reasonably designate in such proceeding and shall assume
the defense of such proceeding and pay the fees and expenses actually incurred
by such counsel related to such proceeding. Notwithstanding the foregoing, in
any such proceeding, any Indemnified Party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party, unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Party failed within a reasonable time after notice of commencement
of the action to assume the defense and employ counsel reasonably satisfactory
to the Indemnified Party, (iii) the Indemnifying Party and its counsel do
not pursue in a reasonable manner the defense of such action or (iv) the
named parties to any such action (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, or any affiliate of the
Indemnifying Party, and such Indemnified Party shall have been reasonably
advised by counsel that, either (x) there may be one or more legal defenses
available to it which are different from or additional to those available to
the Indemnifying Party or such affiliate of the Indemnifying Party or
(y) a conflict may exist between such Indemnified Party and the
Indemnifying Party or such affiliate of the Indemnifying Party, in which event
the Indemnifying Party shall not have the right to assume or direct the defense
of such action on behalf of such Indemnified Party, it being understood,
however, that the Indemnifying Party shall not, in connection with any one such
action or separate but substantially similar or related actions arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all such Indemnified Parties, which firm shall be designated in
writing by those Indemnified Parties who sold a majority of the Registrable
Shares sold by all such Indemnified Parties and any such separate firm for the
Company, the directors, the officers and such control Persons of the Company as
shall be designated in writing by the Company. The Indemnifying Party shall not
be liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld or delayed, but if
settled with such consent or if there be a final judgment for the plaintiff,
the Indemnifying Party agrees to indemnify any Indemnified Party from and
against any loss or liability by reason of such settlement or judgment to the extent
provided in this Section 6 without reference to this sentence. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Party is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such proceeding.

 

(d)           If the indemnification provided for in Section 6(a) or
6(b) is for any reason held to be unavailable

 

12

 

to an Indemnified Party in respect of any Liabilities referred to
therein (other than by reason of the exceptions provided therein) or is
insufficient to hold harmless a party indemnified thereunder, then each
Indemnifying Party under such sections, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such Liabilities (i) in such
proportion as is appropriate to reflect the relative benefits of the
Indemnified Party on the one hand and the Indemnifying Parties on the other in
connection with the statements or omissions that resulted in such Liabilities,
or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but
also the relative fault of the Indemnifying Parties and the Indemnified Party,
as well as any other relevant equitable considerations. The relative fault of
the Company, on the one hand, and any Purchaser Indemnitees, on the other,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by
such Purchaser Indemnitees and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.

 

(e)           The parties agree that it would not be just
and equitable if contribution pursuant to this Section 6 were determined
by pro rata allocation (even if
such Indemnified Parties were treated as one entity for such purpose), or by
any other method of allocation that does not take account of the equitable
considerations referred to in Section 6(d). The amount paid or payable by
an Indemnified Party as a result of any Liabilities referred to in Section 6(d) shall
be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses actually incurred by such Indemnified Party
in connection with investigating or defending any such action or claim. For
purposes of this Section 6, each Person, if any, who controls (within the
meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act) a Holder shall have the same rights to contribution as such Holder,
as the case may be, and each Person, if any, who controls (within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act)
the Company, and each officer, director, partner, member, employee,
representative, agent or manager of the Company shall have the same rights to
contribution as the Company. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought
from any obligation it or they may have under this Section 6 or otherwise,
except to the extent that any party is materially prejudiced by the failure to
give notice. 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.

 

(f)            The indemnity and contribution agreements
contained in this Section 6 will be in addition to any liability which the
indemnifying parties may otherwise have to the indemnified parties referred to
above. Each Purchaser Indemnitee’s obligations to contribute pursuant to this Section 6
are not joint but are several in the proportion that the number of Shares sold
by such Purchaser Indemnitee bears to the number of Shares sold by all
Purchaser Indemnities.

 

7.             Termination of the Company’s
Obligations.

 

The Company shall have no
further obligations pursuant to this Agreement at such time as no Registrable
Shares are outstanding, provided, however, that the Company’s obligations under
Sections 3, 6 and 8 of this Agreement shall remain in full force and effect
following such time.

 

8.             Miscellaneous.

 

(a)           Amendments and Waivers.    This Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given, without the written consent of the
Company and Holders beneficially owning a majority of the then outstanding
Registrable Shares; provided, however,
that for purposes of this Agreement, Registrable Shares owned, directly or
indirectly, by an Affiliate of the Company shall not be deemed to be
outstanding. Notwithstanding the foregoing, a waiver or consent to or departure
from the provisions hereof with respect to a matter that

 

13

 

relates exclusively to the rights of a Holder whose securities are
being sold pursuant to a Registration Statement and that does not directly or
indirectly affect, impair, limit or compromise the rights of other Holders may
be given by such Holder; provided that
the provisions of this sentence may not be amended, modified or supplemented
except in accordance with the provisions of the immediately preceding sentence.

 

(b)           Notices.    All notices and other
communications, provided for or permitted hereunder shall be made in writing
and delivered by facsimile (with receipt confirmed), overnight courier or
registered or certified mail, return receipt requested, or by telegram,
addressed as follows:

 

(i)            if to a Holder, at the most current address
given by the transfer agent and registrar of the Shares to the Company;

 

(ii)           if to the Company, at the offices of the
Company at 1100 Louisiana Street, Suite 4400, Houston, Texas 77002,
Attention: Stephen W. Herod, (facsimile 832-204-2877); with copies (which shall
not constitute notice) to: (A) Hinkle Elkouri Law Firm L.L.C., 2000 Epic
Center, 301 North Main Street, Wichita, Kansas 67202, Attention: David S.
Elkouri, Esq. (Fax: (316) 264-1518) and (B) Thompson &
Knight LLP, 333 Clay Street, Suite 3300, Houston, Texas 77002, Attention:
Dallas Parker, Esq. (facsimile 832-397-8110); and

 

(iii)          if to the Purchasers, to them at the address
set forth on Exhibit A hereto, or such other address as each Purchaser may
specify in writing to the Company.

 

(c)           Successors and Assigns;
Third Party Beneficiaries.    This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto and shall inure to the benefit of each
Holder. The Company agrees that the Holders shall be third party beneficiaries
to the agreements made hereunder by the Purchasers and the Company, and each
Holder shall have the right to enforce such agreements directly to the extent
it deems such enforcement necessary or advisable to protect its rights
hereunder; provided, however, that
such Holder fulfills all of its obligations hereunder.

 

(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)           Governing
Law.     THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT OF THE DISTRICT
OF DELAWARE OR THE DELAWARE STATE COURT SYSTEM, INCLUDING, BUT NOT LIMTED TO,
THE DELAWARE COURT OF CHANCERY, IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE
LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(f)            Severability.    If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions set forth herein shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that

 

14

 

contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties hereto that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.

 

(g)           Entire Agreement.    This Agreement, together
with the Stock Purchase Agreement, is intended by the parties hereto as a final
expression of their agreement, and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein and therein.

 

(h)           Registrable Shares Held by
the Company or its Affiliates.    Whenever
the consent or approval of Holders of a specified percentage of Registrable
Shares is required hereunder, Registrable Shares held by the Company or its
Affiliates shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.

 

(i)            Survival.    This Agreement is intended
to survive the consummation of the transactions contemplated by the Stock
Purchase Agreement. The indemnification and contribution obligations under Section 6
of this Agreement shall survive the termination of the Company’s obligations
under Section 2 of this Agreement.

 

(j)            Headings.    The headings in this
Agreement are for convenience of reference only and shall not limit or
otherwise affect the provisions of this Agreement. All references made in this
Agreement to “Section” refer to such Section of this Agreement, unless
expressly stated otherwise.

 

IN WITNESS
WHEREOF, the parties
have executed this Agreement as of the date first above written.

 

	
  “COMPANY”

  	
   

  
	
   

  	
   

  
	
  PETROHAWK ENERGY CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name: Floyd C. Wilson

  	
   

  
	
  Title: President and Chief
  Executive Officer

  	
   

  
	
   

  	
   

  
	
  “PURCHASERS”

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: North Sound Legacy
  International Ltd.

  	
  By: North Sound Legacy
  Institutional Fund, LLC

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  By: North Sound Legacy
  Fund, LLC

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
										

 

15

 

EXHIBIT A

PURCHASERS

 

North Sound Legacy Fund LLC                                     

c/o North Sound Capital LLC

53 Forest Avenue

Old Greenwich, CT 06870

Attn: Andrew B. David, General Counsel

Fax: (203) 967-5701

 

North Sound Legacy Institutional Fund LLC

c/o North Sound Capital LLC

53 Forest Avenue

Old Greenwich, CT 06870

Attn: Andrew B. David, General Counsel

Fax: (203) 967-5701

 

North Sound Legacy International Ltd.

c/o North Sound Capital LLC

53 Forest Avenue

Old Greenwich, CT 06870

Attn: Andrew B. David, General Counsel

Fax: (203) 967-5701

 

16

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