-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FRYAE7K4sCo+ex0yaCXNxLWWAqb2HGX4Zce1WChPXpUDTYfyusah6YovKAZatrPV YRYUI8W6aUrAafheC/8o1Q== 0000950124-00-002646.txt : 20000502 0000950124-00-002646.hdr.sgml : 20000502 ACCESSION NUMBER: 0000950124-00-002646 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20000501 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DURASWITCH INDUSTRIES INC CENTRAL INDEX KEY: 0001054070 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 880308867 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-57731 FILM NUMBER: 615125 BUSINESS ADDRESS: STREET 1: 234 S EXTENSION ROAD CITY: MESA STATE: AZ ZIP: 85210 BUSINESS PHONE: 4808333131 MAIL ADDRESS: STREET 1: 234 S EXTENSION ROAD CITY: MESA STATE: AZ ZIP: 85210 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DELPHI AUTOMOTIVE SYSTEMS CORP CENTRAL INDEX KEY: 0001072342 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 383430473 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 5725 DELPHI DRIVE CITY: TROY STATE: MI ZIP: 48098 BUSINESS PHONE: 2484471500 MAIL ADDRESS: STREET 1: 5725 DELPHI DRIVE CITY: TROY STATE: MI ZIP: 48098 SC 13D 1 SCHEDULE 13D


                                 SCHEDULE 13D



                                 (RULE 13d-101)



  Information to be Included in Statements Filed Pursuant to Rule 13d-1(a) and
               Amendments Thereto Filed Pursuant to Rule 13d-2(a)



                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549



                                  SCHEDULE 13D



                  UNDER THE SECURITIES EXCHANGE ACT OF 1934
                            (AMENDMENT NO.        )*



                          DuraSwitch Industries, Inc.
- --------------------------------------------------------------------------------
                                (Name of Issuer)



                                  Common Stock
- --------------------------------------------------------------------------------
                         (Title of Class of Securities)



                                  266905 20 7
- --------------------------------------------------------------------------------
                                 (CUSIP Number)



                              Diana L. Kaye, Esq.
                     Delphi Automotive Systems Corporation
                               5725 Delphi Drive
                              Troy, Michigan 48098
                                 (248) 813-2000
- --------------------------------------------------------------------------------
          (Name, Address and Telephone Number of Person Authorized to
                      Receive Notices and Communications)



                                 April 20, 2000
- --------------------------------------------------------------------------------
            (Date of Event which Requires Filing of this Statement)



     If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box / /.



          Note: Schedules filed in paper format shall include a signed original
     and five copies of the schedule, including all exhibits.  See Rule
     13d-7(b) for other parties to whom copies are to be sent.



          *The remainder of this cover page shall be filled out for a reporting
     person's initial filing on this form with respect to the subject class of
     securities, and for any subsequent amendment containing information which
     would alter disclosures provided in a prior cover page.



     The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).



CUSIP NO. 266905 20 7             13D                        PAGE 2 OF 7   PAGES


- --------------------------------------------------------------------------------



1   NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
    (ENTITIES ONLY)
    Delphi Automotive Systems Corporation 38-3430473
- --------------------------------------------------------------------------------
2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
    (See Instructions)
                                                                         (a) [ ]
                                                                         (b) [X]
- --------------------------------------------------------------------------------
3   SEC USE ONLY



- --------------------------------------------------------------------------------
4   SOURCE OF FUNDS (See Instructions)



    WC, OO
- --------------------------------------------------------------------------------
5   CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
    TO ITEM 2(d) OR 2(e)                                                     [ ]



- --------------------------------------------------------------------------------
6   CITIZENSHIP OR PLACE OF ORGANIZATION



    Delaware
- --------------------------------------------------------------------------------
                7   SOLE VOTING POWER
  NUMBER OF
                    1,876,846*
   SHARES      -----------------------------------------------------------------
                8   SHARED VOTING POWER
BENEFICIALLY
                    -0-
OWNED BY EACH  -----------------------------------------------------------------
                9   SOLE DISPOSITIVE POWER
  REPORTING
                    1,876,846*
   PERSON      -----------------------------------------------------------------
               10   SHARED DISPOSITIVE POWER
    WITH
                    -0-
- --------------------------------------------------------------------------------
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON



     1,876,846*
- --------------------------------------------------------------------------------
12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
     CERTAIN SHARES (See Instructions)                                       [ ]



- --------------------------------------------------------------------------------
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)



     19.9%
- --------------------------------------------------------------------------------
14   TYPE OF REPORTING PERSON (See Instructions)



     CO
- --------------------------------------------------------------------------------

• Delphi Automotive Systems Corporation has the right to purchase up to 1,876,846 shares of DuraSwitch Common Stock (as defined herein) upon the exercise of an option granted to Delphi pursuant to an Option Purchase Agreement dated April 20, 2000, between Delphi Automotive Systems Corporation and DuraSwitch Industries, Inc., and a warrant issued to Delphi pursuant to a Warrant Purchase Agreement dated April 20, 2000, between Delphi Automotive Systems Corporation and DuraSwitch Industries, Inc. Until either the option or the warrant is exercised, Delphi Automotive Systems Corporation does not have any right to vote (or to direct the voting of) or dispose (or direct the disposition of) any shares of DuraSwitch Common Stock that may be purchased upon exercise of the option or the warrant.

SCHEDULE 13D

Item 1. Security and Issuer.

This statement on Schedule 13D relates to the common stock, par value $.001 per share (the “DuraSwitch Common Stock”), of DuraSwitch Industries, Inc. (“DuraSwitch”). The address of the principal executive office of DuraSwitch is 234 South Extension Road, Mesa, Arizona 85210.

Item 2. Identity and Background.

This statement is filed by Delphi Automotive Systems Corporation, a Delaware corporation (“Delphi”). The address of the principal business and principal office of Delphi is 5725 Delphi Drive, Troy, Michigan 48098. Delphi is a world leading supplier of automotive components, integrated systems and modules to the automotive industry.

To the best of Delphi’s knowledge as of the date hereof, the name, business address, present principal occupation or employment and citizenship of each executive officer and director of Delphi and the names, principal business and address of any corporation or other organization in which such employment is conducted are set forth on Schedule I hereto. The information contained in Schedule I is incorporated herein by reference.

During the last five years, neither Delphi nor, to the best knowledge of Delphi, any of the executive officers or directors of Delphi has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, neither Delphi nor, to the best knowledge of Delphi, any of its executive officers or directors has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.

On April 20, 2000, DuraSwitch entered into an Option Purchase Agreement (the “Option Purchase Agreement”) and a Warrant Purchase Agreement (“Warrant Purchase Agreement”) with Delphi. Pursuant to the Option Purchase Agreement, DuraSwitch granted to Delphi an irrevocable option (the “Option”) to purchase 1,651,846 shares of DuraSwitch Common Stock (subject to adjustment) at a purchase price per share equal to $7.00 (subject to adjustment). The Option is immediately exercisable. The purchase price required to purchase the shares of DuraSwitch Common Stock subject to the Option would be $11,562,922.

Pursuant to the Warrant Purchase Agreement, DuraSwitch issued to Delphi a warrant (the “Warrant”) to purchase up to 225,000 shares of DuraSwitch Common Stock (subject to adjustment) at a purchase price per share equal to $7.00 (subject to adjustment). The Warrant is immediately exercisable. The purchase price required to purchase all shares of DuraSwitch Common Stock subject to the Warrant would be $1,575,000.

Delphi anticipates that any funds to be paid by it upon exercise of the Option or the Warrant would be provided from working capital and cash on hand. No separate consideration was paid in connection with the Option Purchase Agreement or the Warrant Purchase Agreement. The descriptions of the Option Purchase Agreement and the Warrant Purchase Agreement contained herein are qualified in their entirety by reference to the Option Purchase Agreement and the Warrant Purchase Agreement, which are attached hereto as Exhibits 1 and 2, respectively.

Item 4. Purpose of Transaction.

Delphi acquired the Option and the Warrant for investment purposes. At the time of the execution of the Option Purchase Agreement and the Warrant Purchase Agreement, Delphi and DuraSwitch also executed a License Agreement dated April 20, 2000, pursuant to which Delphi obtained certain rights to utilize and manufacture DuraSwitch’s magnetically coupled switch technology for the automotive industry. Delphi may acquire or dispose of additional securities of DuraSwitch from time to time in privately negotiated transactions or otherwise, subject to market conditions and other factors. Except as set forth in the paragraph below, Delphi has no present plan or proposal that relates to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D.

Pursuant to the Option Purchase Agreement and the Warrant Purchase Agreement, DuraSwitch granted Delphi the Option and the Warrant, which provide for the purchase of up to 1,876,846 shares of DuraSwitch Common Stock (subject to adjustment) at a purchase price equal to $7.00 per share (subject to adjustment), representing, in the aggregate, approximately 19.9% of the shares of DuraSwitch Common Stock issued and outstanding (including shares issued pursuant to the Option and the Warrant). The Option Purchase Agreement provides that upon the exercise of the Option, Delphi and the primary shareholders of DuraSwitch, Messrs. R. Terren Dunlap, Anthony J. Van Zeeland and Robert J. Brilon (the “Primary Shareholders”), will enter into a Shareholders’ Agreement (the “Shareholders’ Agreement”) that provides that all shares owned by them will be voted in such manner, and DuraSwitch, Delphi and the Primary Shareholders will take such other action, as will be necessary to: (i) cause the bylaws of DuraSwitch to be amended to include the terms set forth in subparagraph (v) below (to the extent such bylaws are not already in effect); (ii) prevent, without the written consent of Delphi, any amendment to the articles of incorporation or bylaws of DuraSwitch except as referred to in clause (i) above; (iii) cause the board of directors of DuraSwitch to consist of six members and to cause one designee of Delphi (increased to two designees if Delphi’s ownership interest increases to 20% or greater and the board of directors increases to greater than six members) and three designees of the Primary Shareholders to be elected as directors of DuraSwitch; (iv) prevent DuraSwitch from taking any action inconsistent with the Shareholders’ Agreement or the articles of incorporation or bylaws described therein; and (v) prevent any subsidiary or affiliate of DuraSwitch from taking, without the consent of Delphi, any of the actions listed in the following sentence which, if taken by DuraSwitch, would require the prior unanimous consent of the directors of DuraSwitch. Approval of the following matters must include the unanimous affirmative vote of the directors of DuraSwitch: (i) changing the nature of DuraSwitch’s business or expanding or reducing the scope of DuraSwitch’s operations; (ii) amending the articles of incorporation or bylaws of DuraSwitch; (iii) creating debt or debt obligations

exceeding a two to one ratio of debt to equity; and (iv) paying dividends or other distributions absent positive retained earnings.

The descriptions of the Option Purchase Agreement and the Warrant Purchase Agreement contained herein are qualified in their entirety by reference to the Option Purchase Agreement and the Warrant Purchase Agreement, which are attached hereto as Exhibits 1 and 2, respectively.

Item 5. Interest in Securities of the Issuer.

DuraSwitch granted to Delphi the Option to purchase 1,651,846 shares of DuraSwitch Common Stock (subject to adjustment) at a purchase price per share equal to $7.00 (subject to adjustment) pursuant to the Option Purchase Agreement, and issued to Delphi the Warrant to purchase up to 225,000 shares of DuraSwitch Common Stock (subject to adjustment) at a purchase price per share equal to $7.00 (subject to adjustment) pursuant to the Warrant Purchase Agreement. The Option may be exercised immediately by Delphi and expires at 11:59 p.m. on June 30, 2000. The Warrant may be exercised immediately by Delphi and expires at 11:59 p.m. on April 20, 2002 or, if Delphi exercises the Option, at 11:59 p.m. on April 20, 2004. Pursuant to the Option Purchase Agreement and the Warrant Purchase Agreement, Delphi has certain registration rights relating to the shares of DuraSwitch Common Stock issuable upon the exercise of the Option or the Warrant.

The total of 1,876,846 shares of DuraSwitch Common Stock (subject to adjustment) subject to the Option and the Warrant represents approximately 19.9% of the shares of DuraSwitch Common Stock issued and outstanding (including shares issued pursuant to the Option and the Warrant). Pursuant to the Option Purchase Agreement, if DuraSwitch issues additional shares of DuraSwitch Common Stock upon the exercise of options, warrants, convertible instruments and other rights to acquire DuraSwitch Common Stock (an “Issuance”), the number of shares subject to the Option will be increased to allow Delphi to purchase such number of shares of DuraSwitch Common Stock as is necessary to maintain its 19.9% ownership interest, at an exercise price equal to the average closing price of the DuraSwitch Common Stock over the 90 day period immediately preceding the date of such issuance. The Option for such additional shares may be exercised at any time within 90 days after DuraSwitch notifies Delphi of such an Issuance. Conversely, if DuraSwitch acquires or retires shares of DuraSwitch Common Stock (a “Redemption Event”), Delphi has the right to require DuraSwitch to purchase (the “Put Right”) such number of shares of DuraSwitch Common Stock as is necessary to maintain Delphi’s 19.9% interest. The price at which DuraSwitch will buy such shares will be the same price paid by DuraSwitch in the Redemption Event. The Put Right may be exercised by Delphi within 90 days after DuraSwitch notifies Delphi of the occurrence of a Redemption Event. The descriptions of the Option Purchase Agreement and the Warrant Purchase Agreement contained herein are qualified in their entirety by reference to the Option Purchase Agreement and the Warrant Purchase Agreement, which are attached hereto as Exhibits 1 and 2, respectively.

Until either the Option or the Warrant is exercised, Delphi does not have any right to vote (or to direct the voting of) or dispose (or direct the disposition of) any shares of DuraSwitch Common Stock that may be purchased upon exercise of the Option or the Warrant.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.

The information set forth in Items 3 through 5 is incorporated herein by reference. Copies of the Option Purchase Agreement and Warrant Purchase Agreement are included as Exhibits 1 and 2, respectively, to this Schedule 13D. To the best of Delphi’s knowledge, except as described in this Schedule 13D, there are at present no other contracts, arrangements, understandings or relationships among the persons named in Item 2 above, and between such persons and any person, with respect to the securities of DuraSwitch.

Item 7. Material to Be Filed as Exhibits.


Exhibit		Description

99.1 99.2		Option Purchase Agreement Warrant Purchase Agreement

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

DELPHI AUTOMOTIVE SYSTEMS
CORPORATION

/s/ Diane L. Kaye
Name: Diane L. Kaye
Title: Secretary

Date: April 28, 2000

SCHEDULE I

Directors and Executive Officers of Delphi Automotive Systems Corporation

The following table sets forth the name, business address and present principal occupation or employment of each director and executive officer of Delphi. Except as indicated below, each person is a U. S. citizen, and the business address of each such person is 5725 Delphi Drive, Troy, Michigan 48098.

Board of Directors


Name and Title		Present Principal Occupation





J.T. Battenberg III		Chairman, Chief Executive Officer and President




Chairman of the Board		Delphi Automotive Systems Corporation




Oscar de Paula Bernardes Neto* Director		Chairman of the Board Santista Alimentos S/A and Seara Alimentos S/A




Virgis W. Colbert Director		Executive Vice President Miller Brewing Company




Alan S. Dawes Director		Executive Vice President and Chief Financial Officer Delphi Automotive Systems Corporation




Dr. Bernd Gottschalk** Director		President Association of the German Automobile Industry




Shoichiro Irimajiri*** Director		President and Representative Director Sega Enterprises, Ltd.




Thomas G. Labrecque Director		Former Chairman The Chase Manhattan Corporation




Susan A. McLaughlin Director		President-Consumer Services BellSouth Telecommunications, Inc.




John D. Opie Director		Vice Chairman of the Board and Executive Officer General Electric Company




Roger S. Penske Director		Founder and Chairman Penske Corporation




Donald L. Runkle Director		Executive Vice President and President, Dynamics and Propulsion Sector Delphi Automotive Systems Corporation




Thomas Wyman Lead Director		Former Chairman, Chief Executive Officer CBS, Inc.

Executive Officers Who Are Not Directors


Name		Title and Present Principal Occupation





José Maria Alapont****		Vice President and President, Delphi Europe




John P. Arle		Vice President, Mergers and Acquisitions




Volker J. Barth**		Vice President and President Delphi South America




James A. Bertrand*****		Vice President and President, Delphi Interior Systems




John G. Blahnik		Vice President and Treasurer




Kevin M. Butler		Vice President, Human Resources Management




Ray C. Campbell		Vice President, Global Purchasing




Guy C. Hachey*****		Vice President and President, Delphi Energy and Chassis Systems




Karen L. Healy		Vice President, Corporate Affairs and Facilities




David R. Heilman		Vice President and President, Delphi Packard Electric Systems




Peter H. Janak		Vice President and Chief Information Officer




Mark C. Lorenz		Vice President, Operations and Logistics




Rodney O’Neal		Executive Vice President and President, Safety, Thermal, and Electrical Architecture Sector




Ronald M. Pirtle		Vice President and President, Delphi Harrison Thermal Systems




Logan G. Robinson		Vice President and General Counsel




James A. Spencer		Vice President and President, Delphi Asia Pacific




Paul J. Tosch		Vice President and President, Delphi Saginaw Steering Systems




Mark R. Weber		Executive Vice President, Operations, Human Resources Management and Corporate Affairs




David B. Wohleen		Executive Vice President, President, Electronics & Mobile Communication Sector and President, Delphi Delco Electronic Systems




*Citizen of Brazil




**Citizen of Germany




***Citizen of Japan




****Citizen of Spain




*****Citizen of Canada

Exhibit Index


Exhibit		Description

99.1		Option Purchase Agreement




99.2		Warrant Purchase Agreement

EX-99.1 2 OPTION PURCHASE AGREEMENT 1 EXHIBIT 99.1 OPTION PURCHASE AGREEMENT THIS OPTION PURCHASE AGREEMENT ("AGREEMENT") is dated APRIL 20, 2000, by and between DELPHI AUTOMOTIVE SYSTEMS CORPORATION, a Delaware corporation ("HOLDER") and DURASWITCH INDUSTRIES, INC., a Nevada corporation ("COMPANY"). In consideration of the premises and the mutual representations, warranties, covenants and agreements contained in this Agreement, the parties, intending to be legally bound, agree as follows: 1. In consideration of Holder entering into a License Agreement with Company dated as of the date of this Agreement, and other good and valuable consideration, receipt of which is hereby acknowledged by Company, Company hereby issues to Holder an irrevocable option to purchase 1,651,846 shares of its $.001 par value common stock (the "COMMON STOCK"), subject to adjustment as provided in the Option to Purchase Common Stock (the "OPTION"). 2. Company represents and warrants to Holder that: (a) Company will at all times have authorized, and reserved sufficient shares of Common Stock for issuance pursuant to the Option and/or this Agreement; it will take all actions necessary to ensure that all such shares are issued in full compliance with all applicable laws and regulations, and with any requirement of any securities exchange upon which any capital stock of Company may be listed; and the issuance of the Option is, and of such shares will be, exempt from registration under any federal or state securities laws; and (b) Company's authorized capitalization consists solely of 40,000,000 shares of Common Stock par value $.001 per share and 10,000,000 shares of Series A, no par value preferred stock; with respect to each class of shares, Company's most recent SEC filing, Form 10-KSB describes outstanding shares and shares issuable based on all existing options, warrants and other rights to acquire Company's Common Stock or Preferred Stock (as the case may be), with no changes since that filing, except as previously otherwise disclosed in writing to Holder. (c) Company has full power and authority to enter into this Agreement and to consummate the transactions contemplated herein, and this Agreement has been duly executed and delivered by Company and is a valid and legally binding obligation of Company in accordance with its terms under Nevada law. 3. Holder represents and warrants to Company that it is acquiring the Option (and will acquire the Common Stock issuable upon exercise of the Option) for its own account for investment and not with a view towards distribution, except in compliance with all applicable laws. 4. Holder shall not sell or otherwise transfer the Option or any Common Stock acquired upon the exercise of the Option except pursuant to an effective registration under the Securities Act of 1933 (the "SECURITIES ACT") or in a transaction which, in the opinion of counsel (which may be in-house counsel to Holder), qualifies as an exempt transaction under the Securities Act and the rules and regulations promulgated thereunder and any applicable state securities laws. The certificates evidencing the Option and the Common Stock issuable upon exercise of the Option may bear an appropriate legend reflecting the foregoing restrictions on the transfer of such securities. 5. The provisions of Exhibit A hereto, pursuant to which Company has granted certain registration rights to Holder, are incorporated herein by reference as if stated in full in this Agreement. 6. This Agreement (including the Exhibits), together with the Option (and Exhibits to the Option), constitutes the complete and entire agreement between Holder and Company regarding the sale of the Option to Holder by Company. 2 7. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Nevada without resort to that state's conflict-of-laws principles. 8. This Agreement (including the registration rights set forth in Exhibit A) shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent transferees of the Option or any shares of Common Stock acquired upon the exercise of the Option; but nothing herein shall be deemed to permit any assignment, transfer or other disposition of the Option or any shares of Common Stock acquired upon the exercise of the Option issued pursuant to this Agreement in violation of applicable law. 9. At the date of this Agreement, Holder has not had an opportunity to investigate or analyze the business, assets, commitments (licenses, other contracts, etc.), liabilities, properties and affairs of Company. Company agrees to provide Holder with reasonable access to its facilities and personnel to enable Holder to complete such investigation and analysis, and to provide Holder with copies of documents relating thereto during the Exercise Period. In addition, Company will keep Holder informed of its affairs, and will advise Holder of any and all events or conditions that exist or occur and that have had or might have a material adverse effect on the assets, properties, business, liabilities, prospects or financial condition of Company, other than such events or conditions previously disclosed to Holder in writing. 10. Upon exercise of the Option for [1,651,846] Option Shares, Holder and Messrs. Dunlap, Van Zeeland (Tony) and Brilon (the "PRIMARY SHAREHOLDERS") will enter a shareholders' agreement ("SHAREHOLDERS' AGREEMENT") that provides that all shares owned by them will be voted in such manner, and Company, Holder and the Primary Stockholders will take such other action as may be necessary to: (a) Cause the By-laws of Company to be amended to include the terms set forth in subparagraph (e) below (to the extent such By-laws are not already in effect); (b) Prevent, without the written consent of Holder, any amendment to the articles of Incorporation or By-laws of Company except as referred to in clause (a) above; (c) Cause the Board of Directors of Company to consist of six members and to cause one designee of Holder (increased to two designees if Holder's ownership interest increases to 20% or greater and Board of Directors increases to greater than six members) and the three Designees of the Primary stockholders to be elected as directors of Company; (d) Prevent Company from taking any action inconsistent with the Stockholders' Agreement or the Articles of Incorporation or By-laws described therein; and (e) Prevent any subsidiary or affiliate of Company from taking, without the consent of Holder, any of the following actions which, if taken by Company, will require the prior unanimous consent of the Directors of Company. Approval of the following matters must include the unanimous affirmative vote of the Directors of Company: (i) changing the nature of Company's business or expanding or reducing the scope of Company's operations; (ii) amending the Certificate of Incorporation or By-laws of Company; (iii) the creation of debt or debt obligations exceeding a two to one ratio of debt to equity; (iv) dividends or other distributions absent positive retained earnings; (f) Company currently has comprehensive employee benefit plans. The parties will consider in good faith whether any voting provisions are appropriate relating to significant changes in employee compensation arrangements. 11. Company and Holder and the Primary Shareholders agree to negotiate in good faith to finalize the Shareholders' Agreement prior to expiration of the Exercise Period. 2 3 IN WITNESS WHEREOF, each of the parties has duly executed this Agreement as of this 20th day of April, 2000. Signed: DELPHI AUTOMOTIVE SYSTEMS DURASWITCH INDUSTRIES, INC. CORPORATION /s/ David R. Heilman /s/ R. Terren Dunlap - ------------------------------ ----------------------------- David R. Heilman R. Terren Dunlap President, Delphi Packard Electric Systems CEO and Chairman /s/ Robert J. Brilon /s/ Anthony J. Van Zeeland 3 4 EXHIBIT A REGISTRATION RIGHTS 1. PIGGY-BACK RIGHTS. (a) If Company decides, at any time prior to the second year anniversary of the expiration of the Exercise Period (as defined in the Option), to prepare and file a registration statement under the Securities Act of 1933 (the "SECURITIES ACT") with respect to the public offering for cash of any shares of its Common Stock (or of other securities convertible into or exchangeable for Common Stock) ("REGISTRATION STATEMENT"), and which is not a registration solely to implement an employee benefit plan or a transaction to which Rule 145 under the Securities Act is applicable, Company shall give 30 days' prior written notice of such decision to Holder and shall, upon the written request of Holder and subject to Paragraph 3 below, include in the Registration Statement such number of Option Shares (as defined in the Option) as Holder may request, together with any other shares of Common Stock then beneficially owned by Holder or Holder's affiliates (collectively "HOLDER'S SHARES"). If Company has not received a request from Holder to include Option Shares within such 30-day period, then Company shall have no obligation to include any such shares in the offering. The registration rights granted in this section shall expire if not exercised before the second year anniversary of the expiration of the Exercise Period. (b) Company shall keep such Registration Statement(s) and other filings relating thereto effective and current under the Securities Act permitting the sale of Holder's Shares included therein for the same period that the registration is maintained effective in respect of shares of other persons (including Company). In any underwritten offering of Common Stock, any Holder's Shares which are included will be sold at the same time and the same per-share price as Company's shares. In connection with any Registration Statement or subsequent amendment or similar document filed with respect thereto, Company shall make Holder's Shares covered thereby eligible for public offering and sale under the securities and Blue Sky laws of such jurisdictions as may be specified by Holder before the effective date of such Registration Statement; provided that Company shall not be obligated to qualify to do business in any jurisdiction where it is not so qualified as of such effectiveness, or to take any action which would subject it to unlimited service of process in any jurisdiction where it is not so subject at such time. Company shall keep such Blue Sky filings current for the length of time it must keep effective any Registration Statement, post-effective amendment, prospectus or offering circular pursuant hereto. (c) Upon receipt of any notice from Company that the Registration Statement or any prospectus included therein must be supplemented or amended, Holder will forthwith discontinue disposition of any shares pursuant to such Registration Statement until Holder's receipt of copies of a supplemented or amended prospectus covering such shares, and, if so directed by Company, Holder will deliver to Company (at Company's expense and as soon as possible) all copies, other than permanent file copies then in Holder's possession, of the prospectus covering such shares current at the time of its receipt of such notice. Company shall use its best efforts to deliver and, if necessary, cause to be made effective under the Securities Act, and any applicable state securities laws, any such amended or supplemented prospectus as soon as possible. 2. EXPENSES; CONSENT. In connection with any Registration Statement or other filing described herein (including without limitation keeping such filings effective as provided herein), Company shall bear all the expenses and professional fees related to the registration including, but not limited to, printing, filing, legal, accounting and registration fees (provided that Holder shall be responsible for any legal expenses incurred by Holder relating to registration of Holder's Shares). Company shall also provide Holder with such number of printed copies of the prospectus, offering circulars and/or supplemental or amended prospectuses in final and preliminary form as Holder may reasonably request. Company consents to the use of each such prospectus or offering circular in connection with the sale of the Holder's Shares. 4 5 3. UNDERWRITTEN OFFERINGS. (a) If any registration in which Holder proposes to participate pursuant to Paragraph 1 involves the distribution of any securities through one or more underwriters, Company will, if requested by Holder, arrange for such underwriters to include all of the Company shares to be offered and sold by Holder among the securities of Company to be distributed by such underwriters. The underwriters' obligation to include such Shares shall be conditioned upon Holder's agreement to enter into an agreement with the managing or lead underwriter, as is customary for selling shareholders which are not affiliates of the issuer, provided that Holder shall not be required to make any representations or warranties to or agreements with Company or the underwriters other than representations, warranties or agreements regarding Holder, its shares and its intended method of distribution or any other representations or warranties required by law or customarily given by selling shareholders which are not affiliates of the Issuer in an underwritten public offering. (b) If any registration under Paragraph 1 involves an underwritten offering and the managing underwriter of such offering shall advise Company that, in its view, the number of securities requested to be included in such registration exceeds the largest number (the "MAXIMUM AMOUNT") that can be sold in an orderly manner in such offerings, within a price range acceptable to Company, Company shall include in such registration shares in the following priority: first, all shares of Common Stock that the Company proposes to register for its own account; and second, Holder's Shares requested by Holder to be included in the Registration Statement, pro rata with the aggregate of all shares of all other persons exercising similar registration rights granted before the date hereof. 4. INDEMNIFICATION; CONTRIBUTION. (A) INDEMNIFICATION BY COMPANY. Company shall indemnify, to the fullest extent permitted by law, Holder, its directors, stockholders, officers, affiliates, employees, agents and each person who controls any of the foregoing within the meaning of the Securities Act against all losses, claims, damages, liabilities and expenses (including reasonable attorneys' fees) caused by, resulting from, arising out of or related to any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus or preliminary prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein not misleading, except insofar as the same are caused by or contained in any information with respect to Holder furnished in writing to Company by Holder specifically for use therein or caused by Holder's failure to deliver a copy of the Registration Statement or prospectus or any amendments or supplements thereto in accordance with the requirements of the Securities Act after Company has furnished such Holder with a copy of the same. Company shall also indemnify any underwriter of Company's Common Stock, its officers, employees and directors and each person who controls such underwriter (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of Holder. 5 6 (B) INDEMNIFICATION BY HOLDER. In connection with any Registration Statement in which Holder is participating, such Holder will furnish to Company in writing such information and affidavits as Company reasonably requests in connection with preparation of the Registration Statement, prospectus or preliminary prospectus and shall indemnify, to the full extent permitted by law, Company, its directors, each of its officers who have signed the Registration Statement and each person who controls Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including reasonable attorneys' fees) caused by, resulting from, arising out of or related to any untrue statement of a material fact or any omission of a material fact required to be stated in the Registration Statement or prospectus or any amendment thereof or supplement thereto, or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is caused by or contained in any information or affidavit furnished in writing by such Holder expressly for use in such Registration Statement, prospectus, preliminary prospectus or any amendment thereof. In no event shall the liability of Holder hereunder exceed the amount of net proceeds received by it upon the sale of securities pursuant to such offering. (C) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party after the receipt by such person of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which such person may claim indemnification or contribution pursuant to this Agreement and, unless in the reasonable judgment of such indemnified party a conflict of interest may exist between such indemnified party and the indemnifying party with respect to such claim, permit the indemnifying party to assume the defense of such claim with counsel satisfactory to such indemnified party. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one counsel with respect to such claim, unless in the reasonable judgment of counsel for such indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the reasonable fees and expenses of such additional counsel or counsels. The indemnifying party will not be subject to any liability for any settlement made without its consent. (D) CONTRIBUTION. (i) If the indemnification provided for in this Paragraph 4 from the indemnifying party is unavailable to an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Subparagraph 4(c) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. (ii) The parties agree that it would not be just and equitable if contribution pursuant to this Subparagraph 4(d) were determined by pro rata allocation or by any 6 7 other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. (iii) If indemnification is available under this Paragraph 4, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Subparagraphs 4(a) and 4(b) hereof without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration provided for in this Paragraph 4(d). 7 EX-99.2 3 WARRANT PURCHASE AGREEMENT 1 EXHIBIT 99.2 WARRANT PURCHASE AGREEMENT THIS WARRANT PURCHASE AGREEMENT ("AGREEMENT") is dated APRIL 20, 2000, by and between DELPHI AUTOMOTIVE SYSTEMS CORPORATION, a Delaware corporation ("HOLDER") and DURASWITCH INDUSTRIES, INC., a Nevada corporation ("COMPANY"). In consideration of the premises and the mutual representations, warranties, covenants and agreements contained in this Agreement, the parties, intending to be legally bound, agree as follows: 1. In consideration of Holder entering into a License Agreement with Company dated as of the date of this Agreement, and other good and valuable consideration, receipt of which is hereby acknowledged by Company, Company hereby issues to Holder its warrant to purchase up to 225,000 shares of its $.001 par value common stock (the "COMMON STOCK"), subject to adjustment as provided therein (the "WARRANT"). 2. Company represents and warrants to Holder that: (a) Company will at all times have authorized, and reserved sufficient shares of Common Stock for issuance pursuant to the Warrant; it will take all actions necessary to ensure that all such shares are issued in full compliance with all applicable laws and regulations, and with any requirement of any securities exchange upon which any capital stock of Company may be listed; and the issuance of the Warrant is, and of such shares will be, exempt from registration under any federal or state securities laws; and (b) Company's authorized capitalization consists solely of 40,000,000 shares of Common Stock par value $.001 per share and 10,000,000 shares of Series A, no par value preferred stock; with respect to each class of shares, Company's most recent SEC filing, Form 10-KSB describes outstanding shares and shares issuable based on all existing options, warrants and other rights to acquire Company's Common Stock or Preferred Stock (as the case may be), with no changes since that filing, except as previously otherwise disclosed in writing to Holder. (c) Company has full power and authority to enter into this Agreement and to consummate the transactions contemplated herein, and this Agreement has been duly executed and delivered by Company and is a valid and legally binding obligation of Company in accordance with its terms under Nevada law. 3. Holder represents and warrants to Company that it is acquiring the Warrant (and will acquire the Common Stock issuable upon exercise of the Warrant) for its own account for investment and not with a view towards distribution, except in compliance with all applicable laws. 4. Holder shall not sell or otherwise transfer the Warrant or any Common Stock acquired upon the exercise of the Warrant except pursuant to an effective registration under the Securities Act of 1933 (the "SECURITIES ACT") or in a transaction which, in the opinion of counsel (which may be in-house counsel to Holder), qualifies as an exempt transaction under the Securities Act and the rules and regulations promulgated thereunder and any applicable state securities laws. The certificates evidencing the Warrant and the Common Stock issuable upon exercise of the Warrant may bear an appropriate legend reflecting the foregoing restrictions on the transfer of such securities. 5. The provisions of Exhibit A hereto, pursuant to which Company has granted certain registration rights to Holder, are incorporated herein by reference as if stated in full in this Agreement. 6. This Agreement (including the Exhibits), together with the Warrant (and Exhibits to the Warrant), constitutes the complete and entire agreement between Holder and Company regarding the sale of the Warrant to Holder by Company. 1 2 7. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Nevada without resort to that state's conflict-of-laws principles. 8. This Agreement (including the registration rights set forth in Exhibit A) shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent transferees of the Warrant or any shares of Common Stock acquired upon the exercise of the Warrant; but nothing herein shall be deemed to permit any assignment, transfer or other disposition of the Warrant or any shares of Common Stock acquired upon the exercise of the Warrant issued pursuant to this Agreement in violation of applicable law. IN WITNESS WHEREOF, each of the parties has duly executed this Agreement as of this 20th day of April, 2000. Signed: DELPHI AUTOMOTIVE SYSTEMS DURASWITCH INDUSTRIES, INC. CORPORATION /s/ David R. Heilman /s/ R. Terren Dunlap - ----------------------------- ------------------------------ David R. Heilman R. Terren Dunlap President, Delphi Packard Electric Systems CEO and Chairman 2 3 EXHIBIT A REGISTRATION RIGHTS 1. PIGGY-BACK RIGHTS. (a) If Company decides, at any time prior to the second year anniversary of the expiration of the Exercise Period (as defined in the Warrant), to prepare and file a registration statement under the Securities Act of 1933 (the "SECURITIES ACT") with respect to the public offering for cash of any shares of its Common Stock (or of other securities convertible into or exchangeable for Common Stock) ("REGISTRATION STATEMENT"), and which is not a registration solely to implement an employee benefit plan or a transaction to which Rule 145 under the Securities Act is applicable, Company shall give 30 days' prior written notice of such decision to Holder and shall, upon the written request of Holder and subject to Paragraph 3 below, include in the Registration Statement such number of Warrant Shares (as defined in the Warrant) as Holder may request, together with any other shares of Common Stock then beneficially owned by Holder or Holder's affiliates (collectively "HOLDER'S SHARES"). If Company has not received a request from Holder to include Warrant Shares within such 30-day period, then Company shall have no obligation to include any such shares in the offering. The registration rights granted in this section shall expire if not exercised before the second year anniversary of the expiration of the Exercise Period. (b) Company shall keep such Registration Statement(s) and other filings relating thereto effective and current under the Securities Act permitting the sale of Holder's Shares included therein for the same period that the registration is maintained effective in respect of shares of other persons (including Company). In any underwritten offering of Common Stock, any Holder's Shares which are included will be sold at the same time and the same per-share price as Company's shares. In connection with any Registration Statement or subsequent amendment or similar document filed with respect thereto, Company shall make Holder's Shares covered thereby eligible for public offering and sale under the securities and Blue Sky laws of such jurisdictions as may be specified by Holder before the effective date of such Registration Statement; provided that Company shall not be obligated to qualify to do business in any jurisdiction where it is not so qualified as of such effectiveness, or to take any action which would subject it to unlimited service of process in any jurisdiction where it is not so subject at such time. Company shall keep such Blue Sky filings current for the length of time it must keep effective any Registration Statement, post-effective amendment, prospectus or offering circular pursuant hereto. (c) Upon receipt of any notice from Company that the Registration Statement or any prospectus included therein must be supplemented or amended, Holder will forthwith discontinue disposition of any shares pursuant to such Registration Statement until Holder's receipt of copies of a supplemented or amended prospectus covering such shares, and, if so directed by Company, Holder will deliver to Company (at Company's expense and as soon as possible) all copies, other than permanent file copies then in Holder's possession, of the prospectus covering such shares current at the time of its receipt of such notice. Company shall use its best efforts to deliver and, if necessary, cause to be made effective under the Securities Act, and any applicable state securities laws, any such amended or supplemented prospectus as soon as possible. 2. EXPENSES; CONSENT. In connection with any Registration Statement or other filing described herein (including without limitation keeping such filings effective as provided herein), Company shall bear all the expenses and professional fees related to the registration including, but not limited to, printing, filing, legal, accounting and registration fees (provided that Holder shall be responsible for any legal expenses incurred by Holder relating to registration of Holder's Shares). Company shall also provide Holder with such number of printed copies of the prospectus, offering circulars and/or supplemental or amended prospectuses in final and preliminary form as Holder may reasonably request. Company consents to the use of each such prospectus or offering circular in connection with the sale of the Holder's Shares. 3 4 3. UNDERWRITTEN OFFERINGS. (a) If any registration in which Holder proposes to participate pursuant to Paragraph 1 involves the distribution of any securities through one or more underwriters, Company will, if requested by Holder, arrange for such underwriters to include all of the Company shares to be offered and sold by Holder among the securities of Company to be distributed by such underwriters. The underwriters' obligation to include such Shares shall be conditioned upon Holder's agreement to enter into an agreement with the managing or lead underwriter, as is customary for selling shareholders which are not affiliates of the issuer, provided that Holder shall not be required to make any representations or warranties to or agreements with Company or the underwriters other than representations, warranties or agreements regarding Holder, its shares and its intended method of distribution or any other representations or warranties required by law or customarily given by selling shareholders which are not affiliates of the Issuer in an underwritten public offering. (b) If any registration under Paragraph 1 involves an underwritten offering and the managing underwriter of such offering shall advise Company that, in its view, the number of securities requested to be included in such registration exceeds the largest number (the "MAXIMUM AMOUNT") that can be sold in an orderly manner in such offerings, within a price range acceptable to Company, Company shall include in such registration shares in the following priority: first, all shares of Common Stock that the Company proposes to register for its own account; and second, Holder's Shares requested by Holder to be included in the Registration Statement, pro rata with the aggregate of all shares of all other persons exercising similar registration rights granted before the date hereof. 4. INDEMNIFICATION; CONTRIBUTION. (A) INDEMNIFICATION BY COMPANY. Company shall indemnify, to the fullest extent permitted by law, Holder, its directors, stockholders, officers, affiliates, employees, agents and each person who controls any of the foregoing within the meaning of the Securities Act against all losses, claims, damages, liabilities and expenses (including reasonable attorneys' fees) caused by, resulting from, arising out of or related to any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus or preliminary prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein not misleading, except insofar as the same are caused by or contained in any information with respect to Holder furnished in writing to Company by Holder specifically for use therein or caused by Holder's failure to deliver a copy of the Registration Statement or prospectus or any amendments or supplements thereto in accordance with the requirements of the Securities Act after Company has furnished such Holder with a copy of the same. Company shall also indemnify any underwriter of Company's Common Stock, its officers, employees and directors and each person who controls such underwriter (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of Holder. (B) INDEMNIFICATION BY HOLDER. In connection with any Registration Statement in which Holder is participating, such Holder will furnish to Company in writing such information and affidavits as Company reasonably requests in connection with preparation of the Registration Statement, prospectus or preliminary prospectus and shall indemnify, to the full extent permitted by law, Company, its directors, each of its officers who have signed the Registration Statement and each person who controls Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including reasonable attorneys' fees) caused by, resulting from, arising out of or related to any untrue statement of a material fact or any 4 5 omission of a material fact required to be stated in the Registration Statement or prospectus or any amendment thereof or supplement thereto, or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is caused by or contained in any information or affidavit furnished in writing by such Holder expressly for use in such Registration Statement, prospectus, preliminary prospectus or any amendment thereof. In no event shall the liability of Holder hereunder exceed the amount of net proceeds received by it upon the sale of securities pursuant to such offering. (C) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party after the receipt by such person of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which such person may claim indemnification or contribution pursuant to this Agreement and, unless in the reasonable judgment of such indemnified party a conflict of interest may exist between such indemnified party and the indemnifying party with respect to such claim, permit the indemnifying party to assume the defense of such claim with counsel satisfactory to such indemnified party. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one counsel with respect to such claim, unless in the reasonable judgment of counsel for such indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the reasonable fees and expenses of such additional counsel or counsels. The indemnifying party will not be subject to any liability for any settlement made without its consent. (D) CONTRIBUTION. (i) If the indemnification provided for in this Paragraph 4 from the indemnifying party is unavailable to an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Subparagraph 4(c) hereof, any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. (ii) The parties agree that it would not be just and equitable if contribution pursuant to this Subparagraph 4(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. 5 6 (iii) If indemnification is available under this Paragraph 4, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Subparagraphs 4(a) and 4(b) hereof without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration provided for in this Paragraph 4(d). 6 -----END PRIVACY-ENHANCED MESSAGE-----