Xxxxx.xxx, Inc.
SECURITIES PURCHASE AGREEMENT
January 30, 2001
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (the "Agreement") is made as of the 30th
day of January, 2001, by and between Xxxxx.xxx, Inc., a Delaware corporation
(the "Company"), and Eagle Wireless International, Inc, a Texas corporation
("Eagle").
RECITALS
WHEREAS, Eagle and XxxxxXxxxx.xxx, Inc., a Delaware corporation
("ClearWorks"), are subject to that certain Agreement and Plan of Reorganization
dated as of September 15, 2000 wherein they have agreed to enter into a business
combination transaction in which, among other things, each share of common stock
of ClearWorks issued and outstanding immediately prior to the Effective Time (as
defined therein) will be exchanged and converted into 0.8 shares of common stock
of Eagle.
WHEREAS, Eagle has filed with the Securities and Exchange Commission a
Registration Statement on Form S-4 which purports to register all shares of
Eagle common stock to be issued in the proposed business combination
transaction.
WHEREAS, Eagle wishes to acquire from the Company 1,500,000 shares of the
common stock of the Company in return for 500,000 shares of the common stock of
ClearWorks, which 500,000 shares of ClearWorks common stock shall convert, as of
the Effective Time, to 400,000 shares of Eagle common stock subject to the Form
S-4 Registration Statement (the "Eagle Shares").
WHEREAS, Eagle and the Company have entered into that certain License
Agreement of even date herewith (the "License Agreement") pursuant to which the
Company is to receive an additional 130,000 shares of ClearWorks common stock,
which shall convert as of the Effective time to 104,000 shares of Eagle common
stock subject to the Form S-4 Registration Statement (the "License Shares").
NOW THEREFORE, in consideration of the foregoing and the covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. PURCHASE AND SALE OF COMMON STOCK.
1.1 Sale and Issuance. Subject to the terms and conditions of this
Agreement, (i) Eagle agrees to purchase at the Closing (as hereinafter defined),
and the Company agrees to sell and issue to Eagle at the Closing, 1,500,000
shares of Common Stock (the "Burst Shares"), at a purchase price of 500,000
shares of the common stock of ClearWorks currently owned by Eagle, which shares
shall, by the Closing Date (as defined below), convert to the Eagle Shares.
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1.2 Escrow and Closing.
(a) Escrow. The parties agree to select a mutually agreeable third party to
act as escrow agent ("Escrow Agent") to hold and deliver the Eagle Shares,
together with any and all other documents reasonably requested by Escrow Agent,
to assist the Company and Eagle in effecting the transaction contemplated
herein.
(b) Closing Date. The closing of the transactions contemplated hereby (the
"Closing") shall occur on or before January 31, 2001 (the "Closing Date"). At
the closing, the Escrow Agent shall deliver the Burst Shares to Eagle and the
Eagle Shares and License Shares to the Company.
(c) Transactions and Document Exchange at Closing. Prior to or at the
Closing, the following transactions shall occur and documents shall be
exchanged, all of which shall be deemed to occur simultaneously:
(i) The Company shall deliver to the Escrow Agent for the benefit of
Eagle:
(1) a certificate evidencing the Burst Shares being acquired;
(2) an executed copy of a Registration Rights Agreement between
the parties setting forth the registration rights which attach to the
Burst Shares;
(3) an executed copy of the License Agreement between the
parties;
(4) such other documents, instruments and/or certificates, if
any, as are required to be delivered pursuant to the provisions of
this Agreement, or which are reasonably determined by the parties to
be required to effectuate the transactions contemplated herein, or as
otherwise may be reasonably requested by Eagle in furtherance of the
intent of this Agreement.
(ii). Eagle shall deliver to the Escrow Agent for the benefit of the
Company:
(1) a certificate evidencing the Eagle Shares;
(2) a certificate evidencing the License Shares:
(3) an executed copy of a Registration Rights Agreement between
the parties setting forth the registration rights which attach to the
Burst Shares;
(4) an executed copy of the License Agreement between the
parties;
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(5) such other documents, instruments and/or certificates, if
any, as are required to be delivered pursuant to the provisions of
this Agreement, or which are reasonably determined by the parties to
be required to effectuate the transactions contemplated herein, or as
otherwise may be reasonably requested by the Company in furtherance of
the intent of this Agreement.
2. VOLUME TRADE LIMITATIONS; BURST ACQUISITION. The Company hereby agrees as
follows:
2.1 Trade Limits. In order to ensure an orderly market for Eagle common
stock, the Company may sell a maximum of 25,000 shares of combined Eagle Shares
and License Shares during any week in which the average daily volume of Eagle
common stock as reported on the American Stock Exchange is less than 250,000
shares. The Company may sell a maximum of 40,000 shares of combined Eagle Shares
and License Shares during any week in which such average daily volume of Eagle
common stock is between 250,000 and 500,000 shares. The Company may sell a
maximum of 50,000 shares of combined Eagle Shares and License Shares during any
week in which such average daily volume of Eagle common stock is in excess of
500,000 shares per day. At Eagle's request, burst will furnish documentation
evidencing the trading history of the Eagle Shares and License Shares.
2.2 Merger, Acquisition or Asset Sale. In the event of a merger,
acquisition or other sale of all or substantially all of the assets of the
Company prior to the termination of Eagle's Rule 144 holding period, the Burst
Shares shall, at Eagle's option, either (i) immediately convert into freely
tradable securities of the Company or its acquirer or (ii) be repurchased by the
Company for a cash price per share equal to the then-current market price of
equivalent shares of the common stock of the Company. If such merger,
acquisition or other sale of assets of the Company occurs prior to the
termination of Eagle's Rule 144 holding period and the cash price of the
Company's common stock is less than $0.50 per share, the License Agreement shall
be extended as contemplated by Section 2.11 of the License Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents
and warrants to Eagle that, as of the date of this Agreement, except as set
forth in the corresponding Section referenced on the Schedule of Exceptions
attached hereto as Schedule A (the "Schedule of Exceptions"):
3.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own and operate its properties and assets and to carry on its business as now
conducted and as presently proposed to be conducted. The Company is duly
qualified and is authorized to transact business and is in good standing as a
foreign corporation in each jurisdiction in which the failure so to qualify or
to be in good standing would have a material adverse effect on the assets,
liabilities, condition (financial or other), business, results of operations or
prospects of the Company or any of its Subsidiaries (a "Material Adverse
Effect").
3.2 Capitalization.
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(a) The authorized capital stock of the Company consists of:
(i) Twenty Million (20,000,000) shares of Convertible Preferred Stock,
par value $0.00001 per share, of which none are issued and outstanding as
of the date hereof and none are held in the Company's treasury.
(ii) One Hundred Million (100,000,000) shares of Common Stock, par
value $.00001 per share, of which Twenty Million One Hundred Forty-Eight
Thousand One Hundred Twenty-Five (20,148,125) shares are issued and
outstanding as of the date hereof and none are held in the Company's
treasury. All of the outstanding shares of Common Stock have been duly
authorized, fully paid and are nonassessable and validly issued in
compliance with all applicable Federal and state securities laws.
(b) Except as set forth on Section 3.2(b) of the Schedule of Exceptions,
there are no outstanding options, warrants, rights (including, without
limitation, conversion or preemptive rights and rights of first refusal or
co-sale rights or similar rights), calls, commitments or other agreements of any
character, orally or in writing, providing for the purchase, issuance or sale by
the Company of any shares of its capital stock, or the registration of any
securities of the Company under the securities laws of any jurisdiction, other
than as contemplated by this Agreement.
(c) The Company is not subject to any obligation (contingent or otherwise)
to repurchase or otherwise acquire or retire any shares of its capital stock or
any warrants, options, calls, commitments or other rights to acquire its capital
stock.
3.3 Subsidiaries. The Company does not have any subsidiaries and does not
currently own or control, directly or indirectly, any interest in any other
corporation, partnership, limited liability company, association or other
business entity other than as set forth in Section 3.3 of the Schedule of
Exceptions. The Company is not a participant in any joint venture, partnership
or similar arrangement. Each of the subsidiaries of the Company set forth in
Section 3.3 of the Schedule of Exceptions (the "Subsidiaries") is a corporation
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation and is duly licensed or qualified to
transact business as a foreign corporation and is in good standing in each
jurisdiction in which the failure so to qualify or to be in good standing would
have a Material Adverse Effect. All of the shares of the capital stock of each
of the Subsidiaries are owned by the Company and are, in each case, free and
clear of any liens, charges, restrictions, claims or encumbrances of any nature
whatsoever (collectively, "Liens") and there are no outstanding subscriptions,
warrants, options, convertible securities, or other rights pursuant to which any
of the Subsidiaries is or may become obligated to issue any shares of its
capital stock to any Person (as defined in Section 9.2 hereof) other than the
Company.
3.4 Authorization. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of this Agreement, the Burst Shares and the Registration Rights
Agreement in substantially the form attached hereto as Exhibit B (the
"Registration Rights Agreement" and collectively with this Agreement and the
License Agreement, the "Transaction Documents"), the performance of all
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obligations of the Company hereunder and thereunder and the authorization,
issuance, sale and delivery of the Burst Shares has been taken or will be taken
prior to the Closing, and the Transaction Documents, when executed and delivered
by the Company, will constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) as the
indemnity provisions of the Registration Rights Agreement may be limited by law.
The sale of the Burst Shares is not subject to any preemptive rights, rights of
first refusal, or similar rights.
3.5 Valid Issuance of Securities. The Burst Shares, when issued, sold, and
delivered in accordance with the terms hereof for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable, and will
be free of restrictions on transfer other than restrictions on transfer under
the Transaction Documents and applicable state and Federal securities laws.
3.6 Governmental Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority is required on the part of the
Company or any of the Subsidiaries in connection with the consummation of the
transactions contemplated by this Agreement, except for (i) filings pursuant to
Regulation D of the Securities Act of 1933, as amended (the "Securities Act"),
(ii) filings required under applicable state "blue sky" laws (which shall be
duly filed) and (iii) the filing of a registration statement or statements
pursuant to the Registration Rights Agreement.
3.7 Private Placement. In reliance on the representations and warranties of
Eagle in Section 4 hereof, the offer, sale and issuance of the Burst Shares as
contemplated by this Agreement is exempt from the registration requirements of
the Securities Act, and neither the Company nor any Person acting on its behalf
will take any action hereafter that would cause the loss of such exemption.
3.8 Litigation. Except as set forth on the Schedule of Exceptions, there is
no action, suit, proceeding or investigation pending or, to the Company's
knowledge, currently threatened against the Company or any of the Subsidiaries
nor is the Company aware that there is any basis for the foregoing. Neither the
Company nor any of the Subsidiaries is a party or subject to the provisions of
any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality. There is no action, suit, proceeding or investigation
by the Company or any of the Subsidiaries currently pending or which the company
intends to initiate.
4. REPRESENTATIONS AND WARRANTIES OF EAGLE. Eagle hereby represents and warrants
to the Company that:
4.1 Authorization. Eagle is a corporation duly organized, validly existing
and in good standing under the laws the State of Texas, and Eagle has the
corporate power and authority to enter into the Transaction Documents to which
it is a party and has (or will have) duly
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authorized, executed and delivered the same. The Transaction Documents to which
it is a party, when executed and delivered by Eagle, will constitute valid and
legally binding obligations of Eagle, enforceable in accordance with their
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and any other laws of general
application affecting enforcement of creditors' rights generally, or (b) as
limited by laws relating to the availability of a specific performance,
injunctive relief or other equitable remedies.
4.2 Shares to be Transferred. Eagle holds of record and owns directly the
shares of ClearWorks set forth in the Recitals above, free and clear of any
restrictions on transfer, including but not limited to restrictions under the
Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended,
and state laws, taxes, security interests, options, warrants, purchase rights,
contracts, commitments, equities, claimed and demands. Eagle is not a party to
any option, warrant, purchase right or other contract or commitment that could
require Eagle to sell, transfer, or otherwise dispose of or encumber any of said
ClearWorks stock or the Eagle Shares and License Shares into which said stock is
to be converted (other than as required by this Agreement). Eagle is not a party
to any voting trust, proxy or other agreement or understanding with respect to
the transfer of said ClearWorks stock, the Eagle Shares or the License Shares.
4.3 Conversion of ClearWorks Securities. As contemplated by the Recitals
above, Eagle has full power and authority to execute, endorse and deliver
certificates representing the ClearWorks common stock to the Escrow Agent, and
further warrants that Eagle need not give any notice, make any filing with,
obtain any authorization, consent or approval of any government or governmental
agency in order to consummate the transaction contemplated by this Agreement
with respect to the transfer and conversion of the ClearWorks common stock into
the Eagle Shares and the License Shares.
4.4 Accredited Investor. Eagle is an "accredited investor" as such term is
defined in Rule 501 under the Securities Act. Eagle is purchasing the Burst
Shares for its own account, for investment only and not with a view to, or any
present intention of, effecting a distribution of such securities or any part
thereof except pursuant to a registration or an available exemption under
applicable law. Eagle acknowledges that the Burst Shares have not been
registered under the Securities Act or the securities laws of any state or other
jurisdiction and cannot be disposed of unless they are subsequently registered
under the Securities Act and any applicable state laws or exemption from such
registration is available. Eagle understands that certificates representing the
Burst Shares shall bear the following, or a substantially similar, legend until
such time as they have been registered under the Securities Act or otherwise may
be sold under Rule 144 under the Securities Act:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR UNDER ANY STATE SECURITIES LAWS.
THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS
PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM
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4.5 Reliance On Exemptions. Eagle understands that the Burst Shares are
being offered and sold in reliance upon specific exemptions from the
registration requirements of Federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations and
warranties of Eagle set forth herein in order to determine the availability of
such exemptions and the eligibility of Eagle to acquire the Burst Shares.
4.6 Information. Eagle has been furnished all documents relating to the
business, finances and operations of the Company that Eagle requested from the
Company. Eagle has been afforded the opportunity to ask questions of the
Company's representatives concerning the Company in making the decision to
purchase the Burst Shares, and such questions have been answered to its
satisfaction. However, neither the foregoing nor any other due diligence
investigation conducted by Eagle or on its behalf shall limit, modify or affect
the representations and warranties of the Company in Section 3 of this Agreement
or the right of Eagle to rely thereon.
4.7 Residence. Eagle is a resident of the jurisdiction set forth under its
name on the signature pages hereto.
4.8 Investment Experience. Eagle has experience as an investor in
securities of Internet-related and technology companies and acknowledges that it
is able to fend for itself, can bear the economic risk of its investment, and
has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Burst
Shares. Eagle has not been organized for the purpose of acquiring the Burst
Shares.
4.9 Broker's or Finder's Fee. No agent, broker, person or firm acting on
behalf of Eagle is, or will be, entitled to any commission or broker's or
finder's fees from any of the parties hereto, or from any Person controlling,
controlled by or under common control with any of the parties hereto, in
connection with any of the transactions contemplated herein.
5. COVENANTS OF THE COMPANY. The Company agrees with Eagle that it shall comply
with the following covenants from and after the date of this Agreement, except
as shall otherwise be expressly agreed pursuant to a written consent or consents
executed by Eagle, until neither Eagle nor any affiliate of Eagle, which Eagle
directly or indirectly, controls, is controlled by or is under common control
with ("Affiliate") owns any of the Burst Shares purchased pursuant to this
Agreement:
5.1 Exchange Act Filings. The Company shall file in a timely manner all
reports and other documents required to be filed by it under the Exchange Act,
and deliver copies of such reports not otherwise available on the Securities and
Exchange Commission ("SEC") web site to Eagle. The Company shall not terminate
its status as an issuer required to file reports under the Exchange Act even if
the Exchange Act or the rules and regulations promulgated thereunder would
permit such termination.
5.2 Conduct of Business. The Company will continue to engage principally in
the business now conducted by the Company or a business or businesses similar
thereto or
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reasonably compatible therewith. The Company will keep in full force and effect
its corporate existence.
5.3 Payment of Taxes, Compliance with Laws, etc. The Company will pay and
discharge all lawful federal, state and local taxes, assessments and
governmental charges or levies imposed upon it or upon its income or property
before the same shall become in default, as well as all lawful claims for labor,
materials and supplies which, if not paid when due, might become a material lien
or charge upon its property or any part thereof; provided, however, that the
Company shall not be required to pay and discharge any such tax, assessment,
charge, levy or claim so long as the validity thereof is being contested by the
Company in good faith by appropriate proceedings and an adequate reserve
therefor has been established on its books. The Company will comply with all
applicable laws and regulations in the conduct of its business, including,
without limitation, all applicable federal and state securities laws in
connection with the issuance of any shares of its capital stock, where the
failure to so comply would have a Material Adverse Effect.
5.4 Insurance. The Company will keep its insurable properties insured, upon
reasonable business terms, by financially sound and reputable insurers against
liability, and the perils of casualty, fire and extended coverage in amounts of
coverage sufficient to allow it to replace any of its material properties that
might be damaged or destroyed. The Company will also maintain with such insurers
insurance against other hazards and risks and liability to Persons and property
to the extent and in the manner customary for companies engaged in the same or
similar business.
5.5 Maintenance of Properties. The Company will maintain all properties
used or useful in the conduct of its business in good repair, working order and
condition, ordinary wear and tear excepted.
5.6 Current Public Information; Effectiveness. The Company shall timely
file all reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder and
shall maintain the effectiveness of the registration statements pursuant to
which the Shares are being registered as provided in the Registration Rights
Agreement until such time as Eagle and its Affiliates no longer own any of the
Burst Shares.
5.7 Further Assurances. If at any time after the Closing any further action
is reasonably necessary to carry out the purposes of the Transaction Documents,
the proper officers or directors of the Company shall execute and deliver any
further instruments or documents and take all such necessary action that may
reasonably be requested by the other party(ies).
6. COVENANTS OF EAGLE. Eagle agrees with the Company that it shall comply with
the following covenants from and after the date of this Agreement, except as
shall otherwise be expressly agreed pursuant to a written consent or consents
executed by the Company, until neither the Company nor any Affiliate of the
Company owns any of the Eagle Shares or the License Shares:
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6.1 Exchange Act Filings. Eagle shall file in a timely manner all reports
and other documents required to be filed by it under the Exchange Act, and
deliver copies of such reports not otherwise available on the SEC's web site to
the Company. Eagle shall not terminate its status as an issuer required to file
reports under the Exchange Act even if the Exchange Act or the rules and
regulations promulgated thereunder would permit such termination.
6.2 Conduct of Business. Eagle will continue to engage principally in the
business now conducted by it or a business or businesses similar thereto or
reasonably compatible therewith. Eagle will keep in full force and effect its
corporate existence.
6.3 Payment of Taxes, Compliance with Laws, etc. Eagle will pay and
discharge all lawful federal, state and local taxes, assessments and
governmental charges or levies imposed upon it or upon its income or property
before the same shall become in default, as well as all lawful claims for labor,
materials and supplies which, if not paid when due, might become a material lien
or charge upon its property or any part thereof; provided, however, that Eagle
shall not be required to pay and discharge any such tax, assessment, charge,
levy or claim so long as the validity thereof is being contested by Eagle in
good faith by appropriate proceedings and an adequate reserve therefor has been
established on its books. Eagle will comply with all applicable laws and
regulations in the conduct of its business, including, without limitation, all
applicable federal and state securities laws in connection with the issuance of
any shares of its capital stock, where the failure to so comply would have a
Material Adverse Effect.
6.4 Insurance. Eagle will keep its insurable properties insured, upon
reasonable business terms, by financially sound and reputable insurers against
liability, and the perils of casualty, fire and extended coverage in amounts of
coverage sufficient to allow it to replace any of its material properties that
might be damaged or destroyed. Eagle will also maintain with such insurers
insurance against other hazards and risks and liability to Persons and property
to the extent and in the manner customary for companies engaged in the same or
similar business.
6.5 Maintenance of Properties. Eagle will maintain all properties used or
useful in the conduct of its business in good repair, working order and
condition, ordinary wear and tear excepted.
6.6 Material Adverse Changes. Eagle will promptly advise the Company of any
event that represents or is reasonably likely to result in a Material Adverse
Effect, and of each suit or proceeding commenced or threatened against Eagle
which, if adversely determined, in the reasonable judgment of Eagle, is
reasonably likely to have a Material Adverse Effect.
6.7 Current Public Information; Effectiveness. Eagle shall timely file all
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder and shall maintain
the effectiveness of the S-4 Registration Statement or such other registration
statements pursuant to which the Eagle Shares and the License Shares are being
registered until such time as the Company and its Affiliates no longer own any
of such securities.
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6.8 Further Assurances. If at any time after the Closing any further action
is reasonably necessary to carry out the purposes of the Transaction Documents,
the proper officers or directors of Eagle shall execute and deliver any further
instruments or documents and take all such necessary action that may reasonably
be requested by the other party(ies).
7. CONDITIONS TO CLOSING. The obligations of the parties to consummate the
transactions contemplated hereunder is subject to the fulfillment, at or before
the Closing, of each of the following conditions, unless otherwise waived:
7.1 Representations and Warranties. The representations and warranties of
the parties as set forth above shall be true and correct in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date.
7.2 Performance. Each party shall have performed and complied with all
covenants, agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by it at or before the
Closing.
7.3 Qualifications. All authorizations, approvals or permits, if any, of
any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of any
securities pursuant to this Agreement shall be obtained and effective as of the
Closing.
7.4 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated herein and all documents incident
thereto shall be reasonably satisfactory in form and substance to each party's
counsel before the Closing Date, who shall have received all such counterpart
and certified or other copies of such documents as they may reasonably request.
7.5 Opinion of Counsel. The Company shall have received from Xxxxxxx X.
Xxxx of Weed & Co., counsel for Eagle, an opinion, dated as of the Closing Date,
in form reasonably acceptable to the Company. Eagle shall have received from Bay
Venture Counsel LLP, counsel for the Company, an opinion, dated as of the
Closing Date, in form reasonably acceptable to Eagle.
7.6 Registration Rights Agreement. The Company and Eagle shall have
executed and delivered the Registration Rights Agreement in substantially the
form attached as Exhibit B.
7.7 License Agreement. The Company and Eagle shall have executed and
delivered the License Agreement.
7.8 Registration Statement. Eagle's Registration Statement on Form S-4
filed on November 9, 2000, as amended, shall have been declared effective by the
SEC.
8. SURVIVAL OF REPRESENTATIONS; INDEMNITY.
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8.1 Survival of Representations. Unless otherwise set forth in this
Agreement, the warranties, representations and covenants of the Company and
Eagle contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing for a period of two (2)
years following the Closing regardless of any investigation on the part of such
party or its representatives, and shall insure to be benefit of the Company's
successors and assigns and Eagle's successors and assigns and to their
transferees of the securities subject hereto, whether expressed or not.
8.2 Indemnification by the Company. The Company agrees to indemnify and
hold Eagle and its agents harmless from damages, losses, costs or expenses
(collectively, "Damages") suffered or paid, directly or indirectly, through
application of the assets of the Company, or Eagle, as a result of any and all
claims, demands, suits, causes of action, proceedings, judgments and
liabilities, including reasonable counsel fees incurred in litigation or
otherwise, assessed, incurred or sustained by or against any of them with
respect to or arising out of the failure of any representation or warranty made
by the Company in this Agreement or in the Schedule of Exceptions delivered
pursuant hereto to be true and correct in all material respects as of the date
of this Agreement and as of the Closing Date or the breach of any covenant made
by the Company hereunder.
8.3 Indemnification by Eagle. Eagle agrees to indemnify and hold the
Company and its agents harmless from Damages suffered or paid, directly or
indirectly, as a result of any and all claims, demands, suits, causes of action,
proceedings, judgments and liabilities, including reasonable counsel fees
incurred in litigation or otherwise, assessed, incurred or sustained by or
against any of them with respect to or arising out of the failure of any
representation or warranty made by Eagle in this Agreement to be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date or out of the breach of any covenant made by Eagle hereunder.
8.4 Notice of Claim. If indemnification pursuant to Sections 7.2 or 7.3 is
sought, the indemnified party shall give notice to the indemnifying party of an
event giving rise to the obligation to indemnify, allow the indemnifying party
to assume and conduct the defense of the claim or action, and cooperate with the
indemnifying party in the defense thereof. If the party obligated to indemnify
and hold the other harmless wrongfully refuses to assume the defense of the
party seeking indemnification, the party refusing to indemnify shall be
responsible for all legal and other expenses incurred by the other party in
connection with the investigation or defense of such claim or action including,
without limitation, expenses incurred in enforcing such obligation to indemnify.
9. MISCELLANEOUS.
9.1 Definition of Knowledge. An individual shall be deemed to have
"knowledge" of or to have "known" a particular fact or other matter if such
individual is actually aware of such fact or other matter. A corporation shall
be deemed to have "knowledge" of or to have "known" a particular fact or other
matter if any individual who is serving, or who has at any time served, as an
officer or director of the corporation, has, or at any time had, knowledge, as
defined above, of such fact or other matter.
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9.2 Definition of Person. "Person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or other department or agency thereof.
9.3 Transfer; Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the parties.
9.4 Governing Law. THIS AGREEMENT AND ALL ACTS AND TRANSACTIONS PURSUANT
HERETO AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED,
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
9.5 Counterparts; Facsimile Signatures. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original and all of
which together shall constitute one instrument. Any executed counterpart of this
Agreement or other signature hereto delivered by a party hereto by facsimile
shall be deemed for all purposes as being good and valid execution and delivery
of this Agreement by that party.
9.6 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
9.7 Notices. Any notice required or permitted by this Agreement shall be in
writing and shall be deemed sufficient upon delivery, when delivered personally
or one (1) day after delivery by overnight courier or sent by telegram, fax or
e-mail provided that in each case, the sender retains proof of receipt, or three
(3) days after being deposited in the U.S. mail, as certified or registered
mail, with postage prepaid, addressed to the party to be notified at such
party's address as set forth on the signature page hereto, or as subsequently
modified by written notice, and (a) if to the Company, with a copy to Xxxxxx X.
Xxxxxx, Esq., Bay Venture Counsel, LLP, 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxxxx 00000, and (b) if to Eagle, with a copy to Xxxxxxx X. Xxxx,
Esq., Weed & Co., 0000 XxxXxxxxx Xxxxx, #0000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000.
9.8 Attorney's Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of any of the Transaction Documents, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
9.9 Amendment and Waivers. Any term of this Agreement may be amended or
waived only with the written consent of the parties hereto. Any amendment or
waiver effected in accordance with this Section 9.9 shall be binding upon Eagle
and each transferee of the Burst Shares, the Company and each transferee of the
Eagle Shares and/or the License Shares, and each future holder of all such
securities.
9.10 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith.
13
In the event that the parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then (a) such provision shall be excluded from
this Agreement, (b) the balance of the Agreement shall be interpreted as if such
provision were so excluded and (c) the balance of the Agreement shall be
enforceable in accordance with its terms.
9.11 Delays or Omissions. No delay or omission to exercise any right, power
or remedy accruing to any party under this Agreement, upon any breach or default
of any other party under this Agreement, shall impair any such right, power or
remedy of such non-breaching or non-defaulting party nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein, or of
or in any similar breach or default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
9.12 Entire Agreement. The Transaction Documents, and the documents
referred to herein and therein constitute the entire agreement between the
parties hereto pertaining to the subject matter hereof and expressly supersede
any Term Sheet executed with respect to the subject matter hereof and any and
all other written or oral agreements relating to the subject matter hereof
existing between the parties hereto are expressly canceled.
9.13 Waiver of Jury Trial. Each of the parties hereto waives to the fullest
extent permitted by law any right it may have to trial by jury in respect of any
claim, demand, action or cause of action based on, or arising out of, under or
in connection with this Agreement, or any course of conduct, course of dealing,
verbal or written statement or action of any party hereto, in each case whether
now existing or hereafter arising, and whether in contract, tort, equity or
otherwise. The parties to this Agreement each hereby agrees that any such claim,
demand, action or cause of action shall be decided by court trial without a jury
and that the parties to this Agreement may file an original counterpart of a
copy of this Agreement with any court as evidence of the consent of the parties
hereto to the waiver of their right to trial by jury.
9.14 Rules of Construction. No provision of this Agreement shall be
construed in favor of or against any of the parties hereto by reason of the
extent to which any such party or its counsel participated in the drafting
thereof. References to sections herein include all subsections to the section
referred to. Section headings herein have been inserted for convenience of
reference only, are not a part of this Agreement and shall not be used in
construing this Agreement.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
14
The parties have executed this Securities Purchase Agreement as of the date
first written above.
COMPANY:
Xxxxx.xxx, Inc.
By: ________________________________
Name: Xxxxxxx Xxxx
Title: President and Chief Executive Officer
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000, x401
Fax: (000) 000-0000
E-mail: xxxxxxx.xxxx@xxxxx.xxx
EAGLE:
Eagle Wireless International, Inc.
By: ________________________________
Name: Dr. H. Xxxx Xxxxxx
Title: President and Chief Executive Officer
Address: 000 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000)000-0000
E-mail: Xxxxxxx@xxxx.xxx
15
SCHEDULES
Schedule A: Schedule of Exceptions to Representations and Warranties
EXHIBITS
Exhibit B: Form of Registration Rights Agreement
16
SCHEDULE OF EXCEPTIONS
In connection with the execution and delivery of that certain Securities
Purchase Agreement (the "Agreement"), dated as of January 30, 2001 by and
between Xxxxx.xxx, Inc., a Delaware corporation (the "Company"), and Eagle
Wireless International, Inc. a Texas corporation, the Company hereby delivers
this Schedule of Exceptions (this "Schedule") to the Company's representations
and warranties given in Section 2 of the Agreement. References to any document
do not purport to be complete and are qualified in their entirety by the
document itself. Unless the context otherwise requires, all capitalized terms
used in this Schedule shall have the respective meanings assigned to them in the
Agreement.
No reference to or disclosure of any item or other matter in this Schedule
shall be construed as an admission or indication that such item or other matter
is material or that such item is required to be referred to or disclosed in this
Schedule. No disclosure in this Schedule relating to any possible breach or
violation of any agreement, law or regulation shall be construed as an admission
or indication that any such breach or violation exists or has actually occurred.
This Schedule and the information and disclosures contained herein are
intended only to list those items required to be listed in Section 2 of the
Agreement, and to qualify and limit the representations, warranties and
covenants of the Company contained in the Agreement and shall not be deemed to
expand in any way the scope or effect of any such representations, warranties or
covenants.
The bold-faced headings contained in this Schedule are included for
convenience only, and are not intended to limit the effect of the disclosures
contained in this Schedule or to expand the scope of the information required to
be disclosed in this Schedule.
Section 3.1 Organization Good Standing and Qualification.
The Company leases facilities for offices and employs one or two employees
in each office in California and Arizona. The Company is not qualified to
do business in Arizona.
The Company received notice from Nasdaq on December 21, 2000 that its
common stock has failed to maintain a minimum bid price of $1.00 over the
previous 30 consecutive trading days, as required by Marketplace Rule
4310(c)(4) (the "Rule"). In accordance with Marketplace Rule 4310(c)(8)(B),
the Company has 90 calendar days, or until March 21, 2001, to regain
compliance with this Rule. If at any time before March 21, 2001 the bid
price of the Company's common stock is at least $1.00 for a minimum of 10
consecutive trading days, Nasdaq will determine if the Company complies
with the Rule. However, if the Company is unable to demonstrate compliance
with the Rule on or before March 21, 2001, Nasdaq will provide the Company
with written notification pursuant to Marketplace Rule 4815(a) that Nasdaq
will file an action to delist its common
stock. At that time, the Company may request a review of Nasdaq's
determination pursuant to Marketplace Rule 4800 Series.
Section 3.2 Capitalization.
(b)(i) Number of shares reserved for issuance pursuant to stock option,
employee benefit or other plans:
Total of 9,730,000 shares of common stock have been reserved for
issuance upon exercise of incentive and non-statutory options and stock
purchase rights granted under the Company's 1992, 1998 and 1999 Stock
Plans (the "Plans").
(ii) Number of shares reserved for issuance or issuable pursuant to
securities exercisable for, or convertible into or exchangeable for, any
shares of Common Stock:
Common Stock issuable on exercise of outstanding stock options issued
under the Plans: 8,029,350 shares, of which options to purchase
5,363,665 shares were exercisable as of 12/31/00.
Common Stock issuable on exercise of outstanding warrants: 6,435,396
shares.
(iii) Section 4 of a Securities Purchase Agreement dated as of January 27,
2000 (the "January 2000 Purchase Agreement") provides the purchasers
under that agreement with a right of first refusal to purchase
additional securities issued by the Company, subject to certain
exceptions.
(iv) Number of shares of Common Stock reserved for issuance with respect to
the sale of the Burst Shares: 1,500,000
Section 3.3 Subsidiaries.
Explore Technology, Inc. is an Arizona corporation and a wholly owned
subsidiary of the Company.
Timeshift-TV, Inc. ("Timeshift") is a Delaware corporation and a wholly
owned subsidiary of the Company.
Section 3.7 Litigation.
The Company has filed for arbitration against Whit Soundview f/k/a
E*Offering for rescission of an exclusive investment banking agreement
and return of fees paid.
2
XXXXX.XXX, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is dated effective as
of January 30, 2001 (the "Effective Date") by and between (i) Eagle Wireless
International , Inc., a Texas corporation ("Eagle" or "Holder") and (ii)
Xxxxx.Xxx, Inc., a Delaware corporation (the "Company").
RECITALS
WHEREAS, Eagle and XxxxxXxxxx.xxx, Inc., a Delaware corporation
("ClearWorks"), are subject to that certain Agreement and Plan of Reorganization
dated as of September 15, 2000 wherein they have agreed to enter into a business
combination transaction in which, among other things, each share of common stock
of ClearWorks issued and outstanding immediately prior to the Effective Time (as
defined therein) will be exchanged and converted into 0.8 shares of common stock
of Eagle.
WHEREAS, Eagle has filed with the Securities and Exchange Commission a
Registration Statement on Form S-4 which purports to register all shares of
Eagle common stock to be issued in the proposed business combination
transaction.
WHEREAS, Eagle and the Company are parties to a Securities Purchase
Agreement ("the "Purchase Agreement") and Escrow Agreement, each of even date
herewith, pursuant to which Eagle has agreed to acquire from the Company
1,500,000 shares of the common stock of the Company in return for 500,000 shares
of the common stock of ClearWorks and said 500,000 shares of ClearWorks common
stock shall convert, as of the Effective Time, to 400,000 shares of Eagle common
stock subject to the Form S-4 Registration Statement.
WHEREAS, the Company is obligated to enter into this Agreement pursuant to
the terms of the Purchase Agreement. All capitalized terms not defined herein
shall have the meaning established in the Purchase Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained in this Agreement, the parties hereto
hereby agree as follows:
1. Definitions.
"Commission" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
"Common Stock" means any and all (i) common stock of the Company issued
pursuant to the Purchase Agreement; (ii) common stock of the Company issued as a
dividend or other distribution with respect to or in replacement thereof, and
(iii) any common stock issued in any combination or subdivision thereof. In
determining the amount of Common Stock held by any Person, the sum of (i), (ii)
and (iii) shall be used and a Person shall be deemed to "hold" all Common Stock
then held by and/or issuable to such Person.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar Federal statue and the rules and regulations of the Commission
thereunder all as the same shall be in effect at the time.
"Person" means any individual, corporation, trust, partnership,
association, or other entity.
"Registrable Shares" means the Common Stock.
"Registration Statement" means the registration statement and any
additional registration statements filed with the Commission as contemplated by
Section 2, including (in each case) any 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 in
such registration statement or statements.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Untrue Statement" shall include any untrue statement or alleged untrue
statement in the Registration Statement, or any omission or alleged omission to
state in the Registration Statement 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.
2.1 Demand Registration
The Company shall,
(a) within 120 days following the Closing Date, prepare and file with the
Commission a Registration Statement on Form S-1 in order to register with the
Commission under the Securities Act a sale by Holder in accordance with the
method or methods of distribution thereof as reasonably specified by Holder on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act all of
the Registrable Shares (notwithstanding anything to the contrary expressed or
implied herein, if a registration statement on Form S-3, or any substitute form,
becomes available for registration of the Registrable Shares, the Company may
instead prepare and file with the Commission a registration statement on Form
S-3 at any time in order to register the Registrable Shares under the Securities
Act and such registration statement will be a "Registration Statement" for the
purposes of this Agreement);
(b) use its best efforts, subject to receipt of necessary information from
Holder, to cause such Registration Statement to become effective no later than
180 days following the Closing Date.
2.2 Piggyback Registration
(a) In the event it proposes to file on behalf of any of its security
holders a Registration Statement other than as specified in Section 2.1(a) above
and other than a registration statement on Form S-4
4
Registration Rights Agreement
or S-8 (or any successor form unless such forms are being used in lieu of or a
the functional equivalent of, registration rights) for any class that is the
same or similar to the Registrable Shares, the Company shall give written notice
setting forth the terms of the proposed offering and such other information as
Holder may reasonably request at least 30 days before the initial filing with
the Commission of such registration statement, and offer to include in such
filing such Registrable Shares as Holder may request. Holder will advise the
Company in writing within 14 days after the date of receipt of such notice,
setting forth the amount of such Registrable Shares for which registration is
requested. Failure to give such notice shall be deemed a waiver of the rights of
Holder hereunder with respect to such proposed registration, but not with
respect to any subsequent registration. The Company will thereupon include in
such filing the number of Registrable Shares for which registration is so
requested, and will use its best efforts to effect registration under the
Securities Act of such Registrable Shares.
(b) Notwithstanding the foregoing, if the managing underwriters, or
underwriters, if any, of such offering determines that inclusion of all of the
Registrable Shares requested to be included exceeds the number which can be sold
in such offering without materially and adversely affecting the marketability of
the offering, then the amount of securities to be offered for the account of
Holder will be reduced pro rata (according to the Registrable Shares proposed to
be registered) to the extent necessary to reduce the total amount of securities
to be included in such offering to the amount recommended by such managing
underwriter or underwriters; provided however, that if securities are being
offered for the account of other Persons as well as the Company, then with
respect to the Registrable Shares intended to be offered by Holder, Registrable
Shares shall be allocated among such other Persons and Holder pro rata based on
the number of shares for which registration was requested.
2.3 Registration Procedures and Expenses
In connection with any registration of Registrable Shares under this
Section 2, the Company shall,
(a) promptly notify Holder, at any time when a prospectus relating to such
Registration Statement is required to be delivered under the Securities Act, of
the happening of any event as a result of which the prospectus included in or
relating to such Registration Statement contains an Untrue Statement;
(b) promptly prepare and file with the Commission, and deliver to Holder,
such amendments and supplements to such Registration Statement and the
prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all Registrable
Shares until termination of such obligation as provided in Section 2.7 below;
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Registration Rights Agreement
(c) furnish to Holder a copy of the prospectus, including preliminary
prospectus, in conformity with the requirements of the Securities Act, in order
to facilitate the public sale or other disposition of all or any of the
Registrable Shares by Holder;
(d) file such documents as may be required of the Company for normal
securities law clearance for the resale of the Registrable Shares in any state
reasonably requested by Holder provided, however, that the Company shall not be
required in connection with this paragraph (d) to (i) qualify as a foreign
corporation to do business under the laws of any jurisdiction in which it shall
not then be qualified or execute a general consent to service of process in any
jurisdiction or (ii) undertake any filing obligations in those states where the
Company does not currently meet such filing requirements;
(e) use its best efforts to cause all Registrable Shares to be listed on
each securities exchange, quotation system, and market on which equity
securities by the Company are then listed or traded;
(f) bear all expenses in connection with this Agreement, including, without
limitation, all registration and filing fees (including all expenses incident to
filing with the NASD), printing expenses, fees and disbursements of counsel for
company, expenses of any special audits incident to or required by any such
registration and expenses of complying with the securities or blue sky laws of
any jurisdiction, other than (i) fees and expenses, if any, of counsel or other
advisors to Holder and (ii) brokers commissions, discounts or fees and transfer
taxes; and
(g) take all reasonable actions required to prevent the entry of any stop
order issued or threatened by the Commission or any state regulatory authority
with respect to any Registration Statement covering Registrable Shares, and take
all reasonable actions to remove it if entered.
2.4 Indemnification
(a) The Company agrees to indemnify and hold harmless Holder, Holder's
directors, officers, partners, agents, each underwriter of Registered Shares,
and each Person who controls any of the foregoing (within the meaning of Section
15 of the Securities Act) (each an "Indemnified Party") from and against any
losses, claims, damages or liabilities to which such Indemnified Party may
become subject (under the Securities Act or otherwise) insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, any Untrue Statement in the Registration
Statement, or arise out of any failure by the Company to fulfill any undertaking
included in the Registration Statement or arise under the Securities Act or any
other statute or at common law and the Company will reimburse such Indemnified
Party for any reasonable legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim; provided, however, that the Company shall not be liable in any such case
to the extent that such loss, claim, damage or liability arises out of, or is
based upon, an
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Registration Rights Agreement
Untrue Statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Indemnified Party specifically for use in preparation of the Registration
Statement or the failure of such Holder to comply with the covenants and
agreements contained in Section 2 hereof respecting the sale of the Registrable
Shares or any Untrue Statement in any prospectus that is corrected in any
subsequent prospectus that was delivered to the Holder prior to the pertinent
sale or sales by Holder.
(b) Holder agrees to indemnify and hold harmless the Company (and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, each officer of the Company who signs the Registration Statement
and each director of the Company) from and against any losses, claims, damages
or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any failure to
comply with the covenants and agreements contained in Section 2 hereof
respecting sale of the Registrable Shares, or any Untrue Statement contained in
the Registration Statement if, but only if, such Untrue Statement was made in
reliance upon and in conformity with written information furnished by or on
behalf of Holder specifically for use in preparation of the Registration
Statement and Holder will reimburse the Company (or such officer, director or
controlling person), as the case may be, for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim; provided that in no event shall any indemnity by
Holder under this Section2.4 exceed the net proceeds received by such Holder
from the sale of the Registrable Shares covered by such Registration Statement.
(c) Promptly after receipt by any indemnified person of a notice of a claim
or the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 2.4, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be entitled to participate therein, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; provided, however, that if there exists or shall exist a
conflict of interest that would make it inappropriate, in the opinion of counsel
to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel at
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Registration Rights Agreement
the expense of such indemnifying person; provided, however, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate
counsel for all indemnified parties. No indemnifying party in the defense of any
such claim or litigation shall, except with the consent of each indemnified
party, consent to entry of any judgment or enter into any settlement that does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
of such claim or litigation, and no indemnified party shall consent to entry of
any judgment or settle such claim or litigation without the prior written
consent of the indemnifying party.
(d) If the indemnification provided for in this Section 2.4 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage, or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission. 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. Notwithstanding anything to the
contrary contained herein, any contribution by Holder hereunder shall not exceed
the net proceeds received by Holder from the sale of the Shares covered by the
Registration Statement.
(e) The remedies provided for in this Section 2.4 shall be in addition to
any other remedies available to Holder under this Agreement, at law or in
equity.
2.5 Transfer of Shares After Registration; Notice. Holder hereby covenants
with the Company not to make any sale of the Registrable Shares after
registration without effectively causing the prospectus delivery requirement
under the Securities Act to be satisfied. Holder acknowledges that there may be
times when the Company must suspend the use of the prospectus forming a part of
the Registration Statement until such time as an amendment to the Registration
Statement has been filed by the Company and declared effective by the
Commission, or until such time as the Company has filed an appropriate report
with the Commission pursuant to the Exchange Act. Holder hereby covenants that
it will not sell any Shares pursuant to said
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Registration Rights Agreement
prospectus during the period commencing at the time at which the Company gives
Holder notice of the suspension of the use of said prospectus and ending at the
time the Company gives Holder notice that Holder may thereafter effect sales
pursuant to said prospectus; provided, however, that no such postponement shall
be permitted for more than 90 days during any 12 month period. The foregoing
provisions of this Section 2.5 shall in no manner diminish or otherwise impair
the Company's obligations under Sections 2.1 and 2.2 above.
2.6 Reporting Requirements.
(a) The Company agrees to use its best efforts to:
(i) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(ii) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and
(iii) so long as Holder owns Registrable Shares, to furnish to Holder
forthwith upon request (1) a written statement by the Company as to whether
it complies with the reporting requirements of said Rule 144, the
Securities Act and the Exchange Act, or whether it qualifies as a
registrant whose securities may be resold pursuant to Commission Form S-3,
(2) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company, and (3) such
other information as may be reasonably requested in availing Holder of any
rule or regulation of the Commission that would permit the selling of the
Registrable Shares without registration.
2.7 Termination of Obligations. The obligations of the Company pursuant to
Sections 2.1 through 2.6 hereof shall cease and terminate upon the earlier to
occur of (i) such time as all of the Registrable Shares have been resold or (ii)
such time as all of the Registrable Shares may be sold during any 3 month period
pursuant to Rule 144, including Rule 144 (k) or (iii) upon the second
anniversary date of the date of effectiveness of the Registration Statement.
2.8. Assignability of Registration Rights. The Registration rights set
forth in this Section 2 are assignable only to assignees acquiring the lesser of
250,000 or more Registrable Shares or all of Holder's Registrable Shares held at
the time of assignment. Notwithstanding anything to the contrary herein, in no
event shall the Holder of less than 250,000 Registrable Securities assign any
rights herein after 30 days following the Effective Date and prior to the
effectiveness of the Registration Statement. Provided further that the Company
shall not be obligated to file any post-effective amendment to the Registration
Statement solely for the purpose
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Registration Rights Agreement
of adding such assignee(s) to the Registration Statement more than once during
any consecutive six month period.
3 Miscellaneous.
(a) Consent to Amendments. Except as otherwise expressly provided herein,
the provisions of this Agreement may be amended and/or the provisions hereof
waived, only with the written consent of the Company and Holder. No course of
dealing between the Company and Holder or any delay in exercising any rights
hereunder or under the Company's Certificate of Incorporation will operate as a
waiver of any rights of Holder.
(b) Successors and Assigns. All covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not.
(c) Severability. Each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this Agreement.
(c) Counterparts. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts when taken together shall constitute one and
the same Agreement.
(d) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
(e) Notices. All notices, demands, consents or other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been given (i) when personally delivered, (ii) three (3) business days following
mailing thereof, if sent by first class certified mail, return receipt
requested, or (iii) the next business day following transmission or mailing, if
sent by facsimile (receipt confirmed and followed up by one of the other
delivery methods discussed herein as well), Express Mail, Federal Express or
similar service, addressed as follows:
If to Holder: To the applicable address set forth in the Purchase
Agreement
If to the Company: Xxxxx.Xxx, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
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Registration Rights Agreement
With a Copy to: Bay Venture Counsel, LLP
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
Any party may change its address for purposes hereof by notice given in
accordance with this Section 3.f to each of the other parties hereto.
(f) Governing Law. The validity, meaning and effect of this Agreement, and
all amendments and supplements hereto and all waivers and consents hereunder,
shall be determined in accordance with the laws of California, applicable to
contracts made and to be performed entirely within the State of California. Each
of the parties hereby submits to personal jurisdiction in the County of San
Francisco, State of California solely for purposes of this Agreement and waives
any objection as to venue in the County of San Francisco, State of California.
(g) Schedules and Exhibits. All schedules and exhibits are an integral part
of this Agreement.
(h) Litigation Costs. Subject to Section 2.4, if any legal action or any
arbitration or other proceeding is brought for the enforcement of this
Agreement, or because of a dispute, breach, default, or misrepresentation in
connection with any of the provisions of this Agreement, the successful or
prevailing party or parties shall be entitled to recover reasonable attorneys'
fees and other costs incurred in that action or proceeding, in addition to any
other relief to which it or they may be entitled, if and only to the extent that
the applicable arbitrator or court shall so direct and such direction is final
and not subject to appeal or review.
(i) Specific Performance. Each party's obligation under this Agreement is
unique. If any party should default in its obligations under this Agreement, the
parties each acknowledge that it would be extremely impracticable to measure the
resulting damages; accordingly, each non defaulting party, in addition to any
other available rights or remedies, may xxx in equity for specific performance,
and the parties each expressly waive the defense that a remedy in damages will
be adequate.
(j) Integration. This instrument constitutes the entire agreement of the
parties hereto respecting the registration of the Registrable Shares by the
Holders and correctly sets forth the rights, duties, and obligations of each
party hereto to the others in relation thereto as of its date. Any prior
agreements, promises, negotiations or representations concerning its subject
matter which are not expressly set forth in this Agreement.
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Registration Rights Agreement
(l) No Inconsistent Agreements. The Company will not hereafter enter into
any agreement with respect to its securities that is inconsistent with or
violates the rights granted to Holder in this Agreement.
IN WITNESS WHEREOF, the parties have executed this registration rights Agreement
as of the day and year first written above.
XXXXX.XXX, INC.
a Delaware corporation
By: ________________________________
Xxxxxxx Xxxx
President and Chief Executive Officer
EAGLE WIRELESS INTERNATIONAL, INC.
a Texas corporation
By: ________________________________
Dr. H. Xxxx Xxxxxx
President and Chief Executive Officer
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