REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into as of January 10, 2007, by and among Xxxxx World Trade,
Ltd., a Nevada corporation (the “Company”)
and
each Holder of shares of Series A Convertible Preferred Stock (the “A
Shares”)
of the
Company pursuant to a Securities Purchase Agreement, dated as of the date
hereof, by and between each Investor and the Company (the “SPA”).
The
Underlying Shares shall have the registration rights as set forth
herein.
The
Company and the Investors hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
Term Sheet shall have the meanings given such terms in the Term Sheet. As used
in this Agreement, the following terms shall have the following
meanings:
“Certificate
of Designation”
means
the Certificate of Designation for the A Shares.
“Closing
Date”
means
the date of the closing of the Financing.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock”
means the Company’s common stock par value $0.001 per share.
“Conversion
Shares”
means
all shares of Common Stock issuable upon conversion of the A
Shares.
“Dividend
Shares”
means any shares of Common Stock issuable as dividend payments in respect of
the
A Shares as provided in the Certificate of Designation (including the Conversion
Shares if dividend payments are made in A Shares).
“Effectiveness
Period”
shall
mean from the date hereof until the earlier to occur of the date when all
Registrable Securities covered by a Registration Statement either (a) have
been
sold pursuant to a Registration Statement or an exemption from the registration
requirements of the Securities Act, and (b) pursuant to a written opinion of
Company counsel acceptable to the Company’s transfer agent and the legal counsel
for the Holders, may be sold pursuant to Rule 144(k).
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended.
“Holder”
or “Holders”
means the holder or holders, as the case may be, from time to time of
Registrable Securities (including any permitted assignee).
“Indemnified
Party”
shall have the meaning set forth in Section 5(c).
“Indemnifying
Party”
shall have the meaning set forth in Section 5(c).
“Investor”
shall mean each purchaser of A Shares pursuant to the SPA.
“Investors”
shall mean, collectively, each Investor.
“Losses”
shall have the meaning set forth in Section 5(a).
“Mandatory
Effectiveness Date”
means,
with respect to the Mandatory Registration Statement required to be filed
pursuant to Section
2(a)
of this
Agreement.
“Mandatory
Filing Date”
shall have the meaning set forth in Section 2(a).
“Mandatory
Registration Date”
shall have the meaning set forth in Section 2(a).
“Mandatory
Registration Statement”
shall have the meaning set forth in Section 2(a).
“Offering”
means the sale by the Company of the A Shares pursuant to the SPA.
“Person”
shall mean an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Prospectus”
means the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by any prospectus supplement, with respect to the terms of the offering of
any
portion of the Conversion Registrable Securities or Exchange Registrable
Securities covered by the Registration Statement, and all other amendments
and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference
in
such Prospectus.
“Registrable
Securities”
means (i) the Underlying Shares, (ii) Dividend Shares; and (iii) any shares
of
Common Stock issued or issuable upon any stock split, dividend or other
distribution, recapitalization, anti-dilution adjustment or similar event with
respect to the foregoing or in connection with any provisions of the Certificate
of Designation.
“Registration
Statement”
means any registration statement required to be filed hereunder (which, at
the
Company's option, may be an existing registration statement of the Company
previously filed with the Commission, but not declared effective), including
(in
each case) the Prospectus, amendments and supplements to the registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference in the registration statement.
“Rule 415”
means Rule 415 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar
Rule or regulation hereafter adopted by the Commission having substantially
the same effect as such Rule.
-2-
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar
Rule or regulation hereafter adopted by the Commission having substantially
the same effect as such Rule.
“Securities
Act”
means the Securities Act of 1933, as amended.
“Stated
Value”
shall have the meaning set forth in the Certificate of Designation.
“Trading
Day”
means
(a) a day on which the Common Stock is traded on a Trading Market, or
(b) if the Common Stock is not quoted on a Trading Market, a day on which
the Common Stock is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or agency
succeeding to its functions of reporting price); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (a), and
(b) hereof, then Trading Day shall mean a Business Day;
“Trading
Market”
means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the OTC Bulletin Board, the American Stock
Exchange, the New York Stock Exchange, the Nasdaq National Market or the Nasdaq
SmallCap Market.
2. Registration.
(a) Mandatory
Registration.
On the
date nine (9) months from the date of the initial closing of the Offering (the
“Mandatory
Registration Date”),
the
Company shall file with the Commission a Registration Statement (the
“Mandatory
Registration Statement”),
covering the resale of all of the Registrable Securities for an offering to
be
made on a continuous basis pursuant to Rule 415. The Mandatory Registration
Statement required hereunder shall be on Form S-1, Form SB-2 or Form S-3 (except
if the Company is not then eligible to register for resale the Registrable
Securities on Form S-1, Form SB-2 or Form S-3, in which case the Mandatory
Registration Statement shall be on another appropriate form in accordance
herewith). The Mandatory Registration Statement required hereunder shall contain
the Plan of Distribution, attached hereto as Annex
A
(which
may be modified to respond to comments, if any, received from the Commission
staff). The Company shall cause the Mandatory Registration Statement to become
effective, no later than ninety (90) days after the Mandatory Filing Date (the
“”Mandatory
Effectiveness Date”),
and
remain effective as provided herein. The Company shall use its best efforts
to
cause the Mandatory Registration Statement to be declared effective under the
Securities Act and shall keep the Mandatory Registration Statement continuously
effective under the Securities Act for the entire Effectiveness
Period.
(b) Filing
Default Damages.
If the
Mandatory Registration Statement is not filed on or prior to the Mandatory
Filing Date, then the Company shall pay to the Holders of the Underlying Shares,
for each thirty (30) day period of such failure and until the date a Mandatory
Registration Statement is filed or the Registrable Securities may be sold
pursuant to Rule 144(k), whichever comes first, an amount in cash, as partial
liquidated damages and not as a penalty, equal to two (2%) percent of the Stated
Value for each A Share. If the Company fails to pay any partial liquidated
damages pursuant to this Section
2(b)
in full
within five (5) days of the date payable, the Company shall pay interest thereon
at a rate of 18% per annum (or such lesser maximum amount that is permitted
to
be paid by applicable law) to the Holders, accruing daily from the date such
partial liquidated damages are due until such amounts, plus all such interest
thereon, are paid in full.
-3-
(c) Effectiveness,
Etc. Default Damages.
If the Mandatory Registration Statement is not declared effective by the
Commission on or prior to the Mandatory Effectiveness Date, or the Commission
declares any such Registration Statement effective, but the Holders of
Registrable Securities cannot sell such Registrable Securities thereunder,
for
any reason relating to the Company which is not cured within sixty (60) days
after its receipt of written notice of the reason, then the Company shall pay
to
the Holder, for each thirty (30) day period until the Registration Statement
is
declared effective (or the Holders of Registrable Securities can sell
thereunder, as the case may be), an amount in cash equal to two (2%) percent
of
the Stated Value of each A Share.
(d) Piggyback
Registrations Rights.
If, at any time following the date hereof, and there is not an effective
Registration Statement covering the Registrable Securities and the Company
shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under
the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company
shall send to each Holder a written notice of such determination at least twenty
(20) days prior to the filing of any such registration statement and shall
automatically include in such registration statement all Registrable Securities;
provided,
however,
that (i) if, at any time after giving written notice of is intention to register
any securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company determines for any
reason not to proceed with such registration, the Company will be relieved
of
its obligation to register any Registrable Securities in connection with such
registration, and (ii) in case of a determination by the Company to delay
registration of its securities, the Company will be permitted to delay the
registration of Registrable Securities for the same period as the delay in
registering such other securities.
3. Registration
Procedures.
In connection with the Company's registration obligations hereunder, and during
the Effectiveness Period, the Company shall:
(a) Not
less
than five (5) business days prior to the filing of the Registration Statement
or
any related Prospectus or any amendment or supplement thereto, the Company
shall
furnish to Holders, a draft of the Registration Statement, or any related
Prospectus or any amendment or supplement thereto.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep the Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period; (ii) cause the related Prospectus to be amended or supplemented by
any
required Prospectus supplement, and as so supplemented or amended to be filed
pursuant to Rule 424; and (iii) respond to any comments received from the
Commission staff with respect to the Registration Statement or any amendment
thereto.
-4-
(c) Notify
as
promptly as reasonably possible, but no later than three (3) business days,
each
Holder of Registrable Securities included in the Registration Statement: (i)
(A)
when a Prospectus or any Prospectus supplement or post-effective amendment
to
the Registration Statement has been filed, provided
such
Holder has previously requested in writing to receive notice of such filing;
(B)
when the Commission notifies the Company whether there will be a “review” of the
Registration Statement and whenever the Commission staff
comments
in writing on the Registration Statement, provided
such
Holder has previously requested in writing to receive notice of such
notification; and (C) when the Registration Statement or any post-effective
amendment has become effective; (ii) of any request by the Commission
staff
or
any
other Federal or state governmental authority during the period of effectiveness
of the Registration Statement for amendments or supplements to the Registration
Statement or Prospectus or for additional information; (iii) of the issuance
by
the Commission or any other federal or state governmental authority of any
stop
order suspending the effectiveness of the Registration Statement covering any
or
all of the Registrable Securities or the initiation of any Proceedings for
that
purpose; (iv) of the receipt by the Company of any notification with respect
to
the suspension of the qualification or exemption from qualification of any
of
the Registrable Securities for sale in any jurisdiction, or the initiation
of
any Proceeding for such purpose; and (v) of the occurrence of any event or
passage of time that makes the financial statements included in the Registration
Statement ineligible for inclusion therein or any statement made in the
Registration Statement or Prospectus or any document incorporated or deemed
to
be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material
fact
or omit to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading.
(d) Use
its best efforts to avoid the issuance of, or if issued, obtain the withdrawal
of (i) any order suspending the effectiveness of the Registration Statement,
or
(ii) any suspension of the qualification (or exemption from qualification)
of
any of the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.
(e) Promptly
deliver to each Holder no later than three (3) business days after the
Effectiveness Date, without charge, two (2) copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto (and, upon the request of the Holder such additional copies
as such Persons may reasonably request in connection with resales by the Holder
of Registrable Securities). The Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by the Holder in connection
with the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto, except after the giving
of
any notice pursuant to Section 3(c).
(f) Prior
to any resale of Registrable Securities by a Holder, use its best efforts to
register or qualify or cooperate with the selling Holders in connection with
the
registration or qualification (or exemption from the registration or
qualification) of such Registrable Securities for the resale by the Holder
under
the securities or Blue Sky laws of such jurisdictions within the United States
as any Holder reasonably requests in writing, to keep such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things reasonably necessary to enable the
disposition in such jurisdictions of the Registrable Securities covered by
the
Registration Statement; provided,
however,
that the Company shall not be required to qualify generally to do business
in
any jurisdiction where it is not then so qualified, subject the Company to
any
material tax in any such jurisdiction where it is not then so subject or file
a
general consent to service of process in any such jurisdiction.
-5-
(g) Upon
the occurrence of any event contemplated by Section 3(c)(v),
as promptly as reasonably possible, prepare a supplement or amendment, including
a post-effective amendment, to the Registration Statement or a supplement to
the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(h) Use
its best efforts to comply with all applicable rules and regulations of the
Commission relating to the registration of the Registrable Securities pursuant
to the Registration Statement or otherwise.
(i) The
Company agrees that the Selling Shareholder Questionnaire attached hereto as
Exhibit
A,
satisfies all of the information required to be provided by each Holder in
connection with the Registration Statement. The Company shall not be required
to
include any Holder that does not complete, date and execute a Selling
Shareholder Questionnaire.
(j) The
Company shall either (a) cause all the Registrable Securities covered by a
Registration Statement to be listed on each securities exchange on which
securities of the same class or series issued by the Company are then listed,
if
any, if the listing of such Registrable Securities is then permitted under
the
rules of such exchange, or (b) secure designation and quotation of all the
Registrable Securities covered by the Registration Statement on the Nasdaq
National Market or the Nasdaq SmallCap Market, or, (c) if the Company is
unsuccessful in satisfying the preceding clauses (a) or (b), the Company
shall secure the inclusion for quotation on The American Stock Exchange, Inc.
or
if it is unable to, the NASD Bulletin Board for such Registrable Securities
and,
without limiting the generality of the foregoing, to arrange for at least two
(2) market makers to register with the National Association of Securities
Dealers, Inc. (“NASD”)
as such with respect to such Registrable Securities. Notwithstanding the
requirements of Sections 3(j) (a) through (c) above, the Company may cause
all
Company securities and the Registrable Securities covered by a Registration
Statement to be listed on the London Stock Exchange Alternative Investment
Market (“AIM”).
The Company shall pay all fees and expenses in connection with satisfying its
obligation under this Section 3(j).
(k) The
Company covenants that it shall file the 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 so long as the Holder owns any Registrable
Securities, but in no event longer than two (2) years; provided,
however,
the Company may delay any such filing but only pursuant to Rule 12b-25
under the Exchange Act, and the Company shall take such further reasonable
action as the Holder may reasonably request (including, without limitation,
promptly obtaining any required legal opinions from Company counsel necessary
to
effect the sale of Registrable Securities under Rule 144 and paying the
related fees and expenses of such counsel), all to the extent required from
time
to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Moreover, if Company securities
are listed on the AIM, it shall file all reports required to be filed pursuant
to the applicable law, rules and regulations applying to companies whose
securities are listed on the AIM. Upon the request of any Holder of Registrable
Securities, the Company will deliver to such Holder a written statement as
to
whether it has complied with such requirements.
-6-
4. Registration
Expenses.
All fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the Registration Statement, other
than fees and expenses of counsel or any other advisor retained by the Holders
and discounts and commissions with respect to the sale of any Registrable
Securities by the Holders. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing
fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities
or
Blue Sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements
of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement.
5. Indemnification
(a) Indemnification
by the Company.
The Company shall, notwithstanding any termination of this Agreement, indemnify
and hold harmless the Holder, the officers, directors, agents and employees
of
it, each Person who controls the Holder (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable
attorneys' fees) and expenses (including the cost (including without limitation,
reasonable attorneys’ fees) and expenses relating to an Indemnified Party’s
actions to enforce the provisions of this Section
5)
(collectively, “Losses”),
as incurred, to the extent arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement,
any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (1) such untrue statements or omissions are based solely upon information
regarding such Holder furnished (or in the case of an omission, not furnished)
in writing to the Company by or on behalf of such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use
in
the Registration Statement, such Prospectus or such form of Prospectus or in
any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose), (2) in the case of an occurrence
of
an event of the type specified in Section 3(c)(ii)-(v),
the use by such Holder of an outdated or defective Prospectus after the Company
has notified such Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of the Advice contemplated in
Section 6(b),
or (3) the failure of the Holder to deliver a prospectus prior to the
confirmation of a sale. The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding of which the Company is
aware
in connection with the transactions contemplated by this Agreement.
-7-
(b) Indemnification
by Holder.
The Holder shall indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within
the
meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from
and
against all Losses, as incurred, to the extent arising out of or based upon:
(x)
the Holder's failure to comply with the prospectus delivery requirements of
the
Securities Act or (y) any untrue or alleged untrue statement of a material
fact
contained in any Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission
of
a material fact required to be stated therein or necessary to make the
statements therein not misleading (i) to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so
furnished (or in the case of an omission, not furnished) in writing by or on
behalf of such Holder to the Company specifically for inclusion in the
Registration Statement or such Prospectus or (ii) to the extent that (1) such
untrue statements or omissions are based solely upon information regarding
such
Holder furnished (or in the case of an omission, not furnished) in writing
to
the Company by or on behalf of such Holder expressly for use therein, or to
the
extent that such information relates to such Holder or such Holder's proposed
method of distribution of Registrable Securities, such Prospectus or such form
of Prospectus or in any amendment or supplement thereto, or (2) in the case
of
an occurrence of an event of the type specified in Section 3(c)(ii)-(v),
the use by such Holder of an outdated or defective Prospectus after the Company
has notified such Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of the Advice contemplated in
Section 6(b),
or (3) the failure of the Holder to deliver a Prospectus prior to the
confirmation of a sale. In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the Subscription Amount
paid by the Holder in the Purchase Agreement.
(c) Conduct
of Indemnification Proceedings.
If any Proceeding shall be brought or asserted against any Person entitled
to
indemnity hereunder (an “Indemnified
Party”),
such Indemnified Party shall promptly notify the Person from whom indemnity
is
sought (the “Indemnifying
Party”)
in writing, and the Indemnifying Party shall have the right to assume the
defense thereof, including the employment of counsel reasonably satisfactory
to
the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided,
that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that such failure shall have
materially prejudiced the Indemnifying Party.
-8-
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to
such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing
that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof
and the reasonable fees and expenses of one separate counsel for all Indemnified
Parties in any matters related on a factual basis shall be at the expense of
the
Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding affected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of
any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party
from
all liability on claims that are the subject matter of such
Proceeding.
All
reasonable fees and expenses of the Indemnified Party (including reasonable
fees
and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten (10)
Trading Days of written notice thereof to the Indemnifying Party; provided,
that the Indemnified Party shall promptly reimburse the Indemnifying Party
for
that portion of such fees and expenses applicable to such actions for which
such
Indemnified Party is not entitled to indemnification hereunder, determined
based
upon the relative faults of the parties.
(d) Contribution.
If a claim for indemnification under Section 5(a)
or Section
5(b)
is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses 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 of a material fact, has been taken or made by, or relates
to
information supplied by, such Indemnifying Party or Indemnified Party, and
the
parties' relative intent, knowledge, access to information and opportunity
to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c),
any reasonable attorneys' or other reasonable fees or expenses incurred by
such
party in connection with any Proceeding to the extent such party would have
been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its
terms.
-9-
6. Miscellaneous.
(a) Compliance.
The Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.
(b) Amendments
and Waivers.
The provisions of this Agreement, including the provisions of this sentence,
may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the same shall be in writing
and signed by the Company and each Holder of the then outstanding Registrable
Securities.
(c) Notices.
Any
and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the Trading Day following the date of delivery to the
courier service, if sent by nationally recognized overnight courier service,
(ii) the third Trading Day following the date of mailing, if sent by
first-class, registered or certified mail, postage prepaid, (iii) the Trading
Day following transmission by electronic mail with receipt confirmed or
acknowledged, or (iv) upon actual receipt by the party to whom such notice
is
required to be given. The address for such notices and communications shall
be
delivered and addressed as set forth in the Purchase Agreement or to such other
address as shall be designated in writing from time to time by a party
hereto.
(d) Successors
and Assigns.
This Agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of each of the parties and shall inure to the benefit
of
the Holder.
(e) Execution
and Counterparts.
This Agreement may be executed in any number of counterparts, each of which
when
so executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
(f) Governing
Law.
This Agreement shall be governed by and construed exclusively in accordance
with
the internal laws of the State of New York without regard to the conflicts
of
laws principles thereof. The parties hereto hereby irrevocably agree that any
suit or proceeding arising directly and/or indirectly pursuant to or under
this
Agreement, shall be brought solely in a federal or state court located in the
City, County and State of New York. By its execution hereof, the parties hereby
covenant and irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City, County and
State of New York and agree that any process in any such action may be served
upon any of them personally, or by certified mail or registered mail upon them
or their agent, return receipt requested, with the same full force and effect
as
if personally served upon them in New York City. The parties hereto waive any
claim that any such jurisdiction is not a convenient forum for any such suit
or
proceeding and any defense or lack of in
personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from
the
other party hereto of its reasonable counsel fees and
disbursements.
-10-
(g) Severability.
If any term, provision, covenant or restriction of this Agreement is held by
a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be
hereafter declared invalid, illegal, void or unenforceable.
(h) Headings.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.
[Remainder
of page intentionally left blank]
-11-
IN
WITNESS WHEREOF,
the parties have executed this Registration Rights Agreement as of the date
first written above.
|
XXXXX
WORLD TRADE, LTD.
|
||
|
By:
|
||
|
Name:
Xxxxx X. Xxxxxxxx
|
||
|
Title:
Executive Vice President and
|
||
|
|
Chief
Executive Officer
|
|
-12-
INVESTOR’S
SIGNATURE PAGE
NAME
REDACTED
|
By:
|
/s/NAME
REDACTED
|
|
Name:
NAME
REDACTED
|
|
|
Title:
Chief Operating Officer
|
|
|
Address:
Address
Redacted
|
|
Facsimile
Number: Number
Redacted
-13-
ANNEX
A
Plan
of Distribution
The
Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which
the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:
|
·
|
ordinary
brokerage transactions and transactions in which the broker/dealer
solicits purchasers;
|
|
·
|
block
trades in which the broker/dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
purchases
by a broker/dealer as principal and resale by the broker/dealer for
its
account;
|
|
·
|
an
exchange distribution in accordance with the Rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
settlement
of short sales;
|
|
·
|
broker/dealers
may agree with the Selling Stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
|
·
|
a
combination of any such methods of sale;
and
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker/dealers
engaged by the Selling Stockholders may arrange for other brokers/dealers to
participate in sales. Broker/dealers may receive commissions from the Selling
Stockholders (or, if any broker/dealer acts as agent for the purchaser of
shares, from the purchaser) in amounts to be negotiated. The Selling
Stockholders do not expect these commissions to exceed what is customary in
the
types of transactions involved.
The
Selling Stockholders may from time to time pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act of 1933 amending the list
of
Selling Stockholders to include the pledgee, transferee or other successors
in
interest as Selling Stockholders under this prospectus.
The
Selling Stockholders and any broker/dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker/dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions under
the
Securities Act. The Selling Stockholders have informed the Company that it
does
not have any agreement or understanding, directly or indirectly, with any person
to distribute the Common Stock.
The
Company is required to pay all fees and expenses incident to the registration
of
the shares. The Company has agreed to indemnify the Selling Stockholders against
certain losses, claims, damages and liabilities, including liabilities under
the
Securities Act.
2
EXHIBIT
A
SELLING
STOCKHOLDER QUESTIONNAIRE
Xxxxx
World Trade
Ladies
and Gentlemen:
I
acknowledge that I am a holder of securities of Xxxxx World Trade, Ltd. (the
“Company”).
I
understand that I will be named as a selling stockholder in the prospectus
that
forms a part of the registration statement on Form S-1 (or other applicable
form) that the Company will file with the Securities and Exchange Commission
to
register under the Securities Act of 1933, as amended, the securities I expect
to sell. The Company will use the information that I provide in this
Questionnaire to ensure the accuracy of the registration statement and the
prospectus.
|
Please
answer every question.
If
the answer to any question is “none” or “not applicable,” please so
state.
|
1. Name. Type
or
print your name exactly as it should appear in the Registration
Statement.
2. Manner
of Ownership of Shares:
Individual
_______ Community Property ________ Tenants
in Common _______
Joint
Tenants with Rights of Survivorship ________ Corporate
________
Partnership
______ Trust ________ Other ___________________________
|
3.
|
Contact
Information. Provide
the address, telephone number and fax number where you can be reached
during business hours.
|
|
Address:
|
|
|
Phone:
|
|
|
Fax:
|
|
|
4.
|
Relationship
with the Company. Describe
the nature of any position, office or other material relationship
you have
had with the Company during the past three
years.
|
3
|
5.
|
Organizational
Structure.
Please indicate or (if applicable) describe how you are organized.
|
|
(a) Are
you a natural
person?
(if
so, please xxxx the box and skip to Question 5)
|
¨
Yes ¨
No
|
|
(b) Are
you a reporting
company
under the 1934 Act?
(if
so, please xxxx the box and skip to Question 5)
|
¨
Yes ¨
No
|
|
(c) Are
you a majority-owned
subsidiary
of
a reporting company under the 1934 Act?
(if
so, please xxxx the box and skip to Question 5)
|
¨
Yes ¨
No
|
|
(d) Are
you a registered
investment fund
under the 1940 Act?
(if
so, please xxxx the box and skip to Question 5)
|
¨
Yes ¨
No
|
If
you
have answered "no" to all of the foregoing questions, please describe: (i)
the
exact legal description of your entity (e.g., corporation, partnership, limited
liability company, etc.); (ii) whether the legal entity so described is managed
by another entity and the exact legal description of such entity (repeat this
step until the last entity described is managed by a person or persons, each
of
whom is described in any one of (a) through (d) above), (iii) the names of
each
person or persons having voting and investment control over the Company's
securities that the entity owns (e.g., director(s), general partner(s), managing
member(s), etc.).
|
Legal
Description of Entity:
|
|
|
Name
of Entity(ies) Managing Such Entity (if any):
|
|
|
|
|
|
|
|
|
Name
of Entity(ies) Managing such Entity(ies)
(if
any):
|
|
|
|
|
|
|
|
|
Name(s)
of Natural Persons Having Voting or Investment
|
|
|
Control
Over the Shares Held by such Entity(ies):
|
|
|
|
|
|
|
|
|
|
4
|
6.
|
Ownership
of the Company’s Securities.
This question covers your beneficial ownership of the Company’s
securities. Please consult the Appendix
A
to
this Questionnaire for information as to the meaning of “beneficial
ownership.” State the number of shares of the Company’s common stock that
you beneficially owned as of the date this Questionnaire is
signed:
|
No.
of Shares of
Stock______________________________________________________________________________
7. Acquisition
of Shares.
Please
describe below the manner in which you acquired your shares of Common Stock
of
the Company including, but not limited to, the date, the name and address of
the
seller(s), the purchase price and pursuant to which documents (the “Acquisition
Documents”).
Please forward such documents used to acquire your shares as provided
below.
|
8.
|
Plan
of Distribution.
I
have reviewed the proposed “Plan of Distribution” attached to this
Registration Rights Agreement as Annex
A,
and agree that the statements contained therein reflect my intended
method(s) of distribution or, to the extent these statements are
inaccurate or incomplete, I have communicated in writing to one of
the
parties listed above my signature to any changes to the proposed
“Plan of
Distribution” that are required to make these statements accurate and
complete. ¨ (Please
check the box if you have made any changes to Appendix
B)
|
|
9.
|
Reliance
on Responses.
I
acknowledge and agree that the Company and its legal counsel shall
be
entitled to rely on my responses in this Questionnaire in all matters
pertaining to the registration statement and the sale of any shares
of
common stock of the Company pursuant to the registration
statement.
|
|
10.
|
NASD.
The National Association of Securities Dealers, Inc. (“NASD”)
may request, in connection with their review of the Registration
Statement
and Prospectus under the Securities Act of 1933, as amended, that
the
Company inform them of the names of all persons who purchased securities
from the Company, together with any affiliations with the NASD of
such
purchasers. In order to aid the Company in responding to such request,
the
undersigned furnishes the following
information:
|
PART
A: DETERMINATION OF RESTRICTED PERSON STATUS:
Please
check all appropriate categories.
The
undersigned is:
___ (i) a
broker-dealer;
|
___
|
(ii)
an officer, director, general partner, associated
person1
or employee of a broker-dealer
(other
than a limited business broker-dealer)2;
|
1 A person “associated with” a broker-dealer includes any natural person
engaged in the investment banking or securities business who is directly or
indirectly controlling or controlled by a broker-dealer, any partner, director,
officer or sole proprietor of a broker-dealer.
2
A limited business broker-dealer is any broker-dealer whose authorization to
engage in the securities business is limited solely to the purchase and sale
of
investment company/variable contracts securities and direct participation
program securities.
5
|
___
|
(iii)
an agent of a broker-dealer (other than a limited business broker-dealer)
that is engaged in the investment banking or securities
business;
|
|
___
|
(iv)
an immediate family member3 of a person described in
(ii) or (iii) above. Under certain circumstances, if the undersigned
checks this category, he/she/it may be able to participate in New
Issue
investments. The Company may request additional information in order
to
determine the eligibility of the undersigned under this
Restricted Person category;
|
|
|
___
|
(v)
a finder or any person acting in a fiduciary capacity to a managing
underwriter, including, but not limited to, attorneys, accountants
and
financial consultants;
|
|
___
|
(vi)
a person who has authority to buy or sell securities for a bank,
savings
and loan institution, insurance company, investment company, investment
advisor or collective investment account4 (including a private
investment vehicle such as a hedge fund or an offshore fund);
|
|
___
|
(vii)
an immediate family member of a person described in (v) or (vi) above
who
materially supports5, or receives material support from, the
undersigned;
|
|
___
|
(viii)
a person listed or required to be listed in Schedule A, B or C of
a Form
BD (other than with respect to a limited business broker-dealer),
except
persons whose listing on Schedule A, B or C is related to a person
identified by an ownership code of less than 10% on Schedule
A;
|
|
|
___
|
(ix)
a person that (A) directly or indirectly owns 10% or more of a public
reporting company listed, or required to be listed, in Schedule A
of a
Form BD or (B) directly or indirectly owns 25% or more of a public
reporting company listed, or required to be listed in Schedule B
of a Form
BD, in each case (A) or (B), other than a reporting company that
is listed
on a national securities exchange or is traded on the Nasdaq National
Market, or other than with respect to a limited business
broker/dealer;
|
|
___
|
(x)
an immediate family member of a person described in (viii) or (ix)
above.
Under certain circumstances, if the undersigned places a check next
to
this category, he/she/it may be able to participate in New Issue
investments. The Company may request additional information in order
to
determine the eligibility of the undersigned under this Restricted
Person
category;
|
|
___
|
(xi)
any entity (including a corporation, partnership, limited liability
company, trust or other entity) in which any person or persons listed
in
(i)-(x) above has a beneficial interest6;
or
|
| ___ |
None
of the above categories apply and the undersigned is eligible to
participate in New Issue
securities.
|
3The
term
"Immediate family" includes the investor’s: (i) parents, (ii) mother-in-law or
father-in-law. (iii) husband or wife, (iv) brother or sister, (v) brother-in-law
or sister-in-law, (vi) son-in-law or daughter-in-law, (vii) children, and
(viii)
any other person who is supported, directly or indirectly, to a material
extent
by an officer, director, general partner, employee, agent of a broker-dealer
or
person associated with a broker-dealer.
4A
"collective investment account" is any hedge fund, investment corporation,
or
any other collective investment vehicle that is engaged primarily in the
purchase and/or sale of securities. investment clubs (groups of individuals
who
pool their money to invest in stock or other securities and who are collectively
responsible for making investment decisions) and family investment vehicles
(legal entities that are beneficially owned solely by immediate family members
(as defined above)) are not
considered collective investment accounts.
5The
term “material” support” means directly or indirectly providing more than 25% of
a person’s income in the prior calendar year or living in the same household
with a member of one’s Immediate family.
6
The term ‘beneficial interest” means any economic interest such as the right to
share in gains or losses. The receipt of a management or performance based
fee
for operating a collective investment account, or other fee for acting
in a
fiduciary capacity, is not
considered a beneficial interest in the account; however, if such fee is
subsequently invested into the account (as a deferred fee arrangement or
otherwise), it is considered a beneficial interest in that
account.
6
PART
B: DETERMINATION OF EXEMPTED ENTITY STATUS:
The
undersigned is:
|
___
|
(i)
a publicly-traded entity (other than a broker-dealer or an affiliate
of a
broker-dealer, where such broker-dealer is authorized to engage in
the
public offering of New Issues either as a selling group member or
underwriter) that is listed on a national securities exchange or
traded on
the Nasdaq National Market or is a foreign issuer whose securities
meet
the quantitative designation criteria for listing on a national securities
exchange or trading on the Nasdaq National
Market;
|
|
____
|
(ii)
an investment company registered under the Investment Company Act
of 1940,
as amended;
|
|
____
|
(iii)
a corporation, partnership, limited liability company, trust or any
other
entity (including a private investment vehicle such as a hedge fund
or an
offshore fund, or a broker-dealer organized as an investment partnership)
and
|
(A)
the
beneficial interests of Restricted Persons do not exceed in the aggregate 10%
of
such entity; or
(B) such
entity limits participation by Restricted Persons to not more than 10% of the
profits and losses of New Issues;
____
(iv) an
investment company organized under the laws of a foreign jurisdiction and
(A) the
investment company is listed on a foreign exchange or authorized for sale to
the
public by a foreign regulatory authority; and
(B) no
person
owning more than 5% of the shares of the investment company is a Restricted
Person;
|
____
|
(v)
(A) an employee benefits plan under the U.S. Employee Retirement
Income
Security Act of 1974, as amended, that is qualified under Section
401(a)
of the Internal Revenue Code of 1986, as amended (the “Code”)
and such plan is not sponsored solely by a broker-dealer, (B) a state
or
municipal government benefits plan that is subject to state and/or
municipal regulation or (C) a church plan under Section 414(e) of
the
Code;
|
___ (vi) a
tax
exempt charitable organization under Section 501(c)(3) of the Code;
|
___
|
(vii)
a common trust fund or similar fund as described in Section
3(a)(12)(A)(iii) of the Securities Exchange Act of 1934, as amended,
and
the Company
|
(A) has
investments from 1,000 or more accounts, and
(B) does
not
limit beneficial interests in the Company principally to trust accounts of
Restricted Persons; or
___ (viii) an
insurance company general, separate or investment account, and
(A) the
account is funded by premiums from 1,000 or more policyholders, or, if a general
account, the insurance company has 1,000 or more policyholders, and
(B) the
insurance company does not limit the policyholders whose premiums are used
to
fund the account principally to Restricted Persons, or, if a general account,
the insurance company does not limit its policyholders principally to Restricted
Persons.
7
Please
acknowledge that your answers to the foregoing questions are true and correct
to
the best of your information and belief by signing and dating this Questionnaire
where indicated below. Please return the completed executed questionnaire
via
fax
to
___________
at ( )-____-
as soon as possible.
If
at any
time you discover that your answer to a question was inaccurate, or if any
event
occurring after your completion hereof would require a change in your answer
to
any questions, please immediately contact ________________ at ( )-____- .
|
Date:
|
,
200__
|
|||
|
|
(Print
name of selling stockholder)
|
|||
|
By:
|
||||
|
(Signature)
|
||||
|
Name:
|
||||
|
(Print
name)
|
||||
|
Title:
|
||||
8
APPENDIX
A
|
1.
|
Definition
of “Beneficial Ownership”
|
|
(a)
|
A
“Beneficial
Owner”
of a security includes any person who, directly or indirectly, through
any
contract, arrangement, understanding, relationship or otherwise has
or
shares:
|
|
(1)
|
Voting
power which includes the power to vote, or to direct the voting of,
such
security; and/or
|
|
(2)
|
Investment
power which includes the power to dispose, or direct the disposition
of,
such security.
|
Please
note that either
voting
power or
investment power, or
both, is
sufficient for you to be considered the beneficial owner of shares.
|
(b)
|
Any
person who, directly or indirectly, creates or uses a trust, proxy,
power
of attorney, pooling arrangement or any other contract, arrangement
or
device with the purpose or effect of divesting such person of beneficial
ownership of a security or preventing the vesting of such beneficial
ownership as part of a plan or scheme to evade the reporting requirements
of the federal securities acts shall be deemed to be the beneficial
owner
of such security.
|
|
(c)
|
Notwithstanding
the provisions of paragraph (a), a person is deemed to be the “beneficial
owner” of a security, if that person has the right to acquire beneficial
ownership of such security within 60 days, including but not limited
to
any right to acquire: (A) through the exercise of any option, warrant
or right; (B) through the conversion of a security; (C) pursuant
to the power to revoke a trust, discretionary account or similar
arrangement; or (D) pursuant to the automatic termination of a trust,
discretionary account or similar arrangement; provided, however,
any
person who acquires a security or power specified in paragraphs (A),
(B)
or (C) above, with the purpose or effect of changing or influencing
the
control of the issuer, or in connection with or as a participant
in any
transaction having such purpose or effect, immediately upon such
acquisition shall be deemed to be the beneficial owner of the securities
which may be acquired through the exercise or conversion of such
security
or power.
|
