EXHIBIT 10.5
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FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
This First Amendment to Registration Rights Agreement (this "Amendment")
is entered into as of October 16, 2001 among XXXXXXXXXXXXXXX.XXX, a Nevada
corporation (the "Company"), and XXXX CAPITAL GROWTH FUND II, L.P., a Delaware
limited partnership (the "Security Holder").
R E C I T A L S:
1. The Company and the Security Holder entered into a Registration Rights
Agreement dated as of November 22, 1999 (the "Original Agreement").
2. The Company and the Security Holder now desire to enter into a
Securities Purchase Agreement whereby the Security Holder will advance to the
Company the amount of $2,500,000 in exchange for a the Company's issuance of a
Subordinated Secured Convertible Note (the "Convertible Note") and its execution
of other related documents all dated as of the date hereof (the "Transaction
Agreements").
3. The terms of the Convertible Note provide that the Security Holder may
elect to convert all or a portion of the value of the Convertible Note into the
common stock of the Company, par value $0.001 per share (the "Conversion
Shares"); and
4. In connection with the execution of the Convertible Note and the other
Transaction Agreements, the Company and the Secured Party now desire to amend
the Original Agreement and confirm the continued legality, validity and binding
effect of the Original Agreement, as amended by this Amendment.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used in this Amendment, to the extent
not otherwise defined herein, shall have the same meanings as in the Original
Agreement.
2. Amendments. The Original Agreement is amended as follows:
(a) Section 1(a) shall be amended to read in its entirety as follows:
Securities Purchase Agreement. The Company and the
Security Holder have today executed that certain Securities
Purchase Agreement (the "Securities Purchase Agreement"),
pursuant to which the Company has agreed, among other things,
to issue an aggregate of 1,142,857 shares (the "Initial
Shares") of the common stock of the Company, par value $.001
per share, (the "Common Stock")
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to the Security Holder or their successors, assigns or
transferees (collectively, the "Holders"). In addition,
pursuant to the terms of the Securities Purchase Agreement and
the transactions contemplated thereby, the Company has entered
into an agreement (the "Warrant Agreement") whereby the
Company has issued to the Security Holder warrants (the
"Warrants") exercisable for an aggregate of 350,000 shares of
Common Stock (the "Warrant Shares"). The number of Warrant
Shares is subject to adjustment upon the occurrence of stock
splits, recapitalizations and similar events occurring after
the date hereof, as set forth in the Warrant Agreement.
Further, the Company and the Security Holder have executed as
of October 16, 2001, an additional Securities Purchase
Agreement (the "Subsequent Securities Purchase Agreement")
pursuant to which the Company has issued to the Security
Holder a Subordinated Secured Convertible Note (the
"Convertible Note") the terms of which provide that the
Security Holder may, at its election, convert all or a portion
of the outstanding principal and interest into shares of
Common Stock (the "Conversion Shares"). The number of
Conversion Shares is subject to adjustment upon the occurrence
of stock splits, recapitalizations and similar events
occurring after the date hereof, as set forth in the terms of
the Convertible Note.
(b) Section 1(b) shall be amended to read in its entirety as follows:
Definition of Securities. The Initial Shares, the
Warrant Shares (whether the Warrant Shares have been exercised
and issued or are currently exercisable by the holder of the
Warrants pursuant to the terms and conditions of the Warrant
Agreement), and the Conversion Shares (regardless whether the
Security Holder has elected to convert any portion of the
Convertible Note or any Conversion Shares have been issued by
the Company) are collectively herein referred to as the
"Securities."
(c) Section 2.1(a) shall be amended to read in its entirety as follows:
Registration of Registrable Securities. From the date
hereof and continuing until the termination of this Agreement,
the holders of 51% of the Registrable Securities currently
outstanding and/or exercisable may deliver to the Company one
or more written requests that all or any portion of the
Registrable Securities be registered pursuant to the terms of
this Agreement (each a "Registration Request"). Within
thirty-one (31) days after any Registration Request, the
Company shall prepare and file a registration statement to
effect the registration under the Securities Act of all or any
portion of the Registrable Securities which relate (or,
because of the indeterminable number thereof, which could
reasonably be deemed to relate) to the Securities; all to the
extent requisite to permit the public disposition of such
Registrable Securities so to be registered. The Company shall
use its best efforts to cause the Registration Statement which
is the subject of this Section 2.1(a) (the "Registration
Statement") to be declared effective by the Commission upon
the earlier to occur of (i) 120 days after the date of the
Registration Request, (ii) 90 days following the filing of the
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Registration Statement contemplated by this Section 2.1, or
(iii) ten (10) business days after receipt of a "no review" or
similar letter from the Commission (the "Required
Effectiveness Date"). Notwithstanding the foregoing, the fact
that the Company has effectively registered any of the
Registrable Securities will not, of itself, remove any
restrictions on the ability of the Security Holder to conduct
public sales of the Company's Common Stock pursuant to the
terms and conditions set forth in the Subsequent Securities
Purchase Agreement. Nothing contained herein shall be deemed
to limit the number of Registrable Securities to be registered
by the Company hereunder. As a result, should the Registration
Statement not relate to the maximum number of Registrable
Securities acquired by (or potentially acquirable by) the
holders thereof upon exercise of the Warrants or the
Conversion of the Convertible Note described in Section 1
above, the Company shall be required to promptly file a
separate registration statement (utilizing Rule 462
promulgated under the Exchange Act, where applicable) relating
to such Registrable Securities which then remain unregistered.
The provisions of this Agreement shall relate to such separate
registration statement as if it were an amendment to the
Registration Statement.
(c) Section 3 shall be amended to include the following definitions:
"Conversion Shares": As defined in Section 1.
"Convertible Note": As defined in Section 1.
"Registrable Securities": The Securities and any securities
issued or issuable with respect to such Securities by way of
stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation
or other reorganization or any adjustment otherwise provided
for in the Securities Purchase Agreement, the Subsequent
Securities Purchase Agreement, the Warrant Agreement or the
Convertible Note. Once issued such securities shall cease to
be Registrable Securities when (a) a registration statement
with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall
have been distributed in accordance with such registration
statement, (b) they shall be have been distributed to the
public pursuant to Rule 144 (or any successor provision) under
the Securities Act, (c) they shall have been otherwise
transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the
Company and subsequent disposition of them shall not require
registration or qualification of them under the Securities Act
or any similar state law then in force, (d) they shall have
ceased to be outstanding, (e) on the expiration of the
applicable Registration Maintenance Period or (f) any and all
legends restricting transfer thereof have been removed in
accordance with the provisions of Rule 144(k) (or any
successor provision) under the Securities Act. The Securities
shall constitute Registrable Securities while owned by (a) the
Purchaser or any Affiliate (as those terms are defined in the
Subsequent Securities Purchase Agreement) or (b) a transferee
of at least 100,000 of the Initial Shares, the Warrant Shares
or the Conversion Shares.
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"Subsequent Securities Purchase Agreement": As defined in
Section 1.
3. Ratifications. The terms and provisions of the Original Agreement,
as modified by this Amendment, are hereby ratified and confirmed and shall
continue in full force and effect. The Company and the Security Holder hereby
acknowledge and agree that the Original Agreement, as amended hereby, is and
shall remain in full force and effect and is and shall continue to be the legal,
valid and binding obligation of the Company and the Security Holder, as
applicable, enforceable against them in accordance with their respective terms.
4. Representations and Warranties. The Company hereby represents and
warrants to the Security Holder that (a) the execution, delivery and performance
of this Amendment has been authorized by all requisite corporate action on the
part of the Company (b) this Amendment constitutes a legal, valid and binding
obligation of the Company, enforceable against it in accordance with its terms;
(c) there is no provision of law, in the charter or bylaws of the Company, and
no provision of any existing mortgage, contract, lease, indenture or agreement
binding on the Company which would be contravened by the making or delivery of
this Amendment, or by the performance or observance of any of the terms hereof;
(d) the execution, delivery and performance of this Amendment does not require
any approval or consent of, or filing or registration with, any governmental or
any other agency or authority, stockholders or any other party or, if such
approval or consent is required, the same has been obtained; and (e) as of the
date hereof no default or event of default is in existence and the Company is
not otherwise in default or breach of any provision of the Original Agreement,
as amended hereby.
5. Survival of Representations, Warranties and Covenants. All
representations, warranties and covenants made in this Amendment or any other
document furnished in connection with this Amendment shall survive the execution
and delivery of this Amendment, and no investigation by the Security Holder
shall affect the representations, warranties and covenants or the right of the
Security Holder to rely upon them.
6. Further Assurances. The Company agrees that at any time and from
time to time, upon the written request of the Security Holder, it will execute
and deliver such further documents and do such further acts and things as the
Security Holder may reasonably request in order to fully effect the purposes of
this Amendment.
7. Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
8. Applicable Law. This Amendment shall be deemed to have been made
and to be performable in Dallas, Dallas County, Texas and shall be governed
by and construed in accordance with the laws of the State of Texas.
9. Successors and Assigns. This Amendment is binding upon and shall
inure to the benefit of the Company and the Security Holder, and their
respective successors, permitted assigns, heirs and personal representatives,
except the Company may not assign or transfer
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any of its respective rights or obligations hereunder without the prior written
consent of Security Holder.
10. Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
11. ENTIRE AGREEMENT. THE ORIGINAL AGREEMENT, AS AMENDED HEREBY,
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
12. Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed and delivered by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXXXXXXXXXXX.XXX
By:
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Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
Address: 0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attn: Chief Executive Officer
XXXX CAPITAL GROWTH FUND II, L.P.
By: XXXX CAPITAL GROWTH, L.P.
its general partner
By: XXXX CAPITAL
MANAGEMENT, L.L.C., its
general partner
By:
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Name: J.R. Holland, Jr.
Title: President
Address: 0000 Xxx Xxxxxx
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attn.: Xxxxxx X. Xxxxxx, Esq.
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