REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of the 28th day of
February, 2005 is made and entered into by and among XXXXXX EQUIPMENT, INC., a
Delaware corporation (the "Company"), and ROYNAT MERCHANT CAPITAL INC., a
Delaware corporation (the "Subscriber").
STATEMENT OF PURPOSE
WHEREAS, pursuant to the terms of that certain Subscription Agreement
of even date herewith by and between the Company and the Subscriber (the
"Subscription Agreement"), the Company is issuing to the Subscriber a
subordinated debenture in the original principal amount of Six Million Five
Hundred Thousand Dollars ($6,500,000) dated as of the date hereof, executed by
the Company in favor of the Subscriber (the "Debenture") and, in connection with
such transaction, the Subscriber is receiving a warrant issued by the Company
(the "Warrant") to purchase One Million (1,000,000) shares of the Company's
common stock; and
WHEREAS, in order to induce the Subscriber to enter into the
transactions contemplated by the Subscription Agreement, the Company desires to
grant registration rights to the Subscriber for the Shares.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties hereto agree as follows:
1. DEFINITIONS. As used herein, the following defined terms shall have
the following respective meanings:
"Blue Sky Laws" means statutes or regulations of any state in the
United States requiring the registration or qualification of offers and sales of
securities to the public or providing an exemption from such registration or
qualification requirements.
"Closing" has the meaning set forth in the Subscription Agreement.
"Common Stock" includes (a) the common stock of the Company, par
value $[__] per share, as described in its certificate of incorporation as in
effect on the date hereof, (b) any other class of capital stock hereafter
authorized having the right to share in distributions either of earnings or
assets without limit as to amount or percentage or (c) any other capital stock
into which such Common Stock is reclassified or reconstituted.
"Company" has the meaning set forth in the preamble hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Act Registration Statement" means registration statement
filed with the SEC pursuant to the Exchange Act.
"Holders" means any holder or holders of the Warrant or any shares
of Common Stock issued upon exercise of the Warrant.
"Indemnified Party" has the meaning set forth in Section 7(c).
"Indemnifying Party" has the meaning set forth in Section 7(c).
"Mandatory Registration Statement" has the meaning set forth in
Section 2(a)(i).
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act or the Exchange Act and the declaration or
ordering of the effectiveness of such registration statement by the SEC.
"Registrable Securities" means (i) any Common Stock issued or
issuable upon exercise of the Warrant and (ii) any Common Stock issued
or issuable with respect to the Common Stock referred to in clause (i)
above by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when they have been
distributed to the public pursuant to an offering registered under the
Securities Act or sold to the public through a broker, dealer or market
maker in compliance with Rule 144 under the Securities Act (or any
similar rule then in force) or repurchased by the Company or any
Subsidiary. For purposes of this Agreement, a Holder shall be deemed to
be a Holder of Registrable Securities, and the Registrable Securities
shall be deemed to be in existence, whenever such Holder has the right
to acquire directly or indirectly such Registrable Securities (upon
conversion or exercise in connection with a transfer of securities or
otherwise, but disregarding any restrictions or limitations upon the
exercise of such right), whether or not such acquisition has actually
been effected, and such Holder shall be entitled to exercise the rights
of a Holder of Registrable Securities hereunder (it being understood,
however, that any Registrable Securities which are not shares of Common
Stock shall be converted into or exercised for shares of Common Stock
immediately prior to the effectiveness of any registration pursuant to
which such Common Stock is to be sold).
"Registration Expenses" has the meaning set forth in Section 5.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means (i) any corporation more than 50% of the
outstanding voting securities of which are owned by the Company or any
subsidiary, directly or indirectly, or (ii) a partnership, limited
liability company or other entity in which the Company or any
subsidiary holds a general partnership or other equity interest
sufficient to enable it to direct the management policies thereof.
Unless otherwise stated, all other capitalized terms used herein but
not defined shall have the meanings set forth in the Subscription Agreement.
2. MANDATORY REGISTRATION
(a) The Company shall:
(i) cause to be filed with the SEC, as soon as practicable
after the Closing, but in no event more than sixty (60) days after
the Closing, a registration statement under the Securities Act to
register all of the Registrable Securities (the "Mandatory
Registration Statement") on (A) Form S-1 or any other successor or
similar long-form registration or (B) Form S-2 or Form S-3 or any
other successor or similar short-form registration if the Company
is eligible to use any such short form;
(ii) cause the Mandatory Registration Statement to become
effective at the earliest possible time, but in no event later than
180 days after the Closing.
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(b) In connection the performance of its obligation pursuant
to Section 2(a) of this Agreement, the Company shall:
(i) file all pre-effective amendments to the
Mandatory Registration Statement as may be necessary in order to cause
the Mandatory Registration Statement to become effective; and
(ii) if applicable, file a post-effective amendment
to the Mandatory Registration Statement pursuant to Rule 430A under the
Securities Act.
(c) The Company shall cause the Mandatory Registration Statement
to be effective continuously, supplemented and amended as required by
the Securities Act and regulations promulgated by the SEC and
applicable Blue Sky Laws to the extent necessary to ensure that it
is available for sales of Registrable Securities by the Holders until
the earlier of (i) the expiration of the period referred to in Rule
144(k) under the Securities Act (or any successor rule) with respect to
the Registrable Securities, (ii) such shorter period that will
terminate when all the Registrable Securities have been sold pursuant
to the Mandatory Registration Statement or (iii) the date when all
Registrable Securities have been sold to pursuant to Rule 144 under the
Securities Act (or any successor rule).
(d) Priority. The Company shall not include in the Mandatory
Registration Statement any securities or offer of securities which are
not Registrable Securities without the prior written consent of the
Holders of at least 51% of the Registrable Securities included in the
Mandatory Registration Statement, except for the securities set forth
on Schedule 1 hereto. If the offering to be made under the Mandatory
Registration Statement is an underwritten offering and the managing
underwriters advise the Company in writing that in their opinion the
number of Registrable Securities and, if permitted hereunder, other
securities requested to be included in such registration exceeds the
number of Registrable Securities and other securities, if any, which
can be sold in an orderly manner in such offering within a price range
acceptable to the Holders of at least 51% of the Registrable Securities
included in the Mandatory Registration Statement, the Company shall so
advise the Holders and include in such registration (i) first, the
Registrable Securities requested to be included in such registration
pro rata among the Holders of such Registrable Securities on the basis
of the number of Registrable Securities owned by each such Holder at
the time of filing of the Mandatory Registration Statement and (ii)
second, any other securities to be sold by the Company or requested to
be included in such registration.
(e) Expenses. The Company shall pay all Registration Expenses.
(f) Selection of Underwriters. The Holders who desire to do so
may sell their Registrable Securities in an underwritten offering. In
any such underwritten offering, the investment banking firm or firms to
serve as the underwriters shall be selected by the Holders of at least
51% of the Registrable Securities included in the Mandatory
Registration Statement.
3. PIGGYBACK REGISTRATIONS.
(a) Right to Piggyback. Whenever the Company proposes or
determines to register any of its securities under the Securities Act
for its own account or the account of any holder of the Company's
securities (other than a registration on Form S-4 or Form S-8 or any
successor or similar forms) and the registration form to be used may be
used for the registration of Registrable Securities (a "Piggyback
Registration"), the Company (i) shall give prompt written notice to all
Holders of Registrable Securities of its intention to effect such a
registration at least 20 days before filing the Piggyback Registration
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and (ii) subject to Sections 3(c) and 3(d) below, shall include in such
registration all Registrable Securities with respect to which the
Company has received written requests for inclusion therein within 10
days after the receipt of the Company's notice. The notice referred to
in this Section 3(a) shall include a list of the jurisdictions in which
the Company intends to attempt to qualify such securities under the
applicable Blue Sky Laws. The decision of one or more Holders of
Registrable Securities to participate in a Piggyback Registration shall
not relieve the Company of its obligations to register the Registrable
Securities held by the participating Holder or any other Holder
pursuant to Section 2 of this Agreement.
(b) Piggyback Expenses. The Registration Expenses of the
Holders of Registrable Securities shall be paid by the Company in all
Piggyback Registrations whether or not such registration is
consummated.
(c) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the
Company, and the managing underwriters advise the Company in writing
that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering,
the Company shall include in such registration (i) first, the
securities the Company proposes to sell, (ii) second, the Registrable
Securities requested to be included in such registration, pro rata
among the Holders of such Registrable Securities on the basis of the
number of Registrable Securities owned by each such Holder and (iii)
third, any other securities requested to be included in such
registration.
(d) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of
holders of the Company's securities (other than the Holders of
Registrable Securities), and the managing underwriters advise the
Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which
can be sold in such offering without adversely affecting the
marketability of the offering, the Company shall include in such
registration (i) first, the securities requested to be included therein
by the holders requesting such registration and the Registrable
Securities requested to be included in such registration pro rata among
the holders of such securities on the basis of the number of securities
owned by each such Holder and (ii) second, any other securities
requested to be included in such registration.
(e) Withdrawal by the Company. If, at any time after giving
written notice of its intention to register any of its securities as
set forth in Section 3(a) and prior to the effective date of the
registration statement filed in connection therewith, the Company's
board of directors shall determine in its good faith judgment for any
reason not to register such securities, the Company may, at its
election, give written notice of such determination to each Holder of
Registrable Securities and thereupon shall be relieved of its
obligation to register any Registrable Securities in connection with
such registration (but not from its obligation to pay the Registration
Expenses in connection therewith as provided herein).
4. REGISTRATION PROCEDURES. The Company shall effect the registration
and sale of the Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company shall:
(a) before filing a Mandatory Registration Statement or a
registration statement for Piggyback Registration in which Holders of
Registrable Securities are participating (in either case, a
"Registration Statement"), amendments thereto, or a related prospectus
or prospectus supplement, furnish to the counsel selected by the
Holders of at least 51% of the Registrable Securities covered by such
Registration Statement copies of all such documents proposed to be
filed, which documents shall be subject to the review and comment of
such counsel;
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(b) notify each Holder of Registrable Securities of the
effectiveness of each Registration Statement filed hereunder and comply
with the provisions of the Securities Act with respect to the
disposition of all securities covered by the Registration Statement
until such time as all such securities have been disposed of in
accordance with the intended methods of disposition by the seller or
sellers thereof set forth in the Registration Statement and the
prospectus used in connection therewith;
(c) furnish to each seller of Registrable Securities such
number of copies of such Registration Statement, each amendment and
supplement thereto, the prospectus included in such Registration
Statement (including each preliminary prospectus) and such other
documents as such seller may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such
jurisdictions as any seller (including any underwriter) state requests
and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned
by such seller; provided, that the Company shall not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section, (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general
service of process in any such jurisdiction;
(e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which
the prospectus included in the Registration Statement contains an
untrue statement of a material fact or omits any fact necessary to make
the statements therein not misleading, and, as expeditiously as
possible, the Company shall prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to a Subscriber of such
Registrable Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on a
securities exchange or included in an inter-dealer quotation system on
which similar securities issued by the Company are then listed or
included and shall take any other action necessary or advisable to
facilitate the disposition of the Registrable Securities;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such Registration
Statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
Holders of at least 51% of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities (including
effecting a stock split or a combination of shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant
to such Registration Statement and any attorney, accountant or other
agent retained by any such seller or underwriter, all necessary
financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors,
employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with the Registration Statement;
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(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC and applicable Blue Sky Laws;
(k) permit any Holder of Registrable Securities which the Holder,
in its sole and exclusive judgment, might be deemed to be an
underwriter or a controlling person of the Company, to participate in
the preparation of the Registration Statement and to require the
insertion therein of material, requested of the Company in writing,
which in the reasonable judgment of such Holder and its counsel should
be included;
(l) in the event of the issuance of any stop order suspending the
effectiveness of the Registration Statement, or of any order suspending
or preventing the use of any related prospectus or suspending the
qualification of any Common Stock included in the Registration
Statement for sale in any jurisdiction, the Company shall use its best
efforts promptly to obtain the withdrawal of such order; and
(m) in the event of an underwritten public offering, obtain a cold
comfort letter from the Company's independent public accountants in
customary form and covering such matters of the type customarily
covered by cold comfort letters as the Holders of at least 51% of the
Registrable Securities reasonably request.
5. EXPENSES OF REGISTRATION. All expenses (collectively, the
"Registration Expenses") incident to or incurred in connection with any
performance of, compliance with, registration or qualification pursuant to this
Agreement, including, without limitation, all registration, filing, compliance,
Blue Sky Laws, listing, and qualification fees and expenses, printing expenses,
messenger, courier and delivery expenses, fees and disbursements of custodians
fees and disbursements of counsel for the Company and the underwriters, fees and
expenses of one counsel chosen by the Holders of the Registrable Securities
included in the Registration Statement, fees and expenses of underwriter
(excluding discounts and commissions) and expenses and fees of accountants and
audits incidental to or required by such registration, shall be borne by the
Company.
6. REGISTRATION DEFAULT. If a Registration Statement covering all of
the Registrable Securities (i) has not been declared effective by the SEC on or
prior to the 180th day following the Closing Date (the "Effective Deadline") or
(ii) has been declared effective but shall thereafter cease to be effective or
fail to be usable for its intended purpose without being succeeded immediately
by a post-effective amendment that cures such failure and that is declared
effective within thirty (30) days (each such event referred to in clauses (i)
and (ii), a "Registration Default"), the Company hereby agrees to pay to the
Subscriber a fee Fifty Thousand Dollars ($50,000) per month, pro rated for any
portion thereof, during each month or portion thereof that the Registration
Default continues without cure. If there occurs a Registration Default and the
Company (A) fails to file, on a timely basis, any periodic or current report
required by the Exchange Act or regulations promulgated thereunder, (B) allows
any class of its securities of which the Registrable Securities are a part to
become de-listed on a national securities exchange or excluded from or
disqualified from trading through an inter-dealer quotation system or (C)
otherwise fails to comply with any applicable federal securities laws and
regulations, Blue Sky Laws or listing or inclusion requirements of a national
securities exchange or inter-dealer quotation system (each such event referred
to in clauses (A), (B), and (C), a "Non-Compliance Condition"), the Company
hereby agrees to pay to the Subscriber an additional fee of Fifty Thousand
Dollars ($50,000) per month (the "Non-Compliance Fee") pro rated for any portion
thereof, during each month or portion thereof that the Registration Default and
Non-Compliance Condition continue without cure. Notwithstanding the foregoing,
the Non-Compliance Fee shall not be payable in respect of any particular
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Non-Compliance Condition if the Company provides written notice to the
Subscriber of the occurrence of the particular Non-Compliance Condition within
thirty (30) calendar days of the occurrence of the particular Non-Compliance
Condition. The fees provided in this Section 6 shall be payable on the last
business day of each month to Subscriber at the office designated for the
Subscriber to receive notices pursuant to Section 15 of this Agreement. Any
unpaid balance of such fees shall accrue interest at an annual rate of 15%,
shall be payable monthly on the last business day of each month and compounded
monthly. The Subscriber's rights to fees pursuant to this Section 6 represent a
lost opportunity cost and shall not be construed as liquidated damages and,
further, shall not serve to limit or replace any remedies at law or in equity
arising from any failure by the Company to perform its obligations under this
Agreement.
7. INDEMNIFICATION
(a) The Company will indemnify each Holder of Registrable
Securities, each of the Holder's officers, directors, partners and
employees, and each person controlling such Holder, with respect to
such registration or qualification effected pursuant to this Agreement
and in which Registrable Securities of the Holders are included,
against all claims, losses, damages, and liabilities (or actions in
respect thereto) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any
prospectus, Registration Statement or other document incident to any
such registration or qualification, or based on any omission (or
alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of any rule or regulation
promulgated pursuant to any Federal, state or common law rule or
regulation including, without limitation, the Securities Act,
applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification
or compliance and will reimburse each such Holder, each of the Holder's
officers, directors, partners and employees, and each person
controlling such Holder, for any legal and any other reasonable
expenses incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, including reasonable
attorneys' fees and expenses; provided, however, that the Company will
not be liable in any such case to the extent that any such claim, loss,
damage or liability arises out of or is based on any untrue statement
or omission based upon and in conformity with written information
furnished to the Company by such Holder in a signed document. Such
indemnity shall be effective notwithstanding any investigation made by
or on behalf of any Holder or any such officer, director, partner,
employee, or controlling person and shall survive any transfer by the
same of the Registrable Securities.
(b) Each Holder will, if Registrable Securities held by or issuable
to such Holder are included in the securities as to which such
registration or qualification is being effected, indemnify the Company,
each of its directors, officers and employees, each person who controls
the Company, and each other such Holder, each of such other Holder's
officers, directors, partners and employees, and each person
controlling such other Holder, against all claims, losses, damages and
liabilities (or actions in respect thereto) arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact
contained in any such Registration Statement, prospectus or other
document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, such
Holders, such directors, officers, partners, employees or persons for
any legal or any other reasonable expenses incurred in connection with
investigating or defending any such claim, loss, damage, liability or
action, including reasonable attorneys' fees and expenses, in each case
to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in
such Registration Statement, prospectus or other document in reliance
upon and in conformity with written information furnished to the
Company by such Holder. Notwithstanding the foregoing, the liability of
any such Holder shall not exceed an amount equal to the proceeds
realized by each such Holder of Registrable Securities sold as
contemplated herein. Such indemnity shall be effective notwithstanding
any investigation made by or on behalf of the Company, any such
director, officer, partner, employee, or controlling person and shall
survive the transfer of such securities by such Holder.
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(c) Each party entitled to indemnification under this Section 7
(the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought. Unless in the reasonable judgment of the
Indemnified Party a conflict of interest may exist between the
Indemnifying Party and the Indemnified Party, the Indemnifying Party
shall be permitted to assume the defense of any such claim or any
litigation resulting therefrom; provided, however, that in any event
counsel for the Indemnifying Party or Indemnified Party who shall
conduct the defense of such claim or litigation as provided above shall
be approved by the other Party (which approval shall not be
unreasonably withheld), and such other Party may participate in such
defense at such Party's expense; provided, further, that the failure of
any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 8
unless such failure shall have had a material adverse effect on the
Indemnifying Party's ability to defend such claim.
(d) The Indemnified Party shall make no settlement of any claim or
litigation which would give rise to liability on the part of the
Indemnifying Party under any indemnity contained in this Section 8
without the written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld or delayed, and no Indemnifying
Party shall make any settlement of any such claim or litigation without
the consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed. If a firm offer is made to settle a
claim or litigation defended by the Indemnified Party and the
Indemnified Party notifies the Indemnifying Party in writing that the
Indemnified Party desires to accept and agree to such offer, but the
Indemnifying Party elects not to accept or agree to such offer within
ten (10) days after receipt of written notice from the Indemnified
Party of the terms of such offer, then, in such event, the Indemnified
Party shall continue to contest or defend such claim or litigation and,
if such claim or litigation is within the scope of the Indemnifying
Party's indemnity contained in this Section 7, the Indemnified Party
shall be indemnified pursuant to the terms hereof. If a firm offer is
made to settle a claim or litigation defended by the Indemnifying Party
and the Indemnifying Party notifies the Indemnified Party in writing
that the Indemnifying Party desires to accept and agree to such offer,
but the Indemnified Party elects not to accept or agree to such offer
within ten days after receipt of written notice from the Indemnifying
Party of the terms of such offer, then, in such event, the Indemnified
Party may continue to contest or defend such claim or litigation and,
in such event, the total maximum liability of the Indemnifying Party to
indemnify or otherwise reimburse the Indemnified Party in accordance
with this Agreement with respect to such claim or litigation shall be
limited to and shall not exceed the amount of such settlement offer,
plus reasonable out-of-pocket costs and expenses (including reasonable
fees and disbursements of counsel) to the date of notice that the
Indemnifying Party desired to accept such settlement offer.
(e) The indemnification payments required pursuant to this Section
7 for expenses of the investigation or defense of a claim or lawsuit
shall be made from time to time during the course of the investigation
or defense, as the case may be, upon submission of reasonably
sufficient documentation that any such expenses have been incurred.
8. INFORMATION BY HOLDER. The Holders of Registrable Securities
included in any Registration Statement filed pursuant to this Agreement shall
furnish to the Company such written information regarding such Holders and the
plan of distribution proposed by such Holders as the Company may reasonably
request in writing and as shall be required in connection with any registration
or qualification referred to in this Agreement. The Company agrees to include in
any such Registration Statement all information concerning the Holders and their
distribution which the Holders shall reasonably request.
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9. RULE 144 REPORTING. With a view to making available to the Holders
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 promulgated under the Securities
Act, or any successor provision thereto, at all times;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the
Exchange Act;
(c) so long as a Holder owns any Registrable Securities, to furnish
to such Holder forthwith upon its request a written statement by the
Company as to the Company's compliance with the reporting requirements
of Rule 144 and of the Securities Act and the Exchange Act and such
other reports and documents filed by the Company as such Holder may
reasonably request in availing itself of any rule or regulation of the
SEC allowing such Holder to sell any such securities without
registration; and
(d) take any further action reasonably requested by a Holder to
enable such Holder to sell its Registrable Securities without
registration under Rule 144, under any successor provision, or any
similar rule or regulation promulgated by the SEC from time to time.
10. TRANSFER OF REGISTRATION RIGHTS. The Subscriber (or any subsequent
Holder of Registrable Securities) may assign this Agreement to a transferee of
any of its Registrable Securities; provided, however, that the Company is given
written notice by the transferring Holder at the time of or within a reasonable
time after the transfer, stating the name and address of the transferee and
identifying the securities with respect to which such transfer is made. Subject
to the foregoing provision, this Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and assigns;
provided, further, that the registration rights granted in this Agreement shall
not be transferred to purchasers who received Registrable Securities in a sale
made pursuant to a Registration Statement or pursuant to a sale under Rule 144
or any successor provision thereto.
11. CHANGES. The terms and provisions of this Agreement may not be
modified or amended, except that they may be modified or amended with the
written consent of (a) the Company and (b) the Subscriber. None of the terms and
provisions of this Agreement may be waived except in writing by the person so
waiving.
12. GRANTING OF REGISTRATION RIGHTS. The Company shall not, without the
prior written consent of the Subscriber, grant any rights to any persons to
register any shares of Common Stock or other securities of the Company if such
rights could reasonably be expected to conflict with, or be on parity with, the
rights of the Holders of the Shares.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York with regard to conflicts of
laws provisions.
14. NOTICE. All notices and other communications required or permitted
to be given in respect of this Agreement shall be sent by personal delivery,
nationally recognized overnight courier, facsimile or certified or registered
mail, to the following parties at the following addresses, or, in each case, at
such other address or addresses as any party shall hereafter specify by written
notice to the others:
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(a) if to the Company:
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxx, Chairman
Telecopy No. (000)000-0000
with a copy to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telecopy No. (000)000-0000
(b) if to the Subscriber:
Roynat Merchant Capital Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy No. (000)000-0000
with a copy to:
Roynat Merchant Capital Inc.
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx
Attention: Xxxx X. Xxxxx, Manager, Merchant Banking
and:
Xxxxx & Xxx Xxxxx PLLC
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxxxx, Esq.
Telecopy No.: 000-000-0000/000-000-0000
(c) if to a Holder other than the Subscriber, to the address
provided to the Company pursuant to Section 10 of this Agreement.
Any notice required to be given hereunder by one party to another shall be
deemed to have been received (a) when delivered, if personally delivered or sent
via facsimile, (b) one day following delivery to a nationally recognized
overnight courier or (c) on the third business day following the date on which
the piece of mail containing such communication is posted, if sent by certified
or registered mail.
15. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original and which together shall constitute a
single agreement.
16. HEADINGS. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
hereof.
10
17. SURVIVAL. This Agreement shall survive until all obligations
hereunder have been satisfied in full.
11
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed by their authorized officers as of the day and year first above
written.
COMPANY:
XXXXXX EQUIPMENT, INC.,
a Delaware corporation
By: /s/ XXXXXXXX X. XXXX
--------------------
Name: Xxxxxxxx X. Xxxx
Title: President
SUBSCRIBER:
ROYNAT MERCHANT CAPITAL INC.
a Delaware corporation
By: /s/ XXXXX XXXXXX
----------------
Name: Xxxxx Xxxxxx
Title: President
12
SCHEDULE 1
XXXXXX EQUIPMENT, INC.
OUTSTANDING SECURITIES HOLDING REGISTRATION RIGHTS
