Exhibit 10.5
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of June 27, 2000, by
and among Xxxxxxxxxxxxxxx.xxx, a Nevada corporation (the "Company"), and the
Persons set forth on Schedule I attached hereto (the "Investors").
This Agreement is made pursuant to a certain Securities Purchase
Agreement dated as of the date hereof by and among the Company and the
purchasers named therein (the "Purchase Agreement"). The execution of this
Agreement is a condition to the closing of the transactions contemplated by the
Purchase Agreement.
NOW, THEREFORE, the parties hereto, in consideration of the
foregoing, the mutual covenants and agreements hereinafter set forth, and other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, agree as follows:
1. REGISTRATION STATEMENTS.
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(a) Shelf Registration.
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(i) The Company shall, on or before July 7, 2000, prepare
and file with the Commission under the Securities Act a Registration Statement
with respect to the Registrable Securities, and shall use its best efforts to
cause such Registration Statement to be declared effective at the earliest
practicable date. The Company shall at its own expense, subject to Section
1(a)(v), ensure the availability of a Prospectus meeting the requirements of
Section 10(a) of the Securities Act and shall take any and all other actions
necessary in order to ensure the ability of the holders of all of the
Registrable Securities to effect a resale of their Registrable Securities, for
such period as the Company is obligated to maintain the effectiveness of a
Registration Statement pursuant to Section 1(a)(ii).
(ii) The Company shall use its best efforts to cause any
such Registration Statement described in Section 1(a)(i) to remain effective
(or, if required by applicable law, to cause another Registration Statement with
respect to the Registrable Securities to become and remain effective) until the
earlier to occur of: (i) such time as all the Registrable Securities have been
sold by the Investors and (ii) such time as all the Registrable Securities held
by the Investors could be sold under Rule 144 of the Securities Act during any
90-day period.
(iii) When and if the Commission declares the Registration
Statement effective, the Company shall promptly deliver to each Investor a
certificate signed by the Chief Executive Officer or President of the Company
stating that the Registration Statement is effective and, to his or her
knowledge, no stop order with respect to the Registration Statement has been
issued and no proceedings therefor have been instituted.
(iv) For the period set forth in Section 1(a)(ii), the
Company shall, subject to Section 1(a)(v): (A) file such amendments to the
Registration Statement and the Prospectus, file such documents as may be
required to be incorporated by reference in any of such documents, and take all
other actions as may be necessary to ensure to the holders of Registrable
Securities the ability to effect the public resale of their Registrable
Securities
(including without limitation taking any actions necessary to ensure the
availability of a Prospectus meeting the requirements of Section 10(a) of the
Securities Act); and (B) provide each holder of Registrable Securities copies of
any documents prepared pursuant to Section 1(a)(iv)(A).
(v) During the effectiveness of the Registration
Statement, the Company shall promptly notify the Investors of the happening of
any event or other circumstance as the result of which, in the Company's
judgment, (i) the prospectus included in the Registration Statement, as then in
effect, would include an 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 not misleading in light of the circumstances then existing,
(ii) the offer or resale of the Shares and any Warrant Shares would otherwise
have a material and adverse effect on any proposed or pending acquisition,
merger, business combination or other material transaction involving the
Company, or (iii) financial statements meeting the requirements of Regulation S-
X are not available with respect to such acquisition, merger, business
combination or other transaction; and, upon receipt of such notice and until the
earlier of (i) the date the Company makes available to the Investors a
supplemented or amended prospectus meeting the requirements of the Securities
Act and relevant blue sky laws, or (ii) the date the Company notifies the
Investors that the Investors may resume offers and sales using the prior
prospectus, the Investors shall not offer or sell any Shares or any Warrant
Shares pursuant to the Registration Statement (and shall return all copies of
such prior prospectus to the Company if requested to do so by it).
Notwithstanding Section 1(a)(ii), the Company may continue such "blackout"
period or periods for such period of time as the Company considers reasonably
necessary and in its best interest due to circumstances then existing, or simply
due to the fact that amendments/supplements of a Registration
Statement/prospectus cannot be prepared instantly; but in no event may the
Company impose "blackouts" for any period of 15 or more consecutive business
days or totaling more than 25 business days in any 12 month period.
(b) Amendments. Upon the occurrence of any event that would cause
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any Registration Statement (i) to contain a material misstatement or omission or
(ii) not to be effective and usable for resale of Registrable Securities during
the period that such Registration Statement is required to be effective and
usable, the Company shall promptly file an amendment to the Registration
Statement, in the case of clause (i), correcting any such misstatement or
omission, and in the case of either clause (i) or (ii), using its best efforts
to cause such amendment to be declared effective and such Registration Statement
to become usable as soon as practicable thereafter.
(c) Liquidated Damages.
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(i) If the Registration Statement has not been declared
effective by October 7, 2000 (the "Target Effective Date"), the Company shall
pay liquidated damages to each Investor in the form of a Warrant (as defined
below) to purchase five shares of Common Stock of the Company for every 100
shares of Registrable Securities (excluding Warrant Shares) held by that
Investor. In addition, for every month after the Target Effective Date that
passes prior to the Registration Statement being declared effective, an
additional Warrant to purchase five shares of Common Stock for every 100 shares
of Registrable Securities (excluding Warrant Shares) held by that Investor shall
be issued to each Investor. In addition, for every 20 business
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days which constitute a "blackout" period under Section 1(a)(v) exceeding 25
business days in any 12 month period, the Company shall pay liquidated damages
to each Investor in the form of a Warrant to purchase five shares of Common
Stock of the Company for every 100 shares of Registrable Securities (excluding
Warrant Shares) held by that Investor. The shares of Common Stock of the Company
issuable upon exercise of the Warrants are referred to herein as the Warrant
Shares. As the obligation to issue the Warrants accrues, the Company shall
reserve for issuance the corresponding number of Warrant Shares. The liquidated
damages to be paid to the Investors pursuant to this Section 1(c) shall cease to
accrue on the day after the Registration Statement is first declared effective.
(ii) The parties hereto agree that the liquidated damages
provided for in this Section 2(c) constitute a reasonable estimate of the
damages that will be suffered by the Investors by reason of the failure of the
Registration Statement to be declared effective prior to the Target Effective
Date.
(iii) The Warrants to be issued as liquidated damages under
this Section 2(c) (the "Warrants") shall contain the following terms: (A) an
exercise price equal to $12.10 per share, (B) immediate exercisability upon
issuance, (C) an expiration date of two years after issuance, (D) standard
antidilution protection for stock splits, stock dividends and the like, and (E)
provisions for cashless exercise. The Company and the holders agree to negotiate
and finalize the terms of the Warrants as soon as practicable, and in any event
no later than two weeks after the date of this Agreement. All Warrants required
to be issued to an Investor shall be delivered within five (5) business days
after the obligation to issue them has arisen.
(d) The Company shall cooperate with the Investors to facilitate
the timely preparation and delivery of certificates representing the Registrable
Securities and Warrant Shares to be offered for resale pursuant to the
Registration Statement and enable such certificates to be in such denomination
or amounts, as the case may be, as the Investors may reasonably request and, on
such request, the Company shall cause its legal counsel to deliver to the
transfer agent for the Registrable Securities and Warrant Shares an opinion of
such counsel in appropriate form to ensure the transfer of such shares without
legend upon delivery by the Investors to the transfer agent of a certificate
that the resale was made via proper delivery of the Prospectus under the
Registration Statement.
2. REGISTRATION PROCEDURES.
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In connection with any Registration Statement and subject to the
provisions of Section 1 the Company shall use its best efforts to effect such
registration to permit the sale of the Registrable Securities being sold in
accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Company shall as expeditiously as possible:
(a) prepare and file with the Commission a Registration Statement
relating to the registration on any appropriate form under the Securities Act,
which form shall be available for the sale of the Registrable Securities being
sold in accordance with the intended method or methods of distribution thereof
and shall include all financial statements required by the Commission to be
filed therewith (including, if required by the Securities Act or any regulation
thereunder, financial statements of any Subsidiary of the Company which shall
have guaranteed
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any indebtedness of the Company), cooperate and assist in any filings required
to be made with the NASD and use its best efforts to cause such registration
Statement to become effective and approved by such governmental agencies or
authorities as may be necessary to enable the selling holders to consummate the
disposition of such Registrable Securities;
(b) prepare and file with the Commission such amendments and post-
effective amendments to the Registration Statement as may be necessary to keep
the Registration Statement effective for the applicable period set forth in
Section 1; in the case of any Registration Statement filed pursuant to Rule 415
under the Securities Act, cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424under the Securities Act, and to comply fully with the applicable
provisions of Rules 424 and 430A under the Securities Act in a timely manner,
and to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;
(c) advise the holders of the Registrable Securities promptly and,
if requested by such Persons, confirm such advice in writing:
(i) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment thereto, when the same has become
effective;
(ii) of the existence of any fact and the happening of any
event that makes any statement of a material fact made in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in the Registration Statement or the Prospectus in order
to make the statements therein not misleading; and
(iii) of the issuance by the Commission of any stop order or
other order suspending the effectiveness of the Registration Statement, or any
order issued by any state securities commission or other regulatory authority
suspending the qualification or exemption from qualification of such Registrable
Securities under state securities or "blue sky" laws. If at any time the Company
shall receive any such stop order suspending the effectiveness of the
Registration Statement, or any such order from a state securities commission or
other regulatory authority, the Company shall use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(d) deliver to each holder of the Registrable Securities, without
charge, as many copies of the Prospectus and any amendment or supplement thereto
as such Persons may reasonably request; the Company consents to the use of the
Prospectus and any amendment or supplement thereto by each of the holders of the
Registrable Securities in connection with the offering and the sale of the
Registrable Securities covered by the Prospectus or any amendment or supplement
thereto;
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(e) prior to any public offering of Registrable Securities,
provide for and obtain the registration and qualification of the Registrable
Securities under the securities or "blue sky" laws of such jurisdictions as the
holders of the Registrable Securities may reasonably request and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statement;
(f) use its best efforts to cause the Registrable Securities
covered by the Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such Registrable
Securities;
(g) if any fact or event contemplated by clause (c)(ii) above
shall exist or have occurred, prepare a supplement or post-effective amendment
to the Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Registrable Securities, the Prospectus will not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading;
(h) provide a transfer agent and registrar (if the Company does
not already have such an agent) and CUSIP number for all Registrable Securities
not later than the effective date of the Registration Statement;
(i) make available for inspection by a representative of the
holders of the Registrable Securities, and any attorney, accountant or other
professional retained by such holders, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such holder, attorney, accountant or other professional in
connection with such Registration Statement subsequent to the filing thereof and
prior to its effectiveness, except that the aforementioned advisors may be
required to sign a reasonably acceptable confidentiality agreement;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission;
(k) use its best efforts to cause all Registrable Securities to be
listed on each securities exchange, if any, on which equity securities issued by
the Company are then listed; and
(l) use its best efforts to take all other steps necessary to
effect the registration of the Registrable Securities contemplated hereby.
Each holder of the Registrable Securities as to which any
Registration Statement is being effected agrees to furnish promptly to the
Company all information reasonably known to such holder to be necessary to make
the information previously furnished to the Company by such holder not
materially misleading.
Each holder of the Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the existence of any
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fact of the kind described in Section 2(c)(ii), or notice of a stop order or
suspension described in Section 2(c)(iii), such holder shall forthwith
discontinue disposition of Registrable Securities and cease to use the
Prospectus in use under such Registration Statement. The Company shall, as
promptly as practicable, provide each holder with copies of the supplemented or
amended Prospectus contemplated by Section 2(g), or advise the holders in
writing that the use of the Prospectus may be resumed, and provide each holder
with copies of any additional or supplemental filings which are incorporated by
reference in the Prospectus. If so directed by the Company, each such holder
shall deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
3. REGISTRATION EXPENSES. All expenses incident to the Company's
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performance of or compliance with this Agreement shall be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation:
(a) all registration and filing fees and expenses (including
filings made with the NASD);
(b) fees and expenses of compliance with federal securities and
state "blue sky" or securities laws;
(c) expenses of printing (including printing certificates for the
Registrable Securities and Prospectuses), messenger and delivery services and
telephone;
(d) all application and filing fees in connection with listing the
Registrable Securities on a national securities exchange or automated quotation
system pursuant to the requirements hereof;
(e) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit and
"cold comfort" letters required by or incident to such performance); and
(f) any reasonable out-of-pocket expenses (including attorneys'
fees of one counsel representing the Investors) of the holders of the
Registrable Securities (or the agents who manage their accounts).
The Company shall, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, rating agency fees and the fees and expenses of any Person, including
special experts, retained by the Company.
4. INDEMNIFICATION.
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(a) The Company agrees to indemnify and hold harmless each holder
of the Registrable Securities and each Person, if any, who controls such holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses (including, without limiting the foregoing but subject to Section
4(c), the reasonable legal and other expenses incurred in connection with any
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action, suit or proceeding or any claim asserted) arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto to each
holder) or any preliminary prospectus, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages, liabilities or expenses are caused directly by an
untrue statement or omission contained in information relating to such holder,
furnished in writing to the Company by or on behalf of such holder expressly for
use therein.
(b) As a condition to the inclusion of its Registrable Securities
in any Registration Statement pursuant to this Agreement, each holder thereof
shall furnish to the Company in writing, promptly after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Registration Statement, Prospectus or preliminary prospectus
(including such completed and executed questionnaires as the Company may
reasonably request) and agrees to indemnify and hold harmless, severally and not
jointly, the Company and its directors, its officers who sign such Registration
Statement, and any Person controlling the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the indemnity from the Company to each holder and Persons controlling such
holder, but only with reference to information relating specifically to such
holder furnished in writing by or on behalf of such holder expressly for use in
such Registration Statement or the Prospectus or any preliminary prospectus
included therein, and of which none of the Company, its directors, officers or
Affiliates has any actual or constructive knowledge independent of such holder;
provided, however, that such holder of Registrable Securities shall not be
liable in any such case to the extent that the holder has furnished in writing
to the Company prior to the filing of any such Registration Statement,
Prospectus or preliminary prospectus information expressly for use in such
Registration Statement, Prospectus or preliminary prospectus which corrected or
made not misleading information previously furnished to the Company, and the
Company failed to include such information therein. In case any action shall be
brought against the Company, any of its directors, any such officer, or any such
controlling Person based on the Registration Statement, the Prospectus or any
preliminary prospectus and in respect of which indemnity may be sought against
one or more of the holders, such holders shall have the rights and duties given
to the Company by Section 4(c) (except that if the Company as provided in
Section 4(c) shall have assumed the defense thereof such holders shall not be
required to do so, but may employ separate counsel therein and participate in
the defense thereof but the fees and expenses of such counsel shall be at such
holder's expense) and the Company and its directors, any such officers, and any
such controlling Person shall have the rights and duties given to the holders by
Section 4(c). In no event shall the liability of any selling holder hereunder be
greater than the net proceeds (i.e., proceeds net of underwriting discounts,
fees, commissions and any other expenses payable by such selling holder)received
by such holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) In case any action or proceeding (including any governmental
or regulatory investigation or proceeding) shall be brought against any current
or former holder of the Registrable Securities or any Person controlling such
holder, with respect to which indemnity
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may be sought against the Company pursuant to Section 4(a), such holder or such
Person controlling such holder shall promptly notify the Company in writing and
the Company shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such holder and payment of all fees and
expenses relating thereto. Such holder and such Persons controlling such holder
shall have the right to employ separate counsel in any such action or proceeding
and participate in the defense thereof, but the fees and expenses of such
counsel shall be at such holder's expense unless (i) the employment of such
counsel has been specifically authorized in writing by the Company, which
authorization shall not be unreasonably withheld, (ii) the Company has not
assumed the defense and employed counsel reasonably satisfactory to such holder
within 15 days after notice of any such action or proceeding, or (iii) the named
parties to any such action or proceeding(including any impleaded parties)
include both such holder or any Person controlling such holder and the Company
and such holder or any Person controlling such holder shall have been advised by
such counsel that there maybe one or more legal defenses available to such
holder or Person controlling such holder that are different from or additional
to those available to the Company and, in the reasonable opinion of such
counsel, could not be asserted by the Company's counsel without creating a
conflict of interest (in which case the Company shall not have the right to
assume the defense of such action or proceeding on behalf of such holder or
controlling Person, it being understood, however, that the Company shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to all local counsel which
is necessary, in the good faith opinion of both counsel for the indemnifying
party and counsel for the indemnified party in order to adequately represent the
indemnified parties) for all such holders and controlling Persons, which firm
shall be designated in writing by the holders of a majority of the Registrable
Securities currently or formerly held by such holders and that all such fees and
expenses shall be reimbursed as they are incurred upon written request and
presentation of invoices). The Company shall not be liable for any settlement of
any such action effected without the written consent of the Company (which
consent shall not be unreasonably withheld), but if settled with the written
consent of the Company or if there is a final judgment for the plaintiff, the
Company agrees to indemnify and hold harmless such holder and all Persons
controlling such holder from and against any loss or liability by reason of such
settlement or judgment. The Company shall not, without the prior written consent
of the holder, effect any settlement of any pending or threatened proceeding in
respect of which any holder or any Person controlling such holder is a party and
indemnity has been sought hereunder by such holder or any Person controlling
such holder unless such settlement includes an unconditional release of such
holder or such controlling Person from all liability on claims that are the
subject matter of such proceeding.
(d) If the indemnification provided for in this Section 4 is
unavailable to an indemnified party under paragraphs (a), (b) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, 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, claims, damages, liabilities and expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the holders of the Registrable Securities on the
other hand from the original sale by the Company of the Registrable Securities,
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative
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benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and such holders on the other hand in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the Company on the one hand and such holders on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company on the one hand or
by such holders on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or expenses shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim.
(e) The Company and the holders of the Registrable Securities
agree that it would not be just and equitable if contribution pursuant to this
Section 4 were determined by a pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in subsection(d) above. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities and expenses referred to in
subsection(d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating any claim or defending any such action,
suit or proceeding. Notwithstanding any other provision of this Agreement, no
holder of the Registrable Securities shall be required to contribute an amount
greater than the net proceeds received by such holder with respect to the sale
of Registrable Securities giving rise to any indemnification or contribution
obligation under this Section 4. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
5. RULE 144A. The Company hereby agrees with each holder of the
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Registrable Securities for so long as any of the Registrable Securities remain
outstanding and during any period in which the Company is not subject to
Section13 or 15(d) of the Exchange Act, to make available to any beneficial
owner of Registrable Securities in connection with any sale thereof and any
prospective purchaser of such Registrable Securities from such beneficial owner,
the information required by Rule 144A(d)(4) under the Securities Act.
6. RULE 144. The Company agrees with each holder of Registrable
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Securities to:
(a) comply with the requirements of Rule 144(c) under the
Securities Act with respect to current public information about the Company;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time it is subject to such reporting
requirements); and
(c) furnish to any holder of Registrable Securities upon request
(i) a written statement by the Company as to its compliance with the
requirements of said Rule 144(c) and the
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reporting requirements of the Securities Act and the Exchange Act (at any time
it is subject to such reporting requirements), (ii) a copy of the most recent
annual or quarterly report of the Company, and (iii)such other reports and
documents of the Company as such holder may reasonably request to avail itself
of any similar rule or regulation of the Commission allowing it to sell any such
securities without registration.
7. INTERPRETATION OF AGREEMENT; DEFINITIONS.
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(a) Definitions. Unless the context otherwise requires, the terms
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hereinafter set forth when used herein shall have the following meanings and the
following definitions shall be equally applicable to both the singular and
plural forms of any of the terms herein defined.
"AFFILIATE" means, as to any Person, a Person which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, the first Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting stock, through an investment advisory or other fiduciary
arrangement, by contract or otherwise.
"AGREEMENT" means this Registration Rights Agreement and all
Schedules hereto.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which banks in New York are required by law to close or are customarily
closed.
"COMMISSION" means the Securities and Exchange Commission as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Exchange Act, then the Person
performing such duties at such time.
"COMMON STOCK" means any stock of any class of the Company which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which is not subject to redemption by the Company.
"COMPANY" has the meaning assigned in the first paragraph of this
Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"INVESTORS" means, collectively, the Persons listed on Schedule I,
and any successors or permitted assignees of any of their rights hereunder that
hold Registrable Securities.
"NASD" means National Association of Securities Dealers, Inc.
"OFFERING" means the offering of up to 2,000,000 shares of Common
Stock pursuant to a Confidential Private Placement Memorandum dated June 12,
2000.
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"PERSON" means an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political subdivision
thereof.
"PROSPECTUS" means the prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
"REGISTRABLE SECURITIES" means all shares of Common Stock purchased in the
Offering and all Warrant Shares held at the relevant time by an Investor. As to
any particular securities, such securities will cease to be Registrable
Securities when (i) they have been transferred in a public offering registered
under the Securities Act, (ii) they have been transferred in a sale made through
a broker, dealer or market-maker pursuant to Rule 144 under the Securities Act
or (iii) the holder thereof is able to sell all of such securities under Rule
144 under the Securities Act during any 90-day period.
"REGISTRATION STATEMENT" means any registration statement of the Company
relating to the registration for resale of Registrable Securities, including any
registration statement filed pursuant to the provisions of this Agreement,
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"WARRANT" shall have the meaning set forth in Section 2(c).
"WARRANT SHARES" shall mean the shares of Common Stock of the Company
issuable upon exercise of outstanding Warrants.
(b) Accounting Principles. Where the character or amount of any asset or
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liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with the
generally accepted accounting principles in effect from time to time, to the
extent applicable, except where such principles are inconsistent with the
express requirements of this Agreement including without limitation the
definitions set out in Section 7.
(c) Directly or Indirectly. Where any provision in this Agreement refer
----------------------
to action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether the action in question is
taken directly or indirectly by such Person.
8. MISCELLANEOUS.
-------------
(a) Remedies. Each holder of the Registrable Securities, in addition to
--------
being entitled to exercise all rights provided herein, and granted by law,
including recovery of damages, shall be entitled to specific performance of its
rights under this Agreement. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Agreement and hereby agrees to
11
waive the defense in any action for specific performance that a remedy at law
would be adequate.
(b) No Inconsistent Agreements. The Company shall not, on or after the
--------------------------
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to such holders of the Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
securities under any other agreements.
(c) 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 without the written consent of the Company and holders of at least 2/3 of
the Registrable Securities outstanding at that time.
(d) Notices. All notices, demands and other communications provided for
-------
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery. Such notices, demands and other communications will be sent to any
Investor at the address indicated on Schedule I, to any other holder of
Registrable Securities at such holder's address of record appearing on the
Company's books and to the Company at the address indicated below:
Xxxxxxxxxxxxxxx.xxx
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: President
Telecopier: (000) 000-0000
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party. All
such notices, demands and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; upon receipt, if
mailed postage prepaid; when receipt is acknowledged, if telecopied; or at the
time delivered, if delivered by an air courier guaranteeing overnight delivery.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the successors and permitted assigns of the Investors,
including without limitation and without the need for an express assignment,
Affiliates of the Investors; provided, however, that this Agreement shall not
inure to the benefit of or be binding upon transferees of the Investors that are
not Affiliates of the Investors and do not hold at least 25,000 shares of Common
Stock. In addition, whether or not any express assignment has been made, the
provisions of this Agreement which are for the benefit of the Investors are also
for the benefit of, and enforceable by, any subsequent holder of Registrable
Securities that is either an Affiliate of an Investor or a holder of at least
25,000 shares of Common Stock.
(f) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed
12
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(g) Governing Law. THE CORPORATE LAW OF THE STATE OF NEVADA SHALL GOVERN
-------------
ALL ISSUES AND QUESTIONS CONCERNING THE RELATIVE RIGHTS AND OBLIGATIONS OF THE
COMPANY AND ITS STOCKHOLDERS. ALL OTHER ISSUES AND QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND THE
EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAW PRINCIPLES THEREOF.
(h) Severability. Should any part of this Agreement for any reason be
------------
declared invalid, such decision shall not affect the validity of any remaining
portion, which remaining portion shall remain in force and effect as if this
Agreement had been executed with the invalid portion thereof eliminated and it
is hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein any
such part, parts, or portion which may, for any reason, be hereafter declared
invalid.
(i) Captions. The descriptive headings of the various Sections or parts
--------
of this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
(j) Waiver of Jury Trial. EACH OF THE COMPANY AND THE INVESTORS WAIVES
--------------------
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
(k) Effectiveness of Agreement. This Agreement shall become effective
--------------------------
upon execution by the Company and delivery hereof by the Company to at least one
Investor and the execution by such Investor and delivery hereof by such Investor
to the Company, notwithstanding the fact that any other potential Investors
listed in Schedule I have not so executed and delivered this Agreement.
(l) Final Agreement. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
---------------
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
(m) Attorneys' Fees. In the event any action in law or equity,
---------------
arbitration or other proceeding is brought for the enforcement of this Agreement
or in connection with any of the provisions of this Agreement, the prevailing
party or parties shall be entitled to its attorneys' fees and other costs
reasonably incurred in such action or proceeding.
13
(n) Massachusetts Business Trust. The names "Westcore Trust" and
----------------------------
"Trustees of Westcore Trust" refer respectively to the Trust created and the
Trustees, as Trustees but not individually or personally, acting from time to
time under an Amended and Restated Declaration Trust dated November 19, 1987,
which is hereby referred to and a copy of which is on file at the office of the
State Secretary of the Commonwealth of Massachusetts and at the principal office
of the Trust. The obligations of "Westcore Trust" entered into in the name of or
on behalf of any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or representatives of the Trust personally, but bind
only the Trust Property, and all persons dealing with any class of shares of the
Trust must look solely on the Trust Property belonging to such class for the
enforcement of any claims against the Trust.
[Remainder of this page intentionally left blank]
14
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement, or caused this Agreement to be duly executed on its behalf, as
of the date first written.
XXXXXXXXXXXXXXX.XXX, a Nevada
corporation
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
[Signatures of Investors are contained in Schedule I]
15
SCHEDULE I
INVESTORS
Name of Investor:
-----------------------------------
Authorized Signature:
-----------------------------------
Title of Signatory:
-----------------------------------
Address:
-----------------------------------
-----------------------------------
-----------------------------------
Number of Shares of
Common Stock Acquired:
-----------------------------------
16
