RAKO CAPITAL CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") sets forth
the registration rights granted by RAKO Capital Corporation, a Nevada
corporation (the "Company"), to the Stockholder(s) listed in the attached
Schedule A under this Agreement dated as of February 7, 2003.
WHEREAS, the Stockholder(s) listed in Schedule A have
purchased Common Stock of the Company, and, as part of the purchase agreement,
the Company has agreed to grant to the Stockholder(s) certain registration
rights which, subject to the restrictions set forth below, will allow the
Stockholder(s) to sell certain shares with the Company bearing the expenses
associated with such sales.
NOW, THEREFORE, in consideration of the foregoing and the
covenants contained herein, the parties agree as follows:
1. Definitions. The following terms when used in this
Agreement shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Commission" shall mean the Securities and Exchange
Commission.
"Company-paid Long-Form Registrations" shall have the meaning
provided in Section 2(b).
"Demand Registration" shall have the meaning provided in
Section 2(a).
"Long-Form Registrations" shall have the meaning provided in
Section 2(a).
"Person" shall mean any natural person, corporation, firm,
partnership, association, government, governmental agency or other entity,
whether acting in an individual, fiduciary or other capacity.
"Registrable Securities" shall mean (i) Common Stock of the
Company issued to a Stockholder pursuant to a transaction with the Company,
including shares issued pursuant to the exercise of a warrant, (ii) Common Stock
of the Company distributed to a Stockholder or its affiliates as an indirect
result of the Company's acquisition of the assets of TWS International, Inc. on
or about January 31, 2003; and (iii) any equity securities of the Company issued
or issuable with respect to its Common Stock 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 (or any similar rule then in force). For purposes of
this Agreement, a Person shall be deemed to be a holder of Registrable
Securities whenever the Person has the right to acquire, directly or indirectly,
the 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 the
acquisition has actually been effected.
"Registration Expenses" shall have the meaning provided in
Section 6(a).
"Rule 144" shall mean Rule 144 promulgated under the
Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Short-Form Registrations" shall have the meaning provided in
Section 2(a).
"Stockholders Agreement" shall mean the Stockholders Agreement
among the Stockholders and the Company of even date herewith.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
2. Demand Registrations.
(a) Requests for Registration. Subject to the terms and
conditions hereof, at any time after December 31, 2003, if the holders of
Registrable Securities request registration under the Securities Act of
Registrable Securities having a market valuation of not less than One Million
Dollars ($1,000,000) on Form S-1 or any similar long-form registration
("Long-Form Registrations") or, as provided in Section 2(c), the holders of
Registrable Securities request registration under the Securities Act of
Registrable Securities having a market valuation of not less than One Million
Dollars ($1,000,000) on Form S-2 or S-3 or any similar short-form registration
("Short-Form Registrations"), if available, either of which requests specify the
approximate number of Registrable Securities requested to be registered and the
anticipated per share price range for such offering (but not less than such
minimum), then within ten days after receipt of any such request, the Company
shall give written notice of such requested registration to all other holders of
Registrable Securities having demand registration rights and shall include in
the registration all Registrable Securities with respect to which the Company
has received written requests for inclusion therein within 15 days after the
receipt of the Company's notice. All registrations requested pursuant to this
Section 2(a) are referred to herein as "Demand Registrations."
(b) Long-Form Registration. The holders of Registrable
Securities shall be entitled to request one Long-Form Registration in which the
Company shall pay all Registration Expenses ("Company-paid Long-Form
Registration"). A registration shall not count as a permitted Long-Form
Registration until it has become effective, and any Company-paid Long-Form
Registration above shall not count as the permitted Long-Form Registration
unless the holders of Registrable Securities are able to register and sell 100%
of the Registrable Securities requested to be included in such registration.
Notwithstanding the foregoing, the Company shall pay all Registration Expenses
in connection with any registration initiated as a Company-paid Long-Form
Registration, whether or not it becomes effective.
(c) Short-Form Registrations. In addition to the Long-Form
Registration provided pursuant to Section 2(b), the holders of Registrable
Securities having a market
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valuation of not less than One Million Dollars ($1,000,000) shall be entitled to
request up to three Short-Form Registrations in which the Company shall pay all
Registration Expenses. Demand Registrations shall be Short-Form Registrations
whenever the Company is permitted to use any applicable short form. After the
Company has become subject to the reporting requirements of the 1934 Act, the
Company shall use its best efforts to make Short-Form Registrations available
for the sale of Registrable Securities.
(d) Priority on Demand Registrations. If a Demand
Registration is an underwritten offering and the managing underwriters advise
the Company in writing that in their opinion the number of Registrable
Securities and other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities that can be
sold in an orderly manner in such offering within a price range acceptable to
the holders of a majority of the Registrable Securities initially requesting
registration, the Company shall include in the registration, prior to the
inclusion of any securities that are not Registrable Securities, the number of
Registrable Securities requested to be included that, in the opinion of the
underwriters, can be sold in an orderly manner within the price range of the
offering, pro rata among the respective holders thereof on the basis of the
amount of Registrable Securities owned by each such holder. Any Persons other
than holders of Registrable Securities who participate in Demand Registrations
that are not at the Company's expense must pay their share of the Registration
Expenses as provided in Section 7.
(e) Restrictions on Registrations. The Company shall not be
obligated to effect any Demand Registration within six months after the
effective date of a previous Demand Registration or a registration in which the
holders of Registrable Securities were given piggyback rights pursuant to
Section 3 and in which there was no reduction in the number of Registrable
Securities requested to be included (except to the extent permitted pursuant to
Section 2(b) with respect to a Long-Form Registration). The Company may postpone
for up to six months the filing or the effectiveness of a registration statement
for a Demand Registration if the Board of Directors of the Company determines in
good faith that it is reasonably foreseeable that the Demand Registration would
have a material adverse effect on the Company; provided, that, in such event,
the holders of Registrable Securities initially requesting the Demand
Registration shall be entitled to withdraw such request and, if such request is
withdrawn, the Demand Registration shall not count as one of the permitted
Demand Registrations hereunder, and the Company shall pay all Registration
Expenses in connection with the withdrawn registration.
(f) Selection of Underwriters. The holders of a majority of
the Registrable Securities initially requesting registration shall have the
right to select the investment banker(s) and manager(s) to administer the
offering, subject to the Company's approval (which shall not be unreasonably
withheld).
3. Piggyback Registrations.
(a) Right to Piggyback. Subject to the terms and conditions
hereof, whenever the Company proposes to register any of its securities under
the Securities Act (other than pursuant to a Demand Registration) and the
registration form to be used may be used for the registration of Registrable
Securities (a "Piggyback Registration"), the Company shall give
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prompt written notice to all holders of Registrable Securities of the Company's
intention to effect such a registration and shall include in the registration
all Registrable Securities with respect to which the Company has received
written requests for inclusion therein within 15 days after the receipt of the
Company's notice.
(b) Piggyback Expenses. The Registration Expenses of the
holders of Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
(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 that can be sold in an orderly manner in such offering within
a price range acceptable to the Company, the Company shall include in such
registration (i) first, the securities the Company proposes to sell, and (ii)
second, the Registrable Securities requested to be included in the registration
and any other securities requested to be included in the registration, pro rata
among the holders of such Registrable Securities and such other securities on
the basis of the number of shares owned by each such holder.
(d) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities and the managing underwriters advise the Company in
writing that, in their opinion, the number of securities requested to be
included in the registration exceeds the number that can be sold in an orderly
manner in such offering within a price range acceptable to the holders initially
requesting the registration, the Company shall include in such registration the
Registrable Securities requested to be included in the registration and any
other securities requested to be included in the registration, pro rata among
the holders of such Registrable Securities and such other securities on the
basis of the number of shares owned by each holder.
(e) Selection of Underwriters. If any Piggyback
Registration is an underwritten offering, the Company shall have the right to
select the investment banker(s) and manager(s) for the offering.
(f) Other Registrations. If the Company has previously
filed a registration statement with respect to Registrable Securities (pursuant
to Section 2 or pursuant to this Section 3), and if such previous registration
has not been withdrawn or abandoned, the Company shall not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-8 or any successor form for registration of
employee stock plans), whether on its own behalf or at the request of any holder
or holders of such securities, until a period of at least six months has elapsed
from the effective date of the previous registration.
4. Holdback Agreements.
(a) Each holder of Registrable Securities agrees not to
effect any public sale or distribution (including sales pursuant to Rule 144) of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and the 90-day period or such longer period as required by the underwriters
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managing the registered public offering beginning on the effective date of any
underwritten Demand Registration or underwritten Piggyback Registration in which
Registrable Securities are included (except for sales of such securities as part
of such underwritten registered offering and as otherwise permitted under Rule
144(k)), unless the underwriters managing the registered public offering
otherwise agree.
(b) The Company agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 90-day period or such longer period as required by the
underwriters managing the registered public offering beginning on the effective
date of any underwritten Demand Registration or any underwritten Piggyback
Registration (except as part of such underwritten registration or pursuant to
registrations on Form S-8 or any successor form), unless the underwriters
managing the registered public offering otherwise agree and (ii) to cause each
holder of its equity securities, or any securities convertible into or
exchangeable or exercisable for its equity securities, purchased from the
Company at any time after the date of this Agreement (other than in a registered
public offering) to agree not to effect any public sale or distribution
(including sales pursuant to Rule 144) of any such securities during such period
(except as part of such underwritten registration, if otherwise permitted),
unless the underwriters managing the registered public offering otherwise agree.
5. Registration Procedures. Whenever the holders of
Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company shall endeavor to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(a) Prepare and file with the Commission a registration
statement with respect to such Registrable Securities and endeavor to cause the
registration statement to become effective and remain effective until the
earlier of (i) the date when all Registrable Securities covered by the
registration statement have been sold or (ii) 90 days from the effective date of
the registration statement; provided that before filing a registration statement
or prospectus or any amendments or supplements thereto, the Company shall
furnish to the counsel selected by the holders of a majority of the Registrable
Securities covered by the registration statement copies of all such documents
proposed to be filed, including documents that are to be incorporated by
reference into the registration statement, amendment or supplement, which
documents shall be subject to the review of such counsel, and which proposed
registration statement or amendment or supplement thereto shall not be filed by
the Company if the holders of a majority of the Registrable Securities covered
by the registration statement, amendment or supplement reasonably object to such
filing;
(b) Prepare and file with the Commission such amendments
and supplements to the registration statement and the prospectus used in
connection therewith as may be necessary to keep the registration statement
effective for the period referred to in Section 5(a) and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by the registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in the registration statement;
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(c) Furnish to each seller of Registrable Securities such
number of copies of the registration statement, each amendment and supplement
thereto, the prospectus included in the registration statement (including each
preliminary prospectus) and such other documents as such holder may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such holder;
(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 holder thereof reasonably requests and do any and all other
acts and things that may be reasonably necessary or advisable to enable such
holder to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such holder; provided, however, that the Company shall not
be required to qualify to do business or file a general consent to service of
process in any such jurisdiction;
(e) Notify each holder 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 such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such holder, the Company shall
prepare a supplement or amendment to the prospectus so that, as thereafter
delivered to the purchasers 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) Promptly notify the holders of Registrable Securities
and the underwriters, if any, of the following events and (if requested by any
such Persons) confirm such notification in writing: (i) the filing of the
prospectus or any prospectus supplement and the registration statement and any
amendment or post-effective amendment thereto and, with respect to the
registration statement or any post-effective amendment thereto, the declaration
of the effectiveness of such document; (ii) any requests by the Commission for
amendments or supplements to the registration statement or the prospectus or for
additional information; (iii) the issuance or threat of issuance by the
Commission of any stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that purpose; and (iv) the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the
initiation or threat of initiation of any proceeding for such purpose;
(g) Cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company are
then listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, endeavor to secure
designation of all such Registrable Securities covered by the registration
statement as a NASDAQ "national market system security" within the meaning of
Rule 11Aa2-1 of the Commission or, failing that, to secure NASDAQ authorization
for such Registrable Securities and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such with
respect to such Registrable Securities with the NASD;
(h) Provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
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(i) Enter into such customary agreements (including,
without limitation, underwriting agreements in customary form) and take all such
other actions as the holders of a majority 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, without
limitation, effecting a stock split or a combination of shares);
(j) Make available for inspection by any holder of
Registrable Securities, any underwriter participating in any disposition
pursuant to the registration statement and any attorney, accountant or other
agent retained by any such holder or underwriter, all 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 holder, underwriter,
attorney, accountant or agent in connection with the registration statement;
(k) Otherwise endeavor to comply with all applicable rules
and regulations of the Commission, and make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the period of
at least twelve months beginning with the first day of the Company's first full
calendar quarter after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(l) Permit any holder of Registrable Securities to
participate in the preparation of such registration or comparable statement and
to require the insertion therein of material furnished to the Company in
writing, which in the reasonable judgment of the holder and its counsel should
be included;
(m) Make every reasonable effort to prevent the entry of
any order suspending the effectiveness of the registration statement and, in the
event of the issuance of any such stop order, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any security included in such registration statement for sale in any
jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order;
(n) Endeavor to cause such 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 holders
thereof to consummate the disposition of such Registrable Securities;
(o) Cooperate with the selling holders of Registrable
Securities and the underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends, and enable such Registrable Securities to
be in such lots and registered in such names as the underwriters may request at
least two business days prior to any delivery of Registrable Securities to the
underwriters;
(p) Provide a CUSIP number for all Registrable Securities
not later than the effective date of the registration statement; and
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(q) Prior to the effectiveness of the registration
statement and any post-effective amendment thereto and at each closing of an
underwritten offering, (i) make such representations and warranties to the
selling holders of such Registrable Securities and the underwriters, if any,
with respect to the Registrable Securities and the registration statement as are
customarily made by issuers to underwriters in primary underwritten offerings,
(ii) obtain opinions of counsel to the Company and updates thereof (which
counsel and which opinions shall be reasonably satisfactory to the underwriters,
if any, and to the holders of a majority of the Registrable Securities being
sold) addressed to each selling holder and the underwriters, if any, covering
the matters customarily covered in opinions requested in underwritten offerings
and such other matters as may be reasonably requested by such holders and
underwriters or their counsel, (iii) obtain "cold comfort" letters and updates
thereof from the Company's independent certified public accountants addressed to
the selling holders of Registrable Securities and the underwriters, if any, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters by underwriters in connection with primary
underwritten offerings and (iv) deliver such documents and certificates as may
be reasonably requested by the holders of a majority of the Registrable
Securities being sold and by the underwriters, if any, to evidence compliance
with clause (i) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company.
6. Registration Expenses.
(a) All expenses incident to the Company's performance of
or compliance with this Agreement, including, without limitation, all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public
accountants, underwriters (excluding discounts and commissions) and other
Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), shall be borne by the Company, and the Company shall
pay 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 or quarterly review, the expense of any
liability insurance and the expenses and fees for listing the securities to be
registered on each securities exchange on which similar securities issued by the
Company are then listed or on the NASD automated quotation system.
(b) To the extent Registration Expenses are not required to
be paid by the Company, each holder of securities included in any registration
hereunder shall pay those Registration Expenses allocable to the registration of
the holder's securities so included, and any Registration Expenses not so
allocable shall be borne by all sellers of securities included in the
registration in proportion to the aggregate selling price of the securities to
be so registered.
7. Indemnification.
(a) The Company agrees to indemnify, to the extent
permitted by law, each holder of Registrable Securities, its affiliates and
their respective officers, directors, employees and agents, as the case may be,
and each Person who controls the holder (within the meaning of the Securities
Act), against all losses, claims, damages, liabilities and expenses caused by
any
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untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for use
therein as provided in Section 7(b) below. In connection with an underwritten
offering, the Company shall indemnify the underwriters, their officers,
directors and partners, as the case may be, and each Person who controls the
underwriters (within the meaning of the Securities Act), to the same extent as
provided above with respect to the indemnification of the holders of Registrable
Securities.
(b) In connection with any registration statement in which
a holder of Registrable Securities is participating, each holder shall furnish
to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the extent permitted by law, shall indemnify the Company,
its directors and officers and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is contained in any information or affidavit so
furnished in writing by the holder; provided that the obligation to indemnify
shall be individual to each holder.
(c) Any Person entitled to indemnification hereunder shall
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (ii) unless in the indemnified
party's reasonable judgment a conflict of interest between the indemnified and
the indemnifying parties may exist with respect to such claim, permit the
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party shall not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by the
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party, a conflict of interest may exist between the
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and shall survive the transfer of securities.
The Company also agrees to make such provisions as are reasonably requested by
any indemnified party for contribution to the party in the event the Company's
indemnification is unavailable for any reason.
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8. Participation in Underwritten Registrations. No Person
may participate in any registration hereunder that is underwritten unless the
Person (a) agrees to sell the Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that no
holder of Registrable Securities included in any underwritten registration shall
be required to make any representations or warranties to the Company or the
underwriters other than representations and warranties regarding the holder and
the holder's intended method of distribution.
9. Reports Under the Securities Laws. With a view to
making available to the holders of Registrable Securities the benefits of Rule
144 and any other rule or regulation of the Commission that may at any time
permit the holder to sell securities of the Company to the public without
registration, the Company agrees to use its best efforts to:
(a) Make and keep public information available, as those
terms are understood and defined in Rule 144, at all times subsequent to 90 days
after the effective date of any registration statement covering an underwritten
public offering filed under the Securities Act by the Company;
(b) File with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
1934 Act at any time after it is subject to the registration requirements; and
(c) Furnish to any holder so long as the holder owns any of
the Registrable Securities forthwith upon request a written statement by the
Company that it has complied with the reporting requirements of Rule 144 (at any
time after 90 days after the effective date of the registration statement filed
by the Company), and of the Securities Act and the 1934 Act (at any time after
it has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
so filed by the Company as may be reasonably requested by any holder in availing
itself of any rule or regulation of the Commission permitting the selling of any
of the Company's securities without registration.
10. Transfer of Registration Rights. Provided that upon any
transfer of Registrable Securities the Company is given written notice by the
holder of Registrable Securities at the time of transfer stating the name and
address of the transferee of such Registrable Securities and identifying the
Registrable Securities with respect to which the rights under this Agreement are
being assigned, the rights of the holder of Registrable Securities under this
Agreement may be transferred in whole or in part at any time to any such
transferee, so long as such transfer of Registrable Securities is in accordance
with all applicable state and federal securities laws and regulations.
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11. Miscellaneous.
(a) No Inconsistent Agreements. The Company shall not
hereafter enter into any agreement with respect to its securities that is
inconsistent with or violates the rights granted to the holders of Registrable
Securities in this Agreement.
(b) Adjustments Affecting Registrable Securities. The
Company shall not take any action, or permit any change to occur, with respect
to its securities that would materially and adversely affect the ability of the
holders of Registrable Securities to include the Registrable Securities in a
registration undertaken pursuant to this Agreement or that would materially and
adversely affect the marketability of the Registrable Securities in any such
registration (including, without limitation, effecting a stock split or a
combination of shares).
(c) Remedies. Any Person having rights under any provision
of this Agreement shall be entitled to enforce such rights specifically to
recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. The parties hereto
agree and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that any party may, in its sole
discretion, apply to any court of law or equity of competent jurisdiction
(without posting any bond or other security) for specific performance and for
other injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement.
(d) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only upon the
prior written consent of the Company and holders of a majority of the
Registrable Securities (excluding all Registrable Securities held by the
Company, or, to the extent purchased pursuant to Section 4 of the Stockholders
Agreement, any shareholder of the Company). The failure of any party to enforce
any of the provisions of this Agreement will in no way be construed as a waiver
of such provisions and will not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its terms.
(e) Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto shall bind and inure
to the benefit of the respective successors and assigns of the parties hereto,
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement that are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities who consents in
writing to be bound by this Agreement.
(f) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, that provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
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(g) Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, any one of which need not contain the
signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.
(h) Descriptive Headings; Interpretation. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement. The use of the word "including" in this
Agreement shall be by way of example rather than by limitation.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of law.
(j) Notices. All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Statement
shall be in writing and shall be delivered pursuant to the terms of the
Stockholders Agreement.
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of February 7, 2003.
RAKO CAPITAL CORPORATION
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
Title: Chief Executive Officer
STANFORD VENTURE CAPITAL HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
Title: President
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SCHEDULE A
STOCKHOLDER PARTIES TO REGISTRATION RIGHTS AGREEMENT WITH
RAKO CAPITAL CORPORATION
NAME AND ADDRESS
----------------
Stanford Venture Capital
Holdings, Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx, XX 00000
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