Exhibit 10 Registration Rights Agreement granted to USURF Communications,
Inc., a Colorado corporation dated May 26, 2004
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is entered into as of
May 26, 2004, by and between (the "Company"), and USURF Communications, Inc., a
Colorado corporation ("USURF").
WHEREAS, in connection with the issuance and sale of 4,000,000 shares of
the Company's common stock (the "Shares") to USURF, the Company desires to
provide USURF and the Holders (as defined below) certain rights with respect to
the Shares as an inducement to USURF to purchase the Shares;
NOW, THEREFORE, in consideration of the mutual agreements, covenants and
conditions contained herein, the Company and USURF hereby agree as follows.
Article X.
RESTRICTIONS ON TRANSFER
10.1 Restrictive Legend. Each certificate representing (i) the Shares
and (ii) any other securities issued in respect of the Shares upon conversion of
the Shares upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall (unless otherwise permitted by the
provisions of Section 1.2 below) be stamped or otherwise imprinted with a legend
in substantially the form specified in the Asset Purchase Agreement between the
parties dated as of April 15, 2004.
USURF agrees that the Company shall make notation on its records and give
appropriate instructions to any transfer agent of the Shares in order to
implement the restrictions on transfer established in this Section 1. Such
legend shall be removed by the Company from any certificate upon request at such
time as the Holder of the shares represented by the certificate satisfies the
requirements of Rule 144(k) under the Securities Act of 1933, as amended (the
"Act"), provided that Rule 144(k) as then in effect does not differ
substantially from Rule 144(k) as in effect as of the date of this Agreement,
and provided further that the Company has received from the Holder a written
representation that (i) such Holder is not an affiliate of the Company and has
not been an affiliate during the preceding three months, (ii) such Holder has
beneficially owned the shares represented by the certificate for a period of at
least two years, (iii) such Holder otherwise satisfies the requirements of Rule
144(k) as then in effect with respect to such shares, and (iv) such Holder will
submit the certificate for any such shares to the Company for reapplication of
the legend at such time as the holder becomes an affiliate of the Company or
otherwise ceases to satisfy the requirements of Rule 144(k) as then in effect.
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10.2 Notice of Proposed Transfers. The Holder of each certificate
representing Registrable Securities (as defined below) by acceptance thereof
agrees to comply in all respects with the provisions of this Section 1.2. Prior
to any proposed sale, assignment, transfer or pledge of any Registrable
Securities, unless there is in effect a registration statement under the Act
covering the proposed transfer, the Holder thereof shall give written notice to
the Company of such holder's intention to effect such transfer, sale, assignment
or pledge. Each such notice shall describe the manner and circumstances of the
proposed transfer, sale, assignment or pledge in sufficient detail, and shall be
accompanied at such Holder's expense by either (i) a written opinion of legal
counsel who shall, and whose legal opinion shall, be reasonably satisfactory to
the Company addressed to the Company, to the effect that the proposed transfer
of the Registrable Securities may be effected without registration under the
Act, or (ii) a "no action" letter from the SEC to the effect that the transfer
of such securities without registration will not result in a recommendation by
the staff of the Securities and Exchange Commission (the "SEC") that action be
taken with respect thereto, whereupon the holder of such Registrable Securities
shall be entitled to transfer such Registrable Securities in accordance with the
terms of the notice delivered by the Holder to the Company. The Company will not
require such a legal opinion or "no action" letter (a) in any transaction in
compliance with Rule 144, or (b) in any transaction in which a Holder that is a
partnership, limited liability company or corporation distributes Shares after
six months after the purchase of such securities hereunder solely to partners,
members or shareholders (as the case may be) thereof for no consideration,
provided that each transferee agrees in writing to be subject to the terms of
this Section 1.2. Each certificate evidencing the Registrable Securities
transferred as above provided shall bear, except if such transfer is made
pursuant to Rule 144, the appropriate restrictive legend set forth in Section
1.1 above, except that such certificate shall not bear such restrictive legend
if in the opinion of counsel for such holder and the Company such legend is not
required in order to establish compliance with any provisions of the Act.
Article XI
REGISTRATION RIGHTS
The Company hereby grants to each of the Holders the registration rights
set forth in this Section 2, with respect to the Registrable Securities (as
defined below) owned by such Holders. The Company and the Holders agree that the
registration rights provided herein set forth the sole and entire agreement, and
supersede any prior agreement, between the Company and the Holders with respect
to registration rights for the Company's securities.
11.1 Certain Definitions. As used in this Agreement:
(a) The terms "register," "registered" and "registration" refer
to a registration effected by filing with the SEC a registration statement (the
"Registration Statement") in compliance with the Act, and the declaration or
ordering by the SEC of the effectiveness of such Registration Statement.
(b) The term "Registrable Securities" means (i) the Shares,
(ii) any securities of the Company issued or issuable as a dividend or other
distribution with respect to, or in exchange or in replacement of, the Shares or
any other Registrable Securities; provided, however, that Shares or other
securities shall only be treated as Registrable Securities if and so long as (A)
they have not been sold to or through a broker or dealer or underwriter in a
public distribution or a public securities transaction, (B) they have not been
sold in a transaction exempt from the registration and prospectus delivery
requirements of the Act under Section 4(1) thereof so that all transfer
restrictions and restrictive legends with respect thereto are removed upon the
consummation of such sale, and (C) the registration rights associated with such
securities have not been terminated pursuant to Section 2.15 hereof.
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(c) The term "Holders" means USURF and any transferee who
acquires Registrable Securities in accordance with Section 2.8 hereof for so
long as USURF or such transferee, as the case may be, holds Registrable
Securities.
11.2 Rule 144 Reporting. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC that may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its diligent efforts to:
(a) Make and keep current public information available within
the meaning of Rule 144 under the Act or any similar or analogous rule
promulgated under the Act;
(b) File with the SEC, in a timely manner, all reports and
other documents required of the Company under the Act and 1934 Act; and
(c) So long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements which are relevant to
compliance with Rule 144 (at any time commencing 90 days after the effective
date of the first registration filed by the Company for an offering of its
securities to the general public), the 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
as a Holder may reasonably request in availing itself of any rule or regulation
of the SEC allowing it to sell any such securities without registration.
11.3 Amendment of Registration Rights. Any provision of this Section 2
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least a majority of the
Registrable Securities then outstanding and not registered. Any amendment or
waiver effected in accordance with this Section shall be binding upon each
Holder, each future Holder of Registrable Securities and the Company.
Article XII.
MISCELLANEOUS
12.1 Governing Law. This Agreement shall be governed by, and construed
and interpreted in accordance with the laws of the State of Colorado as applied
to agreements among Delaware residents made and to be performed entirely within
the State of Colorado.
12.2 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
12.3 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subjects
hereof. Nothing in this Agreement, express or implied, is intended to confer
upon any party, other than the parties hereto and their successors and assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein.
Notices, etc. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given upon
personal delivery or upon confirmed delivery by facsimile or telecopy, or on the
fifth day (or the tenth day if to a party with an address outside of the United
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States) following mailing by registered or certified mail, return receipt
requested, postage prepaid, addressed: (a) if to a Holder, at such Holder's
address as the Company maintains for the Holder in its stock transfer records,
or at such other address as such Holder shall have furnished to the Company in
writing, or (b) if to the Company, at 0000 0xx Xxxxxx, Xxxxx 000, Xxxxxxxx Xxxx,
Xx 00000, or at such other address as the Company shall have furnished to the
Holders in writing.
12.4 Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
12.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
IN WITNESS WHEREOF, this Registration Rights Agreement has been duly
executed and delivered by the parties as of the date first above written.
ZKID NETWORK, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
USURF COMMUNICATIONS, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
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