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EXHIBIT 6.7
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is dated as of
April 15, 1999, and is being made and entered into by and among TORNADO
DEVELOPMENT, INC., a Delaware corporation ("TDI"), and XXXXX.XXX, INC., a
Delaware corporation (the "Holder"), with reference to the following RECITALS:
R E C I T A L S:
A. For the convenience of the parties, certain capitalized words and
phrases used herein are defined or referred to in Section 3.1.
B. To provide the Holder with greater liquidity in the future with
respect to the Registrable Stock, the Holder wishes to have certain registration
rights and TDI wishes to grant such rights to the Holder.
NOW, THEREFORE, in consideration of the recitals and of the respective
covenants, representations, warranties and agreements herein contained, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE 1
REGISTRATION RIGHTS
1.1 DEMAND REGISTRATION.
1.1.1 REQUEST FOR REGISTRATION. If, at any time after April
15, 2001, TDI shall have a market capitalization of
$100 million or more, Holder may, from that date
through the Expiration Date, make a written request
(the "Demand Notice") for registration under the
Securities Act (a "Demand Registration") of 20% or
more of Holder's Registrable Stock, subject to the
conditions of this Agreement. The Demand Notice will
specify the number of shares of Registrable Stock
proposed to be sold and will also specify the
intended method of disposition thereof. Subject to
Section 1.1.4 hereof, TDI will include in the Demand
Registration all Registrable Stock specified in the
Demand Notice. The Demand Registration shall be on
such appropriate registration form of the Commission
as TDI shall determine.
1.1.2 LIMITATIONS ON DEMAND REGISTRATION. TDI shall not be
obligated to effect more than one Demand Registration
under this Section 1.1.2.
Notwithstanding any provision of this Agreement to the
contrary, TDI shall not be obligated to honor any Demand Notice
requesting a Demand Registration, or otherwise cause a Demand
Registration to become effective, hereunder if the Demand Notice is
delivered to TDI during the period commencing 90 days before the
estimated effective date
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of a registration statement pursuant to which TDI proposes to offer
shares of any class of equity securities of TDI in an underwritten
offering and ending 180 days after the closing date of any such
offering. If TDI determines not to proceed with such proposed offering,
TDI shall promptly notify the Holder who made the Demand Notice that
(i) TDI's proposed offering has been cancelled and (ii) TDI will file
the Demand Registration as soon as practicable as requested by the
Holder who delivered the Demand Notice.
1.1.3 EFFECTIVE REGISTRATION AND EXPENSES. Upon receipt of
a Demand Notice, TDI will (i) take appropriate
action, on a reasonable, timely basis, to prepare and
file a registration statement covering the
Registrable Stock requested to be included in the
Demand Registration (subject to Section 1.1.4 below)
and (ii) use its commercially reasonable efforts to
cause the Demand Registration to become effective
under the Securities Act. A registration will not
count as a Demand Registration unless a registration
statement with respect thereto has become effective
(unless the Holders whose Registrable Stock are
included in such Demand Registration withdraw their
shares of Registrable Stock, in which case such
demand shall count as the Demand Registration). TDI
will pay all Registration Expenses in connection with
the Demand Registration.
1.1.4 PRIORITY ON DEMAND REGISTRATION. In the event the
offering of shares pursuant to a Demand Registration
shall be in the form of an underwritten offering by
or through one or more underwriters, and the managing
underwriter or underwriters of such underwritten
offering advise TDI in writing that, in their
opinion, the number of shares of Registrable Stock
and any other securities requested to be included in
such offering is sufficiently large to affect
materially and adversely the success of such offering
(a "Material Adverse Effect"), TDI shall include in
such registration the aggregate number of shares of
Registrable Stock which in the opinion of such
managing underwriter or underwriters can be sold
without any such Material Adverse Effect. In such
event, other securities requested to be included in
such offering by others with piggyback registration
rights shall only be included if (i) all shares of
Registrable Stock requested to be included in the
Demand Registration are included and (ii) the
inclusion of such other securities will not result in
a Material Adverse Effect.
1.2 INCIDENTAL REGISTRATION.
1.2.1 PIGGYBACK RIGHTS OF HOLDER. If at any time or times
from and after the date hereof, TDI intends to file
prior to the Expiration Date a Registration Statement
on Form X-0, X-0 or S-3 (or other appropriate form)
for the registration of Common Stock with the
Commission (other than a (i) Registration Statement
on Form S-4 (or any
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successor form) relating to a corporate
reorganization or other transaction under Rule 145,
(ii) Registration Statement relating to securities
issued pursuant to, or interests in, an employee
benefit plan for the employees of TDI or its
affiliates or (iii) Registration Statement on a form
which does not permit the inclusion of securities
sold in a secondary offering), then TDI shall notify
the Holder at least 30 days prior to each such filing
of TDI's intention to file such a Registration
Statement. Such notice shall state the amount and
type of securities proposed to be registered thereby.
Upon the written request of the Holder (a "Holder
Request") given within 20 days after receipt of any
such notice stating the number of shares of
Registrable Stock to be disposed of by the Holder and
the intended method of disposition, TDI will use
reasonable efforts to cause the aggregate of the
Registrable Stock designated in the Holder Requests
to be included in such registration so as to permit
the disposition (in accordance with the methods
specified in the Holder Request(s)) by the Holder of
the Registrable Stock so registered, subject to the
reductions specified in Sections 1.2.2 and 1.2.4, as
applicable. The Holder shall be entitled, subject to
such reductions, to participate in an unlimited
number of such registrations.
1.2.2 REDUCTIONS OF REGISTRABLE STOCK TO BE INCLUDED. If
the registration proposed by TDI involves an
underwritten offering of the Common Stock, whether or
not for sale for the account of TDI, to be
distributed (on a best efforts or firm commitment
basis) by or through one or more underwriters, and
the managing underwriter of such underwritten
offering shall advise TDI in writing that, in its
opinion, the registration of all or a specified
portion of Registrable Stock concurrently with the
Common Stock will adversely affect the distribution
of such Common Stock by such underwriters, then TDI
may require, by written notice to the Holder, that
the distribution of all or a specified portion of the
Registrable Stock be excluded from such registration
in accordance with Section 1.2.3.
1.2.3 ALLOCATION OF REGISTRATION OPPORTUNITIES. In any
circumstance in which the Registrable Stock and other
shares of TDI Common Stock (including shares of
Common Stock issued or issuable upon conversion of
shares of any currently unissued series of preferred
stock of TDI) with registration rights (the "Other
Shares") requested to be included in a registration
under this Section 1.2 on behalf of the Holder or
other selling stockholders ("Other Stockholders")
cannot be so included as a result of limitations of
the aggregate number of shares of Registrable Stock
and Other Shares that may be so included, the number
of shares of Registrable Stock and Other Shares that
may be so included shall be allocated among the
Holder and Other
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Stockholders requesting inclusion of shares pro rata
on the basis of the number of shares of Registrable
Stock and Other Shares that would be held by the
Holder and Other Stockholders, assuming conversion;
provided, however, that such allocation shall not
operate to reduce the aggregate number of shares of
Registrable Stock and Other Shares to be included in
such registration. If the Holder or any Other
Stockholder does not request inclusion of the maximum
number of shares of Registrable Stock and Other
Shares allocated to such Person pursuant to the
above-described procedure, the remaining portion of
any such Person's allocation shall be reallocated
among those requesting Holder and Other Stockholders
whose allocations did not satisfy their requests pro
rata on the basis of the number of shares of
Registrable Stock and Other Shares which would be
held by the Holder and Other Stockholders, assuming
conversion, and this procedure shall be repeated
until all of the shares of Registrable Stock and
Other Shares which may be included in the
registration on behalf of the Holder and Other
Stockholders have been so allocated.
1.2.4 WITHDRAWALS. TDI may in its discretion withdraw any
Registration Statement filed pursuant to this Section
1.2 subsequent to its filing and prior to its
effective date without liability to the Holder, other
than to pay expenses pursuant to Section 1.4.
1.3 INDEMNITY.
TDI will, and hereby does, indemnify and hold harmless, to the
extent permitted by law, each Holder, its partners, representatives,
shareholders, officers and directors, if any, and each Person, if any,
who controls the Holder within the meaning of Section 15 of the
Securities Act, against all losses, claims, damages, liabilities (or
proceedings in respect thereof) and expenses (under the Securities Act
or common law or otherwise), joint or several, resulting from any
untrue or misleading statement or alleged untrue or misleading
statement of a material fact contained in any Registration Statement
(as declared effective) or prospectus filed under Rule 424(b) under the
Securities Act (and as amended or supplemented if TDI shall have
furnished any amendments or supplements thereto) or any preliminary
prospectus or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as:
(i) such losses, claims, damages, liabilities (or
proceedings in respect thereof) or expenses are caused by any
untrue statement or alleged untrue statement made in reliance
on or in conformity with any information furnished in writing
to TDI by the Holder expressly for use therein; or
(ii) in the case of any registration that is not an
underwritten offering, such losses, claims, damages,
liabilities (or proceedings in respect thereof) or expenses
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result from the Holder selling Registrable Stock to a Person
asserting the existence of an untrue or misleading statement
or alleged untrue statement or omission or alleged omission in
a preliminary prospectus and to whom there was not given or
sent, at or prior to the written confirmation of the sale of
the Registrable Stock, a copy of the final prospectus or the
final prospectus as then amended or supplemented but only if
such statement or omission was corrected in such final
prospectus or amended or supplemented final prospectus prior
to such written confirmation and the Holder was given notice,
prior to such written confirmation, of the availability of, or
that TDI was preparing, such final prospectus or amended or
supplemented final prospectus.
If the offering pursuant to any Registration Statement
provided for under this Agreement is made through underwriters, no
action or failure to act on the part of such underwriters (whether or
not such underwriter is an Affiliate of any Holder) shall affect TDI's
obligations to indemnify the Holder or any other Person pursuant to the
preceding sentence. It is agreed that the indemnity agreement contained
in this Section 1.3(a) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability, or action if such settlement
is effected without the consent of TDI (which consent has not been
unreasonably withheld).
In connection with any Registration Statement in which the
Holder is participating, the Holder will indemnify and hold harmless,
to the extent permitted by law, TDI, its officers, directors, partners,
legal counsel, and accountants, and each underwriter, if any, of TDI
Securities covered by such Registration Statement, and each Person, if
any, who controls TDI or any such underwriter within the meaning of
Section 15 of the Securities Act, and each of the Other Stockholders,
and each of their respective officers, directors, and partners, and
each Person controlling any of the Other Stockholders against any
losses, claims, damages, liabilities (or proceedings in respect
thereof) and expenses (under the Securities Act or common law or
otherwise) resulting from any untrue statement or alleged untrue
statement of a material fact or any omission or alleged omission of a
material fact required to be stated in the Registration Statement (as
declared effective) or prospectus filed under Rule 424(b) under the
Securities Act or preliminary prospectus or any amendment thereof or
supplement thereto, or necessary to make the statements therein not
misleading, but only to the extent that:
(i) such untrue statement is made in reliance on or
in conformity with any information furnished in writing by the
Holder expressly for use therein; or
(ii) in the case of any registration that is not an
underwritten offering, such losses, claims, damages,
liabilities (or proceedings in respect thereof) or expenses
resulting from the Holder selling Registrable Stock to a
Person asserting the existence of an untrue statement or
alleged untrue statement or omission or alleged omission in a
preliminary prospectus and to whom there was not given or
sent, at or prior to the written confirmation of the sale of
the Registrable Stock, a copy of the final prospectus or of
the final prospectus as then amended or supplemented but only
if such statement or omission was corrected in such final
prospectus or amended or
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supplemented final prospectus prior to such written
confirmation and the Holder was given notice, prior to such
written confirmation, of the availability of, or that TDI was
preparing, such final prospectus or amended or supplemented
final prospectus;
provided, however, that the obligations of the Holder hereunder shall
not apply to amounts paid in settlement of any such claims, losses,
damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of the Holder (which consent
has not been unreasonably withheld); and, provided further, that the
Holder's obligations under this Section 1.3.(b) shall be limited to an
amount equal to the net proceeds to the Holder of the Registrable Stock
sold pursuant to such Registration Statement.
Any Person entitled to indemnification under the provisions of
Section 1.3.(a) or (b) shall (i) give prompt notice to the indemnifying
party of any claim with respect to which it seeks indemnification, and
(ii) unless in the opinion of counsel reasonably satisfactory to the
indemnifying party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, permit such
indemnifying party to assume the defense of such claim, with counsel
reasonably satisfactory to the indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the
indemnifying party); and if such defense is so assumed, such
indemnifying party shall not enter into any settlement without the
consent of the indemnified party if such settlement attributes
liability to the indemnified party and such indemnifying party shall
not be subject to any liability for any settlement made without its
consent (which shall not be unreasonably withheld). In the event an
indemnifying party shall not be entitled, or elects not, to assume the
defense of a claim, such indemnifying party shall not be obligated to
pay the fees and expenses of more than one counsel or firm of counsel
for all parties indemnified by such indemnifying party in respect of
such claim. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of a participating
Holder, its officers, directors or any Person, if any, who controls the
Holder as aforesaid, and shall survive the transfer of such securities
by the Holder.
If for any reason the foregoing indemnity is unavailable, then
the indemnifying party shall contribute to the amount paid or payable
by the indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law or provides a lesser sum to the indemnified party than the amount
hereinafter calculated, in such proportion as is appropriate to reflect
not only the relative benefits received by the indemnifying party on
the one hand and the indemnified party on the other but also the
relative fault of the indemnifying party and the indemnified party as
well as any other relevant equitable considerations. Notwithstanding
the foregoing, no Holder shall be required to contribute any amount in
excess of the amount the Holder would have been required to pay to an
indemnified party if the indemnity under Section 1.3.(a) or (b), as
applicable, was available. 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. The relative fault
of the
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indemnifying party and of the indemnified party 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 indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement or
omission.
An indemnifying party shall make payments of all amounts
required to be made pursuant to the foregoing provisions of this
Section 1.3 to or for the account of the indemnified party from time to
time promptly upon receipt of bills or invoices relating thereto or
when otherwise due and payable.
Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten
public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.
1.4 REGISTRATION PROCEDURES.
Whenever the Holder has properly requested that any
Registrable Stock be registered pursuant to Sections 1.1 or 1.2, TDI
will use reasonable efforts to effect the registration in furtherance
of the sale of the Registrable Stock in accordance with the intended
method of disposition thereof, and in connection with any such request
TDI will:
(i) prepare and file with the Commission such
amendments and supplements to such Registration Statement and
the prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective for
such period (not to exceed 90 days) as will terminate when all
Registrable Stock covered by such Registration Statement have
been sold and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by
such Registration Statement during such period in accordance
with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement;
(ii) furnish to each seller of Registrable Stock such
number of copies of such Registration Statement, each
amendment and supplement thereto (in each case including all
exhibits thereto), the prospectus included in such
Registration Statement (including each preliminary
prospectus), each amendment and supplement thereto and such
other documents as such seller may reasonably request in order
to facilitate the disposition of the Registrable Stock owned
by such seller;
(iii) use reasonable efforts to register or qualify
the Registrable Stock under such other applicable securities
or blue sky laws of such jurisdictions as any seller
reasonably requests and do any and all other acts and things
which may be reasonably necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of
the Registrable Stock owned by such seller; provided, however,
that TDI will not be required to (A) qualify generally to do
business or
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subject itself to taxation in any jurisdiction where it would
not otherwise be required to qualify or be subject but for
this subparagraph (iii), or (B) consent to general service of
process in any such jurisdiction;
(iv) use reasonable efforts to cause the Registrable
Stock covered by such Registration Statement to be registered
with or approved by such other Governmental Authorities as may
be reasonably necessary by virtue of the business and
operations of TDI to enable the seller or sellers thereof to
consummate the disposition of the Registrable Stock;
(v)(A) notify each seller of the Registrable Stock,
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 to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading, and (B) prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the
purchasers of the Registrable Stock, such prospectus will not
contain 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;
(vi)(B) use reasonable efforts to cause all
Registrable Stock to be listed on each securities exchange or
stock market on which the Common Stock is then listed or
quoted, and (B) unless the same already exists, provide a
transfer agent, registrar and CUSIP number for all Registrable
Stock not later than the effective date of the Registration
Statement;
(vii) make available for inspection at the offices of
TDI during regular business hours by any seller of Registrable
Stock, any underwriter participating in any disposition
pursuant to such Registration Statement and any attorney,
accountant or other agent retained by any such seller or
underwriter, such financial and other records, pertinent
corporate documents and properties of TDI as shall be
reasonably requested by them and be necessary to enable them
to exercise its due diligence responsibility; and
(viii) use its reasonable efforts to otherwise comply
with all applicable rules and regulations of the Commission.
In connection with any registration effected pursuant to
Sections 1.1 or 1.2, that the Holder has requested that its securities
be registered pursuant to such Registration Statement shall provide to
TDI such information as may be reasonably requested by TDI to be
required for inclusion in such Registration Statement pursuant to the
Securities Act and the rules and regulations thereunder.
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Holder agrees by acquisition of the Registrable Stock and the
registration rights thereunder that, upon receipt of any notice from
TDI of the happening of any event of the kind described in Section
1.4(a)(v), the Holder will forthwith discontinue disposition of
Registrable Stock pursuant to the Registration Statement covering the
Registrable Stock until the Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by such Section
1.4(a)(v), and, if so directed by TDI, the Holder will deliver to TDI
(at TDI's expense) all copies, other than permanent file copies then in
the Holder's possession, of the prospectus covering the Registrable
Stock current at the time of receipt of such notice. In the event TDI
shall give any such notice, the period mentioned in Section 1.4(a)(i)
shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to Section
1.4(a)(v) to and including the date when each seller of Registrable
Stock covered by such Registration Statement shall have received the
copies of the supplemented or amended prospectus contemplated by such
Section 1.4(a)(v).
1.5 EXPENSES. All Registration Expenses incurred in effecting any
registration, qualifications or compliance pursuant to this
Agreement, shall be borne by TDI. All Selling Expenses
relating to Registrable Stock so registered shall be borne by
the Holder, according to the quantity of Registrable Stock
included in such registration along with any other expenses in
connection with the registration required to be borne by the
Holder of the Registrable Stock.
1.6 LIMITATION ON REGISTRATION. Notwithstanding the foregoing,
under no circumstances will TDI be obligated to cause any
registration effected pursuant to this Agreement to remain
effective after the Expiration Date or to include any
Registrable Stock in a Registration Statement which becomes
effective after the Expiration Date.
1.7 DELAY OF REGISTRATION. No Holder shall have any right to take
any action to restrain, enjoin, or otherwise delay any
registration as the result of any controversy that might arise
with respect to the interpretation or implementation of this
Article 1.
ARTICLE 2
UNDERWRITTEN OFFERINGS
2.1 UNDERWRITING ARRANGEMENTS. If TDI or holders of securities
initially requesting or demanding such registration have
determined to enter into an underwriting agreement in
connection therewith, all shares constituting Registrable
Stock to be included in such registration shall be subject to
such underwriting agreement and no Person may participate in
such registration unless such Person agrees to sell such
Person's securities on the basis provided in the underwriting
arrangements approved by such Persons so determining to enter
therein and completes and executes all questionnaires,
indemnities, underwriting agreements and other reasonable
documents which must be executed under the terms of such
underwriting arrangements.
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If requested by the underwriters for any underwritten offering of
Registrable Stock, TDI will enter into an underwriting agreement that shall
contain such representations and warranties by TDI and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions.
2.2 SELECTION OF UNDERWRITERS. If TDI at any time proposes to register
any TDI Securities for sale for its own account and such securities are to be
distributed by or through one or more underwriters, the selection of the
underwriter(s), including, without limitation, the managing underwriter(s),
shall be made by TDI.
2.3 HOLDBACK AGREEMENTS. Notwithstanding any other provision of the
Agreement, if any registration pursuant to this Agreement shall be in connection
with an underwritten public offering, each Holder agrees, if so required by the
managing underwriter, not to effect any public sale or distribution of
Registrable Stock (other than as part of such underwritten public offering)
within 30 days prior to the effective date of such Registration Statement or 90
days after the effective date of such Registration Statement.
ARTICLE 3
DEFINITIONS AND CONSTRUCTION
3.1 DEFINITION OF CERTAIN TERMS.
Except as otherwise expressly provided or unless the context otherwise
requires, the terms defined in this Section 3.1, whenever used in this
Agreement, shall have the respective meanings assigned to them in this Section
for all purposes of this Agreement, and include the plural as well as the
singular.
As used herein, the following terms have the following meanings:
AGREEMENT: this instrument as originally executed, or as it may be from
time to time supplemented or amended by one or more supplements or
amendments hereto entered pursuant to the applicable provisions hereof.
COMMISSION: the United States Securities and Exchange Commission and
any successor federal agency having similar powers.
COMMON STOCK: the voting Class A Common Stock, no par value per share,
of TDI.
DEMAND NOTICE: as defined in Section 1.1.1.
DEMAND REGISTRATION: as defined in Section 1.1.1.
EXPIRATION DATE: March 31, 2007.
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GOVERNMENTAL AUTHORITY: the United States of America, any state or
other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government within any such jurisdiction.
HOLDER: as defined in the first paragraph of this Agreement, and any
Person who (i) subsequently becomes the owner of record of any
Registrable Stock and (ii) enters into an amendment or supplement to
this Agreement pursuant to which such subsequent holder of Registrable
Stock agrees to be bound by each and every provision of this Agreement
except for the provisions of Section 1.1.
HOLDER CONVERSION SHARES: all shares of Common Stock issued to Holder
upon conversion of the Preferred Stock received by Holder upon the
automatic conversion of the Note.
HOLDER REQUEST: as defined in Section 1.2.1.
HOLDER WARRANT SHARES: all shares of Common Stock received by Holder
from TDI upon exercise of the Warrant.
MATERIAL ADVERSE EFFECT: as defined in Section 1.1.4.
NOTE: the Promissory Note of even date herewith payable by TDI to
Holder in the original principal amount of $1,000,000.00
OTHER SHARES: as defined in Section 1.2.3.
OTHER STOCKHOLDERS: as defined in Section 1.2.3.
PERSON: any individual, corporation (including a business trust) joint
stock company, partnership, joint venture, trust, estate, limited
liability company, unincorporated association, unincorporated
organization, Governmental Authority or any other entity.
PREFERRED STOCK: the Series B Preferred Stock, no par value per share,
of TDI, having the powers, designations, preferences, and relative
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, as set forth in
the Certificate of Determination for the Preferred Stock attached to
the Note as Annex A.
REGISTER, REGISTERED AND REGISTRATION: refer to a registration effected
by filing a Registration Statement in compliance with the Securities
Act, and the declaration or ordering by the Commission of the
effectiveness of such Registration Statement.
REGISTRABLE STOCK: collectively, the Holder Conversion Shares and the
Holder Warrant Shares, and all shares of Common Stock issued by TDI in
respect of such Shares.
REGISTRATION EXPENSES: all expenses incurred in effecting any
registration pursuant to this Agreement, including, without limitation,
all registration, qualification, and filing fees, printing
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expenses, escrow fees, fees and disbursements of counsel for TDI, blue
sky fees and expenses, and expenses of any regular or special audits
incident to or required by any such registration, but shall not include
Selling Expenses, fees and disbursements of counsel for the Holder.
REGISTRATION STATEMENT: a registration statement prepared on an
appropriate form promulgated under the Securities Act.
RULE 144: Rule 144 (or any successor provision) under the Securities
Act.
RULE 145: Rule 145 (or any successor provision) under the Securities
Act.
SECURITIES ACT: the Securities Act of 1933.
SELLING EXPENSES: all underwriting discounts, selling commissions and
stock transfer taxes applicable to the sale of Registrable Stock and
fees and disbursements of counsel for any Holder (other than the fees
and disbursements of counsel included in Registration Expenses).
TDI: as defined in the first paragraph of this Agreement.
TDI SECURITIES: securities issued by TDI.
WARRANT: the Warrant to purchase 50,000 shares of Common Stock at an
initial exercise price of $3.00 per share granted by TDI to the Holder
on the date hereof.
3.2 RULES OF CONSTRUCTION
(i) "This Agreement" means this instrument as originally
executed or as it may be from time to time supplemented or amended by
one or more supplements or amendments hereto entered pursuant to the
applicable provisions hereof;
(ii) "includes" and "including" are not limiting, and, in each
case, shall be construed as if followed by the words "without
limitation," "but not limited to" or words of similar import;
(iii) "may not" is prohibitive, and not permissive;
(iv) "shall" is mandatory, and not permissive;
(v) "or" is not exclusive [i.e., if a party "may do (a), (b)
or (c)," then the party may do all of, any one of, or any combination
of, (a), (b) or (c)] unless the context expressly provides otherwise;
(vi) all references in this instrument to designated Articles,
Sections, Exhibits, and Schedules are to the designated Articles,
Sections, Exhibits, and Schedules of this instrument as originally
executed;
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(vii) all references herein to constitutions, treaties,
statutes, laws, rules, regulations, ordinances, codes or orders include
any successor thereto or replacement thereof, include any amendment,
modification or supplements thereof or thereto from time to time, and,
include all rules and regulations promulgated thereunder or pursuant
thereto;
(viii) the words "herein," "hereof," "hereto" and "hereunder"
and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision; and
(ix) all terms used herein which are defined in the Securities
Act, the Exchange Act or the rules and regulations promulgated
thereunder have the meanings assigned to them therein unless otherwise
defined herein.
ARTICLE 4
GENERAL PROVISIONS
4.1 SEVERABILITY. If any provision of this Agreement, including
any phrase, sentence, clause, Section or subsection is
inoperative or unenforceable for any reason, such
circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any
other case or circumstance, or of rendering any other
provision or provisions herein contained invalid, inoperative,
or unenforceable to any extent whatsoever.
4.2 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been
duly given if (a) delivered personally, (b) mailed by
first-class, registered or certified mail, return receipt
requested, postage prepaid, or (c) sent by next-day or
overnight mail or delivery or (d) sent by telecopy or
telegram.
if to TDI, to
Tornado Development, Inc.
0000 Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxx, President
if to the Holder, to
Xxxxx.xxx, Inc.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, III, Chairman
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or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery on the day
after such delivery, (x) if by certified or registered mail, on the seventh
business day after the mailing thereof, (y) if by next-day or overnight mail or
delivery, on the day delivered, (z) if by telecopy or telegram, on the next day
following the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.
4.3 HEADINGS. The headings contained in this Agreement
are for purposes of convenience only and shall not
affect the meaning or interpretation of this
Agreement.
4.4 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement and supersede all prior agreements
and understandings, both written and oral, between
the parties with respect to the subject matter
hereof.
4.5 COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be deemed
an original and all of which shall together
constitute one and the same instrument.
4.6 GOVERNING LAW. This Agreement shall be governed in
all respects, including as to validity,
interpretation and effect, by the internal laws of
the State of Texas, without giving effect to the
conflict of laws rules thereof.
4.7 BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and
their respective heirs, successors and permitted
assigns.
4.8 ASSIGNMENT. This Agreement shall not be assignable or
otherwise transferable by any party hereto without
the prior written consent of the other parties
hereto.
4.9 NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement shall confer any rights upon any person or
entity other than the parties hereto and their
respective heirs, successors and permitted assigns.
4.10 AMENDMENT; WAIVERS, ETC. No amendment, modification
or discharge of this Agreement, and no waiver
hereunder, shall be valid or binding unless set forth
in writing and duly executed by the party against
whom enforcement of the amendment, modification,
discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific
matter described in such writing and shall in no way
impair the rights of the party granting such waiver
in any other respect or at any other time. Neither
the waiver by any of the parties hereto of a breach
of or a default under any of the provisions of
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this Agreement, nor the failure by any of the
parties, on one or more occasions, to enforce any of
the provisions of this Agreement or to exercise any
right or privilege hereunder, shall be construed as a
waiver of any other breach or default of a similar
nature, or as a waiver of any of such provisions,
rights or privileges hereunder. The rights and
remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any party
may otherwise have at law or in equity. The rights
and remedies of any party based upon, arising out of
or otherwise in respect of any inaccuracy or breach
of any representation, warranty, covenant or
agreement or failure to fulfill any condition shall
in no way be limited by the fact that the act,
omission, occurrence or other state of facts upon
which any claim of any such inaccuracy or breach is
based may also be the subject matter of any other
representation, warranty, covenant or agreement as to
which there is no inaccuracy or breach.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
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REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
TORNADO DEVELOPMENT, INC.
By:
----------------------------------------
Xxxxx Xxxx, President
HOLDER
XXXXX.XXX, INC.
By:
----------------------------------------
Xxxx Xxxxxxxx, Chief Financial Officer
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