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EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made
and entered into as of March 2, 2000, among Xxxxx.xxx, Inc., a Florida
corporation (the "COMPANY"), and the parties who have executed this Agreement
and whose names appear as the purchasers on SCHEDULE I hereto (each such
purchaser listed on SCHEDULE I hereto is sometimes individually referred to
herein as a "PURCHASER", and all such purchasers are sometimes collectively
referred to herein as the "PURCHASERS").
This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof among the Company and the Purchasers (the
"PURCHASE AGREEMENT").
The Company and the Purchasers hereby agree as follows:
1. DEFINITIONS.
Capitalized terms used and not otherwise defined herein shall
have the meanings given such terms in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
"AFFILIATE" means, with respect to any Person, any other
Person that directly or indirectly controls or is controlled by or under common
control with such Person. For the purposes of this definition, "CONTROL", when
used with respect to any Person, means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "AFFILIATED", CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"BUSINESS DAY" means any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the
State of New York generally are authorized or required by law or other
government action to close.
"CERTIFICATE OF DESIGNATION" means the Certificate of
Designation of the Company with respect to the Securities.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Company's Common Stock, par value
$0.01 per share.
"EFFECTIVENESS DATE" means the earlier of (i) the 5th Business
Day after the Company has received notice (written or oral) from the Commission
that the Commission staff will not be reviewing the Registration Statement or
has no further comments on the Registration Statement or (ii) the date that the
Commission declares the Registration Statement Effective.
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"EFFECTIVENESS PERIOD" has the meaning set forth in Section
2(a) hereof.
"EVENT" has the meaning set forth in Section 2(b) hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FILING DATE" means the date on which the Initial Registration
Statement is filed.
"FILING DEADLINE" means that date that is sixty (60) days
after the First Closing Date.
"FIRST CLOSING DATE" shall mean the First Closing Date as
defined in the Purchase Agreement.
"HOLDER" or "HOLDERS" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"INDEMNIFIED PARTY" has the meaning set forth in Section 5(c)
hereof.
"INDEMNIFYING PARTY" has the meaning set forth in Section 5(c)
hereof.
"INITIAL REGISTRATION STATEMENT" has the meaning set forth in
Section 2(a) hereof.
"LOSSES" has the meaning set forth in Section 5(a) hereof.
"MAJORITY HOLDERS" means the Holders of at least sixty (60%)
percent of the Registrable Securities.
"NATIONAL MARKET" means the NASDAQ National Market, the NASDAQ
SmallCap Market, the New York Stock Exchange and the American Stock Exchange.
"OTCBB" means the OTC Bulletin Board of the National
Association of Securities Dealers, Inc.
"PERSON" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"PROCEEDING" means an action, claim, suit, arbitration,
investigation or proceeding (including, without limitation, an investigation or
partial proceeding, such as a deposition), whether commenced or threatened.
"PROSPECTUS" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
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respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
"REGISTRABLE SECURITIES" means the shares of Common Stock
issued or issuable upon conversion of or with respect to the Securities, and
shall include any shares of the Company's capital stock issued with respect to
the Securities as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise.
"REGISTRATION DELAY PAYMENT" has the meaning set forth in
Section 2(b) hereof.
"REGISTRATION STATEMENT" means the Initial Registration
Statement and any additional registration statements contemplated by Sections
6(d) hereof, including (in each case) the Prospectus, amendments and supplements
to such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference in
such registration statement.
"RULE 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"RULE 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"SECURITIES" means the Company's Series A1 Convertible
Preferred Stock issuable pursuant to the Purchase Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" means a
registration in connection with which securities of the Company are sold to an
underwriter for reoffering to the public pursuant to an effective registration
statement, whether on a firm commitment or best efforts basis.
2. REGISTRATION REQUIREMENTS.
(a) FILING AND EFFECTIVENESS OBLIGATIONS. On or prior to the
Filing Deadline, the Company shall prepare and file with the Commission a
Registration Statement (the "INITIAL REGISTRATION STATEMENT") which shall cover
all Registrable Securities for an offering to be made on a continuous basis
pursuant to a "Shelf" registration statement under Rule 415. The Initial
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Registration Statement shall be on Form S-3 or other similar form (or any
successor form). The Company shall (i) use its reasonable best efforts to cause
the Initial Registration Statement to be declared effective under the Securities
Act as promptly as possible after the Filing Date and (ii) keep the Initial
Registration Statement continuously effective under the Securities Act (subject
to Section 3(n)) from the Effectiveness Date until the date which is three (3)
years after the Effectiveness Date or such earlier date when all of the Holders'
Registrable Securities covered by the Initial Registration Statement have been
sold or may be sold without volume restrictions pursuant to Rule 144 (the
"EFFECTIVENESS PERIOD"). The number of shares of Common Stock initially included
in the Initial Registration Statement shall be no less than 100% of the sum of
the number of shares of Common Stock that are then issuable upon conversion of
the Securities (based on the Conversion Price (as defined in the Certificate of
Designation) as would then be in effect at such time).
(b) PENALTIES. If (i) the Initial Registration Statement
covering all the applicable Registrable Securities required to be filed by the
Company pursuant to this Agreement is not filed with the Commission on or before
the Filing Deadline, (ii) the Company fails to respond, in a commercially
reasonable manner, to any comments made by the Commission with respect to the
Initial Registration Statement within ten (10) Business Days following the
receipt thereof or (iii) on any day after a Registration Statement has been
declared effective by the Commission (A) sales of all the Registrable Securities
required to be included on a Registration Statement cannot be made pursuant to
the Registration Statement (including, without limitation, because of a failure
to keep the Registration Statement effective, to disclose such information as is
necessary for sales to be made pursuant to the Registration Statement, or to
register sufficient shares of Common Stock, but excluding any "black-out
periods" permitted pursuant to Section 3(n) hereof) or (B) the Common Stock is
not listed or included for quotation on the OTCBB or, subsequent to the day that
the Common Stock is first listed or included for quotation on a National Market,
a National Market (each such event specified in (i), (ii) and (iii) above, an
"EVENT"), then, as partial relief for the damages to any Holder by reason of any
such delay in or reduction of its ability to sell the Registrable Securities
(which remedy shall not be exclusive of any other remedies available at law or
in equity), the Company shall pay to each Holder, upon the occurrence of each
such violation, an amount (a "REGISTRATION DELAY PAYMENT") equal to the product
of (a) the purchase price of such Holder's Securities (as set forth in SCHEDULE
I to the Purchase Agreement), (b) (.015) and (c) the number of months (rounded
up to the nearest whole month in the event of partial months) that such Event
has occurred and is continuing. The Company shall pay such Registration Delay
Payments to each Holder in cash on the last Business Day of each month during
which an Event has occurred and is continuing; PROVIDED, HOWEVER, that if such
Event arises by or is a result of anything other than a refusal or failure to
act by the Company), the Registration Delay Payment shall be the product of (a)
the purchase price of such Holder's Securities (as set forth in SCHEDULE I to
the Purchase Agreement), (b) (.00417) and (c) the number of months (rounded up
to the nearest whole month in the event of partial months) that such Event has
occurred and is continuing. In the event the Company fails to make a
Registration Delay Payment within ten (10) Business Days of the date such
Registration Delay Payment is due, such Registration Delay Payment shall bear
interest at the rate of 1.0% per month (rounded up to the nearest whole month in
the event of partial months) until paid in full.
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3. REGISTRATION PROCEDURES.
In connection with the Company's registration obligations
hereunder, the Company shall:
(a) PREPARATION OF REGISTRATION STATEMENT. Prepare and file
with the Commission, on or prior to the Filing Deadline, the Initial
Registration Statement (which shall include a Plan of Distribution substantially
in the form of EXHIBIT A annexed hereto), and cause the Initial Registration
Statement to become effective and remain effective as provided herein. The
sections of any Registration Statement covering information with respect to the
Holders, the Holders' beneficial ownership of securities of the Company or the
Holders' intended method of disposition of Registrable Securities shall conform
to the information provided to the Company by each of the Holders. The Company
shall respond as promptly as possible, but in no event later than ten (10)
Business Days, to any comments received from the Commission with respect to the
Initial Registration Statement or any amendment thereto and as promptly as
possible provide the Holders true and complete copies of all correspondence from
and to the Commission relating to the Initial Registration Statement
(b) AMENDMENTS. Prepare and file with the Commission such
amendments and supplements to the Initial Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective for the Effectiveness Period. In
the event the number of shares available under a Registration Statement filed
pursuant to this Agreement is insufficient to cover 100% of the Registrable
Securities issued or issuable upon conversion of the Securities, the Company
shall amend such Registration Statement, or file a new Registration Statement
(on the short form available therefor, if applicable), or both, so as to cover
100% of the Registrable Securities (based on the Conversion Price of the
Securities and other relevant factors on which the Company reasonably elects to
rely), in each case as soon as practicable, but in any event within twenty (20)
Business Days after the necessity therefor arises. The Company shall use its
reasonable best efforts to cause such amendment and/or new Registration
Statement to become effective as soon as practicable following the filing
thereof.
(c) NOTIFICATIONS. Notify the Holders of Registrable
Securities (i) (A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed,
(B) when the Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement and (C) when such Registration Statement or
post-effective amendment has become effective, (ii) of any request by the
Commission or any other federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any Proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
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from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose (v) of the happening of any event (of which the Company has knowledge)
as a result of which the Prospectus included in such Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing and (vi) of the beginning and end of a black-out
period pursuant to Section 3(n).
(d) CONFIRMATION OF EFFECTIVENESS. Within two (2) Business
Days after a Registration Statement which covers applicable Registrable
Securities is ordered effective by the Commission, the Company shall deliver,
and shall cause legal counsel for the Company to deliver, to the transfer agent
for such Registrable Securities (with copies to the Holders whose Registrable
Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the Commission in the form
attached hereto as EXHIBIT B.
(e) COPIES OF REGISTRATION STATEMENT. Furnish to each Holder,
without charge, at least one conformed copy of each Registration Statement and
each amendment thereto, including financial statements and schedules, all
documents incorporated or deemed to be incorporated therein by reference, and
all exhibits to the extent requested by such Holder (including those
incorporated by reference) promptly after the filing of such documents with the
Commission.
(f) COPIES OF PROSPECTUS. Promptly deliver to each Holder,
without charge, as many copies of the Prospectus or Prospectuses (including each
form of Prospectus) and each amendment or supplement thereto as such Holder may
reasonably request; and the Company hereby consents to the use of such
Prospectus and the most current amendment or supplement thereto (if any) by each
of the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto unless otherwise prohibited by the terms of this Agreement.
(g) BLUE SKY. Prior to any public offering of Registrable
Securities, use its reasonable efforts to register or qualify or cooperate with
the selling Holders in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things reasonably necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by a Registration
Statement; PROVIDED, HOWEVER, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.
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(h) LISTING. Cause all Registrable Securities relating to a
Registration Statement to be listed on the National Market on which the Common
Stock of the Company is then listed or quoted as and when required pursuant to
the Purchase Agreement.
(i) INTENTIONALLY OMITTED.
(j) DUE DILIGENCE. Make available for inspection by the
selling Holders, any representative of such Holders, any underwriter
participating in any disposition of Registrable Securities, and any attorney or
accountant retained by such selling Holders or underwriters, at the offices
where normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the officers, directors, agents and employees of the
Company and its subsidiaries to supply all information in each case reasonably
requested by any such Holder, representative, underwriter, attorney or
accountant in connection with such Registration Statement (it being understood
that the Company may condition such availability upon the receipt of
confidentiality agreements from all such Persons in a form reasonably requested
by the Company).
(k) EARNINGS STATEMENT. The Company will make generally
available to its security holders an earnings statement, which need not be
audited, covering a twelve month period commencing after the Effective Date of
the Registration Statement, and ending not later than 15 months thereafter, as
soon as reasonably practicable after the end of such period, which earnings
statement shall satisfy the provisions of Section 11(a) of the Act and Rule 158
thereunder.
(l) SUSPENSIONS. Use its reasonable best efforts to avoid the
issuance of, or, if issued, obtain the withdrawal of (i) any order suspending
the effectiveness of the Registration Statement or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment
(m) INFORMATION. The Company may require each selling Holder
to furnish to the Company information regarding such Holder and the distribution
of such Registrable Securities as is required by law to be disclosed in the
Registration Statement, and the Company may exclude from such registration the
Registrable Securities of any such Holder who unreasonably fails to furnish such
information within a reasonable time after receiving such request.
The Company shall hold in confidence and not make any
disclosure of information concerning a Holder provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
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disclosure in violation of this Agreement or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information
concerning a Holder is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to such Holder prior to
making such disclosure, and allow the Holder, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.
If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (if such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar federal statute then in
force) the deletion of the reference to such Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.
Each Holder agrees by its acquisition of such Registrable
Securities that, upon receipt of a notice from the Company of the occurrence of
any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv),
3(c)(v) or 3(c)(vi), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such Holder's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement contemplated by Section 3(e) or 3(f), or until it is advised in
writing by the Company that the use of the applicable Prospectus may be resumed,
and, in either case, has received copies of any additional or supplemental
filings that are incorporated or deemed to be incorporated by reference in such
Prospectus or Registration Statement.
(n) BLACK-OUT PERIODS. Subject to the last sentence of this
Section 3(n), the Company may by written notice require that the Holders
immediately cease sales of Registrable Securities (for a period not to exceed
twenty (20) consecutive days in any one instance and for a period not to exceed
sixty (60) calendar days in any twelve-month period) pursuant to a Registration
Statement at any time that (i) the Company becomes engaged in a business
activity or negotiation which is not disclosed in a Registration Statement (or
the prospectus included therein) which the Company reasonably believes must be
disclosed therein under applicable law and which the Company desires to keep
confidential for business purposes, (ii) the Company determines that a
particular disclosure so determined to be required to be disclosed therein would
be premature or would adversely affect the Company or its business or prospects
or (iii) the Registration Statement can no longer be used under the existing
rules and regulations promulgated under the Securities Act (each of (i), (ii) or
(iii), a "MATERIAL CONDITION"). The Company shall not be required to disclose to
the Holders which of the reasons specified in (i), (ii) or (iii) above is the
basis for requiring a suspension of sales due to the occurrence of a Material
Condition. The Company will use its commercially reasonable best efforts to
ensure that the use of the Registration Statement (and the prospectus included
therein) may be resumed as soon as it is practicable.
4. REGISTRATION EXPENSES.
All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company,
whether or not pursuant to an Underwritten Offering and whether or not the
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Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to any National Market on which Registrable
Securities are required hereunder to be listed or quoted and (B) in compliance
with state securities or Blue Sky laws, (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
and of printing prospectuses if the printing of prospectuses is requested by the
managing underwriters, if any), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities
Act liability insurance, if the Company so desires such insurance, and (vi) fees
and expenses of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement. In addition,
the Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange, system or
market as required hereunder. The Holders shall pay any underwriting discounts
or commissions and any transfer or similar taxes in connection with the sale of
Registrable Securities.
5. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, agents, brokers (including brokers who
offer and sell Registrable Securities as principal as a result of a pledge or
any failure to perform under a margin call of Common Stock), investment advisors
and employees of each such Holder, each Person who controls any such Holder
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from and
against any and all joint or several losses, claims, damages, liabilities, costs
(including, without limitation, costs of preparation and attorneys' fees) and
expenses (collectively, together with Proceedings by any regulatory or
self-regulatory organization, whether commenced or threatened, "LOSSES"), as
incurred, arising out of or relating to (i) any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary Prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or amendment or supplement thereto, in light of the circumstances
under which they were made) not misleading, except to the extent, but only to
the extent, that such untrue statements or omissions are based solely upon and
in conformity with information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, which information was
reasonably relied on by the Company for use therein or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
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in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of prospectus or in any amendment or supplement thereto
(PROVIDED that the Company amended any disclosure with respect to the method of
distribution upon written notice from the Holders that such section of the
Prospectus should be revised in any way) or (ii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of Registrable Securities.
The Company shall not, however, be liable to any Holder for any Losses with
respect to any untrue or alleged untrue statement of material fact or omission
or alleged omission of material fact if such statement or omission was made in a
preliminary Prospectus and such Holder did not receive a copy of the final
Prospectus (or any amendment or supplement thereto) at or prior to the
confirmation of the sale of the Registrable Securities in any case where such
delivery is required by the Securities Act and the untrue or alleged untrue
statement of material fact or omission or alleged omission of material fact
contained in such preliminary Prospectus was corrected in the final Prospectus
(or any amendment or supplement thereto), unless the failure to deliver such
final Prospectus (as amended or supplemented) was a result of noncompliance by
the Company with Section 3(f) of this Agreement. The Company shall notify the
Holders promptly of the institution, threat or assertion of any Proceeding of
which the Company is aware in connection with the transactions contemplated by
this Agreement.
(b) INDEMNIFICATION BY HOLDERS. Each Holder shall, severally
and not jointly, indemnify and hold harmless the Company, its officers,
directors, agents and employees, each Person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the officers, directors, agents and employees of such controlling
Persons, to the fullest extent permitted by applicable law, from and against all
Losses, as incurred, arising solely out of or based solely upon any untrue
statement of a material fact contained in the Registration Statement, any
Prospectus, or any form of prospectus, or arising solely out of or based solely
upon any omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading to the extent, but only to the
extent, that such untrue statement or omission is contained in any information
so furnished in writing by such Holder to the Company specifically for inclusion
in the Registration Statement or such Prospectus and that such information was
reasonably relied upon by the Company for use in the Registration Statement,
such Prospectus or such form of prospectus or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of prospectus; PROVIDED, HOWEVER, that the indemnity
agreement contained in this Section 5(b) shall not apply to amounts paid in
settlement of any Losses if such settlement is effected without the prior
written consent of such Holder. In no event shall the liability of any selling
Holder hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity hereunder
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(an "INDEMNIFIED PARTY"), such Indemnified Party promptly shall notify the
Person from whom indemnity is sought (the "INDEMNIFYING PARTY") in writing, and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
PROVIDED, HOWEVER, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Indemnified Parties unless: (i) the Indemnifying Party has
agreed in writing to pay such fees and expenses; (ii) the Indemnifying Party
shall have failed promptly to assume the defense of such Proceeding and to
employ counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (iii) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the reasonable expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten (10) Business Days of written notice thereof to the
Indemnifying Party, which notice shall be delivered no more frequently than on a
monthly basis (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; PROVIDED, that
the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to indemnification
hereunder).
(d) CONTRIBUTION. If a claim for indemnification under Section
5(a) or 5(b) is unavailable to an Indemnified Party because of a failure or
refusal of a court of competent jurisdiction to enforce such indemnification in
accordance with its terms (by reason of public policy or otherwise), 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, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
11
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Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms. In no event shall any selling Holder be required to
contribute an amount under this Section 5(d) in excess of the net proceeds
received by such Holder upon sale of the Registrable Securities pursuant to the
Registration Statement giving rise to such contribution obligation.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. 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 indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.
6. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company or by a
Holder of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any of
its subsidiaries has, as of the date hereof, nor shall the Company or any of its
subsidiaries, 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
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
12
13
Except as disclosed in SCHEDULE 2.1(r) of the Purchase Agreement, neither the
Company nor any of its subsidiaries has previously entered into any agreement
granting any registration rights with respect to any of its securities to any
Person. This Agreement, together with the Purchase Agreement, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters.
(c) NO PIGGYBACK ON REGISTRATIONS. Except as disclosed on
SCHEDULE 2.1(r) of the Purchase Agreement, neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in the Initial Registration Statement and the
Company shall not after the date hereof enter into any agreement providing such
right to any of its security holders.
(d) PIGGY-BACK REGISTRATIONS. Except as provided herein if, at
any time when there is not an effective Registration Statement covering the
Registrable Securities during any period when a Registration Statement is
required to be so effective, the Company shall determine to prepare and file
with the Commission a registration statement pursuant to an Underwritten
Offering relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than on Form S-4
or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, the Company shall
send to each Holder of Registrable Securities written notice of such
determination and, if within ten (10) days after receipt of such notice, any
such Holder shall so request in writing, (which request shall specify the
Registrable Securities intended to be disposed of by the Holders), the Company
will use reasonable efforts to effect the registration under the Securities Act
of all Registrable Securities which the Company has been so requested to
register by the Holder, to the extent requisite to permit the disposition of the
Registrable Securities so to be registered; PROVIDED, that if at any time after
giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to such Holder and, thereupon, (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay expenses in accordance with Section 4 hereof),
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities being registered pursuant to
this Section 6(d) for the same period as the delay in registering such other
securities. The Company shall include in such registration statement all or any
part of such Registrable Securities such Holder requests to be registered;
PROVIDED, HOWEVER, that the Company shall not be required to register any
Registrable Securities pursuant to this Section 6(d) that are eligible for sale
pursuant to Rule 144(k) of the Securities Act. In the case of an Underwritten
Offering, if the managing underwriter(s) or underwriter(s) should reasonably
object to the inclusion of the Registrable Securities in such registration
13
14
statement, then if the Company after consultation with the underwriter's
representative should reasonably determine that the inclusion of such
Registrable Securities would materially adversely affect the offering
contemplated in such registration statement, and based on such determination
recommends inclusion in such registration statement of fewer Registrable
Securities than proposed to be sold by the Holders, then (x) the number of
Registrable Securities of the Holders included in such registration statement
shall be reduced pro rata among such Holders (based upon the number of
Registrable Securities requested to be included in the registration) or (y) none
of the Registrable Securities of the Holders shall be included in such
registration statement if the Company, after consultation with the
underwriter(s), recommends the inclusion of none of such Registrable Securities;
PROVIDED, HOWEVER, that if securities are being offered for the account of other
Persons as well as the Company, such reduction shall not represent a greater
fraction of the number of Registrable Securities intended to be offered by the
Holders than the fraction of similar reductions imposed on such other Persons
(other than the Company).
(e) 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, unless the same shall be in writing and signed by the Company
and the Majority Holders; PROVIDED, HOWEVER, that for the purposes of this
sentence, Registrable Securities that are owned, directly or indirectly, by the
Company, or an Affiliate of the Company are not deemed outstanding.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of a
Holder and that does not directly or indirectly affect the rights of any other
Holders may be given by the Holders to which such waiver or consent relates;
PROVIDED, HOWEVER, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence. Any amendment or waiver effected in accordance
with this Section shall be binding upon each Holder, each future Holder, and the
Company. Upon effectiveness of each such amendment or waiver, the Company shall
promptly give written notice thereof to the Holders who have not previously
consented thereto in writing.
(f) NOTICES. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered personally, (ii) upon receipt, when sent by facsimile
(if received by or before 5:00 p.m. Eastern Time where such notice is received)
or the first (1st) Business Day following such delivery (if received after 5:00
p.m. Eastern Time where such notice is received), PROVIDED confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party and such delivery is also made in accordance with clause (iii)
hereof or (iii) one (1) Business Day after deposit with a nationally recognized
overnight courier. The addresses for such communications are (A) if to the
Company, to the address set forth on SCHEDULE I hereto, with copies to Xxxxxxxxx
Xxxxxxx, P.A., 0000 Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx, 00000, Attention: Xxxxxx X.
Xxxxxxx, Esq., facsimile no. (000) 000-0000 and (B) if to any Purchaser, to its
address set forth on SCHEDULE I hereto, with copies to Akin, Gump, Strauss,
Xxxxx & Xxxx, L.L.P., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxx X. Xxxx, Esq., facsimile no. (000) 000-0000, or to such other address as
may be designated in writing hereafter, in the same manner, by such Person.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not
14
15
assign its rights or obligations hereunder without the prior written consent of
the Majority Holders. Each Holder may assign its rights hereunder in the manner
and to the Persons as permitted under the Purchase Agreement.
(h) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(i) GOVERNING LAW. The corporate laws of the State of Florida
shall govern all issues concerning the relative rights of the Company and the
Holders as its stockholders. All other questions concerning the construction,
validity, enforcement and interpretation of 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. Each party hereby irrevocably submits
to the nonexclusive jurisdiction of the state and federal courts sitting in the
City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any Proceeding any claim that it is not personally subject to the jurisdiction
of any such court, that such Proceeding is improper. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law.
(j) CUMULATIVE REMEDIES. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(k) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(l) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(m) SHARES HELD BY THE COMPANY AND ITS AFFILIATES. Whenever
the consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
its Affiliates (other than any Holder or transferees or successors or assigns
thereof if such Holder is deemed to be an Affiliate solely by reason of its
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
15
16
[SIGNATURE PAGES FOLLOW]
16
17
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
XXXXX.XXX, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: CEO & President
18
XXXXX XXXXXXX STRATEGIC GROWTH FUND, LTD.
By: Xxxxx Xxxxxxx Asset Management, LLC
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Principal
XXXXX XXXXXXX STRATEGIC GROWTH FUND, L.P.
By: Xxxxx Xxxxxxx Capital, LLC
its general partner
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Principal
19
ROYAL BANK OF CANADA
By its Agent
RBC Dominion Securities Corporation
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President, Deputy
General Counsel
20
LB I GROUP INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Senior Vice President
00
XXXXXXXX XXXXX L.P.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
22
XXXX XXXXX FUND-I, L.P.
By: Xxxx Xxxxx, Inc.
------------------------------------
its general partner
By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: President
23
GENMAR HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxxx XX
------------------------------------
Name: Xxxxx X. Xxxxxxxx XX
Title: EVP & CFO
24
ASIACOMMERCE LLC
By: /s/ Xxxxx Xx
Name: Xxxxx Xx
Title:
25
SCHEDULE I
COMPANY
XXXXX.XXX, INC.
0000 X. Xxxxxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Kenbian Ng
Facsimile: (000) 000-0000
PURCHASERS:
XXXXX XXXXXXX STRATEGIC GROWTH FUND, L.P.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
XXXXX XXXXXXX STRATEGIC GROWTH FUND, LTD.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
ROYAL BANK OF CANADA
c/o RBC Dominion Securities
One Liberty Plaza - 2nd Floor
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Vice President, Global Middle Office
and to: Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
LBI GROUP INC.
c/x Xxxxxx Brothers, Inc.
3 World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
00
XXXXXX HOLDINGS, INC.
000 Xxxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxx XX
with a copy to:
Xxxx X. XxXxxxxxx,
Senior Vice President and General Counsel
Facsimile: (000) 000-0000
XXXXXXXX MAREX L.P.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
Xxxxxxxx Financial Group
with a copy to
Xxxxxx & Xxxxxxx
Xxxxxxxxx Center South
000 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxx
XXXX XXXXX FUND-I, L.P.
c/o Xxxx Xxxxx, Inc.
000 Xxxxxxxx Xxx., Xxxxxxxxx XX
Xxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxxx
with a copy to:
Xxxxxxxxx Traurig, P.A.
0000 Xxxxxxxx Xxx.
Xxxxx, Xxxxxxx 00000
Facsimile (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Asiacommerce LLC
0 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxx XX0X 0XX
Facsimile: 011-44-171-235-2878
27
EXHIBIT A
PLAN OF DISTRIBUTION
Our company is registering the shares of common stock on
behalf of the selling stockholders. All costs, expenses and fees in connection
with the registration of the shares offered by this prospectus will be borne by
our company, other than brokerage commissions and similar selling expenses, if
any, attributable to the sale of shares which will be borne by the selling
stockholders. Sales of shares may be effected by selling stockholders from time
to time in one or more types of transactions (which may include block
transactions) in the over-the-counter market, on a national securities market or
quotation system, in negotiated transactions, through put or call options
transactions relating to the shares, through short sales of shares, or a
combination of such methods of sale, at market prices prevailing at the time of
sale, or at negotiated prices. Such transactions may or may not involve brokers
or dealers. The selling stockholders have advised our company that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities, nor is
there an underwriter or coordinated broker acting in connection with the
proposed sale of shares by the selling stockholders.
The selling stockholders may enter into hedging transactions
with broker-dealers or other financial institutions. In connection with such
transactions, broker-dealers or other financial institutions may engage in short
sales of the shares or of securities convertible into or exchangeable for the
shares in the course of hedging positions they assume with selling stockholders.
The selling stockholders may also enter into options or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealers or other financial institutions of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as amended or supplemented to reflect such
transaction).
The selling stockholders may make these transactions by
selling shares directly to purchasers or to or through broker-dealers, which may
act as agents or principals. Such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from selling stockholders and/or
the purchasers of shares for whom such broker-dealers may act as agents or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
The selling stockholders and any broker-dealers that act in
connection with the sale of shares may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, and any commissions received by
such broker-dealers or any profit on the resale of the shares sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act. The selling stockholders may agree to indemnify any
agent, dealer or broker-dealer that participates in transactions involving sales
of the shares against certain liabilities, including liabilities arising under
the Securities Act.
28
Because selling stockholders may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, the
selling stockholders will be subject to the prospectus delivery requirements of
the Securities Act. Our company has informed the selling stockholders that the
anti-manipulative provisions of Regulation M promulgated under the Exchange Act
may apply to their sales in the market.
Selling stockholders also may resell all or a portion of the
shares in open market transactions in reliance upon Rule 144 under the
Securities Act, provided they meet the criteria and conform to the requirements
of Rule 144.
Upon our company being notified by a selling stockholder that
any material arrangement has been entered into with a broker-dealer for the sale
of shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing:
o the name of each such selling stockholder and of the
participating broker-dealer(s);
o the number of shares involved;
o the initial price at which such shares were sold;
o the commissions paid or discounts or concessions allowed
to such broker-dealer(s), where applicable;
o that such broker-dealer(s) did not conduct any
investigation to verify the information set out or
incorporated by reference in this prospectus; and
o other facts material to the transactions.
2
29
EXHIBIT B
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attention:
Re: XXXXX.XXX, INC.
Ladies and Gentlemen:
We are counsel to Xxxxx.xxx, Inc., a Florida corporation (the
"Company"), and have represented the Company in connection with that certain
Securities Purchase Agreement (the "Purchase Agreement") entered into by and
among the Company and the purchasers named therein (collectively, the "Holders")
pursuant to which the Company issued to the Holders its Series A1 Convertible
Preferred Stock (the "Securities") convertible into shares of the Company's
common stock, par value $0.01 per share. Pursuant to the Purchase Agreement, the
Company also has entered into a Registration Rights Agreement with the Holders
(the "Registration Rights Agreement") pursuant to which the Company agreed,
among other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement), including the shares of Common Stock issuable
upon conversion of the Securities, under the Securities Act of 1933, as amended
(the "1933 Act"). In connection with the Company's obligations under the
Registration Rights Agreement, on _______________, 2000, the Company filed a
Registration Statement on Form S-3 (File No. 333-_____________) (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") relating to the Registrable Securities which names each of the Holders as
a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
cc: [LIST NAMES OF HOLDERS]
