REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement ("Agreement") is entered into effective
as of the 1st day of April 2003, by and between UNIVERSAL DOMAINS INCORPORATED,
a Canadian federal corporation (the "Company"), those persons listed on Exhibit
A (individually, a "Stockholder" and collectively, the "Stockholders") and
evidences that for good and valuable consideration, the receipt and sufficiency
of which is acknowledged, the parties hereto agree as follows:
ARTICLE I. DEFINED TERMS
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Section 1.1 Defined Terms. As used herein, unless the context otherwise
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requires, the following terms have the following respective meanings:
Commission: The Securities and Exchange Commission or any other Federal
agency at the time administering the Securities Act.
Common Stock: Means the common stock of the Company.
Company: As defined in the introductory paragraph of this Agreement.
Exchange Act: The Securities Exchange Act of 1934, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time. Reference to a particular section of the
Securities Exchange Act of 1934 shall include a reference to the comparable
section, if any, of any such similar federal statute.
Initiating Holders: Any holder or holders of at least 51% of the
Registrable Securities by number of Shares of Common Stock at the time
outstanding and initiating a request pursuant to Section 2.1 for the
registration of all or part of such holder's or holders' Registrable Securities.
Person: A corporation, an association, a partnership, an organization,
business, an individual, a governmental or political subdivision thereof or a
governmental agency.
Registrable Securities: (a) any shares of Common Stock issued to the
Stockholders pursuant to any arrangement with the Company other than the Plan
and (b) any securities issued or issuable with respect to any Common Stock
referred to in the foregoing subdivision by way of stock dividend or stock split
or in connection with a combination of shares of Common Stock, recapitalization,
merger, consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (a) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (b) they shall have been distributed to the public pursuant to Rule
144 (or any successor provision) under the Securities Act, (c) they shall have
been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force, (d)
they shall have ceased to be outstanding, (e) after the second anniversary of
the date of this Agreement, the holder of such Registrable Securities owns less
than 50% of the total outstanding Common Stock originally issued to such person,
or (f) after the second anniversary of the date of this Agreement, the
Registrable Securities represent, in the aggregate, less than 10% of the total
outstanding Common Stock.
Registration Expenses: All expenses incident to the Company's performance
of or compliance with Article II or III, including, without limitation, all
registration, filing, listing, and NASD fees, all fees and expenses of complying
with securities or blue sky laws, all word processing, duplicating, printing and
engraving expenses, messenger and delivery expenses, the fees and disbursements
of counsel for the Company and of its independent public accountants, including
the expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, the fees and disbursements of a
single counsel and accountants retained by the holder or holders of more than
51% of the Registrable Securities being registered, premiums and other costs of
policies of insurance against liabilities arising out of the public offering of
the Registrable Securities being registered and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, but excluding
underwriting discounts and commissions and transfer taxes, if any.
Securities Act: The Securities Act of 1933, or any similar Federal statute,
and the rules and regulations of the Commission thereunder, all as of the same
shall be in effect at the time. References to a particular section of the
Securities Act of 1933 shall include a reference to the comparable section, if
any, of any such similar Federal statute
Section 1.2 Construction. Whenever the context requires, the gender of
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all words used herein shall include the masculine, feminine and neuter, and the
number of all words shall include the singular and plural.
Section 1.3 References. Unless otherwise specified, references in this
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Agreement to "Sections", "Subsections" or "Articles" refer to the sections,
subsections or articles in this Agreement.
ARTICLE II. DEMAND REGISTRATION
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Section 2.1. Request for Registration of Registrable Securities. After
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one year from the date hereof, upon the written request of one or more
Initiating Holders, requesting that the Company effect the registration under
the Securities Act of all or part of such Initiating Holders' Registrable
Securities and specifying the intended method of disposition thereof, the
Company will promptly give written notice of such requested registration to all
registered holders of Registrable Securities, and thereupon the Company will use
its best efforts to effect the registration under the Securities Act of the
following:
Registration Rights Agreement
Page 2 of 16
(a) the Registrable Securities which the Company has been so
requested to be registered by such Initiating Holders for disposition in
accordance with the intended method of disposition stated in such request;
(b) all other Registrable Securities the holders of which shall have
made a written request to the Company for registration thereof within 30
days after the giving of such written notice by the Company (which request
shall specify the intended method of disposition of such Registrable
Securities); and
(c) all Shares of Common Stock which the Company may elect to
register in connection with the offering of Registrable Securities pursuant
to this Article II;
all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities and the
additional Shares of Common Stock, if any, so to be registered; provided, that,
the provisions of this Section 2.1 shall not require the Company to effect more
than two registrations of Registrable Securities.
Section 2.2. Registration Statement Form. Registrations of Registrable
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Securities under this Article II shall be on an appropriate registration form of
the Commission (i) as shall be selected by the Company and shall be reasonably
acceptable to the holders of more than fifty percent (by number of Shares of
Common Stock) of the Registrable Securities so to be registered and (ii) as
shall permit the disposition of such Registrable Securities in accordance with
the intended method or methods of disposition specified in their request for
such registration. The Company agrees to include in any such registration
statement all information which holders of Registrable Securities being
registered shall reasonably request. The Company agrees to include in any such
registration statement all information which holders of Registrable Securities
being registered shall reasonably request.
Section 2.3. Expenses. The Company will pay all Registration Expenses in
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connection with any registrations requested pursuant to this Article II.
Section 2.4. Effective Registration Statement. A registration requested
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pursuant to this Article II shall not be deemed to have been effected (i) unless
a registration statement with respect thereto has become effective; provided,
that a registration which does not become effective after the Company has filed
a registration statement with respect thereto solely by reason of the refusal to
proceed of the Initiating Holders (other than a refusal to proceed based upon
the advice of counsel relating to a matter with respect to the Company) shall be
deemed to have been effected by the Company at the request of such Initiating
Holders unless the Initiating Holders shall have elected to pay all Registration
Expenses in connection with such registration, (ii) if, after it has become
effective, such registration is withdrawn by the Company (other than at the
request of a majority of the Initiating Holders), interfered with by any stop
order, injunction or other order or requirement of the Commission or other
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Page 3 or 16
governmental agency or court for any reason prior to the expiration of a 30 day
period following such registration statement effectiveness (or, in the case of a
Shelf Registration, the time period provided in Section 2.7), or (iii) the
conditions to closing specified in any purchase agreement or underwriting
agreement entered into in connection with such registration are not satisfied,
other than due solely to some act or omission by such Initiating Holders.
Section 2.5. Selection of Underwriters. If a requested registration
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pursuant to this Article II involves an underwritten offering, the underwriter
or underwriters thereof shall be selected by the consent of holders of a
majority (by number of Shares of Common Stock) of Registrable Securities and
shall be reasonably acceptable to the Company.
Section 2.6. Priority in Requested Registrations. If a requested
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registration pursuant to this Article II involves an underwritten offering, and
the managing underwriter shall advise the Company in writing (with a copy to
each holder of Registrable Securities requesting registration) that, in its
opinion, the number of securities requested to be included in such registration
(including securities of the Company which are not Registrable Securities)
exceeds the number which can be sold in such offering within a price range
reasonably acceptable to the Company and to the holders of a majority (by number
of Shares of Common Stock) of the Registrable Securities requested to be
included in such registration, the Company will include in such registration, to
the extent of the number which the Company is so advised can be sold in such
offering, (i) first, Registrable Securities requested to be included in such
registration pro rata among the holders thereof requesting such registration as
provided in Section 2.1 on the basis of the number of such securities requested
to be included in such registration by the holder or holders of Registrable
Securities, and (ii) second, other securities of the Company included in such
registration in any manner and amount selected by the Company.
Section 2.7. Shelf-Registration. A request by an Initiating Holder
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pursuant to Section 2.1 may specify that the intended method of disposition is a
"shelf offering" ("Shelf Offering Request"); provided that, at the time of such
request, the Company is eligible to use Form S-3 (or any successor form) to
register the sale of Registrable Securities by the Stockholders. In addition to
the other obligations of the Company set forth herein, in connection with a
Shelf Offering Request, the Company will file a "shelf" registration statement
on an appropriate form pursuant to Rule 415 under the Securities Act or any
similar rule that may be adopted by the Commission with respect to all
Registrable Securities the Company is required to effect the registration of
under this Article II (a "Shelf Registration"). The Company shall keep the Shelf
Registration continuously effective for a period of at least twelve months
following the date on which the Shelf Registration is declared effective (or
such shorter period that terminates on the earlier of (i) a date specified by
the holders of a majority (by number of Shares of Common Stock) of the
Registrable Securities covered by such statement or (ii) the date on which all
Registrable Securities covered by such Shelf Registration have been sold or
withdrawn, but in no case prior to the expiration of the 90-day period referred
to in Section 4(3) of the Securities Act and rule 174 thereunder, if
applicable). The Company shall supplement or make amendments to the Shelf
Registration, if required by the registration form used by the Company, the
instructions thereto, the Securities Act or the rules and regulations of the
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Page 4 of 16
Commission, or if reasonably requested by a holder of Registrable Securities
covered by the Shelf Registration. The Company will furnish the holders of
Registrable Securities covered by the Shelf Registration a copy of all such
supplements or amendments at least one business day prior to filing such
supplement or amendment.
ARTICLE III. "PIGGYBACK" REGISTRATION
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Section 3.1. Right to Include Registrable Securities. If the Company at
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anytime proposes to file a registration statement under the Securities Act
covering any of its equity securities other than a registration on Forms S-4 or
S-8, or any successor or similar forms and other than pursuant to Article II
whether or not for sale or its own account, it will each such time give prompt
written notice to all holders of Registrable Securities of its intention to do
so and of such holders' rights under this Article III. Upon the written request
of any such holder made within 30 days after the receipt of any such notice
(which request shall specify the Registrable Securities intended to be disposed
of by such holder and the intended method of disposition thereof), the Company
will use its best efforts to effect the registration under the Securities Act of
all Registrable Securities which the Company has been so requested to register
by the holders thereof, to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered, by inclusion of such Registrable Securities in
the registration statement which covers the securities which the Company
proposes to register; 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 either not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to each holder of Registrable Securities 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 the Registration Expenses in
connection therewith), without prejudice, however, to the rights of any holder
or holders of Registrable Securities entitled to do so to request that such
registration be effected as a registration under Article II and (ii) in the case
of a determination to delay registering, shall be permitted to delay registering
any Registrable Securities, for the same period as the delay in registering such
other securities. No registration affected under this Article II shall relieve
the Company of its obligation to affect any registration upon request under
Article II. The Company will pay all Registration Expenses incurred by holders
by Registrable Securities in connection with each registration of Registrable
Securities requested pursuant to this Article III.
Section 3.2. Priority in Piggy-Back Registrations. If (i) a registration
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pursuant to this Article III involves an underwritten offering of the securities
being registered, whether or not for sale for the account of the Company, to be
distributed (on a firm commitment basis) by or through one or more underwriters
of recognized standing under underwriting terms appropriate for such a
transaction, and (ii) the managing underwriter of such underwritten offering
shall inform the Company and holders of the Registrable Securities requesting
such registration by letter of its belief that the distribution of all or a
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Page 5 of 16
specified number of such Registrable Securities concurrently with the securities
being distributed by such underwriters would interfere with the successful
marketing of the securities being distributed by such underwriters (such writing
to state the basis of such belief and the approximate number of such Registrable
Securities which may be distributed without such effect), then the Company may,
upon written notice to all holders of such Registrable Securities, reduce pro
rata (if and to the extent stated by such managing underwriter to be necessary
to eliminate such effect) the number of such Registrable Securities and
securities proposed to be sold by any Person (other than the Company or Persons
with "demand" or similar registration rights that have requested such
registration pursuant to a written agreement with the Company) the registration
of which shall have been requested by each holder of Registrable Securities and
each Person so that the resultant aggregate number of such Registrable
Securities and securities proposed to be registered by other Persons so included
in such registration shall be equal to the number of Shares of Common Stock
stated in such managing underwriter's letter.
ARTICLE IV. REGISTRATION PROCEDURES
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Section 4.1. Preparation of Filings. If and whenever the Company is
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required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Articles II or III the
following shall apply:
(a) Registration Statement. The Company shall promptly prepare and
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file (in the case of a registration pursuant to Article II, such filing to
be made within 90 days after the initial request of one or more Initiating
Holders of Registrable Securities or in any event as soon after such
request as possible) with the Commission the requisite registration
statement to effect such registration (including such audited financial
statements as may be required by the Securities Act or the rules and
regulations promulgated thereunder) and thereafter use its best efforts to
cause such registration statement to become and remain effective; provided,
however, that the Company may withdraw any registration of its securities
which are not Registrable Securities (and, under the circumstances
specified in Section 3.2 its securities which are Registrable Securities)
at any time prior to the effective date of the registration statement
relating thereto; provided further, that before filing such registration
statement or any amendments thereto, the Company will furnish to the
holders of Registrable Securities that are to be included in such
registration and their counsel copies of all such documents proposed to be
filed, which documents will be subject to the review and reasonable
approval of such holders and their counsel.
(b) Amendments. The Company shall prepare and file with the
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Commission such amendments, post effective amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and to
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement for
the following time periods: (i) in the case of a Shelf Registration under
Article II, the time period specified in Section 2.8; (ii) in the case of a
registration under Article, II other than a Shelf Registration, 30 days or
Registration Rights Agreement
Page 6 of 16
such shorter period as all Registrable Securities have been sold in
accordance with the intended methods of disposition specified by the
holders thereof; and (iii) in the case of a registration under Article III,
such period of time as the Company determines.
(c) Copies of Documents. The Company shall furnish to each seller of
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Registrable Securities covered by such registration statement and each
underwriter, if any, of the securities being sold by such seller such
number of conformed copies of such registration statement and of each
amendment and supplement thereto (in each case including all exhibits to
such registration statement), such number of copies of the prospectus
contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed
pursuant to Rule 424 under the Securities Act and such other documents, as
such seller and underwriter, if any, may reasonably request in order to
facilitate the public sale or other disposition of the Registrable
Securities (owned by such Seller (it being understood that the Company
consents to the use of the prospectus and any amendments or supplement
thereto by each holder of Registrable Securities covered by the
registration statement and the underwriter or underwriters, if any, in
connection with the offering and sale of Registrable Securities covered by
the prospectus or any amendment or supplement thereto).
(d) Blue-Sky. The Company will use its best efforts to register or
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qualify all Registrable Securities under the securities laws or blue sky
laws of the jurisdictions as any seller thereof and any underwriter of the
securities being sold by such seller of Registrable Securities shall
reasonably request, to keep such registrations or qualifications in effect
for so long as such registration statement remains in effect, and take any
other action which may be reasonably necessary or advisable to enable such
seller and underwriter to consummate the disposition in such jurisdictions
of the securities owned by such seller, except that the Company shall not
for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for the
requirements of this subsection (d) be obligated to be so qualified, or to
consent to general service of process in any such jurisdiction.
(e) Other Approvals. The Company will use its best efforts to cause
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all Registrable Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof to
consummate the intended disposition of such Registrable Securities.
(f) Notice of Events. The Company will notify each seller of
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Registrable Securities covered by such registration statement at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, upon the Company's discovery that, or upon the happening of
any event 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 any material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made, and at the request
of any such seller promptly prepare and furnish to such seller and each
underwriter, if any, a reasonable number of copies of a supplement to or an
Registration Rights Agreement
Page 7 of 16
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they
were made.
(g) Earnings Statement. The Company will otherwise use commercially
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reasonable efforts to comply with all applicable rules and regulations of
the Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning with the
first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11 (a) of the Securities Act, and will furnish to each such seller of
Registrable Securities at least five business days prior to the filing
thereof a copy of any amendment or supplement to such registration
statement or prospectus and shall not file any thereof to which any such
seller of Registrable Securities shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act or of the rules or
regulations thereunder.
(h) Listing. The Company will cause all Registrable Securities
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covered by the registration statement to be listed on each securities
exchange or traded or quoted on each market on which the same class of
securities issued by the Company are then listed, traded or quoted.
(i) Transfer Agent. The Company will provide a transfer agent,
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registrar and a CUSIP number for all Registrable Securities no later than
the effective date of such registration statement.
(j) Access. The Company will make available for inspection by any
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holder of Registrable Securities included in such registration statement,
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 (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records"), as
shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such
Inspector in connection with such registration statement; provided that
records which the Company determines, in good faith, to be confidential and
which it notifies the Inspectors are confidential shall not be disclosed by
the Inspectors unless (i) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in the registration statement
or (ii) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction; provided, further, that
any decision not to disclose information pursuant to clause (i) shall be
made after consultation with counsel for the Company and counsel for such
holders; and each holder of Registrable Securities agrees that it will,
upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company at
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Page 8 of 16
its expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential.
Section 4.2. Data front Holders of Registrable Securities. The Company
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may require each seller of Registrable Securities as to which any registration
is being affected to furnish the Company such information regarding such seller
and the distribution of such Registrable Securities as the Company may from time
to time reasonably request in writing.
Section 4.3. Discontinuance of Use of Prospectus. Each holder of
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Registrable Securities agrees by acquisition of such Registrable Securities
that, upon receipt of any written notice from the Company of the occurrence of
any event of the kind described in Section 4.1(g), such holder will forthwith
discontinue such holder's offer of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until such
holder's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 4.1(g) and, if so directed by the Company, will deliver
to the Company (at the Company's expense) all copies, other than permanent file
copies, then in such holder's possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice. In the
event the Company shall give any such notice, the period mentioned in Section
4.1(b) shall be extended by the length of the period from and including the date
when each seller of any Registrable Securities covered by such registration
statement shall have received such notice to the date on which each such seller
has received the copies of the supplemented or amended prospectus contemplated
by Section 4.l(g).
Section 4.4. Underwritten Offerings. If requested by the underwriters for
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any underwritten offering by holders of Registrable Securities pursuant to a
registration requested under Article II, the Company will enter into an
underwriting agreement with such underwriters for such offering, such agreement
to be reasonably satisfactory in form and substance to the Company, each such
holder and the underwriters, and to contain such representations and warranties
by the Company and such other terms as are generally prevailing in agreements of
this type, including, without limitation, indemnities to the effect and to the
extent provided in Section 5.1. The holders of the Registrable Securities will
cooperate with the Company in the negotiation of the underwriting agreement and
will give consideration to the reasonable suggestions of the Company regarding
the form thereof; provided that nothing herein contained shall diminish the
foregoing obligations of the Company. The holders of Registrable Securities to
be distributed by such underwriters shall be parties to such underwriting
agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. Any such holder of Registrable Securities
shall not be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such holder, such holder's Registrable Securities and such
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Page 9 of 16
holder's intended method of distribution and any other representation required
by law.
Section 4.5. Holdback Agreements. The Company agrees if so required by a
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managing underwriter of an offering of Registrable Securities not to effect any
public sale or distribution of its equity securities or securities convertible
into or exchangeable or exercisable for any of such securities during the seven
days prior to and the 90 days after any underwritten registration pursuant to
Article II or III has become effective, except as part of such underwritten
registration and except pursuant to registrations on Form S-8, or any successor
or similar forms thereto.
Section 4.6. Preparation; Reasonable Investigation. In connection with
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the preparation and filing of each registration statement under the Securities
Act pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, and their respective counsel and accountants, the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such access to its books and
records and such opportunities to discuss the business of the Company with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such holders' and such
underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
ARTICLE V. INDEMNIFICATION
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Section 5.1. Indemnification by the Company. In the event of any
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registration of any securities of the Company under the Securities Act, the
Company will, and hereby does, indemnify and hold harmless in the case of any
registration statement filed pursuant to Articles II and III, the holder of any
Registrable Securities covered by such registration statement, its directors and
officers, each other Person who participates as an underwriter in the offering
or sale of such securities and each other person, if any, who controls such
holder of Registrable Securities or any such underwriter within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such holder of Registrable Securities or any such director or
officer or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or 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, and the Company will
reimburse such holder, and each such director, officer, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that the Company shall not be liable
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Page 10 of 16
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company through an
instrument duly executed by such holder, specifically stating that its for use
in the preparation thereof and, provided further that the Company shall not be
liable to any Person who participates as an underwriter, in the offering or sale
of Registrable Securities or to any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
within the time required by the Securities Act to the Person asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such holder of Registrable Securities or
any such director, officer, underwriter or controlling person and shall survive
the transfer of such securities by such holder.
Section 5.2. Indemnification by the Sellers. The Company may require, as
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a condition to including any Registrable Securities in any registration
statement filed pursuant to Article II or III, that the Company shall have
received an undertaking satisfactory to it from the prospective seller of
Registrable Securities, to indemnify and hold harmless (in the same manner and
to the same extent as set forth in Section 5.1) the Company, each director of
the Company, each officer of the Company and each other Person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
any statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller specifically stating
that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement; provided, that such Sellers' liability under such indemnification
shall be limited to the net sales proceeds actually received by such seller from
the sale of the Company's securities pursuant to such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Such indemnity shall remain in full force and effect, regardless of
any investigation made by or on behalf of the Company or any such director,
officer or controlling person and shall survive the transfer of such securities
by such seller.
Section 5.3. Notices of Claims, etc. Promptly after receipt by an
-------------------------------------
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Sections 5.1 or 5.2, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
Registration Rights Agreement
Page 11 of 16
give written notice to the latter of the commencement of such action, provided
that the failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under Sections, 5.1
or 5.2, except to the extent that the indemnifying party is actually prejudiced
by such failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that the indemnifying party
may wish, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement of any such action which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability, or a covenant not to xxx, in respect to such
claim or litigation. No indemnified party shall consent to entry of any judgment
or enter into any settlement of any such action the defense of which has been
assumed by an indemnifying party without the consent of such indemnifying party.
Section 5.4. Other Indemnification. Indemnification similar to that
------------------------------------
specified in Sections 5.1 and 5.2 (with appropriate modifications) shall be
given by the Company and each seller of Registrable Securities with respect to
any required registration or other qualification of securities under any federal
or state law or regulation of any governmental authority, other than the
Securities Act.
Section 5.5. Indemnification Payments. The indemnification required by
---------------------------------------
this Article V shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
ARTICLE VI. RULE 144
--------------------
Section 6.1. Rule 144. The Company shall timely file the reports required
-----------------------
to be filed by it under the Securities Act and the Exchange Act (including but
not limited to the reports under Sections 13 and 15(d) of the Exchange Act
referred to in subparagraph (c)(1) of Rule 144 adopted by the Securities and
Exchange Commission under the Securities Act) and the rules and regulations
adopted by the Commission thereunder (or, if the Company is not required to file
such reports, will, upon the request of any holder of Registrable Securities,
make publicly available the other information referred to in subparagraph (c)(2)
of Rule 144 under the Securities Act) and will take such further action as any
holder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or (b) any similar rule or regulation hereafter
Registration Rights Agreement
Page 12 of 16
adopted by the Commission. Upon the request of any holder of Registrable
Securities, the Company will deliver to such holder a written statement as to
whether it has complied with such requirements.
ARTICLE VII. MISCELLANEOUS
--------------------------
Section 7.1. Remedies. The Company agrees that monetary damages would not
-----------------------
be adequate compensation for any loss incurred by reason of such a breach and
hereby agrees to waive the defense in any action for specific performance of
such an obligation that a remedy at law would be adequate.
Section 7.2. No Inconsistent Agreements. Without the written consent of
-----------------------------------------
the holders of a majority of the then outstanding Registrable Securities, the
Company will not on or after the date of this Agreement enter into any agreement
with respect to its securities which is inconsistent with the rights granted to
the holders of Registrable Securities in this Agreement or otherwise conflicts
with the provisions hereof. The Company has not previously entered into any
agreement with respect to its securities granting any registration rights to any
Person. The rights granted to the holders of Registrable Securities hereunder do
not in any way conflict with and are not inconsistent with the rights granted to
the holders of the Company's securities under any agreements previously entered
into by the Company.
Section 7.3. Adjustments Affecting Registrable Securities. The Company
-----------------------------------------------------------
will not take any action, or permit any change to occur, with respect to the
Registrable Securities which would adversely affect the ability of the holders
of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement.
Section 7.4. Assignment. This Agreement shall be binding upon and inure
-------------------------
to the benefit of and be enforceable by the parties hereto and their respective
successors and assigns. In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the benefit
of the parties hereto other than the Company shall also be for the benefit of
and enforceable by any subsequent holder of any Registrable Securities.
Section 7.5. Descriptive Readings. The descriptive headings of the
-----------------------------------
several sections and paragraphs of this Agreement are inserted for reference
only and shall not limit or otherwise affect the meaning hereof.
Section 7.6. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
----------------------------
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAWS OF THE STATE OF MISSISSIPPI WITHOUT REFERENCE TO THE PRINCIPLES OF
CONFLICTS OF LAWS.
Registration Rights Agreement
Page 13 of 16
Section 7.7. Counterparts. This Agreement may be executed simultaneously
---------------------------
in any number of counterparts, each of which shall be deemed an original, but
all such counterparts shall together constitute one and the same instrument.
Section 7.8. Entire Agreement. This Agreement embodies the entire
-------------------------------
agreement and understanding between the Company and each other party hereto and
supersedes all prior agreements and understandings relating to the subject
matter hereof.
Section 7.9. Severability. In the event that any one or more of the
---------------------------
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
Section 7.10. Amendments and Waivers. This Agreement may be amended and
--------------------------------------
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have obtained
the written consent to such amendment, action or omission to act, of the holder
or holders of 51% or more of the Shares of Common Stock of Registrable
Securities. Each holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by any consent authorized by this Section 7.10,
whether or not such Registrable Securities shall have been marked to indicate
such consent.
Section 7.11. Nominees for Beneficial Owners. In the event that any
----------------------------------------------
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election, be treated as the holder of
such Registrable Securities for purposes of any request or other action by any
holder or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of Shares of Common Stock of
Registrable Securities held by any holder or holders of Registrable Securities
contemplated by this Agreement. If the beneficial owner of any Registrable
Securities so elects, the Company may require assurances reasonably satisfactory
to it of such owner's beneficial ownership of such Registrable Securities.
Section 7.12. Notices. Except as otherwise provided in this Agreement,
-----------------------
all communications provided for hereunder shall be in writing and sent by
first-class mail, postage prepaid, and (a) if addressed to a party to this
Agreement other than the Company, at the address of such party set forth in
Exhibit or at such other address as such party shall have furnished to the
Company in writing, or (b) if addressed to any other holder of Registrable
Securities, at the address that such holder shall have furnished to the Company
in writing, or, until any such other holder so furnishes to the Company an
address, then to and at the address of the last holder of such Registrable
Securities who has furnished an address to the Company, or (c) if addressed to
the Company, to the attention of its General Counsel, or at such other address,
or to the attention of such other officer, as the Company shall have furnished
to each holder of Registrable Securities at the time outstanding.
Registration Rights Agreement
Page 14 of 16
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized as of the
date first above written.
UNIVERSAL DOMAINS INCORPORATED
By: /s/ Xxxx Xxxxx
---------------------------
Name: Xxxx Xxxxx
Title: President
Registration Rights Agreement
Page 15 of 16
Exhibit A
---------
Name and address of Stockholders
1. Name: Hawkeye Drilling Co.
Address: X.X. Xxx 00,
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxxx, President
Number of Shares of Common Stock held: 10,000,000
----------
Signature: /s/ Xxxxx Xxxxx Xxxxxxxxx
-----------------------------------
2. Name: Xxxxxxx X. Xxxxxxx
Address: 000 Xxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Number of Shares of Common Stock held: 5,000,000
---------
Signature: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Registration Rights Agreement
Exhibit A - Page 1 of 1
