Contract
EXHIBIT
10.11
REGISTRATION
RIGHTS AGREEMENT
(this
“Agreement”),
dated
as of May 25, 2006, by and among Xxxxxx, Inc., a Delaware corporation (the
“Company”),
and
the undersigned buyers (each, a “Buyer”,
and
collectively, the “Buyers”).
WHEREAS:
A. In
connection with the Securities Purchase Agreement, dated as of May 24, 2006,
by
and among the Company and the Buyers (the “Securities
Purchase Agreement”),
the
Company has agreed, upon the terms and subject to the conditions set forth
in
the Securities Purchase Agreement, to issue and sell to each Buyer (i) the
Company’s 7.0% Senior Secured Convertible Notes (the “Notes”),
which
will be convertible into shares (“Conversion Shares”)
of the
Company’s common stock, par value $.01 per share (“Common
Stock”),
in
accordance with the terms of the Notes and (ii) warrants (the “Warrants”)
which
will be exercisable to purchase shares of Common Stock (as exercised
collectively, the “Warrant
Shares”).
B. In
accordance with the terms of the Securities Purchase Agreement, the Company
has
agreed to provide certain registration rights under the Securities Act of
1933,
as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the “1933
Act”),
and
applicable state securities laws.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and each of the Buyers hereby agree as
follows:
1. Definitions.
Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
a. “Business
Day”
means
any day other than Saturday, Sunday or any other day on which commercial
banks
in The City of New York are authorized or required by law to remain
closed.
b. “Closing
Date”
shall
have the meaning set forth in the Securities Purchase Agreement.
c. “Effective
Date”
means
the date the Registration Statement has first been declared effective by
the
SEC.
d. “Effectiveness
Deadline”
means
the date which is (i) in the event that the Registration Statement is not
subject to full review by the SEC, 60 calendar days after the Filing Deadline
or
(ii) in the event that the Registration Statement is subject to full review
by
the SEC, 90 calendar days after the Filing Deadline.
e. “Filing
Deadline”
means
the earlier of (i) 10 calendar days after the Company’s receipt of Stockholder
Approval and (ii) July 17, 2006.
f. “Investor”
means
a
Buyer or any transferee or assignee thereof to whom a Buyer or another Investor
assigns its rights under this Agreement and who agrees to become bound by
the
provisions of this Agreement in accordance with Section 9.
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g. “Person”
means
an individual, a limited liability company, a partnership, a joint venture,
a
corporation, a trust, an unincorporated organization and a government or
any
department or agency thereof.
h. “register,”
“registered,”
and
“registration”
refer
to a registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant
to
Rule 415 and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.
i. “Registrable
Securities”
means
(i) the Conversion Shares issued or issuable upon conversion of the Notes,
(ii)
the Warrant Shares issued or issuable upon exercise of the Warrants, (iii)
any
share capital of the Company issued or issuable with respect to the Notes,
the
Conversion Shares, the Warrant Shares or the Warrants as a result of any
split,
dividend, recapitalization, exchange or similar event or otherwise, without
regard to any limitations on conversion of the Notes or exercise of the Warrants
and (iv) any share capital of the Company issued or issuable upon a repurchase,
redemption or similar transaction with respect to the Notes.
j. “Registration
Statement”
means
a
registration statement or registration statements of the Company filed under
the
1933 Act covering the Registrable Securities.
k. “Required
Holders”
means
the holders of at least 75% of the Registrable Securities.
l. “Required
Registration Amount”
means
120% of the number of Registrable Securities issued and issuable pursuant
to the
Notes and Warrants as of the trading day immediately preceding the applicable
date of determination, subject to adjustment as provided in Section 2(e)
(without regard to any limitations on conversion of the Notes or exercise
of the
Warrants).
m. “Rule
415”
means
Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis.
n. “SEC”
means
the United States Securities and Exchange Commission.
2. Registration.
a. Mandatory
Registration.
The
Company shall prepare, and, as soon as practicable but in no event later
than
the Filing Deadline, file with the SEC the Registration Statement on Form
S-3
covering the resale of all of the Registrable Securities. In the event that
Form
S-3 is unavailable for such a registration, the Company shall use such other
form as is available for such a registration, subject to the provisions of
Section 2(d). The Registration Statement prepared pursuant hereto shall register
for resale at least the number of shares of Common Stock equal to the Required
Registration Amount as of the date the Registration Statement is initially
filed
with the SEC. The Registration Statement shall contain (except if otherwise
directed by the Required Holders) the “Selling
Stockholders”
and
“Plan
of Distribution”
sections in substantially the form attached hereto as Exhibit
A.
The
Company shall use its best efforts to have the Registration Statement declared
effective by the SEC as soon as practicable, but in no event later than the
Effectiveness Deadline. By 9:30am on the Business Day immediately following
the
Effective Date, the Company shall file with the SEC in accordance with Rule
424
under the 1933 Act the final prospectus to be used in connection with sales
pursuant to such Registration Statement.
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b. Allocation
of Registrable Securities.
The
initial number of Registrable Securities included in any Registration Statement
and any increase in the number of Registrable Securities included therein
shall
be allocated pro rata among the Investors based on the number of Registrable
Securities held by each Investor at the time the Registration Statement covering
such initial number of Registrable Securities or increase thereof is declared
effective by the SEC. In the event that an Investor sells or otherwise transfers
any of such Investor’s Registrable Securities to one or more Investors, each
transferee Investor shall be allocated a pro rata portion of the number of
Registrable Securities included in such Registration Statement for such
transferor Investor at the time of transfer. Any shares of Common Stock included
in a Registration Statement that remain allocated to any Person which ceases
to
hold any Registrable Securities covered by such Registration Statement shall
be
allocated to the remaining Investors, pro rata based on the number of
Registrable Securities then held by such Investors which are covered by such
Registration Statement. In no event shall the Company include any securities
other than Registrable Securities on any Registration Statement without the
prior written consent of the Required Holders.
c. Legal
Counsel.
Subject
to Section 5 hereof, the Required Holders shall have the right to select
two
legal counsel to review and oversee any registration pursuant to this Section
2
(collectively, the “Legal
Counsel”),
which
shall be Xxxxxxx Xxxx & Xxxxx LLP and Drinker Xxxxxx & Xxxxx LLP or such
other counsel as thereafter designated by the Required Holders. The Company
and
Legal Counsel shall reasonably cooperate with each other in performing the
Company’s obligations under this Agreement.
d. Ineligibility
for Form S-3.
In the
event that Form S-3 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall (i) register the resale
of
the Registrable Securities on another appropriate form reasonably acceptable
to
the Required Holders and (ii) undertake to register the Registrable Securities
on Form S-3 as soon as such form is available, provided that the Company
shall
maintain the effectiveness of the Registration Statement then in effect until
such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the SEC.
e. Sufficient
Number of Shares Registered.
In the
event the number of shares available under a Registration Statement filed
pursuant to Section 2(a) is insufficient to cover all of the Registrable
Securities required to be covered by such Registration Statement or an
Investor’s allocated portion of the Registrable Securities pursuant to Section
2(b), the Company shall amend the applicable Registration Statement, or file
a
new Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover at least the Required Registration Amount
as of the trading day immediately preceding the date of the filing of such
amendment or new Registration Statement, in each case, as soon as practicable,
but in any event not later than 30 days after the necessity therefor arises.
The
Company shall use its best efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following
the
filing thereof. For purposes of the foregoing provision, the number of shares
available under a Registration Statement shall be deemed “insufficient to cover
all of the Registrable Securities or an Investor’s allocated portion of the
Registrable Securities” if at any time the number of shares of Common Stock
available for resale under the Registration Statement is less than the Required
Registration Amount as of such time. The calculation set forth in the foregoing
sentence shall be made without regard to any limitations on the conversion
of
the Notes or the exercise of the Warrants and such calculation shall assume
that
the Notes are then convertible for shares of Common Stock at the then prevailing
Conversion Price (as defined in the Notes) and the Warrants are then exercisable
for shares of Common Stock at the then prevailing Exercise Price (as defined
in
the Warrants).
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f. Effect
of Failure to File and Obtain and Maintain Effectiveness of Registration
Statement.
If (i)
a Registration Statement covering all of the Registrable Securities required
to
be covered thereby and required to be filed by the Company pursuant to this
Agreement is (A) not filed with the SEC on or before the applicable Filing
Deadline (a “Filing
Failure”)
or (B)
not declared effective by the SEC on or before the applicable Effectiveness
Deadline (an “Effectiveness
Failure”)
or
(ii) on any day after the Effective Date sales of all of the Registrable
Securities required to be included on such Registration Statement cannot
be made
(other than during an Allowable Grace Period (as defined in Section 3(r))
pursuant to such Registration Statement or otherwise (including, without
limitation, because of a failure to keep such Registration Statement effective,
to disclose such information as is necessary for sales to be made pursuant
to
such Registration Statement, to register a sufficient number of shares of
Common
Stock or to maintain the listing of the Common Stock) (a “Maintenance
Failure”)
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 underlying shares of Common Stock
(which
remedy shall not be exclusive of any other remedies available at law or in
equity), the Company shall pay to each holder of Registrable Securities relating
to such Registration Statement an amount in cash equal to 1.5% of the aggregate
Purchase Price (as defined in the Securities Purchase Agreement) of such
Investor’s Notes relating to the Registrable Securities required to be included
in such Registration Statement on each of the following dates: (i) on every
30th
day after the day of a Filing Failure and thereafter (pro rated for periods
totaling less than 30 days) until such Filing Failure is cured; (ii) on every
30th day after the day of an Effectiveness Failure and thereafter (pro rated
for
periods totaling less than 30 days) until such Effectiveness Failure is cured;
(iii) on every 30th day after the initial day of a Maintenance Failure and
thereafter (pro rated for periods totaling less than 30 days) until such
Maintenance Failure is cured. The payments to which a holder shall be entitled
pursuant to this Section 2(f) are referred to herein as “Registration
Delay Payments.”
Registration Delay Payments shall be paid on the earlier of (I) the 30th
day
after the event or failure giving rise to the Registration Delay Payments
has
occurred and (II) the third Business Day after the event or failure giving
rise
to the Registration Delay Payments is cured. In the event the Company fails
to
make Registration Delay Payments in a timely manner, such Registration Delay
Payments shall bear interest at the rate of two percent per month (prorated
for
partial months) until paid in full. Notwithstanding anything herein or in
the
Securities Purchase Agreement to the contrary, in no event shall the aggregate
amount of Registration Delay Payments payable to any Investor exceed, in
the
aggregate, 10% of the aggregate Purchase Price of such Investor’s
Notes.
3. Related
Obligations.
At
such
time as the Company is obligated to file a Registration Statement with the
SEC
pursuant to Section 2(a), 2(d) or 2(e), the Company will use its best efforts
to
effect the registration of the Registrable Securities in accordance with
the
intended method of disposition thereof and, pursuant thereto, the Company
shall
have the following obligations:
a. The
Company shall submit to the SEC, within two Business Days after the Company
learns that no review of a particular Registration Statement will be made
by the
staff of the SEC or that the staff has no further comments on a particular
Registration Statement, as the case may be, a request for acceleration of
effectiveness of such Registration Statement to a time and date not later
than
48 hours after the submission of such request. The Company shall keep each
Registration Statement effective pursuant to Rule 415 at all times until
the
earlier of (i) the date as of which the Investors may sell all of the
Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or any successor thereto) promulgated
under
the 1933 Act or (ii) the date on which the Investors shall have sold all
of the
Registrable Securities covered by such Registration Statement (the “Registration
Period”).
The
Company shall ensure that each Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein) does not contain
any
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 (in the case
of
prospectuses, in the light of the circumstances in which they were made)
not
misleading.
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b. The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and
the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may
be
necessary to keep such Registration Statement effective at all times during
the
Registration Period, and, during such period, comply with the provisions
of the
1933 Act with respect to the disposition of all Registrable Securities of
the
Company covered by such Registration Statement until such time as all of
such
Registrable Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth
in
such Registration Statement. In the case of amendments and supplements to
a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing
a
report on Form 10-Q, Form 10-K or any analogous report under the Securities
Exchange Act of 1934, as amended (the “1934
Act”),
the
Company shall have incorporated such report by reference into such Registration
Statement, if applicable, or shall file such amendments or supplements with
the
SEC on the same day on which the 1934 Act report is filed which created the
requirement for the Company to amend or supplement such Registration
Statement.
c. The
Company shall (A) permit Legal Counsel and each Investor to review and comment
upon (i) a Registration Statement at least three Business Days prior to its
filing with the SEC and (ii) all amendments and supplements to all Registration
Statements (except for Annual Reports on Form 10-K, and Reports on Form 10-Q,
Reports on Form 8-K and any similar or successor reports) within a reasonable
number of days prior to their filing with the SEC, and (B) not file any
Registration Statement or amendment or supplement thereto in a form to which
Legal Counsel or any Investor reasonably objects. The Company shall not submit
a
request for acceleration of the effectiveness of a Registration Statement
or any
amendment or supplement thereto without the prior approval of Legal Counsel,
which consent shall not be unreasonably withheld, conditioned or delayed.
The
Company shall furnish to Legal Counsel, without charge, (i) copies of any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement, (ii) promptly after
the
same is prepared and filed with the SEC, one copy of any Registration Statement
and any amendment(s) thereto, including financial statements and schedules,
all
documents incorporated therein by reference, if requested by an Investor,
and
all exhibits and (iii) upon the effectiveness of any Registration Statement,
one
copy of the prospectus included in such Registration Statement and all
amendments and supplements thereto. The Company shall cooperate with Legal
Counsel in performing the Company’s obligations pursuant to this Section
3.
d. The
Company shall furnish to each Investor whose Registrable Securities are included
in any Registration Statement, without charge, (i) promptly after the same
is
prepared and filed with the SEC, at least one copy of such Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, if requested
by an
Investor, all exhibits and each preliminary prospectus, (ii) upon the
effectiveness of any Registration Statement, ten (10) copies of the prospectus
included in such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Investor may reasonably request)
and (iii) such other documents, including copies of any preliminary or final
prospectus, as such Investor may reasonably request from time to time in
order
to facilitate the disposition of the Registrable Securities owned by such
Investor.
e. The
Company shall use its best efforts to (i) register and qualify, unless an
exemption from registration and qualification applies, the resale by Investors
of the Registrable Securities covered by a Registration Statement under such
other securities or “blue sky” laws of all applicable jurisdictions in the
United States, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations
and
qualifications as may be necessary to maintain the effectiveness thereof
during
the Registration Period, (iii) take such other actions as may be necessary
to
maintain such registrations and qualifications in effect at all times during
the
Registration Period, and (iv) take all other actions reasonably necessary
or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this
Section 3(e), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such jurisdiction.
The Company shall promptly notify Legal Counsel and each Investor who holds
Registrable Securities of the receipt by the Company of any notification
with
respect to the suspension of the registration or qualification of any of
the
Registrable Securities for sale under the securities or “blue sky” laws of any
jurisdiction in the United States or its receipt of notice of the initiation
or
threatening of any proceeding for such purpose.
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f. The
Company shall notify Legal Counsel and each Investor in writing of the happening
of any event, as promptly as practicable after becoming aware of such event,
as
a result of which the prospectus included in a Registration Statement, as
then
in effect, includes an untrue statement of a material fact or an omission
to
state a material fact required to be stated therein or necessary to make
the
statements therein, in the light of the circumstances under which they were
made, not misleading (provided that in no event shall such notice contain
any
material non-public information), and, subject to Section 3(r), promptly
prepare
a supplement or amendment to such Registration Statement to correct such
untrue
statement or omission and deliver ten (10) copies of such supplement or
amendment to Legal Counsel and each Investor (or such other number of copies
as
Legal Counsel or such Investor may reasonably request). The Company shall
also
promptly notify Legal Counsel and each Investor in writing (i) when a prospectus
or any prospectus supplement or post-effective amendment has been filed,
and
when a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to Legal
Counsel and each Investor by facsimile on the same day of such effectiveness
and
by overnight mail), (ii) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related information,
and
(iii) of the Company’s reasonable determination that a post-effective amendment
to a Registration Statement would be appropriate.
g. The
Company shall use its best efforts to prevent the issuance of any stop order
or
other suspension of effectiveness of a Registration Statement, or the suspension
of the qualification of any of the Registrable Securities for sale in any
jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and
to
notify Legal Counsel and each Investor who holds Registrable Securities being
sold of the issuance of such order and the resolution thereof or its receipt
of
notice of the initiation or threat of any proceeding for such
purpose.
h. If,
after
the execution of this Agreement, an Investor believes, after consultation
with
its legal counsel, that it could reasonably be deemed to be an underwriter
of
Registrable Securities, at the request of such Investor, the Company shall
furnish to such Investor, on the date of the effectiveness of the Registration
Statement and thereafter from time to time on such dates as such Investor
may
reasonably request (i) a letter, dated such date, from the Company’s independent
certified public accountants in form and substance as is customarily given
by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to such Investor, and (ii) an opinion, dated as
of
such date, of counsel representing the Company for purposes of such Registration
Statement, in form, scope and substance as is customarily given in an
underwritten public offering, addressed to such Investor.
i. If
after
the execution of this Agreement an Investor believes, after consultation
with
its legal counsel, that it could reasonably be deemed to be an underwriter
of
Registrable Securities, at the request of such Investor, the Company shall
make
available for inspection by (i) such Investor, (ii) its legal counsel and
(iii)
one firm of accountants or other agents retained by all such Investors
(collectively, the “Inspectors”)
during
regular business hours and upon reasonable notice, all pertinent financial
and
other records, and pertinent corporate documents and properties of the Company
(collectively, the “Records”),
as
shall be reasonably deemed necessary by each Inspector, and cause the Company’s
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each Inspector shall agree
to
hold in strict confidence and shall not make any disclosure (except to an
Investor) or use of any Record or other information which the Company determines
in good faith to be confidential, and of which determination the Inspectors
are
so notified, unless (a) the disclosure of such Records is necessary to avoid
or
correct a misstatement or omission in any Registration Statement or is otherwise
required under the 1933 Act, (b) the release of such Records is ordered pursuant
to a final, non-appealable subpoena or order from a court or government body
of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of
this
Agreement. Each Investor agrees that it shall, upon learning that disclosure
of
such Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and
allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein (or in any other confidentiality agreement between
the Company and any Investor) shall be deemed to limit the Investors’ ability to
sell Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.
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j. The
Company shall hold in confidence and not make any disclosure of information
concerning an Investor 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. The Company agrees that it shall,
upon learning that disclosure of such information concerning an Investor
is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt written notice to such Investor and allow
such
Investor, at the Investor’s expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such
information.
k. The
Company shall cause all of the Registrable Securities covered by a Registration
Statement to be listed on each securities exchange or automated quotation
system
on which securities of the same class or series issued by the Company are
then
listed. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 3(k).
l. The
Company shall cooperate with the Investors who hold Registrable Securities
being
offered and, to the extent applicable, facilitate the timely preparation
and
delivery of certificates (not bearing any restrictive legend) representing
the
Registrable Securities to be offered pursuant to a Registration Statement
and
enable such certificates to be in such amounts as the Investors may reasonably
request and registered in such names as the Investors may request.
m. If
requested by an Investor, the Company shall (i) as soon as practicable
incorporate in a prospectus supplement or post-effective amendment such
information as an Investor reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering
and (ii) as soon as practicable make all required filings of such prospectus
supplement or post-effective amendment after being notified of the matters
to be
incorporated in such prospectus supplement or post-effective amendment; and
(iii) as soon as practicable, supplement or make amendments to any Registration
Statement if reasonably requested by an Investor holding any Registrable
Securities.
n. The
Company shall use its best efforts to cause the Registrable Securities covered
by a Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to consummate the
disposition of such Registrable Securities.
o. The
Company shall make generally available to its security holders as soon as
practical, but not later than 90 days after the close of the period covered
thereby, an earnings statement (in form complying with, and in the manner
provided by, the provisions of Rule 158 under the 0000 Xxx) covering a
twelve-month period beginning not later than the first day of the Company’s
fiscal quarter next following the effective date of a Registration
Statement.
p. The
Company shall otherwise use its best efforts to comply with all applicable
rules
and regulations of the SEC in connection with any registration
hereunder.
q. Within
two Business Days after a Registration Statement that covers Registrable
Securities is ordered effective by the SEC, 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 Investors whose Registrable
Securities are included in such Registration Statement) confirmation that
such
Registration Statement has been declared effective by the SEC in the form
attached hereto as Exhibit
B.
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r. Notwithstanding
anything to the contrary herein, at any time after the Effective Date, the
Company may delay the disclosure of material non-public information concerning
the Company the disclosure of which at the time is not, in the good faith
opinion of the Board of Directors of the Company, in the best interest of
the
Company and, in the opinion of counsel to the Company, otherwise required
(a
“Grace
Period”);
provided, that the Company shall promptly (i) notify the Investors in writing
of
the existence of material non-public information giving rise to a Grace Period
(provided that in each notice the Company will not disclose the content of
such
material non-public information to the Investors) and the date on which the
Grace Period will begin, and (ii) notify the Investors in writing of the
date on
which the Grace Period ends; and, provided further, that no Grace Period
shall
exceed 20 consecutive days and no more than two Grace Periods shall occur
during
any 365 day period and the first day of any Grace Period must be at least
two
trading days after the last day of any prior Grace Period (each, an
“Allowable
Grace Period”).
For
purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the Investors receive the notice referred
to
in clause (i) and shall end on and include the later of the date the Investors
receive the notice referred to in clause (ii) and the date referred to in
such
notice. The provisions of Section 2(f) hereof shall not be applicable during
the
period of any Allowable Grace Period. Upon expiration of the Grace Period,
the
Company shall again be bound by the first sentence of Section 3(f) with respect
to the information giving rise thereto unless such material non-public
information is no longer applicable. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended shares of
Common Stock to a transferee of an Investor in accordance with the terms
of the
Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which an Investor has entered into a contract
for
sale prior to the Investor’s receipt of the notice of a Grace Period and for
which the Investor has not yet settled.
s. The
Company shall use its best efforts to maintain the eligibility of its
registration statement on Form S-3 so that it is available for the registration
of the resale of Registrable Securities.
4. Obligations
of the Investors.
a. At
least
five Business Days prior to the first anticipated filing date of a Registration
Statement other than the initial Registration Statement, the Company shall
notify each Investor in writing of the information the Company requires from
each such Investor if such Investor elects to have any of such Investor’s
Registrable Securities included in such Registration Statement. It shall
be a
condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of a particular Investor that such Investor furnish to the Company
such information regarding itself, the Registrable Securities held by it
and the
intended method of disposition of the Registrable Securities held by it as
shall
be reasonably required to effect the effectiveness of the registration of
such
Registrable Securities and shall execute such documents in connection with
such
registration as the Company may reasonably request.
b. Each
Investor, by such Investor’s acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder,
unless
such Investor has notified the Company in writing of such Investor’s election to
exclude all of such Investor’s Registrable Securities from such Registration
Statement.
c. Each
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(f), such Investor
will
immediately discontinue disposition of Registrable Securities pursuant to
any
Registration Statement(s) covering such Registrable Securities until such
Investor’s receipt of notice that the supplemented or amended prospectus
contemplated by Section 3(f) has been filed with the SEC or receipt of notice
that no supplement or amendment is required. Notwithstanding anything to
the
contrary, the Company shall cause its transfer agent to deliver unlegended
shares of Common Stock to a transferee of an Investor in accordance with
the
terms of the Securities Purchase Agreement in connection with any sale of
Registrable Securities with respect to which an Investor has entered into
a
contract for sale prior to the Investor’s receipt of a notice from the Company
of the happening of any event of the kind described in Section 3(f) and for
which the Investor has not yet settled.
-8-
d. Each
Investor covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it or an exemption therefrom
in
connection with sales of Registrable Securities pursuant to the Registration
Statement.
5. Expenses
of Registration.
All
reasonable expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to Sections
2 and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements
of
counsel for the Company and Legal Counsel, up to a maximum of $5,000 each
per
Legal Counsel, shall be paid by the Company.
6. Indemnification.
In
the
event any Registrable Securities are included in a Registration Statement
under
this Agreement:
a. To
the
fullest extent permitted by law, the Company will, and hereby does, indemnify,
hold harmless and defend each Investor, the directors, officers, members,
partners, employees, agents, representatives of, and each Person, if any,
who
controls any Investor within the meaning of the 1933 Act or the 1934 Act
(each,
an “Indemnified
Person”),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable attorneys’ fees, amounts paid in settlement or
expenses, joint or several, (collectively, “Claims”)
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by
or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified
Damages”),
to
which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of
or are based upon: (i) any untrue statement or alleged untrue statement of
a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other “blue sky” laws of any jurisdiction in
which Registrable Securities are offered (“Blue
Sky Filing”),
or
the omission or alleged omission to state a material fact required to be
stated
therein or necessary to make the statements therein not misleading, (ii)
any
untrue statement or alleged untrue statement of a material fact contained
in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented,
if
the Company files any amendment thereof or supplement thereto with the SEC)
or
the omission or alleged omission to state therein any material fact necessary
to
make the statements made therein, in the light of the circumstances under
which
the statements therein were made, not misleading, (iii) any violation or
alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any violation of
this
Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, “Violations”).
Subject to Section 6(c), the Company shall reimburse the Indemnified Persons,
promptly as such Indemnified Damages are incurred and are due and payable,
for
any legal fees or other reasonable expenses incurred by them in connection
with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in strict
conformity with information furnished in writing to the Company by such
Indemnified Person expressly for use in the Registration Statement or any
such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company to such Indemnified Person pursuant to Section 3(c);
and (ii) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company,
which
consent shall not be unreasonably withheld or delayed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or
on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
-9-
b. In
connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is
set
forth in Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement and each Person, if any, who controls
the
Company within the meaning of the 1933 Act or the 1934 Act (each, an
“Indemnified
Party”),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim
or
Indemnified Damages arise out of or are based upon any Violation, in each
case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in strict conformity with written information furnished to the Company
by such Investor expressly for use in the Registration Statement; and, subject
to Section 6(c), such Investor will reimburse any legal or other expenses
reasonably incurred by an Indemnified Party in connection with investigating
or
defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of
such
Investor, which consent shall not be unreasonably withheld or delayed; provided,
further, however, that the Investor shall be liable under this Section 6(b)
for
only that amount of a Claim or Indemnified Damages as does not exceed the
net
proceeds received by such Investor as a result of the sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity shall
remain
in full force and effect regardless of any investigation made by or on behalf
of
such Indemnified Party and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9. Notwithstanding anything
to
the contrary contained herein, the indemnification agreement contained in
this
Section 6(b) with respect to any preliminary prospectus shall not inure to
the
benefit of any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected on a timely basis
in
the prospectus, as then amended or supplemented.
c. Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section
6
of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person
or
Indemnified Party shall, if a Claim in respect thereof is to be made against
any
indemnifying party under this Section 6, deliver to the indemnifying party
a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party
so
desires, jointly with any other indemnifying party similarly noticed, to
assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as
the
case may be; provided, however, that an Indemnified Person or Indemnified
Party
shall have the right to retain its own counsel with the fees and expenses
of not
more than one counsel for such Indemnified Person or Indemnified Party to
be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of
the
Indemnified Person or Indemnified Party and the indemnifying party would
be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by
such
counsel in such proceeding. In the case of an Indemnified Person, legal counsel
referred to in the proviso of the immediately preceding sentence shall be
selected by the Investors holding at least a majority in interest of the
Registrable Securities included in the Registration Statement to which the
Claim
relates. The Indemnified Party or Indemnified Person shall cooperate fully
with
the indemnifying party in connection with any negotiation or defense of any
such
action or Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person that relates to such action or Claim. The indemnifying
party
shall keep the Indemnified Party or Indemnified Person reasonably apprised
at
all times as to the status of the defense or any settlement negotiations
with
respect thereto. No indemnifying party shall be liable for any settlement
of any
action, claim or proceeding effected without its prior written consent,
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the
prior
written consent of the Indemnified Party or Indemnified Person, consent to
entry
of any judgment or enter into any settlement or other compromise that does
not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such Claim or litigation, and such settlement shall not include
any admission as to fault on the part of the Indemnified Party. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter
for
which indemnification has been made. The failure to deliver written notice
to
the indemnifying party within a reasonable time of the commencement of any
such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is materially prejudiced in its ability
to
defend such action.
-10-
d. The
indemnification required by this Section 6 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 Indemnified Damages are incurred.
e. The
indemnity agreements contained herein shall be in addition to (i) any cause
of
action or similar right of the Indemnified Party or Indemnified Person against
the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.
7. Contribution.
To
the
extent any indemnification by an indemnifying party is prohibited or limited
by
law, the indemnifying party agrees to make the maximum contribution with
respect
to any amounts for which it would otherwise be liable under Section 6 to
the
fullest extent permitted by law; provided, however, that: (i) no Person involved
in the sale of Registrable Securities that is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) in
connection with such sale shall be entitled to contribution from any Person
involved in such sale of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such
seller
from the sale of such Registrable Securities pursuant to such Registration
Statement.
8. Reports
Under the 1934 Act.
With
a
view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that
may
at any time permit the Investors to sell securities of the Company to the
public
without registration (“Rule
144”),
the
Company agrees to:
a. make
and
keep public information available, as those terms are understood and defined
in
Rule 144;
b. file
with
the SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains
subject to such requirements and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and
c. furnish
to each Investor so long as such Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company, if true, that it has
complied with the reporting requirements of Rule 144, the 1933 Act and the
1934
Act, and (ii) such other information as may be reasonably requested to permit
the Investors to sell such securities pursuant to Rule 144 without
registration.
9. Assignment
of Registration Rights.
The
rights under this Agreement shall be automatically assignable by the Investors
to any transferee of all or any portion of such Investor’s Registrable
Securities if: (i) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished
to the
Company within a reasonable time after such assignment; (ii) the Company
is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee,
and
(b) the securities with respect to which such registration rights are being
transferred or assigned; (iii) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee
is
restricted under the 1933 Act or applicable state securities laws; (iv) at
or
before the time the Company receives the written notice contemplated by clause
(ii) of this sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein; and (v) such
transfer shall have been made in accordance with the applicable requirements
of
the Securities Purchase Agreement.
-11-
10. Amendment
of Registration Rights.
Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Holders. Any amendment or waiver effected in accordance with this Section
10
shall be binding upon each Investor and the Company. No such amendment shall
be
effective to the extent that it applies to less than all of the holders of
the
Registrable Securities. No amendment shall be effective against any holder
of
Registrable Securities without the consent of such holder if such amendment
adversely effects the rights of such holder hereunder. No consideration shall
be
offered or paid to any Person to amend or consent to a waiver or modification
of
any provision of any of this Agreement unless the same consideration also
is
offered to all of the parties to this Agreement.
11. Miscellaneous.
a. A
Person
is deemed to be a holder of Registrable Securities whenever such Person owns
or
is deemed to own of record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon the
basis
of instructions, notice or election received from the record owner of such
Registrable Securities.
b. 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 (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending
party);
or (iii) one Business Day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive
the
same. The addresses and facsimile numbers for such communications shall
be:
If
to the
Company:
Xxxxxx,
Inc.
00
Xxxxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxxx
X. Xxxxxxxxx, Esq.
With
a
copy to:
Xxxxxxxx,
Xxxxx & Xxxxxx LLP
00
Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxx,
XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxxx
X. Xxxxxxx, Esq.
If
to
Legal Counsel:
Drinker
Xxxxxx & Xxxxx LLP
One
Xxxxx
Square
00xx
xxx
Xxxxxx Xxxxxxx
Xxxxxxxxxxxx,
XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxxxxx, Esq.
-12-
and
Xxxxxxx
Xxxx & Xxxxx LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Telephone: (212)
756-2000s
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxxx, Esq.
If
to a
Buyer, to its address and facsimile number set forth on the Schedule of Buyers
attached hereto, with copies to such Buyer’s representatives as set forth on the
Schedule of Buyers, or to such other address and/or facsimile number and/or
to
the attention of such other Person as the recipient party has specified by
written notice given to each other party five days prior to the effectiveness
of
such change. Written confirmation of receipt (A) given by the recipient of
such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a courier or overnight courier service shall
be
rebuttable evidence of personal service, receipt by facsimile or receipt
from a
nationally recognized overnight delivery service in accordance with clause
(i),
(ii) or (iii) above, respectively.
c. Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate
as a
waiver thereof.
d. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of
New
York,
without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of New
York.
Each party hereby irrevocably submits to the exclusive 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 suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court,
that
such suit, action or proceeding is brought in an inconvenient forum or that
the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to
such
party at the address for such notices to it under this Agreement and agrees
that
such service shall constitute good and sufficient service of process and
notice
thereof. Nothing contained herein shall be deemed to limit in any way any
right
to serve process in any manner permitted by law. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
e. This
Agreement, the other Transaction Documents (as defined in the Securities
Purchase Agreement) and the instruments referenced herein and therein constitute
the entire agreement among the parties hereto with respect to the subject
matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein.
This
Agreement, the other Transaction Documents and the instruments referenced
herein
and therein supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
f. Subject
to the requirements of Section 9, this Agreement shall inure to the benefit
of
and be binding upon the permitted successors and assigns of each of the parties
hereto.
-13-
g. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
h. This
Agreement may be executed in identical counterparts, each of which shall
be
deemed an original but all of which shall constitute one and the same agreement.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
i. Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
j. All
consents and other determinations required to be made by the Investors pursuant
to this Agreement shall be made, unless otherwise specified in this Agreement,
by the Required Holders.
k. The
language used in this Agreement will be deemed to be the language chosen
by the
parties to express their mutual intent and no rules of strict construction
will
be applied against any party.
l. This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may
any
provision hereof be enforced by, any other Person, except to the extent set
forth in Section 6.
m. The
obligations of each Investor hereunder are several and not joint with the
obligations of any other Investor, and no provision of this Agreement is
intended to confer any obligations on any Investor vis-à-vis any other Investor.
Nothing contained herein, and no action taken by any Investor hereto, shall
be
deemed to constitute the Investors as a partnership, an association, a joint
venture or any other kind of entity or group, or create a presumption that
the
Investors are in any way acting in concert or as a group with respect to
such
obligations or the transactions contemplated herein.
[Signature
Page Follows]
-14-
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
COMPANY:
|
|
|
XXXXXX,
INC.
|
|
|
By:
|
/s/Xxxxx X. Xxxxxxx |
| Xxxxx X. Xxxxxxx | |
| CFO |
[Signature
Page to Registration Rights Agreement]
-15-
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
BUYERS:
|
|
|
Radcliffe
SPC, Ltd. for and on behalf of the Class A
|
|
| Convertible Crossover Segregated Portfolio | |
| By: RG Capital Management, L.P. | |
| By: RGC Management Company, LLC | |
|
|
|
|
By:
|
/s/ Xxxxxx X. Xxxxxxxxxx |
|
Name:
Xxxxxx X. Xxxxxxxxxx
|
|
|
Title:
Managing Director
|
|
[Signature
Page to Registration Rights Agreement]
-16-
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
OTHER
BUYERS:
|
|
| LBI Group, Inc. | |
|
By:
|
/s/Xxxx X. Xxxxxxx |
|
Name:
Xxxx X. Xxxxxxx
|
|
|
Title:
SVP
|
| Kamunting Street Master Fund, Ltd. | |
|
By:
|
/s/Xxxxxx X. Dannagher |
|
Name:
Xxxxxx X. Dannagher
|
|
|
Title:
Director of Research
|
|
| Kamunting Street Capital Management, LP | |
| as Investment Manager for Kamunting Street Master Fund, Ltd. |
|
By:
|
/s/ Xxxxxx X. Xxxxx |
|
Name:
Xxxxxx X. Xxxxx
|
|
|
Title:
Authorized Signatory
|
| Capital Ventures International | |
|
By:
Heights Capital Management, the authorized
agent
|
|
|
By:
|
/s/Xxxxxx Xxxxxxxx |
|
Name:
Xxxxxx Xxxxxxxx
|
|
|
Title:
Investment Manager
|
| Evolution Master Fund Ltd. SPC Segregated Portfolio M. | |
|
By:
|
/s/ Xxxxxx Xxxxxxx |
|
Name:
Xxxxxx Xxxxxxx
|
|
|
Title:
Director
|
| Highbridge International LLC | |
|
by:
Highbridge Capital Management, LLC
|
|
|
By:
|
/s/ Xxxx X. Chill |
|
Name:
Xxxx X. Chill
|
|
|
Title:
Managing Director
|
| Dolphin Offshore Partners, L.P. | |
|
By:
|
/s/ Xxxxx X. Xxxxx |
|
Name:
Xxxxx X. Xxxxx
|
|
|
Title:
General Partner
|
[Signature
Page to Registration Rights Agreement]
-17-
EXHIBIT
A
SELLING
STOCKHOLDERS
The
shares of common stock being offered by the selling stockholders consists
of the
shares of common stock issuable upon conversion of the notes and issuable
upon
exercise of the warrants. For additional information regarding the issuance
of
the notes and warrants, see “Private Placement of Notes and Warrants” above. We
are registering the shares of common stock in order to permit the selling
stockholders to offer the shares for resale from time to time. Except for
the
ownership of the notes and the warrants issued pursuant to the Securities
Purchase Agreement, the selling stockholders have not had any material
relationship with us within the past three years.
The
table
below lists the selling stockholders and other information regarding the
beneficial ownership of the shares of common stock by each of the selling
stockholders. The second column lists the number of shares of common stock
beneficially owned by each selling stockholder, based on its ownership of
the
notes and warrants issued pursuant to the Securities Purchase Agreement,
as of
________, 200_, assuming conversion of the notes and exercise of the warrants
held by the selling stockholders on that date, after giving effect to certain
limitations included in the notes and the warrants, which are discussed below.
As a result of these limitations, the beneficial ownership information for
certain of the selling stockholders reflects the maximum number of shares
that
are beneficially owned by those selling stockholders after giving effect
to
these provisions and such beneficial ownership information does not include
all
of the shares that may be sold by such selling stockholders pursuant to this
prospectus. The third column lists the shares of common stock being offered
by
this prospectus by the selling stockholders.
In
accordance with the terms of registration rights agreements with the selling
stockholders, this prospectus generally covers the resale of at least 120%
of
the number of shares of common stock issuable upon conversion of the notes
and
exercise of the related warrants as of the trading day immediately preceding
the
date the registration statement is initially filed with the SEC. Because
the
conversion price of the notes and the exercise price of the warrants may
be
adjusted in certain circumstances, the number of shares that will actually
be
issued may be more or less than the number of shares being offered by this
prospectus. The fourth column assumes the sale of all of the shares offered
by
the selling stockholders pursuant to this prospectus.
Under
the
terms of the notes and the warrants, a selling stockholder may not convert
the
notes or exercise the warrants to the extent such conversion or exercise
would
cause such selling stockholder, together with its affiliates, to beneficially
own a number of shares of common stock which would exceed 4.99% of our then
outstanding shares of common stock following such conversion or exercise,
excluding for purposes of such determination shares of common stock issuable
upon conversion of the notes or exercise of the warrants that have not been
exercised. The selling stockholders may sell all, some or none of their shares
in this offering. See “Plan of Distribution.”
|
Name
of Selling Stockholder
|
Number
of Shares Beneficially Owned Prior to
Offering
|
Maximum
Number of Shares
to
be Sold Pursuant to this Prospectus
|
Number
of Shares Owned After Offering
|
|
Radcliffe
SPC, Ltd.
for
and on behalf of the Class A Convertible Crossover Segregated
Portfolio
|
0
|
||
|
LBI
Group, Inc.
|
0
|
||
|
Xxxxxxxxx
Xxxxxx Master Fund, Ltd.
|
0
|
||
|
Tribeca
Global Convertible Investments Limited
|
0
|
||
|
Capital
Ventures International
|
0
|
||
|
Evolution
Master Fund Ltd. SPC, Segregated Portfolio M
|
0
|
||
|
Smithfield
Fiduciary, LLC
|
0
|
||
|
Dolphin
Offshore Partners, L.P.
|
0
|
(1) [ ]
-2-
PLAN
OF DISTRIBUTION
We
are
registering the shares of common stock issuable upon conversion of the notes
and
the shares of common stock issuable upon exercise of the warrants to permit
the
resale of these shares of common stock by the holders of the notes and warrants
from time to time after the date of this prospectus. We will not receive
any of
the proceeds from the sale by the selling stockholders of the shares of common
stock.
The
selling stockholders may sell all or a portion of the shares of common stock
beneficially owned by them and offered hereby from time to time directly
or
through one or more underwriters, broker-dealers or agents. If the shares
of
common stock are sold through underwriters or broker-dealers, the selling
stockholders will be responsible for underwriting discounts or commissions
or
agent’s commissions. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of
the
sale, at varying prices determined at the time of sale, or at negotiated
prices.
These sales may be effected in transactions, which may involve crosses or
block
transactions,
|
•
|
on
any national securities exchange or quotation service on which
the
securities may be listed or quoted at the time of
sale;
|
|
•
|
in
the over-the-counter market;
|
|
•
|
in
transactions otherwise than on these exchanges or systems or in
the
over-the-counter market;
|
|
•
|
through
the writing of options, whether such options are listed on an options
exchange or otherwise;
|
|
•
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
•
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal
to
facilitate the transaction;
|
|
•
|
purchases
by a broker-dealer as principal and resale by the broker-dealer
for its
account;
|
|
•
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
•
|
privately
negotiated transactions;
|
|
•
|
short
sales;
|
|
•
|
sales
pursuant to Rule 144;
|
|
•
|
broker-dealers
may agree with the selling securityholders to sell a specified
number of
such shares at a stipulated price per
share;
|
|
•
|
a
combination of any such methods of sale;
and
|
|
•
|
any
other method permitted pursuant to applicable
law.
|
If
the
selling stockholders effect such transactions by selling shares of common
stock
to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or commissions from
purchasers of the shares of common stock for whom they may act as agent or
to
whom they may sell as principal (which discounts, concessions or commissions
as
to particular underwriters, broker-dealers or agents may be in excess of
those
customary in the types of transactions involved). In connection with sales
of
the shares of common stock or otherwise, the selling stockholders may enter
into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of common stock in the course of hedging in positions
they
assume. The selling stockholders may also sell shares of common stock short
and
deliver shares of common stock covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short sales.
The
selling stockholders may also loan or pledge shares of common stock to
broker-dealers that in turn may sell such shares.
The
selling stockholders may pledge or grant a security interest in some or all
of
the warrants or notes owned by them and, if they default in the performance
of
their secured obligations, the pledgees or secured parties may offer and
sell
the shares of common stock from time to time pursuant to this prospectus
or any
amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act of 1933, as amended, amending, if necessary, the list
of
selling stockholders to include the pledgee, transferee or other successors
in
interest as selling stockholders under this prospectus. The selling stockholders
also may transfer and donate the shares of common stock in other circumstances
in which case the transferees, donees, pledgees or other successors in interest
will be the selling beneficial owners for purposes of this
prospectus.
The
selling stockholders and any broker-dealer participating in the distribution
of
the shares of common stock may be deemed to be “underwriters” within the meaning
of the Securities Act, and any commission paid, or any discounts or concessions
allowed to, any such broker-dealer may be deemed to be underwriting commissions
or discounts under the Securities Act. At the time a particular offering
of the
shares of common stock is made, a prospectus supplement, if required, will
be
distributed which will set forth the aggregate amount of shares of common
stock
being offered and the terms of the offering, including the name or names
of any
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling stockholders and any discounts,
commissions or concessions allowed or reallowed or paid to
broker-dealers.
Under
the
securities laws of some states, the shares of common stock may be sold in
such
states only through registered or licensed brokers or dealers. In addition,
in
some states the shares of common stock may not be sold unless such shares
have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
There
can
be no assurance that any selling stockholder will sell any or all of the
shares
of common stock registered pursuant to the shelf registration statement,
of
which this prospectus forms a part.
The
selling stockholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of
1934,
as amended, and the rules and regulations thereunder, including, without
limitation, to the extent applicable Regulation M of the Exchange Act, which
may
limit the timing of purchases and sales of any of the shares of common stock
by
the selling stockholders and any other participating person. To the extent
applicable Regulation M may also restrict the ability of any person engaged
in
the distribution of the shares of common stock to engage in market-making
activities with respect to the shares of common stock. All of the foregoing
may
affect the marketability of the shares of common stock and the ability of
any
person or entity to engage in market-making activities with respect to the
shares of common stock.
We
will
pay all expenses of the registration of the shares of common stock pursuant
to
the registration rights agreements, estimated to be $[ ] in total, including,
without limitation, Securities and Exchange Commission filing fees and expenses
of compliance with state securities or “blue sky” laws; provided, however, that
a selling stockholder will pay all underwriting discounts and selling
commissions, if any. We will indemnify the selling stockholders against
liabilities, including some liabilities under the Securities Act, in accordance
with the registration rights agreements, or the selling stockholders will
be
entitled to contribution. We may be indemnified by the selling stockholders
against civil liabilities, including liabilities under the Securities Act,
that
may arise from any written information furnished to us by the selling
stockholder specifically for use in this prospectus, in accordance with the
related registration rights agreements, or we may be entitled to
contribution.
Once
sold
under the shelf registration statement, of which this prospectus forms a
part,
the shares of common stock will be freely tradable in the hands of persons
other
than our affiliates.
-2-
EXHIBIT
B
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
[Transfer
Agent]
[Address]
Attention:
Re: Xxxxxx,
Inc.
Ladies
and Gentlemen:
[We
are][I am] counsel to Xxxxxx, Inc., a Delaware corporation (the “Company”),
and
have represented the Company in connection with that certain Securities Purchase
Agreement (the “Securities
Purchase Agreement”)
entered into by and among the Company and the buyers named therein
(collectively, the “Holders”)
pursuant to which the Company issued to the Holders shares of its common
stock,
par value $.01 per share (the “Shares”).
Pursuant to the Securities 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)
under
the Securities Act of 1933, as amended (the “1933
Act”).
In
connection with the Company’s obligations under the Registration Rights
Agreement, on ____________ ___, 200_, 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][I] advise you that a member of the SEC’s
staff has advised [us][me] 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][I] 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.
This
letter shall serve as our standing opinion to you that the shares of Common
Stock are freely transferable by the Holders pursuant to the Registration
Statement. You need not require further letters from us to effect any future
legend-free issuance or reissuance of shares of Common Stock to the Holders
as
contemplated by the Company’s Irrevocable Transfer Agent Instructions dated
________ __, 2006.
|
Very
truly yours,
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
CC: [LIST
NAMES OF HOLDERS]
