EXHIBIT 10.2
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MINIMUM BORROWING NOTE REGISTRATION RIGHTS AGREEMENT
This Minimum Borrowing Note Registration Rights Agreement (this
"Agreement") is made and entered into as of August 31, 2004, by and between
XXX.xxx, Inc., a Delaware corporation (the "Company"), and Laurus Master Fund,
Ltd. (the "Purchaser").
This Agreement is made pursuant to the Security Agreement, dated as of
the date hereof, by and between the Purchaser and the Company (the "Security
Agreement"), and pursuant to the Minimum Borrowing Note and the Warrants
referred to therein.
The Company and the Purchaser hereby agree as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined herein
that are defined in the Security Agreement shall have the meanings given such
terms in the Security Agreement. As used in this Agreement, the following terms
shall have the following meanings:
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means shares of the Company's common stock, par value
$0.005 per share.
"EFFECTIVENESS DATE" means with respect to the Registration Statement
required to be filed hereunder, the 90th day following the Closing Date if the
Commission has no comments on such Registration Statement and the 120th day
following the Closing Date if the Commission does provide written comments to
such Registration Statement.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section
2(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and any successor statute.
"FILING DATE" means, with respect to (1) the Registration Statement
which is required to be filed with respect to the Loans evidenced by a Minimum
Borrowing Note made on the initial funding date, the date which is thirty (30)
days after the Closing Date, and (2) with respect to shares of Common Stock
issuable to the Holder as a result of adjustments to the Fixed Conversion Price
made pursuant to, Section 3.5 of the Minimum Borrowing Notes, or Section 4 of
the Warrant or otherwise, thirty (30) days after the occurrence such event or
the date of the adjustment of the Fixed Conversion Price.
"HOLDER" or "HOLDERS" means the Purchaser or any of its affiliates or
transferees to the extent any of them hold Registrable Securities.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 5(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 5(c).
"MINIMUM BORROWING NOTE" has the meaning set forth in the Security
Agreement.
"PROCEEDING" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"PROSPECTUS" means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"REGISTRABLE SECURITIES" means the shares of Common Stock issued upon
the conversion of the each Minimum Borrowing Note and issuable upon exercise of
the Warrants.
"REGISTRATION STATEMENT" means each registration statement required to
be filed hereunder, including the Prospectus therein, amendments and supplements
to such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
"RULE 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"RULE 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"RULE 424" means Rule 424 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and any
successor statute.
"TRADING MARKET" means any Principal Market "WARRANTS" means the
Common Stock purchase warrants issued pursuant to the Security Agreement.
2. REGISTRATION.
(a) On or prior to each Filing Date, the Company shall prepare and
file with the Commission a Registration Statement covering the Registrable
Securities for an offering to be made on a continuous basis pursuant to Rule
415. Each Registration Statement shall be on
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Form S-3 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith). The Company shall cause each
Registration Statement to become effective and remain effective as provided
herein. The Company shall use its reasonable commercial efforts to cause the
first such Registration Statement to be declared effective under the Securities
Act as promptly as possible after the filing thereof, but in any event no later
than the applicable Effectiveness Date. The Company shall use its reasonable
commercial efforts to cause any subsequent such Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event no later than the applicable Effectiveness
Date. The Company shall use its reasonable commercial efforts to keep each
Registration Statement continuously effective under the Securities Act until the
date which is the earlier date of when (i) all Registrable Securities covered by
such Registration Statement have been sold or (ii) all Registrable Securities
covered by such Registration Statement may be sold immediately without
registration under the Securities Act and without volume restrictions pursuant
to Rule 144(k), as determined by the counsel to the Company pursuant to a
written opinion letter to such effect, addressed and acceptable to the Company's
transfer agent and the affected Holders or (iii) two years from the Closing Date
(each, an "Effectiveness Period"). (b) If: (i) any Registration Statement is not
filed on or prior to the applicable Filing Date for such Registration Statement;
(ii) a Registration Statement filed hereunder is not declared effective by the
Commission by the date required hereby with respect to such Registration
Statement; (iii) after a Registration Statement is filed with and declared
effective by the Commission, such Registration Statement ceases to be effective
(by suspension or otherwise) as to all Registrable Securities to which it is
required to relate at any time prior to the expiration of the Effectiveness
Period applicable to such Registration Statement (without being succeeded
immediately by an additional Registration Statement filed and declared
effective) for a period of time which shall exceed 45 days in the aggregate per
year or more than 30 consecutive calendar days (defined as a period of 365 days
commencing on the date such Registration Statement is declared effective); or
(iv) the Common Stock is not listed or quoted, or is suspended from trading on
any Trading Market for a period of three (3) consecutive Trading Days (provided
the Company shall not have been able to cure such trading suspension within 45
days of the notice thereof or list the Common Stock on another Trading Market);
(any such failure or breach being referred to as an "Event," and for purposes of
clause (i) or (ii) the date on which such Event occurs, or for purposes of
clause (iii) the date which such 30 day or 20 consecutive day period (as the
case may be) is exceeded, or for purposes of clause (iv) the date on which such
three (3) Trading Day period is exceeded, being referred to as "Event Date"),
then until the applicable Event is cured, the Company shall pay to each Holder
an amount in cash, as liquidated damages and not as a penalty, equal to one
percent (1.0%) for each thirty (30) day period (prorated for partial periods) on
a daily basis of the original principal amount of each applicable Minimum
Borrowing Note. While such Event continues, such liquidated damages shall be
paid not less often than each thirty (30) days. Any unpaid liquidated damages as
of the date when an Event has been cured by the Company shall be paid within
three (3) days following the date on which such Event has been cured by the
Company. In no event shall the aggregate liquidated damages amount under each of
clause (i), (ii) (iii), or (iv) exceed six percent (6.0%) of the original
principal amount of the Minimum Borrowing Note.
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(c) Promptly following the Effectiveness Date, the Company shall
cause its counsel issue an opinion to the Company's transfer agent in the form
attached hereto as Exhibit A. Further, following the Effectiveness Date and upon
a request from the Holder in connection with a sale by the Holder of Registrable
Securities, the Company shall make reasonable efforts to cause its counsel to
cooperate with the Holder to facilitate the preparation and delivery of a
certificate or certificates representing the Registrable Securities to be
delivered to a purchaser pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the Securities Act and
the Security Agreement, of all restrictive legends; provided that in connection
with any such request, counsel to the Company may require the Holder to deliver
to it a letter in the form attached hereto as Exhibit B.
3. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions hereof to effect the registration of any Registrable Securities
under the Securities Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement with
respect to such Registrable Securities, respond as promptly as possible to any
comments received from the Commission, and use its best efforts to cause such
Registration Statement to become and remain effective for the Effectiveness
Period with respect thereto, and promptly provide to the Purchaser copies of all
filings and Commission letters of comment relating thereto;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by
such Registration Statement and to keep such Registration Statement effective
until the expiration of the Effectiveness Period applicable to such Registration
Statement;
(c) furnish to the Purchaser such number of copies of the Registration
Statement and the Prospectus included therein (including each preliminary
Prospectus) as the Purchaser reasonably may request to facilitate the public
sale or disposition of the Registrable Securities covered by such Registration
Statement;
(d) use its commercially reasonable efforts to register or qualify the
Purchaser's Registrable Securities covered by such Registration Statement under
the securities or "blue sky" laws of such jurisdictions within the United States
as the Purchaser may reasonably request, provided, however, that the Company
shall not for any such purpose be required to qualify generally to transact
business as a foreign corporation in any jurisdiction where it is not so
qualified or to consent to general service of process in any such jurisdiction;
(e) list the Registrable Securities covered by such Registration
Statement with any securities exchange on which the Common Stock of the Company
is then listed;
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(f) immediately notify the Purchaser at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the Prospectus contained in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing; and
(g) make available for inspection by the Purchaser and any attorney,
accountant or other agent retained by the Purchaser, all publicly available,
non-confidential financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all publicly available, non-confidential information
reasonably requested by the attorney, accountant or agent of the Purchaser.
In connection with the Company's obligations under this Agreement, each
Holder shall furnish to the Company such information regarding such Holder and
the distribution and/or sale proposed by such Holder as the Company may
reasonably request in writing and as shall be reasonably required in connection
with any Registration Statement to be filed pursuant to this Agreement.
4. REGISTRATION EXPENSES. All expenses relating to the Company's
compliance with Sections 2 and 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders are called "Registration Expenses". All selling
commissions applicable to the sale of Registrable Securities, including any fees
and disbursements of any special counsel to the Holders beyond those included in
Registration Expenses, are called "Selling Expenses." The Company shall only be
responsible for Registration Expenses.
5. INDEMNIFICATION.
(a) In the event of a registration of any Registrable Securities under
the Securities Act pursuant to this Agreement, the Company will indemnify and
hold harmless the Purchaser, and its officers, directors and each other person,
if any, who controls the Purchaser within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Purchaser, or such persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions 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 Registrable Securities were registered under the Securities Act
pursuant to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the 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 will reimburse the Purchaser, and each such person for any
reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
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provided, however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by or on
behalf of the Purchaser or any such person in writing specifically for use in
any such document. For the purposes of this Section 5, losses claims, damages or
liabilities shall not be deemed to include any consequential indirect, exemplary
or special damages, whether or not such damages where reasonably foreseeable.
(b) In the event of a registration of the Registrable Securities under
the Securities Act pursuant to this Agreement, the Purchaser will indemnify and
hold harmless the Company, and its officers, directors and each other person, if
any, who controls the Company within the meaning of the Securities Act, against
all losses, claims, damages or liabilities, joint or several, to which the
Company or such persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact which was furnished in writing by the
Purchaser to the Company expressly for use in (and such information is contained
in) the Registration Statement under which such Registrable Securities were
registered under the Securities Act pursuant to this Agreement, any preliminary
Prospectus or final Prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the 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 will reimburse the Company and each
such person for any reasonable legal or other expenses incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that the Purchaser will be liable in any
such case if and only to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished in writing to the Company by or on behalf of the Purchaser
specifically for use in any such document. Notwithstanding the provisions of
this paragraph, the Purchaser shall not be required to indemnify any person or
entity in excess of the amount of the aggregate net proceeds received by the
Purchaser in respect of Registrable Securities in connection with any such
registration under the Securities Act.
(c) Promptly after receipt by a party entitled to claim
indemnification hereunder (an "Indemnified Party") of notice of the commencement
of any action, such Indemnified Party shall, if a claim for indemnification in
respect thereof is to be made against a party hereto obligated to indemnify such
Indemnified Party (an "Indemnifying Party"), notify the Indemnifying Party in
writing thereof, but the omission so to notify the Indemnifying Party shall not
relieve it from any liability which it may have to such Indemnified Party other
than under this Section 5(c) and shall only relieve it from any liability which
it may have to such Indemnified Party under this
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Section 5(c) if and to the extent the Indemnifying Party is prejudiced by such
omission. In case any such action shall be brought against any Indemnified Party
and it shall notify the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such Indemnified Party, and, after notice from the Indemnifying
Party to such Indemnified Party of its election so to assume and undertake the
defense thereof, the Indemnifying Party shall not be liable to such Indemnified
Party under this Section 5(c) for any legal expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof; if the
Indemnified Party retains its own counsel, then the Indemnified Party shall pay
all fees, costs and expenses of such counsel, provided, however, that, if the
defendants in any such action include both the indemnified party and the
Indemnifying Party and the Indemnified Party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the Indemnifying Party or if the interests
of the Indemnified Party reasonably may be deemed to conflict with the interests
of the Indemnifying Party, the Indemnified Party shall have the right to select
one separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the reasonable expenses and fees
of such separate counsel and other expenses related to such participation to be
reimbursed by the Indemnifying Party as incurred.
(d) In order to provide for just and equitable contribution in the
event of joint liability under the Securities Act in any case in which either
(i) the Purchaser, or any officer, director or controlling person of the
Purchaser, makes a claim for indemnification pursuant to this Section 5 but it
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 5 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required on
the part of the Purchaser or such officer, director or controlling person of the
Purchaser in circumstances for which indemnification is provided under this
Section 5; then, and in each such case, the Company and the Purchaser will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion so that the
Purchaser is responsible only for the portion represented by the percentage that
the public offering price of its securities offered by the Registration
Statement bears to the public offering price of all securities offered by such
Registration Statement, provided, however, that, in any such case, (A) the
Purchaser will not be required to contribute any amount in excess of the public
offering price of all such securities offered by it pursuant to such
Registration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
6. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company or by a Holder,
of any of their respective obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement.
(b) NO PIGGYBACK ON REGISTRATIONS. Except as set forth on Schedule
6(b) hereto, neither the Company nor any of its security holders (other than the
Holders in such capacity pursuant hereto) may include securities of the Company
in any Registration Statement other than the Registrable Securities, and the
Company shall not after the date hereof enter into any agreement providing any
such right for inclusion of shares in the Registration Statement to
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any of its security holders. Except as and to the extent specified in Schedule
6(b) hereto, the Company has not previously entered into any agreement granting
any registration rights with respect to any of its securities to any Person that
have not been fully satisfied.
(c) COMPLIANCE. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it in connection with sales of Registrable Securities pursuant to any
Registration Statement.
(d) DISCONTINUED DISPOSITION. Each Holder agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the Company
of the occurrence of a Discontinuation Event (as defined below), such Holder
will forthwith discontinue disposition of such Registrable Securities under the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph. For purposes of this Section 7(d), a "Discontinuation Event" shall
mean (i) when the Commission notifies the Company whether there will be a
"review" of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the
Holders); (ii) any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by the
Commission of any stop order suspending the effectiveness of such Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and/or (v) the occurrence of any event or passage of time that makes
the financial statements included in such Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(e) PIGGY-BACK REGISTRATIONS. If at any time during any Effectiveness
Period there is not an effective Registration Statement covering all of the
Registrable Securities required to be covered during such Effectiveness Period
and the Company shall determine to prepare and file with the Commission a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or
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business or equity securities issuable in connection with stock option or other
employee benefit plans, then the Company shall send to each Holder written
notice of such determination and, if within fifteen (15) days after receipt of
such notice, any such Holder shall so request in writing, the Company shall
include in such registration statement all or any part of such Registrable
Securities such holder requests to be registered, to the extent the Company may
do so without violating registration rights of others which exist as of the date
of this Agreement, subject to customary underwriter cutbacks applicable to all
holders of registration rights and subject to obtaining any required the consent
of any selling stockholder(s) to such inclusion under such registration
statement.
(f) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of the then outstanding Registrable Securities. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of certain Holders
and that does not directly or indirectly affect the rights of other Holders may
be given by Holders of at least a majority of the Registrable Securities to
which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.
(g) NOTICES. Any notice or request hereunder may be given to the
Company or the Purchaser at the respective addresses set forth below or as may
hereafter be specified in a notice designated as a change of address under this
Section 7(g). Any notice or request hereunder shall be given by registered or
certified mail, return receipt requested, hand delivery, overnight mail or
telecopy (confirmed by mail). Notices and requests shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any party to
whom it is addressed, in the case of those by mail or overnight mail, deemed to
have been given three (3) business days after the date when deposited in the
mail or with the overnight mail carrier, and, in the case of a telecopy, when
confirmed. The address for such notices and communications shall be as follows:
If to the Company: XXX.Xxx, Inc.
000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
With a copy to: Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
If to a Purchaser: To the address set forth under
such Purchaser name on the
signature pages hereto.
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If to any other Person who is then the registered Holder:
To the address of such Holder as
it appears in the stock transfer
books of the Company
or such other address as may be designated in writing hereafter in accordance
with this Section 6(g) by such Person.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of the Purchaser . The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Each Holder may assign their respective rights hereunder in the
manner and to the Persons as permitted under the Notes and the Security
Agreement with the prior written consent of the Company, which consent shall not
be unreasonably withheld.
(i) EXECUTION AND COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(j) GOVERNING LAW. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement shall be
commenced exclusively in the state and federal courts sitting in the City of New
York, Borough of Manhattan. Each party hereto 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
Proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such Proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for 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. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby. If either party shall
commence a Proceeding to enforce any provisions of a Transaction Document, then
the prevailing party in such Proceeding shall be reimbursed by the other party
for its reasonable attorneys fees and other
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costs and expenses incurred with the investigation, preparation and prosecution
of such Proceeding.
(k) CUMULATIVE REMEDIES. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(l) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(m) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
[Balance of page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
XXX.XXX, INC.
By: /s/ Xxxxxx X. XxXxxxxx
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Name: Xxxxxx X. XxXxxxxx
--------------------------
Title: Chief Financial Officer
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LAURUS MASTER FUND, LTD.
By: /s/ Xxxxx Grin
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Name: Xxxxx Grin
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Title: Director
-------------------------
Address for Notices:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Grin
Facsimile: 000-000-0000
12
FORM OF TH&T OPINION TO BE ATTACHED AS EXHIBIT A TO REGISTRATION RIGHTS
AGREEMENT:
[DATE]
American Stock Transfer and Trust Company
0000 00xx Xxxxxx
Xxxxxxxx, XX 00000
Re: XXX.xxx, Inc.
-------------
Ladies and Gentlemen:
We are counsel to XXX.xxx, Inc., a Delaware corporation (the
"Company"). From time to time you will receive a notice (a "Selling Stockholder
Notice") from certain stockholders of the Company (each a "Selling Stockholder")
related to the sale of "restricted" shares (the "Restricted Securities") of the
Company's common stock, par value $0.005 per share (the "Common Stock"),
pursuant to a Registration Statement on Form S-3 (No. 333-________) (the
"Registration Statement") under the Securities Act of 1933, as amended. The
Selling Stockholder Notice will indicate that such Selling Stockholder has sold
all or a portion of his or her Restricted Securities pursuant to the
Registration Statement, as the same may have been amended. The Securities and
Exchange Commission declared the Registration Statement effective on __________.
In connection with each request by a Selling Stockholder to sell all
or some of his or her Restricted Shares pursuant to the aforementioned
Registration Statement, we will have received and relied upon all such documents
as we have deemed appropriate for purposes of this opinion.
Based upon the foregoing and subject to the receipt by you of a
clearance memorandum in the form attached hereto as Exhibit A (the "Clearance
Memorandum") signed by an attorney of this firm, we are of the opinion that it
is appropriate for you, as transfer agent, upon presentation of a certificate or
certificates for transfer of the Restricted Securities into the name or for the
account of the purchaser, to issue a new certificate therefor to such purchaser
and, if applicable, a certificate representing the balance of the Selling
Stockholder's certificate, in each case with the restrictions and the
restrictive legends, if any, set forth in such Clearance Memorandum.
Very truly yours,
XXXXX, XXXXXXX & XXXXXXXXX, LLP
13
Exhibit A
---------
Clearance Memorandum
To: American Stock Transfer and Trust Company
From: Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
Date:
Re: Sale of Securities Pursuant to Registration Statement on Form S-3
(File No. 333-____); Legal Opinion of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP,
dated [______]
Issuer: XXX.xxx, Inc.
Transferor: ____________________________
Certificate Number: ____________________
Number of Shares Sold: ___________ Shares
Representation Letters Reviewed:
Transferor Representation Letter(s): Date(s):_________________________
Restrictive Legend on New Certificates:
Transferee Certificate: [_] None [_] Present Restrictive Legend(s)
[_] Other (Specify Below)
Name of Transferee if restricted: ______________________
Balance Certificate to Transferor (if applicable): [_] None [_]Present
Restrictive Legend(s)
[_] Other (Specify Below)
Responsible Attorney Signature: ______________________________
Print Name: ______________________________
14
FORM OF TRANSFEROR REP LETTER TO BE DELIVERED BY LAURUS (AND INCLUDED AS EXHIBIT
B TO REGISTRATION RIGHTS AGREEMENT):
NOTIFICATION OF SALE
The undersigned Stockholder sold to the public shares of XXX.xxx, Inc.
registered under a certain Registration Statement on Form S-3, File No.
333-_____, as follows.
================================================================================
Name, Address,
Telephone Number and
Name, Address, Telephone Facsimile Number of Number of Number of
Number and Facsimile Agent, Broker-Dealer or Shares Shares Date
Number of Stockholder Underwriter Owned Sold of Sale
================================================================================
Tel: Tel:
Fax: Fax:
================================================================================
Other Information:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
__________________________
Signature of Stockholder
__________________________
Print Name
__________________________
Date
ALL NOTIFICATIONS OF SALE SHOULD BE FORWARDED BY FACSIMILE TO:
XXXXX, XXXXXXX & XXXXXXXXX, LLP
000 XXXX XXXXXX
XXXXXX, XXXXXXXXXXXXX 00000
ATTN: XXXXXXX X. XXXXXXX
PHONE: (000) 000-0000
FACSIMILE: (000) 000-0000
WITHIN 24 HOURS FOLLOWING A SALE
--------------------------------
15
EXHIBIT 10.2
------------
Date: ________________________
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Re: XXX.xxx, Inc. Registration Statement on Form S-3
------------------------------------------------
Dear Sir or Madam:
The undersigned stockholder hereby requests that stock certificate(s)
for a total of _____________________________ shares of Common Stock (the
"Shares") of XXX.xxx, Inc. (the "Company"), which the undersigned owns, be
issued in the name of ____________ _________________, without the restrictive
legend presently on the certificate(s) held by the undersigned stockholder. The
undersigned stockholder has been informed by you that a Registration Statement
on Form S-3 (File No. 333-_____) (the "Registration Statement") covering resale
of the Shares was declared effective by the Securities and Exchange Commission
on _____________. The undersigned stockholder further represents to and agrees
with you that:
1. In connection with the sale by the undersigned stockholder of any
of the Shares, the undersigned stockholder has delivered a copy
of the Prospectus included in the Registration Statement to the
purchaser directly or through the undersigned stockholder's
broker-dealer in compliance with the timing requirements of the
Securities Act of 1933 and the Securities Exchange Act of 1934.
2. Any such sale has been made only in the manner described under
"Plan of Distribution" in the Prospectus.
3. The undersigned stockholder will only sell the Shares while the
Registration Statement is effective, unless another exemption
from registration is available.
4. The undersigned stockholder has not and will not engage in any
stabilizing or other transaction in violation of Regulation M and
has not and will not trade on any undisclosed material
information about the Company in violation of Rule 10b-5 under
the Exchange Act. If the undersigned stockholder is subject to
the Company's xxxxxxx xxxxxxx policy, the undersigned stockholder
has and will continue to comply with the Company's xxxxxxx
xxxxxxx policy and, to the extent applicable, blackout periods.
5. The Company, its attorneys and its transfer agent may rely on
this letter to the same extent as if it were addressed to them.
The undersigned stockholder agrees that you may rely upon the
foregoing statements. The undersigned stockholder agrees to notify you
immediately of any development or occurrence that, to his, her or its knowledge,
would render any of the foregoing representations and agreements inaccurate.
Sincerely,
By: ___________________________
Name:___________________________
Title:__________________________
