EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is made as of October 25, 1996 by and between Xxx-Tyme,
Inc., a Delaware corporation (the "Company"), and Ulster Investments Limited,
an Antiguan corporation ("Purchaser").
The Company and Purchaser are parties to a certain Loan and Warrant
Purchase Agreement of even date herewith (the "Purchase Agreement"). In order
to induce Purchaser to enter into the Purchase Agreement, the Company has
agreed to provide the registration rights to Purchaser as set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
"Closing" under the Purchase Agreement. Except as otherwise indicated,
capitalized terms used herein are defined in Section 9 hereof.
The parties hereto agree as follows:
1. Effectiveness. In the event the Purchaser is unable to sell the
Registrable Securities to the Public in an open market transaction at any time
after a 40-day restricted period immediately following the Closing (as defined
in the Purchase Agreement) due to any statute, administrative order, rule,
regulation, court decision or regulatory interpretation which amends or repeals
Regulation S as promulgated by the Securities and Exchange Commission or
otherwise makes it unavailable to the Purchaser or due to any breach of
warranty, representation or covenant in the Purchase Agreement by the Company,
the rights of the Purchaser contained herein will become effective ("Effective
Date").
2. Piggyback Registrations.
(a) Right to Piggyback. Whenever, after the Effective Date,
the Company proposes to register any of its securities under the
Securities Act other than pursuant to a Demand Registration hereunder
(as set forth in Subsection 3(a)), and the registration form to be
used may be used for the registration of any Registrable Securities (a
"Piggyback Registration"), the Company will give prompt written notice
to all holders of the Registrable Securities for which the
registration form may be used of its intention to effect such a
registration and will include in such registration all Registrable
Securities (in accordance with the priorities set forth in Subsections
2(c) and 2(d) below) with respect to which the Company has received
written requests for inclusion therein within fifteen (15) days after
the receipt of the Company's notice.
(b) Piggyback Expenses. The Registration Expenses (as defined
in Section 6(a) hereof) of the holders of Registrable Securities will
be paid by the Company in all Piggyback Registrations.
(c) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the
Company and the managing underwriters advise the Company in writing
that in their opinion the number of securities
requested to be included in such registration exceeds the number which
can be sold in such offering, the Company will include in such
registration (i) first, the securities that the Company proposes to
sell and the Registrable Securities requested to be included in such
registration, pro rata among the Company and the holders of such
Registrable Securities on the basis of the number of shares which the
Company proposes to register and of the Registrable Securities being
requested for registration which are owned by such holders; provided,
however, that should any state securities administrator require any
escrow or holdback of securities, such securities will come first from
the securities proposed to be sold by the Company, and (ii) second,
other securities requested to be included in such registration.
(d) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of
holders of the Company's securities and the managing underwriters
advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the
number which can be sold in such offering, the Company will include in
such registration (i) first, the Registrable Securities requested to
be included in such registration and the securities requested to be
included therein by the holders requesting such registration, pro rata
among the holders of Registrable Securities and the holders of the
securities requesting such registration on the basis of the number of
securities so requested to be included therein, and (ii) second, the
other securities requested to be included in such registration.
(e) Selection of Underwriters. If any Piggyback Registration
is an underwritten offering, the selection of investment banker(s) and
manager(s) for the offering must be approved by the holders of a
majority of the Registrable Securities included in such Piggyback
Registration, which approval shall not be unreasonably withheld.
(f) Other Registrations. If the Company has previously filed
a registration statement with respect to Registrable Securities
pursuant to Section 3 or pursuant to this Section 2, and if such
previous registration has not been withdrawn or abandoned, the Company
will not file or cause to be effected any other registration of any of
its equity securities or securities convertible or exchangeable into
or exercisable for its equity securities under the Securities Act
(except on Form S-8 or any successor form), whether on its own behalf
or at the request of any holder or holders of such securities, until a
period of at least six (6) months has elapsed from the effective date
of such previous registration except with respect to any Demand
Registration which is required due to the inability of the holders of
Registrable Shares to register the Registrable Shares required to be
included in any Piggyback Registration.
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3. Demand Registrations.
(a) Requests for Registration. Subject to the terms of this
Agreement, the holders of at least a majority of the Registrable
Securities may, at any time after the Effective Date, request (i)
registration under the Securities Act of all or part of their
Registrable Securities on Form S-1 or any similar long-form
registration ("Long-Form Registrations") or (ii) registration under
the Securities Act of all or part of their Registrable Securities on
Form S-2 or S-3 (if eligible) or any similar short-form registration
("Short-Form Registrations"), if available. Within ten (10) days after
receipt of any such request, the Company will give written notice of
such request to all other holders of the Registrable Securities and
will include in such registration all Registrable Securities with
respect to which the Company has received written requests for
inclusion therein within fifteen (15) days after the receipt of the
Company's notice. All registrations requested pursuant to this
Subsection 2(a) are referred to herein as "Demand Registrations."
(b) Number of Demand Registrations. The holders of the
Registrable Securities will be entitled to request one (1) Demand
Registration pursuant to which the Registrable Securities shall be
registered. The Company will pay all Registration Expenses with
respect to a Demand Registration. A registration will not count as a
permitted Demand Registration (i) until it has become effective
(unless such Demand Registration has not become effective due solely
to the fault of the holders requesting such registration) and (ii)
unless the holders of the Registrable Securities are able to register
all of the Registrable Securities requested to be included in such
registration (unless such holders are not so able to register such
amount of the Registrable Securities due solely to the fault of such
holders); provided, however, that in any event the Company will pay
all Registration Expenses in connection with any registration
initiated as a Demand Registration.
(c) Type of Demand Registration. A Demand Registration will
be a Short- Form Registration in which the Company will pay all
Registration Expenses whenever the Company is permitted to use any
applicable short form. Otherwise, the Demand Registration will be a
Long-Form Registration. As long as the Company remains subject to the
reporting requirements of the Securities Exchange Act, the Company
will use its best efforts to make Short-Form Registrations available
for the sale of Registrable Securities.
(d) Priority on Demand Registrations. The Company will not
include in any Demand Registration any securities which are not
Registrable Securities without the written consent of holders of a
majority of the Registrable Securities. If other securities are
permitted to be included in a Demand Registration which is an
underwritten offering and the managing underwriters advise the Company
in writing that in their opinion the number of Registrable Securities
and other securities requested to be included exceeds the number of
Registrable Securities and other securities which can be sold in such
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offering, the Company will include in such registration, prior to the
inclusion of any securities which are not Registrable Securities, the
number of Registrable Securities requested to be included which in the
opinion of such underwriters can be sold, pro rata among the respective
holders on the basis of the amount of Registrable Securities so
requested to be included therein.
(e) Selection of Underwriters. The holders of a majority of
the Registrable Securities included in any Demand Registration will
have the right to select the investment banker(s) and manager(s) to
administer the offering.
(f) Period of Effectiveness. The Company will maintain the
effectiveness of any Demand Registration for a period of one (1) year
after effectiveness unless the holders of the Registrable Securities
notify the Company that all of the Registrable Securities have been
sold pursuant to the Demand Registration.
(g) Other Registration Rights. Except as provided in this
Agreement, the Company will not grant to any person or entity the
right to request the Company to register any equity securities of the
Company, or any securities convertible or exchangeable into or
exercisable for such securities, without the written consent of the
holders of a majority of the Registrable Securities.
4. Holdback Agreements.
(a) Each holder of Registrable Securities agrees not to
effect any public sale or distribution of equity securities of the
Company, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven (7) days prior to
and the 90-day period beginning on the effective date of any
underwritten Demand Registration or any underwritten Piggyback
Registration in which Registrable Securities are included (except as
part of such underwritten registration), unless the underwriters
managing the registered public offering otherwise agree and such sale
or distribution otherwise complies with Regulation ss.240.10b-6 of the
Securities Exchange Act; provided, however, that the holders of
Registrable Securities may elect, at their option, to not have the
underwriter sell the Registrable Securities which such holders have
registered and to otherwise determine the method and timing of the
sale of the securities so registered without regard to the holdback
provisions hereof.
(b) The Company agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, during the
seven (7) days prior and the 90-day period beginning on the effective
date of any underwritten Demand Registration or any underwritten
Piggyback Registration (except as part of such underwritten
registration or pursuant to registrations on Form S-8 or any successor
form), unless the underwriters managing the registered public offering
otherwise agree, and (ii) to cause each 10% or greater holder of its
equity securities, or any securities convertible into or exchangeable
or exercisable for such
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securities, purchased from the Company (other than in a registered
public offering) to agree not to effect any public sale or
distribution of any such securities during such period (except as part
of such underwritten registration, if otherwise permitted, or except
as permitted in subsection (a) of this Section 4), unless the
underwriters managing the registered public offering otherwise agree.
5. Registration Procedures. Whenever the holders of Registrable
Securities have requested that any Registrable Securities will be registered
pursuant to this Agreement, the Company will use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto, the Company will
as expeditiously as possible:
(a) prepare and file with the Securities and Exchange
Commission a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration
statement to become effective (provided that, before filing a
registration statement or prospectus or any amendments or supplements
thereto, the Company will furnish to the counsel or counsels of the
holders of the Registrable Securities covered by such registration
statement copies of all such documents proposed to be filed);
(b) prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period
of not less than twelve (12) months and comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such other
documents as such seller may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of
such jurisdictions as any seller of Registrable Securities reasonably
requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate
the disposition in such jurisdictions of Registrable Securities owned
by such seller (provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this subparagraph, (ii)
subject itself to taxation in any such jurisdiction, or (iii) consent
to general service of process in any such jurisdiction);
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(e) notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the prospectus included in such registration statement contains
an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading, and, at the request of any
such seller, the Company will prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on
each securities exchange, the Nasdaq National Market, the Nasdaq Small
Cap Market or other system or facility on which similar securities
issued by the Company are then listed or traded, if any;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
registration statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other
actions as the holders of a majority of the Registrable Securities
being sold or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities
(including, without limitation, effecting a stock split or a
combination of shares); and
(i) make available for inspection during normal business
hours by any seller of Registrable Securities, any underwriter
participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by any
such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the
Company's officers, directors, employees and independent accountants
to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such
registration statement.
6. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including, without limitation, all
registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, listing fees, printing expenses,
messenger and delivery expenses, and fees and disbursements of counsel
for the Company and all independent certified public accountants,
underwriters (excluding discounts and commissions) and other persons
or entities retained by the Company (all such expenses being herein
called "Registration Expenses") will be borne by the Company. The
Company will also pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or
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accounting duties), the expense of any annual audit or quarterly
review, the expense of any liability insurance and the expenses and
fees for listing the securities to be registered on each securities
exchange on which similar securities issued by the Company are then
listed.
(b) In connection with each Demand Registration, the Company
will reimburse the holders of Registrable Securities covered by such
registration for the reasonable fees and disbursements of one counsel
chosen by the holders of a majority of such Registrable Securities.
7. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted
by law, each holder of Registrable Securities, its officers and
directors and each person or entity who controls such holder (within
the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses caused by any untrue or alleged
untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein, except insofar as the
same are caused by or contained in any information furnished in
writing to the Company by such holder expressly for use therein or
which such holder failed to provide after being so requested or by
such holder's failure to deliver a copy of the registration statement
or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies
of the same or which is otherwise attributable to the gross negligence
or willful misconduct of such holder. In connection with an
underwritten offering, the Company will indemnify such underwriters,
their officers and directors and each person or entity who controls
such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of
the holders of Registrable Securities.
(b) In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder
will furnish to the Company in writing such information and affidavits
as the Company reasonably requests for use in connection with any such
registration statement or prospectus and, to the extent permitted by
law, will indemnify the Company, its directors and officers, each
person or entity who controls the Company (within the meaning of the
Securities Act), against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of
material fact contained or required to be contained in the
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained or required to be
contained in any information or affidavit so furnished or required to
be so furnished in writing by such holder; provided that the
obligation to indemnify will be several, not joint and several,
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among such holders of Registrable Securities and the liability of each
such holder of Registrable Securities will be in proportion to and
limited to the net amount received by such holder from the sale of
Registrable Securities pursuant to such registration statement.
(c) Any person or entity entitled to indemnification
hereunder will (i) give prompt written notice to the indemnifying
party of any claim with respect to which it seeks indemnification and
(ii) unless in such indemnified party's reasonable judgment a conflict
of interest between such indemnified and indemnifying parties may
exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim, with counsel reasonably satisfactory
to the indemnified party. If such defense is assumed, the indemnifying
party will not be subject to any liability for any settlement made by
the indemnified party without its consent (but such consent will not
be unreasonably withheld). An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for
all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party
a conflict of interest may exist between such indemnified party and
any other of such indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement
will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director
or controlling person or entity of such indemnified party and will
survive the transfer of securities. The Company also agrees to make
such provisions, as are reasonably requested by any indemnified party,
for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
8. Current Public Information. At all times after the Company has
filed a registration statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the Securities
Exchange Act and such registration statement has been declared effective, the
Company will file all reports required to be filed by it under the Securities
Act and the Securities Exchange Act, and will take such further action as any
holder or holders of Registrable Securities may reasonably request, all to the
extent required to enable such holders to sell Registrable Securities pursuant
to (i) Rule 144 adopted by the Securities and Exchange Commission under the
Securities Act (as such rule may be amended from time to time) or any similar
rule or regulation hereafter adopted by the Securities and Exchange Commission
or (ii) a registration statement on Form S-2 or Form S-3, if eligible, or any
similar registration statement form hereafter adopted by the Securities and
Exchange Commission. Upon request, the Company will deliver to such holders of
Registrable Securities a written statement as to whether it has complied with
such requirements.
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9. Definitions.
(a) Registrable Securities.
(1) The term "Registrable Securities" means (i) any
of the Company's Common Stock or other securities issued or
issuable to Purchaser pursuant to the Purchase Agreement upon
exercise of the Warrants (as defined in the Purchase
Agreement) or upon conversion of the Preferred Stock issued
or issuable upon exercise of the Warrant to purchase
Preferred Stock, (ii) any Common Stock issued or issuable
upon exercise of any preemptive rights afforded to those
persons or entities holding securities described in clause
(i) above or pursuant to the Purchase Agreement, (iii) any
Common Stock issued or issuable with respect to the
securities referred to in clauses (i) and (ii) by way of
stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger,
consolidation or other reorganization, and (iv) any other
shares of Common Stock held by persons or entities holding
securities described in clauses (i) to (iii), inclusive,
above.
(2) As to any particular Registrable Securities,
such securities will cease to be Registrable Securities when
they have (a) been effectively registered under the
Securities Act and disposed of in accordance with the
registration statement covering them, (b) been sold to the
public in accordance with Rule 144 (or any similar provision
then in force) under the Securities Act, or (c) been
otherwise transferred on the open market in a public
transaction and new certificates for them not bearing a
Securities Act restrictive legend have been delivered by the
Company pursuant to the Purchase Agreement. Whenever any
particular securities cease to be Registrable Securities, the
holder thereof will be entitled to receive from the Company,
without expense, new securities of like tenor not bearing a
restrictive legend as set forth in the Purchase Agreement.
(b) The term "Securities Act" means the Securities Act of
1933, as amended, and all rules and regulations promulgated
thereunder.
(c) The term "Securities Exchange Act" means the Securities
Exchange Act of 1934, as amended, and all rules and regulations
promulgated thereunder.
(d) The term "Long-Form Registration" means a registration
under the Securities Act on Form S-1 or any similar long form
registration.
(e) The term "Short-Form Registration" means a registration
under the Securities Act on Form S-2 or S-3 (if eligible) or any
similar short form registration.
(f) Unless otherwise stated, other capitalized terms
contained herein have the meanings set forth in the Purchase
Agreement.
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10. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the holders of
Registrable Securities in this Agreement.
(b) Adjustments Affecting Registrable Securities. The Company
will not take any action or permit any change to occur with respect to
its securities which would materially and adversely affect the ability
of the holders of Registrable Securities to include such Registrable
Securities in a registration undertaken pursuant to this Agreement or
which would materially and adversely affect the marketability of such
Registrable Securities in any such registration (including, without
limitation, effecting a stock split or a combination of shares).
(c) Remedies. Any person or entity having rights under any
provision of this Agreement will be entitled to enforce such rights
specifically, to recover damages caused by reason of any breach of any
provision of this Agreement, and to exercise all other rights granted
by law.
(d) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, only if the Company has
obtained the written consent of holders of at least a majority of the
Registrable Securities.
(e) Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto will bind
and inure to the benefit of the respective successors and assigns of
the parties hereto whether so expressed or not. In addition, whether
or not any express assignment has been made, the provisions of this
Agreement which are for the benefit of purchasers or holders of
Registrable Securities are also for the benefit of, and enforceable
by, any subsequent holder of Registrable Securities.
(f) Incorporation of Purchase Agreement Provisions. The
paragraphs entitled "Severability", "Headings", "Governing Law", and
"Notices" of the Purchase Agreement are hereby incorporated in this
Agreement by reference and made a part hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
THE COMPANY:
XXX-TYME, INC., a Delaware corporation
By: /s/ Xxxxxx Xxxxxx
------------------------------
Its: President
PURCHASER:
ULSTER INVESTMENTS LIMITED, an
Antiguan corporation
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Its: Secretary
For and on behalf of:
ANTIGUA INTERNATIONAL TRUST LTD.
Director
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