Exhibit 4.11
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of this 29th day of September, 1999, by and between the party or
parties designated in Attachment "A" exhibited hereto ("Holder"), and Xxxxxxxxx
Communications, Inc., a Nevada corporation (the "Company").
RECITAL
PURCHASER is purchasing Debentures from the Company that are
convertible into shares of the Company's common stock. The Company hereby grants
PURCHASER certain demand and incidental registration rights in connection with
such shares.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereby agree
as follows:
AGREEMENT
1. DEFINITIONS. Unless the context requires otherwise, the following
underlined terms shall have the following respective meanings:
1.1 AGREEMENT. This Registration Rights Agreement.
1.2 PURCHASER. The parties designated in Attachment "A" as
purchasers of 10% Debentures of the Company and holders of the rights conferred
in this Agreement.
1.3 COMMON STOCK. The Company's common stock.
1.4 COMPANY. Xxxxxxxxx Communications, Inc., a Nevada
corporation.
1.5 DEBENTURES. The Company's 10% Convertible Subordinated
Debentures issued to PURCHASER pursuant to that certain Debenture Purchase
Agreement incorporated by referenced hereto and of even date herewith.
1.6 EXCHANGE ACT. The Securities Exchange Act of 1934, as
amended.
1.7 HOLDER. A holder of Shares.
1.8 REGISTRATION EXPENSES. All expenses of registration,
including but not limited to registration and filing fees, including filing fees
for NASDAQ and all stock exchanges on which the Common Stock is traded, fees and
expenses of complying with the Securities Laws, printing expenses, transfer
agent fees, and the fees and expenses of the Company's independent certified
public accountants, the Company's investment banker and underwriter, and the
Company's legal counsel, but excluding the Selling Holder's brokerage fees,
underwriting fees and discounts, transfer taxes, if any, and the fees and
expenses of the Selling Holder's legal counsel and other advisors.
1.9 SEC. The United States Securities and Exchange Commission.
1.10 SECURITIES ACT. The Securities Act of 1933, as amended.
1.11 SECURITIES LAWS. The Securities Act, the Exchange Act,
and all applicable state securities laws, and all rules and regulations
promulgated thereunder.
1.12 SELLING HOLDER. With respect to any registration
statement, any Holder whose Shares are included therein.
1.13 SHARES. Shares of Common Stock issued on conversion of
the Debentures.
2. GRANT OF REGISTRATION RIGHTS.
2.1 REGISTRATION RIGHTS. The Company hereby grants the Holders
unlimited incidental registration rights with respect to the Shares on the terms
and conditions set forth in Section 4 of this Agreement. The Company hereby
grants the Holders as a group four (4) demand registration rights on the terms
and conditions set forth in Section 3 of this Agreement.
2.2 EXPENSES. The Company shall pay all Registration Expenses.
The Selling Holders shall pay all brokerage fees, underwriting fees and
discounts, transfer taxes, if any, and the fees and expenses of the Selling
Holder's legal counsel in connection with the registration and sale of the
Shares. Except as provided in Section 5.2 of this Agreement, the Selling Holders
shall pay all Registration Expenses if they withdraw all Shares from
registration; provided that the Selling Holders shall retain all registration
rights under this Agreement.
2.3 TERM. The registration rights granted under this Agreement
shall terminate on the earliest of (i) the sale of all of the Shares by the
Holders, (ii) the receipt by the Holders of the written opinion of legal counsel
for the Company that the Shares may be publicly sold without the need for
compliance with the registration provisions of the Securities Laws, or (iii) the
tenth (10th) anniversary of the date hereof.
3. DEMAND REGISTRATION RIGHTS.
3.1 NOTICE OF DEMAND. If the Company receives a written notice
from Holders beneficially owning at least a majority of the outstanding Shares,
including Shares issuable on conversion of any unconverted portion of the
Debentures, demanding that the Company register such Holders' Shares, then the
Company shall give written notice of such demand to all Holders and will use its
commercial best efforts to include in a registration statement all Shares
requested to be so included by all Holders upon written notice to the Company
within fifteen (15) days after the date of the notice by the Company to the
Holders, as long as the total of all Shares for which registration is demanded
represents at least twenty percent (20%) of the total Shares issuable under the
Debentures.
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3.2 REGISTRATION. Promptly after receipt of a demand for
registration as set forth in Section 3.1 of this Agreement, the Company shall
prepare and file with the SEC a registration statement, on the applicable form
deemed most appropriate by the Company, for all Shares for which registration is
demanded, and the Company shall use its commercial best efforts to cause such
registration statement to become effective as soon as practicable. The parties
agree that it is the intent of this Agreement that upon conversion and shortly
thereafter, shares will be issued to Holders in the amount subject to conversion
and in a form which will be free of any restrictive legend upon effective
registration by the Company in any registration statement and resale by Holders.
3.3 DEFERRAL OF REGISTRATION. If the Holders demand a
registration hereunder, the Company may defer filing such registration statement
with the SEC for up to thirty (30) days after the effective date of a
registration statement that the Company had filed with the SEC or had been
declared effective prior to the demand by the Holders if market conditions do
not warrant the sale of shares under registration at the time of the effective
date.
4. INCIDENTAL REGISTRATION RIGHTS.
4.1 NOTICE OF REGISTRATION; REGISTRATION. Whenever the Company
proposes to file (but without any obligation to so file) a registration
statement under the Securities Act in connection with a public offering of
shares of Common Stock for cash (other than in connection with any merger,
acquisition, or other transaction under Rule 145 of the Securities Act, exchange
offer, dividend reinvestment plan, employee benefit plan, or stock option plan),
the Company shall give all Holders written notice of such intention at least
thirty (30) days prior to the anticipated filing date. The Company shall include
in such registration statement all Shares requested to be so included by Selling
Holders upon written notice to the Company within fifteen (15) days of the
Company's notice, and shall use its commercial best efforts to cause such
registration statement to become effective as soon as practicable. The Selling
Holders shall be required to sell the Shares on the same general terms and
conditions as all other shares of Common Stock being offered in such
registration statement.
4.2 WITHDRAWAL BY THE COMPANY. The Company shall retain the
absolute right to withdraw any registration statement prior to the effective
date thereof, even if the Company has given notice to the Holders pursuant to
Section 4.1 of this Agreement and the Selling Holders have requested inclusion
of Shares therein.
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5. REGISTRATION PROCEDURES.
5.1 SELLING HOLDER INFORMATION. The Selling Holders shall
provide the Company with such information about the Selling Holders and their
intended manner of distribution of the Shares, and shall otherwise cooperate
with the Company and the underwriters as may be needed or helpful in the
reasonable opinion of the Company to complete the obligations of the Company
hereunder. If any Selling Holder fails to comply with this requirement for more
than ten (10) business days after the Company gives written notice of such
failure to comply to such Selling Holder, then the Company shall have no further
obligation to include such Selling Holder's Shares in the registration
statement.
5.2 CONSULTATION. The Company shall supply copies of any
registration statement and any amendment thereto to the Selling Holders prior to
filing the registration statement with the SEC, and shall reasonably consult
with the Selling Holders and their legal counsel with respect to the form and
content of such filing. The Company shall promptly amend such registration
statement to include such reasonable changes as a Selling Holder and its legal
counsel agree should be included therein. A Selling Holder may withdraw the
Selling Holder's Shares from the registration statement and retain all
registration rights under this Agreement in the event a requested change is
unreasonably refused by the Company.
5.3 PROVISION FOR PROSPECTUSES. The Company shall furnish the
Selling Holders with the number of copies of a summary prospectus or other
prospectus, including a preliminary prospectus in conformity with the
requirements of the Securities Act, and such other documents as the Selling
Holders may reasonably request in order to facilitate the public sale or other
disposition of the Shares.
5.4 STATE SECURITIES LAWS COMPLIANCE. The Company shall
register or qualify the Shares covered by the registration statement under the
Securities Laws of such states as the Selling Holders may reasonably request in
light of the costs of such registration or qualification for the Company
(provided that the Company shall not be required to either qualify to do
business in any state where it is not then so qualified, or consent to the
general service of process for all purposes in any state where it is not then
qualified to do business), and shall perform all other acts that may be
reasonably necessary or advisable to enable the Selling Holders to consummate
the public sale or other disposition of the Shares in such states.
5.5 AMENDMENTS. The Company shall prepare and file promptly
with the SEC such amendments and supplements to the registration statement filed
with the SEC in connection with such registration and the prospectus used in
connection therewith, as may be necessary to keep such registration statement
continuously effective and in compliance with the Securities Act for up to nine
(9) months, or until all Shares registered in such registration statement have
been sold, whichever is earlier.
5.6 PROSPECTUS DELIVERY. At any time when a sale or other
public disposition of shares of Common Stock pursuant to a registration
statement is subject to a prospectus deli-very requirement, the Company shall
immediately notify the Selling Holders of the occurrence of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing. Upon receipt
of such a notice, the Selling Holders shall immediately discontinue sales or
other dispositions of Shares pursuant to such registration statement. The
Selling Holders may resume sales only upon receipt of an amended prospectus or
after the Selling Holders have been advised by the Company that use of the
previous prospectus may be legally resumed.
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5.7 OPINIONS. At the request of a Selling Holder, the Company
shall furnish on the date that the Shares are delivered to the underwriter for
sale in connection with an underwritten offering registration pursuant to this
Agreement (i) a letter from the legal counsel representing the Company for the
purposes of such registration giving the Selling Holders the right to rely upon
the opinion of such legal counsel delivered to the underwriters acting on behalf
of the Company in connection with such registration insofar as such opinion
relates to the Selling Holders, and (ii) a letter from the independent certified
public accountants of the Company giving the Selling Holders the right to rely
on the letter of such accountants delivered to the underwriters acting on behalf
of the Company in connection with such registration.
5.8 STOP ORDERS. The Company shall immediately notify the
Selling Holders of the issuance by the SEC of any stop order or order suspending
the effectiveness of any registration statement, the issuance by any state
regulatory authority of any order suspending the registration or qualification
of the Shares for sale in such jurisdiction, or the initiation of any proceeding
for such purposes. The Company, with the reasonable cooperation of the Selling
Holders, shall use its commercial best efforts to contest any such proceeding or
to obtain the withdrawal of any such order at the earliest possible date.
5.9 REVIEW OF RECORDS. The Company shall make available all
financial and other records, pertinent corporate documents, and properties of
the Company for inspection by the Selling Holders or their legal counsel or
accountants may reasonably request, and shall cause the Company's officers,
directors, and employees to supply all information reasonably requested by any
such person in connection with any registration statement filed or to be filed
hereunder, so long as such person agrees to keep confidential all records,
information, or documents designated by the Company in writing as confidential.
5.10 COMPLIANCE WITH SECURITIES LAWS. In all actions taken
under this Agreement, the Company and the Selling Holders shall comply with all
provisions of the Securities Laws.
6. REPORTS UNDER THE EXCHANGE ACT. With the view to making the benefits
of Rule 144 under the Securities Act available to the Holders, the Company
shall:
6.1 PUBLIC INFORMATION. Ensure that there is adequate current
public information (as set forth in Rule 144(c)) available with respect to the
Company;
6.2 TIMELY FILING. Timely file with the SEC all reports and
other documents required to be filed by the Company under the Securities Act,
the Exchange Act, and the rules and regulations promulgated thereunder; and
6.3 DELIVERIES UPON REQUEST. Promptly furnish to a Holder upon
request (i) a written statement by the Company that it has complied with these
covenants, (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents filed by the Company as may
be reasonably requested by such Holder.
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7. INDEMNIFICATION.
7.1 THE COMPANY'S INDEMNIFICATION. The Company shall
indemnify, defend, save, and hold each Selling Holder harmless from and against
any and all liabilities, claims, damages, demands, expenses, and losses,
including but not limited to interest, penalties, court costs, reasonable
attorneys' fees, and settlements approved by the Company, which approval shall
not be unreasonably withheld, resulting from any untrue statement of a material
fact contained in any registration statement or in any other document filed with
the SEC pursuant to this Agreement, or any omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same may have been based upon (i)
information furnished in writing to the Company by such Selling Holder, any
agent for such Selling Holder, an underwriter, or another selling shareholder
for inclusion in such registration statement or other document, or (ii) the
circumstances set forth in Section 7.2(b) of this Agreement.
7.2 THE SELLING HOLDER'S INDEMNIFICATION. Each Selling Holder
shall indemnify, defend, save, and hold the Company and its officers, directors,
and controlling persons (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) harmless from and against any and all
liabilities, claims, damages, demands, expenses, and losses, including but not
limited to interest, penalties, court costs, reasonable attorneys' fees, and
settlements approved by such Selling Holder, which approval shall not be
unreasonably withheld, resulting from (a) any untrue statement of a material
fact contained in any registration statement or in any other document filed with
the SEC pursuant to this Agreement, or any omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, based upon or arising from any information furnished in writing
to the Company by such Selling Holder or any agent for such Selling Holder for
inclusion in the registration statement or other document, or (b) any untrue
statement of a material fact contained in any prospectus, or any omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, if (1) a later prospectus shall correct
the untrue statement or omission that is the basis of the liability, claim,
damage, demand, expense, or loss for which indemnification is sought, (2) a copy
of the later prospectus had not been sent or given to the purchaser at or prior
to confirmation of sale to such purchaser and the Selling Holder shall have been
under an obligation to deliver such later prospectus, (3) there would have been
no liability but for such failure to deliver such later prospectus by the
Selling Holder, and (4) the Company had notified the Selling Holder prior to the
confirmation of sale that the earlier prospectus had been or would be replaced
by the later prospectus.
7.3 CONTRIBUTION. If the indemnification provided for in this
Section 7 from an indemnifying party is unavailable to an indemnified party
hereunder in respect to any liability, claim, damage, demand, expense, or loss
referred to herein, then the indemnifying party in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such liability, claim, damage, demand, expense,
or loss in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and the indemnified party in connection with the
statements or omissions that resulted in such liability, claim, damage, demand,
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expense, or loss, as well as any other relevant equitable consideration. The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue statement of
a material fact or the omission to state a material fact relates to information
supplied by such indemnifying party or indemnified party and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such untrue statement or omission. The amount paid or payable by a party
as a result of the liabilities, claims, damages, demands, expenses, and losses
referred to above shall be deemed to include any court costs, attorneys' fees,
and other expenses reasonably incurred by such party in connection with
investigating or defending any action, suit, or proceeding. The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 7.3 were determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to in this Section 7.3. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not also guilty of such fraudulent
misrepresentation.
8. GENERAL PROVISIONS.
8.1 AMENDMENT. All amendments, modifications, or waivers of
this Agreement shall be in writing and shall be made only with the written
consent of the Company and the Holders of a majority of the outstanding Shares.
Any amendment, modification, or waiver effected in accordance with this Section
8.1 shall be binding upon PURCHASER and all Holders.
8.2 WAIVER. Any waiver of any right, power, or privilege
hereunder must be in writing and signed by the party or parties being charged
with the waiver. No delay on the part of any party or parties hereto in
exercising any right, power, or privilege hereunder shall operate as a waiver of
any other right, power, or privilege hereunder, nor shall any single or partial
exercise of any right, power, or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege.
8.3 NOTICES. All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be delivered personally or sent by overnight courier, by telecopier with
confirmation by first class mail, or by certified mail, return receipt
requested. Notices delivered personally or sent by overnight courier or
telecopier with confirmation by first class mail shall be effective on the date
first received, while notices sent by certified mail, return receipt requested,
shall be deemed to have been received and to be effective three (3) business
days after deposit into the mails. Notices shall be given to the parties at the
following respective addresses, or to such other addresses as any party shall
designate in writing:
If to the Company: Xx. Xxxx Xxxxxxxxx
President
Xxxxxxxxx Communications, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxx X-0
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxxx, Xx., Esq.
Xxxxxx Coffee Nojima, LLP
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
If to any Holder: at the address set forth in Attachment "A".
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8.4 SUCCESSORS AND ASSIGNS. This Agreement and each of its
provisions shall be binding upon and shall inure to the benefit of the parties
hereto and their respective administrators, successors, and assigns.
Notwithstanding the immediately preceding sentence, no Holder may assign any of
its rights or obligations hereunder without the prior written consent of the
Company, which consent the Company may not unreasonably withhold.
8.5 LAW GOVERNING. This Agreement has been negotiated,
executed, and delivered and shall be performed in the State of California and
shall be governed by and construed and enforced in accordance with the laws of
the State of California, without regard for its conflict of laws rules. The
parties hereby irrevocably submit to the exclusive jurisdiction of the courts of
the State of California and any United States District Court situated in the
State of California for the purposes of construing and enforcing this Agreement.
8.6 ATTORNEYS' FEES. In any suit to interpret or enforce the
terms and provisions of this Agreement, the prevailing party shall be entitled
to recover court costs and attorneys' fees, in addition to any other remedy or
recovery to which such party may be entitled.
8.7 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, including by facsimile transmission, all of which together
shall constitute a single instrument.
8.8 SEVERABILITY OF PROVISIONS. In the event any one or more
of the provisions of this Agreement shall for any reason be held to be invalid,
illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal, or unenforceable provision had
never been contained herein.
8.9 CONSTRUCTION. The headings in the sections and paragraphs
of this Agreement are for convenience only and shall not constitute a part
hereof. Whenever the context so requires, the masculine shall include the
feminine and the neuter, the singular shall include the plural, and conversely.
The terms and all parts of this Agreement shall in all cases be interpreted
simply and according to their plain meaning and neither for nor against any
party hereto.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first written above.
_________________________ XXXXXXXXX COMMUNICATIONS, INC.
By see Attachment "A" By: /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
President
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Attachment "A"
HOLDERS:
AJW PARTNERS, LLC
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxx
Manager
Address:
0000 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
NEW MILLENIUM CAPITAL PARTNERS II, LLC
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxxx
Authorized Signatory
Address:
0000 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Registration Rights Agreement
ATTACHMENT "A" CONTINUED
HOLDERS:
BANK XXXXXXXX DE BEAUFORT
By:
---------------------------------
Name:
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Its: Authorized Signatory
--------------------------------
Address:
Xxxxxxxxxxx 000
0000 XX Xxxxxxxxx
Xxxxxxxxxxx
Registration Rights Agreement
