REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (this "Agreement") dated as of
June 4, 2000, by and among XXXXXXXX.XXX, INC., a Delaware corporation (the
"Company"), and the Persons listed as stockholders (the "Stockholders") on
Schedule I of the Agreement and Plan of Merger, dated as of the date hereof,
among the Company, RCOM Acquisition Corp. I, a Delaware corporation, Inabox,
Inc., a Delaware corporation ("Inabox"), and the Stockholders (the "Merger
Agreement").
PREAMBLE
WHEREAS, in order to induce the Stockholders and Inabox to
enter into the Merger Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement; and
WHEREAS, the execution and delivery of this Agreement by the
Company is a condition to consummating the Merger (as defined in the Merger
Agreement) pursuant to the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Stockholders agree as follows:
1. Definitions
As used in this Agreement, the following capitalized terms
shall have the following meanings:
Common Stock: Common Stock of the Company, par value
$ 0.001 per share as constituted on the date hereof, and any capital stock into
which such Common Stock may hereafter be changed, and such term shall also
include (unless the context clearly indicates otherwise) (i) capital stock of
the Company of any other class or series (regardless of how denominated) issued
to the holders of shares of Common Stock upon any reclassification thereof which
is also not preferred as to dividends or assets on liquidation over any other
class or series of capital stock of the Company and which is not subject to
redemption and (ii) shares of common stock of any successor or acquiring
corporation or any affiliate thereof which are issued or may be issuable to any
Stockholders in the circumstances contemplated by Section 13(k).
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder by the SEC.
Family Donee: With respect to individual
Stockholders, (i) such Stockholders' parents, spouse, adult lineal descendants
and siblings, (ii) the adult spouses of such siblings, the adult spouses of such
lineal descendants and the parents of such spouse, and (iii) trusts for the
benefit of any of such individuals or their children.
Indemnified Holder: See Section 8(a) hereof.
NASD: National Association of Securities Dealers,
Inc.
Person: An individual, partnership, corporation,
limited liability company, joint venture, trust or unincorporated organization,
or a government or agency or political subdivision thereof of whatever nature.
Prospectus: The prospectus included in any
Registration Statement, 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 the Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments to the
Registration Statement of which such prospectus is a part and all material
incorporated by reference in such prospectus.
Registration Expenses: See Section 7(a)(9) hereof.
Registrable Securities: Any and all shares of Common
Stock which (i) at any time and from time to time are issued to the Stockholders
by the Company pursuant to the Merger Agreement, or (ii) are issued or issuable
pursuant to a stock dividend, stock split or other distribution with respect to
such shares of Common Stock, or issued to any of them in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization; provided, however, that any Registrable Security shall cease to
be a Registrable Security if (a) a registration statement under the Securities
Act covering such Registrable Security shall have been declared effective by the
Commission and such Registrable Security shall have been disposed of pursuant to
such registration statement, (b) such Registrable Security shall have been sold
in a transaction which satisfies the requirements of paragraph (f) of Rule 144
under the Securities Act (as such paragraph is in effect on the Issue Date) and,
if such transaction is a "brokers' transaction" referred to in such paragraph of
Rule 144, also satisfies the requirements of paragraph (g) of Rule 144 under the
Securities Act (as such paragraph is in effect on the Issue Date), or (c) such
Registrable Security is no longer held by a Stockholder.
Registration Statement: Any registration statement of
the Company that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
Rights: Any options, warrants, convertible or
exchangeable securities or other rights, however denominated, to subscribe for,
purchase or otherwise acquire any equity interest or other security of any class
or series, with or without payment of additional consideration in cash or
property, either immediately or upon the occurrence of a specified date or a
specified event or the satisfaction or happening of any other condition or
contingency.
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Securities Act: The Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder by the SEC.
SEC: The Securities and Exchange Commission.
Stockholder: Each Person who is listed as a
stockholder on Schedule I of the Merger Agreement and each Family Donee of such
Person who (i) at any time acquires any Registrable Securities directly or
indirectly from such Stockholder in a transaction or chain of transactions not
involving a public offering within the meaning of the Securities Act and (ii)
was assigned, by such Person from whom such Registrable Securities were
acquired, the registration rights of such Stockholder hereunder with respect to
such Registrable Securities, together with the successors and assigns, heirs and
personal representatives of each of the foregoing, in each case for so long as
any such Stockholder continues to hold Registrable Securities; provided,
however, that no such other Person shall constitute a Stockholder unless each
Person to whom any such transfer is made shall, contemporaneously with such
transfer and by written instrument, become a party to, and a "Stockholder"
under, and accept and adopt the terms and provisions of, this Agreement.
2. Securities Subject to this Agreement
(a) Registrable Securities. The securities entitled to the
benefits of this Agreement are the Registrable Securities.
(b) Holders of Registrable Securities. A Person is deemed to
be a holder of Registrable Securities whenever such Person owns of record
Registrable Securities or has the Right to acquire such Registrable Securities,
whether or not such acquisition has actually been effected and disregarding any
legal restrictions upon the exercise of such right.
3. [Intentionally Omitted]
4. Piggy-Back Registration. If the Company at any time or from time to
time subsequent to the date of this Agreement proposes to register any
securities under the Securities Act either for its own account or the account of
any selling security holders (other than pursuant to (i) a registration
statement on Forms S-4 or S-8 or any successor or similar forms, (ii) a
registration relating solely to a Commission Rule 145 offering, or (iii) a
registration on any form that does not permit secondary sales), the Company
shall:
(a) give to each holder of a Registrable Security written
notice thereof at least 20 days in advance of the filing of any registration
statement in respect thereof (which notice will include a list of the
jurisdictions in which the Company intends to attempt to qualify such securities
under the applicable blue sky or other state securities laws, the proposed
offering price, and the plan of distribution);
(b) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 20 days after receipt of such written notice from the
Company, by any holder or holders of Registrable Securities;
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(c) use commercially reasonable efforts to cause the managing
underwriter or underwriters of such proposed underwritten offering to permit the
Registrable Securities requested to be included in the Registration Statement
for such offering to be included on the same terms and conditions as any similar
securities of the Company included therein. Notwithstanding the foregoing, if
the managing underwriter or underwriters of such offering deliver a written
opinion to the holders of such Registrable Securities that marketing
considerations require a limitation on the number of shares of Common Stock or
other Registrable Securities offered pursuant to any Registration Statement
subject to this Section, then subject to the advice of said managing underwriter
or underwriters as to the size and composition of the offering, the Company will
include Common Stock and other Registrable Securities in such registration in
accordance with the following priorities: (i) first, if such offering is a
secondary offering on behalf of other holders of securities of the Company
pursuant to a contractual obligation of the Company to register such securities
(i.e., a demand registration right), the securities to be sold for the account
of such holders; (ii) second, securities to be sold for the account of the
Company; (iii) third, securities to be sold for the account of holders of
securities of the Company pursuant to piggy-back registration provisions of
other agreements in existence on the date hereof, (iv) fourth, securities to be
sold for the account of holders of securities of the Company pursuant to
piggy-back registration provisions of other agreements executed and delivered by
the Company after the date hereof which expressly provide that their respective
piggy-back registration provisions are superior to those of the Company set
forth in this Agreement, and (v) fifth, with respect to all holders of
Registrable Securities and all holders of other Common Stock who have requested
to be included in the registration pursuant to this Section 4 and to other,
analogous piggy-back registration provisions of other agreements, respectively,
in proportion to the number of shares each such holder requested to be included
in the offering pursuant to their respective piggy-back rights. The Company will
bear all Registration Expenses in connection with a piggy-back registration.
Notwithstanding the foregoing, if at any time after giving
written notice of its intention to register its equity securities and before the
effectiveness of the Registration Statement filed in connection with such
registration, the Company determines for any reason either not to effect such
registration or to delay such registration, the Company may, at its election, by
delivery of written notice to each holder of Registrable Securities (A) in the
case of a determination not to effect registration, relieve itself of its
obligation to register the Registrable Securities in connection with such
registration or (B) in the case of a determination to delay registration, delay
the registration of such Registrable Securities for the same period as the delay
in the registration of such other equity securities.
Notwithstanding anything to the contrary contained in this
Agreement, the Company will have no obligation to register the Registrable
Securities of any Stockholder if the number of shares of Registrable Securities
such Stockholder has requested to be registered could be sold by such
Stockholder pursuant to Rule 144 of the Securities Act in any three-month period
without registration in compliance with Rule 144 of the Securities Act.
Holders of Registrable Securities may exercise piggy-back
registration rights under this Section 4 at any time or from time to time during
the five (5) year period commencing on the Effective Time (as such term is
defined in the Merger Agreement) of the Merger, so long as such holders continue
to hold Registrable Securities.
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5. Hold-Back Agreements
Each holder of Registrable Securities agrees not to effect any public
sale or distribution of securities of the Company of the same class as the
securities included in a Registration Statement, including a sale pursuant to
Rule 144 under the Securities Act, during the 7-day period prior to, and during
the period (up to 180 days) following, the effective date of such Registration
Statement for each underwritten offering made pursuant to such Registration
Statement, to the extent requested in writing by the managing underwriters
(except as part of such underwritten registration, if permitted); provided,
however, that the hold-back period shall not be longer than the hold-back period
agreed to in writing by the Company's executive officers and directors.
6. Registration Procedures
In connection with the Company's registration obligations pursuant to
Section 4 hereof, the Company will use commercially reasonable efforts to effect
such registration to permit the sale of such Registrable Securities in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company will as expeditiously as possible but in no event
later than 30 days after receipt of a request for registration pursuant to the
terms of Section 4:
(a) before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, furnish to the counsel selected by the
holders of a majority of the Registrable Securities covered by such Registration
Statement and the underwriters, if any, copies of all such documents proposed to
be filed, which documents will be made available for prior review and comment by
such counsel;
(b) prepare and file with the SEC a Registration Statement and such
amendments and post-effective amendments to any Registration Statement, and such
supplements to the Prospectus, as may be required by the rules, regulations or
instructions applicable to the registration form utilized by the Company or by
the Securities Act or otherwise necessary to keep such Registration Statement
continuously effective; and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such Registration
Statement during the one-year period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;
(c) notify the selling holders of Registrable Securities and the
managing underwriters, if any, promptly, and (if requested by any such Person)
confirm such advice in writing,
(1) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective,
(2) of any request by the SEC for amendments or supplements to
the Registration Statement or the Prospectus or for additional information,
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(3) of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement or the initiation or threatening
of any proceedings for that purpose,
(4) if at any time the representations and warranties of the
Company contemplated by paragraph (n) below cease to be true and correct,
(5) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose, and
(6) of the existence of any fact which results in the
Registration Statement, the Prospectus or any document incorporated therein by
reference containing an untrue statement of material fact or omitting to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
(d) use reasonable efforts to prevent the issuance of any stop order or
to obtain the withdrawal of any order suspending the effectiveness of the
Registration Statement as soon as practicable;
(e) if reasonably requested by the managing underwriter or underwriters
or a holder of Registrable Securities being sold in connection with an
underwritten offering, immediately incorporate in a Prospectus supplement or
post-effective amendment such necessary information as the managing underwriters
or the holders of a majority in number of the Registrable Securities being sold
reasonably request to have included therein relating to the plan of distribution
with respect to such Registrable Securities, including, without limitation,
information with respect to the amount of Registrable Securities being sold to
such underwriters, the purchase price being paid therefor by such underwriters
and with respect to any other terms of the underwritten (or best efforts
underwritten) offering of the Registrable Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as notified of the matters to be incorporated
in such Prospectus supplement or post-effective amendment;
(f) at the request of any selling holder of Registrable Securities,
furnish to such selling holder of Registrable Securities and each managing
underwriter, without charge, at least one copy of the Registration Statement and
any post-effective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
(g) deliver to each selling holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons may reasonably request; the Company consents to the use of the
Prospectus or any amendment or supplement thereto by each of the selling holders
of Registrable Securities and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by the Prospectus or any
amendment or supplement thereto;
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(h) prior to any public offering of Registrable Securities, use
commercially reasonable efforts to register or qualify or cooperate with the
selling holders of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions as any seller or underwriter reasonably requests in
writing and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement; provided that the Company will
not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action which would subject it to general
service of process or taxation in any such jurisdiction where it is not then so
subject;
(i) cooperate with the selling holders of Registrable Securities and
the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and enable such Registrable Securities to be in
such denominations and registered in such names as the managing underwriters may
request at least two business days prior to any sale of Registrable Securities
to the underwriters;
(j) use commercially reasonable efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other United States federal or state governmental
agencies or authorities as may be necessary to enable the seller or sellers
thereof and the underwriters, if any, to consummate the disposition of such
Registrable Securities;
(k) if any fact contemplated by paragraph (c)(6) above shall exist,
prepare a supplement or post-effective amendment to the Registration Statement
or the related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, the Prospectus will not contain an
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;
(l) use commercially reasonable efforts to cause all Registrable
Securities covered by the Registration Statement to be listed on each securities
exchange or automated quotation system on which similar securities issued by the
Company are then listed, if requested by the holders of a majority in number of
such Registrable Securities or by the managing underwriters, if any;
(m) not later than the effective date of the applicable Registration
Statement, provide a CUSIP number for all Registrable Securities and provide the
applicable trustee(s) or transfer agent(s) with printed certificates for the
Registrable Securities which are in a form eligible for deposit with The
Depositary Trust Company;
(n) enter into customary agreements (including underwriting agreements)
and take all other appropriate actions in order to expedite or facilitate the
disposition of such Registrable Securities and in such connection, whether or
not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration:
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(1) make such representations and warranties and indemnities
to the holders of such Registrable Securities and the underwriters, if any, in
form, scope and substance as are customarily made by issuers to underwriters in
primary underwritten offerings;
(2) obtain opinions of counsel to the Company and updates
thereof addressed to each selling holder and the underwriters, if any, covering
the matters customarily covered in opinions requested in underwritten offerings;
(3) obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants addressed to the selling
holders of Registrable Securities and the underwriters, if any, such letters to
be in customary form and covering matters of the type customarily covered in
"cold comfort" letters to underwriters in connection with primary underwritten
offerings (provided that the Registrable Securities constitute at least 10% of
the securities covered by such Registration Statement);
(4) deliver such documents and certificates as may be
reasonably requested by the holders of a majority of the Registrable Securities
being sold and the managing underwriters, if any, to evidence compliance with
paragraph (k) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company.
(o) subject to the execution of confidentiality agreements in form and
substance satisfactory to the Company, make available to a representative of the
holders of a majority in number of the Registrable Securities being registered
pursuant to such Registration Statement, any underwriter participating in any
disposition pursuant to such Registration Statement, and any attorney or
accountant retained by the sellers or underwriter all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such representative, underwriter, attorney or
accountant in connection with the registration, with respect to each at such
time or times as the Company shall reasonably determine; provided that any
records, information or documents that are designated by the Company in writing
as confidential shall be kept confidential by such Persons unless disclosure of
such records, information or documents (i) is required by court or
administrative order; (ii) becomes generally available to the public other than
as a result of a disclosure by such Persons; (iii) was available to such Persons
on a non-confidential basis prior to its disclosure by the Company, as shown by
prior written record, or (iv) becomes available to such Persons on a
non-confidential basis from a source other than the Company or its
representatives, provided that such source is not known by such Persons to be
bound by a confidentiality agreement with or other obligation of secrecy to the
Company.
(p) otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make generally available to its
security holders earnings statements satisfying the provisions of Section 11(a)
of the Securities Act, no later than 45 days after the end of any 12-month
period (or 90 days, if such a period is a fiscal year) (1) commencing at the end
of any month in which Registrable Securities are sold to underwriters in an
underwritten offering, or, if not sold to underwriters in such an offering, (2)
beginning with the first month commencing after the effective date of the
Registration Statement, which statements shall cover said 12-month periods;
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(q) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter" that is required
to be retained in accordance with the rules and regulations of the NASD); and
(r) promptly prior to the filing of any document which is to be
incorporated by reference into the Registration Statement or the Prospectus
(after initial filing of the Registration Statement) provide copies of such
document for review and comment to counsel to the selling holders of Registrable
Securities and to the managing underwriters, if any, and make the Company's
representatives available for discussion of such document.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding such seller and the distribution of such securities as the
Company may from time to time reasonably request in writing.
Each holder of Registrable Securities agrees that to avail itself of
the rights afforded hereby, upon receipt of any notice from the Company of the
happening of any event of the kind described in paragraph (k) above, such holder
will forthwith discontinue disposition of Registrable Securities registered in a
Registration Statement until such holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by paragraph (k) above, or until
it is advised in writing by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in the Prospectus, and, if so directed by the
Company, such holder will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such holder's possession, of
the Prospectus covering such Registrable Securities current at the time of
receipt of such notice.
Each holder of Registrable Securities agrees that to avail itself of
the rights afforded hereby, such holder shall (i) make such representations and
warranties and indemnities to the Company and the underwriters in form, scope
and substance as are customarily made by selling shareholders in primary
underwritten offerings; (ii) obtain opinions of counsel to such holder and
updates thereof (provided that such opinions shall be at the sole expense of the
Company) and addressed to the Company and the underwriter covering the matters
customarily covered in opinions requested in underwritten offerings; and (iii)
deliver such documents and certificates as may be reasonably requested by the
Company and the managing underwriters to ensure the Company's compliance with
Section 6(k) above.
In the event the Company shall give any such notice, the time periods
mentioned in Section 6(b) hereof shall be extended by the number of days during
the period from and including the date of the giving of such notice to and
including the date when each seller of Registrable Securities covered by such
Registration Statement either receives the copies of the supplemented or amended
prospectus contemplated by Section 6(k) hereof or is advised in writing by the
Company that the use of the Prospectus may be resumed.
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7. Registration Expenses
(a) All expenses incident to the Company's performance of or compliance
with this Agreement will be paid by the Company, regardless whether a
Registration Statement becomes effective, including, without limitation:
(1) all registration and filing fees (including, without
limitation, with respect to filings required to be made with the NASD);
(2) fees and expenses of compliance with securities or blue
sky laws (including, without limitation, fees and disbursements of counsel for
the underwriters or selling holders in connection with blue sky qualifications
of the Registrable Securities and determination of their eligibility for
investment under the laws of such jurisdictions, as the managing underwriters or
holders of Registrable Securities being sold may designate);
(3) printing (including, without limitation, expenses of
printing or engraving certificates for the Registrable Securities in a form
eligible for deposit with The Depositary Trust Company and of printing
prospectuses), messenger, telephone and delivery expenses;
(4) fees and disbursements of counsel for the Company, for the
underwriters and for the selling holders of the Registrable Securities (subject
to the provisions of Section 7(b) hereof);
(5) fees and disbursements of all independent certified public
accountants of the Company (including, without limitation, the expenses of "cold
comfort" letters required by or incident to such performance);
(6) fees and disbursements of underwriters (excluding
discounts, commissions or fees of underwriters, selling brokers, dealer managers
or similar securities industry professionals relating to the distribution of the
Registrable Securities or legal expenses of any Person other than the Company,
the underwriters and the selling holders);
(7) securities acts liability insurance if the Company so
desires;
(8) fees and expenses of other Persons retained by the
Company; and
(9) fees and expenses associated with any NASD filing required
to be made in connection with the Registration Statement, including, if
applicable, the fees and expenses of any "qualified independent underwriter"
(and its counsel) that is required to be retained in accordance with the rules
and regulations of the NASD (all such expenses being herein called "Registration
Expenses").
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The Company will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the securities to
be registered on each securities exchange on which similar securities issued by
the Company are then listed, rating agency fees and the fees and expenses of any
Person, including special experts, retained by the Company.
(b) In connection with each Registration Statement required
hereunder, the Company will reimburse the holders of Registrable Securities
being registered pursuant to such Registration Statement for the reasonable fees
and disbursements of not more than one counsel chosen by the holders of a
majority of such Registrable Securities being registered pursuant to such
Registration Statement; provided such counsel is reasonably acceptable to the
Board of Directors of the Company.
8. Indemnification
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each holder of Registrable Securities, and, if
applicable, its officers, directors, employees and agents and each Person who
controls such holder within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act (each such person being sometimes
hereinafter referred to as an "Indemnified Holder") from and against all losses,
claims, damages and liabilities, including all actual legal or other expenses
reasonably incurred by an Indemnified Holder in connection with investigating or
defending against such loss, claim, damage, liability or action, joint or
several, to which such Indemnified Holders may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or based upon any omission
or alleged omission to state therein a 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, except insofar as any
such untrue statement or omission is based upon information furnished in writing
to the Company by such holder expressly for use therein; provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus if the Prospectus would have completely
corrected such untrue statement or omission; and provided further, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission in the
Prospectus, if such untrue statement or alleged untrue statement, omission or
alleged omission is completely corrected in an amendment or supplement to the
Prospectus and if, having previously been furnished by or on behalf of the
Company with copies of the Prospectus as so amended or supplemented, such holder
thereafter fails to deliver such Prospectus as so amended or supplemented prior
to or concurrently with the sale of a Registrable Security to the person
asserting such loss, claim, damage, liability or expense who purchased such
Registrable Security which is the subject thereof from such holder. This
indemnity will be in addition to any liability which the Company may otherwise
have. The Company will also indemnify underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, their officers and directors and each Person who controls such
Persons (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Indemnified Holders of Registrable Securities.
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If any action or proceeding (including any governmental
investigation or inquiry) shall be brought or asserted against an Indemnified
Holder in respect of which indemnity may be sought from the Company, such
Indemnified Holder shall promptly notify the Company in writing, and the Company
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Holder and the payment of all expenses. Such
Indemnified Holder shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be the expense of such Indemnified Holder unless (a) the
Company has agreed to pay such fees and expenses or (b) the Company shall have
failed to assume the defense of such action or proceeding or shall have failed
to employ counsel reasonably satisfactory to such Indemnified Holder in any such
action or proceeding or (c) such Indemnified Holder in its reasonable judgment
has separate defenses available or due to actual or potential material differing
interests between them (in which case, if such Indemnified Holder notifies the
Company in writing that it elects to employ separate counsel at the expense of
the Company, the Company shall not have the right to assume the defense of such
action or proceeding on behalf of such Indemnified Holder, it being understood,
however, that the Company shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for such Indemnified Holder and any
other Indemnified Holders, which firm shall be designated in writing by such
Indemnified Holders). The Company shall not be liable for any settlement of any
such action or proceeding effected without its written consent, but if settled
with its written consent, or if there be a final judgment for the plaintiff in
any such action or proceeding, the Company agrees to indemnify and hold harmless
such Indemnified Holders from and against any loss or liability by reason of
such settlement or judgment.
(b) Indemnification by Holder of Registrable Securities. Each
holder of Registrable Securities severally agrees to indemnify and hold harmless
the Company, its directors, officers, employees and agents and each Person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and each other holder of
Registrable Securities that participates in such offering to the same extent as
the foregoing indemnity from the Company to such holder, but only with respect
to information relating to such holder furnished in writing by such holder
expressly for use in any Registration Statement or Prospectus, or any amendment
or supplement thereto, or any preliminary prospectus. In case any action or
proceeding shall be brought against the Company or its directors or officers or
any such controlling person, in respect of which indemnity may be sought against
a holder of Registrable Securities, such holder shall have the rights and duties
given the Company and the Company or its directors or officers or such
controlling person shall have the rights and duties given to each holder by the
preceding paragraph. Notwithstanding the foregoing, if the Company is an
indemnified party, the Company shall designate the one counsel, and in all other
circumstances, the one counsel shall be designated by a majority in interest
based upon the Registrable Securities of the Indemnified parties. In no event
shall the liability of any selling holder of Registrable Securities hereunder be
greater in amount than the proceeds received by such holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
12
The Company and each other holder of Registrable Securities
that participates in such offering shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as provided
above with respect to information so furnished in writing by such Persons
specifically for inclusion in any Prospectus or Registration Statement or any
amendment or supplement thereto, or any preliminary prospectus.
(c) Contribution. If the indemnification provided for in this
Section 8 is unavailable to an indemnified party under Section 8(a) or Section
8(b) hereof (other than by reason of exceptions provided in those Sections) in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each applicable 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 losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the Company, on the one hand, and of the Indemnified Holder, on the other hand,
in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand,
and of the Indemnified Holder, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Indemnified Holder and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in the second paragraph of Section 8(a) hereof, any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.
The Company and each holder of Registrable Securities agree
that it would not be just and equitable if contribution pursuant to this Section
8(c) were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
8(c), an Indemnified Holder shall not be required to contribute any amount in
excess of the amount by which the total price at which the securities sold by
such Indemnified Holder or its affiliated Indemnified Holders and distributed to
the public were offered to the public exceeds the amount of any damages which
such Indemnified Holder, or its affiliated Indemnified Holders, has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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 was not guilty of such fraudulent
misrepresentation.
9. Rule 144.
Upon the request of any holder of Registrable Securities, the Company
will deliver to such holder a written statement as to whether it has complied
with those requirements under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder, the compliance with which
are necessary to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time or (b) any similar rule or regulation hereafter adopted by the
SEC.
13
10. Participation in Underwritten Registrations.
(a) No holder (or its successors or assigns) may participate in any
underwritten registration hereunder unless such Person (a) agrees to sell such
Person's securities on the basis provided in any underwriting arrangements
approved by the underwriters and other Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
(b) In the case of an underwritten offering by the Company of
securities, each holder of Registrable Securities shall, with respect to
Registrable Securities that such holder then desires to sell pursuant to Section
4, enter into an underwriting agreement with the same underwriters engaged by
the Company with respect to securities being offered by the Company and the
Company shall cause such underwriters to include in any such underwriting all of
the securities that a holder of Registrable Securities then desires to sell;
provided, however, that such underwriting agreement is in substantially the same
form as the underwriting agreement that the Company enters into in connection
with the primary offering it is making, except for such differences in the
underwriting agreement as are generally customary to distinguish between an
issuer and its selling stockholders.
11. Restrictive Legend.
Each certificate representing Registrable Securities and Rights
exercisable, convertible or exchangeable for Registrable Securities shall,
except as otherwise provided in this Section 11 or in Section 12, be stamped or
otherwise imprinted with a legend substantially in the following form:
"The securities represented by this certificate have
not been registered under the Securities Act of 1933 or applicable
state securities laws. These securities have been acquired for
investment and not with a view to distribution or resale, and may not
be sold mortgaged, pledged, hypothecated or otherwise transferred
without an effective registration statement for such securities under
the Securities Act of 1933 and applicable state securities laws, or the
availability of an exemption from the registration provisions of the
Securities Act of 1933 and applicable state securities laws."
A certificate shall not bear such legend if in the opinion of counsel reasonably
satisfactory to the Company the securities being sold thereby may be publicly
sold without registration under the Securities Act.
14
12. Notice of Proposed Transfer.
Prior to any proposed transfer of any Registrable Securities
(other than under the circumstances described in Section 4), the holder thereof
shall give written notice to the Company of its intention to effect such
transfer. Each such notice shall describe the manner of the proposed transfer
and, if requested by the Company, shall be accompanied by an opinion of counsel
reasonably satisfactory to the Company to the effect that the proposed transfer
may be effected without registration under the Securities Act, whereupon the
holder of such stock shall be entitled to transfer such stock in accordance with
the terms of its notice; provided, however, that no such opinion of counsel
shall be required for a transfer to one or more partners of the transferor (in
the case of a transferor that is a partnership), to one or more members of the
transferor (in the case of a transferor that is a limited liability company) or
to an affiliated corporation (in the case of a transferor that is a
corporation); provided, further, however, that any transferee other than a
partner or affiliate of the transferor shall execute and deliver to the Company
a representation letter in form reasonably satisfactory to the Company's counsel
to the effect that the transferee is acquiring Registrable Securities for its
own account, for investment purposes and without any view to distribution
thereof. Each certificate for Registrable Securities transferred as above
provided shall bear the legend set forth in Section 11, except that such
certificate shall not bear such legend if (i) such transfer is in accordance
with the provisions of Rule 144 (or any other rule permitting public sale
without registration under the Securities Act) or (ii) the opinion of counsel
referred to above is to the further effect that the transferee and any
subsequent transferee (other than an affiliate of the Company) would be entitled
to transfer such securities in a public sale without registration under the
Securities Act. The restrictions provided for in this Section 12 shall not apply
to securities which are not required to bear the legend prescribed by Section 11
in accordance with the provisions of that Section.
13. Miscellaneous.
(a) Remedies. Each holder of Registrable Securities, in addition to
being entitled to exercise all rights provided herein, and granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) 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 Company has obtained the written consent of holders of at least
a majority of the outstanding Registrable Securities; provided, further, that no
such amendment shall unfairly discriminate against any particular holder of
Registrable Securities relative to the other holders thereof. Any action taken
under this Section shall bind all holders of Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of holders of
Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other holders of Registrable Securities may be given by the holders of
a majority of the Registrable Securities being sold.
15
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a holder of Registrable Securities initially at its
address set forth on the signature page hereof and thereafter at such other
address, notice of which is given by such holder to the Company in accordance
with the provisions of this Section 13(c); and
(2) if to the Company, initially at its address set forth on
the signature page hereof and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 13(c), with a copy to
Loeb & Loeb LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, Attention: Xxxxx X.
Xxxxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered during regular
business hours on a business day (otherwise, on the next business day); when
received if deposited in the mail, postage prepaid, if mailed; when receipt of
confirmation of delivery occurs, if telecopied during regular business hours on
a business day (otherwise, on the next business day); and on the next business
day, if timely delivered to an air courier guaranteeing overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of the Company, and the heirs,
personal representatives and permitted assigns of the Stockholders who are
natural persons and the successors and permitted assigns of the Stockholders who
are not natural persons.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate 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.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
(h) Severability. The invalidity or unenforceability of any provision
of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
(i) Entire Agreement. This Agreement, including any exhibits hereto and
the documents and instruments referred to herein and therein, is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties, covenants or undertakings, other than those set forth or
referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
16
(j) Termination as to Stockholders. If a Stockholder ceases to hold any
Registrable Securities, such Stockholder shall cease to be a party to this
Agreement, but (i) this Agreement shall continue in full force and effect and
continue to be binding on the Company and the other Stockholders and (ii) the
rights and obligations under Sections 4 and 8 of such former Stockholder, each
Person (if any) who controls such former Stockholder within the meaning of the
Securities Act and each of their respective affiliates, partners, directors,
officers, employees and agents of the foregoing with respect to any piggyback
registration in which such former Stockholder was a selling stockholder shall
survive.
(k) Certain Mergers and Other Events. If the Company proposes to
consummate any consolidation, merger, binding share exchange or reorganization
to which the Company is a party and in which the Company is not the continuing
corporation or any sale, conveyance, transfer or lease to another entity of the
properties and assets of the Company as an entirety or substantially as an
entirety and if, as a result of or in connection with such transaction, the
Stockholders would receive or would be entitled to receive, in exchange for or
otherwise with respect to the Registrable Securities held by them, any common
stock, other capital stock or other securities of the successor or acquiring
corporation or any affiliate thereof or any Rights for any such common stock,
capital stock or other securities, then the Company shall not consummate such
transaction unless the successor or acquiring entity (as the case may be) shall,
in a manner reasonably satisfactory to the holders of a majority of the
Registrable Securities, grant to the Stockholders registration rights with
respect to such common stock, other capital stock or other securities which
shall be no less favorable in all material respects to the Stockholders than the
provisions of this Agreement. In the event of (i) any reclassification,
reorganization or change of the outstanding shares of Common Stock or other
capital stock of the Company, (ii) any consolidation, merger, binding share
exchange or reorganization to which the Company is party (other than a
consolidation, merger, share exchange or reorganization in which the Company is
the continuing corporation and which does not result in any reclassification of
or change in the Common Stock) or (iii) any other event of any kind occurs which
results in a change in the securities constituting or included in the Common
Stock immediately before such event, then the Stockholders shall be entitled to
registration rights with respect to such all securities issued or issuable to
them by reason thereof which are comparable in all material respects to those
provided for herein with respect to Registrable Securities. In the event any
dispute relating to this Section 13(k) shall arise, then such dispute shall
promptly thereafter be submitted for resolution by an independent law firm of
recognized national standing selected by the Company and reasonably acceptable
to the holders of a majority of the Registrable Securities, whose decision (with
the advice of an independent investment banking firm of recognized national
standing selected by such law firm, if such law firm believes it advisable to
seek such advice) shall be final and conclusive. The fees and expenses of such
law firm (and of any such investment banking firm) shall be paid by the Company.
17
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
XXXXXXXX.XXX, INC., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
RCOM ACQUISITION CORP. I, a Delaware
corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
INABOX INC., a Delaware corporation
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
Title:
STOCKHOLDERS:
ATALANTA SELECTIVE FUND #6, a Nevada
general partnership
By: /s/ Xxxxxx Xxxxxxx Attorney-in-Fact
---------------------------------
Name: Xxxxxx Xxxxxxx
Title:
/s/ Xxxx Xxxx Xxxxxxxx Attorney-in-Fact
------------------------------------
Xxxxxx Xxxxxxxx
18
/s/ Xxxxxx Xxxxxxx Attorney-in-Fact
------------------------------------
Xxxxx Xxxxxxxxxx
/s/ Xxxxxx Xxxxxxx Attorney-in-Fact
------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx Xxxxxxx Attorney-in-Fact
------------------------------------
Xxxx Xxx Xxxxxx
/s/ Xxxx Xxxx Xxxxxxxx Attorney-in-Fact
------------------------------------
Xxxx Xxxxxxxxx
/s/ Xxxxxx Xxxxxxx Attorney-in-Fact
------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx
------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxxxx Xxxx
------------------------------------
Xxxxxxxxx Xxxx
/s/ Xxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxx
XXXXXXX XXXXX IRREVOCABLE FAMILY
TRUST
By: /s/ Mireille Xxxxx Xxxxx
------------------------------
Name: Mireille Xxxxx Xxxxx
Title: Trustee
/s/ Xxxx Xxxx Xxxxxxxx
------------------------------------
Xxxx Xxxx Xxxxxxxx
19
/s/ Xxxx Xxxx Xxxxxxxx Attorney-in-Fact
------------------------------------
Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx Xxxxxxxx Attorney-in-Fact
------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxx Xxxx Xxxxxxxx Attorney-in-Fact
------------------------------------
Xxx Xxxxxx
/s/ Xxxxxx Xxxx
------------------------------------
Xxxxxx Xxxx
/s/ Xxxxxx Xxxxxxx Attorney-in-Fact
------------------------------------
Xxxxxx Xxxxxxxxx
20
