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EXHIBIT 4.1
[PCF&K DRAFT OF 01/18/00]
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made
and entered into as of January 18, 2000, among xxxxxxxxxx.xxx, a Delaware
corporation (the "Company"), Acqua Wellington Value Fund, Ltd., a company
organized under the laws of the Bahamas ("AWVF"), and Four Corners Capital, LLC,
a Delaware limited liability company ("Four Corners" and, together with AWVF,
the "Purchasers").
WHEREAS, the Company is issuing and selling to AWVF and AWVF
is purchasing from the Company, pursuant to a Common Stock Purchase Agreement,
dated as of the date hereof (the "AWVF Purchase Agreement"), between the Company
and AWVF, for an aggregate purchase price of $10,000,000, 1,650,709 shares of
the Company's Common Stock (as defined below), a warrant (the "AWVF A Warrant")
to purchase up to 1,238,031 shares of Common Stock, a warrant (the "AWVF B
Warrant") to purchase up to 1,155,497 shares of Common Stock, and a warrant (the
"AWVF C Warrant" and, together with the AWVF A Warrant and the AWVF B Warrant,
the "Warrants") to purchase up to 866,623 shares of Common Stock.
WHEREAS, the Company is issuing and selling to Four Corners
and Four Corners is purchasing from the Company, pursuant to a Common Stock
Purchase Agreement, dated as of the date hereof (the "Four Corners Purchase
Agreement"), between the Company and Four Corners for an aggregate purchase
price of $1,000,000, 165,070 shares of Common Stock, a warrant (the "Four
Corners A Warrant") to purchase up to 123,802 shares of Common Stock, a warrant
(the "Four Corners B Warrant") to purchase up to 1,485,658 shares of Common
Stock, and a warrant (the "Four Corners C Warrant" and together with the Four
Corners A Warrant and the Four Corners B Warrant, the "Four Corners Warrants")
to purchase up to 1,114,228 shares of Common Stock (the Four Corners Warrants,
together with the AWVF Warrants are referred to as the "Warrants");
WHEREAS, the Company desires to grant to AWVF registration
rights as set forth herein with respect to the shares of Common Stock being
purchased under the AWVF Purchase Agreement and the shares of Common Stock
issuable upon exercise of the AWVF warrants; and
WHEREAS, the Company desires to grant to Four Corners
registration rights as set forth herein with respect to (i) the shares of Common
Stock being purchased under the Four Corners Purchase Agreement, (ii) the shares
of Common Stock issuable upon exercise of the Four Corners Warrants and (iii)
(x) the shares of Common Stock issuable upon exercise of warrants and options to
purchase shares of Common Stock (the "Outstanding Warrants and
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Options") held as of the date hereby by Four Corners and/or its Affiliates (as
defined below), as set forth on Schedule A hereto and (y) the shares of Common
Stock (the "Outstanding Shares") held as of the date hereof by Four Corners
and/or its Affiliates, as set forth on Schedule A hereto.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and conditions
contained herein, the sufficiency of which is hereby acknowledged, the Company
and the Purchaser hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein shall
have the meanings given such terms in the AWVF Purchase Agreement or the Four
Corners Purchase Agreement, as applicable. As used in this Agreement, the
following terms shall have the following meanings:
"Advice" shall have the meaning set forth in Section 3(o).
"Affiliate" means, with respect to any Person, any other
Person that directly or indirectly controls or is controlled by or under common
control with such Person. For the purposes of this definition, "control," when
used with respect to any Person, means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms of "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
"Blackout Period" shall have the meaning set forth in Section
3(n).
"Board" shall have the meaning set forth in Section 3(n).
"Business Day" means any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the
state of New York generally are authorized or required by law or other
government actions to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's Common Stock, par value
$.04 per share.
"Effectiveness Date" means the 120th day following the date of
the Tranche I Closing.
"Effectiveness Period" shall have the meaning set forth in
Section 2(a).
"Event " shall have the meaning set forth in Section 7(e).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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"Filing Date" means the 60th day following the date of the
Tranche I Closing.
"Holder" or "Holders" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in
Section 5(c).
"Indemnifying Party" shall have the meaning set forth in
Section 5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Person" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
"Registrable Securities" means (i) the Common Stock issued and
the shares of Common Stock issuable upon exercise of the AWVF Warrants to AWVF
pursuant to the AWVF Purchase Agreement (the "AWVF Warrant Shares"), (ii) the
Common Stock issued and issuable and the shares of Common Stock issuable upon
exercise of the Four Corners Warrants to Four Corners pursuant to the Four
Corners Purchase Agreement (the "Four Corners Warrant Shares" and, together with
the AWVF Warrant Shares, the "Warrant Shares"), (iii) the shares of Common Stock
issuable to Four Corners upon exercise of the Outstanding Warrants and Options,
(iv) the Outstanding Shares and (v) any other dividend or other distribution
with respect to, conversion or exchange of, or in replacement of, the foregoing
(i), (ii), (iii), (iv). Notwithstanding anything contained herein to the
contrary, if the actual number of shares of Common Stock issuable upon exercise
of the Warrants exceeds 100% of the number of shares of Common Stock issuable
upon exercise of the Warrants based upon a computation as at each Closing Date
(as that term is defined in the AWVF Purchase Agreement or the Four Corners
Purchase Agreement, as applicable) or the Filing Date, the term "Registrable
Securities" shall be deemed to include such additional shares of Common Stock.
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"Registration Statement" means the registration statements and
any additional registration statements contemplated by Section 2, including (in
each case) the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference in such
registration statement.
"Rule 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Special Counsel" means any special counsel to the Holders,
for which the Holders will be reimbursed by the Company pursuant to Section 4.
"Tranche I Closing" shall have the meaning set forth in
Section 1.3 of the AWVF Purchase Agreement.
2. Registration Rights.
The Company shall use its reasonable efforts to prepare and
file, within ten (10) business days of the Tranche I Closing, and in any event
on or prior to the Filing Date, with the Commission a "shelf" registration
statement covering all Registrable Securities for an offering to be made on a
continuous basis pursuant to Rule 415. Such shelf registration statement shall
be on Form S-3 (except if the Company is not then eligible to register for
resale the Registrable Securities on Form S-3, in which case such registration
shall be on another appropriate form in accordance herewith).
The Company shall (i) not permit any securities other than the
Registrable Securities to be included in the Registration Statement and (ii) use
its best efforts to cause the Registration Statement to be declared effective
under the Securities Act as promptly as possible after the filing thereof, but
in any event prior to the Effectiveness Date, and to keep such Registration
Statement continuously effective under the Securities Act until such date as is
the earlier of (x) the date when all Registrable Securities covered by such
Registration Statement have been sold or (y) the date on which the Registrable
Securities may be sold without any restriction pursuant to Rule 144(k) or any
successor provision as determined by the counsel to the Company pursuant to a
written opinion letter, addressed to the Company's transfer agent to
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such effect (the "Effectiveness Period"). If the Company is notified orally or
in writing by the Commission that the Commission has no comments with respect to
the Registration Statement (the "Commission Notice"), the Company shall use its
best efforts to cause the Registration Statement to be declared effective no
later than five (5) business days after receipt of the Commission Notice. If an
additional Registration Statement is required to be filed because the actual
number of shares of Common Stock into which the Warrants are exercisable exceeds
the number of shares of Common Stock initially registered in respect of the
Warrant Shares based upon the computation on the Closing Date or the Filing
Date, the Company shall have twenty (20) Business Days to file such additional
Registration Statement, and the Company shall use its best efforts to cause such
additional Registration Statement to be declared effective by the Commission as
soon as possible, but in no event later than thirty (30) days after filing.
If, during the Effectiveness Period, any of the Registrable
Securities have not been sold pursuant to the shelf registration statement
contemplated in the two preceding paragraphs and such Registrable Securities may
not be sold without any restriction pursuant to the Securities Act or the rules
and regulations promulgated thereunder, then a Holder of such Registrable
Securities may exercise demand registration rights with respect thereto by
delivering to the Company a written notice (a "Demand Registration Notice")
informing the Company of such exercise and specifying the number of Registrable
Securities to be offered by such Holder. Upon receipt of a Demand Registration
Notice, the Company will cause to be filed with the Commission as soon as
reasonably practicable after receiving the Demand Registration Notice a new
registration statement and related prospectus (a "New Registration Statement")
that complies as to form in all material respects with applicable Commission
rules providing for the sale by the exercising Holder of the Registrable
Securities, and agrees to use its best efforts to cause such new Registration
Statement to be declared effective by the Commission as soon as practicable.
3. Registration Procedures.
In connection with the Company's registration obligations
hereunder, the Company shall:
(a) Prepare and file with the Commission on or prior to
the Filing Date, a Registration Statement on Form S-3 (or if the Company is not
then eligible to register for resale the Registrable Securities on Form S-3 such
registration shall be on another appropriate form in accordance herewith) in
accordance with the method or methods of distribution set forth in such
Registration Statement and use its best efforts to cause the Registration
Statement to become effective and remain effective as provided herein; provided,
however, that not less than five (5) Business Days prior to the filing of the
Registration Statement or any related Prospectus or any amendment or supplement
thereto (including any document that would be incorporated therein by
reference), the Company shall (i) furnish to the Holders and any Special
Counsel, copies of all such documents proposed to be filed and shall use its
reasonable best efforts to reflect in each such document, when so filed with the
Commission, such comments as any Holder may reasonably propose and (ii) at the
request of any Holder cause its officers and directors, counsel
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and independent certified public accountants to respond to such inquiries as
shall be necessary, in the reasonable opinion of counsel to such Holders, to
conduct a reasonable investigation within the meaning of the Securities Act. The
Company shall not file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of the Registrable
Securities or any Special Counsel shall reasonably object in writing within
three (3) Business Days of their receipt thereof.
(b) (i) Prepare and file with the Commission such
amendments, including post-effective amendments, to the Registration Statement
as may be necessary to keep the Registration Statement continuously effective as
to the applicable Registrable Securities for the Effectiveness Period and
prepare and file with the Commission such amendments in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424
(or any similar provisions then in force) promulgated under the Securities Act;
(iii) respond as promptly as possible to any comments received from the
Commission with respect to the Registration Statement or any amendment thereto
and as promptly as possible provide the Holders and Special Counsel true and
complete copies of all correspondence from and to the Commission relating to the
Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Holders thereof set forth in the Registration Statement as so
amended or in such Prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities to be
sold and any Special Counsel as promptly as possible (and, in the case of (i)(A)
below, not less than five (5) Business Days prior to such filing) and (if
requested by any such Person) confirm such notice in writing no later than one
(1) Business Day following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to the Registration Statement is proposed
to be filed; (B) when the Commission notifies the Company whether there will be
a "review" of such Registration Statement and whenever the Commission comments
in writing on such Registration Statement and (C) with respect to the
Registration Statement or any post-effective amendment thereto, when the same
has become effective; (ii) of any request by the Commission or any other Federal
or state governmental authority for amendments or supplements to the
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event that requires any revisions to
the Registration Statement, Prospectus or other documents so that, in the case
of the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be
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stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) Use its best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of, (i) any order suspending the effectiveness of
the Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
(e) If requested by the Holders of the Registrable
Securities, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as the
Company reasonably agrees should be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.
(f) Furnish to each Holder and any Special Counsel,
without charge, at least one conformed copy of each Registration Statement and
each amendment thereto, including financial statements and schedules, all
documents incorporated or deemed to be incorporated therein by reference, and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission.
(g) Promptly deliver to each Holder and any Special
Counsel, without charge, as many copies of the Prospectus or Prospectuses
(including each form of prospectus) and each amendment or supplement thereto as
such Persons may reasonably request; and the Company hereby consents to the use
of such Prospectus and each amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable
Securities, use its reasonable best efforts to register or qualify or cooperate
with the selling Holders and any Special Counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Holder requests in writing, to keep each such registration or qualification
(or exemption therefrom) effective during the Effectiveness Period and to do any
and all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by a Registration
Statement; provided, however, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.
(i) Cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold pursuant to a Registration Statement, which certificates shall be free
of all restrictive legends, and to enable such
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Registrable Securities to be in such denominations and registered in such names
as any Holder may request at least two (2) Business Days prior to any sale of
Registrable Securities.
(j) Upon the occurrence of any event contemplated by
Section 3(c)(v), as promptly as possible, (i) prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither the Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (ii) advise the Holders as to when they may resume
distribution of the Shares.
(k) Use its best efforts to cause all Registrable
Securities relating to such Registration Statement to be listed on the American
Stock Exchange and any other securities exchange, quotation system, market or
over-the-counter bulletin board, if any, on which similar securities issued by
the Company are then listed as and when required pursuant to the Purchase
Agreement.
(l) Comply in all material respects with all applicable
rules and regulations of the Commission and make generally available to its
security holders earning statements satisfying the provisions of Section 11(a)
of the Securities Act and Rule 158 not later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year) commencing on the first day of the first fiscal quarter of the
Company after the effective date of the Registration Statement, which statement
shall conform to the requirements of Rule 158.
(m) Request each selling Holder to furnish to the Company
information regarding such Holder and the distribution of such Registrable
Securities as is required by law to be disclosed in the Registration Statement,
and the Company may exclude from such registration the Registrable Securities of
any such Holder who fails to furnish such information within a reasonable time
after receiving such request.
Each Holder covenants and agrees that (i) it will not sell any
Registrable Securities under the Registration Statement until it has received
copies of the Prospectus as then amended or supplemented as contemplated in
Section 3(g) and notice from the Company that such Registration Statement and
any post-effective amendments thereto have become effective as contemplated by
Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will
comply with the prospectus delivery requirements of the Securities Act as
applicable to them in connection with sales of Registrable Securities pursuant
to the Registration Statement.
Each Holder agrees by its acquisition of such Registrable
Securities that, upon receipt of a notice from the Company of the occurrence of
any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv),
3(c)(v) or 3(n), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such Holder's
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receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement contemplated by Section 3(j), or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed.
(n) If (i) there is material non-public information
regarding the Company which the Company's Board of Directors (the "Board")
reasonably determines not to be in the Company's best interest to disclose and
which the Company is not otherwise required to disclose, or (ii) there is a
significant business opportunity (including, but not limited to, the acquisition
or disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction) available to
the Company which the Board reasonably determines not to be in the Company's
best interest to disclose and which the Company would be required to disclose
under the Registration Statement, then the Company may postpone or suspend
filing or effectiveness of a registration statement for a period not to exceed
twenty (20) consecutive days, provided that the Company may not postpone or
suspend its obligation under this Section 3(n) for more than forty-five (45)
days in the aggregate during any 12 month period (each, a "Blackout Period");
provided, however, that no such postponement or suspension shall be permitted
for consecutive twenty (20) day periods, arising out of the same set of facts,
circumstances or transactions; and provided further, that if the Company decides
to postpone or suspend its obligation pursuant to this sentence, it shall give
written notice of such postment or suspension to the Holders to that effect. If
the Company shall give notice of the occurrence of any event of the kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv) and 3(c)(v) or of the
postponement or suspension of the Registration Statement pursuant to this
Section 3(n), then the Effectiveness Period shall be extended by the number of
days during such period from and including the date of the giving of such notice
to and including the date when each Holder shall have received (i) the copies of
the supplement or amendment to the Registration Statement contemplated by
Section 3(j) (if an amended or supplemental prospectus is required) or (ii) the
Advice (if no supplement or amendment to the Registration Statement is
required).
4. Registration Expenses
All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not the Registration Statement is filed or becomes effective and
whether or not any Registrable Securities are sold pursuant to the Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with the American Stock Exchange and each other securities exchange or
market on which Registrable Securities are required hereunder to be listed, (B)
with respect to filings required to be made with the Commission, (C) with
respect to filings required to be made under the NASD and the NASD Regulation,
Inc. and (D) in compliance with state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of counsel for the Holders
in connection with Blue Sky qualifications of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as the Holders of a majority of Registrable
Securities may designate)), (ii) printing expenses (including, without
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limitation, expenses of printing certificates for Registrable Securities and of
printing prospectuses if the printing of prospectuses is requested by the
holders of a majority of the Registrable Securities included in the Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and Special Counsel for the Holders, in
the case of the Special Counsel, to a maximum amount of $25,000, (v) Securities
Act liability insurance, if the Company so desires such insurance, and (vi) fees
and expenses of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement, including,
without limitation, the Company's independent public accountants (including the
expenses of any comfort letters or costs associated with the delivery by
independent public accountants of a comfort letter or comfort letters). In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder.
5. Underwritten Registrations.
If any of the Registrable Securities covered by a Registration
Statement are to be sold in an underwritten offering, the investment banker or
investment bankers and manager or managers that will administer the offering
will be selected by the Holders, of a majority in aggregate principal amount of
such Registrable Securities included in such offering, subject to the consent of
the Company (which shall not be unreasonably withheld or delayed);
notwithstanding anything else herein to the contrary, such holders shall be
responsible for all underwriting commissions and discounts in connection
therewith. The Company shall comply in all material respects with the terms of
any underwriting agreements approved by the Holders.
No Holder may participate in any underwritten registration
hereunder unless such person (i) agrees to sell its Registrable Securities on
the basis reasonably provided in any underwriting arrangements agreed to by
Holders of a majority in aggregate principal amount of the Registrable
Securities included in such offering and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents agreed to by Holders of a majority in aggregate principal amount
of the Registrable Securities included in such offering and reasonably required
under the terms of such underwriting arrangements.
6. Indemnification
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, agents and employees of each of them, each
Person who controls (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) any such Holder and the officers, directors,
agents and employees of each such controlling Person, to the fullest extent
permitted by applicable law, from and against any and all losses, claims,
damages, liabilities,
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costs (including, without limitation, reasonable costs of preparation and
reasonable attorneys' fees) and expenses (collectively, "Losses"), as incurred,
arising out of or relating to any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any Prospectus or any
form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, except to the extent, but only to the extent, that such
untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, which information was reasonably relied on by the Company for use
therein or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of an Indemnified
Party and shall survive the transfer of the Registrable Securities by the
Holders.
(b) Indemnification by Holders. Each Holder shall,
severally and not jointly, indemnify and hold harmless the Company, the
directors, officers, agents and employees, each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from and
against all Losses, as incurred, arising solely out of or based solely upon any
untrue statement of a material fact contained in the Registration Statement, any
Prospectus, or any form of prospectus, or arising solely out of or based solely
upon any omission of a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus or form of
prospectus or supplement thereto, in the light of the circumstances under which
they were made) not misleading, to the extent, but only to the extent, that such
untrue statement or omission is contained in any information so furnished in
writing by such Holder to the Company specifically for inclusion in the
Registration Statement or such Prospectus and that such information was
reasonably relied upon by the Company for use in the Registration Statement,
such Prospectus or such form of prospectus or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus. Notwithstanding anything to the contrary
contained herein, a Holder shall be liable under this Section 6(b) for only that
amount as does not exceed the net proceeds to such Holder as a result of the
sale of Registrable Securities pursuant to such Registration Statement.
(c) Conduct of Indemnification Proceedings. If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an "Indemnified Party"), such Indemnified Party promptly shall notify
the Person from whom indemnity is sought (the "Indemnifying Party") in writing,
and the Indemnifying Party may assume the defense thereof,
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including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except to the extent that such failure
shall have proximately and materially adversely prejudiced the Indemnifying
Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; or (2) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
(d) Contribution. If a claim for indemnification under
Section 6(a) or 6(b) is unavailable or insufficient to an Indemnified Party,
then each 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, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or 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
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses
reasonably incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms. Notwithstanding anything to the contrary contained
herein, the Holders shall be liable or required to contribute
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under this Section 6(c) for only that amount as does not exceed the net proceeds
to such Holder as a result of the sale of Registrable Securities pursuant to
such Registration Statement. No party shall be liable for contribution with
respect to any action or claim settled without its written consent; provided
however, that such written consent was not unreasonably withheld.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) 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 the immediately preceding
paragraph. 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.
The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.
7. Rule 144.
As long as any Holder owns Common Stock, Warrants, Warrant
Shares, Outstanding Warrants or Outstanding Shares, the Company shall timely
file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by, if requested in writing by
any Holders, the Company after the date hereof pursuant to Section 13(a) or
15(d) of the Exchange Act and to promptly furnish such Holders with true and
complete copies of all such filings. As long as any Holder owns Common Stock,
Warrants, Warrant Shares, Outstanding Warrants or Outstanding Shares, if the
Company is not required to file reports pursuant to Section 13(a) or 15(d) of
the Exchange Act, it will prepare and furnish to the Holders and make publicly
available in accordance with Rule 144(c) promulgated under the Securities Act
annual and quarterly financial statements, together with a discussion and
analysis of such financial statements in form and substance substantially
similar to those that would otherwise be required to be included in reports
required by Section 13(a) or 15(d) of the Exchange Act, as well as any other
information required thereby, in the time period that such filings would have
been required to have been made under the Exchange Act. The Company further
shall take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Person to sell Common Stock and
Warrant Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, including providing any legal opinions referred to in the
Purchase Agreement. Upon the written request of any Holder, the Company shall
deliver to such Holder a written certification of a duly authorized officer as
to whether it has complied with such requirements.
8. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or
by a Holder, of any of their obligations under this Agreement, each Holder or
the Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this
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Agreement. The Company and each Holder agree that monetary damages would not
provide adequate compensation for any losses incurred by reason of a breach by
it of any of the provisions of this Agreement and hereby further agrees that, in
the event of any action for specific performance in respect of such breach, it
shall waive the defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company has not, as
of the date hereof entered into any agreement that is currently in effect, nor
shall the Company, on or after the date of this Agreement, enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof, except that the Company has entered into registration rights
agreements with certain holders of the Company's common stock (the "Existing
Agreements") which provide for demand and/or piggyback registration rights. With
respect to each of the Existing Agreements either (i) the agreement by its terms
does not provide the holder thereunder with any right to include shares in any
registration statement filed pursuant to this Agreement or (ii) the Company has
obtained a written waiver from the holders thereunder of any rights such holders
have to include shares in any registration statement filed pursuant to this
Agreement. Without limiting the generality of the foregoing, without the written
consent of the Holders of a majority of the then outstanding Registrable
Securities, the Company shall not grant to any Person the right to request the
Company to register any securities of the Company under the Securities Act
unless the rights so granted are subject in all respects to the prior rights in
full of the Holders set forth herein, and are not otherwise in conflict with the
provisions of this Agreement.
(c) No Piggyback on Registrations. Neither the Company
nor any of its security holders (other than the Holders of Registrable
Securities) may include securities of the Company in the Registration Statement,
and the Company shall not after the date hereof enter into any agreement
providing such right to any of its security holders, unless the right so granted
is subject in all respects to the prior rights in full of the Holders set forth
herein, and is not otherwise in conflict with the provisions of this Agreement.
(d) Piggy-Back Registrations. If at any time when there
is not an effective Registration Statement covering (i) shares of Common Stock
or (ii) Warrant Shares, the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or its then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, the Company shall send to each Holder of Registrable Securities
written notice of such determination and, if within thirty (30) days after
receipt of such notice, any such Holder shall so request in writing (which
request shall specify the Registrable Securities intended to be disposed of by
the Purchasers), the Company will use its best efforts to cause the registration
under the Securities Act of all Registrable Securities which the Company has
been so requested to register by the Holder, to the extent necessary to permit
the disposition of the Registrable Securities so to be registered, provided that
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if at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may, at
its election, give written notice of such determination to such Holder and,
thereupon, (i) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay expenses in accordance with
Section 4 hereof), and (ii) in the case of a determination to delay registering,
shall be permitted to delay registering any Registrable Securities being
registered pursuant to this Section 8(d) for the same period as the delay in
registering such other securities. The Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered; provided, however, that the Company shall not
be required to register any Registrable Securities pursuant to this Section 8(d)
that are eligible for sale pursuant to Rule 144(k) of the Securities Act. In the
case of an underwritten public offering, if the managing underwriter should
reasonably object to the inclusion of the Registrable Securities in such
registration statement, then if the Company after consultation with the managing
underwriter should reasonably determine that the inclusion of such Registrable
Securities, would materially adversely affect the offering contemplated in such
registration statement, and based on such determination recommends inclusion in
such registration statement of fewer or none of the Registrable Securities of
the Holders, then (x) the number of Registrable Securities of the Holders
included in such registration statement shall be reduced pro-rata among such
Holders (based upon the number of Registrable Securities requested to be
included in the registration), if the Company after consultation with the
underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y)
none of the Registrable Securities of the Holders shall be included in such
registration statement, if the Company after consultation with the
underwriter(s) recommends the inclusion of none of such Registrable Securities;
provided, however, that if securities are being offered for the account of other
persons or entities as well as the Company, such reduction shall not represent a
greater fraction of the number of Registrable Securities intended to be offered
by the Holders than the fraction of similar reductions imposed on such other
persons or entities (other than the Company).
(e) Failure to File Registration Statement. The Company
and the Purchasers agree that the Holders will suffer damages if the
Registration Statement is not filed on or prior to the Filing Date and not
declared effective by the Commission on or prior to the Effectiveness Date and
maintained in the manner contemplated herein during the Effectiveness Period or
if certain other events occur. The Company and the Holders further agree that it
would not be feasible to ascertain the extent of such damages with precision.
Accordingly, if (i) the Registration Statement is not filed on or prior to the
Filing Date, or is not declared effective by the Commission on or prior to the
Effectiveness Date (or in the event an additional Registration Statement is
filed because the actual number of shares of Common Stock into which the
Warrants are exercisable exceeds the number of shares of Common Stock initially
registered and is not filed and declared effective within the time periods set
forth in Section 2), or (ii) the Company fails to file with the Commission a
request for acceleration in accordance with Rule 12dl-2 promulgated under the
Exchange Act within five (5) Business Days of the date that the
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Company is notified (orally or in writing, whichever is earlier) by the
Commission that a Registration Statement will not be "reviewed," or not subject
to further review, or (iii) the Registration Statement is filed with and
declared effective by the Commission but thereafter ceases to be effective as to
all Registrable Securities at any time prior to the expiration of the
Effectiveness Period, without being succeeded within thirty (30) days by a
subsequent Registration Statement filed with and declared effective by the
Commission, or (iv) trading in the Common Stock shall be suspended or if the
Common Stock is delisted from the American Stock Exchange for any reason for
more than three (3) Business Days in the aggregate, or (v) the Company breaches
in a material respect any covenant or other material term or condition to this
Agreement, the Purchase Agreement (other than a representation or warranty
contained therein) or any other agreement, document, certificate or other
instrument delivered in connection with the transactions contemplated hereby and
thereby, and such breach continues for a period of thirty (30) days after
written notice thereof to the Company, or (vii) the Company has breached Section
3(n) of this Agreement (any such failure or breach being referred to as an
"Event"), the Company shall pay in cash as liquidated damages for such failure
and not as a penalty to each Holder an amount equal to 2% of such Holder's pro
rata share of the purchase price paid by all Holders for all shares of Common
Stock and Warrants purchased and then outstanding pursuant to the AWVF Purchase
Agreement and the Four Corners Purchase Agreement, as applicable (the
"Liquidated Damages Amount"). Payments to be made pursuant to this Section 8(e)
shall be due and payable in cash immediately upon demand. The parties agree that
the Liquidated Damages Amount represents a reasonable estimate on the part of
the parties, as of the date of this Agreement, of the amount of damages that may
be incurred by the Holders if the Registration Statement is not filed on or
prior to the Filing Date or has not been declared effective by the Commission on
or prior to the Effectiveness Date.
(f) Specific Enforcement, Consent to Jurisdiction.
(i) The Company and the Purchasers acknowledge
and agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to specific performance of the provisions of this
Agreement in addition to any other remedy to which any of them may be entitled
at law or in equity.
(ii) Each of the Company and the Purchaser (i)
hereby irrevocably submits to the jurisdiction of the United States District
Court sitting in the Southern District of New York and if jurisdiction of such
federal courts is not available, the state courts of New York, for the purposes
of any suit, action or proceeding arising out of or relating to this Agreement
or the Purchase Agreement and (ii) hereby waives, and agrees not to assert in
any such suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of such court, that the suit, action or proceeding is
brought in an inconvenient forum or that the venue of the suit, action or
proceeding is improper. Each of the Company and the Purchasers consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such
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service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 8(f) shall affect or limit any right to serve
process in any other manner permitted by law.
(g) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and each of the Holders. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders and that does not directly or
indirectly affect the rights of any other Holders may be given by Holders to
which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.
(h) Notices. Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed to have been given on (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice prior to 5:00 p.m., eastern standard time, on a
Business Day, (ii) the Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice later than 5:00 p.m., eastern standard time, on any
date and earlier than 11:59 p.m., eastern standard time, on such date, (iii) the
second Business Day following the date of mailing, if sent by nationally
recognized overnight courier service or (iv) actual receipt by the party to whom
such notice is required to be given, whichever shall first occur. The addresses
for such communications shall be with respect to each Holder at its address set
forth under its name on Schedule B attached hereto, or with respect to the
Company, addressed to:
xxxxxxxxxx.xxx
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: C. Xxxxxxx Xxxxx
Facsimile No.: (000) 000-0000
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Company shall be sent to Xxxxxx &
Xxxxxx LLP, 0000 Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000,
Attention: Xxxxxx X. Xxxxxx, Facsimile No.: (000) 000-0000. Copies of notices to
any Holder shall be sent to (i) Xxxxxx Xxxxxx Flattau & Klimpl, LLP, 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxxxxx X. Xxxxxxx,
Esq., Facsimile No.: (000) 000-0000 and (ii) Xxxxxxx Xxxxxxx & Xxxxxxxx, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxxxx, Esq.,
Facsimile No.: (000) 000-0000.
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(i) Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns and shall inure to the benefit of each Holder and its
successors and assigns. The Company may not assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of each
Holder. Each Purchaser may assign its rights hereunder in the manner and to the
Persons as permitted hereunder and under the Purchase Agreement.
(j) Assignment of Registration Rights. The rights of each
Holder hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall be
automatically assignable by each Holder to any transferee of such Holder of all
or a portion of the shares of Common Stock or the Registrable Securities if: (i)
the Holder agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company as promptly as
possible after such assignment, (ii) the Company is, as promptly as possible
after such transfer or assignment, furnished with written notice of (a) the name
and address of such transferee or assignee, and (b) the securities with respect
to which such registration rights are being transferred or assigned, (iii)
following such transfer or assignment the further disposition of such securities
by the transferee or assignees is restricted under the Securities Act and
applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this Section, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions of this Agreement. In addition, each Holder shall have the right
to assign its rights hereunder to any other Person with the prior written
consent of the Company, which consent shall not be unreasonably withheld.
Additionally, each Holder shall have the right to assign its rights hereunder to
any Affiliate of such Holder without the consent to the Company. The rights to
assignment shall apply to the Holders (and to subsequent) successors and
assigns.
(k) Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(l) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
(m) Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(n) Severability. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable in any respect, the remainder of the terms, provisions, covenants
and restrictions set forth herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, and the parties hereto
shall use their reasonable efforts to find and employ an alternative means to
achieve the same or
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substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(o) Headings. The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
(p) Within two (2) business days after any Registration
Statement which includes the Registrable Securities is ordered effective by the
Commission, the Company shall deliver, or shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable Securities (with
copies to the Holders whose Registrable Securities are included in such
Registration Statement) confirmation that such Registration Statement has been
declared effective by the Commission in the form attached hereto as Exhibit A.
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IN WITNESS WHEREOF, the parties hereto have caused this
Registration Rights Agreement to be duly executed by their respective authorized
persons as of the date first indicated above.
XXXXXXXXXX.XXX
By:
------------------------------------
Name:
Title:
ACQUA WELLINGTON VALUE FUND, LTD.
By:
------------------------------------
Name:
Title:
FOUR CORNERS CAPITAL, LLC
By:
------------------------------------
Name:
Title:
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EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
ATTN:_____________
RE: XXXXXXXXXX.XXX
Ladies and Gentlemen:
We are counsel to xxxxxxxxxx.xxx, a Delaware corporation (the
"COMPANY"), and have represented the Company in connection with that certain
Common Stock Purchase Agreement (the "PURCHASE AGREEMENT") entered into by and
among the Company and the entity a party thereto (the "HOLDER") pursuant to
which the Company issued to the Holder shares of its common stock, par value
$.01 per share (the "COMMON STOCK"), and warrants to purchase shares of the
Common Stock (the "WARRANTS"). Pursuant to the Purchase Agreement, the Company
has also entered into a Registration Rights Agreement with the Holder (the
"REGISTRATION RIGHTS AGREEMENT") pursuant to which the Company agreed, among
other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement), including the shares of Common Stock issuable
upon exercise of the Warrants, under the Securities Act of 1933, as amended (the
"1933 ACT"). In connection with the Company's obligations under the Registration
Rights Agreement, on ____________ ___, 2000, the Company filed a Registration
Statement on Form (File No. 333-_____________) (the "REGISTRATION STATEMENT")
with the Securities and Exchange Commission (the "SEC") relating to the
Registrable Securities which names each of the Holders as a selling stockholder
thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[COMPANY'S COUNSEL]
cc: [LIST NAMES OF HOLDERS]
