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EXHIBIT 10.1
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REGISTRATION RIGHTS AGREEMENT
AMONG
XXXXXX.XXX, INC
AND
INVESTORS
DATED AS OF MARCH 16, 2000
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TABLE OF CONTENTS
PAGE
1. INCIDENTAL REGISTRATIONS.............................................................1
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2. MANDATORY REGISTRATION...............................................................2
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3. REGISTRATION PROCEDURES..............................................................2
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4. UNDERWRITTEN OFFERINGS...............................................................6
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4.1. Underwriting Agreement........................................................6
4.2. Selection of Underwriters.....................................................6
5. HOLDBACK AGREEMENTS..................................................................6
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6. PREPARATION; REASONABLE INVESTIGATION................................................7
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7. INDEMNIFICATION......................................................................7
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7.1. Indemnification by the Company................................................7
7.2. Indemnification by the Sellers................................................8
7.3. Notices of Claims, etc........................................................9
7.4. Other Indemnification.........................................................9
7.5. Indemnification Payments......................................................9
7.6. Other Remedies...............................................................10
8. DEFINITIONS.........................................................................10
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9. MISCELLANEOUS.......................................................................11
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9.1. Rule 144 etc.................................................................11
9.2. Successors, Assigns and Transferees..........................................12
9.3. Stock Splits, etc............................................................12
9.4. Amendment and Modification...................................................12
9.5. Governing Law................................................................12
9.6. Invalidity of Provision......................................................12
9.7. Notices......................................................................12
9.8. Headings; Execution in Counterparts..........................................13
9.9. Injunctive Relief............................................................13
9.10. Arbitration..................................................................13
9.11. Entire Agreement.............................................................14
10. TERM................................................................................14
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is entered into as of March ___, 2000,
by and among XXXXXX.XXX, INC, a Florida corporation (the "Company"), with its
principal offices located at 0000 Xxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxx 00000,
and other undersigned parties, for the purposes of granting registration rights
to the holders of Common Stock who exercise a counterpart of this Agreement (the
"Investors"). Capitalized terms used herein without definition are defined in
Section 8.
WHEREAS:
A. In connection with the Stock Purchase Agreement of even date herewith
by and between the Company and the Investors (the "Stock Purchase Agreement"),
the Company has agreed, upon the terms and subject to the conditions contained
therein, to issue and sell to the Investors (i) shares of its Common Stock (the
"Common Stock") and (ii) options (the "Options") to acquire shares of Common
Stock (the "Option Shares"); and
B. To induce the Investors to execute and deliver the Stock Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "Securities
Act"), and applicable state securities laws;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Initial
Investors hereby agree as follows:
1. INCIDENTAL REGISTRATIONS
If the Company at any time proposes to register any of its equity
securities under the Securities Act (other than pursuant to a registration on
Form S-4 or S-8 or any successor form), and the registration form to be used may
be used for the registration of Registrable Securities, it will give written
notice to all holders of Registrable Securities of its intention to do so. Upon
the written request of any such holder received by the Company within 30 days
after the giving of such notice by the Company (which request shall specify the
number of Registrable Securities intended to be disposed of by such holder and
the intended method or methods of disposition thereof), the Company will use its
best efforts to effect the registration under the Securities Act of all such
Registrable Securities in accordance with such intended method or methods of
disposition, provided that:
(a) if such registration shall be in connection with an initial
public offering by the Company, the Company shall not include any Registrable
Securities in such proposed registration if the Board shall have determined,
after consultation with the managing underwriter for such offering (or, in the
case that it is not underwritten, an investment banker), that it is not in the
best interests of the Company to include any Registrable Securities in such
registration;
(b) if, at any time after giving written notice of its intention
to register any equity securities and prior to the effective date of the
registration statement filed in connection
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with such registration, the Company shall determine for any reason not to
register such equity securities, the Company may, at its election, give written
notice of such determination to each holder of Registrable Securities and,
thereupon, shall not be obligated to register any Registrable Securities in
connection with such registration (but shall nevertheless pay the Registration
Expenses in connection therewith); and
(c) if a registration pursuant to this Section 1 involves an
underwritten offering, and the managing underwriter (or, in the case of an
offering that is not underwritten, an investment banker) shall advise the
Company that, in its opinion, the number of securities requested and otherwise
proposed to be included in such registration exceeds the number which can be
sold in such offering, the Company will include in such registration to the
extent of the number which the Company is so advised can be sold in such
offering, first, the securities if any, being sold by the Company, second, the
holders of Registrable Securities requested to be included in such registration,
pro rata, among all such holders, on the basis of the number of Registrable
Securities requested to be included by such holders.
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 1,
provided, that each seller of Registrable Securities shall pay all Registration
Expenses to the extent required to be paid directly by such seller under
applicable law and provided, further, that underwriting commissions shall be
paid pro rata by the sellers in such registration, based on the number of shares
of Registrable Securities being sold.
2. MANDATORY REGISTRATION
In the event that the Registrable Securities are excluded from the
registration pursuant to Section 1 hereto or the Registrable Securities are not
registered pursuant to Section 1 within 180 days following the date hereof, the
Company shall prepare, and, as soon as practical but in no event later than 210
days after the date hereof, file with the SEC a registration statement on Form
S-3 (or, if Form S-3 is not then available, on such form of registration
statement as is then available to effect a registration of the Registrable
Securities, subject to the consent of the Investors, which consent will not be
unreasonably withheld) covering the resale of the Registrable Securities. The
Company shall use its best efforts to have the registration statement declared
effective by the SEC as soon as practical, but in no event later than 270 days
after the date hereof.
3. REGISTRATION PROCEDURES
If and whenever the Company is required to use its best efforts to
effect the registration of any Registrable Securities under the Securities Act
as provided in Section 1 or Section 2, the Company will promptly:
(a) in the case of a registration under Section 1, within 120
days after giving the notice to holders of Registrable Securities of its
intention to register equity securities, prepare and file with the Commission, a
registration statement with respect to such Registrable Securities, make all
required filings with the NASD and use reasonable efforts to cause such
registration statement to become effective as soon as practicable;
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(b) prepare and promptly file with the Commission such
amendments and post-effective amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to
keep such registration statement effective for so long as is required to comply
with the provisions of the Securities Act and to complete the disposition of all
securities covered by such registration statement in accordance with the
intended method or methods of disposition thereof, but in no event for a period
of more than six (6) months after such registration statement becomes effective;
provided, however that if the filed registration statement is on a Form S-3 or a
substantially similar form allowing for incorporation by reference, this period
will be extended to no more than one (1) year after such registration statement
becomes effective.
(c) furnish to each seller of Registrable Securities copies of
all documents proposed to be filed with the Commission in connection with such
registration, which documents will be subject to the review of such counsel and
each seller and the Company shall not file any amendment and post-effective
amendments or supplement to such registration statement or the prospectus used
in connection therewith which any such seller shall have reasonably objected in
writing on the grounds that such amendment or supplement does not comply
(explaining why) in all material respects with the requirements of the
Securities Act or of the rules or regulations thereunder;
(d) furnish to each seller of Registrable Securities, without
charge, such number of conformed copies of such registration statement and of
each such amendment and supplement thereto (in each case including all exhibits
and documents filed therewith) and such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such seller in
accordance with the intended method or methods of disposition thereof;
(e) use its reasonable efforts to register or qualify such
Registrable Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as each seller shall
reasonably request, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition of such Registrable Securities in such jurisdictions in accordance
with the intended method or methods of disposition thereof, provided, that the
Company shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified, subject itself to taxation in any jurisdiction wherein it is not so
subject, or take any action which would subject it to general service of process
in any jurisdiction wherein it is not so subject;
(f) use reasonable efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the seller or sellers thereof
to consummate the disposition of such Registrable Securities in accordance with
the intended method or methods of disposition thereof;
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(g) furnish to each seller of Registrable Securities a signed
counterpart of (i) an opinion of counsel for the Company experienced in
securities law matters, dated the effective date of the registration statement
(and, if such registration includes an underwritten public offering, the date of
the closing under the underwriting agreement), and (ii) a "comfort" letter
(unless such a letter is not otherwise being furnished to the Company), dated
the effective date of such registration statement (and if such registration
includes an underwritten public offering, dated the date of the closing under
the underwriting agreement), signed by the independent public accountants who
have issued an audit report on the Company's financial statements included in
the registration statement, covering such matters as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to the
underwriters in underwritten public offerings of securities.
(h) notify each seller of any Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
or existence of any fact, of which the Company has knowledge, as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, and, as promptly as
is practicable, prepare and furnish to such seller a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include 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 not misleading in light of the circumstances then existing;
(i) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement of the Company
(in form complying with the provisions of Rule 158 under the Securities Act)
covering the period of at least 12 months, but not more than 18 months,
beginning with the first month after the effective date of the registration
statement;
(j) notify each seller of any Registrable Securities covered by
such registration statement (i) when the prospectus or any prospectus supplement
or post-effective amendment has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same has become
effective, (ii) of any request by the Commission for amendments or supplements
to such registration statement or to amend or to supplement such prospectus or
for additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of such registration statement or the
initiation of any proceedings for that purpose and (iv) of the suspension of the
qualification of such securities for offering or sale in any jurisdiction, or of
the institution of any proceedings for any of such purposes;
(k) use every reasonable effort to obtain the lifting of any
stop order that might be issued suspending the effectiveness of such
registration statement at the earliest possible moment;
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(l) use reasonable efforts to list such Registrable Securities
on Nasdaq or any securities exchange on which the equity securities of the
Company are then listed or, if no such equity securities are then listed, on
Nasdaq or such securities exchange selected by the Company, if such listing is
then permitted under the rules of Nasdaq or such exchange;
(m) enter into such agreements and take such other actions as
the sellers of Registrable Securities or the underwriters reasonably request in
order to expedite or facilitate the disposition of such Registrable Securities,
including, without limitation, preparing for, and participating in, such number
of "road shows" and all such other customary selling efforts as the underwriters
reasonably request in order to expedite or facilitate such disposition; and
(n) use its reasonable efforts to take all other steps necessary
to effect the registration of such Registrable Securities contemplated hereby.
As a condition to its registration of Registrable Securities of any
prospective seller, the Company may require each seller of any Registrable
Securities as to which any registration is being effected to furnish to the
Company such information regarding such seller, its ownership of Registrable
Securities and the disposition of such Registrable Securities as the Company may
from time to time reasonably request in writing and as shall be required by law
in connection therewith. Each such holder agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such holder true and
accurate.
The Company agrees not to file or make any amendment to any registration
statement with respect to any Registrable Securities, or any amendment of or
supplement to the prospectus used in connection therewith, which refers to any
seller of any Registrable Securities covered thereby by name, or otherwise
identifies such seller as the holder of any Registrable Securities, without the
consent of such seller, such consent not to be unreasonably withheld, unless
such disclosure is required by law.
By acquisition of Registrable Securities, each holder of such
Registrable Securities shall be deemed to have agreed that upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 3(h), such holder will promptly discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(h). If so directed
by the Company, each holder of Registrable Securities will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
in such holder's possession of the prospectus covering such Registrable
Securities at the time of receipt of such notice. In the event that the Company
shall give any such notice, the period mentioned in Section 3(b) 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 any
Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
Section 3(h).
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4. UNDERWRITTEN OFFERINGS
4.1 UNDERWRITING AGREEMENT
If requested by the underwriters for any underwritten offering by
holders of Registrable Securities pursuant to a registration under Section 1,
the Company shall enter into an underwriting agreement with the underwriters for
such offering, which underwriting agreement shall contain such representations
and warranties by the Company and such other terms and provisions as are
customarily contained in agreements of this type, including, without limitation,
indemnities to the effect and to the extent provided in Section 7. The holders
of Registrable Securities to be distributed by such underwriters shall be
parties to such underwriting agreement and may, at their option, require that
any or all of the representations and warranties by, and the agreements on the
part of, the Company to and for the benefit of such underwriters be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement shall also be conditions precedent to the obligations of
such holders of Registrable Securities. No underwriting agreement (or other
agreement in connection with such offering) shall require any holder of
Registrable Securities to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such holder, the ownership of such holder's
Registrable Securities and such holder's intended method or methods of
disposition and any other representation (x) required by law or (y) regarding
information which can only be obtained from such holder and is reasonably
required by the managing underwriter.
4.2 SELECTION OF UNDERWRITERS
If the Company at any time proposes to register any of its securities
under the Securities Act for sale pursuant to an underwritten offering, the
Company will have the right to select the managing underwriter to administer the
offering
5. HOLDBACK AGREEMENTS
(a) If and whenever the Company proposes to register any of its
equity securities under the Securities Act (other than on Form S-4 or S-8 or any
successor form), including, without limitation pursuant to Section 1 hereof,
each holder of Registrable Securities agrees by acquisition of such Registrable
Securities not to, within 10 days prior to the reasonably anticipated effective
date and 90 days (unless advised in writing by the managing underwriter that a
longer period, not to exceed 180 days, is required) after the effective date of
the registration statement relating to such registration, except as part of such
registration, directly or indirectly, (i) offer to sell, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant for the sale of, or
otherwise dispose of or transfer any Registrable Securities or any securities
convertible into or exchangeable or exercisable for Registrable Securities
(including, without limitation any Registrable Securities that such holder has
or hereafter acquires the power of disposition over) or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the Registrable
Securities, whether any such swap transaction is to be settled by delivery of
the Registrable Securities or
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other securities, in cash or otherwise. In addition, each holder of Registrable
Securities agrees to execute and deliver to any managing underwriter (or, in the
case of any offering that is not underwritten, an investment banker) in
connection with a registration of the Company's equity securities under the
Securities Act (other than on Form S-4 or S-8 or any successor form), any
lock-up letter requested of such holder by such Person.
(b) The Company agrees not to effect any public sale or
distribution of its equity securities or securities convertible into or
exchangeable or exercisable for any of such securities within 10 days prior to
and 90 days (unless advised in writing by the managing underwriter that a longer
period, not to exceed 180 days, is required) after the effective date of such
registration statement (except as part of such registration or pursuant to a
registration on Form S-4 or S-8 or any successor form). In addition, the Company
shall use its reasonable efforts to cause each holder of its equity securities
or any securities convertible into or exchangeable or exercisable for any of
such securities, whether outstanding on the date of this Agreement or issued at
any time after the date of this Agreement (other than any such securities
acquired in a public offering), to agree not to effect any such public sale or
distribution of such securities during such period, except as part of any such
registration if permitted, and to use its reasonable efforts to cause each such
holder to enter into a similar agreement to such effect with the Company.
6. PREPARATION; REASONABLE INVESTIGATION
In connection with the preparation and filing of each registration
statement registering Registrable Securities under the Securities Act, the
Company will give the holders of such Registrable Securities so to be registered
and their underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give each of them such access
to the financial and other records, pertinent corporate documents and properties
of the Company and its subsidiaries and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have issued audit reports on its financial statements as shall be reasonably
requested by such holders in connection with such registration statement.
7. INDEMNIFICATION
7.1 INDEMNIFICATION BY THE COMPANY
In the event of any registration of any Registrable Securities pursuant
to this Agreement, the Company will indemnify and hold harmless (a) the seller
of such Registrable Securities, (b) the directors, officers, partners,
employees, advisors, representatives, agents and Affiliates of such seller, (c)
each Person who participates as an underwriter in the offering or sale of such
securities and (d) each person, if any, who controls (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) any such
seller, partner or underwriter against any and all losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), joint or several,
directly or indirectly based upon or arising out of (i) any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such Registrable Securities were registered under the
Securities Act, any preliminary prospectus,
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final prospectus or summary prospectus contained therein or used in connection
with the offering of securities covered thereby, or any amendment or supplement
thereto, or (ii) any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and the Company will reimburse each such indemnified party for any
legal or any other expenses reasonably incurred by them in connection with
investigating, preparing, pursuing or defending any such loss, claim, damage,
liability, action or proceeding, except insofar as any such loss, claim, damage,
liability, action, proceeding or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such seller, any
such underwriter or any such controlling person expressly for use in the
preparation thereof. Such indemnity shall remain in full force and effect,
regardless of any investigation made by such indemnified party and shall survive
the transfer of such Registrable Securities by such seller. The indemnity
agreement contained in this Section 7.1 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, action or proceeding if
such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld).
7.2 INDEMNIFICATION BY THE SELLERS
The Company may require, as a condition to including any Registrable
Securities in any registration statement filed pursuant to Section 1 that the
Company shall have received an undertaking satisfactory to it from each of the
prospective sellers of such Registrable Securities to indemnify and hold
harmless, severally, not jointly, in the same manner and to the same extent as
set forth in Section 7.1, the Company, its directors and officers, any
underwriter and each person, if any, who controls (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) the foregoing
Persons with respect to any statement or alleged statement in or omission or
alleged omission from such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such seller expressly for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. Such indemnity shall
remain in full force and effect, regardless of any investigation made by or on
behalf of the Company or any such director, officer, any underwriter or
controlling Person and shall survive the transfer of such Registrable Securities
by such seller. The indemnity agreement contained in this Section 7.2 shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
action or proceeding if such settlement is effected without the consent of such
seller (which consent shall not be unreasonably withheld). The Company and the
holders of Registrable Securities hereby acknowledge and agree that for all
purposes of this Agreement the only information furnished or to be furnished to
the Company for use in any such registration statement, preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement are statements
specifically relating to (a) transactions between such holder and its
Affiliates, on the one hand, and the Company, on the other hand, (b) the
beneficial ownership of shares of Common Stock by such holder and its Affiliates
and (c) the name and address of such holder. The indemnity provided by each
seller of Registrable Securities under this Section 7.2 shall be limited in
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amount to the net amount of proceeds actually received by such seller from the
sale of Registrable Securities pursuant to such registration statement.
7.3 NOTICES OF CLAIMS, ETC.
Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in the
preceding paragraphs of this Section 7, such indemnified party will, if a claim
in respect thereof is to be made against an indemnifying party, give written
notice to the latter of the commencement of such action or proceeding, provided
that the failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under the preceding
paragraphs of this Section 7, except to the extent that the indemnifying party
is materially prejudiced by such failure to give notice. In case any such action
is brought against an indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof except for the reasonable fees and
expenses of any single counsel retained by such indemnified party to monitor
such action or proceeding. Notwithstanding the foregoing, if such indemnified
party and the indemnifying party reasonably determine, based upon advice of
their respective independent counsel, that a conflict of interest may exist
between the indemnified party and the indemnifying party with respect to such
action and that it is advisable for such indemnified party to be represented by
separate counsel, such indemnified party may retain other counsel, reasonably
satisfactory to the indemnifying party, to represent such indemnified party, and
the indemnifying party shall pay all reasonable fees and expenses of such
counsel. No indemnifying party, in the defense of any such claim or litigation,
shall, except with the consent of such indemnified party, which consent shall
not be unreasonably withheld, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation.
7.4 OTHER INDEMNIFICATION
Indemnification similar to that specified in the preceding paragraphs of
this Section 7 (with appropriate modifications) shall be given by the Company
and each seller of Registrable Securities with respect to any required
registration (other than under the Securities Act) or other qualification of
such Registrable Securities under any federal or state law or regulation of any
governmental authority.
7.5 INDEMNIFICATION PAYMENTS
Any indemnification required to be made by an indemnifying party
pursuant to this Section 7 shall be made by periodic payments to the indemnified
party during the course of the action or proceeding, as and when bills are
received by such indemnifying party with respect to an indemnifiable loss,
claim, damage, liability or expense incurred by such indemnified party.
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7.6 OTHER REMEDIES
If for any reason the foregoing indemnity is unavailable, or is
insufficient to hold harmless an indemnified party, other than by reason of the
exceptions provided therein, then the indemnifying party shall contribute to the
amount paid or payable by the indemnified party as a result of such losses,
claims, damages, liabilities, actions, proceedings or expenses in such
proportion as is appropriate to reflect the relative benefits to and faults of
the indemnifying party on the one hand and the indemnified party on the other in
connection with the offering of Registrable Securities (taking into account the
portion of the proceeds of the offering realized by each such party) and the
statements or omissions or alleged statements or omissions which resulted in
such loss, claim, damage, liability, action, proceeding or expense, as well as
any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by reference
to, among other things, whether the untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statements or omissions. 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. No party shall be liable for contribution under this Section
7.6 except to the extent and under such circumstances as such party would have
been liable to indemnify under this Section 7 if such indemnification were
enforceable under applicable law.
8. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following respective meanings:
"Affiliate" means a person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified.
"Board" means the Board of Directors of the Company.
"Common Stock" means the Company's Common Stock, par value $.001 per
share.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute, and the rules and regulations thereunder which
shall be in effect at the time.
"NASD" means National Association of Securities Dealers, Inc.
"Nasdaq" means the Nasdaq National Market.
"Person" means an individual, corporation, partnership, joint venture,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
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"Registrable Securities" means the Common Stock and the Option Shares
issued upon conversion of those Options which are vested and exercisable on the
date hereof and any shares of capital stock issued or issuable with respect to
such Option Shares or the Common Stock as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise; provided
that nothing herein shall require the registration of the offer or sale of the
Options. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (i) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) they shall have been sold to the public
pursuant to Rule 144 under the Securities Act, (iii) they may be sold to the
public by the holder thereof in a three month period in accordance with Rule 144
without violating Rule 144(e), (iv) they shall have been otherwise transferred
and subsequent disposition of them shall not require registration or
qualification of them under the Securities Act of or any similar state law then
in force or (v) they shall have ceased to be outstanding.
"Registration Expenses" means all reasonable expenses incident to the
Company's performance of or compliance with Section 1, including, without
limitation, (i) registration, filing and NASD fees, (ii) fees and expenses of
complying with securities or blue sky laws, (iii) fees and expenses associated
with listing securities on an exchange or Nasdaq, (iv) word processing,
duplicating and printing expenses, (v) messenger and delivery expenses, (vi)
fees and disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or "cold comfort"
letters, and (vii) any fees and disbursements of underwriters customarily paid
by issuers or sellers of securities, but excluding underwriting discounts and
commissions and transfer taxes, if any.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations thereunder which shall
be in effect at the time.
9. MISCELLANEOUS
9.1 RULE 144 ETC.
If the Company shall have filed a registration statement pursuant to the
requirements of Section 12 of the Exchange Act or a registration statement
pursuant to the requirements of the Securities Act relating to any class of
equity securities, the Company will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder, and will take such further action as any
holder of Registrable Securities may reasonably request, all to the extent
required from time to time 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 successor rule or regulation hereafter
the commission. Upon the request of any holder of Registrable Securities, the
Company will deliver promptly to such holder a written statement as to whether
it has complied with such requirements.
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9.2 SUCCESSORS, ASSIGNS AND TRANSFEREES
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. In addition, and
provided that an express assignment shall have been made, and a copy of which
shall have been delivered to the Company, the provisions of this Agreement which
are for the benefit of a holder of Registrable Securities shall be for the
benefit of and enforceable by any subsequent holder of any Registrable
Securities that holds at least 150,000 shares of Common Stock (as constituted on
the date hereof). Notwithstanding anything herein to the contrary, the assignors
of Registrable Securities shall continue to exercise all rights hereunder on
behalf of any transferees and the Company shall be entitled to deal exclusively
with the assignors and rely on the consent, waiver or any other action by the
assignors as the consent, waiver or other action, as the case may be, of any
such transferee.
9.3 STOCK SPLITS, ETC.
Each holder of Registrable Securities agrees that it will vote to effect
a stock split or combination with respect to any Registrable Securities in
connection with any registration of such Registrable Securities hereunder, or
otherwise, if the managing underwriter shall advise the Company in writing (or,
in connection with an offering that is not underwritten, if an investment banker
shall advise the Company in writing) that in its opinion such a stock split or
combination would facilitate or increase the likelihood of success of the
offering.
9.4 AMENDMENT AND MODIFICATION
This Agreement may be amended, modified or supplemented by the Company
with the written consent of the holders of a majority of the Registrable
Securities.
9.5 GOVERNING LAW
This Agreement and the rights and obligations of the parties hereunder
and the persons subject hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of Texas, without giving
effect to the choice of law principles thereof.
9.6 INVALIDITY OF PROVISION
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.
9.7 NOTICES
All notices, requests, demands, letters, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by fax as follows:
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(i) If to the Company:
XxxXxx.xxx, Inc.
0000 Xxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
with a copy (which shall not constitute notice) to:
Xxxx Xxxxxxxxxx, Esq.
Akin, Gump, Strauss, Xxxxx & Xxxx, LLP
000 Xxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
(ii) If to Investors, to the address indicated on Schedule A,
or at such other address as such each Investor may, from
time to time, designate by providing written notice.
All such notices, requests, demands, letters, waivers and other communications
shall be deemed to have been received (w) if by personal delivery on the day
after such delivery, (x) if by certified or registered mail, on the fifth
business day after the mailing thereof, (y) if by next-day or overnight mail or
delivery, on the day delivered or (z) if by fax, on the next day following the
day on which such fax was sent, provided that a copy is also sent by certified
or registered mail.
9.8 HEADINGS; EXECUTION IN COUNTERPARTS
The headings and captions contained herein are for convenience and shall
not control or affect the meaning or construction of any provision hereof. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and which together shall constitute one and the same
instrument.
9.9 INJUNCTIVE RELIEF
Each of the parties recognizes and agrees that money damages may be
insufficient and, therefore, in the event of a breach of any provision of this
Agreement the aggrieved party may elect to institute and prosecute proceedings
in any court of competent jurisdiction to enforce specific performance or to
enjoin the continuing breach of this Agreement. Such remedies shall, however, be
cumulative and not exclusive, and shall be in addition to any other remedy which
such party may have.
9.10 ARBITRATION
(a) Any claim, controversy or dispute between the parties,
including, without limitation, any dispute involving any party hereto, or their
agents, employees, officers, directors and affiliated agents ("Dispute"),
whether at law, in equity or otherwise, shall be resolved by arbitration
conducted by a single arbitrator, who shall be engaged in the practice of law.
All
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arbitration proceedings arising from this Agreement shall be governed by the
then current rules of the American Arbitration Association ("AAA"), subject to
the limitation that the arbitrator shall not have the authority to award
punitive damages. The arbitrators award shall be final and binding and may be
entered in any court having jurisdiction thereof. The prevailing party, as
determined by the arbitrator, shall be entitled to an award of reasonable
attorneys fees and costs. The Federal Arbitration Act, 9 U.S.C. Secs. 1-16, not
state law, shall govern the arbitrability of all Disputes. The laws of the State
of Texas shall govern the construction and interpretation of this Agreement,
subject to the foregoing provision regarding the Federal Arbitration Act. All
arbitration proceedings related to any Dispute shall occur in the City of San
Antonio in the State of Texas. It is expressly agreed that either party may seek
injunctive relief or specific performance of the obligations hereunder to
maintain the status quo during the pendency of any Dispute in an appropriate
court of law or equity pending an award in arbitration.
(b) Subject to the preceding paragraph, and solely for purposes
of injunctive relief or specific performance, the parties irrevocably submit to
the jurisdiction of any court of the State of Texas.
9.11 ENTIRE AGREEMENT
This Agreement is intended by the parties hereto as a final expression
of their agreement and intended to be a complete and exclusive statement of
their agreement and understanding in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
10. TERM
This Agreement shall be effective as of the date hereof and shall
continue in effect thereafter until the earlier of (a) its termination by the
consent of the Company and holders of a majority of the Registerable Securities;
(b) the date on which no Registrable Securities remain outstanding; and (c) ten
(10) years from the date of this Agreement.
[signature pages to follow]
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[INVESTOR SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been signed and delivered by each
of the parties hereto, effective as of the date first written above.
THE COMPANY:
XXXXXX.XXX, INC
By:
------------------------------------------
Xxxx Xxxxxx, Chief Financial Officer
[INVESTORS SIGNATURE PAGES TO FOLLOW]
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[INVESTOR SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
THE INVESTORS:
-------------------------------------------
XXXXXX X. XXXXXXX
-------------------------------------------
XXXX XXXX
-------------------------------------------
XXXX XXXXX
-------------------------------------------
XXXXX X. XXXXX
-------------------------------------------
XXXXXXX XXXXXX
-------------------------------------------
XXX X. BUTT
-------------------------------------------
M. A. DIZDAR
-------------------------------------------
X. XXXXX XXXXXX
-------------------------------------------
XXXXX X. XXXXXX
-------------------------------------------
XXXXXX XXXXXX
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-------------------------------------------
XXXX XXXXXX
-------------------------------------------
XXXXXXX XXXX XXXXXX
-------------------------------------------
XXXXXX XXXXXX
-------------------------------------------
XXXX XXXXXX
-------------------------------------------
XXXXXXX XXXXXXXX
-------------------------------------------
XXXXXXX XXXXXXXXX
-------------------------------------------
XXXXXXX XXXXX
-------------------------------------------
XXXXXX XXXXX III
-------------------------------------------
XXXXX X. XXXXXXX
TRES HOMBRES
By:
----------------------------------------
Name/Title:
--------------------------------
-------------------------------------------
XXXX XXXXXXXXX
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XXXXXXX-XXXXX INVESTMENT FUND, L.P.
By:
----------------------------------------
Name/Title:
--------------------------------
-------------------------------------------
XXXXXXX X. XXXXXXX
RHOJCOAMT PARTNERSHIP, LTD.
By:
----------------------------------------
Name/Title:
--------------------------------
-------------------------------------------
XXXXXX X. XXXXXXXXX, XX.
CITCAM STOCK
By:
----------------------------------------
Name/Title:
--------------------------------
XXXXXX XXXXX XXXXXXXX TRUST
By:
----------------------------------------
Name/Title:
--------------------------------
XXXXXX-XXXXX INVESTMENTS, INC.
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By:
----------------------------------------
Name/Title:
--------------------------------
RENAISSANCE CAPITAL PARTNERS I
BY: RENAISSANCE CAPITAL GROUP
By:
----------------------------------------
Name/Title:
--------------------------------
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