Exhibit 4.4
XXXXX.XXX, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of June 6, 2005, by and among Xxxxx.xxx, Inc., a Washington corporation
(the "Company"), and the holders of Registrable Securities listed on Schedule A
hereto, as it may be amended from time to time (the "Investors").
RECITAL
In connection with certain transactions between the Company and the
Investors, the parties hereto desire to enter into this Agreement to provide
certain registration rights to the Investors, as provided herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
AGREEMENT
1. REGISTRATION RIGHTS.
1.1 Definitions. For purposes of this Agreement:
(a) Registration. The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933, as amended
(the "Securities Act"), and the declaration or ordering of effectiveness of such
registration statement.
(b) Registrable Securities. The term "Registrable Securities"
means: (i) any and all shares of the Company's common stock ("Common Stock")
issued or issuable upon the conversion of secured convertible promissory notes
issued to Investors by the Company (each, a "Convertible Note"); (ii) any and
all shares of Common Stock issued or issuable to Investors (whether by
contractual agreement, or pursuant to options, warrants or other convertible
securities) by the Company in connection with the Company's acquisition of a
business or technology ("Acquisition Consideration"); (iii) any shares of Common
Stock that become Registrable Securities pursuant to Section 2.2; and (iv) any
shares of Common Stock issued (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued) as a dividend or other
distribution with respect to, in exchange for, or in replacement of, all such
shares of Common Stock described in clauses (i), (ii) and (iii) above or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization; excluding in all cases, however, (A) any Registrable
Securities sold by a Holder pursuant to a registration statement under this
Agreement, (B) any Registrable Securities transferred to a Holder in a
transaction pursuant to Rule 144 promulgated under the Securities Act, (C) any
Registrable Securities transferred by a Holder in which registration rights are
not transferred pursuant to Section 2 hereof, or (D) any Registrable Securities
held by a Holder who is then permitted to sell all of the Registrable Securities
then held by such Holder pursuant to Rule
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144(k) or otherwise pursuant to Rule 144 in any three-month period (clauses (A)
through (D) being "Excluded Shares").
(c) Registrable Securities Then Outstanding. "Registrable
Securities then outstanding" shall mean the number of shares of Common Stock
which are Registrable Securities and (i) are then issued and outstanding or (i)
are then issuable pursuant to the exercise or conversion of then outstanding and
then exercisable options, warrants or convertible securities.
(d) Holder. The term "Holder" or "Holders" means any person or
persons owning of record Registrable Securities or any assignee of record of
such Registrable Securities to whom registration rights have been duly assigned
in accordance with Section 2.1 of this Agreement; provided, however, that for
purposes of this Agreement, a record holder of securities convertible into or
exercisable for such Registrable Securities shall be deemed to be the Holder of
such Registrable Securities; provided, further, that the Company shall in no
event be obligated to register any securities of the Company other than shares
of Common Stock, and that Holders of Registrable Securities will not be required
to convert such securities into shares of Common Stock in order to exercise the
registration rights granted hereunder, until immediately before the closing of
the offering to which the registration relates; and provided further, that a
holder of Excluded Shares shall not be a Holder with respect to such Excluded
Shares.
(e) SEC. The term "SEC" means the United States Securities and
Exchange Commission.
1.2 Demand Registration.
(a) Request by Holders. If the Company shall receive at any time
after six (6) months following the earlier of (i) the date that the Company
becomes subject to the periodic reporting requirements of Sections 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the Exchange Act"), or (ii)
the effective date of a transaction in which the Company's outstanding shares of
Common Stock are exchanged for shares of common stock of an entity that is
subject to the periodic reporting requirements of Sections 13 or 15(d) of the
Exchange Act, a written request from the Holders of at least a majority of the
Registrable Securities then outstanding (the "Initiating Holders") that the
Company file a registration statement under the Securities Act covering the
registration of Registrable Securities having an anticipated aggregate public
offering price (before any underwriting discounts and commissions) of not less
than two million five hundred thousand dollars ($2,500,000), then the Company
shall, within fifteen (15) days of the receipt of such written request, give
written notice of such request ("Request Notice") to all Holders, and commence
taking such steps as may be reasonably necessary to effect, as soon as
practicable, the registration on Form S-2 (or any successor form) under the
Securities Act of all Registrable Securities which Holders request to be
registered and included in such registration by written notice given by such
Holders to the Company within fifteen (15) days after receipt of the Request
Notice, subject only to the limitations of this Section 1.2.
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(b) Underwriting. If the Initiating Holders intend to distribute
the Registrable Securities covered by their request by means of an underwriting,
then they shall so advise the Company as a part of their request made pursuant
to this Section 1.2 and the Company shall include such information in the
written notice referred to in subsection 1.2(a). In such event, the right of any
Holder to include his Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by the Initiating Holders representing a majority of
the Registrable Securities held by all of the Initiating Holders and such
Holder) to the extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the managing underwriter or underwriters selected for
such underwriting by the Company. Notwithstanding any other provision of this
Section 1.2, if the underwriter(s) advise(s) the Company in writing that
marketing factors require a limitation of the number of securities to be
underwritten then the Company shall so advise all Holders of Registrable
Securities which would otherwise be registered and underwritten pursuant hereto,
and the number of Registrable Securities that may be included in such
underwriting shall be reduced as required by the underwriter(s) and allocated
among the Holders of Registrable Securities on a pro rata basis according to the
number of Registrable Securities then outstanding held by each Holder requesting
registration (including the Initiating Holders); provided, however, that the
number of shares of Registrable Securities to be included in such underwriting
and registration shall not be reduced unless all other securities of the Company
being registered for its own account or held by shareholders not having
contractual registration rights are first entirely excluded from the
underwriting and registration. Any Registrable Securities excluded and withdrawn
from such underwriting shall be withdrawn from the registration. For any Holder
which is a partnership or corporation, the partners, retired partners and
shareholders of such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single "Holder," and any pro rata
reduction with respect to such "Holder" shall be based upon the aggregate amount
of shares carrying registration rights owned by all entities and individuals
included in such "Holder," as defined in this sentence.
(c) Limitations on Demand Registrations. The Company is obligated
to effect only one (1) registration pursuant to this Section 1.2 and shall not
be obligated to effect such a registration (i) during the 180-day period after
the effective date of the Company's initial public offering of its securities
pursuant to a registration statement filed under the Securities Act; or (ii) if
the Company or its successor is not eligible to use Form S-2. If Registrable
Securities are included in a registration statement filed by the Company
pursuant to Section 1.3 and declared effective by the SEC, then the Company
shall not be obligated to take any action with respect to any subsequent or
further demand for registration pursuant to this Section 1.2.
(d) Deferral. Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting the filing of a registration statement pursuant to
this Section 1.2, a certificate signed by the President, Chief Executive Officer
or Chief Financial Officer of the Company stating that, in the good faith
judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement,
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then the Company shall have the right to defer such filing for a period of not
more than ninety (90) days after receipt of the request of the Initiating
Holders; provided, however, that the Company may not utilize this right more
than twice in any twelve (12) month period; and provided, further, that the
Company shall not register shares of its equity securities for its account or
for the account of any other party during such 90-day period. In addition, the
Company shall not be obligated to effect a registration pursuant to this Section
1.2 if, within thirty (30) days of the Company's receipt of the request for such
registration, the Company shall furnish to the Holders requesting such
registration a certificate signed by the President, Chief Executive Officer or
Chief Financial Officer of the Company stating that the Company intends to file
a registration statement for its own account.
(e) Expenses. All expenses incurred in connection with a
registration initiated in good faith pursuant to this Section 1.2, whether or
not such registration has become effective, including without limitation all
registration and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements, up to a total of $10,000, of one (1) counsel for the selling
Holder or Holders chosen by the holders of a majority of the Registrable
Securities requested to be included in such registration (but excluding
underwriters' and broker's discounts and commissions), shall be borne by the
Company. Each Holder participating in a registration pursuant to this Section
1.2 shall bear such Holder's proportionate share (based on the total number of
shares sold in such registration other than for the account of the Company) of
all discounts, commissions or other amounts payable to underwriters or brokers
in connection with such offering. Notwithstanding the foregoing, the Company
shall not be required to pay for any expenses of any registration proceeding
begun pursuant to this Section 1.2 if the registration request is subsequently
withdrawn at the request of Initiating Holders representing a majority of the
Registrable Securities held by all of the Initiating Holders unless Holders
representing a majority of Registrable Securities then outstanding agree to
forfeit their rights under this Section 1.2; provided, further, however, that
if, at the time of such withdrawal, the Initiating Holders have learned of a
material adverse change in the condition, business or prospects of the Company
not known to the Initiating Holders at the time of their request for such
registration and have withdrawn their request for registration with reasonable
promptness after learning of such material adverse change, then the Holders
shall not be required to pay any of such expenses and shall retain their rights
pursuant to this Section 1.2.
1.3 Piggyback Registrations.
(a) The Company shall notify all Holders of Registrable
Securities in writing at least fifteen (15) days prior to filing any
registration statement under the Securities Act for purposes of effecting a
public offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to any registration
under Section 1.2 of this Agreement, any registration on Form S-4 or any
successor form, or any registration or in connection with any employee benefit
plan, merger, acquisition, corporate reorganization or issuance of convertible
debt securities) and will afford each such Holder an opportunity to include in
such registration statement all or any part of the Registrable Securities then
held by such Holder. Each Holder desiring to include in any such registration
statement all or any part of
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the Registrable Securities held by such Holder shall, within fifteen (15) days
after receipt of the above-described notice from the Company, so notify the
Company in writing, and in such notice shall inform the Company of the number of
Registrable Securities such Holder wishes to include in such registration
statement. If a Holder decides not to include all of its Registrable Securities
in any registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.
(b) Underwriting. If a registration statement with respect to
which the Company gives notice under this Section 1.3 is for an underwritten
offering, then the Company shall so advise the Holders of Registrable
Securities. In such event, the right of any such Holder's Registrable Securities
to be included in a registration pursuant to this Section 1.3 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
in customary form with the managing underwriter or underwriter(s) selected for
such underwriting. Notwithstanding any other provision of this Agreement, if the
Company or the managing underwriter(s) determine(s) in good faith that marketing
factors require a limitation of the number of shares to be underwritten, then
the Company or the managing underwriter(s) may limit shares (including
Registrable Securities) from the registration and the underwriting or exclude
all such shares, and the number of shares that may be included in the
registration and the underwriting shall be allocated, first, to the Company,
second, to Holders who have initiated the registration by exercise of demand
registration rights pursuant to Section 1.2 (allocated to such Holders on a pro
rata basis based on the total number of Registrable Securities then held by each
of them) or any other registration rights agreement, third, to Holders
requesting inclusion of their Registrable Securities in such registration
statement on a pro rata basis based on the total number of Registrable
Securities then held by each such Holder, and fourth, to shareholders of the
Company not having contractual registration rights. If any Holder disapproves of
the terms of any such underwriting, such Holder may elect to withdraw therefrom
by written notice to the Company and the underwriter, delivered at least ten
(10) business days prior to the effective date of the registration statement.
Any Registrable Securities excluded or withdrawn from such underwriting shall be
excluded and withdrawn from the registration. For any Holder which is a
partnership or corporation, the partners, retired partners and shareholders of
such Holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "Holder," and any pro rata reduction with respect to such
"Holder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"Holder," as defined in this sentence.
(c) Expenses. All expenses incurred in connection with a
registration initiated pursuant to this Section 1.3 whether or not such
registration has become effective, including, without limitation all
registration and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company, and the reasonable fees and
disbursements, up to a total of $10,000, of one (1) counsel for the selling
Holder or Holders chosen by the holders of a majority of the Registrable
Securities requested to be included in such registration
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(but excluding underwriters' and brokers' discounts and commissions), shall be
borne by the Company.
1.4 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement, the Company
shall, commence taking such steps as may be reasonable necessary to effect, as
soon as practicable:
(a) the preparation and filing with the SEC of a registration
statement with respect to such Registrable Securities, the declaration of such
registration statement to be effective, and, upon the request of the Holders of
a majority of the Registrable Securities registered thereunder, maintenance of
the effectiveness of such registration for up to ninety (90) days;
(b) the preparation and filing with the SEC of such disclosure,
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act;
(c) the furnishing to the Holders of such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration;
(d) the qualification of the securities covered by such
registration statement under such other securities or blue sky laws of such
jurisdictions as shall be reasonably requested by the Holders, provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions;
(e) the provision of a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration;
(f) in the event of any underwritten public offering, the
entering into and performance of its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter(s) of such
offering (it being understood and agreed that, as a condition to the Company's
obligations under this clause (f), each Holder participating in such
underwriting shall also enter into and perform its obligations under such an
agreement); and
(g) the notification of each Holder of Registrable Securities
covered by such registration statement at any time when (i) a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing or (ii) there is a stop order issued suspending
effectiveness of the registration statement or the initiation of any proceedings
for that purpose or the receipt by the Company of any notification with
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respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation of any such procedure.
1.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 1.2 or 1.3
hereof that the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them and the intended
method of disposition of such securities as shall be required to timely effect
the registration of their Registrable Securities.
1.6 Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.7 Indemnification. In the event any Registrable Securities are
included in a registration statement under Sections 1.2 or 1.3 hereof:
(a) By the Company. To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, the partners, officers and
directors of each Holder, any underwriter (as defined in the Securities Act) for
such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto;
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading; or
(iii) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act, any federal or state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
federal or state securities law in connection with the offering covered by such
registration statement;
and the Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 1.7(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for
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use in connection with such registration by such Holder, partner, officer,
director, underwriter or controlling person of such Holder.
(b) By Selling Holders. To the extent permitted by law, each
selling Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement, each
person, if any, who controls the Company within the meaning of the Securities
Act, any underwriter and any other Holder selling securities under such
registration statement or any of such other Holder's partners, directors or
officers or any person who controls such Holder within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person, underwriter or other such Holder, partner or
director, officer or controlling person of such other Holder may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration; and each such Holder will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person, underwriter or other Holder, partner,
officer, director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
1.7(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; and provided
further, that the total amounts payable in indemnity by a Holder under this
Section 1.7(b) in respect of any Violation shall not exceed the gross proceeds
received by such Holder in the registered offering out of which such Violation
arises, unless such liability arises out of or is based on the willful
misconduct of such Holder.
(c) Notice. Promptly after receipt by an indemnified party under
this Section 1.7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.7, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential conflict of interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.7, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 1.7.
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(d) Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either (i) any Holder exercising rights under this Agreement, or any controlling
person of any such Holder, makes a claim for indemnification pursuant to this
Section 1.7 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 1.7 provides
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any such selling Holder or any such controlling
person in circumstances for which indemnification is provided under this Section
1.7; then, and in each such case, the Company and such Holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such Holder
is responsible for the portion represented by the percentage that the public
offering price of its Registrable Securities offered by and sold under the
registration statement bears to the public offering price of all securities
offered by and sold under such registration statement, and the Company and other
selling Holders are responsible for the remaining portion; provided, however,
that, in any such case, (A) no such Holder will be required to contribute any
amount in excess of the public offering price of all such Registrable Securities
offered and sold by such Holder pursuant to such registration statement and (B)
no person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from
any person or entity who was not guilty of such fraudulent misrepresentation.
(e) Survival. The obligations of the Company and Holders under
this Section 1.7 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
1.8 "Market Stand-Off" Agreement. Each Holder hereby agrees that it
shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of or engage in
any other transaction regarding any Registrable Securities or other shares of
stock of the Company then owned by such Holder (other than to donees or partners
of the Holder who agree to be similarly bound) for up to one hundred eighty
(180) days following the effective date of a registration statement of the
Company filed under the Securities Act; provided, however, that the foregoing
covenant is subject to the condition that all officers and directors of the
Company and all three percent (3%) or greater security holders enter into
similar agreements.
In order to enforce the foregoing covenant, (i) the Company shall have the
right to place restrictive legends on the certificates representing the shares
subject to this Section 1.8 and to impose stop transfer instructions with
respect to the Registrable Securities and such other shares of stock of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period and (ii) the Holder agrees
to execute the form of agreement requested by the Company and/or underwriter.
1.9 Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the SEC which may at any time permit the
sale of the Registrable Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to:
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(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the earlier of 1.2(a)(i) or (ii);
(b) take all commercially reasonable steps to file with the SEC
in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act (at any time after the earlier of
1.2(a)(i) or (ii)); and
(c) as long as a Holder owns any Registrable Securities, to
furnish to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 (at any
time after ninety (90) days after the earlier of 1.2(a)(i) or (ii)), and of the
Securities Act and the Exchange Act (at any time after it has become subject to
the reporting requirements of the Exchange Act), a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
of the Company as a Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing a Holder to sell any such securities without
registration (at any time after the Company has become subject to the reporting
requirements of the Exchange Act).
1.10 Termination of the Company's Obligations. The Company shall have
no obligations pursuant to Sections 1.2 and 1.3 with respect to: (a) any request
or requests for registration made by any Holder after the first anniversary of
the earlier of 1.2(a)(i) or (ii), or (b) any Registrable Securities proposed to
be sold by a Holder in a registration pursuant to Section 1.2 or 1.3 if, in the
opinion of counsel to the Company, all such Registrable Securities held by a
Holder may be sold in a three-month period without registration under the
Securities Act pursuant to Rule 144 under the Securities Act.
2. ASSIGNMENT AND AMENDMENT.
2.1 Assignment. Notwithstanding anything herein to the contrary, the
registration rights of a Holder under Section 1 may be assigned by a Holder only
to (i) a party who acquires at least one hundred thousand (100,000) shares of
Registrable Securities or (ii)(A) a shareholder, partner, member, or beneficiary
of such assigning Holder; (B) a spouse, child, parent or beneficiary of the
estate of such assigning Holder or (C) a trust for the benefit of the persons
set forth in (A) or (B); provided, however, that no party may be assigned any of
the foregoing rights unless the Company is given written notice by the assigning
party at the time of such assignment stating the name, address and tax
identification number of the assignee and identifying the securities of the
Company as to which the rights in question are being assigned; and provided
further that any such assignee shall receive such assigned rights subject to all
the terms and conditions of this Agreement, including without limitation the
provisions of this Section 2.
2.2 Amendment of Rights. Except as provided in this Section 2.2, any
provision of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Holders
representing a majority of the Registrable Securities then outstanding.
Notwithstanding the foregoing, if, after the effective date of this Agreement,
the Company issues and sells any Convertible Notes or Acquisition Consideration
to
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a person or entity and (a) the subscription document for such security or
securities entitles such person or entity to become a party to this Agreement
and be treated as an "Investor" hereunder, or (b) the Company and such person or
entity otherwise agree in writing that such person or entity may become a party
to this Agreement and be treated as an "Investor" hereunder (each such person or
entity, a "New Investor"), then (i) such New Investor shall, upon execution of a
counterpart signature page hereto, become a party to this Agreement as an
"Investor" hereunder, (ii) Schedule A shall be automatically amended to add such
New Investor, without the need for any consent, approval or signature of any
Holder, and (iii) the shares of Common Stock or issued or issuable to such New
Investor upon the conversion or exercise of such Convertible Note or Acquisition
Consideration shall be deemed to be "Registrable Securities" hereunder. Any
amendment or waiver effected in accordance with this Section 2.2 shall be
binding upon each Investor, each Holder, each permitted successor or assignee of
such Investor or Holder and the Company.
3. GENERAL PROVISIONS.
3.1 Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered, deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid, electronic-mail or
facsimile when receipt is electronically confirmed (i) if to an Investor, to the
address last shown on the records of the Company for such party, and (ii) if to
the Company, to the address set forth below:
Xxxxx.xxx, Inc.
0000 000xx Xxxxxx XX
Xxxxxxx, XX 00000
Attention: Secretary
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to: DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx X. Steel, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
Any party hereto (and such party's permitted assigns) may by notice so given
change its address for future notices hereunder. Notice shall be deemed
conclusively given when personally delivered or three (3) days after deposited
in the mail in the manner set forth above.
3.2 Entire Agreement. This Agreement, together with all the exhibits
hereto, constitutes and contains the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties respecting the subject matter hereof.
11
3.3 Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the internal laws of the State of Washington as
applied to agreements among Washington residents entered into and to be
performed entirely within Washington, excluding that body of law relating to
conflict of laws and choice of law. Each party irrevocably consents to the
exclusive of jurisdiction of the U.S. federal courts and the state courts
located in King County, Washington in any suit or proceeding based in or arising
under this Agreement and irrevocably agrees that all claims in respect of such
suit or proceeding may be determined in such courts.
3.4 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, then such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
3.5 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.
3.6 Successors and Assigns. Subject to the provisions of Section 2.1,
the provisions of this Agreement shall inure to the benefit of, and shall be
binding upon, the successors and permitted assigns of the parties hereto. In
particular, in the event of a merger, consolidation, statutory share exchange or
other reorganization of the Company (including a triangular merger) with or into
any other corporation, the Company shall cause the surviving corporation or any
affiliate of such surviving corporation, as the case may be, following such
merger, consolidation, statutory share exchange or other reorganization to
expressly assume all of the Company's obligations pursuant to this Agreement in
writing.
3.7 Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
3.8 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
3.9 Costs and Attorneys' Fees. In the event that any action, suit or
other proceeding is instituted concerning or arising out of this Agreement or
any transaction contemplated hereunder, the prevailing party shall recover all
of such party's costs and attorneys' fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
3.10 Adjustments for Stock Splits and Certain Other Changes. Wherever
in this Agreement there is a reference to a specific number of shares of
Registrable Securities, Common Stock or Preferred Stock of the Company of any
class or series, then, upon the occurrence of any subdivision, combination or
stock dividend of such class or series of stock, the specific number of shares
so referenced in this Agreement shall automatically be proportionally
12
adjusted to reflect the affect on the outstanding shares of such class or series
of stock by such subdivision, combination or stock dividend.
3.11 Aggregation of Stock. All shares held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.
[REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date and year first above written.
XXXXX.XXX, INC.
By:
------------------------------------
Xxxxxx Mall, Chief Operating Officer
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT
XXXXX.XXX, INC.
COUNTERPART SIGNATURE PAGE TO
REGISTRATION RIGHTS AGREEMENT
INVESTORS:
IF AN ENTITY:
----------------------------------------
[NAME OF INVESTOR]
Dated: By:
---------------------- ------------------------------------
[signature]
------------------------------------
[print name]
Title:
---------------------------------
IF AN INDIVIDUAL:
----------------------------------------
[NAME OF INVESTOR]
Dated:
---------------------- ----------------------------------------
[signature]
IF JOINT HOLDERS:
----------------------------------------
[NAME OF CO-INVESTOR]
Dated:
---------------------- ----------------------------------------
[signature]
----------------------------------------
[NAME OF CO-INVESTOR]
----------------------------------------
[signature]
