1
EXHIBIT 10.4
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement, made as of
July 30, 2001 is by and between XxxxXxxxxx.xxx Corp., a Florida corporation (the
"Corporation"), and Xxx Enterprises, Incorporated, a Delaware corporation (the
"Purchaser"), its successors and assigns.
RECITALS
WHEREAS, the Purchaser is purchasing from the Corporation
XxxxXxxxxx.xxx Corp., Series A-R Floating Rate Subordinated Convertible
Debentures, Authorized Aggregate Issue $3,000,000, Convertible for Common Stock
of the Company (the "Debenture" or "Debentures"), which Debentures are
convertible into shares of Common Stock, par value $.001 per share, of the
Corporation (the "Common Stock"), as contemplated by that certain Investment
Agreement dated as of November 1, 2000, which was amended by the First Amendment
thereto dated as of July 30, 2001 (the "Investment Agreement") by and between
Corporation and the Purchaser, and incorporated by reference herein as EXHIBIT
1, such purchases being subject to the terms and conditions of the Investment
Agreement; and
WHEREAS, the Corporation deems it desirable for the Corporation to
grant certain registration rights to the Purchaser in order to induce the
Purchaser to purchase the Common Stock pursuant to the terms of the Investment
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. As used in this Agreement:
(a) "Commission" means the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
(b) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
(c) "Person" means a natural person, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization or a governmental
entity or any department, agency or political subdivision thereof.
(d) "Registrable Shares" means at any time any shares of
Common Stock held by the Purchaser, its successors and assigns upon conversion
of any one Series A-R Debenture as provided therein and in the Investment
Agreement, irrespective of the means or form by which such Purchaser
2
acquired such Common Stock; provided, that, Registrable Shares shall not include
any shares (x) the sale of which has been registered prior to November 1, 2000
pursuant to the Securities Act and which shares have been sold pursuant to such
registration or (y) which have been sold to the public prior to November 1, 2000
pursuant to Rule 144 of the Commission under the Securities Act. For purposes of
this Agreement, a Person will be deemed to be a holder of Registrable Shares
whenever such Person has the then existing right to acquire such Registrable
Shares (by exercise, conversion or otherwise), whether or not such acquisition
has actually been effected.
(e) "Registration Expenses" means all expenses incident to the
Corporation's performance of or compliance with this Agreement,
including, without limitation, all registration and filing fees, fees
of transfer agents and registrars, fees and expenses of compliance with
securities or blue sky laws, fees of the National Association of
Securities Dealers, Inc., printing expenses, fees and disbursements of
counsel for the Corporation, fees and expenses of the Corporation's
independent certified public accountants, and the fees and expenses of
any underwriters (excluding Selling Expenses) and other Persons
retained by the Corporation and all internal expenses (including,
without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any
annual audit or quarterly review, the expense of any liability
insurance obtained by the Corporation and the expenses and fees for
listing or authorizing for quotation the securities to be registered on
each securities exchange or automated quotation system on which any
shares of Common Stock are then listed or quoted.
(f) "Securities Act" means the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
(g) "Selling Expenses" means discounts and commissions
attributable to the Registrable Shares included in any U.S. registration thereof
and the fees of any financial advisors or attorneys retained by the Purchaser in
connection with any U.S. registration.
2. Demand Registrations.
(a) Requests for Registration. (i) Any time after the
earlier of 180 days after an United States public offering by
the Corporation after November 1, 2000 or November 1, 2003,
Purchaser may request registration under the Securities Act of
all or part of its Registrable Shares (but not less than the
Registrable Shares received upon the conversion of at least
one Series A-R Debenture) for sale in the manner specified in
such request; provided, that, the Corporation shall not be
obligated to register Registrable Shares pursuant to this
Section 2(a)(i): (w) on more than three occasions in the
aggregate; (x) during the 180-day period following an United
States public offering after November 1, 2000 by the
Corporation; (y) if the Corporation delivers notice to the
holders of the Registrable Shares within 30 days of any
request hereunder that the Corporation in good faith believes
that it will file a registration statement for an United
States public offering after November 1, 2000 within 90 days
of such holder's request;
3
and (z) if in any case the aggregate offering price to the
public for such registration is to be less than $1,000,000
(prior to underwriting discounts and commissions). Within ten
days after receipt of any request pursuant to this paragraph
2(a), the Corporation will give written notice of such request
to all other holders of Registrable Shares and will include in
such registration (as part of such Demand Registration (as
defined herein)) all Registrable Shares with respect to which
the Corporation has received written requests for inclusion
therein within 15 days after the receipt of the Corporation's
notice. All registrations requested pursuant to Section 2(a)
are referred to herein as "Demand Registrations."
(ii) A registration will not count as a Demand
Registration until it has become effective and unless the
holders of Registrable Shares are able to register and sell at
least 80% of the Registrable Shares requested to be included
in such registration; provided, that, in any event the
Corporation will pay all Registration Expenses in connection
with any registration requested hereunder; provided, further,
that a registration which is withdrawn at the sole request of
Purchaser who demanded such Demand Registration will count as
a Demand Registration unless the Company is reimbursed by
Purchaser for all reasonable out-of-pocket expenses incurred
by the Company in connection with such registration.
(b) Priority on Demand Registrations. The Corporation and the
Purchaser shall, upon mutual agreement, designate the managing underwriters, if
applicable, for such United States offering. If the managing underwriters advise
the Corporation in writing that in their opinion the number of Registrable
Shares and other securities requested to be included (x) creates a substantial
risk that the price per share in such registration will be materially and
adversely affected or (y) exceeds the number of Registrable Shares and other
securities which can be sold in such United States offering, then the
Corporation will include in such registration, prior to the inclusion of any
securities which are not Registrable Shares, the number of Registrable Shares
requested to be included which in the opinion of such underwriters can be sold,
pro rata among the respective holders on the basis of the number of Registrable
Shares owned by such holders.
(c) Restrictions on Registrations. The Corporation may
postpone for up to 90 days the filing or the effectiveness of a registration
statement for a Demand Registration if the Corporation reasonably believes that
such Demand Registration will have a material adverse effect on any proposal or
plan by the Corporation to engage in any financing, acquisition of assets or any
merger, consolidation, tender offer or other significant transaction; provided,
that, the Corporation shall have the right to postpone such filing or
effectiveness only one time during any period of 12 consecutive months.
(d) Inclusion of Shares by Company. If the managing
underwriter has not limited the number of Registrable Shares to be underwritten,
the Company may include securities for its own account or for the account of
others in such registration if the managing underwriter so agrees and if (i) the
number of Registrable Shares which would otherwise have been included in such
registration and underwriting will not thereby be limited and (ii) the offering
price for the Registrable Shares which
4
would otherwise have been included in such registration and underwriting will
not be adversely affected. The inclusion of such shares shall be on the same
terms as the registration of the Registrable Shares. In the event that the
underwriters exclude some of the securities to be registered, the securities to
be sold for the account of the Company and any other holders shall be excluded
in their entirety prior to the exclusion of any Registrable Shares.
3. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Corporation proposes to
register any of its securities under the Securities Act (except on S-8 or any
successor form) and the registration form to be used may be used for the
registration of Registrable Shares (a "Piggyback Registration"), the Corporation
will give prompt written notice to all holders of Registrable Shares of its
intention to effect such a registration (which notice shall be given not less
than 30 days prior to the date the registration statement is to be filed) and,
subject to the terms hereof, will include in such registration all Registrable
Shares with respect to which the Corporation has received written requests for
inclusion therein within 15 days after the receipt of the Corporation's notice.
(b) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the
Corporation, and the managing underwriters advise the Corporation in writing
that in their opinion the number of securities requested to be included in such
registration (i) creates a substantial risk that the price per share in such
registration will be materially and adversely affected, or (ii) exceeds the
number which can be reasonably sold in such United States offering, then the
Corporation will include in such registration (x) first, the securities the
Corporation proposes to sell, (y) second, the Registrable Shares requested to be
included in such registration which in such opinion of such underwriters can be
sold, pro rata among the holders of such Registrable Shares on the basis of the
number of Registrable Shares requested to be included by such holders, and (z)
third, other securities requested to be included in such registration.
(c) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Corporation's securities, and the managing underwriters advise the
Corporation in writing that in their opinion the number of securities requested
to be included in such registration (i) creates a substantial risk that the
price per share in such registration will be materially and adversely affected,
or (ii) exceeds the number which can reasonably be sold in such United States
offering, then the Corporation will include in such registration (x) first, the
securities requested to be included therein by the holders requesting such
registration (including the Registrable Shares whose holders joined a Demand
Registration pursuant to the last sentence of Section 2(a), and (y) second,
other securities requested to be included in such registration; provided,
however, notwithstanding the immediately preceding clause, Registrable Shares
requested to be included in such registration may not be reduced to the degree
that such shares would comprise less than 30% of the securities registered in
any such Piggyback Registration (which for purposes of this paragraph 3(c) shall
include any Registrable Shares registered pursuant to clause (x) above).
5
(d) Demand Registrations. Notwithstanding anything to the
contrary herein, whenever the Corporation shall effect a Demand Registration in
order to offer Registrable Shares on a continuous basis in accordance with Rule
415 of the Securities Act, no securities held by stockholders of the Company
other than holders of Registrable Shares may be covered by such registration
unless Purchaser shall have consented thereto in writing.
(e) Other Registrations. If the Corporation has previously
received a request for a Demand Registration pursuant to paragraph 2 or has
previously filed a registration statement with respect to Registrable Securities
pursuant to this paragraph 3, and if such previous request or registration has
not been withdrawn or abandoned, the Corporation will not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-8 or any successor forms), whether on its
own behalf or at the request of any holder or holders of such securities, until
a period of 90 days has elapsed from the effective date of such Demand
Registration or previous registration (other than registrations relating to an
United States public offering after November 1, 2000, for which the period shall
be 180 days).
4. Holdback Agreements.
The Corporation agrees, if the managing underwriters request
such agreement, (i) not to effect any public sale or distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the 90-day period beginning on the effective date of
any underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten registration or pursuant to registrations
on Form S-8 or any successor forms), and (ii) to use all reasonable efforts to
cause each holder of at least .5% (on a fully-diluted basis) of its equity
securities (other than equity securities acquired in a public trading market),
or any securities convertible into or exchangeable or exercisable for such
securities, purchased from the Corporation at any time after November 1, 2000 to
agree not to effect any public sale or distribution of any such securities
during such period (except as part of such underwritten registration, if
otherwise permitted).
5. Registration Procedures. (a) Whenever any holders of
Registrable Shares have requested that any Registrable Shares be registered
pursuant to this Agreement, the Corporation will use its best efforts to effect
the registration and the sale of such Registrable Shares in accordance with the
intended method of disposition thereof, and pursuant thereto the Corporation
will:
(i) prepare and file with the Commission a
registration statement with respect to such Registrable Shares and
cause such registration statement to become and remain effective for
such period as may be reasonably necessary to effect the sale of such
securities;
(ii) prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep
such registration statement effective and comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement during
6
such period in accordance with the intended methods of disposition by
the sellers thereof set forth in such registration statement;
(iii) furnish to each seller of Registrable Shares
and the underwriters of the securities being registered such number of
copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as
such seller or underwriters may reasonably request in order to
facilitate the disposition of the Registrable Shares owned by such
seller or the sale of such securities by such underwriters;
(iv) register or qualify such Registrable Shares
under such other securities or blue sky laws of such jurisdictions as
any seller or, in the case of an underwritten United States public
offering, the managing underwriter, reasonably requests and do any and
all other acts and things which may be reasonably necessary to enable
such seller to consummate the disposition in such jurisdictions of the
Registrable Shares owned by such seller (provided, however, that the
Corporation will not be required to (x) qualify generally to do
business in any jurisdiction where it would not otherwise be required
to qualify but for this subparagraph or (y) consent to general service
of process in any such jurisdiction);
(v) cause all such Registrable Shares to be listed or
authorized for quotation on each securities exchange or automated
quotation system on which similar securities issued by the Corporation
are then listed or quoted;
(vi) provide a transfer agent and registrar for all
such Registrable Shares not later than the effective date of such
registration statement;
(vii) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other
actions as the holders of a majority of the Registrable Shares being
sold or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Shares;
(viii) make available for inspection by any seller of
Registrable Shares, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant
or other agent retained by any such seller or underwriter, all
financial and other records, pertinent corporate documents and
properties of the Corporation, and cause the Corporation's officers,
directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with the preparation of
such registration statement;
(ix) notify each seller of such Registrable Shares,
promptly after it shall receive notice thereof, of the time when such
registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been
filed;
7
(x) notify each seller of such Registrable Shares of
any request by the Commission for the amending or supplementing of such
registration statement or prospectus or for additional information;
(xi) prepare and file with the Commission, promptly
upon the request of any seller of such Registrable Shares, any
amendments or supplements to such registration statement or prospectus
which, in the written opinion of counsel selected by the holders of a
majority of the Registrable Shares being registered, is required under
the Securities Act in connection with the distribution of Registrable
Shares by such seller;
(xii) prepare and promptly file with the Commission
and promptly notify each seller of such Registrable Shares of the
filing of such amendment or supplement to such registration statement
or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities
is required to be delivered under the Securities Act, any event shall
have occurred as the result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(xiii) advise each seller of such Registrable Shares,
promptly after it shall receive notice or obtain knowledge thereof, of
the issuance of any stop order by the Commission suspending the
effectiveness of such registration statement or the initiation or
threatening of any proceeding for such purpose and promptly use its
best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued;
(xiv) (x) at least forty-eight hours prior to the
filing of any registration statement or prospectus or any amendment or
supplement to such registration statement or prospectus, furnish a copy
thereof to each seller of such Registrable Shares and (y) if reasonably
requested by any such seller, promptly incorporate into the same (or
delete from the same) any information that such seller reasonably
believes is necessary in order to ensure that such document complies in
all material respects with the requirements of the Securities Act;
(xv) at the request of any seller of such Registrable
Shares in connection with an underwritten United States offering,
furnish on the date or dates provided for in the underwriting
agreement: (i) an opinion of counsel, addressed to the underwriters and
the sellers of Registrable Shares, covering such matters as such
underwriters and sellers may reasonably request and as are customarily
covered by the issuer's counsel in an underwritten United States
offering; and (ii) a letter or letters from the independent certified
public accountants of the Corporation addressed to the underwriters and
the sellers of Registrable Shares, covering such matters as such
underwriters and sellers may reasonably request and as are customarily
covered in accountant's letters in connection with an underwritten
United States offering; and
(xvi) otherwise use its best efforts to comply with
the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement in
8
accordance with the intended method of disposition and to make
generally available to its security holders, as soon as reasonably
practicable, an earnings statement satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder.
(b) Each holder of Registrable Shares that sells Registrable
Shares pursuant to a registration under this Agreement agrees as follows:
(i) Such seller shall cooperate as reasonably
requested by the Corporation with the Corporation in connection with
the preparation of the registration statement, and for so long as the
Corporation is obligated to file and keep effective the registration
statement, shall provide to the Corporation, in writing, for use in the
registration statement, all such information regarding such seller and
its plan of distribution of the Registrable Shares as may be reasonably
necessary to enable the Corporation to prepare the registration
statement and prospectus covering the Registrable Shares, to maintain
the currency and effectiveness thereof and otherwise to comply with all
applicable requirements of law in connection therewith.
(ii) During such time as such seller may be engaged
in a distribution of the Registrable Shares, such seller shall comply
with Regulation M promulgated under the Exchange Act and pursuant
thereto it shall, among other things; (x) not engage in any
stabilization activity in connection with the securities of the
Corporation in contravention of such regulation; (y) distribute the
Registrable Shares under the registration statement solely in the
manner described in the registration statement; (z) cease distribution
of such Registrable Shares pursuant to such registration statement upon
receipt of written notice from the Corporation that the prospectus
covering the Registrable Shares contains any untrue statement of a
material fact or omits a material fact required to be stated therein or
necessary to make the statements therein not misleading.
6. Registration Expenses. The Corporation shall pay all
Registration Expenses and the holders of the Registrable Shares shall pay all
Selling Expenses.
7. Indemnification.
(a) In the event of a registration of the Registrable Shares
under the Securities Act pursuant to the terms hereof, the Corporation agrees to
indemnify, to the fullest extent permitted by law, each seller of Registrable
Shares, its officers and directors and each Person who controls such seller
(within the meaning of the Securities Act or the Exchange Act) against all
losses, claims, damages, liabilities and expenses (including, without
limitation, reasonable attorneys' fees) caused by any untrue or alleged untrue
statement of a material fact contained in any registration statement under which
such Registrable Shares were registered, any prospectus or preliminary
prospectus contained therein or any amendment thereof or supplement thereto or
any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse such seller of Registrable Shares and its officers, directors or
controlling persons for any legal or other expenses reasonably incurred by such
seller, director, officer or controlling person in connection with investigation
or defense of such loss, claim, damage, liability or expense except insofar as
the same are
9
caused by or contained in any information furnished in writing to the
Corporation or any managing underwriter by such seller or any such controlling
person expressly for use therein. The reimbursements required by this paragraph
7(a) will be made by periodic payments during the course of the investigation or
defense, as and when bills are received or expenses incurred.
(b) In connection with any registration statement in which a
seller of Registrable Shares is participating, each such seller will furnish to
the Corporation in writing such information and affidavits as the Corporation
reasonably requests for use in connection with any such registration statement
or prospectus and, to the fullest extent permitted by law, will indemnify the
Corporation, its directors and officers and each Person who controls the
Corporation (within the meaning of the Securities Act) and each underwriter and
controlling person thereof against any losses, claims, damages, liabilities and
expenses (including, without limitation, reasonable attorneys' fees) resulting
from any untrue statement of a material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only to
the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing to the Corporation or any
managing underwriter by such seller or a controlling person thereof expressly
for use therein; provided, that, the obligation to indemnify will be several,
not joint and several, among such sellers of Registrable Shares, and the
liability of each such seller of Registrable Shares will be limited to the net
amount received by such seller from the sale of Registrable Shares pursuant to
such registration statement, except that the foregoing limitation shall not
apply to any claim for indemnification for liability specifically attributed to
a fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) made by such seller. The reimbursements required by this
paragraph 7(b) will be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.
(c) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give such notice
shall not limit the rights of such Person except to the extent such failure to
give notice shall materially prejudice the rights of the indemnifying party) and
(ii) unless in such indemnified party's reasonable judgment (with written advice
of counsel) a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party will not
enter into any settlement without the indemnified party's prior written consent
unless such settlement includes an unconditional release of the indemnified
party from liability relating to the claim. An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment (with written advice of counsel) of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
(d) Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 7(a) or Section 7(b) are
unavailable to or insufficient to hold harmless an indemnified party
10
in respect of any losses, claims, damages, liabilities or expenses (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and the indemnified party as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the holders or any underwriters or all of them were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 7(d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or expenses (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or, except as provided in Section 7(c), defending any such action
or claim. Notwithstanding the provisions of this Section 7(d), no holder shall
be required to contribute an amount greater than the dollar amount of the net
proceeds received by such holder with respect to the sale of any Registrable
Shares, except that the foregoing limitation shall not apply to any claim for
indemnification for liability specifically attributed to a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
made by such holder. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The holders' obligations in this Section 7(d) to contribute
shall be several in proportion to the amount of Registrable Shares registered by
them and not joint.
(e) The indemnification and contribution provided for under
this Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party.
8. Compliance with Rule 144; Delivery of Information for Rule
144A Transactions. (a) The Corporation shall (A) make and keep public
information available, as those terms are understood and defined in Rule 144 of
the Commission, (B) file with the Commission in a timely manner all reports and
other documents required of the Corporation under the Securities Act and the
Exchange Act and (C) at the request of any holder who proposes to sell
securities in compliance with Rule 144, furnish to such holder a written
statement of compliance with the reporting requirements of the Commission as set
forth in Rule 144 and make available to such holders such information as will
enable the holders to make sales pursuant to Rule 144.
(b) If a holder of Common Stock issuable upon conversion of
the Debentures proposes to transfer any such securities pursuant to Rule 144A
under the Securities Act (as in effect from time to time), the Corporation
agrees to provide (upon the request of such holder or the prospective
transferee) to such holder and (if requested) to the prospective transferee any
financial or other information
11
concerning the Corporation which is required to be delivered by such holder to
any transferee of such securities pursuant to such Rule 144A.
9. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that no
holder of Registrable Shares included in any underwritten registration shall be
required to make any representations or warranties to the Corporation or the
underwriters other than representations and warranties regarding such holder,
such holder's intended method of distribution and such holder's title to the
Registrable Shares.
10. No Inconsistent Agreements. The Corporation will not after
November 1, 2000 enter into any agreement with respect to its securities which
is inconsistent with the rights granted to the holders of the Registrable Shares
in this Agreement.
11. Future Registration Rights; Additional Purchaser. (a) The
Corporation shall not grant to any Person any additional registration rights
with respect to securities of the Corporation if such additional registration
rights are superior in any fashion to the registration rights granted to the
Purchaser pursuant to this Agreement, unless Purchaser shall consent in writing.
(b) It is agreed and understood that any Persons who purchase
a Debenture pursuant to the Investment Agreement shall be deemed a Purchaser
hereunder upon any such Persons' execution of a signature page hereto.
12. Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.
13. Amendments and Waivers. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended or waived at any time
only by the written agreement of the Corporation and Purchaser; provided, that,
(i) any such amendment or waiver shall apply equally to all holders of
Registrable Shares and (ii) any proposed amendment or waiver be delivered to all
holders of Registrable Shares at least three days prior to the adoption thereof.
Any amendment or waiver which does not apply equally to all holders of
Registrable Shares must be consented to by the Corporation and each holder of
Registrable Shares who is adversely affected. Any waiver, permit, consent or
approval of any kind or character on the part of any such holders of any
provision or condition of this Agreement must be made in writing and shall be
effective only to the extent specifically set forth in writing.
14. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto, whether so expressed or
not. In addition and whether or not any express assignment has been made, the
provisions of this Agreement which are for the benefit of Purchaser or holders
of Registrable Shares are also for the
12
benefit of, and enforceable by, any subsequent holder of Registrable Shares who
consents in writing to be bound by this Agreement and acquires the Registrable
Shares upon conversion of at least one Series A-R Debenture as provided therein
and in the Investment Agreements.
15. Final Agreement. This Agreement constitutes the final
agreement of the parties concerning the matters referred to herein, and
supersedes all prior agreements and understandings.
16. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
17. Descriptive Heading. The descriptive headings of this
Agreement are inserted for convenience of reference only and do not constitute a
part of and shall not be utilized in interpreting this Agreement.
18. Notices. Any notices required or permitted to be sent
hereunder shall be delivered personally or mailed by certified mail return
receipt requested, or delivered by overnight courier service to the following
addresses, or such other addresses as shall be given by notice delivered
hereunder, or transmitted by facsimile transmission, and shall be deemed to have
been given upon delivery if delivered personally, when confirmation of
transmission is received if transmitted by facsimile, three business days after
mailing if mailed, or one business day after delivery to the courier if
delivered by overnight courier service:
If to the holders of Registrable Shares, to the addresses set
forth on the stock record books of the Corporation;
with a copy to:
Lane & Xxxxxxxx
000 X. Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: C. Xxxx Xxxxxxxx III, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Corporation:
XxxxXxxxxx.xxx Corp.
000 - 0000 Xxxx Xxxxxxxx
Xxxxxxxxx, XX X0X 0X0
13
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Duane, Morris & Heckscher, LLP
000 X. Xxxxx Xxxxx Xxxx, Xxx. 0000
Xxxxxxx, XX 00000-0000
Phone: (000) 000-0000
20. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE
OF IOWA EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
21. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one instrument. Each
party shall receive a duplicate original of the counterpart copy or copies
executed by it and the Corporation.
22. Attorneys Fees. In the event of any action, arbitration or
suit based upon or arising out of any actual or alleged breach by any party of
any representation, warranty, covenant or agreement in this Agreement, the
prevailing party shall be entitled to recover its reasonable attorneys' fees and
expenses of such action, arbitration or suit from the other party, in addition
to any other relief ordered by any proper arbitration proceeding or court.
23. Survival. All of the Corporation's representations,
warranties, covenants, undertakings and agreements contained herein shall
survive any termination, expiration, default, acceleration, enforcement,
amendment or waiver of any provision, payment or redemption under the Investment
Agreement and the Debentures, including, without limitation, the expiration of
the Purchaser's rights of conversion with respect to the Common Stock.
PURCHASER: CORPORATION:
XXX ENTERPRISES, INCORPORATED XXXXXXXXXX.XXX CORP.
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxx Xxxxxx
-------------------------------- -----------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxxx
Title: Vice President-Interactive Title: President & Chief Executive
Media Officer
