REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of the __ day of _______, 200_ (the "Effective Date") between
SiriCOMM, Inc., a Delaware corporation (the "Company"), and the parties set
forth on the signature page and Exhibit A hereto (each, a "Purchaser" and
collectively, the "Purchasers").
Recitals:
A. The Purchasers have purchased units from the Company (each, a "Unit"
and collectively, the "Units"), each Unit consisting of (i) one share of the
Company's Common Stock (as defined below) and (ii) redeemable Common Stock
purchase warrants (the "Warrants"), each entitling the holder thereof to
purchase one share of Common Stock at $1.50 per share, pursuant to Subscription
Agreements (each, a "Subscription Agreement" and collectively, the "Subscription
Agreements") by and between the Company and each Purchaser.
B. The Company has issued a warrant (the "Placement Agent Warrant") to
purchase shares of the Company's Common Stock to Xxxxxxx Xxxxxx Xxxxxx Inc., a
Texas corporation (the "Placement Agent").
C. The Company, the Purchasers and the Placement Agent desire to set
forth the registration rights to be granted by the Company to the Purchasers and
the Placement Agent.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants, and conditions set forth herein and in
the Subscription Agreements, the parties mutually agree as follows:
Agreement:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Approved Market" means the Nasdaq National Market, the Nasdaq SmallCap
Market, the NASD OTC Bulletin Board, the New York Stock Exchange, Inc., or the
American Stock Exchange, Inc.
"Blackout Period" means, with respect to a registration, a period in
each case commencing on the day immediately after the Company notifies the
Purchasers and the Placement Agent that they are required, pursuant to Section
4(f), to suspend offers and sales of Registrable Securities during which the
Company, in the good faith judgment of its Board of Directors, determines
(because of the existence of, or in anticipation of, any acquisition, financing
activity, or other transaction involving the Company, or the unavailability for
reasons beyond the Company's control of any required financial statements,
disclosure of information that is in its best interest not to publicly disclose,
or any other event or condition of similar significance to the Company) that the
registration and distribution of the Registrable Securities to be covered by
such registration statement, if any, would be seriously detrimental to the
Company and its stockholders and ending on the earlier of (1) the date upon
which the material non-public information commencing the Blackout Period is
disclosed to the public or ceases to be material and (2) such time as the
Company notifies the selling Holders that the Company will no longer delay such
filing of the Registration Statement, recommence taking steps to make such
Registration Statement effective, or allow sales pursuant to such Registration
Statement to resume; provided, however, that (a) the Company shall limit its use
of Blackout Periods, in the aggregate, to 30 Trading Days in any 12-month period
and (b) no Blackout Period may commence sooner than 60 days after the end of a
prior Blackout Period.
"Business Day" means any day of the year, other than a Saturday,
Sunday, or other day on which the Commission is required or authorized to close.
"Closing Date" means ________________ ____, 200_, or such other time as
is mutually agreed between the Company and the Purchasers for the closing of the
sale referred to in Recital A above.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, par value $0.001 per share, of
the Company and any and all shares of capital stock or other equity securities
of: (i) the Company that are added to or exchanged or substituted for the Common
Stock by reason of the declaration of any stock dividend or stock split, the
issuance of any distribution or the reclassification, readjustment,
recapitalization or other such modification of the capital structure of the
Company; and (ii) any other corporation, now or hereafter organized under the
laws of any state or other governmental authority, with which the Company is
merged, that results from any consolidation or reorganization to which the
Company is a party, or to which is sold all or substantially all of the shares
or assets of the Company, if immediately after such merger, consolidation,
reorganization or sale, the Company or the stockholders of the Company own
equity securities having in the aggregate more than 50% of the total voting
power of such other corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Family Member" means (a) with respect to any individual, such
individual's spouse, any descendants (whether natural or adopted), any trust all
of the beneficial interests of which are owned by any of such individuals or by
any of such individuals together with any organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended, the estate of any
such individual, and any corporation, association, partnership or limited
liability company all of the equity interests of which are owned by those above
described individuals, trusts or organizations and (b) with respect to any
trust, the owners of the beneficial interests of such trust.
"Holder" means each Purchaser, the Placement Agent, or any of such
person's respective successors and Permitted Assigns who acquire rights in
accordance with this Agreement with respect to the Registrable Securities
directly or indirectly from a Purchaser or the Placement Agent, including from
any Permitted Assignee.
"Inspector" means any attorney, accountant, or other agent retained by
a Purchaser for the purposes provided in Section 4(j).
"Majority Holders" means at any time Holders of a majority of the
Registrable Securities.
"Offering Price" means the Offering Price set forth in the Placement
Agent Agreement dated December__, 2005, between the Company and the Placement
Agent.
"Permitted Assignee" means (a) with respect to a partnership, its
partners or former partners in accordance with their partnership interests, (b)
with respect to a corporation, its stockholders in accordance with their
interest in the corporation, (c) with respect to a limited liability company,
its members or former members in accordance with their interest in the limited
liability company, (d) with respect to an individual party, any Family Member of
such party, (e) an entity that is controlled by, controls, or is under common
control with a transferor, or (f) a party to this Agreement.
The terms "register," "registered," and "registration" refers to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registrable Securities" means (i) the Shares issued to the Purchasers
as part of the private placement of Units, (ii) the Shares issued to the
Purchasers upon the exercise of the Warrants, (iii) shares of Common Stock
issued to the Placement Agent upon the exercise of the Placement Agent Warrant,
and (iv) all Shares received as share dividends or Shares issued on stock
splits, mergers, consolidations or other reorganizations, excluding (i) any
Registrable Securities that have been publicly sold or may be sold immediately
without registration under the Securities Act either pursuant to Rule 144 of the
Securities Act or otherwise; (ii) any Registrable Securities sold by a person in
a transaction pursuant to a registration statement filed under the Securities
Act or (iii) any Registrable Securities that are at the time subject to an
effective registration statement under the Securities Act.
"Registration Default Date" means the date that is 90 days following
the Closing Date; provided, however, if the Registration Statement is subject to
review by the Commission staff, the Registration Default Date shall be the date
that is 120 days following the Closing Date.
"Registration Default Period" means the period following the
Registration Default Date during which any Registration Event occurs and is
continuing.
"Registration Event" means the occurrence of any of the following
events:
(a) the Company fails to file with the Commission the
Registration Statement on or before the Registration Filing Date
pursuant to Section 3(a),
(b) the Registration Statement covering Registrable Securities
is not declared effective by the Commission on or before the
Registration Default Date,
(c) after the SEC Effective Date, sales cannot be made
pursuant to the Registration Statement for any reason (including
without limitation by reason of a stop order, or the Company's failure
to update the Registration Statement) but except as excused pursuant to
Section 3(a) or for the reasons specified in clause (d), or
(d) the Common Stock generally or the Registrable Securities
specifically are not listed or included for quotation on an Approved
Market, or trading of the Common Stock is suspended or halted on the
Approved Market, that at the time constitutes the principal market for
the Common Stock, for more than two full, consecutive Trading Days;
provided, however, a Registration Event shall not be deemed to occur if
all or substantially all trading in equity securities (including the
Common Stock) is suspended or halted on the Approved Market for any
length of time.
"Registration Statement" means the registration statement required to
be filed by the Company pursuant to Section 3(a).
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute promulgated in replacement thereof, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.
"SEC Effective Date" means the date the Registration Statement is
declared effective by the Commission.
"Share" means a share of Common Stock.
"Trading Day" means a day on whichever (a) the national securities
exchange, (b) the Nasdaq Stock Market, (c) the NASD OTC Bulletin Board or (d)
such other securities market, that at the time constitutes the principal
securities market for the Common Stock, is open for general trading of
securities.
2. Term. This Agreement shall continue in full force and effect for a
period of three (3) years from the Effective Date, or such shorter period ending
on the date that all Registrable Securities as of the date hereof have ceased to
be registrable securities, unless terminated sooner hereunder.
3. Registration.
(a) Registration on Form SB-2. As promptly as reasonably practicable
after the date hereof, but in any event not later than 30 days after the Closing
Date (the "Registration Filing Date"), the Company shall file with the
Commission a registration statement on Form SB-2, or such other form for which
the Company then qualifies if the Company is not then eligible to use Form SB-2,
relating to the resale by the Holders of all of the Registrable Securities, and
the Company shall use its best efforts to cause such registration statement to
be declared effective within 90 days after the Closing Date; provided, however,
that the Company shall not be obligated to effect any such registration,
qualification, or compliance pursuant to this Section 3(a), or keep such
registration effective pursuant to Section 4: (i) in any particular jurisdiction
in which the Company would be required to qualify to do business as a foreign
corporation or as a dealer in securities under the securities or blue sky laws
of such jurisdiction or to execute a general consent to service of process in
effecting such registration, qualification or compliance, in each case where it
has not already done so; or (ii) during any Blackout Period, in which case the
Registration Filing Date shall be extended to the date immediately following the
last day of such Blackout Period.
(b) Piggyback Registration. If the Company shall determine to register
for sale for cash any of its Common Stock, for its own account or for the
account of others (other than the Holders), other than (i) a registration
relating solely to employee benefit plans or securities issued or issuable to
employees, consultants (to the extent the securities owned or to be owned by
such consultants could be registered on Form S-8) or any of their Family Members
(including a registration on Form S-8) or (ii) a registration relating solely to
a Commission Rule 145 transaction, a registration on Form S-4 in connection with
a merger, acquisition, divestiture, reorganization, or similar event, the
Company shall promptly give to the Holders written notice thereof (and in no
event shall such notice be given less than 20 calendar days prior to the filing
of such registration statement), and shall, subject to Section 3(c), include in
such registration (and any related qualification under blue sky laws or other
compliance) (a "Piggyback Registration"), all of the Registrable Securities
specified in a written request or requests, made within 10 calendar days after
receipt of such written notice from the Company, by any Holder or Holders.
However, the Company may, without the consent of the Holders, withdraw such
registration statement prior to its becoming effective if the Company or such
other stockholders have elected to abandon the proposal to register the
securities proposed to be registered thereby.
(c) Underwriting. Subject to the restrictions in Section 3(e), if a
Piggyback Registration is for a registered public offering involving an
underwriting, the Company shall so advise the Holders in writing or as a part of
the written notice given pursuant to Section 3(b). In such event the right of
any Holder to registration pursuant to Section 3(b) 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 securities through such
underwriting shall (together with the Company and any other stockholders of the
Company distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company or selling stockholders, as
applicable. Notwithstanding any other provision of this Section 3(c), if the
underwriter or the Company determines that marketing factors require a
limitation of the number of shares to be underwritten, the underwriter may
exclude some or all Registrable Securities from such registration and
underwriting. The Company shall so advise all Holders (except those Holders who
failed to timely elect to distribute their Registrable Securities through such
underwriting or have indicated to the Company their decision not to do so), and
the number of shares of Registrable Securities that may be included in the
registration and underwriting, if any, shall be allocated among such Holders as
follows: the number of shares that may be included in the registration and
underwriting shall be allocated first to the Company and then, subject to
obligations and commitments existing as of the date hereof, to all selling
stockholders, including the Holders, who have requested to sell in the
registration on a pro rata basis according to the number of shares requested to
be included.
No Registrable Securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in such registration.
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. The Registrable Securities and/or other securities so withdrawn
from such underwriting shall also be withdrawn from such registration; provided,
however, that, if by the withdrawal of such Registrable Securities a greater
number of Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation imposed by the underwriters),
then the Company shall offer to all Holders who have included Registrable
Securities in the registration the right to include additional Registrable
Securities pursuant to the terms and limitations set forth herein in the same
proportion used above in determining the underwriter limitation.
(d) Other Registrations. Prior to the SEC Effective Date the Company
shall not, without the prior written consent of the Majority Holders, file or
request the acceleration of any other registration statement filed with the
Commission, and during any time subsequent to the SEC Effective Date when the
Registration Statement for any reason is not available for use by any Holder for
the resale of any Registrable Securities, the Company shall not, without the
prior written consent of the Majority Holders, file any other registration
statement or any amendment thereto with the Commission under the Securities Act
or request the acceleration of the effectiveness of any other registration
statement previously filed with the Commission, other than (A) any registration
statement on Form S-8 or Form S-4 and (B) any registration statement or
amendment that the Company is required to file or as to which the Company is
required to request acceleration pursuant to any obligation in effect on the
date of execution and delivery of this Agreement.
(e) Failure to File Registration Statement. If a Registration Event
occurs, then the Company will make payments to each Purchaser and the Placement
Agent (to the extent it has exercised the Placement Agent Warrant) (a "Qualified
Purchaser"), as partial liquidated damages for the minimum amount of damages to
the Qualified Purchaser by reason thereof, and not as a penalty, at a rate equal
to one percent of the Offering Price per share of Common Stock held by such
Qualified Purchaser per month, for each calendar month of the Registration
Default Period (pro rated for any period less than 30 days); provided, however,
if a Registration Event occurs (or is continuing) on a date more than one-year
after the Qualified Purchaser acquired the Registrable Securities (and thus the
one-year holding period under Rule 144(d) has elapsed), liquidated damages shall
be paid only with respect to that portion of a Qualified Purchaser's Registrable
Securities that cannot then be immediately resold in reliance on Rule 144. Each
such payment shall be due and payable within five days after the end of each
calendar month of the Registration Default Period until the termination of the
Registration Default Period and within five days after such termination. Such
payments shall be in partial compensation to the Qualified Purchaser, and shall
not constitute the Qualified Purchaser's exclusive remedy for such events. The
Registration Default Period shall terminate upon (i) the filing of the
Registration Statement in the case of clause (a) of the definition of
"Registration Event," (ii) the SEC Effective Date in the case of clause (b) of
the definition of "Registration Event," (iii) the ability of the Qualified
Purchaser to effect sales pursuant to the Registration Statement in the case of
clause (c) of the definition of "Registration Event," (iv) the listing or
inclusion and/or trading of the Common Stock on an Approved Market, as the case
may be, in the case of clause (d) of the definition of "Registration Event," and
(v) in the case of the events described in clauses (b) and (c) of the definition
of "Registration Event," the earlier termination of the Registration Default
Period. The amounts payable as partial liquidated damages pursuant to this
paragraph shall be payable in lawful money of the United States. Amounts payable
as partial liquidated damages to each Qualified Purchaser hereunder with respect
to each share of Registrable Securities shall cease when the Qualified Purchaser
no longer holds such share of Registrable Securities or such share of
Registrable Securities can be immediately sold by the Qualified Purchaser in
reliance on Rule 144. The Placement Agent acknowledges and agrees that the
partial liquidated damages provided for in this Section 3(e) shall apply to
Registrable Securities and the Placement Agent only to the extent the Placement
Agent has exercised the Placement Agent Warrant.
4. Registration Procedures. In the case of each registration,
qualification, or compliance effected by the Company pursuant to Section 3, the
Company will keep each Holder reasonably advised in writing (which may include
e-mail) as to the initiation of each registration, qualification, and compliance
and as to the completion thereof. At its expense with respect to any
registration statement filed pursuant to Section 3, the Company will:
(a) prepare and file with the Commission with respect to such
Registrable Securities, a registration statement on Form SB-2, or such other
form for which the Company then qualifies if the Company is not then eligible to
use Form SB-2, and which form shall be available for the sale of the Registrable
Securities in accordance with the intended method(s) of distribution thereof,
and use its commercially reasonable efforts to cause such registration statement
to become and remain effective at least for a period ending with the first to
occur of (i) the sale of all Registrable Securities covered by the registration
statement, (ii) the availability under Rule 144 for the Holder to immediately,
freely resell without restriction all Registrable Securities covered by the
registration statement, and (iii) one year after a registration statement filed
pursuant to Section 3(a) is declared effective by the Commission (in either
case, the "Effectiveness Period"); provided, however, if at the end of such
one-year period, any Holder is not able to immediately, freely resell all
Registrable Securities that it owns, the Effectiveness Period shall continue
until terminated pursuant to clause (i) or (ii); provided, further, however,
that (i) no later than five Business Days before filing with the Commission a
registration statement or prospectus (or any amendments or supplements thereto
affecting the "Plan of Distribution" or "Selling Stockholder" portions thereof),
the Company shall (i) furnish to each Holder a copy of the "Plan of
Distribution" and "Selling Stockholder" portions of the registration statement
and the other portions of such documents proposed to be filed that the Company
considers not to contain material, non-public information (excluding any
exhibits other than applicable underwriting documents), in substantially the
form proposed to be filed and (ii) the Company shall promptly notify each Holder
of Registrable Securities covered by such registration statement of any stop
order issued or threatened by the Commission and take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered;
(b) if a registration statement is subject to review by the Commission,
promptly respond to all comments and diligently pursue resolution of any
comments to the satisfaction of the Commission;
(c) 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
during the Effectiveness Period, (but in any event at least until expiration of
the 90-day period referred to in Section 4(3) of the Securities Act and Rule
174, or any successor thereto, thereunder, if applicable), and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended method(s) of disposition by the sellers thereof set
forth in such registration statement;
(d) furnish, without charge, to each Holder of Registrable Securities
covered by such registration statement (i) a reasonable number of copies of such
registration statement (including any exhibits thereto other than exhibits
incorporated by reference), each amendment and supplement thereto as such Holder
may request, (ii) such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and any other
prospectus filed under Rule 424 under the Securities Act) as such Holders may
request, in conformity with the requirements of the Securities Act, and (iii)
such other documents as such Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Holder,
but only during the Effectiveness Period;
(e) use its commercially reasonable best efforts to register or qualify
such Registrable Securities under such other applicable securities or blue sky
laws of such jurisdictions as any Holder of Registrable Securities covered by
such registration statement reasonably requests as may be necessary for the
marketability of the Registrable Securities (such request to be made by the time
the applicable registration statement is deemed effective by the Commission) and
do any and all other acts and things that may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Holder; provided,
however, that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (e), (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any such
jurisdiction;
(f) as promptly as practicable after becoming aware of such event,
notify each Holder of such Registrable Securities at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event that comes to the Company's attention if as a result of
such event the prospectus included in such registration statement contains 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
and the Company shall promptly prepare and furnish to such Holder a supplement
or amendment to such prospectus (or prepare and file appropriate reports under
the Exchange Act) so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, unless suspension of
the use of such prospectus otherwise is authorized herein or in the event of a
Blackout Period, in which case no supplement or amendment need be furnished (or
Exchange Act filing made) until the termination of such suspension or Blackout
Period;
(g) comply, and continue to comply during the period that such
registration statement is effective under the Securities Act, in all material
respects with the Securities Act and the Exchange Act and with all applicable
rules and regulations of the Commission with respect to the disposition of all
securities covered by such registration statement and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months, but not more than 18 months,
beginning with the first full calendar month after the SEC Effective Date, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act;
(h) as promptly as practicable after becoming aware of such event,
notify each Holder of Registrable Securities being offered or sold pursuant to
the Registration Statement of the issuance by the Commission of any stop order
or other suspension of effectiveness of the Registration Statement at the
earliest possible time;
(i) permit the Holders of Registrable Securities being included in the
Registration Statement and their legal counsel, at such Holders' sole cost and
expense (except as otherwise specifically provided in Section 6) to review and
have a reasonable opportunity to comment on the Registration Statement and all
amendments and supplements thereto affecting the "Plan of Distribution" or
"Selling Stockholder" portions thereof, at least five Business Days prior to
filing thereof with the Commission and shall not file any such document to which
the Majority Holders reasonably object;
(j) make available for inspection at the Company's office by any Holder
and any Inspector retained by such Holder, at such Holder's sole expense, all
records as shall be reasonably necessary to enable such Holder to exercise its
due diligence responsibility, and cause the Company's officers, directors, and
employees to supply all information that such Holder or any Inspector may
reasonably request for purposes of such due diligence; provided, however, that
such Holder shall hold in confidence and shall not make any disclosure of any
record or other information that the Company determines in good faith to be
confidential, and of which determination such Holder is so notified at the time
such Holder receives such information, unless (i) the disclosure of such record
is necessary to avoid or correct a misstatement or omission in the Registration
Statement and a reasonable time prior to such disclosure the Holder shall have
informed the Company of the need to so correct such misstatement or omission and
the Company shall have failed to correct such misstatement of omission, (ii) the
release of such record is ordered pursuant to a subpoena or other order from a
court or governmental body of competent jurisdiction or (iii) the information in
such record has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company shall not be
required to disclose any confidential information in such records to any
Inspector until and unless such Inspector shall have entered into a
confidentiality agreement with the Company with respect thereto, substantially
in the form of this Section 4(j), which agreement shall permit such Inspector to
disclose records to the Holder who has retained such Inspector. Each Holder
agrees that it shall, upon learning that disclosure of such records is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, the records deemed confidential. The Company shall hold
in confidence and shall not make any disclosure of information concerning a
Holder provided to the Company pursuant to this Agreement unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) disclosure of such information to the Staff of the Commission's
Division of Corporation Finance is necessary to respond to comments raised by
the Staff in its review of the Registration Statement, (iii) disclosure of such
information is necessary to avoid or correct a misstatement or omission in the
Registration Statement, (iv) release of such information is ordered pursuant to
a subpoena or other order from a court or governmental body of competent
jurisdiction, or (v) such information has been made generally available to the
public other than by disclosure in violation of this or any other agreement. The
Company agrees that it shall, upon learning that disclosure of such information
concerning a Holder is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to such Holder and allow
such Holder, at such Holder's expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, such information;
(k) use its best efforts to cause all the Registrable Securities
covered by the Registration Statement to be quoted on the NASD OTC Bulletin
Board or such other principal securities market on which securities of the same
class or series issued by the Company are then listed or traded;
(l) provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities at all times;
(m) cooperate with the Holders of Registrable Securities being offered
pursuant to the Registration Statement to issue and deliver certificates (not
bearing any restrictive legends) representing Registrable Securities to be
offered pursuant to the Registration Statement within five Trading Days after
delivery of certificates to the Company and enable such certificates to be in
such denominations or amounts as the Holders may reasonably request and
registered in such names as the Holders may request;
(n) during the Effectiveness Period, refrain from bidding for or
purchasing any Common Stock or any right to purchase Common Stock or attempting
to induce any person to purchase any such security or right if such bid,
purchase or attempt would in any way limit the right of the Holders to sell
Registrable Securities by reason of the limitations set forth in Regulation M
under the 1934 Act; and
(o) take all other reasonable actions necessary to expedite and
facilitate disposition by the Holders of the Registrable Securities pursuant to
the Registration Statement.
5. Suspension of Offers and Sales. Each Holder of Registrable
Securities agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(f) or of the
commencement of a Blackout Period, such Holder shall discontinue 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 4(f) or notice of the
end of the Blackout Period, and, if so directed by the Company, such Holder
shall deliver to the Company (at the Company's expense) all copies (including,
without limitation, any and all drafts), other than permanent file copies, then
in such Holder's possession, of the prospectus covering such Registrable
Securities current at the time of receipt of such notice. In the event the
Company shall give any such notice, the period mentioned in Section 4(a)(iii)
shall be extended by the greater of (i) ten business days or (ii) the number of
days during the period from and including the date of the giving of such notice
pursuant to Section 4(f) to and including the date when each Holder of
Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
Section 4(f).
6. Registration Expenses. The Company shall pay all expenses in
connection with any registration, including, without limitation, all
registration, filing, stock exchange fees, printing expenses, all fees and
expenses of complying with securities or blue sky laws, and the fees and
disbursements of counsel for the Company and of its independent accountants;
provided, however, that, in any underwritten registration, each party shall pay
for its own underwriting discounts and commissions and transfer taxes. Except as
provided above in this Section 6 and Section 9, the Company shall not be
responsible for the expenses of any attorney or other advisor employed by a
Holder of Registrable Securities.
7. Assignment of Rights. No Holder may transfer or assign its rights
under this Agreement to any party without the prior written consent of the
Company; provided, however, that a Holder may assign its rights under this
Agreement without such restrictions to a Permitted Assignee as long as (a) such
transfer or assignment is effected in accordance with applicable securities
laws; (b) such transferee or assignee agrees in writing to become subject to the
terms of this Agreement; and (c) the Company is given written notice by such
Holder of such transfer or assignment, stating the name and address of the
transferee or assignee and identifying the Registrable Securities with respect
to which such rights are being transferred or assigned.
8. Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may request in writing.
9. Indemnification.
(a) In the event of the offer and sale of Registrable Securities held
by Holders under the Securities Act, the Company shall, and hereby does,
indemnify and hold harmless, to the fullest extent permitted by law, each
Holder, its directors, officers, partners, each other person who participates as
an underwriter in the offering or sale of such securities, and each other
person, if any, who controls or is under common control with such Holder or any
such underwriter within the meaning of Section 15 of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, and expenses to
which the Holder or any such director, officer, partner or underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such shares
were registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not misleading,
and the Company shall reimburse the Holder, and each such director, officer,
partner, underwriter and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating, defending or
settling any such loss, claim, damage, liability, action or proceeding;
provided, however, that the Company shall not be liable in any such case (i) to
the extent that any such loss, claim, damage, liability (or action or proceeding
in respect thereof) or expense arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
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 through an instrument duly
executed by or on behalf of such Holder specifically stating that it is for use
in the preparation thereof or (ii) if the person asserting any such loss, claim,
damage, liability (or action or proceeding in respect thereof) who purchased the
Registrable Securities that are the subject thereof did not receive a copy of an
amended preliminary prospectus or the final prospectus (or the final prospectus
as amended or supplemented) at or prior to the written confirmation of the sale
of such Registrable Securities to such person because of the failure of such
Holder or underwriter to so provide such amended preliminary or final prospectus
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact made in such preliminary prospectus was corrected in
the amended preliminary or final prospectus (or the final prospectus as amended
or supplemented). Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holders, or any such
director, officer, partner, underwriter or controlling person and shall survive
the transfer of such shares by the Holder.
(b) As a condition to including any Registrable Securities to be
offered by a Holder in any registration statement filed pursuant to this
Agreement, each such Holder agrees to be bound by the terms of this Section 9
and to indemnify and hold harmless, to the fullest extent permitted by law, the
Company, its directors and officers, and each other person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which the Company
or any such director or officer or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement in or
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 omission was made in reliance upon and
in conformity with written information about such Holder furnished to the
Company by or on behalf of such Holder expressly for use in the preparation
thereof, and such Holder shall reimburse the Company, and each such director,
officer, and controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating, defending, or settling and
such loss, claim, damage, liability, action, or proceeding; provided, however,
that such indemnity agreement found in this Section 9(b) shall in no event
exceed the gross proceeds from the offering received by such Holder. 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 or controlling
person and shall survive the transfer by any Holder of such shares.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in
Section 9(a) or (b) (including any governmental action), such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the indemnifying party of the commencement of such
action; provided, however, that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under Section 9(a) or (b), except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in the
reasonable judgment of counsel to such indemnified party a conflict of interest
between such indemnified and indemnifying parties may exist or the indemnified
party may have defenses not available to the indemnifying party in respect of
such claim, the indemnifying party shall be entitled to participate in and to
assume the defense thereof, 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 shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties arises in
respect of such claim after the assumption of the defenses thereof or the
indemnifying party fails to defend such claim in a diligent manner, other than
reasonable costs of investigation. Neither an indemnified nor an indemnifying
party shall be liable for any settlement of any action or proceeding effected
without its consent. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that 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. Notwithstanding anything to the contrary
set forth herein, and without limiting any of the rights set forth above, in any
event any party shall have the right to retain, at its own expense, counsel with
respect to the defense of a claim.
(d) In the event that an indemnifying party does or is not permitted to
assume the defense of an action pursuant to Section 9(c) or in the case of the
expense reimbursement obligation set forth in Section 9(a) and (b), the
indemnification required by Section 9(a) and (b) shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills received or expenses, losses, damages, or liabilities
are incurred.
(e) If the indemnification provided for in this Section 9 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage or expense referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall (i) contribute to the amount paid or payable by such indemnified party as
a result of such loss, liability, claim, damage or expense as is appropriate to
reflect the proportionate relative fault of the indemnifying party on the one
hand and the indemnified party on the other (determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission), or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, not only the proportionate relative
fault of the indemnifying party and the indemnified party, but also the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other, as well as any other relevant equitable considerations. No
indemnified party guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent misrepresentation.
(f) Other Indemnification. Indemnification similar to that specified in
the preceding subsections of this Section 9 (with appropriate modifications)
shall be given by the Company and each Holder of Registrable Securities with
respect to any required registration or other qualification of securities under
any federal or state law or regulation or governmental authority other than the
Securities Act.
10. Rule 144. For a period of at least 24 months following the Closing
Date, the Company will use its commercially reasonable best efforts (a) to
timely file all reports required to be filed by the Company after the date
hereof under the Securities Act and the Exchange Act (including the reports
pursuant to Section 13(a) or 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144) and the rules and regulations adopted by the
Commission thereunder), (b) if the Company is not required to file reports
pursuant to such sections, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell shares of Common Stock under Rule 144, and
(c) to take such further action as any holder of shares of Common Stock may
reasonably request, all to the extent required from time to time to enable the
Purchasers to sell shares of Common Stock without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144,
including causing its attorneys to issue and deliver any appropriate legal
opinion required to permit a Purchaser to sell shares of Common Stock under Rule
144 upon receipt of appropriate documentation relating to such sale.
11. Independent Nature of Each Purchaser's Obligations and Rights. The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and each Purchaser shall not be
responsible in any way for the performance of the obligations of any other
Purchaser under this Agreement. The decision of each Purchaser to purchase
Common Stock and enter into this Agreement has been made by each Purchaser
independently of any other Purchaser. Nothing contained herein and no action
taken by any Purchaser pursuant hereto, shall be deemed to constitute such
Purchasers as a partnership, an association, a joint venture, or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement. Each Purchaser acknowledges that no other
Purchaser has acted as agent for the Purchaser in connection with making its
investment in Common Stock and that no other Purchaser will be acting as agent
of the Purchaser in connection with monitoring its investment in the Common
Stock or enforcing its rights under this Agreement. Each Purchaser shall be
entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.
12. Miscellaneous
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York and the United States of
America, both substantive and remedial. Any judicial proceeding brought against
either of the parties to this agreement or any dispute arising out of this
Agreement or any matter related hereto shall be brought in the courts of the
State of New York, New York County, or in the United States District Court for
the Southern District of New York and, by its execution and delivery of this
agreement, each party to this Agreement accepts the jurisdiction of such courts.
The foregoing consent to jurisdiction shall not be deemed to confer rights on
any person other than the parties to this Agreement.
(b) Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, Permitted Assignees, executors and administrators of the parties
hereto. In the event the Company merges with, or is otherwise acquired by, a
direct or indirect subsidiary of a publicly traded company, the Company shall
condition the merger or acquisition on the assumption by such parent company of
the Company's obligations under this Agreement.
(c) Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.
(d) Notices, etc. All notices or other communications that are required
or permitted under this Agreement shall be in writing and sufficient if
delivered by hand, by facsimile transmission, by registered or certified mail,
postage pre-paid, by electronic mail, or by courier or overnight carrier, to the
persons at the addresses set forth below (or at such other address as may be
provided hereunder), and shall be deemed to have been delivered as of the date
so delivered:
If to the Company: SiriCOMM, Inc.
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Chairman, President and CEO
Facsimile: (000) 000-0000
e-mail: xxxx.xxxxxxx@xxxxxxxx.xxx
with a copy to: Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
e-mail: xxxxxxxxxx@xxxxxxxx.xxx
If to the Purchasers: To each Purchaser at the address
set forth on Exhibit A
with a copy to: Xxxxxxx Xxxxxx Xxxxxx Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Managing Director
Facsimile: (000) 000-0000
e-mail: xxxxxxx.xxxxxxxxx@xxxxxxxx.xxx
and a copy to: Day, Xxxxx & Xxxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: R. Xxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
e-mail: xxxxxxx@xxx.xxx
or at such other address as any party shall have furnished to the other parties
in writing.
(e) Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any Holder of any Registrable Securities, upon any
breach or default of the Company under this Agreement, shall impair any such
right, power or remedy of such Holder nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereunder occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any Holder of any breach or default under
this Agreement, or any waiver on the part of any Holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement, or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
(g) Severability. In the case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
(h) Amendments. The provisions of this Agreement may be amended at any
time and from time to time, and particular provisions of this Agreement may be
waived, with and only with an agreement or consent in writing signed by the
Company and by the holders of an 80% majority of the number of shares of
Registrable Securities outstanding as of the date of such amendment or waiver.
The Purchasers acknowledge that by the operation of this Section 12(h), the
holders of an 80% majority of the outstanding Registrable Securities may have
the right and power to diminish or eliminate all rights of the Purchasers under
this Agreement.
(i) Limitation on Subsequent Registration Rights. After the date of
this Agreement, the Company shall not, without the prior written consent of the
Holders of at least a majority of the Registrable Securities then outstanding,
enter into any agreement with any holder or prospective holder of any securities
of the Company that would grant such holder registration rights senior to those
granted to the Holders hereunder.
[Signatures on following page]
This Registration Rights Agreement is hereby executed as of the date
first above written.
COMPANY:
SIRICOMM, INC.
By:
-------------------------------
Name:
Its:
PLACEMENT AGENT:
XXXXXXX XXXXXX XXXXXX INC.
By:
-------------------------------
Name:
Its:
[Counterpart Signature Pages Attached]
Counterpart Signature Page to Registration Rights Agreement
PURCHASER:
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(PRINT NAME)
By:
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Name:
----------------------------------------
Its:
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Exhibit A
Purchaser Information
Name Address Number of Shares
