EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of August
28, 1997, is entered into by and among Xxx Xxx Roo, Inc., a Delaware corporation
(the "Company"), and each Holder (as hereinafter defined) executing a signature
page hereto.
This Agreement is made pursuant to a certain Securities Purchase Agreement
dated as of August 12, 1997 by and among the Company and the Purchaser named
therein (the "Purchase Agreement"). In order to induce the Purchaser to enter
into the Purchase Agreement, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution of this Agreement is a
condition to the closing of the transactions contemplated by the Purchase
Agreement.
In consideration of the foregoing, the parties hereby agree as follows:
SECTION 1. DEFINITIONS.
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As used in this Agreement, the following terms shall have the following
meanings:
"Advice" shall have the meaning set forth in Section 3.
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"Affiliate" means, with respect to any specified Person, any other Person
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(i) directly or indirectly controlling (including, but not limited to, all
directors and executive officers of such Person), controlled by or under direct
or indirect common control with such specified Person, or (ii) that directly or
indirectly owns more than 10% of the voting securities of such Person. A Person
shall be deemed to control a corporation if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Business Day" means a day that is not a Legal Holiday.
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"Commission" means the Securities and Exchange Commission.
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"Common Stock" means the common stock, par value $.01 per share, of the
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Company.
"Company" shall have the meaning set forth in the preamble and shall
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include the Company's successors by merger, acquisition, reorganization or
otherwise.
"Controlling Persons" shall have the meaning set forth in Section 5(a).
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"Damages" shall have the meaning set forth in Section 5(a).
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"Exchange Act" means the Securities Exchange Act of 1934, as amended from
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time to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"Holder" means (i) each Person (other than the Company) executing a
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signature page
hereto and (ii) each Person (other than the Company) to whom a Holder transfers
Warrant Shares if such Person acquires such Warrant Shares as Registrable
Securities.
"Holders' Counsel" means Xxxxxxx, Procter & Xxxx LLP, special counsel to
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the Holders, or any successor counsel selected by Holders of a majority in
interest of the Registrable Securities.
"Inspectors" shall have the meaning set forth in Section 3(m).
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"Legal Holiday" means a Saturday, Sunday or a day on which banking
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institutions in New York City, New York, or Boston, Massachusetts, or at such
place of payment, are not required to be opened.
"NASD" shall have the meaning set forth in Section 3(q).
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"Nasdaq" shall have the meaning set forth in Section 3(o).
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"Objection Notice" shall have the meaning set forth in Section 3(a).
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"Objecting Party" shall have the meaning set forth in Section 3(a).
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"Person" means any individual, corporation, partnership, joint venture,
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association, joint-stock company, trust, limited liability company,
unincorporated organization, government or other agency, or any political
subdivision thereof, or any other entity of whatever nature.
"Prospectus" means the prospectus included in any Registration Statement
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(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"Purchase Agreement" means the Securities Purchase Agreement, dated as of
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the date of this Agreement, between the Company and the Holder, pursuant to
which the Warrants are being issued, as amended, modified or supplemented from
time to time, together with any exhibits, schedules or other attachments
thereto.
"Records" shall have the meaning set forth in Section 3(m).
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"Registrable Securities" means the Warrant Shares; provided, however, that
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any Warrant Shares shall cease to be Registrable Securities when (i) a
Registration Statement covering such Registrable Securities has been declared
effective and such Registrable Securities have been disposed of pursuant to such
effective Registration Statement, (ii) such Registrable Securities are
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transferred to any Person other than a Holder pursuant to Rule 144 (or any
successor rule or similar provision then in effect, but not Rule 144A) under the
Securities Act, including a sale pursuant to the provisions of Rule 144(k),
(iii) such Warrant Shares shall have ceased to be outstanding, or (iv) such
Warrant Shares may be resold pursuant to Rule 144(k) assuming a Net Cashless
Exercise (as defined in Section 2.3 of the Warrant Agreement) thereof in
accordance with Section 2.3 of the Warrant Agreement.
"Registration Expenses" shall have the meaning set forth in Section 4.
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"Securities Act" means the Securities Act of 1933, as amended from time to
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time, or any successor statute, and the rules and regulations of the Commission
promulgated thereunder.
"Shelf Registration Statement" means a registration statement of the
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Company on the appropriate form for an offering to be made on a continuous basis
pursuant to Rule 415 under the Securities Act that covers any of the Registrable
Securities pursuant to the provisions of this Agreement, and all amendments and
supplements to any such registration statement, including post-effective
amendments, in each case including the Prospectus, all exhibits, and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement.
"Suspension Notice" shall have the meaning set forth in Section 3.
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"Suspension Period" shall have the meaning set forth in Section 3.
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"Target Filing Date" shall mean the date which is 270 days after the date
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hereof, or such other date subsequent thereto as the Holders shall request.
"Warrant Agreement" means the Warrant Agreement, dated as of the date of
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this Agreement, by and between the Company and the Purchaser identified therein,
as amended or supplemented from time to time in accordance with the terms
thereof.
"Warrants" means the warrants to purchase shares of Common Stock issued to
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the Holder pursuant to the Warrant Agreement.
"Warrant Shares" means the shares of Common Stock issuable upon exercise of
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the Warrants and all shares of Common Stock directly or indirectly issued or
issuable in respect of the Warrant Shares by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation, or other reorganization. For purposes of this Agreement, all
references to Holders of Warrants exercisable into a majority or other specified
percentage of Warrant Shares shall be read as incorporating the assumption that
all Warrants have been exercised into Warrant Shares.
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SECTION 2. SHELF REGISTRATION.
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(a) Filing; Effectiveness. Not later than the Target Filing Date,
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the Company shall prepare and file with the Commission a Shelf Registration
Statement covering the resale of all of the Registrable Securities. The Company
shall use its best efforts to cause the Shelf Registration Statement to be
declared effective as promptly as reasonably practicable following the Target
Filing Date and to keep such Shelf Registration Statement continuously effective
for a period beginning on the date on which such Shelf Registration Statement is
declared effective and ending on the date which is 24 months following the date
of this Agreement.
(b) Supplements; Amendments. The Company agrees, if necessary, to
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supplement or amend the Shelf Registration Statement, as required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or as
reasonably requested (which request shall result in the filing of a supplement
or amendment) by any Holder of Registrable Securities to which such Shelf
Registration Statement relates, and the Company agrees upon request to furnish
to the Holders and Holders' Counsel copies of any such supplement or amendment
prior to its being used and/or filed with the Commission.
(c) Effective Registration. A registration will not be deemed to
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have been effected as a Shelf Registration Statement unless the Shelf
Registration Statement with respect thereto has been declared effective by the
Commission and the Company has complied in all material respects with its
obligations under this Agreement with respect thereto; provided, however, that
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if after a Shelf Registration Statement has been declared effective, the
offering of Registrable Securities pursuant to such Shelf Registration Statement
is interfered with by any stop order, injunction or other order or requirement
of the Commission or any other governmental agency or court, such Shelf
Registration Statement will be deemed not to have become effective during the
period of such interference until the offering of Registrable Securities
pursuant to such Shelf Registration Statement may legally resume. If a
registration requested pursuant to this Section 2 is deemed not to have been
effected, then the Company shall continue to be obligated to effect a
registration pursuant to this Section 2.
(d) Information Regarding Holders. A Holder of Registrable
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Securities included in a Shelf Registration Statement shall provide all
information with respect to itself, its plan of distribution and related matters
as may be reasonably requested by the Company in order to effect the
registration and disposition of such Registrable Securities pursuant to such
Shelf Registration Statement. If a Holder has not executed a counterpart to this
Agreement, the Company may, if it so elects, condition inclusion of such
Holder's Registrable Securities in the Shelf Registration Statement upon receipt
of such a counterpart.
SECTION 3. REGISTRATION PROCEDURES.
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In connection with the obligations of the Company to effect or cause the
registration of
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any Registrable Securities pursuant to the terms and conditions of this
Agreement, the Company shall use its best efforts to effect the registration and
sale of such Registrable Securities in accordance with the intended method of
disposition thereof as quickly as practicable, and in connection therewith:
(a) The Company shall prepare and file with the Commission a Shelf
Registration Statement on the appropriate form under the Securities Act,
which Shelf Registration Statement shall comply as to form in all material
respects with the requirements of the applicable form and include all
financial statements required by the Commission to be filed therewith, and
use its best efforts to cause such Shelf Registration Statement to become
effective and remain effective in accordance with the provisions of this
Agreement; provided, however, that, at least ten Business Days prior to
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filing a Shelf Registration Statement or Prospectus or any amendments or
supplements thereto, including documents incorporated by reference after
the initial filing of the Shelf Registration Statement, the Company shall
furnish to Holders' Counsel draft copies of all such documents proposed to
be filed, which documents will be subject to the review of Holders'
Counsel, and the Company will not, unless required by law or this
Agreement, file any Shelf Registration Statement or amendment thereto or
any Prospectus or any supplement thereto to which Holders holding a
majority in interest of the Registrable Securities covered by such Shelf
Registration Statement shall reasonably object; provided, however, that any
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such objection to the filing of any Shelf Registration Statement or
amendment thereto or any Prospectus or supplement thereto shall be made by
written notice (the "Objection Notice") delivered to the Company no later
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than ten Business Days after the party or parties asserting such objection
or their counsel (the "Objecting Party") receives draft copies of the
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documents that the Company proposes to file. The Objection Notice shall
set forth the objections and the specific areas in the draft documents
where such objections arise. The Company shall have five Business Days
after receipt of the Objection Notice to correct such deficiencies to the
reasonable satisfaction of the Objecting Party, and will notify each Holder
of any stop order issued or threatened by the Commission in connection
therewith and shall use its best efforts to prevent the entry of such stop
order or, if entered, to have such stop order withdrawn at the earliest
possible moment.
(b) The Company shall promptly prepare and file with the Commission
such amendments and post-effective amendments to such Shelf Registration
Statement as may be necessary to keep such Shelf Registration Statement
effective for as long as the Company is required to keep such Shelf
Registration Statement effective pursuant to the terms hereof; shall cause
the Prospectus to be supplemented by any required Prospectus supplement,
and, as so supplemented, to be filed pursuant to Rule 424 under the
Securities Act; and shall comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all Registrable
Securities covered by such Shelf Registration Statement during the
applicable period in accordance with the intended methods of disposition by
the Holders set forth in such Shelf Registration Statement or amendment
thereto or such Prospectus or supplement thereto;
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(c) The Company shall promptly furnish to any Holder of Registrable
Securities included in a Shelf Registration Statement, without charge, such
number of conformed copies of such Shelf Registration Statement and any
post-effective amendment thereto and such number of copies of the
Prospectus (including each preliminary Prospectus) and any amendments or
supplements thereto, any documents incorporated by reference therein and
such other documents as any such Holder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable
Securities being sold by such Holder (it being understood that the Company
consents to the use of the Prospectus and any amendment or supplement
thereto by each Holder selling Registrable Securities in connection with
the offering and sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto).
(d) The Company shall, on or prior to the date on which a Shelf
Registration Statement is declared effective, (i) use its best efforts to
register or qualify the Registrable Securities covered by such Shelf
Registration Statement under the securities or "blue sky" laws of each of
the 50 states of the United States or obtain appropriate exemptions
therefrom; (ii) do any and all other acts and things which may be
reasonably necessary or advisable to enable the Holders of Registrable
Securities included in such Shelf Registration Statement to consummate the
disposition of such Registrable Securities in accordance with their
intended method of disposition thereof; (iii) use its best efforts to keep
each such state securities or "blue sky" registration or qualification (or
exemption therefrom) effective during the period in which the Company is
required to keep such Shelf Registration Statement effective; and (iv) do
any and all other acts or things which may be reasonably necessary or
advisable to enable the Holders of Registrable Securities included in such
Shelf Registration Statement to complete the disposition in such
jurisdictions of such Registrable Securities in accordance with their
intended method of disposition thereof; provided, however, that the Company
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shall not be required (x) to qualify to do business in any jurisdiction
where it would not otherwise be required to so qualify but for this Section
3(d) or (y) to file any general consent to service of process.
(e) The Company shall use its best efforts to cause the Registrable
Securities covered by a Shelf Registration Statement to be registered with
or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company to enable
the Holders to consummate the disposition of such Registrable Securities in
accordance with their intended method of disposition thereof.
(f) The Company shall promptly notify each Holder of Registrable
Securities included in a Shelf Registration Statement and Holders' Counsel
and (if requested by any such Person) confirm such notice in writing, (i)
when such Shelf Registration Statement or a Prospectus or any post-
effective amendment or any Prospectus supplement has been filed and, with
respect to such Shelf Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
Commission or any state securities authority for amendments and supplements
to such Shelf
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Registration Statement and Prospectus or for additional information after
such Shelf Registration Statement has become effective, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness
of such Shelf Registration Statement or the initiation or threatening of
any proceedings for that purpose, (iv) of the issuance by any state
securities commission or other regulatory authority of any order suspending
the registration or qualification or exemption from registration or
qualification of any of the Registrable Securities under state securities
or "blue sky" laws or the initiation of any proceedings for that purpose,
(v) if, between the effective date of such Shelf Registration Statement and
the closing of any sale of Registrable Securities covered thereby, the
representations and warranties of the Company contained in any underwriting
agreement, securities sales agreement or other similar agreement, if any,
relating to the offering of such Registrable Securities cease to be true
and correct in all material respects, and (vi) of the happening of any
event which makes any statement of a material fact made in such Shelf
Registration Statement or related Prospectus untrue or which requires the
making of any changes in such Shelf Registration Statement or Prospectus so
that such Shelf Registration Statement or Prospectus will not contain any
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,
in light of the circumstances under which they were made, not misleading;
and, as promptly as practicable thereafter, prepare and file an amendment
to such Shelf Registration Statement with the Commission and furnish to any
such Holders a supplement or amendment to such Prospectus so that, as
thereafter deliverable to the purchasers of such Registrable Securities,
such Prospectus will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(g) The Company shall make generally available to the Holders of
Registrable Securities included in a Shelf Registration Statement an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than 30 days after the end of the 12-month period
beginning with the first day of the Company's first fiscal quarter
commencing after the effective date of such Shelf Registration Statement,
which earnings statement shall cover said 12-month period, and which
requirement will be deemed to be satisfied if the Company timely files
complete and accurate information on Forms 10-Q, 10-K and 8-K under the
Exchange Act and otherwise complies with Rule 158 under the Securities Act.
(h) The Company shall promptly use its best efforts to prevent the
issuance of any order suspending the effectiveness of a Shelf Registration
Statement, and, if any such order suspending the effectiveness of a Shelf
Registration Statement is issued, shall promptly use its best efforts to
obtain the withdrawal of such order at the earliest possible moment.
(i) The Company shall, if requested by any Holder of Registrable
Securities included in a Shelf Registration Statement or Holders' Counsel,
promptly incorporate in a Prospectus supplement or post-effective amendment
such information as such Holder or
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Holders' Counsel reasonably requests to be included therein, and the
Company shall promptly make all required filings of such Prospectus
supplement or post-effective amendment.
(j) After the filing with the Commission of any document which is
incorporated by reference into a Shelf Registration Statement (in the form
in which it was incorporated), the Company shall, upon request, promptly
deliver a copy of each such document to each of the Holders of Registrable
Securities included in such Shelf Registration Statement so requesting and
to Holders' Counsel.
(k) The Company shall cooperate with the Holders of Registrable
Securities included in a Shelf Registration Statement to facilitate the
timely preparation and delivery of certificates (which shall not bear any
restrictive legends unless required under applicable law) representing
Registrable Securities sold under such Shelf Registration Statement to the
purchasers thereof, and enable such Registrable Securities to be in such
denominations and registered in such names as such Holders may request and
keep available and make available to the Company's transfer agent prior to
the effectiveness of such Shelf Registration Statement a supply of such
certificates.
(l) The Company shall take such actions as the Holders of Registrable
Securities included in a Shelf Registration Statement may reasonably
request in order to expedite or facilitate the disposition of Registrable
Securities, it being understood that the Company will not be obligated to
enter into any underwriting or similar agreement.
(m) The Company shall promptly make available to each Holder of
Registrable Securities included in a Shelf Registration Statement and any
attorney, accountant or other agent or representative retained by any such
Holder (collectively, the "Inspectors"), upon execution of a
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confidentiality agreement reasonably acceptable to the Company and such
Inspector, all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records"), as shall be
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reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees
to supply all Records and other information requested by any such Inspector
in connection with such Shelf Registration Statement.
(n) The Company shall furnish to each Holder of Registrable
Securities included in a Shelf Registration Statement, upon request, a
signed counterpart, addressed to such Holder, of (i) an opinion or opinions
of counsel to the Company, and (ii) a comfort letter or comfort letters
from the Company's independent public accountants, each in customary form
and covering matters of the type customarily covered by opinions or comfort
letters, as the case may be.
(o) The Company shall use its best efforts to cause the Registrable
Securities included in a Shelf Registration Statement (if the Company and
the Registrable Securities so qualify) (i) to be listed on each national
securities exchange, if any, on which similar securities issued by the
Company are then listed, or (ii) if similar securities issued by the
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Company are not then listed, to be authorized for listing or quotation, as
applicable, on the New York Stock Exchange or The Nasdaq Stock Market,
Inc.'s ("Nasdaq") National Market.
(p) The Company shall provide a CUSIP number for all Registrable
Securities covered by a Shelf Registration Statement not later than the
effective date of such Shelf Registration Statement.
(q) The Company shall cooperate with each Holder of Registrable
Securities included in a Shelf Registration Statement and Holders' Counsel
in connection with any filings required to be made with the National
Association of Securities Dealers, Inc. ("NASD").
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(r) The Company shall, during the period when the Prospectus is
required to be delivered under the Securities Act, promptly file all
documents required to be filed with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act.
(s) The Company shall appoint a transfer agent and registrar for all
Registrable Securities covered by a Shelf Registration Statement not later
than the effective date of such Shelf Registration Statement.
(t) If the Registrable Securities are of a class of securities that
is listed on a national securities exchange or Nasdaq, the Company will
file copies of any Prospectus with such exchange or Nasdaq, as applicable,
in compliance with Rule 153 under the Securities Act so that the Holders
shall benefit from the prospectus delivery procedures described therein.
Each Holder of Registrable Securities included in a Shelf Registration
Statement, upon receipt of any notice (a "Suspension Notice") from the Company
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of the happening of any event of the kind described in Section 3(f), shall
forthwith discontinue disposition of the Registrable Securities pursuant to such
Shelf Registration Statement covering such Registrable Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(f) or until such Holder is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and such
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Holder has received copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus, and, if so directed by the Company,
such Holder will deliver to the Company (at the Company's expense) all copies,
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; provided, however, that the Company shall not give a Suspension
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Notice until after the Shelf Registration Statement has been declared effective
and shall not give more than one Suspension Notice during any period of twelve
consecutive months and in no event shall the period from the date on which any
such Holder receives a Suspension Notice to the date on which any such Holder
receives either the Advice or copies of the supplemented or amended Prospectus
contemplated by Section 3(f) (the "Suspension Period") exceed 60 days. In the
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event that the Company shall give any Suspension Notice, (i) the Company shall
use its best efforts and take
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such actions as are reasonably necessary to render the Advice and end the
Suspension Period as promptly as practicable and (ii) the time periods for which
a Shelf Registration Statement is required to be kept effective pursuant to
Section 2 hereof shall be extended by the number of days during the Suspension
Period.
If any Shelf Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar Federal or state securities or "blue sky" statute
and the rules and regulations thereunder then in force, the deletion of the
reference to such Holder.
SECTION 4. REGISTRATION EXPENSES. Any and all expenses incident to the
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Company's performance of or compliance with this Agreement, including without
limitation, all Commission and securities exchange, Nasdaq or NASD registration
and filing fees, all fees and expenses incurred in connection with compliance
with state securities or "blue sky" laws (including reasonable fees and
disbursements of counsel for any Holders in connection with "blue sky"
qualifications of the Registrable Securities), printing expenses, messenger and
delivery expenses, internal expenses (including, without limitation, all
salaries and expenses of the Company's officers and employees performing legal
or accounting duties), all expenses for word processing, printing and
distributing any Shelf Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, the fees and expenses of the Company incurred in connection with the
listing of the Registrable Securities, the fees and disbursements of counsel for
the Company and of the independent certified public accountants of the Company
(including the expenses of any comfort letters or costs associated with the
delivery by independent certified public accountants of a comfort letter or
comfort letters requested pursuant to Section 4(n)), Securities Act liability
insurance (if the Company elects to obtain such insurance), the reasonable fees
and expenses of any special experts or other Persons retained by the Company in
connection with any registration, and the reasonable fees and disbursements of
Holders' Counsel incurred in connection with each registration hereunder (up to
a maximum of $10,000 in the aggregate) (but excluding underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Securities) (all such expenses being herein called "Registration
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Expenses"), will be borne by the Company whether or not the Shelf Registration
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Statement to which such expenses relate becomes effective.
SECTION 5. INDEMNIFICATION AND CONTRIBUTION.
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(a) Indemnification by the Company. The Company agrees to
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indemnify and hold harmless, to the full extent permitted by law, each Holder,
its partners, members, officers,
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directors, trustees, stockholders, employees, agents and investment advisers,
and each Person who controls such Holder within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, or is under common
control with, or is controlled by, such Holder, together with the partners,
members, officers, directors, trustees, stockholders, employees, agents and
investment advisors of such controlling Person (collectively, the "Controlling
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Persons"), from and against all losses, claims, damages, liabilities and
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expenses (including, without limitation, any legal or other fees and expenses
incurred by any Holder or any such Controlling Person in connection with
defending or investigating any action or claim in respect thereof)
(collectively, the "Damages") to which such Holder, its partners, officers,
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directors, trustees, stockholders, employees, agents and investment advisers,
and any such Controlling Person, may become subject under the Securities Act or
otherwise, insofar as such Damages (or proceedings in respect thereof) arise out
of or are based upon any untrue or alleged untrue statement of material fact
contained in any Shelf Registration Statement (or any amendment thereto)
pursuant to which Registrable Securities were registered under the Securities
Act, including all documents incorporated therein by reference, or are caused by
any omission or alleged omission to state therein a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or are caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided, however,
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that the Company shall not be liable for Damages to any Holder under this
Section 5(a) to the extent that any such Damages (i) arise out of or are based
upon any such untrue statement or omission which is based upon information
relating to such Holder furnished in writing to the Company by such Holder
expressly for use in any such Shelf Registration Statement (or any amendment
thereto) or Prospectus (or amendment or supplement thereto); or (ii) were caused
by the fact that such Holder sold Securities to a Person as to whom it shall be
established that there was not sent or given, or deemed sent or given pursuant
to Rule 153 under the Securities Act, at the time of or prior to the written
confirmation of such sale, a copy of the Prospectus as then amended or
supplemented if, and only if, (a) the Company has previously furnished copies of
such amended or supplemented Prospectus to such Holder and (b) such Damages were
caused by any untrue statement or omission or alleged untrue statement or
omission contained in the Prospectus so delivered which was corrected in such
amended or supplemented Prospectus.
(b) Indemnification by the Holders. In connection with any Shelf
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Registration Statement in which a Holder is participating, each such Holder
agrees, severally and not jointly, to indemnify and hold harmless the Company,
its directors and officers and each Person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against all Damages to the same extent as the
foregoing indemnity from the Company to such Holder, but only to the extent such
Damages arise out of or are based upon any untrue statement of a material fact
contained in any Shelf Registration Statement (or any amendment thereto) or
Prospectus (or any amendment or supplement thereto) or are caused by any
omission to state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, which untrue
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statement or omission is based upon information relating to such Holder
furnished in writing to the Company by such Holder expressly for use in any such
Shelf Registration Statement (or any amendment thereto) or any such Prospectus
(or any amendment or supplement thereto); provided, however, that such Holder
-------- -------
shall not be obligated to provide such indemnity to the extent that such Damages
result from the failure of the Company to promptly amend or take action to
correct or supplement any such Shelf Registration Statement or Prospectus on the
basis of corrected or supplemental information furnished in writing to the
Company by such Holder expressly for such purpose. In no event shall the
liability of any Holder of Registrable Securities hereunder be greater in amount
than the dollar amount of the net proceeds received by such Holder upon the sale
of the Registrable Securities giving rise to such indemnification obligation.
(c) Indemnification Procedures. In case any proceeding (including any
--------------------------
governmental investigation) shall be instituted involving any Person in respect
of which indemnity may be sought pursuant to either paragraph (a) or (b) above,
such Person (the "indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceedings
and shall pay the fees and disbursements of such counsel relating to such
proceeding. The failure of an indemnified party to notify the indemnifying
party with respect to a particular proceeding shall not relieve the indemnifying
party from any obligation or liability (i) which it may have pursuant to this
Agreement if the indemnifying party is not substantially prejudiced by such
failure to so notify it or (ii) which it may have otherwise than pursuant to
this Agreement. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel, or (ii) the indemnifying party fails promptly to assume the defense of
such proceeding or fails to employ counsel reasonably satisfactory to such
indemnified party, or (iii) (A) the named parties to any such proceeding
(including any impleaded parties) include both such indemnified party or an
Affiliate of such indemnified party and any indemnifying party or an Affiliate
of such indemnifying party, (B) there may be one or more defenses available to
such indemnified party or such Affiliate of such indemnified party that are
different from or additional to those available to any indemnifying party or
such Affiliate of any indemnifying party and (C) such indemnified party shall
have been advised by such counsel that there may exist a conflict of interest
between or among such indemnified party or such Affiliate of such indemnified
party and any indemnifying party or such Affiliate of any indemnifying party, in
which case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel of its choice at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense thereof and such counsel shall be at the expense of the indemnifying
party, it being understood, however, that unless there exists a conflict among
indemnified parties, the indemnifying parties shall not, in connection with any
one such proceeding or separate but substantially similar or related proceedings
in the same jurisdiction, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for such
indemnified parties. The indemnifying party shall not be liable for
12
any settlement of any proceeding effected without its written consent (which
consent shall not be unreasonably withheld) but, if settled with such consent or
if there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify each indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of any indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which such indemnified party is a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on all claims that are the subject matter of such proceeding with no
payment by such indemnified party of consideration.
(d) Contribution. If the indemnification from the indemnifying party
------------
provided for in this Section 5 is found, pursuant to a final judicial
determination not subject to appeal, to be unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities, or expenses
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities, or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and the indemnified parties in connection with the
actions that resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact, has been made by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities, and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 5(c), any legal or
other expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
--- ----
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no selling Holder shall be
required to contribute any amount in excess of the amount by which the total net
proceeds received by such selling Holder with respect to Registrable Securities
sold by such selling Holder exceeds the amount of any damages which such selling
Holder has otherwise been required to pay by reason of such untrue statement or
alleged untrue statement or omission or alleged omission. Each Holder's
obligation to contribute pursuant to this Section 5(d) is several and not joint
and shall be determined by reference to the proportion that the net proceeds of
the offering received by such Holder bears to the total net proceeds of the
offering received by all the Holders. 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 remedies provided for in this Section 5 are
not exclusive and shall not limit any rights or remedies that may otherwise be
available to any indemnified
13
party at law or in equity.
If indemnification is available under this Section 5, the indemnifying
party shall indemnify each indemnified party to the full extent provided in
Sections 5(a) and (b) without regard to the relative fault of said indemnifying
party or indemnified party or any other equitable consideration provided for in
this Section 5(d).
SECTION 6. RULE 144. The Company covenants that it will file any reports
--------
required to be filed by it under the Securities Act and the Exchange Act, and
the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such reports, it will, upon the request of any
Holder, make publicly available other information so long as necessary to permit
sales of the Registrable Securities pursuant to Rule 144 under the Securities
Act), and it will take such further action as any Holder may request, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any successor rule or similar
provision hereafter adopted by the Commission. Upon the request of any Holder,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
SECTION 7. MISCELLANEOUS.
-------------
(a) No Inconsistent Agreements. The Company has not entered into
--------------------------
nor will the Company on or after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with, and are not inconsistent with, the rights granted to the holders
of the Company's other issued and outstanding securities under any such
agreements. The Company may grant registration rights that would permit any
Person the right to piggy-back or may itself exercise its right to piggy-back,
on any Shelf Registration Statement, provided that if the managing underwriter
--------
or underwriters, if any, of such offering delivers an opinion to the Holders
that the total amount of securities which they and the holders of such new
piggy-back rights intend to include in any Shelf Registration Statement is so
large as to materially and adversely affect the success of such offering
(including the price at which such securities can be sold), then only the
amount, number or kind of securities to be offered for the account of holders of
such new piggy-back rights (other than the Company) will be reduced to the
extent necessary to reduce the total amount of securities to be included in such
Shelf Registration Statement to the amount, number or kind recommended by the
managing underwriter prior to any reduction in the amount of Registrable
Securities to be included; and provided further that if such offering is not
-------- -------
underwritten, then such piggy-back rights shall only be exercised with the
consent of the Holders of Warrants exercisable into a majority of the Warrant
Shares being offered under such Shelf Registration Statement.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or
14
consents to departures from the provisions hereof may not be given, unless the
Company has obtained the written consent of Holders of Warrants exercisable into
at least a majority of Warrant Shares which are affected by such amendment,
modification, supplement, waiver or consent; provided, however, that, no
-------- -------
amendment, modification, supplement, waiver or consent to any departure from the
provisions of Section 3 hereof (other than any immaterial amendment,
modification, supplement, waiver or consent) shall be effective as against any
Holder of Warrants unless consented to in writing by such Holder.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by telecopier, registered or certified
mail (return receipt requested), postage prepaid or courier to the parties at
their respective addresses set forth on the signature pages hereof (or at such
other address for any party as shall be specified by like notice, provided that
notices of a change of address shall be effective only upon receipt thereof).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; by confirmed
receipt of transmission, if telecopied; and on the next Business Day if timely
delivered to a courier guaranteeing overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders. If any transferee of any Holder shall acquire
Registrable Securities in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York without regard to
principles or rules of conflicts of law.
(h) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
15
thereby, it being intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
(i) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and is intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement, the Warrant Agreement and the Securities Purchase
Agreement supersede all prior agreements and understandings between the parties
with respect to such subject matter.
(j) Attorneys' Fees. In any action or proceeding brought to enforce
---------------
any provision of this Agreement or where any provision hereof is validly
asserted as a defense, the successful party shall, to the extent permitted by
applicable law, be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
(k) Further Assurances. Each party shall cooperate and take such
------------------
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
(l) Remedies. In the event of a breach or a threatened breach by any
--------
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by law.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that remedies at law for violations
hereof including monetary damages, are inadequate and that the right to object
in any action for specific performance or injunctive relief hereunder on the
basis that a remedy at law would be adequate is waived.
[Remainder of Page Intentionally Left Blank]
16
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
XXX XXX ROO, INC.
By: /s/ Xxxxxx X. Xxxxx
_______________________
Name: Xxxxxx X. Xxxxx
Title: President and Chief Financial Officer
Notice Information:
Ms. Xxxx Xxxxxx
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
phone: (000) 000-0000
fax: (000) 000-0000
17
REGISTRATION RIGHTS AGREEMENT
PURCHASER SIGNATURE PAGE
B III CAPITAL PARTNERS, L.P.
a Delaware Limited Partnership
By: DDJ CAPITAL III, LLC
Its General Partner
By: DDJ CAPITAL MANAGEMENT, LLC
Its Manager
By:_________________________________
Name:
Title:
Notice Information:
Xx. Xxx Xxxxxxx
DDJ Capital Management, LLC
000 Xxxxxx Xxxxxx, Xxxxx X-0
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
phone: (000) 000-0000
fax: (000) 000-0000
18
