EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("AGREEMENT") is made and entered
into as of December 17, 2001, by and among Excalibur Holdings, Inc., a Texas
corporation (the "COMPANY"), Seneca Capital, L.P., a Delaware limited
partnership ("SENECA LP"), Seneca Capital International, Ltd., a corporation
organized under the laws of the Cayman Islands ("SENECA INTERNATIONAL") (who are
collectively referred to as "SENECA"), and such other persons who may execute
this Agreement and are listed on SCHEDULE 1.
RECITALS
WHEREAS, concurrently with the execution of this Agreement, the Company
has entered into a Series A Preferred Stock Purchase Agreement of even date
herewith (the "PURCHASE AGREEMENT"), pursuant to which the Company has agreed to
issue and sell shares of the Company's Series A Convertible Preferred Stock,
$.001 par value per share (the "SERIES A PREFERRED STOCK"), to the purchasers
signatory to the Purchase Agreement, to the extent and in such amounts as set
forth therein.
WHEREAS, concurrently with the execution of this Agreement, the Holders
(as defined herein) will receive warrants (the "WARRANTS") to purchase an
aggregate of five hundred fifty thousand (550,000) shares of the Series A
Preferred Stock.
WHEREAS, this Agreement is being entered into pursuant to Section 7.9
of the Purchase Agreement.
WHEREAS, as a condition to the obligations of the Holders under the
Purchase Agreement, the Company has agreed to grant the registration rights with
respect to the Registrable Common (as defined herein) pursuant to this Agreement
on the terms and conditions set forth herein.
WHEREAS, certain capitalized terms used herein without definition have
the meanings specified in the Purchase Agreement or Section 1 herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Holders hereby acknowledge and agree as
follows:
SECTION 1. DEFINITIONS.
As used in this Agreement, the following capitalized terms, not
otherwise defined in the Purchase Agreement, shall have the meanings as set
forth herein:
1.1. "AFFILIATE" of any Person means any Person who controls, is
controlled by or is under common control with any other Person or Persons. For
the purposes of this definition, "control" has the meaning specified as of the
date of this Agreement for that word in Rule 405 promulgated by the Commission
under the Securities Act.
1.2. "BOARD" means the Board of Directors of the Company.
1.3. "COMMISSION" means the United States Securities and Exchange
Commission, and any successor thereto.
1.4. "COMMON STOCK" means the Company's common stock, $.001 par value.
1.5. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated from time to time thereunder.
1.6. "HOLDERS" means (a) holders as of the date of this Agreement of
Series A Preferred Stock, each of whom is a party to this Agreement, (b) any
subsequent legal or beneficial owner of Series A Preferred Stock or Registrable
Common who has become a party to this Agreement in accordance with Section 11 of
this Agreement.
1.7. "MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, prospects, assets, properties, or financial condition of the Company
(or the Public Company).
1.8. "PERSON" includes all natural persons, corporations, business
trusts, associations, limited liability companies, partnerships, joint ventures,
governments, agencies, political subdivisions and other entities of whatever
nature.
1.9. "PUBLIC COMPANY" shall mean a corporation (a) which issues
securities to the holders of outstanding shares of capital stock of the
Corporation in connection with (i) a merger, acquisition, or consolidation of
the Corporation into or with such corporation (or an Affiliate thereof), or (ii)
any sale, lease, license (on an exclusive basis) or transfer by the Corporation
of all or substantially all its assets to such corporation (or an Affiliate
thereof), and (b) whose business operations were dormant immediately before such
merger, acquisition, consolidation, sale, lease, license, or transfer.
1.10. "PUBLIC COMPANY BOARD" means the Board of Directors of the Public
Company.
1.11. "PUBLIC COMPANY COMMON STOCK" shall mean the common stock of the
Public Company.
1.12. "PUBLIC COMPANY PREFERRED STOCK" shall have the meaning set forth
in the definition of "Reorganization" below.
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1.13. "PURCHASE AGREEMENT" has the meaning specified in the Recitals.
1.14. "REGISTRABLE COMMON" means (a) any shares of Public Company
Common Stock which have been issued or are issuable upon the conversion of the
Public Company Preferred Stock, (b) any shares of Public Company Common Stock
which have been issued in the Reorganization in exchange for Series A Preferred
Stock or Common Stock which was issued upon the conversion of the Series A
Preferred Stock, (c) any shares of Public Company Common Stock held by any
Holder, and (d) any share of Public Company Common Stock issued as a dividend,
stock split, reclassification, recapitalization or other distribution with
respect to or in exchange for or replacement of any Registrable Common;
provided, however, that shares of Public Company Common Stock shall no longer be
Registrable Common (i) when they shall have been effectively registered under
the Securities Act and sold by the Holder thereof in accordance with such
registration or sold by the Holder pursuant to Section 4(1) of the Securities
Act or Rule 144, or (ii) when registration under the Securities Act would no
longer be required for the immediate public distribution of such shares of
Public Company Common Stock as a result of the provisions of Rule 144.
1.15. "REGISTER," "REGISTERED" AND "REGISTRATION" refer 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.
1.16. "REORGANIZATION" shall mean the merger, acquisition, or
consolidation of the Corporation into or with the Public Company (or an
Affiliate thereof), or any sale, lease, license (on an exclusive basis) or
transfer by the Corporation of all or substantially all its assets to the Public
Company (or an Affiliate thereof), in each case which results in (a) the
conversion or exchange of all shares of Series A Preferred Stock into or for all
shares of a series of preferred stock of the Public Company (the "PUBLIC COMPANY
PREFERRED STOCK") that has rights, preferences and privileges which are
substantially similar to those of the Series A Preferred Stock, (b) the exchange
of all other outstanding shares of capital stock of the Corporation for similar
capital stock of the Public Company, (c) the shareholders of the Corporation
(including the holders of Common Stock, the holders of Series A Preferred Stock
on an as-if converted basis, and the holders of Convertible Securities on an
fully diluted, as-if converted basis) immediately prior to the transaction own
at least eighty percent (80%) of the then outstanding shares of capital stock
(on a fully diluted, as-if converted basis) of the Public Company immediately
after the transaction, and (d) the Public Company becoming subject to the
reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, with respect to the Public Company Common Stock.
1.17. "RULE 144" means Rule 144 promulgated by the Commission under the
Securities Act, as such rule may be amended from time to time, or any successor
rule thereto.
1.18. "SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated from time to time thereunder.
1.19. "SERIES A PREFERRED STOCK" means the Company's Series A Preferred
Stock (which includes the shares of Series A Preferred Stock issued pursuant to
the Purchase Agreement and shares of Series A Preferred Stock which may be
issued upon exercise of the Warrants) and any shares of Series A Preferred Stock
issued in payment of a dividend upon any share of Series A Preferred Stock and
(b) any other capital stock issued as a dividend or other distribution with
respect to, or in replacement of, any Series A Preferred Stock.
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1.20. "WARRANTS" has the meaning specified in the Recitals.
SECTION 2. REGISTRATION RIGHTS.
2.1. REQUIRED REGISTRATION.
2.1.1. Subject to the limitations and requirements set forth
in this Section 2.1, as soon as practicable after the closing date of
the Reorganization, but in no event more than forty-five (45) days
after the closing date of the Reorganization, the Company (or the
Public Company) shall prepare and file a Registration Statement under
the Securities Act, covering the Registrable Common, and shall use its
best efforts to cause such Registration Statement to become effective
as soon as is practicable.
2.1.2. If the Company (or the Public Company) shall furnish to
each Holder within thirty (30) days after the closing of the
Reorganization a certificate signed by the President of the Company (or
the Public Company) stating that, in the good faith judgment of the
Board (or the Public Company Board) it would be seriously detrimental
to, and have a Material Adverse Effect on, the Company (or the Public
Company) and its shareholders for such Registration Statement to be
filed as required in Section 2.1.1 and it is therefore essential to
defer the filing of such Registration Statement, the Company (or the
Public Company) shall have the right to defer such filing for a period
ending not later than ninety (90) days from the date of such
certification. Except in the event of a stop order contemplated by
Section 3.9, the Company (or the Public Company) may delay the
registration required by this Section 2.1 not more than once.
2.1.3. If the Holders intend to distribute the Registrable
Common covered by the Registration Statement by means of an
underwriting, a majority in interest of the Holders shall execute a
notice indicating such intent and submit such notice to the Company (or
the Public Company). The Company (or the Public Company) shall select
the underwriter, with the approval of a majority in interest of the
Holders, which approval shall not be unreasonably withheld.
Notwithstanding any other provision of this Section 2, if the managing
underwriter advises the Holders in writing that marketing factors
require reducing the number of shares to be underwritten, then the
number of shares of Registrable Common included in the underwriting
shall be reduced pro rata among all participating Holders in proportion
(as nearly as practicable) to the amount of Registrable Common owned by
each Holder; provided, however that such reduction shall be made only
if all other securities to be included (other than the Registrable
Common) already have been entirely excluded from the underwriting.
Nothing in this Section 2.1.3 shall prohibit a Holder whose shares have
been reduced in such underwriting from reselling such Holder's shares
outside of the underwriting if the Registration Statement is effective,
no stop order contemplated by Section 3.9 has been issued, and such
Holder has not received a notice to discontinue under Section 9.
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2.1.4. The Holders acknowledge that the Registration Statement
will cover any shares of Common Stock (or Public Company Common Stock)
where the holder of such shares have previously been granted
registration rights with respect to such shares.
2.2. INCIDENTAL REGISTRATION.
2.2.1. Each time the Company (or the Public Company) shall
determine to proceed with the actual preparation and filing of a
Registration Statement under the Securities Act in connection with the
proposed offer and sale for cash of any of its equity securities for
its own account or the account of any of its security holders (other
than pursuant to Section 2.1 or a registration on Form S-8 or Form S-4
or their equivalents), the Company (or the Public Company) shall give
written notice of its determination to all record Holders of
Registrable Common not theretofore registered under the Securities Act
and sold (a "PARTICIPATION NOTICE") at least twenty (20) days before
the anticipated filing date of any such Registration Statement, and
such notice shall offer to all Holders the opportunity to have any or
all of the Registrable Common held by such Holders included in such
Registration Statement (subject to an underwriter's cutback
contemplated by Section 2.2.3). Upon the written request of a record
Holder of any Registrable Common given within twenty (20) days after
receipt of a Participation Notice, the Company (or the Public Company)
will, except as herein provided, cause all such Registrable Common, the
record Holders of which have so requested registration thereof, to be
included in such Registration Statement on the same terms and
conditions as the securities being registered by the Company, provided
that the shares of Series A Preferred Stock (or Public Company
Preferred Stock) submitted for registration shall be converted into
Common Stock (or Public Company Common Stock) in such Registration
Statement or such Holder shall deliver a written commitment to the
Company (or the Public Company) to convert such Series A Preferred
Stock (or Public Company Preferred Stock) into shares of Common Stock
(or Public Company Common Stock) immediately prior to the effective
time of such Registration Statement, all to the extent requisite to
permit the sale or other disposition by the prospective seller or
sellers of the Registrable Common to be so registered. Any Holder's
request for such inclusion may be withdrawn, in whole or in part, at
any time prior to the effective date of such Registration Statement, so
long as such withdrawal does not delay, hinder, or otherwise adversely
affect the proposed offering. If any registration pursuant to this
Section 2.2 shall be underwritten in whole or in part, the Company (or
the Public Company) may require that the Registrable Common requested
for inclusion pursuant to this Section 2.2 be included in the
underwriting on the same terms and conditions as the securities
otherwise being sold through the underwriters.
2.2.2. Nothing contained in this Agreement shall prevent the
Company (or the Public Company) from, at any time, abandoning or
delaying any such registration initiated by it. If the Company (or the
Public Company) determines not to proceed with a registration after the
registration statement has been filed with the Commission and the
Company's (or the Public Company's) decision not to proceed is
primarily based upon the anticipated public offering price of the
securities to be sold by the Company (or the Public Company), the
Company (or the Public Company) shall promptly complete the
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registration for the benefit of those selling security Holders who wish
to proceed with a public offering of their securities and who bear all
expenses incurred by the Company (or the Public Company) thereafter as
the result of such registration arising after the Company (or the
Public Company) has decided not to proceed.
2.2.3. If in the good faith judgment of the managing
underwriter of such public offering, the inclusion of all of the
Registrable Common originally covered by a request for registration
pursuant to this Section 2.2 would interfere with the successful
marketing of the shares of stock offered by the Company (or the Public
Company), the shares of stock otherwise to be included in the
underwritten public offering shall be reduced pro rata among the
Holders requesting such registration and may, in the managing
underwriter's sole discretion, be reduced to no shares of Registrable
Common included in the underwriting; provided, however, in such event
only the Holders and the Company (or the Public Company) may sell
shares of Registrable Common in such registration without the consent
of the Holders of at least sixty-six percent (66%) of the then
outstanding Registrable Common.
2.3. UNDERWRITING ARRANGEMENTS APPLICABLE TO REQUIRED AND INCIDENTAL
REGISTRATIONS. The right of any Holder to include Registrable Common in any
underwritten registration pursuant to this Agreement shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Common in the underwriting. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company (or the Public Company)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected.
SECTION 3. REGISTRATION PROCEDURES. When the Company (or the Public Company) is
required by the terms of this Agreement to effect the registration of
Registrable Common under the Securities Act, the Company (or the Public Company)
will do the following:
3.1. FILING. Prepare and file with the Commission a Registration
Statement with respect to such securities, and use its best efforts to cause
such Registration Statement to become effective;
3.2. PERIOD OF EFFECTIVENESS. Use its best efforts, which shall include
the filing and preparation with the Commission of amendments and supplements to
the Registration Statement and the prospectus contained therein, to cause such
Registration Statement to remain continuously effective from the date it becomes
effective for a period ending on the earlier of (i) when all Registrable Common
covered by the Registration Statement have been sold or (ii) when all
Registrable Common covered by the Registration Statement may be sold without
registration under the Securities Act pursuant to the exemptions provided by
Rule 144 under the Securities Act during any ninety (90) day period without
restriction on volume, or (b) (i) two (2) years following the date on which the
Registration Statement becomes effective under the Securities Act for any
Registration Statement pursuant to which any of the Registrable Common are being
offered exclusively or (ii) ninety (90) days for any Registration Statement
pursuant to which shares of Common Stock (or Public Company Common Stock) are
being offered for the account of the Company (or the Public Company) along with
any of the Registrable Common;
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3.3. COPIES. Furnish to the Holders participating in such registration
and to the underwriters of the securities being registered such reasonable
number of copies of the Registration Statement, preliminary prospectus, final
prospectus and such other documents as such Holders or underwriters may
reasonably request in order to facilitate the public offering of such
securities;
3.4. BLUE SKY. Use its best efforts to register or qualify the
securities covered by such Registration Statement under such state securities or
blue sky laws of such jurisdictions as such participating Holders may reasonably
request in writing, except that the Company (or the Public Company) shall not
for any purpose be required to execute a general consent to service of process
or to qualify to do business as a foreign corporation in any jurisdiction
wherein it is not so qualified;
3.5. NOTIFICATION. Notify the Holders participating in such
registration, promptly after it shall receive notice thereof, of any letter of
comments regarding the Registration Statement received from the Commission, the
time when such Registration Statement has become effective or an amendment or
supplement to any prospectus forming a part of such Registration Statement has
been filed, or the notice required by Section 9;
3.6. AMENDMENT NOTICE. Notify such Holders promptly of any request by
the Commission for the amending or supplementing of such Registration Statement
or prospectus or for additional information;
3.7. AMENDMENT. Prepare and file with the Commission, promptly upon the
request of any such Holders, any amendments, supplements, or post-effective
amendments to such Registration Statement or prospectus which, in the opinion of
counsel for such Holders (and concurred in by counsel for the Company (or the
Public Company)), is required under the Securities Act or the rules and
regulations thereunder is necessary to keep such Registration effective for the
time periods set forth in Section 3.2;
3.8. UPDATE. Prepare and promptly file with the Commission and promptly
notify such Holders of the filing of such amendment or supplement to such
Registration Statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event shall
have occurred as the result of which any such prospectus or any other prospectus
as then in effect would include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading;
3.9. STOP ORDERS. Advise such Holders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of such Registration Statement or the
initiation or threatening of any proceeding for that purpose and promptly use
its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued; and
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3.10. COMPLIANCE ISSUES. Not file any amendment or supplement to such
Registration Statement or prospectus to which a majority in interest of such
Holders shall have reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the requirements of the
Securities Act or the rules and regulations promulgated thereunder, after having
been furnished with a copy thereof at least three (3) business days prior to the
filing thereof (provided, however, that any reports filed pursuant to the
Exchange Act need not be reviewed nor approved by such Holders), unless, in the
opinion of counsel for the Company (or the Public Company), the filing of such
amendment or supplement is reasonably necessary to protect the Company (or the
Public Company) from any liabilities under any applicable federal or state law
and such filing will not violate applicable law.
SECTION 4. EXPENSES. With respect to the registration required pursuant to
Section 2.1 hereof (except as otherwise provided in such Section) and with
respect to each inclusion of Registrable Common in a Registration Statement
pursuant to Section 2.2 hereof (except as otherwise provided in such Section),
the Company (or the Public Company) shall bear the following fees, costs and
expenses: all registration, filing and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company (or the Public
Company), fees and disbursements of counsel for the underwriter or underwriters
of such securities (if the Company (or the Public Company) and or selling
security Holders are required to bear such fees and disbursements), all internal
Company (or the Public Company) expenses, all legal fees and disbursements and
other expenses of complying with state securities or blue sky laws of any
jurisdictions in which the securities to be offered are to be registered or
qualified, the reasonable fees and disbursements of one special counsel for the
selling security Holders and the premiums and other costs of policies of
insurance obtained by the Company (or the Public Company) against liability (if
any) arising out of such public offering. All other fees and disbursements of
any accountants or advisors for the selling security Holders, underwriting
discounts and commissions and transfer taxes relating to the shares included in
the offering by the selling security Holders, and any other expenses incurred by
the selling security Holders not expressly included above, shall be borne by the
selling security Holders.
SECTION 5. INDEMNIFICATION. In the event that any Registrable Common is included
in a Registration Statement under Section 2.1 or 2.2 hereof:
5.1. INDEMNIFICATION BY COMPANY. To the fullest extent permitted by
law, the Company (or the Public Company) will indemnify and hold harmless each
Holder of Registrable Common which is included in a Registration Statement
pursuant to the provisions hereof, its directors, officers, employees, partners,
principals, equity holders, managed or advised accountants, advisors,
representatives, agents, and any underwriter (as defined in the Securities Act)
for such Holder and each Person, if any, who controls such Holder or such
underwriter within the meaning of the Securities Act, from and against, and will
reimburse such Holder and each such underwriter and controlling Person with
respect to, any and all loss, claim, damage, liability and expense
(collectively, "LOSSES") to which such Holder or any such underwriter or
controlling Person may become subject under the Securities Act, state securities
laws or otherwise, and the Company (or the Public Company) will pay to each such
Holder, underwriter or controlling person any legal or other costs or expenses
reasonably incurred by such person in connection with investigating or defending
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any such Loss, insofar as such Losses are caused by or arise out of any untrue
statement or alleged untrue statement of any material fact contained in such
Registration Statement, any prospectus contained therein or any amendment or
supplement thereto, or arise out of or are based upon the 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; provided, however, that neither the Company nor
the Public Company will be liable in any such case to the extent that any such
Loss arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished by such Holder, such underwriter or such controlling Person in writing
specifically for use in the preparation thereof; provided however, that the
indemnity agreement in this Section 5.1 shall not apply to amounts paid in
settlement of any such Loss if such settlement is effected without the consent
of the Company (or the Public Company), which consent shall not be unreasonably
withheld, and that the foregoing indemnity obligation with respect to any
preliminary prospectus shall not inure to the benefit of any Holder on account
of any Loss whatsoever arising from the sale of any Registrable Common by such
Holder to any person if (A) a copy of the final prospectus (as amended or
supplemented if such amendments or supplements shall have been furnished to such
Holder prior to the confirmation of the sale involved) shall not have been sent
or given by or on behalf of such Holder to such person, if required by law, with
or prior to the written confirmation of the sale involved, and (B) the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such preliminary prospectus from which such Loss
arose was corrected in the final prospectus (as amended or supplemented if such
amendments or supplements thereto shall have been furnished as aforesaid).
5.2. INDEMNIFICATION BY HOLDERS. To the fullest extent permitted by
law, each Holder of Registrable Common which is included in a Registration
Statement pursuant to the provisions hereof will indemnify and hold harmless the
Company, the Public Company, their respective its directors, officers,
employees, partners, principals, equity holders, managed or advised accountants,
advisors, representatives, agents, each Person, if any, who controls the Company
and the Public Company within the meaning of the Securities Act, any other
Holder selling securities pursuant to such Registration Statement, any
controlling Person of any such selling Holder, any underwriter and any
controlling Person of any such underwriter (including any broker or dealer
through whom such of the shares may be sold) (each, an "INDEMNITEE") from and
against, and will reimburse any Indemnitee with respect to, any and all Losses
to which such Indemnitee may become subject under the Securities Act, state
securities laws or otherwise, and such Holder will pay to any Indemnitee any
legal or other costs or expenses reasonably incurred by such person in
connection with investigating or defending any such Loss, insofar as such Losses
are caused by or arise out of any untrue or alleged untrue statement of any
material fact contained in such Registration Statement, any prospectus contained
therein or any amendment or supplement thereto, or arise out of or are based
upon the omission or the 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, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in reliance upon
and in conformity with written information furnished by such Holder specifically
for use in the preparation thereof; provided, however, that the indemnity
agreement in this Section 5.2 shall not apply to amounts paid in settlement of
any such Loss if such settlement is effected without the consent of the
indemnifying Holder, which consent shall not be unreasonably withheld; provided,
however, that such indemnifying Holder shall not, without approval of each party
being indemnified pursuant to this Section 5.2, which approval shall not be
unreasonably withheld, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term the giving by the
claimant or plaintiff to the parties being so indemnified of a release from all
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liability with respect to such claim or litigation; and provided further, that
the foregoing indemnity obligation with respect to any preliminary prospectus
shall not inure to the benefit of either the Company or the Public Company on
account of any Loss whatsoever arising from the sale of any Registrable Common
by the Holder to any person if (A) a copy of the final prospectus (as amended or
supplemented if such amendments or supplements shall have been furnished to such
Holder prior to the confirmation of the sale involved) shall not have been sent
or given by or on behalf of such Holder to such person, if required by law, with
or prior to the written confirmation of the sale involved, and (B) the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such preliminary prospectus from which such Loss
arose was corrected in the final prospectus (as amended or supplemented if such
amendments or supplements thereto shall have been furnished as aforesaid);
provided, further that the obligations of each Holder under this Section 5.2
shall be limited to an amount equal to the proceeds actually received by such
Holder of Registrable Common sold as contemplated herein, unless such claim,
loss, damage, liability or action resulted from such Holder's fraudulent
misconduct.
5.3. CONTRIBUTION. In any case in which either (i) any Holder of
Registrable Common which is included in a Registration Statement pursuant to the
provisions hereof, or its directors, officers, employees, partners, principals,
equity holders, managed or advised accountants, advisors, representatives,
agents, and any underwriter (as defined in the Securities Act) for such Holder
and each Person, if any, who controls such Holder or such underwriter within the
meaning of the Securities Act, makes a claim for indemnification pursuant to
this Section 5 but it is judicially determined (by the entry of a final judgment
or decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding that this Section 5 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling Holder or any such controlling
person in circumstances for which indemnification is required by this Section 5,
then, in each such case, the Company and such Holder will contribute to the
aggregate Losses to which they may be subject (after contribution from others)
in such proportions so that such holder is responsible for the portion
represented by the percentage that the proceeds actually received by such Holder
of Registrable Common sold as contemplated herein bears to the proceeds actually
received from the sale of all securities pursuant to the Registration Statement,
and the Company is responsible for the remaining portion; provided, however,
that, in any such case, (A) no such Holder will be required to contribute any
amount in excess of the proceeds actually received by such Holder of Registrable
Common sold as contemplated herein, and (B) 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 or entity who is not guilty of
such fraudulent representation.
5.4. INDEMNIFICATION PROCEDURES. Promptly after receipt by a party
entitled to indemnification pursuant to this Section 5 (each, an "INDEMNIFIED
PARTY") of notice of the commencement of any action involving the subject matter
of the foregoing indemnity provisions such Indemnified Party will, if a claim is
to be made against the party obligated to provide indemnification pursuant to
this section (each, an "INDEMNIFYING PARTY"), promptly notify the Indemnifying
Party of the commencement thereof; but the omission to provide such notice will
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not relieve the Indemnifying Party from any liability hereunder, except to the
extent that the delay in giving, or failing to give, such notice has a material
adverse effect upon the ability of the indemnifying party to defend against the
claim. In case such action is brought against an Indemnified Party, the
Indemnifying Party shall have the right to participate in and, at the
Indemnifying Party's option, to assume the defense thereof, singly or jointly
with any other Indemnifying Party similarly notified, with counsel reasonably
satisfactory to the Indemnified Party; provided, however, that if the defendants
in any action include both the Indemnified Party and the Indemnifying Party and
the Indemnified Party shall have reasonably concluded based on advice of counsel
that there may be legal defenses available to any Indemnified Parties that are
different from or additional to those available to the Indemnifying Party, or if
there is a conflict of interest which would prevent counsel for the Indemnifying
Party from also representing the Indemnified Party, the Indemnified Party shall
have the right to select counsel to participate in the defense of such action on
behalf of such Indemnified Party at the expense of the Indemnifying Party;
provided that the Indemnifying Party shall be responsible for the expense of
only one such special counsel selected jointly by the Indemnified Parties, if
there is more than one Indemnified Party. After notice from an Indemnifying
Party to any Indemnified Party of such Indemnifying Party's election to assume
the defense of the action, the Indemnifying Party will not be liable to such
Indemnified Party pursuant to this Section 5 for any legal or other expense
subsequently incurred by such Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation, unless (i) the Indemnified
Party shall have employed counsel in accordance with the proviso of the
preceding sentence, or (ii) the Indemnifying Party shall not have employed
counsel reasonably satisfactory to the Indemnified Party to represent the
Indemnified Party within a reasonable time after the notice of the commencement
of the action, or (iii) the Indemnifying Party has authorized the employment of
counsel for the Indemnified Party at the expense of the Indemnifying Party.
SECTION 6. TERMINATION OF REGISTRATION OBLIGATIONS. This Agreement, and the
registration rights set forth herein, shall terminate upon that time at which
each Holder is able to sell all of such Holder's Registrable Common under Rule
144 promulgated under the Securities Act during any ninety (90) day period.
SECTION 7. COOPERATION. Any Holder whose Registrable Common is to be included in
a Registration Statement either filed pursuant to Section 2.1 or as part of a
Company (or Public Company) registration agrees to cooperate with all reasonable
requests by the Company (or the Public Company) necessary to effectuate the
purposes of this Agreement, including by timely providing the Company (or the
Public Company) with all information necessary to file a Registration Statement.
SECTION 8. SELLER INFORMATION. The Company (or the Public Company) may require
each selling Holder of Registrable Common as to which any registration is being
effected to furnish to the Company (or the Public Company) such information
regarding such Holder, such Holder's Registrable Common and such Holder's
intended method of disposition as the Company (or the Public Company) may from
time to time reasonably request; provided that such information shall be used
only in connection with such registration. If the Registration Statement refers
to any Holder by name or otherwise as the Holder of any securities of the
Company (or the Public Company), then such Holder shall promptly (i) notify the
Company (or the Public Company) and its counsel of the existence of any fact of
11
which such Holder becomes aware and the happening of any event which relates to
Holder or the distribution of the securities owned by such Holder which results
in the Registration Statement containing an untrue statement of material fact or
omitting to state a material fact required to be stated therein or necessary to
make any statements therein not misleading, or the prospectus included in such
Registration Statement containing an untrue statement of material fact or
omitting to state a material fact required to be stated therein or necessary to
make any statements therein, in light of the circumstances under which they were
made, not misleading, and (ii) provide to the Company (or the Public Company)
such information which relates to Holder or the distribution of the securities
owned by such Holder as shall be necessary to enable the Company (or the Public
Company) to prepare a supplement or post-effective amendment to such
Registration Statement or related prospectus or any document incorporated
therein by reference or file any other documents required so that such
Registration Statement will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
SECTION 9. NOTICE TO DISCONTINUE. Each Holder acknowledges that the ability of
such Holder to resell the Registrable Common is subject to the Commission's
review of the Registration Statement and the Company's (and the Public
Company's) legal obligation to update the prospectus made part of the
Registration Statement from time to time as circumstances warrant. If the
Commission does not declare the Registration Statement effective, the Holders
will not be able to publicly resell the Registrable Common except pursuant to
Rule 144 under the Securities Act, which among other things, requires that the
Registrable Common be held for at least 12 months prior to any public resale. If
the Commission does not declare the Registration Statement effective, investors
will not be able to publicly resell the Registrable Common pursuant to the
Registration Statement during any periods that the prospectus made part of the
Registration Statement is materially out of date or otherwise requires
amendment. Each holder of Registrable Securities agrees that, upon receipt of
any notice from the Company (or the Public Company) of the happening of any
event which causes the prospectus relating to the Registrable Common to include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, such Holder shall forthwith discontinue
disposition of Registrable Common pursuant to the Registration Statement
covering such Registrable Common until such Holder's receipt of the copies of
the supplemented or amended prospectus required by Section 3.8 and, if so
directed by the Company, such Holder shall deliver to the Company (or the Public
Company) (at the Company's (or the Public Company's) expense) all copies, other
than permanent file copies, then in such Holder's possession of the prospectus
covering such Registrable Common which is current at the time of receipt of such
notice. If the Company (or the Public Company) shall give any such notice, the
Company (or the Public Company) shall extend the period during which such
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days in excess of ten (10) business days during the period from
and including the date of the giving of such notice to and including the date
when the Holder shall have received the copies of the supplemented or amended
prospectus.
12
SECTION 10. "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees as follows:
10.1.1. Following the effective date of the Reorganization,
such Holder shall not, directly or indirectly, sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant
any option to purchase or otherwise transfer or dispose of, other than
for estate planning purposes, more than five percent (5%) of the
Registrable Common held by the Holder as of the date of this Agreement,
in any one-month period commencing on the effective date of the
Reorganization, except for bona fide gifts to persons who agree in
writing to be bound by the terms of this Agreement; provided however,
that (i) the executive officers and directors of the Company and the
Public Company, as well as each holder of at least one percent (1%) of
the Company's Common Stock or the Public Company's Common Stock (both
on an as-if-converted basis), shall have agreed to be bound by
substantially the same terms and conditions, and (ii) the time period
requested for such market stand-off shall not exceed two (2) years.
10.1.2. Following the effective date of the Reorganization, if
the Company (or the Public Company) files a registration statement
under the Securities Act in connection with the Company's (or the
Public Company's) proposed offer and sale for cash of its securities,
and in the good faith judgment of the managing underwriter of such
public offering, the sale of the Registrable Common pursuant to the
Registration Statement filed pursuant to Section 2.1 hereof would
interfere with the successful marketing of the securities offered by
the Company (or the Public Company) in such public offering, then such
Holder shall not, directly or indirectly, sell, offer to sell, contract
to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of, other than for
estate planning purposes, any of the Registrable Common held by the
Holder, except for (a) bona fide gifts to persons who agree in writing
to be bound by the terms of this Agreement and (b) sales of Registrable
Common pursuant to Section 2.2 hereof; provided however, that (i) the
executive officers and directors of the Company and the Public Company,
as well as each holder of at least one percent (1%) of the Company's
Common Stock or the Public Company's Common Stock (both on an
as-if-converted basis), shall have agreed to be bound by substantially
the same terms and conditions, (ii) the time period requested for such
market stand-off shall not exceed one-hundred eighty (180) days after
the closing of such public offering, and (iii) the restriction shall
not apply to a registration relating solely to employee, consultant or
advisor benefit plans on Form S-1, Form SB-2 or Form S-8 (or similar
forms promulgated after the date hereof) or a registration relating
solely to a transaction pursuant to Rule 145 promulgated under the
Securities Act on Form S-4 (or similar forms promulgated after the date
hereof).
10.1.3. The Company and the Public Company may impose
stop-transfer instructions during such stand-off period with respect to
the securities of each Holder subject to this restriction if necessary
to enforce such restrictions.
SECTION 11. LIMITATIONS ON ADDITIONAL REGISTRATION RIGHTS. From and after the
date of this Agreement, neither the Company nor the Public Company shall enter
into any agreement granting any holder or prospective holder of any securities
of the Company (or the Public Company) registration rights with respect to such
securities unless the prior approval of the Holders of sixty-six percent (66%)
of the then outstanding Registrable Common has been obtained and such new holder
is made a party to this Agreement.
13
SECTION 12. MISCELLANEOUS.
12.1. WAIVERS, AMENDMENTS AND APPROVALS. In each case in which the
approval of the Holders is required by the terms of this Agreement, such
requirement shall be satisfied by a vote or the written action of Holders of at
least sixty-six percent (66%) of the Registrable Common, unless a lower
percentage is specifically required by the terms of this Agreement. Any term or
provision of this Agreement requiring performance by or binding upon the Company
(or the Public Company or Holders may be amended, and the observance of any term
of this Agreement may be waived (either generally or in a particular instance
and either retroactively or prospectively), only by a writing signed by the
Company (or the Public Company) as approved by the Board (or the Public Company
Board) and the Holders of at least sixty-six percent (66%) of the then
outstanding Registrable Common. Any amendment or waiver effected in accordance
with this Section shall be binding upon the Holders (including permitted assigns
pursuant to Section 10 hereof). The waiver by a party of any breach hereof or
default in payment of any amount due hereunder or default in the performance
hereof shall not be deemed to constitute a waiver of any other default or
succeeding breach or default. Written notice of any such waiver, consent or
agreement of amendment, modification or supplement shall be given to the record
Holders of Registrable Common who did not give written consent thereto.
Notwithstanding the foregoing, any party to this Agreement may waive any of its
rights hereunder without the consent of any other party.
12.2. WRITTEN CHANGES, WAIVERS, ETC. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only by a statement in writing signed by the party against which enforcement of
the change, waiver, discharge or termination is sought, except to the extent
provided in Section 10.1.
12.3. NOTICES. All notices, requests, consents and other communications
required or permitted hereunder shall be in writing and shall be personally
delivered or, mailed first-class postage prepaid, registered or certified mail
or dispatched by recognized delivery service or via facsimile, as follows:
12.3.1. to a Holder, addressed to such Holder at the
address(es) set forth on SCHEDULE 1;
with a copy (which shall not constitute notice to a
Holder) to:
14
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
12.3.2. to the Company (or the Public Company), to:
Excalibur Holdings, Inc.
00000 Xxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy (which shall not constitute notice to the
Company or the Public Company) to:
Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
and such notices and other communications shall for all purposes of this
Agreement be treated as being effective or having been given if delivered
personally, or, if sent by mail delivery service or facsimile, when received.
Any party may change its address for such communications by giving notice
thereof to the other parties in conformity with this Section.
12.4. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENTS, ETC. All
representations, warranties, covenants and agreements contained herein or in any
certificate, document or instrument delivered pursuant to this Agreement (other
than any legal opinion) shall survive the execution and delivery of this
Agreement or such certificate, document or instrument, as the case may be. All
statements contained in any certificate, document or instrument prepared by or
on behalf of the Company and delivered by the Company (other than legal
opinions) shall constitute representations and warranties by the Company
hereunder.
12.5. DELAYS OR OMISSIONS. Except as expressly provided herein, no
delay or omission to exercise any right, power or remedy accruing to any party
under this Agreement shall impair any such right, power or remedy of such party
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence thereto, or of a similar breach or default thereafter 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 party hereto of
any breach or default under the Agreement, or any waiver on the part of any
party 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.
15
12.6. OTHER REMEDIES. Any and all remedies herein expressly conferred
upon a party shall be deemed cumulative with, and not exclusive of, any other
remedy conferred hereby or by law on such party, and the exercise of any one
remedy shall not preclude the exercise of any other.
12.7. ATTORNEYS' FEES. Should suit be brought to enforce or interpret
any part of this Agreement, the prevailing party shall be entitled to recover,
as an element of the costs of suit and not as damages, reasonable attorneys'
fees to be fixed by the court (including, without limitation, costs, expenses
and fees on any appeal). The prevailing party shall be the party entitled to
recover its costs of suit, regardless of whether such suit proceeds to final
judgment. A party not entitled to recover its costs shall not be entitled to
recover attorneys' fees. No sum for attorneys' fees shall be counted in
calculating the amount of a judgment for purposes of determining if a party is
entitled to recover costs or attorneys' fees.
12.8. ENTIRE AGREEMENT. This Agreement, the schedules hereto, the
documents referenced herein and the exhibits thereto, constitute the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and thereof and supersede all prior and contemporaneous agreements
or understandings, inducements or conditions, express or implied, written or
oral, between the parties with respect hereto and thereto, including without
limitation the Term Sheet. The express terms hereof control and supersede any
course of performance or usage of the trade inconsistent with any of the terms
hereof.
12.9. SEVERABILITY. Should any one or more of the provisions of this
Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement,
shall be given effect separately from the provision or provisions determined to
be illegal or unenforceable and shall not be affected thereby. The parties
further agree to replace such void or unenforceable provision of this Agreement
with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of the void or unenforceable
provision.
12.10. SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon and be enforceable
by the successors and assigns of the parties hereto, including the holder or
holders from time to time of any of the Registrable Common; provided, however,
that no holder of any of the Registrable Common shall be entitled to assign or
transfer any rights hereunder to any party or entity (including existing and
future customers of the Company or the Public Company) engaged in the same
industry that the Company or the Public Company is so engaged in as of the date
hereof. Whether a party or entity is engaged in the same industry as the Company
or the Public Company will be reasonably determined by the Board or the Public
Company Board. Notwithstanding the foregoing, a successor or assign of a Holder
shall not be regarded as an "HOLDER" for purposes of this Agreement, unless such
transferee is an Affiliate of the transferor or it acquires or is otherwise the
holder of at least 25,000 shares of Series A Preferred Stock or the Common
Stock, Public Company Preferred Stock, or Public Company Common Stock equivalent
(subject to appropriate adjustment for any stock dividends, stock splits,
subdivisions, reorganizations and other capitalization changes effected after
the Closing Date).
16
12.11. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Texas without regard to its principles of
conflicts of laws.
12.12. COUNTERPARTS. This Agreement may be executed concurrently in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
12.13. AGGREGATION OF STOCK. All shares of Common Stock, Series A
Preferred Stock, Public Company Preferred Stock and/or Registrable Common held
or acquired by entities or persons controlled by, or under common control with,
an Investor shall be aggregated together for purposes of determining the
availability of rights under this Agreement.
17
IN WITNESS WHEREOF, this Agreement is hereby executed as of the date first
written above.
COMPANY: EXCALIBUR HOLDINGS, INC.
------------------------------------
By:
---------------------------------
Its:
--------------------------------
INVESTORS:
SENECA CAPITAL, L.P.
------------------------------------
By:
--------------------------------
Its:
--------------------------------
SENECA CAPITAL INTERNATIONAL, LTD.
------------------------------------
By:
--------------------------------
Its:
--------------------------------
(SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
18
SCHEDULE 1
LIST OF HOLDERS
---------------
Seneca Capital, L.P.
c/o Seneca Capital Investment Partnership
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Seneca Capital International, Ltd.
c/o Seneca Capital Investment Partnership
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Sch. 1 - 2
