10.6 - Reg. Rights.doc
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
as of June 6, 2001, by and among XxxxXx.xxx, Inc., a corporation duly
incorporated and existing under the laws of the State of Nevada (the "Company"),
and Xxxxxx Private Equity, LLC (hereinafter referred to as "Investor").
RECITALS:
WHEREAS, pursuant to the Company's offering ("Offering") of up to
Fifteen Million Dollars ($15,000,000) of Common Stock of the Company, pursuant
to that certain Investment Agreement of even date herewith (the "Investment
Agreement") between the Company and the Investor, the Company has agreed to sell
and the Investor has agreed to purchase, from time to time as provided in the
Investment Agreement, shares of the Company's Common Stock for a maximum
aggregate offering amount as described above;
WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed to issue to the Investor the Commitment Warrants and, in certain
events, Additional Warrants (as defined in the Warrant Antidilution Agreement
between the Company and the Investor) to purchase a number of shares of Common
Stock, exercisable for ten (10) years from their respective dates of issuance
(collectively, the "Warrants"); and
WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed to provide the Investor with certain registration rights with respect
to the Common Stock to be issued in the Offering and the Common Stock issuable
upon exercise of the Warrants as set forth in this Agreement.
TERMS:
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Certain Definitions. As used in this Agreement
(including the Recitals above), the following terms shall have the following
meanings (such meanings to be equally applicable to both singular and plural
forms of the terms defined):
"Additional Registration Statement" shall have the meaning set
forth in Section 3(b).
"Additional Warrants" shall have the meaning ascribed to it
the Warrant Antidilution Agreement between the Company and the Investor.
"Additional Warrant Shares" shall mean shares of Common Stock
isuuable upon exercise of any Additional Warrant.
"Amended Registration Statement" shall have the meaning set
forth in Section 3(b).
"Business Day" shall have the meaning set forth in the
Investment Agreement.
"Closing Bid Price" shall have the meaning set forth in the
Investment Agreement.
"Commitment Warrant" shall have the meaning as set forth in
the Investment Agreement.
"Common Stock" shall mean the common stock, par value $0.01,
of the Company.
"Due Date" shall mean the date that is one hundred twenty
(120) days after the date of this Agreement.
"Effective Date" shall have the meaning set forth in Section
2.3.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, together with the rules and regulations promulgated thereunder.
"Filing Deadline" shall mean the date that is forty-five
(45) days after the date of this Agreement.
"Ineffective Period" shall mean any period of time after the
Effective Date during the term hereof that the Registration Statement or any
Supplemental Registration Statement (each as defined herein) becomes ineffective
or unavailable for use for the sale or resale, as applicable, of any or all of
the Registrable Securities (as defined herein) for any reason (or in the event
the prospectus under either of the above is not current and deliverable).
"Investment Agreement" shall have the meaning set forth in the
Recitals hereto.
"Investor" shall have the meaning set forth in the preamble to
this Agreement.
"Holder" shall mean Investor, and any other person or entity
owning or having the right to acquire Registrable Securities or any permitted
assignee.
"Piggyback Registration" and "Piggyback Registration
Statement" shall have the meaning set forth in Section 4.
"Put" shall have the meaning as set forth in the Investment
Agreement.
"Register," "Registered," and "Registration" shall mean and
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act and pursuant
to Rule 415 under the Securities Act or any successor rule, and the declaration
or ordering of effectiveness of such registration statement or document.
"Registrable Securities" shall have the meaning set forth in
Section 2.1.
"Registration Statement" shall have the meaning set forth in
Section 2.2.
"Rule 144" shall mean Rule 144, as amended, promulgated under
the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, together with the rules and regulations promulgated thereunder.
"Supplemental Registration Statement" shall have the meaning
set forth in Section 3(b).
"Warrants" shall have the meaning set forth in the above
Recitals.
"Warrant Shares" shall mean shares of Common Stock issuable
upon exercise of any Warrant.
2. Required Registration.
2.1 Registrable Securities. "Registrable Securities" shall
mean those shares of the Common Stock of the Company together with any capital
stock issued in replacement of, in exchange for or otherwise in respect of such
Common Stock, that are: (i) issuable or issued to the Investor pursuant to the
Investment Agreement, or (ii) issuable or issued upon exercise of the Commitment
Warrants; provided, however, that notwithstanding the above, the following shall
not be considered Registrable Securities:
(a) any Common Stock which would otherwise be deemed
to be Registrable Securities, if and to the extent that those shares of Common
Stock may be resold in a public transaction without volume limitations or other
material restrictions without registration under the Securities Act, including
without limitation, pursuant to Rule 144 under the Securities Act; and
(b) any shares of Common Stock which have been sold
in a private transaction in which the transferor's rights under this Agreement
are not assigned.
2.2 Filing of Initial Registration Statement. The Company
shall, by the Filing Deadline, file a registration statement ("Registration
Statement") on Form SB-2 (or other suitable form, at the Company's discretion,
but subject to the reasonable approval of Investor), covering the resale of a
number of shares of Common Stock as Registrable Securities equal to at least
Twenty Five Million (25,000,000) shares of Common Stock and shall cover, to the
extent allowed by applicable law, such indeterminate number of additional shares
of Common Stock that may be issued or become issuable as Registrable Securities
by the Company pursuant to Rule 416 of the Securities Act. In the event that the
Company has not filed the Registration Statement by the Filing Deadline, then
the Company shall pay to Investor an amount equal to $250, in cash, for each of
the first ten (10) Business Day after the Filing Deadline until such
Registration Statement is filed, and $500, in cash, for each Business Day
thereafter until such Registration Statement is filed, payable within ten (10)
Business Days following the end of each calendar month in which such payments
accrue.
2.3 Response to SEC Comments; Registration Effective
Date.
(i) Company's Obligations. The Company shall use its
reasonable good faith efforts to have the Registration Statement declared
effective by the SEC (the date of such effectiveness is referred to herein as
the "Effective Date") by the Due Date, by
(a) responding to any comments to the Registration
Statement made by the Securities and Exchange Commission (the
"SEC") within thirty (30) days of the Company's receipt of
such comments, and repeating such process as necessary
thereafter up through at least two subsequent rounds of SEC
comments;
(b) consulting with the applicable SEC examiner(s)
regarding possible remedies to any impediments to
effectiveness of the Registration Statement identified by the
SEC, including any such impediments arising out of the
structure of the proposed offering as required by the
Investment Agreement (the "Offering Structure"); and
(c) only to the extent necessary following no fewer
than two rounds of SEC comments and receipt of any
notifications or other communications from the SEC that the
Registration Statement has not been, and is unlikely to be,
declared effective based primarily upon the Offering
Structure, providing the Holder's counsel a right to
reasonably assist the Company in causing the Registration
Statement to be declared effective by the SEC, such right to
be exercised within a period not to exceed forty-five (45)
days.
(ii) Impediment to Registration. If, prior to the the date
that is five (5) months from the date that the Registration Statement is filed
(the "Registration Period Termination Date"), the SEC notifies the Company that
the Offering Structure is an impediment to the Registration Statement being
declared effective and that such impediment can be remedied by (x) withdrawing
the Registration Statement, (y) making amendments to the Investment Agreement
and/or the Registration Rights Agreement, and (z) refiling the Registration
Statement (an "SEC Notice of Remedy"), then the Company shall be obligated to
use its reasonable efforts to carry out (x) - (z) above to cause the
Registration Statement to be declared effective through the same process
outlined in (i)(a) -(c) above for an additional period up through the
Registration Period Termination Date; provided, however, that any amendments
required to be made to the Investment Agreement and/or the Registration Rights
Agreement in accordance with (y) above do not have any actual or potential
direct or indirect adverse economic effect on the terms of the agreements as
they relate to the Company (the procedure in (x) - (z) above is referred to
hereinafter as a "Withdrawal, Amendment and Refiling").
2.4 Shelf Registration. The Registration Statement shall be
prepared as a "shelf" registration statement under Rule 415, and, subject to the
terms of this Agreement, shall be maintained effective as required in Section
3(a) below.
2.5 Supplemental Registration Statement. Within forty five
(45) days of any time that the Registration Statement does not cover a
sufficient number of shares of Common Stock to cover all outstanding Registrable
Securities, the Company shall promptly prepare and file with the SEC such
Supplemental Registration Statement and the prospectus used in connection with
such registration statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all such Registrable
Securities and shall use its best efforts to cause such Supplemental
Registration Statement to be declared effective as soon as possible.
2.6 Demand Registration for Additional Warrant Shares. Within
forty five (45) days of any time that the Company has issued to the Investor
Additional Warrants representing in excess of 100,000 Additional Warrant Shares
which have not yet been registered for resale, the Company shall promptly file a
registration statement (the "Additional Warrant Registration Statement") on any
suitable form, covering the resale of all then unregistered Additional Warrant
Shares and, to the extent allowed by applicable law, such indeterminate number
of additional shares of Common Stock that may be issued or become issuable as
Registrable Securities by the Company pursuant to Rule 416 of the Securities
Act.
3. Obligations of the Company. Whenever required under this Agreement
to effect the registration of any Registrable Securities, and subject to any
restrictions imposed under applicable securities or other law in the reasonable
discretion of the Company including without limitation Regulation FD, the
Company shall, in addition to any and all other obligations contained herein,
and as expeditiously as reasonably possible:
(a) Prepare and file with the Securities and Exchange
Commission ("SEC") a Registration Statement with respect to such Registrable
Securities and use its reasonable good faith efforts to cause such Registration
Statement to become effective in accordance with Section 2.3 above, and to
remain effective until the date that all Registrable Securities are resold
pursuant to such Registration Statement.
(b) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
with such Registration Statement ("Amended Registration Statement") or prepare
and file any additional registration statement ("Additional Registration
Statement," together with the Amended Registration Statement, "Supplemental
Registration Statements") as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all securities covered by
such Supplemental Registration Statements or such prior registration statement
and to cover the resale of all Registrable Securities.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus (if applicable), in conformity
with the requirements of the Securities Act, and such other documents as they
may reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its reasonable good faith efforts to register and
qualify the securities covered by such Registration Statement under such other
securities or Blue Sky laws of the jurisdictions in which the Holders are
located, or such other jurisdictions as shall be reasonably requested by the
Holders of the Registrable Securities covered by such Registration Statement and
of all other jurisdictions where legally required, provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions.
(e) [Intentionally Left Blank].
(f) As promptly as practicable after becoming aware of such
event, notify each Holder of Registrable Securities of the happening of any
event of which the Company has knowledge, as a result of which the prospectus
included in the Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, use its reasonable
good faith efforts promptly to prepare a supplement or amendment to the
Registration Statement to correct such untrue statement or omission, and deliver
a number of copies of such supplement or amendment to each Holder as such Holder
may reasonably request.
(g) Provide Holders with notice of the date that a
Registration Statement or any Supplemental Registration Statement registering
the resale of the Registrable Securities is declared effective by the SEC, and
the date or dates when the Registration Statement is no longer effective.
(h) Provide Holders and their representatives the opportunity
and a reasonable amount of time, based upon reasonable notice delivered to the
Company, to conduct a reasonable due diligence inquiry of Company's pertinent
financial and other records and make available its officers and directors for
questions regarding such information as it relates to information contained in
the Registration Statement.
(i) Provide Holders and their representatives the opportunity
to review the Registration Statement and all amendments or supplements thereto
prior to their filing with the SEC by giving the Holder at least five (5)
business days advance written notice prior to such filing.
(j) Provide each Holder with reasonably prompt notice of the
issuance by the SEC or any state securities commission or agency of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceeding for such purpose. The Company shall use its
reasonable good faith efforts to prevent the issuance of any stop order and, if
any is issued, to obtain the removal thereof at the earliest possible date.
(k) Use its reasonable good faith efforts to list the
Registrable Securities covered by the Registration Statement with all securities
exchanges or markets on which the Common Stock is then listed and prepare and
file any required filing with the NASD, American Stock Exchange, NYSE and any
other exchange or market on which the Common Stock is then listed.
4. Ineffective Period.
(a) Ineffective Period Payment. Within five (5) Business Days
after the last day of any Ineffective Period, the Company will pay to the
Investor in cash ("Ineffective Period Payments"), as liquidated damages for such
suspension and not as a penalty, an amount equal to the number of shares of
Common Stock issued to the Investor in any Put with a Pricing Period End Date
(as defined in the Investment Agreement) that is thirty (30) business days or
less prior to the date that the Ineffective Period commences, multiplied by the
difference of:
(i) the highest closing price of the Company's
Common Stock for any trading day during the Ineffective
Period,
minus
(ii) the lowest closing price of the Company's Common
Stock for the five (5) trading days including and immediately
following the last trading day of such Ineffective Period.
(b) Liquidated Damages. The parties hereto acknowledge and
agree that the sums payable as Ineffective Period Payments shall give rise to
liquidated damages and not penalties. The parties further acknowledge that (i)
the amount of loss or damages likely to be incurred by the Holder is incapable
or is difficult to precisely estimate, (ii) the amounts specified bear a
reasonable proportion and are not plainly or grossly disproportionate to the
probable loss likely to be incurred by the Investor, and (iii) the parties are
sophisticated business parties and have been represented by sophisticated and
able legal and financial counsel and negotiated this Agreement at arm's length.
5. Piggyback Registration. Subject to the limitations imposed under
Section 6 hereof, if anytime prior to the date that the Registration Statement
is declared effective or during any Ineffective Period (as defined in the
Investment Agreement) the Company proposes to register (including for this
purpose a registration effected by the Company for shareholders other than the
Holders) any of its Common Stock under the Securities Act in connection with the
public offering of such securities solely for cash (other than a registration
relating solely for the sale of securities to participants in a Company stock
plan or a registration on Form S-4 promulgated under the Securities Act or any
successor or similar form registering stock issuable upon a reclassification,
upon a business combination involving an exchange of securities or upon an
exchange offer for securities of the issuer or another entity), the Company
shall, at such time, promptly give each Holder written notice of such
registration (a "Piggyback Registration Statement"). Upon the written request of
each Holder given by fax within ten (10) days after mailing of such notice by
the Company, the Company shall cause to be included in such registration
statement under the Securities Act all of the Registrable Securities that each
such Holder has requested to be registered ("Piggyback Registration") and all of
the Additional Warrant Shares that are then unregistered, in each case to the
extent such inclusion does not violate the registration rights of any other
security holder of the company granted prior to the date hereof; provided,
however, that nothing herein shall prevent the Company from withdrawing or
abandoning such registration statement prior to its effectiveness.
6. Limitation on Obligations to Register under a Piggyback
Registration. In the case of a Piggyback Registration pursuant to an
underwritten public offering by the Company, if the managing underwriter
determines and advises that the inclusion in the related Piggyback Registration
Statement of all Registrable Securities proposed to be included would interfere
with the successful marketing of the securities proposed to be registered by the
Company, then the number of such Registrable Securities to be included in such
Piggyback Registration Statement, to the extent any such Registrable Securities
are included in such Piggyback Registration Statement, shall be allocated among
all Holders who had requested Piggyback Registration pursuant to the terms
hereof, in the proportion that the number of Registrable Securities which each
such Holder seeks to register bears to the total number of Registrable
Securities sought to be included by all Holders. If required by the managing
underwriter of such an underwritten
public offering, the Holders shall enter into an agreement limiting the number
of Registrable Securities to be included in such Piggyback Registration
Statement and the terms, if any, regarding the future sale of such Registrable
Securities.
7. Dispute as to Registrable Securities. In the event the Company
believes that shares sought to be registered under Section 2 or Section 5 by
Holders do not constitute "Registrable Securities" by virtue of Section 2.1 of
this Agreement, and the status of those shares as Registrable Securities is
disputed, the Company shall provide, at its expense, an Opinion of Counsel,
reasonably acceptable to the Holders of the Securities at issue (and
satisfactory to the Company's transfer agent to permit the sale and transfer),
that those securities may be sold immediately, without volume limitation or
other material restrictions, without registration under the Securities Act, by
virtue of Rule 144 or similar provisions.
8. Furnish Information. At the Company's request, each Holder shall
furnish to the Company such information regarding Holder, the Registrable
Securities held by it, and the intended method of disposition of such securities
to the extent required to effect the registration of its Registrable Securities
or to determine that registration is not required pursuant to Rule 144 or other
applicable provision of the Securities Act. The Company shall include as it
deems fit all information provided by such Holder pursuant hereto in the
Registration Statement, substantially in the form supplied, except to the extent
such information is not permitted by law.
9. Expenses. All expenses, other than commissions and fees and expenses
of counsel to the selling Holders, incurred in connection with registrations,
filings or qualifications pursuant hereto, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company, shall be borne by the Company.
10. Indemnification. In the event any Registrable Securities
are included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the officers, directors, partners, legal counsel,
and accountants of each Holder, any underwriter (as defined in the Securities
Act, or as deemed by the Securities Exchange Commission, or as indicated in a
registration statement) for such Holder and each person, if any, who controls
such Holder or underwriter within the meaning of Section 15 of the Securities
Act or the Exchange Act, against any losses, claims, damages, or liabilities
(joint or several) to which they may become subject under the Securities Act,
the Exchange Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements or omissions: (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any amendments or supplements thereto, or (ii)
the omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, and
the Company will reimburse each such Holder, officer or director, underwriter or
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 10(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability, or action if such settlement is effected
without the consent of the Company , nor shall the Company be liable in any such
case for any such loss, claim, damage, liability, or action to the extent that
it arises out of or is based upon a violation which occurs in reliance upon and
in conformity with written information furnished expressly for use in connection
with such registration by any such Holder, officer, director, underwriter or
controlling person; provided however, that the above shall not relieve the
Company from any other liabilities which it might otherwise have.
(b) Promptly after receipt by an indemnified party under this
Section 10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume, the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the reasonably incurred fees and
expenses of one such counsel to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 10, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 10.
(c) To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which it would be required to make if such foregoing undertaking was
enforceable which is permissible under applicable law.
(d) The obligations of the Company and Holders under this
Section 10 shall survive the resale, if any, of the Common Stock, the completion
of any offering of Registrable Securities in a Registration Statement under this
Agreement, and otherwise.
11. Reports Under Exchange Act. With a view to making available to the
Holders the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration, the Company agrees
to:
(a) make and keep public information available, as
those terms are understood and defined in Rule 144; and
(b) use its reasonable good faith efforts to file with the SEC
in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act.
12. Amendments to Registration Rights. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the
written consent of each Holder affected thereby. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each Holder,
each future Holder, and the Company.
13. Notices. All notices required or permitted under this Agreement
shall be made in writing signed by the party making the same, shall specify the
section under this Agreement pursuant to which it is given, and shall be
addressed if to (i) the Company at: XxxxXx.xxx, Inc., 00000 Xxxxx Xxxxxx, Xxxxx
000, Xxxxx, XX 00000; Telephone:(000) 000-0000, Facsimile: (000) 000-0000 (or at
such other location as directed by the Company in writing) and (ii) the Holders
at their respective last address as the party as shown on the records of the
Company. Any notice, except as otherwise provided in this Agreement, shall be
made by fax and shall be deemed given at the time of transmission of the fax.
14. Termination. This Agreement shall terminate on the date all
Registrable Securities cease to exist (as that term is defined in Section 2.1
hereof); but without prejudice to (i) the parties' rights and obligations
arising from breaches of this Agreement occurring prior to such termination (ii)
other indemnification obligations under this Agreement.
15. Assignment. No assignment, transfer or delegation, whether by
operation of law or otherwise, of any rights or obligations under this Agreement
by the Company or any Holder, respectively, shall be made without the prior
written consent of the majority in interest of the Holders or the Company,
respectively; provided that the rights of a Holder may be transferred to a
subsequent holder of the Holder's Registrable Securities (provided such
transferee shall provide to the Company, together with or prior to such
transferee's request to have such Registrable Securities included in a
Registration, a writing executed by such transferee agreeing to be bound as a
Holder by the terms of this Agreement) provided that such transfer of such
Registrable Securities is otherwise permissible in accordance with the
Investment Agreement, and the Company hereby agrees to file an amended
registration statement including such transferee as a selling security holder
thereunder; and provided further that the Company may transfer its rights and
obligations under this Agreement to a purchaser of all or a substantial portion
of its business if the obligations of the Company under this Agreement are
assumed in connection with such transfer, either by merger or other operation of
law (which may include without limitation a transaction whereby the Registrable
Securities are converted into securities of the successor in interest) or by
specific assumption executed by the transferee.
16. Arbitration; Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia applicable to
agreements made in and wholly to be performed in that jurisdiction, except for
matters arising under the Act or the Securities Exchange Act of 1934, which
matters shall be construed and interpreted in accordance with such laws. Any
controversy or claim arising out of or related to the Transaction Documents or
the breach thereof, shall be settled by binding arbitration in Atlanta, Georgia
in accordance with the Expedited Procedures (Rules 53-57) of the Commercial
Arbitration Rules of the American Arbitration Association ("AAA"). A proceeding
shall be commenced upon written demand by Company or any Investor to the other.
The arbitrator(s) shall enter a judgment by default against any party, which
fails or refuses to appear in any properly noticed arbitration proceeding. The
proceeding shall be conducted by one (1) arbitrator, unless the amount alleged
to be in dispute exceeds two hundred fifty thousand dollars ($250,000), in which
case three (3) arbitrators shall preside. The arbitrator(s) will be chosen by
the parties from a list provided by the AAA, and if they are unable to agree
within ten (10) days, the AAA shall select the arbitrator(s). The arbitrators
must be experts in securities law and financial transactions. The arbitrators
shall assess costs and expenses of the arbitration, including all attorneys' and
experts' fees, as the arbitrators believe is appropriate in light of the merits
of the parties' respective positions in the issues in dispute. Each party
submits irrevocably to the jurisdiction of any state court sitting in Atlanta,
Georgia or to the United States District Court sitting in Georgia for purposes
of enforcement of any discovery order, judgment or award in connection with such
arbitration. The award of the arbitrator(s) shall be final and binding upon the
parties and may be enforced in any court having jurisdiction. The arbitration
shall be held in such place as set by the arbitrator(s) in accordance with Rule
55.
Although the parties, as expressed above, agree that all
claims, including claims that are equitable in nature, for example specific
performance, shall initially be prosecuted in the binding arbitration procedure
outlined above, if the arbitration panel dismisses or otherwise fails to
entertain any or all of the equitable claims asserted by reason of the fact that
it lacks jurisdiction, power and/or authority to consider such claims and/or
direct the remedy requested, then, in only that event, will the parties have the
right to initiate litigation respecting such equitable claims or remedies. The
forum for such equitable relief shall be in either a state or federal court
sitting in Atlanta, Georgia. Each party waives any right to a trial by jury,
assuming such right exists in an equitable proceeding, and irrevocably submits
to the jurisdiction of said Georgia court. Georgia law shall govern both the
proceeding as well as the interpretation and construction of this Agreement and
the transaction as a whole.
18. Specific Performance. The Holder shall be entitled to the
remedy of specific performance in the event of the Company's breach of this
Agreement, the parties agreeing that a remedy at law would be inadequate.
19. Entire Agreement; Written Amendments Required. This
Agreement, including the Exhibits attached hereto, the Investment Agreement, the
Commitment Warrant, the Common Stock certificates, and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof,
and no party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein. Except as
[INTENTIONALLY LEFT BLANK]
expressly provided herein, neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
this 6th day of June, 2001.
XXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx Xxxxxx, President
Address: Attn: Xxxxxx Xxxxxx, President
00000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Telephone (000) 000-0000
Facsimile (000) 000-0000
INVESTOR:
XXXXXX PRIVATE EQUITY, LLC.
By: ___/s/ Xxxx X. Xxxxxx ____________
-------------------------------------
Xxxx X. Xxxxxx, Manager
Address: 000 Xxxxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
