6.10 PROMISSORY NOTE AND REGISTRATION RIGHTS
AGREEMENT IN FAVOR OF XXXXX XXXXX RISEAM
This Note has not been registered under the Securities Act of 1933, as
amended (the "1933 Act"), or under the provisions of any applicable state
securities laws, but has been acquired by the registered holder hereof for
purposes of investment and in reliance on statutory exemptions under the 1933
Act, and under any applicable state securities laws. This Note may not be
sold, pledged, transferred or assigned except in a transaction which is
exempt under provisions of the 1933 Act and any applicable state securities
laws or pursuant to an effective registration statement; and in the case of
an exemption, only if the Company has received an opinion of counsel
satisfactory to the Company that such transaction does not require
registration of this Note.
AWG, LTD.
$50,000 March 2, 1998
6% PROMISSORY NOTE
DUE January 1, 1999
ON March 2, 1998, FOR VALUE RECEIVED, the undersigned, AWG,
Ltd., a Nevada corporation having an office at 0000 Xxx Xxxxx Xxxx, Xxxx,
Xxxxxxxxxx 00000 (the "Company" or "Maker"), hereby promises to pay to the
order of Xxxxx Xxxxx Riseam his heirs, representatives and permitted assigns
(the "Holder"), at 000 Xxxx Xxxx, Xxxxxxx Xxxx, Xxxxxxx TW 12 1 H R or at
such other place as the Holder of this Note may designate in writing from
time to time, in currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts,
the principal sum of Fifty Thousand ($50,000.00) (the "Note Amount") together
with interest thereon at the rate of six percent (6%) per annum payable
quarterly commencing three (3) months from the date hereof and at the end of
each three (3) month period thereafter. In the event that for any reason
whatsoever any interest or other consideration payable with respect to this
Note shall be deemed to be usurious by a court of competent jurisdiction
under the laws of the State of Nevada or the laws of any other state
governing the repayment hereof, then so much of such interest or other
consideration as shall be deemed to be usurious shall be held by the Holder
as security for the repayment of the principal amount hereof and shall
otherwise be waived.
1. Transfers of Note to Comply with the 1933 Act
The Holder agrees that this Note may not be sold,
transferred, pledged, hypothecated or otherwise disposed of except as
follows: (i) to a person who, in the opinion of counsel to the Company, is a
person to whom the Note may legally be transferred without registration and
without the delivery of a current prospectus under the 1933 Act with respect
thereto and then only against receipt of an agreement of such
person to comply with the provisions of this Section 1 with respect to any
resale or other disposition of the Note; or (ii) to any person who complies
with the provisions of this Section 1 with respect to any resale or other
disposition of the Note; or (iii) to any person upon delivery of a prospectus
then meeting the requirements of the 1933 Act relating to such securities and
the offering thereof for such sale or disposition, and thereafter to all
successive assignees.
2. Payment
(a) This Note, together will all accrued but unpaid
interest thereon, shall be payable on the earliest to occur of the following:
(i) Twelve (12) months from the date of
issuance of this Note; or
(ii) The date of closing of any debt or equity
financing, public or otherwise, which results in gross proceeds to the
Company of not less than $500,000.
(b) The principal amount of this Note may be prepaid
by the Company, in whole or in part, without premium or penalty, at any time,
together with all accrued, but unpaid, interest thereon.
3. Covenants of Company
The Company covenants and agrees that, so long as
this Note shall be Outstanding it will:
(i) Promptly pay and discharge all lawful
taxes, assessments and governmental charges or levies imposed upon the
Company or upon its income and profits, or upon any of its property, before
the same shall become in default, as well as all lawful claims for labor,
materials and supplies which, if unpaid, might become a lien or charge upon
such properties or any part thereof; provided, however, that the Company
shall not be required to pay and discharge any such tax, assessment, charge,
levy or claim so long as the validity thereof shall be contested in good
faith by appropriate proceedings and the Company shall set aside on its books
adequate reserves with respect to any such tax, assessment, charge, levy or
claim so contested;
(ii) Do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate
existence, rights and franchises and comply with all laws applicable to the
Company as its counsel may advise;
(iii) At all times maintain, preserve, protect
and keep its property used and useful in the conduct of its business in good
repair, working order and condition, and from time to time make all needful
and proper repairs, renewals, replacements, betterments and improvements
thereto, so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
(iv) Keep adequately insured by financially
sound insurers, all property of a character usually insured by similar
corporations and carry such other insurance as is usually carried by similar
corporations; and
(v) At all times keep true and correct books
records and accounts.
4. Events of Default
(a) This Note shall become due and payable upon
written demand made by the Holder if one or more of the following events,
herein called events of default, shall happen and be continuing:
(i) Default in the payment of the principal
and accrued interest on this Note, when and as the same shall become due and
payable, and such default not being cured within fifteen (15) days of written
notice of said default being provided to the Company, whether by acceleration
or otherwise;
(ii) Default in the due observance or
performance of any covenant, condition or agreement on the part of the
Company to be observed or performed pursuant to the terms hereof, if such
default shall continue uncured for 15 days after written notice, specifying
such default, shall have been given to the Company by the Holder;
(iii) Application for, or consent to, the
appointment of a receiver, trustee or liquidator for the Company or of its
property under either federal, state or local laws;
(iv) Admission in writing of the Company's
inability to pay its debts as they mature;
(v) General assignment by the Company for the
benefit of creditors;
(vi) Filing by the Company of a voluntary
petition in bankruptcy or a petition or an answer seeking reorganization, or
an arrangement with creditors;
(vii) Entering against the Company of a court
order approving a petition filed against it under the federal bankruptcy
laws, which order shall not have been vacated or set aside or otherwise
terminated within 60 days; or
(viii) The Company selling, assigning or
otherwise transferring all or substantially all of its assets.
(b) The Company agrees that notice of the occurrence
of any event of default, other than a default for non-payment under Section
2(a)(i) herein, will be promptly given by the Company to the Holder at his or
her registered address by certified mail.
(c) In case any one or more of the events of default
specified above shall happen or be continuing, the Holder may proceed to
protect and enforce his right by suit in the specific performance of any
covenant or agreement contained in this Note or in aid of the exercise of any
power granted in this Note or may proceed to enforce the payment of this Note
or to enforce any other legal or equitable rights as such Holder
5. This Note is guaranteed as to repayment of the Note
Amount and interest thereon, by AWG, Inc., a Delaware corporation and
wholly-owed subsidiary of the Company.
6. The undersigned hereby waives presentment for payment,
demand, notice of non-payment and dishonor, protest and notice of protest;
waives trial by jury in any action or proceeding arising on, out of, under or
by reason of this Note; consents to any renewals, extensions and partial
payments of this Note or the indebtedness for which it is given without
notice to it, and consents that no such renewals, extensions or partial
payments or release or modification of any collateral securing this Note or
the indebtedness for which it is given shall discharge the Maker from
liability herein in whole or in part. If this Note be not paid when due and
if it be placed with an attorney for collection, the Maker, Makers, endorsers
and guarantors agree to pay all costs of collection, including reasonable
attorney's fees, together with any disbursements incurred, which is hereby
agreed to be just and reasonable and which shall be added to the amount due
under this Note and recoverable with the amount due under this Note.
7. Miscellaneous
(a) This Note has been issued by the Company
pursuant to authorization of the Board of Directors of the Company.
(b) The Company may consider and treat the person in
whose name this Note shall be registered as the absolute owner thereof for
all purposes whatsoever (whether or not this Note shall be overdue) and the
Company shall not be affected by any notice to the contrary. Subject to the
limitations herein stated, the registered owner of this Note shall have the
right to transfer this Note by assignment, and the transferee thereof shall,
upon his registration as owner of this Note, become vested with all the
powers and rights of the transferor. Registration of any new owner shall take
place upon presentation of this Note to the Company at its principal offices,
together with a duly authenticated assignment. In case of transfer by
operation of law, the transferee
agrees to notify the Company of such transfer and of his address, and to
submit appropriate evidence regarding the transfer so that this Note may be
registered in the name of the transferee. This Note is transferable only on
the books of the Company by the holder hereof, in person or by attorney, on
the surrender hereof, duly endorsed. Communications sent to any registered
owner shall be effective as against all holders or transferees of the Note
not registered at the time of sending the communication.
(c) Payments of interest shall be made as specified
above to the registered owner of this Note. Payment of principal shall be
made to the registered owner of this Note upon presentation of this Note on
or after maturity. No interest shall be due on this Note for such period of
time that may elapse between the maturity of this Note and its presentation
for payment.
(d) This Note may not be changed, modified or
terminated orally, nor may any of its provisions be waived, except by an
agreement in writing signed by the party against whom enforcement of such
change, modification or termination is sought.
(e) If any covenant or other provision of this Note
is invalid, illegal, or incapable of being enforced, by reason of any rule or
law or public policy, all other covenants and provisions of this Note shall
nevertheless remain in full force and effect, and no covenant or provision
shall be deemed dependent upon any other covenant or provision.
(f) The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Note.
(g) Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation
of this Note, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Note, if mutilated, the Company shall execute and deliver a new Note of like
tenor and date. Any such new Note executed and delivered shall constitute an
additional contractual obligation on the part of the Company, whether or not
this Note so lost, stolen, destroyed or mutilated shall be at any time
enforceable by anyone.
(h) This Note shall be construed and enforced in
accordance with the laws of the State of Nevada without regard to the
principles of conflict of law and shall be enforced only in the State or
Federal Courts located in the State of Nevada. All parties
hereto hereby consent and submit themselves to the in personam jurisdiction
thereof and waive any claims of forum non conviens.
IN WITNESS WHEREOF, AWG, LTD. has caused this Note to be
signed in its name by its President on the date first written above.
AWG, LTD.
By: /s/ Xxxx X. Xxxxxxxx
---------------------------
Xxxx X. Xxxxxxxx, President
STATE OF _______________________________)
) ss.:
COUNTY OF ______________________________)
On the ________ day of ________________ , 1998, before me
personally came Xxxx X. Xxxxxxxx to be known, who, being by me duly sworn,
did depose and say that he resides at ____________ ; that he is the President
of AWG, Ltd., a Nevada corporation, the corporation described in and which
executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the board of directors of said
corporation, and that he signed his name thereto by like order.
__________________________
Notary Public
GUARANTEE
In order to induce the Holder to make a loan of the Note
Amount to AWG, Ltd., a Nevada corporation (the "Company") and in
consideration of such loan which is to be evidenced by a Note dated March 2,
1998 by the Company to Xxxxx Xxxxx Riseam (the "Holder") in the sum of
$50,000.00, the undersigned, AWG, Inc., a Delaware corporation (the
"Guarantor") hereby agrees to unconditionally and irrevocably guarantee to
the Holder, his successors and assigns, the repayment of the Note Amount,
plus accrued interest, plus all costs, charges, advances, expenses, and
attorneys' fees reasonably incurred or paid by the Holder in protecting or
enforcing his rights under the Note.
The undersigned Guarantor hereby acknowledges and confirms
that the debt of $50,000.00 and interest, evidenced by the Note is justly
owing by the Company to the Holder without any defense(s), counterclaim(s) or
offset(s) of any kind.
The undersigned Guarantor hereby waives (1) notice of, and
acknowledge due notice of, acceptance of this guaranty by the Holder; (2)
notice of, and acknowledge due notice of, the reliance of the Holder on this
guaranty; (3) demand for payment from the Company or any person indebted in
any manner on or for any of the liabilities or obligations hereby guaranteed;
(4) presentment for payment of the Note or any instrument of the Company or
any other person, protest, notice of protest, notice of dishonor or notice of
any kind to any party thereto and to the undersigned Guarantor.
This guaranty shall continue in full force and be binding
upon the undersigned Guarantor and the successors and/or assigns of the
undersigned Guarantor. Any one or more of the undersigned Guarantors, or any
other party liable upon or in respect of any obligation hereby guaranteed may
be released without affecting the liability of the undersigned Guarantor not
so released.
IN WITNESS WHEREOF, the undersigned has executed this
instrument this 2nd day of March, 1998.
AWG, Inc.
By: _____________________________
Xxxx X. Xxxxxxxx, President
STATE OF ________________________________)
) ss.:
COUNTY OF _______________________________)
On the ________ day of ________________ , 1998, before me
personally came Xxxx X. Xxxxxxxx to be known, who, being by me duly sworn,
did depose and say that he resides at____________________ ; that he is the
President of AWG, Inc., a Delaware corporation, the corporation described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the board of directors of said corporation,
and that he signed his name thereto by like order.
_______________________
Notary Public
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of March 2,
1998, by and between AWG. Ltd., a Nevada corporation (the "Company"), and the
person whose name appears on the signature page attached hereto (individually
a "Holder" and collectively, with the holders of other Units issued in the
Offering, the "Holders").
WHEREAS, pursuant to a Subscription Agreement dated
February 2, 1998, between the Company and the Holders (the "Subscription
Agreement"), the Company has offered (the "Offering"), to accredited
investors only as that term is defined in Rule 501 of Regulation D as
promulgated under the Securities Act of 1933, as amended (the "1933 Act"), up
to five (5) units (the "Units"), each Unit consisting of the Company's one
(1) year six percent (6%) promissory note (collectively the "Promissory
Notes") in the principal amount of $10,000 and 100,000 shares of the
Company's Series A 6% Preferred Stock, $.001 par value per share (the
"Preferred Stock" or the "Shares").
WHEREAS, pursuant to the terms of and in order to induce
the Holders to enter into the Subscription Agreement to purchase the Units,
the Company and the Holders have agreed to enter into this Agreement;
WHEREAS, it is intended by the Company and the Holders that
this Agreement shall become effective immediately upon the acquisition by the
Holders of the Common Stock;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and in the Subscription Agreement, the
Company hereby agrees as follows:
A. REGISTRATION RIGHTS.
1. Registration Rights
(a) "Piggyback Registration". If the Company at any time
proposes to register any of its securities under the Securities Act of 1933,
as amended (the "1933 Act") (other than in connection with a merger or
pursuant to Form S-8 or other comparable form), the Company shall request
that the managing underwriter (if any) of such underwritten offering include
the Preferred Stock (collectively referred to as the "Registerable
Securities") in such registration. If such managing underwriter agrees to
include any of the Registerable Securities in the underwritten offering, the
Company shall at such time give prompt written notice to all Holders of its
intention to effect such registration and of such Holders' rights under such
proposed registration, and upon the request of any Holder delivered to the
Company within twenty (20) days after giving of such notice (which request
shall specify the Registerable Securities intended to be disposed of by such
Holder and the intended method of disposition thereof), the Company shall
include such Registerable Securities held by each such Holder requested to be
included in such registration; provided, however, that:
(i) If, at any time after giving such written
notice of the Company's intention to register any of the Holder's
Registerable Securities and prior to the effective date of the
registration statement filed in connection with such registration,
the Company shall determine for any reason not to register or to
delay the registration of such Registerable Securities, at its sole
election, the Company may give written notice of such determination
to each Holder and thereupon shall be relieved of its obligation to
register any Registerable Securities issued or issuable in
connection with such registration (but not from its obligation to
pay registration expenses in connection therewith or to register the
Registerable Securities in a subsequent registration); and in the
case of a determination to delay a registration shall thereupon be
permitted to delay registering any Registerable Securities for the
same period as the delay in respect of securities being registered
for the Company's own account.
(ii) If the managing underwriter in such
underwritten offering shall advise the Company that it declines to
include a portion or all of the Registerable Securities requested by
the Holders to be included in the registration statement, then all
or a specified portion of the Registerable Securities shall be
excluded from such registration statement (in case of an exclusion
as to a portion of such Registerable Securities, such portion shall
be allocated among such Holders in proportion to the respective
numbers of Registerable Securities requested to be registered by
each such Holder). In such event the Company shall give the Holder
prompt notice of the number of Registerable Securities excluded.
(b) Option to Include Registerable Securities in Offering.
The Holders, subject to the provisions of Section 1, shall have the option to
include their Registerable Securities in the Company's initial public
offering (the "IPO") underwritten by Xxxxx Xxxx and Shire, Inc. ("KMS"). The
Company shall not be required to include any of the Holders' Registerable
Securities in an underwritten offering of the Company's securities unless
such Holders accept the terms of the underwriting as agreed upon between the
Company and KMS (provided such terms are usual and customary for selling
stockholders) and the Holders agree to execute and/or deliver such documents
in connection with such registration as the Company or KMS may reasonably
request.
(c) Mandatory Registration. In the event the Holders have
not sold all of their Registerable Securities in connection with a
registration statement pursuant to Section 1.a, the Company will use its best
efforts to effect the registration of all remaining Registerable Securities
as soon as practicable, but not later than 180 days after the effective date
of such registration statement; provided, however, that such period may be
extended or delayed by the Company for one period of up to 90 days if, upon
the advice of counsel at the time such registration is required to be filed,
or at the time the Company
- 2 -
is required to exercise its best efforts to cause such registration statement
to become effective, such delay is advisable and in the best interests of the
Company because of the existence of non-public material information, or to
allow the Company to complete any pending audit of its financial statements.
(d) Cooperation with Company. Holders will cooperate with
the Company in all respects in connection with this Agreement, including,
timely supplying all information reasonably requested by the Company and
executing and returning all documents reasonably requested in connection with
the registration and sale of the Registerable Securities.
2. Registration Procedures. If and whenever the Company is required
by any of the provisions of this Agreement to use its best efforts to effect
the registration of any of the Registerable Securities under the 1933 Act,
the Company shall (except as otherwise provided in this Agreement), as
expeditiously as possible:
(a) prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement and shall use its best
efforts to cause such registration statement to become effective until the
earlier of when all the Registerable Securities are sold or become capable of
being publicly sold without registration under the 1933 Act;
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the 1933 Act with respect to
the sale or other disposition of all securities covered by such registration
statement whenever the Holder or Holders of such securities shall desire to
sell or otherwise dispose of the same (including prospectus supplements with
respect to the sales of securities or the exercise of warrants from time to
time in connection with a registration statement pursuant to Rule 415 of the
Commission);
(c) furnish to each Holder such numbers of copies of a
summary prospectus or other prospectus, including a preliminary prospectus or
any amendment or supplement to any prospectus, in conformity with the
requirements of the 1933 Act, and such other documents, as such Holder may
reasonably request in order to facilitate the public sale or other
disposition of the securities owned by such Holder;
(d) use its best efforts to register and qualify the
securities covered by such registration statement under such other securities
or blue sky laws of such jurisdictions as each Holder shall request, and do
any and all other acts and things which may be necessary or advisable to
enable such Holder to consummate the public sale or other disposition in such
jurisdictions of the securities owned by such Holder, except that
- 3 -
the Company shall not for any such purpose be required to qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified or to file therein any general consent to service of process;
(e) use its best efforts to list such securities on any
securities exchange on which any securities of the Company is then listed, if
the listing of such securities is then permitted under the rules of such
exchange;
(f) enter into and perform its obligations under an
underwriting agreement, if the offering is an underwritten offering, in usual
and customary form, with the managing underwriter or underwriters of such
underwritten offering;
(g) notify each Holder of Registerable Securities covered
by such registration statement, at any time when a prospectus relating
thereto covered by such registration statement is required to be delivered
under the 1933 Act, of the happening of any event of which it has knowledge
as a result of which the prospectus included in such 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 not misleading in the light of the circumstances then
existing;
(h) furnish, at the request of any Holder on the date such
Registerable Securities are delivered to the underwriters for sale pursuant
to such registration or, if such Registerable Securities are not being sold
through underwriters, on the date the registration statement with respect to
such Registerable Securities becomes effective, (i) an opinion, dated such
date, of the counsel representing the Company for the purpose of such
registration, addressed to the underwriters, if any, and to the Holder making
such request, covering such legal matters with respect to the registration in
respect of which such opinion is being given as the Holder of such
Registerable Securities may reasonably request and are customarily included
in such an opinion and (ii) letters, dated, respectively, (1) the effective
date of the registration statement and (2) the date such Registerable
Securities are delivered to the underwriters, if any, for sale pursuant to
such registration, from a firm of independent certified public accountants of
recognized standing selected by the Company, addressed to the underwriters,
if any, and to the Holder making such request, covering such financial,
statistical and accounting matters with respect to the registration in
respect of which such letters are being given as the Holder of such
Registerable Securities may reasonably request and are customarily included
in such letters: and
(i) take such other actions as shall be reasonably
requested by any Holder to facilitate the registration and sale of the
Registerable Securities; provided, however, that the Company shall not be
obligated to take any actions not specifically required elsewhere herein
which in the aggregate would cost in excess of $5,000.
- 4 -
3. Restrictions on Transfer of Registerable Securities. The Holder
agrees that without the prior written consent of KMS he will not sell or
transfer any of the Registerable Securities for a period of twenty-four (24)
months from the date hereof or, if the Registerable Securities are included
in a Registration Statement, eighteen (18) from the effective date of the
Registration Statement, whichever is earlier.
4. Expenses. All expenses incurred in any registration of the
Holders' Registerable Securities under this Agreement shall be paid by the
Company, including, without limitation, printing expenses, fees and
disbursements of counsel for the Company, expenses of any audits to which the
Company shall agree or which shall be necessary to comply with governmental
requirements in connection with any such registration, all registration and
filing fees for the Holders' Registerable Securities under federal and state
securities laws, and expenses of complying with the securities or blue sky
laws of any jurisdictions pursuant to Section 2(h)(i); provided, however, the
Company shall not be liable for (a) any discounts or commissions to any
underwriter; (b) any stock transfer taxes incurred with respect to
Registerable Securities sold in the Offering or (c) the fees and expenses of
counsel for any Holder.
5. Indemnification. In the event any Registerable Securities are
included in a registration statement pursuant to this Agreement:
(a) Company Indemnity. Without limitation of any other
indemnity provided to any Holder, either in connection with the Offering or
otherwise, to the extent permitted by law, the Company shall indemnify and
hold harmless each Holder, the affiliates, officers, directors and partners
of each Holder, any underwriter (as defined in the 0000 Xxx) for such Holder,
and each person, if any, who controls such Holder or underwriter (within the
meaning of the 1933 Act or the Securities Exchange Act of 1934 (the "Exchange
Act"), against any losses, claims, damages or liabilities (joint or several)
to which they may become subject under the 1933 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, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statements including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) 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 under which they
were made, not misleading, (iii) any violation or alleged violation by the
Company of the 1933 Act, the Exchange Act, or (iv) any state securities law
or any rule or regulation promulgated under the 1933 Act, the Exchange Act or
any state securities law, and the Company shall reimburse each such Holder,
affiliate, officer or director or partner, underwriter or controlling person
for any legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable to any Holder in any
such case
- 5 -
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 or any other officer,
director or controlling person thereof.
(b) Holder Indemnity. Each Holder shall indemnify and hold
harmless the Company, its affiliates, its counsel, officers, directors,
shareholders and representatives, any underwriter (as defined in the 0000
Xxx) and each person, if any, who controls the Company or the underwriter
(within the meaning of the 1933 Act or the Exchange Act), against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the 1933 Act, the Exchange Act or any state securities law, and
the Holder shall reimburse the Company and each such affiliate, officer or
director or partner, underwriter or controlling person for any legal or other
expenses incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; insofar as such losses,
claims, damages or liabilities (or actions with respect thereof) arise out of
or are based upon any statements or information provided by such Holder to
the Company in connection with the offer or sale of Registerable Securities.
(c) Notice; Right to Defend. Promptly after receipt by an
indemnified party under this Section 5 of notice of the commencement of any
action (including any governmental action), such indemnified party shall, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 5, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in and if the indemnifying party agrees in writing that it will
be responsible for any costs, expenses, judgments, damages and losses
incurred by the indemnified party with respect to such claim, 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
fees and expenses to be paid by the indemnifying party, if the indemnified
party reasonably believes that representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing 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 shall relieve such indemnifying party
of any liability to the indemnified party under this Agreement only if and to
the extent that such failure is prejudicial to its ability to defend such
action, and 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 Agreement.
(d) Contribution. If the indemnification provided for in
this Agreement is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, liability, claim, damage or
expense referred to therein, then the
- 6 -
indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the
other hand in connection with the statements or omissions which resulted in
such loss, liability, claim, damage or expense as well as any other relevant
equitable considerations. The relevant fault of the indemnifying party and
the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. Notwithstanding the foregoing, the amount
any Holder shall be obligated to contribute pursuant to the Agreement shall
be limited to an amount equal to the proceeds to such Holder of the
Registerable Securities sold pursuant to the registration statement which
gives rise to such obligation to contribute (less the aggregate amount of any
damages which the Holder has otherwise been required to pay in respect of
such loss, claim, damage, liability or action or any substantially similar
loss, claim, damage, liability or action arising from the sale of such
Registerable Securities).
(e) Survival of Indemnity. The indemnification provided by
this Agreement shall be a continuing right to indemnification and shall
survive the registration and sale of any Registerable Securities by any
person entitled to indemnification hereunder and the expiration or
termination of this Agreement.
6. Assignment of Registration Rights. The rights of the Holders
under this Agreement, including the rights to cause the Company to register
Registerable Securities may not be assigned without the written prior consent
of the Company.
7. Limitations on Other Registration Rights. Except as otherwise set
forth in this Agreement, the Company shall not, without the prior written
consent of the Holders of Registerable Securities representing a majority
thereof held by all the Holders, file any registration statement filed on
behalf of any person (including the Company) other than a Holder to become
effective during any period when the Company is not in compliance with this
Agreement.
8. Remedies.
(a) Time is of Essence. The Company agrees that time is of
the essence of each of the covenants contained herein and that, in the event
of a dispute hereunder, this Agreement is to be interpreted and construed in
a manner that will enable the Holders to sell their Registerable Securities
as quickly as possible after such Holders have indicated to the Company that
they desire their Registerable Securities to be registered.
- 7 -
Any delay on the part of the Company not expressly permitted under this
Agreement, whether material or not, shall be deemed a material breach of this
Agreement.
(b) Remedies Upon Default or Delay. The Company
acknowledges the breach of any part of this Agreement may cause irreparable
harm to a Holder and that monetary damages alone may be inadequate. The
Company therefore agrees that the Holder shall be entitled to injunctive
relief or such other applicable remedy as a court of competent jurisdiction
may provide. Nothing contained herein will be construed to limit a Holder's
right to any remedies at law, including recovery of damages for breach of any
part of this Agreement.
9. Notices.
(a) All communications under this Agreement shall be in
writing and shall be mailed by first class mail, postage prepaid, or
telegraphed or telexed with confirmation of receipt or delivered by hand or
by overnight delivery service:
(i) if to the Company, at:
AWG, Ltd.
0000 Xxx Xxxxx Xxxx
Xxxx, Xxxxxxxxxx 00000
or at such other address as it may have furnished in writing to the
Holders of Registerable Securities at the time outstanding; or
(ii) if to any Holder of any Registerable
Securities, to the address of such Holder as it appears in the stock or
warrant ledger of the Company.
(b) Any notice so addressed, when mailed by registered or
certified mail shall be deemed to be given three days after so mailed, when
telegraphed or telexed shall be deemed to be given when transmitted, or when
delivered by hand or overnight shall be deemed to be given when delivered.
10. Successors and Assigns. Except as otherwise expressly provided
herein, this Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of the Company and each of the Holders.
11. Amendment and Waiver. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, but only with the
written consent of the Company and the Holders of securities representing a
majority of the Registerable Securities; provided, however, that no such
amendment or waiver shall take away any registration right of any Holder of
Registerable Securities or reduce the amount of
- 8 -
reimbursable costs to any Holder of Registerable Securities in connection
with any registration hereunder without the consent of such Holder; further
provided, however, that without the consent of any other Holder of
Registerable Securities, any Holder may from time to time enter into one or
more agreements amending, modifying or waiving the provisions of this
Agreement if such action does not adversely affect the rights or interest of
any other Holder of Registerable Securities. No delay on the part of any
party in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by any party of any right,
power or remedy preclude any other or further exercise thereof, or the
exercise of any other right, power or remedy.
12. Counterparts. One or more counterparts of this Agreement may be
signed by the parties, each of which shall be an original but all of which
together shall constitute one and the same instrument.
13. Governing Law. This Agreement shall be construed in accordance
with and governed by the internal laws of the State of Nevada, without giving
effect to conflicts of law principles.
14. Invalidity of Provisions. If any provision of this Agreement is
or becomes invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein
shall not be affected thereby.
15. Headings. The headings in this Agreement are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the 2nd day of March, 1998.
AWG, LTD.
/s/ Xxxxx Xxxxx Riseam
----------------------------
Signature of Holder
By: /s/ Xxxx X. Xxxxxxxx Xxxxx Xxxxx Riseam
--------------------------- ----------------------------
Xxxx X. Xxxxxxxx, President Print Name of Holder
000 Xxxx Xxxx, Xxxxxxx Xxxx,
----------------------------
England TW 12 1 HR
----------------------------
Print Address of Holder
- 9 -
