AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is entered into as of April 10, 2001, by and among Xxxxxxxx.xxx
Enterprises Inc., a corporation duly incorporated and existing under the laws of
the State of Yukon, Province of Canada (the "Company"), and the investor as
named on the signature page hereto (hereinafter referred to as "Investor"), and
amends and restates the Registration Rights Agreement between the parties dated
on or about November 16, 2000.
RECITALS:
WHEREAS, pursuant to the Company's offering ("Offering") of up to
Twenty-Five Million U.S. Dollars (U.S.$25,000,000), excluding any funds paid
upon exercise of the Warrants, of Common Stock of the Company pursuant to that
certain Amended and Restated 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 of Twenty-Five U.S. Million Dollars
(U.S.$25,000,000);
WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed to issue to the Investor the Commitment Warrants (as defined in the
Investment Agreement) 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 five (5) 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 in the
Warrant Antidilution Agreement between the Company and the Investor.
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"Additional Warrant Shares" shall mean shares of Common Stock
issuable 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, no par value, of the
Company.
"Due Date" shall mean the date that is one hundred eighty (180)
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 April 16, 2001.
"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.
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"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 Thirty-Five Million
(35,000,000) shares of Common Stock and shall cover, to the extent allowed
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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 U.S.$500, in cash, FOR EACH
BUSINESS DAY AFTER THE FILING DEADLINE 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 REGISTRATION EFFECTIVE DATE. The Company shall use its best
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.
2.4 SHELF REGISTRATION. The Registration Statement shall be
prepared as a "shelf" registration statement under Rule 415, and shall be
maintained effective until all Registrable Securities are resold pursuant to the
Registration Statement.
2.5 SUPPLEMENTAL REGISTRATION STATEMENT. Anytime 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. Anytime that
the Company has issued to the Investor Additional Warrants, where the number of
Additional Warrant Shares represented by such warrants, which have not yet been
registered for resale, have an aggregate exercise price in excess of $150,000
(regardless of whether or not such warrants have or have not been exercised),
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, the Company shall, as
expeditiously and 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 best efforts to cause such Registration Statement to become effective
and to remain effective until all Registrable Securities are resold pursuant to
such Registration Statement, notwithstanding any Termination or Automatic
Termination (as each is defined in the Investment Agreement) of the Investment
Agreement.
(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
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("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 best 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, of 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 best 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 by 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 ten (10)
business days advance written notice prior to such filing.
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(j) Provide each Holder with 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 best 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 best 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 listed.
4. INEFFECTIVE PERIOD. Within five (5) Business Days of the last day of
any calendar month in which any Ineffective Period occurs, the Company will pay
to the Investor in cash, for each trading day of such Ineffective Period that
has occurred during that calendar month, as liquidated damages for such
suspension and not as a penalty, an amount equal to X%, accruing daily, of (i)
the number of Registrable Securities held by the Investor as of the close of
trading on such trading day, multiplied by (ii) the closing bid price of the
Company's Common Stock on such trading day, accruing each trading day until the
suspension is lifted, where "X%" shall equal 0.2% per day for each of the first
twenty (20) trading days, in the aggregate, on which the Registration Statement
is subject to any Ineffective Period or Ineffective Periods, and where "X%"
shall equal 0.3% thereafter.
5. PIGGYBACK REGISTRATION. 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 in writing that the inclusion in the related Piggyback
Registration Statement of all Registrable Securities or Additional Warrant
Shares proposed to be included would interfere with the successful marketing of
the securities proposed
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to be registered by the Company, then the number of such Registrable Securities
or Additional Warrant Shares to be included in such Piggyback Registration
Statement, to the extent any such Registrable Securities or Additional Warrant
Shares may be 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 or
Additional Warrant Shares which each such Holder seeks to register bears to the
total number of Registrable Securities or Additional Warrant Shares 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 or Additional Warrant Shares to be included
in such Piggyback Registration Statement and the terms, if any, regarding the
future sale of such Registrable Securities or Additional Warrant Shares.
7. DISPUTE AS TO REGISTRABLE SECURITIES. In the event the Company
believes that shares sought to be registered under Section 2 or Section 4 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 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
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untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or 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 9(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 (which consent shall not be unreasonably
withheld), 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) Each Holder of any securities included in such registration
being effected shall indemnify and hold harmless the Company, its directors and
officers, each underwriter and each other person, if any, who controls (within
the meaning of the Securities Act) the Company or such other indemnified party,
against any liability, joint or several, to which any such indemnified party may
become subject under the Securities Act or any other statute or at common law,
insofar as such liability (or actions in respect thereof) arises out of or is
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained, on the effective date thereof, in any registration statement
under which securities were registered under the Securities Act at the request
of such Holder, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, to the extent, but only to the
extent, that such untrue statement or alleged untrue statement was made in such
registration statement, preliminary or final prospectus, amendment or supplement
thereto in reliance upon and in conformity with information furnished in writing
to the Company by such Holder specifically for use therein, or (ii) any omission
or alleged omission by such Holder to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, to
the extent, but only to the extent, that such omission or alleged omission was
made in such registration statement, preliminary or final prospectus, amendment
or supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by such Holder specifically for use therein.
Such Holder shall reimburse any indemnified party for any legal fees incurred in
investigating or defending any such liability; PROVIDED, HOWEVER, that such
Holder's obligations hereunder shall be limited to an amount equal to the
proceeds to such Holder of the securities sold in any such registration; and
PROVIDED FURTHER, that no Holder shall be required to indemnify any party
against any liability arising from any untrue or misleading statement or
omission contained in any preliminary prospectus if such deficiency is corrected
in the final prospectus or for any liability which arises out of the failure of
such party to deliver a prospectus as required by the Securities Act.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
overnmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party
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under this Section 9, 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 9, 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 9.
(d) In the event that the indemnity provided in paragraphs (a)
and/or (b) of this Section 9 is unavailable to or insufficient to hold harmless
an indemnified party for any reason, the Company and each Holder agree to
contribute to the aggregate claims, losses, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Holders may be subject in such proportion as is appropriate to reflect the
relative fault of the Company and the Holders in connection with the statements
or omissions which resulted in such Losses. Relative fault shall be determined
by reference to whether any alleged untrue statement or omission relates to
information provided by the Company or by the Holders. The Company and the
Holders agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation that does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 9,
each person who controls a Holder of Registrable Securities or Additional
Warrant Shares within the meaning of either the Securities Act or the Exchange
Act and each director, officer, partner, employee and agent of a Holder shall
have the same rights to contribution as such holder, and each person who
controls the Company within the meaning of either the Securities Act or the
Exchange Act and each director and officer of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
(e) The obligations of the Company and Holders under this Section 9
shall survive the resale, if any, of the Common Stock, the completion of any
offering of Registrable Securities or Additional Warrant Shares 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:
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(a) make and keep public information available, as those terms are
understood and defined in Rule 144; and
(b) use its best 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. The
Company will provide the Investor five (5) business days notice prior to filing
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus and shall give the Investor the opportunity to review and comment
on any such amendment or supplement. Failure of the Investor to comment within
five (5) business days shall not preclude the Company from filing such amendment
or supplement after such notice period has expired.
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: Xxxxxxxx.xxx Enterprises Inc, Attn: Xxxxxx X
Xxxx, Chairman, 000 Xxxxxx Xxx, Xxxxxx, 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. Except in connection with the Change of Domicile (as
that term is defined in the Investment Agreement), 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
or Additional Warrant Shares (provided such transferee shall provide to the
Company, together with or prior to such transferee's request to have such
Registrable Securities or Additional Warrant Shares included in a Registration,
a writing executed by such transferee agreeing to be bound as a Holder by the
terms of this Agreement), and the Company hereby agrees to file an amended
registration statement including such transferee or 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.
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16. 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 Securities Act or the Exchange Act, which matters shall be construed
and interpreted in accordance with such laws. Any dispute arising out of or
relating to this Agreement or the breach, termination or validity hereof shall
be finally settled by the federal or state courts located in XXXXXX COUNTY,
GEORGIA.
17. EXECUTION IN COUNTERPARTS PERMITTED. This Agreement may be executed
in any number of counterparts, each of which shall be enforceable against the
parties actually executing such counterparts, and all of which together shall
constitute one (1) instrument.
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. INDEMNITY. Each party shall indemnify each other party against any
and all claims, damages (including reasonable attorney's fees), and expenses
arising out of the first party's breach of any of the terms of this Agreement.
20. ENTIRE AGREEMENT; WRITTEN AMENDMENTS REQUIRED. This Agreement,
including the Exhibits attached hereto, the Investment Agreement, 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 expressly provided
herein,
[INTENTIONALLY LEFT BLANK]
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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 10th day of APRIL, 2001.
XXXXXXXX.XXX ENTERPRISES INC.
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------------
Xxxxxx X. Xxxx, Chairman
Address: 000 Xxxxxx Xxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
INVESTOR:
XXXXXX PRIVATE EQUITY, LLC.
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, Manager
Address: 000 Xxxxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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