Exhibit 10.6
XXXXXXX.XXX CORPORATION
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is entered into
as of _______, 2000, by and among Xxxxxxx.xxx Corporation, a Washington
corporation (the "COMPANY"), and the parties listed on Schedule A hereto (the
"CCS SHAREHOLDERS").
RECITAL
The Company and the CCS Shareholders are entering into a Share Exchange
Agreement of even date herewith (the "Share Exchange Agreement"). The execution
of this Agreement by the parties is a condition to the obligation of each CCS
Shareholder Pursuant to the Share Exchange Agreement.
AGREEMENT
1. DEFINITIONS
For purposes of this Agreement, the following terms have the following
meanings:
(a) "HOLDER" means any person owning or having the right to
acquire Registrable Securities who is a party to this Agreement as of the date
hereof or who may be added as a party pursuant to the terms of this Agreement,
and any assignee thereof;
(b) "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"ACT"), and the declaration or order of effectiveness of such registration
statement or document;
(c) "REGISTRABLE SECURITIES" means (i) the Common Stock of the
Company issuable or issued pursuant to the Share Exchange Agreement and (ii) any
Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of
such Common
Stock, excluding in all cases, however, any Registrable Securities sold by a
person in a transaction in which its rights under this Agreement are not
assigned; and
(d) "REGISTRABLE SECURITIES THEN OUTSTANDING" means the number
of shares of Common Stock outstanding which are, and the number of shares of
Common Stock issuable pursuant to then exercisable or convertible securities
which are, Registrable Securities.
(e) "SEC" means the Securities and Exchange Commission.
2. COMPANY REGISTRATION
If the Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the Holders)
any of its stock or other securities under the Act in connection with the public
offering of such securities solely for cash (other than a registration relating
solely to the sale of securities to participants in a Company stock plan, or a
registration on any form that does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities), the Company shall, at each such
time, promptly give each Holder written notice of such registration. Upon the
written request of each such Holder given within 20 days after receipt of such
notice by the Company, the Company shall use commercially reasonable efforts to
cause to be registered under the Act all of the Registrable Securities that each
such Holder has requested to be registered. In the event that the Company
decides for any reason not to complete the registration of shares of Common
Stock other than Registrable Securities, the Company shall have no obligation
under this Section to continue with the registration of Registrable Securities.
Any request pursuant to this Section 2 to register Registrable Securities as
part of an underwritten public offering of Common Stock shall specify that such
Registrable Securities are to be included in the underwriting on the same terms
and conditions as the shares of Common Stock otherwise being sold through
underwriters under such registration.
3. OBLIGATIONS OF THE COMPANY
Whenever required under this Agreement to effect the registration of
any Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become effective and keep such
registration statement effective for up to 90 days.
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(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 as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Holders such copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request to facilitate the
disposition of all securities covered by such registration statement.
(d) Use commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be required to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such registration shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by
such registration statement, during the time when a prospectus is required to be
delivered under the Act, of the happening of any event 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.
(g) At the request of any Holder selling Registrable
Securities in such registration, furnish on the date that such Registrable
Securities are delivered to the underwriters for sale in connection such
registration (i) an opinion, dated such date, of legal counsel representing the
Company for the purposes of such registration, in form and substance as is
customarily given by Company counsel to underwriters in an underwritten public
offering, addressed to the underwriters and (ii) a letter, dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters.
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(h) List the Registrable Securities being registered on any
national securities exchange on which a class of the Company's equity securities
is listed or qualify the Registrable Securities being registered for inclusion
on Nasdaq if the Company does not have a class of equity securities listed on a
national securities exchange.
(i) Provide a transfer agent and registrar for the securities
being registered and a CUSIP number, not later than the effective date of the
registration statement.
4. FURNISH INFORMATION
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement that the selling Holders shall
furnish to the Company such information regarding themselves, the Registrable
Securities held by them and the intended method of disposition of such
securities as shall be reasonably required to effect the registration of their
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request.
5. EXPENSES OF REGISTRATION
In connection with any registration pursuant to this Agreement, the
Company shall be responsible for the payment of all reasonable expenses of the
registration, with the exception of (a) underwriting discounts and commissions,
which shall be paid by the Company, the Holders and any other selling holders of
the Company's securities in proportion to the aggregate value of the securities
offered for sale by each of them, and (b) the fees and expenses of more than one
law firm acting as counsel to the selling Holders selected by a majority in
interest of the selling Holders, which additional counsel, if any, shall be paid
by the Holder or Holders that engage such counsel. The expenses to be paid by
the Company shall include, without limitation, all registration, filing and
qualification fees, printing and accounting fees, the fees and disbursements of
counsel for the Company and the fees and disbursements of one counsel for the
selling Holders.
6. 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, any underwriter (as defined in the Act) for such
Holder
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and each person, if any, who controls such Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934, as amended (the
"1934 ACT"), against any actual expenses (including legal fees and costs),
losses, claims, damages (including settlement amounts) or liabilities (joint or
several) (collectively, "LOSSES") to which they may become subject under the
Act, the 1934 Act or other federal or state law, insofar as such Losses 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 statement,
including any preliminary prospectus or final prospectus contained therein, or
any amendments or supplements thereto, untrue in light of the circumstances
under which they were made, (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, or (iii) any violation or alleged violation by the Company of
the Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, the 1934 Act or any state securities law. The Company
will reimburse (as incurred) each such Holder, underwriter or controlling person
for any Losses reasonably incurred by them in connection with investigating or
defending any Violations; provided, however, that the indemnity agreement
contained in this Section 6(a) shall not apply to amounts paid in settlement of
any claims for Violations if such settlement is made 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 Losses that arise out of or are based upon a
Violation that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by,
or on behalf of, any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company and its officers, directors, agents and
employees, each underwriter and each other Holder selling securities in such
registration statement, and any person who controls any of the foregoing within
the meaning of the Act or the 1934 Act, against any Losses to which the Company
or such officer, director, agent, employee, or underwriter or other selling
Holder or controlling person may become subject under the Act, the 1934 Act or
other federal or state law, insofar as such Losses arise out of or are based
upon any Violation that occurs in reliance upon and in conformity with written
information furnished by, or on behalf of, such Holder expressly for use in
connection with such registration; and each such Holder will reimburse (as
incurred) any Losses reasonably incurred by the Company or its officers,
directors, agents, employees, or underwriters or other selling Holders or
controlling persons in connection with investigating or defending any
Violations; provided, however, that (i) the indemnity agreement contained in
this Section 6(b)
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shall not apply to amounts paid in settlement of any claims for Violations if
such settlement is made without the consent of the Holder, which consent shall
not be unreasonably withheld and (ii) the obligations of such Holders shall be
limited to an amount equal to the net proceeds to each such Holder of
Registrable Securities sold as contemplated herein.
(c) Promptly after receipt of notice of the commencement of
any action (including any governmental action), an indemnified party will, if a
claim is to be made against any indemnifying party under this Section 6, deliver
to the indemnifying party a written notice of the commencement, 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 notified, 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 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 the proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable period of time
after notice of the commencement of any such action shall relieve such
indemnifying party of any liability to the indemnified party under this Section
6 to the extent such failure is prejudicial to its ability to defend such
action, but the omission 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 6.
(d) If the indemnification provided for in this Section 6 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any Losses, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Losses 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 in connection with the
Violations that resulted in such Losses as well as any other relevant equitable
considerations; provided, that, in no event shall any contribution by a Holder
under this Section 6(d) exceed the net proceeds to each such Holder, except in
the case of willful fraud by such Holder. The relative fault of the indemnifying
party and of the indemnified party shall be determined by reference to, among
other things, whether the Violation resulting in such Losses 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 Violation.
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(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this
Section 6 shall survive the completion of any offering of Registrable Securities
and the termination of Registration Rights pursuant to Section 10.
7. REPORTS UNDER THE ACT
With a view to making available to the Holders the benefits of SEC Rule
144 promulgated under the 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 or pursuant to a registration on Form S-3, the Company
agrees to use commercially reasonable efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times after 90 days from the
effective date of the first registration statement filed by the Company for the
offering of its securities to the general public;
(b) Take such action, including the voluntary registration of
its Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end of the fiscal year in
which the first registration statement filed by the Company for the offering of
its securities to the general public is declared effective;
(c) File with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) Furnish to any Holder, so long as the Holder owns any
Registrable Securities, promptly upon request (i) a written statement by the
Company that it has complied with the reporting requirements of the 1934 Act (at
any time after 90 days from the date on which it becomes subject to such
reporting requirements), or that it qualifies as a registrant whose securities
may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested in availing any Holder of
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any rule or regulation of the SEC that permits the selling of any such
securities without registration or pursuant to such Form S-3.
8. ASSIGNMENT OF REGISTRATION RIGHTS
The rights to cause the Company to register Registrable Securities
pursuant to this Agreement may be assigned by a Holder to a transferee or
assignee of such securities who shall, upon such transfer or assignment, be
deemed a "Holder" under this Agreement; provided that the Company is, within a
reasonable period of time after such transfer, furnished with written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned.
9. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS
From and after the date of this Agreement, the Company shall not,
without the prior written consent of the Holders of a majority of the
Registrable Securities then outstanding, enter into any agreement with any
holder or prospective holder of any securities of the Company that would allow
such holder or prospective holder to include such securities in any registration
filed under Section 2, unless under the terms of such agreement such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of its securities will not reduce the amount of
the Registrable Securities of the Holders which is included.
10. TERMINATION OF REGISTRATION RIGHTS
The registration rights granted under Section 2 of this Agreement shall
terminate as to all Holders on the earlier of the tenth anniversary of the date
of this Agreement or the fifth anniversary of the closing of the Company's next
public offering in which the aggregate proceeds to the Company before deducting
underwriting commissions and expenses are at least $20,000,000 and the per share
price at which the Common Stock is offered to the public is at least $15 (the
"FIFTH ANNIVERSARY"); provided, however, such termination shall be postponed
until the later of (i) that number of days following such Fifth Anniversary
equal to the number of days, if any, between the date of such next public
offering and the Fifth Anniversary that the Common Stock of the Company is not
traded on a national stock exchange or the Nasdaq National Market (or any
successor organization) and (ii) if as of the Fifth Anniversary, the Company is
not so traded, then, one year following such date as the Company first resumes
trading on a national stock exchange or the Nasdaq National Market (or any
successor organization).
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11. MISCELLANEOUS
11.1 NOTICES
Any notice required or permitted under this Agreement shall be given in
writing and shall be deemed effectively given (a) upon personal delivery to the
party to be notified, (b) upon confirmation of receipt by fax by the party to be
notified, (c) one business day after deposit with a reputable overnight courier,
prepaid for overnight delivery and addressed as set forth in (d), or (d) three
days after deposit with the United States Post Office, postage prepaid,
registered or certified with return receipt requested and addressed to the party
to be notified at the address indicated for such party on the signature page, or
at such other address as such party may designate by 10 days' advance written
notice to the other parties given in the foregoing manner.
11.2 AMENDMENTS AND WAIVERS
Any term of this Agreement may be amended and the observance of any
term 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 holders of a majority of the Registrable Securities then outstanding.
Additional Holders may be added to this Agreement with such consent by amending
SCHEDULE A and adding a signature page executed by such additional Holder.
11.3 GOVERNING LAW; JURISDICTION; VENUE
This Agreement shall be governed by and construed under the laws of the
state of Washington without regard to principles of conflict of laws. The
parties irrevocably consent to the jurisdiction and venue of the state and
federal courts located in King County, Washington in connection with any action
relating to this Agreement.
11.4 SUCCESSORS AND ASSIGNS
The terms and conditions of this Agreement shall inure to the benefit
of and be binding on the respective successors and assigns of the parties as
provided herein.
11.5 SEVERABILITY
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement, and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
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11.6 ENTIRE AGREEMENT; COUNTERPARTS
This Agreement constitutes the entire agreement between the parties
about its subject and supersedes all prior agreements. This Agreement may be
executed in two or more counterparts, which together shall constitute one
instrument.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
Xxxxxxx.xxx Corporation
By:
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Its:
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Address:
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Fax:
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Phone:
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HOLDER:
By:
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Its:
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Address:
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Fax:
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Phone:
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SCHEDULE A
TO REGISTRATION RIGHTS AGREEMENT
HOLDER NAME NUMBER OF SHARES
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