EXHIBIT 4.7
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into as
of February 10, 2000, by and among, XXXXXXXXXX.XXX, INC., a corporation duly
incorporated and existing under the laws of the State of Nevada (the "Company"),
California Applied Research, Inc., a Nevada corporation (hereinafter referred to
as "Purchaser"), and Xxxxxxx Xxxxxxx (hereinafter referred to as "Finder").
RECITALS:
WHEREAS, pursuant to the Company's offering ("Offering") of up to Six
Million (6,000,000) common shares to purchase common shares of the Company
pursuant to that certain Letter of Agreement dated February 10, 2000 herewith
(the "Letter Agreement") between the Company and the Purchaser, the Company has
agreed to sell and the Purchaser has agreed to purchase, as provided in the
Letter Agreement, shares of the Company's Common Stock for a maximum amount of
6,000,000 common shares;
WHEREAS, pursuant to the terms of the Letter Agreement, the Company has
agreed to issue to the Finder up to 550,000 Warrants to purchase a number of
shares of Common Stock, exercisable for five (5) years from their respective
dates of issuance (collectively, the "Finder Warrants" or the "Warrants"); and
WHEREAS, pursuant to the terms of the Letter Agreement, the Company has
agreed to provide the Purchaser and Finder 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 Finder Warrants as set forth in this Registration
Rights Agreement.
TERMS:
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in 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, not already defined, shall have the following
meanings (such meanings to be equally applicable to both singular and plural
forms of the terms defined):
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.
"Additional Registration Statement" shall have the meaning set forth in
Section 3(b).
"Amended Registration Statement" shall have the meaning set forth in
Section 3(b).
"Common Stock" shall mean the common stock, par value $0.001, of the
Company.
"Due Date" shall mean the date that is two hundred twenty five (225) days
from the date of this Agreement.
"Effective Date" shall have the meaning set forth in Section 2.4.
"Filing Date" shall mean the date that is one hundred and eighty (180) days
after the date of the Letter of Agreement.
"Holder" shall mean Purchaser and/or Finder, and any other person or entity
owning or having the right to acquire Registrable Securities or any permitted
assignee thereof;
"Ineffective Period" shall mean any period of time that the Registration
Statement or any Supplemental Registration Statement becomes ineffective or
unavailable for use for the sale or resale, as applicable, of any or all of the
Registrable Securities for any reason (or in the event the prospectus under
either of the above is not current and deliverable) during any time period
required under the Registration Rights Agreement.
"Piggyback Registration" and "Piggyback Registration Statement" shall have
the meaning set forth in Section 4.
"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 of 1933, as amended (the
"Act"), and pursuant to Rule 415 under the Act or any successor rule, and the
declaration or ordering of effectiveness of such registration statement or
document.
"Registerable 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 Act. "Supplemental
Registration Statement" shall have the meaning set forth in Section 3(b).
"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 Purchaser pursuant to the Letter
of Agreement or in this Agreement, and (ii) issuable or issued to the Finder
upon exercise of the Finder 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 Act, including without
limitation, pursuant to Rule 144 under the 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 Date, 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 Purchaser), covering the resale of a number of shares
of Common Stock as Registrable Securities equal to at least Six Million Five
Hundred and Fifty Thousand (6,550,000) shares of Common Stock and shall cover,
to the extent allowed by applicable law, such indeterminate number of additional
shares of Common Stock that may be issued or become issuable as Registrable
Securities by the Company pursuant to Rule 416 of the Act.
2.3 [Intentionally Left Blank].
2.4 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.
2.5 [Intentionally Left Blank].
2.6 [Intentionally Left Blank].
2.7 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
such Registration Statement, but in no event later than October 10, 2006.
2.8 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 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.
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.
(b) Prepare and file with the SEC such amendments and supplements
to such Registration Statement and the prospectus used in connection with such
Registration Statement ("Amended Registration Statement") or prepare and file
any additional registration statement ("Additional Registration Statement,"
together with the Amended Registration Statement, "Supplemental Registration
Statements") as may be necessary to comply with the provisions of the 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, 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 Omitted].
(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 prior to such filing.
(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. Piggyback Registration. If anytime prior to the date that the
Registration Statement is declared effective or during any Ineffective Period
(as defined in the Letter 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 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 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
Act all of the Registrable Securities that each such Holder has requested to be
registered ("Piggyback Registration") 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.
5. 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, other than a "private equity line," if the managing
underwriter determines and advises in writing that the inclusion in the
registration statement of all Registrable Securities proposed to be included
would interfere with the successful marketing of the securities proposed to be
registered by the Company, then the number of such Registrable Securities to be
included in the Piggyback Registration Statement, to the extent such Registrable
Securities 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
which each such Holder seeks to register bears to the total number of
Registrable Securities sought to be included by all Holders. If required by the
managing underwriter of such an underwritten public offering, the Holders shall
enter into a reasonable agreement limiting the number of Registrable Securities
to be included in such Piggyback Registration Statement and the terms, if any,
regarding the future sale of such Registrable Securities.
6. 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 Act, by virtue of
Rule 144 or similar provisions.
7. 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 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.
8. 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.
9. Indemnification. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) (i) 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 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 Act or the
Securities Exchange Act of 1934, as amended (the "1934 Act"), against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements or
omissions: (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any 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.
(ii) To the extent permitted by law, each Holder will indemnify and hold
harmless the Company, its officers, directors, partners, legal counsel, and
accountants, any underwriter (as defined in the Act, or as deemed by the
Securities Exchange Commission, or as indicated in a registration statement) for
the Company and each person, if any, who controls such Company or underwriter
within the meaning of Section 15 of the Act or the Securities Exchange Act of
1934, as amended (the "1934 Act"), against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Act,
the 1934 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 made by such Holder: (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, 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 such Holder will
reimburse the Company, its 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 such Holder (which consent shall not be unreasonably withheld), nor
shall such Holder 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
the Company, its officer, director, underwriter or controlling person; provided
however, that the above shall not relieve such Holder from any other liabilities
which it might otherwise have.
(b) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 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.
(c) In the event that the indemnities provided in paragraph (a)
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 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 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 (c).
(d) 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 in a Registration Statement under this
Agreement, and otherwise.
10. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of 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, the Company
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144; and
(b) use its best efforts to file with the SEC in a timely manner all
reports and other documents required of the Company under the Act and the 1934
Act.
11. Amendment of 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.
12. 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 (i) to the Company at the address given below (or at such other
location as directed by the Company in writing) and (ii) to the Holders at their
respective last address given herein or 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.
13. Termination. This Agreement shall terminate on the earlier of (i)
the date all Registrable Securities cease to exist (as that term is defined in
Section 2.1 hereof); or (ii) October 10, 2006; 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.
14. Assignment. No assignment, transfer or delegation, whether by
operation
of law or otherwise, of any rights or obligations under this Agreement by the
Company or any Holder, respectively, shall be made without the prior written
consent of the majority in interest of the Holders or the Company, respectively;
provided that the rights of a Holder may be transferred to a subsequent holder
of the Holder's Registrable Securities (provided such transferee shall provide
to the Company, together with or prior to such transferee's request to have such
Registrable Securities included in a Registration, a writing executed by such
transferee agreeing to be bound as a Holder by the terms of this Agreement), 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. In the event of any transfer hereunder, either party may require
an opinion of counsel as to compliance with applicable securities laws.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada applicable to agreements made in
and wholly to be performed in that jurisdiction, except for matters arising
under the Act or the Securities Exchange Act of 1934, which matters shall be
construed and interpreted in accordance with such laws.
16. 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.
17. Specific Performance. Each party shall be entitled to the remedy of
specific performance in the event of the other party's breach of this Agreement,
the parties agreeing that a remedy at law would be inadequate.
18. 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.
19. Entire Agreement; Written Amendments Required. This Agreement,
including the Exhibits attached hereto, the Letter 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, 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 February
10, 2000.
COMPANY: XXXXXXXXXX.XXX, INC.
By: /S/
-------------------------------------------
Xxxx Xxxxx, President
Address:
000 Xxxx 0xx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Telephone
Facsimile
PURCHASER: CALIFORNIA APPLIED RESEARCH, INC.
By: /S/
-------------------------------------------
Xxxxx Xxxxxxxxx, President
Address:
0000 Xxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
FINDER: XXXXXXX XXXXXXX
/S/
-----------------------------------------------
Address:
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
