REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of May___,
1998, between American Asset Management Corp., a New Jersey corporation (the
"Company"), and the person whose name and address appear on the signature page
of this Agreement ( the "Holder").
RECITALS
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Company has accepted the subscription of the Holder in
connection with the offering by the Company (the "Offering") to certain
"accredited" investors, including the Holder, of an aggregate of 200,000 shares
of common stock, no par value, of the Company (the "Common Stock").
WHEREAS, the Company has agreed to grant to the Holder certain
registration rights with respect to the 50,000 shares of Common Stock (the
"Shares") being purchased by the Holder in the Offering, upon the terms and
conditions herein set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. PIGGYBACK REGISTRATION.
(a) If at any time any time prior to the fifth (5th) year
anniversary of the final closing of the Offering, the Company proposes to
prepare and file with the Securities and Exchange Commission a registration
statement covering equity or debt securities of the Company, or any such
securities of the Company held by its stockholders, other than in connection
with a merger, acquisition or pursuant to a registration statement on Form S-4
or Form S-8 or any successor form (for purposes of this Section 1,
collectively, a "Piggyback Registration Statement"), the Company will give
written notice of its intention to do so by registered or certified mail
("Notice"), at least 15 days prior to the filing of each such Piggyback
Registration Statement, to Holder. Upon the written request of Holder, made
within 5 days after receipt of the Notice, that the Company include any of the
Registrable Shares (as herinafter defined) in the Piggyback Registration
Statement, the Company shall, as to Holder, use reasonable efforts to effect
the registration under the Securities Act of 1933, as amended (the "Act"), of
the Registrable Shares which it has been so requested to register ("Piggyback
Registration"), at the Company's sole cost and expense and at no cost or
expense to Holder (other than any underwriting or other commissions, discounts
or fees of any counsel or advisor to the Holder which shall be payable by the
Holder, as further provided in Section 3(b) hereof); provided, however, that
if, the Piggyback Registration is in connection with an underwritten
public offering and in the written opinion of the Company's underwriter or
managing underwriter of the underwriting group, if any, for such offering, the
inclusion of all or a portion of the Registrable Shares requested to be
registered, when added to the securities being registered by the Company or the
selling stockholder(s), if any, will exceed the maximum amount of the Company's
securities which can be marketed (i) at a price reasonably related to their
then current market value, or (ii) without otherwise having a material adverse
effect on the entire offering, then the Company may, subject to the allocation
priority set forth in the next paragraph, exclude from such offering all or a
portion of the Registrable Shares which it has been requested to register.
Without limiting the generality of the foregoing, such underwriter or managing
underwriter may condition its consent to the inclusion of all or a portion of
the Registrable Shares requested to be registered upon the participation by
Holder in the underwritten public offering on the terms and conditions thereof.
(b) If securities are proposed to be offered for sale
pursuant to such Piggyback Registration Statement by other security holders of
the Company and the total number of the Registrable Shares to be offered by
Holder and such other selling security holders is required to be reduced
pursuant to a request from the underwriter or managing underwriter (which
request shall be made only for the reasons and in the manner set forth above),
the aggregate number of Registrable Shares to be offered by Holder pursuant to
such Piggyback Registration Statement shall equal the number which bears the
same ratio to the maximum number of securities that the underwriter or managing
underwriter believes may be included for all the selling security holders
(including Holder) as the original number of securities proposed to be sold by
Holder bears to the total original number of securities proposed to be offered
by Holder and the other selling securityholders.
(c) Notwithstanding the preceding provisions of this Section
1, the Company shall have the right at any time after it shall have given
written notice pursuant to this Section 1 (irrespective of whether any written
request for inclusion of such securities shall have already been made) to elect
not to file any proposed Piggyback Registration Statement filed pursuant to
this Section 1, or to withdraw the same after the filing but prior to the
effective date thereof.
2. REGISTRABLE SHARES. For purposes of this Agreement, the term
"Registrable Shares" shall mean each of the shares of Common Stock of the
Company acquired and beneficially owned by Holder in connection with the
Offering and any securities issued or issuable with respect to such shares of
Common Stock by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. Once issued, any such securities shall cease to be
Registrable Shares registerable hereunder upon the earlier of (a) the sale of
such securities pursuant to an effective registration statement under the Act,
(b) the distribution thereof to the public pursuant to Rule 144 (or any
successor provision) under the Act, (c) a transfer pursuant to which new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of them shall not
require registration or qualification of them under the Act or any similar
state law then in force, (d) they shall have ceased to be outstanding, or (e)
any and all legends restricting transfer thereof may
been removed in accordance with the provisions of Rule 144(k) (or any successor
provision) under the Act.
3. COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. The Company
hereby covenants and agrees as follows:
(a) Following the effective date of a registration statement
covering Registrable Shares, the Company shall, upon the request of Holder,
forthwith supply such reasonable number of copies of the Registration
Statement, preliminary prospectus and prospectus meeting the requirements of
the Act, and other documents necessary or incidental to the public offering of
the Registrable Shares as shall be reasonably requested by Holder to permit
Holder to make a public distribution of the Registrable Shares. The obligations
of the Company hereunder with respect to the Registrable Shares are expressly
conditioned on Holder's furnishing to the Company such appropriate information
concerning Holder, the Registrable Shares and the terms of Holder's offering of
such shares as the Company may request.
(b) The Company will pay all costs, fees and expenses in
connection with all Registration Statements filed pursuant to this Agreement,
including, without limitation, the Company's legal and accounting fees,
printing expenses and blue sky fees and expenses; provided, however, that
Holder shall be solely responsible for the fees of any counsel or advisor
retained by Holder in connection with such registration and any transfer taxes
or underwriting discounts, selling commissions or selling fees applicable to
the Registrable Shares sold by Holder pursuant thereto.
(c) The Company will use reasonable efforts to qualify or
register the Registrable Shares included in a Registration Statement for
offering and sale under the securities or blue sky laws of such states as are
reasonably requested by Holder, provided that the Company shall not be
obligated to execute or file any general consent to service of process (unless
the Company is already then subject to service in such jurisdiction) or to
qualify as a foreign corporation to do business under the laws of any such
jurisdiction.
(d) Notwithstanding anything contained in this Agreement to
the contrary, the Company shall not be obligated to register the Registrable
Shares under the Act or maintain the effectiveness of any registration
statement filed under Section 1 or 2 hereof if it receives an opinion of
counsel to the Company that any of the Registrable Shares may be freely traded
without registration under the Act, under Rule 144 of the Act or otherwise.
Nothing contained in this Agreement shall require the Company to undergo an
audit, other than in the ordinary course of business.
4. COVENANT OF HOLDER.
(a) Holder, upon receipt of notice from the Company that an
event has occurred which requires a post-effective amendment to any
registration statement covering Registrable Shares
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or a supplement to the prospectus included therein, shall promptly discontinue
the sale of the Registrable Shares until Holder receives a copy of a
supplemented or amended prospectus from the Company, which the Company shall
provide as soon as practicable after such notice.
(b) Holder agrees to fully cooperate with the Company and to
furnish to the Company such information regarding Holder as the Company may
from time to time deem reasonably necessary in connection with the preparation
and filing of any registration statement covering the Registrable Shares.
5. INDEMNIFICATION.
(a) In the event of any registration of any the Registrable
Shares under the Act, the Company shall indemnify and hold harmless the holder
of the Registrable Shares covered by such registration statement, its directors
and officers, against any losses, claims, damages or liabilities to which such
holder or any such director or officer may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities caused by or
arising out of any untrue statement of a material fact contained in any
registration statement under which such securities were registered under the
Act, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, provided that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished or required to be furnished to the Company
by such holder for use in the preparation thereof.
(b) As a condition to including any of the Registrable Shares
in any registration statement filed pursuant to this Agreement, the Holder of
the Registrable Shares, as a prospective seller of the Registrable Shares
hereby agrees to indemnify and hold harmless (in the same manner and to the
same extent as set forth in subdivision (a) of this Section 5) the Company,
each director of the Company, each officer, employee or agent of the Company
and each underwriter of the Registrable Shares and each other person or entity,
if any, which controls the Company or such underwriter within the meaning of
the Act, with respect to any statement or alleged statement in, or omission or
alleged omission from, such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by the Holder for use in the preparation
of such registration statement, preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement. Any such indemnity shall remain in
full force and effect, regardless of any investigation made by or on behalf of
the Company or any such director, officer or controlling person and shall
survive the transfer of such securities by Holder.
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(c) Promptly after receipt by an indemnified party of notice
of the commencement of any action or proceeding involving a claim referred to
in the preceding subdivisions of this Section 5, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action, provided that
the failure of any indemnified party to give notice as provided herein shall
not relieve the indemnifying party of its obligations under the preceding
subdivisions of this Section 5, except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified, to the extent that the
indemnifying party may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the consent of the indemnified party, consent to entry of
any judgment or enter into any settlement of any such action which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability, or a
covenant not to xxx, in respect to such claim or litigation. No indemnified
party shall consent to entry of any judgment or enter into any settlement of
any such action without the consent of the indemnifying party.
6. AMENDMENTS. This Agreement may only be amended by a written
instrument executed by the Company and the Holder.
7. NOTICES. Except as otherwise provided in this Agreement, all
notices, requests and other communications to any person provided for hereunder
shall be in writing and shall be given to such person (a) in the case of the
Holder, addressed to such party at the address set forth on the signature page
of this Agreement or such other address as the Holder shall specify to the
Company in writing, or (b) in the case of the Company, at the address set forth
on the signature page hereto, to the attention of its President, or at such
other address, or to the attention of such other officer, as the Company shall
have furnished to the Holder in writing with a copy to: Xxxxxx Xxxxxxxxxx LLP,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Ethan Seer, Esq. Each
such notice, request or other communication shall be effective (i) if given by
mail, 48 hours after such communication is deposited in the mails (except as
otherwise provided in Section 1) by first class postage prepaid, addressed as
aforesaid or (ii) if given by any other means (including, without limitation,
by fax or air courier), when delivered at the address specified above, provided
that any such notice, request or communication shall not be effective until
received.
8. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto. In addition, and whether
or not any express assignment shall have been made, the provisions of this
Agreement which are for the benefit of Holder shall also be
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for the benefit of and enforceable by any subsequent holder of the Registrable
Shares. Holder agrees, by accepting any portion of the Registrable Shares after
the date hereof, to the provisions of this Agreement.
9. GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS
OF THE STATE OF NEW JERSEY WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF
LAWS.
(b) Each of the Company and Holder hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of New York and of the United States located in the County of New
York, State of New York (the " NY Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto except in such courts), waives
any objection to the laying of venue of any such litigation in the NY Courts
and agrees not to plead or claim that such litigation brought in any NY Courts
has been brought in an inconvenient forum.
10. COUNTERPARTS. This Agreement may be executed by facsimile and may
be signed simultaneously in any number of counterparts, each of which shall be
deemed an original, but all such counterparts shall together constitute one and
the same instrument.
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the Company and each other party hereto relating to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
12. SEVERABILITY. If any provision of this Agreement, or the
application of such provisions to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized
as of the date first above written.
AMERICAN ASSET MANAGEMENT CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx Xxxxxxxxx, President
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Address: 000 Xxxxxxxxxx Xxxx,
Xxxxxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Telecopier:(000) 000-0000
HOLDER: XXXXXX LOW XXX
By: /s/ Xxxxxx Low
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Name: Xxxxxx Low
Title:
Address:
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Telephone: ( )
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Telecopier: ( )
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