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EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), is made and
entered into as of the 9th day of February, 2000, by and between LEXON
Technologies Inc., a Delaware corporation (the "Company"), and Xxxxxxx Xxxxxx,
an individual and resident of the State of Illinois (the "Stockholder").
WITNESSETH:
WHEREAS, in connection with the execution and delivery of that certain
Stock Purchase Agreement (the "Purchase Agreement"), dated February 7, 2000 by
and between the Company and the Stockholder, the Company has agreed to issue,
and as of the date hereof has issued, to the Stockholder (i) a Common Stock
Purchase Warrant A ("Warrant A") to acquire up to 2,600,000 shares of the
Company's common stock, .001 par value per share (the "Common Stock"), (ii) a
Common Stock Purchase Warrant B ("Warrant B") to acquire up to 1,000,000 shares
of the Common Stock, and (iii) a Common Stock Purchase Warrant C ("Warrant C")
to acquire up to 500,000 shares of the Common Stock (with Warrant A, Warrant B
and Warrant C being hereinafter collectively referred to as the "Warrants");
WHEREAS, it is a condition precedent to the obligations of the
Stockholder under the Purchase Agreement that the Company execute and deliver
this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
and covenants hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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ARTICLE I
CERTAIN DEFINITIONS
The following terms shall have the definitions set forth below:
"Commission" shall mean the United States Securities and Exchange
Commission and any successor commission or agency having similar powers.
"Control" (including the terms "controlling," "controlled by" and
"under common control with") shall mean the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
corporation or partnership (including, without limitation, the power to direct
the voting of any securities held by such corporation or partnership), whether
through the ownership of voting securities, by contract, or otherwise, unless
the context indicates otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Registerable Stock" shall mean those shares of the Company's Common
Stock received by the Stockholder upon exercise of any of the Warrants, provided
that such shares shall no longer be Registerable Stock once such shares are (i)
sold pursuant to a registration statement declared effective by the Commission
under the Securities Act, or (ii) sold pursuant to Rule 144 (or any successor
rule) promulgated under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Stockholder" shall mean Xxxxxxx Xxxxxx. The term "Stockholder" shall
also include such Stockholder's successors and assigns, legal representatives
and executors or administrators when the context so requires.
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ARTICLE II
REGISTRATION OF COMMON STOCK
Section 2.1 Required Registration. At any time after February 7, 2001,
the Holder may request that the Company register the resale by him of all or any
portion of the Registerable Stock (such request a "Demand Request"). The Demand
Request shall specify the number of Shares of Registerable Stock as to which
such Demand Request relates and the manner in which the Stockholder proposes to
sell such Registerable Stock, including, if applicable, the name of any
underwriters to be employed by the Stockholder in connection with such sale. If
such Demand Request is made, the Company will cause the resale of the
Registerable Stock specified in the Demand Request to be registered on such form
of registration statement under the Securities Act as is appropriate to allow
the resale of such Registerable Stock in the manner specified in the Demand
Request.
Notwithstanding anything herein to the contrary, the Company shall not
be obligated to effect, or to take any action to effect, any registration
pursuant to this Section 2.1 after the Company has effected two (2)
registrations (meaning that the registration statements relating thereto have
been declared effective by the Commission) at the request of the Holder,
provided, however, that if the Holder requests that such registration be
accomplished through the filing and effectiveness of a registration statement on
Form S-3 (or such other form of registration statement then available for
registering the resale of the Registerable Stock under the Securities Act that
permits significant incorporation by reference of the Company's subsequent
periodic reports filed with the Commission pursuant to the Exchange Act), the
Company shall be obligated to effect the registration so requested unless (i)
the proposed offering of the Registerable Stock does not then qualify for
registration on
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Form S-3, or (ii) the Company has already effected the two (2) registrations
(whether on Form S-3 or otherwise) at the request of the Holder during the
twelve (12) month period preceding the date of such request.
The Company may delay the filing of any registration statement pursuant
to this Section 2.1 for up to three (3) months after the original request for
registration if (i) the filing of the registration statement would cause the
Company to disclose information which would not have to be disclosed at such
time absent the filing of the registration statement and the Board of Directors
of the Company determines in good faith that the disclosure of such information
would be materially adverse to the Company, or (ii) the delay in filing the
registration statement would eliminate the need for the Company to file the
registration statement utilizing interim financial statements.
Section 2.2 Incidental Registration. If the Company at any time
proposes to register any of its Common Stock under the Securities Act for sale
to the public, whether for its own account or for the account of other security
holders or both (except with respect to registration statements on Forms S-4 or
S-8 or another form of registration statement not available for registering
Common Stock for sale to the public generally), it will give written notice of
such proposed registration to the Stockholder no later than thirty (30) days
prior to filing a registration statement. The Stockholder shall have ten(10)
days from receipt of such notice from the Company to deliver a written request
to the Company (such request , a "Piggy-back Request") that the resale by the
Stockholder of all or a portion of the Registerable Stock be registered pursuant
to the registration statement proposed to be filed by the Company. The
Piggy-back Request shall state the number of shares of Registerable Stock as to
which such Piggy-back Request relates and the manner in which the Stockholder
proposes to sell such Registerable Stock. If such Piggy-back Request is made,
the Company will
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use its best efforts to cause the resale of the Registerable Stock specified in
the Piggy-back Request to be registered for resale in the manner specified in
the Piggy-back Request.
In the event that any registration pursuant to this Section 2.2 shall
be, in whole or in part, an underwritten public offering (a) the number of
shares of Registerable Stock to be included in such an underwriting may be
reduced if and to the extent that the managing underwriter shall be of the
written opinion that such inclusion would adversely affect the marketing of the
securities to be sold by the Company in the proposed registration, and (b) in
addition to the foregoing, the Company's obligation to register the Registerable
Stock specified in the Piggy-back Request shall be contingent upon (i) the
Stockholder's agreement to include such Registerable Stock in the underwriting
on the same terms and conditions as the shares of Common Stock otherwise being
sold through underwriters under such registration, and (ii) upon the
Stockholder's execution of any agreements customarily requested by underwriters
in such offerings.
Notwithstanding anything to the contrary contained herein, in the event
that there is a firm commitment underwritten public offering of Common Stock and
the Stockholder does not elect to sell its Registerable Stock to the
underwriters in connection with such offering, the Stockholder shall refrain
from selling any shares of Registerable Stock during the period of distribution
of the Company's securities by such underwriters and the period in which the
underwriting syndicate participates in the after market; provided, however, that
the Stockholder shall, in any event, be entitled to sell its Registerable Stock
commencing on the 90th day after the effective date of such registration
statement.
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Section 2.3 Registration Procedures. (a) If and whenever the Company is
required by the provisions of Sections 2.1 or 2.2 hereof to effect the
registration of any of the Registerable Stock under the Securities Act, the
Company will, as expeditiously as possible:
(i) prepare and file with the Commission a registration statement
with respect to the Registerable Stock and use its best
efforts to cause such registration statement to (A) become
effective, and (B) remain effective for so long as all of the
shares of Registerable Stock covered by such registration
statement remain Registerable Stock.
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective for the period specified in
paragraph (i) above and to comply with the provisions of the
Securities Act and the Exchange Act with respect to the
disposition of all Registerable Stock covered by such
registration statement for such period;
(iii) furnish to the Stockholder such number of copies of the
prospectus forming a part of such registration statement
(including each preliminary prospectus) as the Stockholder may
reasonably request in order to facilitate the public sale or
other disposition of the Registerable Stock covered by such
registration statement;
(iv) use its best efforts to register or qualify the Registerable
Stock covered by such registration statement under the
securities or blue sky laws of such states as any underwriter
or the Stockholder may reasonably request;
(v) notify the Stockholder and its counsel of any stop order
threatened or issued by the Commission or any state securities
regulatory authority, or a trading halt threatened
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or issued by the exchange or over-the-counter market in which
the Common Stock is publicly traded, and take all actions
required to prevent the entry of such stop order or the
imposition of such trading halt or to remove such stop order
or trading halt if entered or imposed;
(vi) notify the Stockholder at any time when a prospectus relating
to the Registerable Stock is required to be delivered under
the Securities Act, of the happening of any event as a result
of which the prospectus, or any document incorporated by
reference in the registration statement of which such
prospectus forms a part, contains an untrue statement of
material fact or omits to state any fact necessary to make the
statements therein in the circumstances under which they were
made not materially misleading, and prepare a supplement or
amendment to such prospectus or any such document incorporated
by reference in such registration statement so that, as
thereafter delivered to the purchasers of such Registerable
Stock, such prospectus or document will not contain an untrue
statement of a material fact or omit to state any fact
necessary to make the statements therein in the circumstances
under which they were made not materially misleading; and
(vii) cause all such Registerable Stock to be listed on the exchange
or market in which the Common Stock is then listed.
(b) In connection with each registration hereunder, the Stockholder
will furnish to the Company in writing such information with respect to itself
and the proposed distribution by it as shall be reasonably necessary in order to
assure compliance with Federal and applicable state securities laws.
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Section 2.4 Expenses. The Company shall pay all of the expenses in
connection with any registration hereunder, regardless of whether such
registration becomes effective, including in each case, without limitation, all
registration and filing fees, legal, accounting, disbursements, printing,
messenger and delivery expenses, and fees and expenses of any other person
retained by the Company. The Stockholder's attorney and other professional fees,
if any, and brokers' or other selling commissions with respect to the
Registerable Stock will be borne by the Stockholder.
Section 2.5 Indemnification. (a) In the event of a registration of any
of the Registerable Stock under the Securities Act, the Company will indemnify
and hold harmless the Stockholder and any underwriter(s) retained by the
Stockholder with respect to the disposition of the Registerable Stock, and each
other person, if any, who controls the Stockholder or underwriter, against any
losses, claims, damages or liabilities, joint or several, to which the
Stockholder or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such Registerable Stock was registered
under the Securities Act, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon 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 in the light of the circumstances then existing, and shall reimburse
the Stockholder, the underwriter(s) and each such 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 Company shall not be liable in any such case if and
to the extent that any such loss, claim,
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damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in any document made in
reliance upon and in conformity with information furnished by the Stockholder or
such underwriter or such controlling person in writing specifically for use in
the preparation of such documents.
(b) In the event of a registration of any of the Registerable Stock
under the Securities Act, the Stockholder will indemnify and hold harmless the
Company and each officer of the Company, each director of the Company and each
person who controls the Company against all losses, claims, damages or
liabilities to which the Company or any such officer, director or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or omissions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement under
which such Registerable Stock was registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon 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 in light of the
circumstances then existing, and shall reimburse the Company and each such
officer, director and 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
Stockholder shall be liable hereunder in any such case if and only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission in any document was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the Stockholder in
writing specifically for use in the preparation of such documents; and provided,
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further, however, that the liability of the Stockholder hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price of shares sold
by the Stockholder under such registration statement bears to the total public
offering price of all securities sold thereunder, but not to exceed the proceeds
actually received by the Stockholder from the sale of Registerable Stock covered
by such registration statement.
(c) Promptly, but in no event more than five (5) business days, after
receipt by an indemnified party hereunder of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party hereunder, notify the indemnifying party in
writing thereof. The failure to so notify the indemnifying party shall not
relieve the indemnifying party from its obligations hereunder, except to the
extent that the indemnifying party is actually prejudiced thereby. In case any
such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in and, 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, to assume and undertake the defense
thereof 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 and undertake the defense thereof, except in the case of a
conflict of interest, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, other than reasonable
costs of investigation. No indemnifying party shall be liable for any settlement
of any action or proceeding effected without its written consent. No
indemnifying
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party shall, without the consent of the indemnified party, consent to entry of
any judgment or enter into any settlement 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 in respect of such claim or
proceeding.
(d) If the indemnification provided for in subparagraphs (a) or (b) of
this Section 2.5 shall for any reason be held by a court to be unavailable to an
indemnified party under such subparagraphs in respect of any losses, claims,
damages or liabilities or actions in respect thereof referred to therein, then
each indemnifying party shall in lieu of indemnifying such indemnified party
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Company, on the one hand, and
the Stockholder, on the other, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or actions, as well
as any other relevant equitable considerations, or if the allocation provided by
the immediately preceding clause is not permitted by applicable law, in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company and the Stockholder from the offering of the securities hereunder.
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 is not guilty of such fraudulent misrepre sentation. In addition, no
individual or entity shall be obligated to contribute hereunder any amounts in
payment for any settlement of any action or proceeding effected without such
individual's or entity's consent.
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(e) The indemnification and contribution required by this Section 2.5
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
Section 2.6 Assignment. The Registration Rights contained in this
Agreement shall be transferable by the Stockholder to any person or entity to
whom the Stockholder transfers any share of Registerable Stock in a transaction
which does not remove the shares so transferred from the definition of
Registerable Stock hereunder.
Section 2.7 Underwriters. The Company shall have no obligation to
obtain an underwriter on behalf of the Stockholders but shall be obligated to
cooperate with any underwriter who has agreed to underwrite the public sale of
any Registerable Stock, including, but not limited to, furnishing such
underwriter with such information as it may reasonably request and the execution
of any agreements customarily requested by underwriters in such offerings.
ARTICLE III
MISCELLANEOUS
Section 3.1 Survival of Agreement; Term. This Agreement shall not be
terminated or amended, nor any provision hereof waived, unless the Stockholder
and the Company agree in writing to such termination, amendment or waiver.
Section 3.2 Notices. All notices to be given by any party hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
certified or registered mail, return receipt requested, five (5) business days
after deposit in the United States Mail, or if telexed or telecopied,
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sent by telegram, or delivered, when confirmation is received, to the relevant
party at its address set forth below:
If to the Company:
Lexon Technologies Inc.
0000 Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
If to the Stockholder:
Xxxxxxx Xxxxxx
000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxx 00000
The parties may change their respective addresses for purposes of
notice hereunder by giving notice of such change to all other parties in the
manner provided in this Section.
Section 3.3 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the permitted successors and assigns of the parties
hereto.
Section 3.4 Complete Agreement. This Agreement represents the entire
agreement among the Stockholder and the Company with respect to the matters set
forth herein.
Section 3.5 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which taken
together are deemed to be one agreement.
Section 3.6 Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.
Section 3.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to its conflicts of law doctrine.
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IN WITNESS WHEREOF, the parties hereto have executed, or caused their
duly authorized representatives to execute, this Agreement as of the day and
year first above written.
THE COMPANY
LEXON TECHNOLOGIES INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Its: /s/ President
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THE STOCKHOLDER
/s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX
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