Exhibit 10.2F
REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of February 16,
2000, by and between LCS GOLF, INC..., a Delaware corporation (the "Company"),
and XXXXXXX COMMUNICATIONS, INC. ("Xxxxxxx").
RECITALS
WHEREAS, Xxxxxxx and the Company are parties to a Marketing Agreement of
even date herewith (the "Marketing Agreement"), pursuant to which Xxxxxxx has
been issued and is the holder of certain options (the "Options") to purchase
200,000 shares of the Company's common stock (the "Common Stock"), and Xxxxxxx
has also loaned the Company $500,000.00 (the "Loan") as evidenced by the
Company's convertible promissory note of even date herewith (the "Note")
entitling the holder to convert the amount due under such note into shares of
Common Stock (the shares of Common Stock into which the Note is convertible are
referred to as the "Shares"); and
WHEREAS, in order to induce Xxxxxxx to enter into the Marketing Agreement
and to accept the Options and make the loan to the Company, the Company has
agreed to enter into this Agreement.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "the Act" means the Securities Act of 1933, as amended.
(b) The term "Common Stock" means the common stock, par value $001 per
share, of the Company.
(c) The term "Form S-3" means such form under the Act as in effect on the
date hereof or any registration form under the Act subsequently adopted by the
SEC which replaces such form.
(d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Section 1.13 hereof
(e) The term "the 1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
(f) The term "register", "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document by the SEC.
(g) The term "Registrable Securities" means (i) the Common Stock (or other
capital stock of the Company) issuable or issued upon exercise of the Options or
conversion of the Note, and (ii) any Common Stock (or other capital 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 Options or Common
Stock, excluding in all cases, however, any Registrable Securities sold in a
transaction
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in which the rights under this Section I are not assigned.
(h) The number of shares of "Registrable Securities then outstanding"
shall be equal to the number of shares of Common Stock (or other capital stock
of the Company) outstanding which are, and the number of shares of Common Stock
(or other capital stock of the Company) issuable pursuant to then exercisable or
convertible securities which are Registrable Securities.
(i) The term "SEC" shall mean the Securities and Exchange Commission.
1.2 Request for Registration.
(a) If the Company shall receive at any time a written request (the
"Request") from (i) the Holders of a majority of the Options then outstanding,
or (ii) the Holder of the Note or of a majority of the Shares, that the Company
file a registration statement under the Act covering the registration of at
least fifty percent (50%) of the Registrable Securities then outstanding or a
lesser percent of the Registrable Securities if the anticipated aggregate
offering price, net of underwriting discounts and commissions, would exceed
$2,000,000), then the Company shall:
(i) within ten (10) days of the receipt of the Request, give written
notice thereof to all Holders; and
(ii) effect as soon as practicable, and in any event within 90 days
of the receipt of such Request, the registration under the Act of all
Registrable Securities which the Holders requested to be registered, subject to
the limitations of subsection 1.2(b),.
(b) If the Holders initiating the Request hereunder ("Initiating Holders")
intend to distribute the Registrable Securities covered by their request by
means of an underwriting, they shall so advise the Company as a part of their
Request and the Company shall include such information in the written notice
referred to in subsection 1.2(a)(i). The underwriter will be selected by the
Company and shall be reasonably acceptable to a majority in interest of the
Holders. In such event, the right of any Holder to include its Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company as provided in subsection
1.4(e)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting. Notwithstanding any
other provision of this Section 1.2, if the underwriter advises the Initiating
I-folders in writing that marketing factors require a limitation of the number
of shares to be underwritten, then the Initiating Holders shall so advise all
Holders of Registrable Securities which would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Securities that may be included
in the underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder; provided, however,
that the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting.
(c) Notwithstanding the foregoing, if the Company shall furnish to Holders
requesting a registration statement pursuant to this Section 1.2, a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to
the Company and its stockholders for such
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registration statement to be filed and it is therefore essential to defer the
filing of such registration statement, the Company shall have the right to defer
taking action with respect to such filing for a period of not more than 120 days
after receipt of the request of the Initiating Holders, provided, however, that
the Company may not utilize the right more than once in any twelve-month period.
(d) In addition, the Company shall not be obligated to effect, or to take
any action to effect, any registration pursuant to this Section 1.2:
(i) After the Company has effected one (1) registration pursuant to
this Section 1.2;
(ii) During the period starting with the date thirty (30) days prior
to the Company's good faith estimate of the date of filing of, and ending on a
date one-hundred and eighty (180) days after the effective date of, a
registration subject to Section 1.3 hereof; provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become filed; or
(iii) If the Initiating Holders propose to dispose of shares of
Registrable Securities in such registration that may otherwise be immediately
registered on Form S-3 pursuant to a request made pursuant to Section 1.12
below.
1.3 Piggyback Registrations. The Company shall notify all Holders of Registrable
Securities in writing at least twenty (20) days prior to filing any registration
statement under the Act for purposes of effecting a public offering of
securities of the Company (other than any registration statement relating to any
registration under Section 1.12 or on Forms S-8 or S-4, or successor forms) and
will afford each such Holder an opportunity to include in such registration
statement all or any part of the Registrable Securities the held by such Holder.
Each Holder desiring to include in any such registration statement all or any
part of the Registrable Securities held by such Holder shall, within twenty (20)
days of receipt of the above-described notice from the Company, so notify the
Company in writing, and in such notice shall inform the Company of the number of
Registrable Securities such Holder wishes to include in such registration
statement. Notwithstanding anything contrary in this Agreement, if a Holder
decides not to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, such Holder shall nevertheless have
the right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company with respect
to offerings of its securities, all upon the terms and conditions set forth
herein.
1.4 Obligations of the Company. Whenever required under this Section 1 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 best efforts to cause such registration
statement to become effective, and keep such registration statement effective
for a period of up to the earlier of one hundred and twenty (120) days or until
the distribution contemplated in the Registration Statement has been completed;
provided, however, that (i) such 120 day period shall be extended for a period
of time equal to the period the Holder refrains from selling any securities
included in such registration at the request of an underwriter of Common Stock
(or other securities) of the Company; and (ii) in the case of any registration
of Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such 120 day period shall be extended, if
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necessary, to keep the registration statement effective until all such
Registrable Securities are sold, provided that Rule 415, or any successor rule
under the Act, permits an offering on a continuous or delayed basis, and
provided further that applicable rules under the Act governing the obligation to
file a post-effective amendment permit, in lieu of filing a post-effective
amendment which (I) includes any prospectus required by Section l0(a)(3) of the
Act or (II) reflects facts or events representing a material or fundamental
change in the information set forth in the registration statement, the
incorporation by reference of information required to be included in (I) and
(II) above to be contained in periodic reports filed pursuant to Section 13 or
15(d) of the 1934 Act in the 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 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 numbers of 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 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 such
jurisdictions as shall be reasonably requested by the Holders; 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) 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 of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto 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) Cause all such Registrable Securities registered pursuant to such
registration statement to be listed on each securities exchange on which similar
securities issued by the Company are then listed not later than the effective
date of such registration statement.
(h) Provide a transfer agent and registrar for all Registrable Securities
registered pursuant to such registration statement and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration.
(i) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 1, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 1, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes
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effective, (i) an opinion, dated such date, of the counsel representing the
Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities 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, if any, and to
the Holders requesting registration of Registrable Securities.
1.5 Furnish Information
(a) It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 1 with respect to the Registrable
Securities of any selling Holder that such Holder shall furnish to the Company
such information regarding itself, the Registrable Securities held by it, and
the intended method of disposition of such securities as shall be reasonably
required to effect the registration of such Holder's Registrable Securities.
(b) The Company shall have no obligation with respect to any registration
requested pursuant to Section 1.2 or Section 1.12 if, due to the operation of
subsection 1.5(a), the number of shares or the anticipated aggregate offering
price of the Registrable Securities to be included in the registration does not
equal or exceed the number of shares or the anticipated aggregate offering price
required to originally trigger the Company's obligation to initiate such
registration as specified in subsection 1.2(a) or subsection 1 . 12(b),
whichever is applicable.
1.6 Expenses of Demand Registration. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Section 1.2, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees,
reasonable fees and disbursements of counsel for the Company, and the reasonable
fees and disbursements (not to exceed $25,000.00) of one counsel for the selling
Holders shall be borne by the Company; provided, however, that the Company shall
not be required to pay for any expenses of any registration proceeding begun
pursuant to Section 1.2 if the registration request is subsequently withdrawn at
the request of the Holders of sixty-six and seven tenths percent (66.7%) of the
Registrable Securities to be registered (in which case all participating Holders
shall bear such expenses) unless such Holders agree to forfeit their right to
one demand registration pursuant to Section 1.2; provided further, however, that
if at the time of such withdrawal, the Holders have learned of a material
adverse change in the condition, business, or prospects of the Company from that
known to the Holders at the time of their request and have withdrawn the request
with reasonable promptness following disclosure by the Company of such material
adverse change, then the Holders shall not be required to pay any of such
expenses and shall retain their rights pursuant to Section 1 .2.
1.7 Expenses of Company Registration. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
1.3 for each Holder, including (without limitation) all registration, filing,
and qualification fees, printers and accounting fees relating or apportionable
thereto and the reasonable fees and disbursements (not to exceed $25,000.00) of
one counsel for the selling Holders, but excluding underwriting discounts and
commissions relating to the disposition of such Registrable Securities.
1.8 Underwriting Requirements. In connection with any offering involving an
underwriting of shares of the Company's capital stock, the Company shall not be
required under
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Section 1.3 to include any of the Holders' securities in such underwriting
unless they accept the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it (or by other persons entitled to
select the underwriters), and then only in such quantity as the underwriters
determine in their sole discretion will not jeopardize the success of the
offering by the Company. If the total amount of securities, including
Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities sold other than by the Company that
the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering (the securities so included to be apportioned pro
rata (as nearly as practicable) among the selling stockholders according to the
total amount of securities entitled to be included therein owned by each selling
stockholder or in such other proportions as shall mutually be agreed to by such
selling stockholders) but in no event shall (i) the amount of securities of the
selling Holders included in the offering be reduced below twenty percent (20%)
of the total amount of securities included in such offering or (ii)
notwithstanding (i) above, any shares being sold by a stockholder exercising a
demand registration right similar to that granted in Section 1.2 be excluded
from such offering. For purposes of the preceding parenthetical concerning
apportionment, for any selling stockholder which is a holder of Registrable
Securities and which is a partnership or corporation, the partners, retired
partners and stockholders of such holder, or the estates and family members of
any such partners and retired partners and any trusts for the benefit of any of
the foregoing persons shall be deemed to be a single "selling stockholder", and
any pro rata reduction with respect to such "selling stockholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling stockholder", as defined in
this sentence.
1.9 Delay of Registration. Each Holder hereby waives any and all rights to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.9.
1.10 Indemnification. In the event that any Registrable Securities are included
in a registration statement under this Section 1:
(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
and each officer, director and person, if any, who controls such Holder or
underwriter within the meaning of the Act or the 1934 Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Act, or the 1934 Act, 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, 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, (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, or (iii) any violation or alleged violation by the
Company of the Act, the 1934 Act, or any rule or regulation promulgated under
the Act, or the 1934 Act; and the Company will pay to each such Holder,
underwriter, officer, director or controlling person, 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 1.10(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such
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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, underwriter, officer, director or
controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify and
hold harmless the Company, each of its directors, each of its officers who has
signed the registration statement, each person, if any, who controls the Company
within the meaning of the Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Act, or the 1934 Act, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon written information furnished by such Holder
expressly for use in connection with such registration; and each such Holder
will pay any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection 1.10(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection
1.10(b) shall not apply to amounts paid in settlement of any such loss, claim,
damages, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; provided
further that in no event shall any indemnity under this subsection I . 10(b)
exceed the net proceeds from the offering of its Registrable Securities received
by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 1.10
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 1.10, 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
indemnified and indemnifying parties; provided, however, that an indemnified
party (together with all other indemnified parties which may be represented
without conflict by one counsel) shall have the right to retain one separate
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 such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to thc indemnified party under this Section
1.10, 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 1. 10.
(d) If the indemnification provided for in this Section 1.10 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage, or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand
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and of the indemnified party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage, or expense as
well as any other relevant equitable considerations; provided that in no event
shall any contribution by a Holder under this Section 1.10(d) exceed the net
proceeds from the offering of its Registrable Securities received 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
untrue or alleged untrue statement of a material fact or the omission to state a
material fact 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 statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into by a Holder and the Company in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control in respect to such holder.
(f) The obligations of the Company and Holders under this Section 1.10
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1.
1.11 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 or pursuant to
a registration on Form S-3, the Company agrees to:
(a) timely make and keep public information available, as those terms are
understood and defined in Rule 144 under the Act at all times after 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, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144 under the Act (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become 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 any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
1.12 Form S-3 Registration.If at any time the Company shall receive a written
request or requests from Holders of at least twenty percent (20%) of the
Registrable Securities
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outstanding that the Company effect a registration on Form S-3 if the Company is
eligible to use such form, or if not, on such other form which thc Company is
entitled to use. with respect to all or a part of the Registrable Securities
owned by such Holder or Holders (the "S-3 Request(s)"), the Company will:
(a) promptly give written notice of the proposed registration, and any
related qualification or compliance, to all other Holders; and
(b) as soon as practicable, but in no even later than seventy-five (75)
days after the receipt of the S-3 Request(s), effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Holder's
or Holders' Registrable Securities as are specified in such S-3 Request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such S-3 Request as are specified in a written
request received by the Company within 15 days after receipt of such written
notice from the Company; provided, however, that the Company shall not be
obligated to effect any such registration pursuant to this section 1.12: (1) if
Form S-3 is not available for such offering by the Holders; (2) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $3,000,000; (3) if the
Company shall furnish to the Holders a certificate signed by the President of
the Company stating that in the good faith judgment of the Board of Directors of
the Company, it would be materially detrimental to the Company and its
stockholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than 90 days after receipt of
the request of the Holder or Holders under this Section 1.12; provided, however,
that the Company shall not utilize this right more than once in any twelve month
period; (4) if the Company has already effected three registrations on Form S-3
for the Holders pursuant to this Section 1.12; or(S) in any particular
jurisdiction in which the Company would be required to qualify to do business or
to execute a general consent to service of process in effecting such
registration.
(c) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so requested
to be registered as soon as practicable after receipt of the S-3 Request or
Requests of the Holders, but in no event later than sixty (60) days after the
receipt of such S-3 Request or Requests. All expenses incurred in connection
with a registration requested pursuant to Section 1.12, including (without
limitation) all registration, filing, qualification, printer's and accounting
fees and the reasonable fees and disbursements of counsel for the selling Holder
or Holders, shall be paid pro rata by the Holders participating in such
registrations. Registrations effected pursuant to this Section 1.12 shall not be
counted as demands for registration or registrations effected pursuant to
Section 1 .2.
1.13 Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Section 1 may be assigned (but
only with all related obligations) by a Holder to (i) such Holder's partner,
shareholder, parent, child, spouse, or trust or (ii) transferee or assignee of
such securities who, after such assignment or transfer, holds at least (A) one
percent (1%) of the outstanding capital stock of the Company on the date of the
transfer, or (B) all of the Registrable Securities owned or controlled by the
transferring Holder, provided: (a) the Company is, within a reasonable 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, and; (b) such transferee or assignee
agrees in writing to be bound by and subject to the terms and conditions of this
Agreement,
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including without limitation the provisions of Section 1 . 15 below; and (c)
such assignment shall be effective only if immediately following such transfer
the further disposition of such securities by the transferee or assignee is
restricted under the Act For the purposes of determining the number of shares of
Registrable Securities held by a transferee or assignee, the holdings of
transferees and assignees of a partnership who arc partners or retired partners
of such partnership (including spouses and ancestors, lineal descendants and
siblings of such partners or spouses who acquire Registrable Securities by gift,
will or intestate succession) shall be aggregated together and with the
partnership; provided that all assignees and transferees who would not qualify
individually for assignment of registration rights shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices or
taking any action under this Section 1.
1.14 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 outstanding Registrable Securities, enter into any
agreement with any holder or prospective holder of any securities of the Company
which would allow such holder or prospective holder (a) to include such
securities in any registration filed under Section 1.2 or Section 1.3 hereof,
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 or (b) to make a demand registration
which could result in such registration statement being declared effective prior
to the earlier of either of the dates set forth in subsection 1.2(a).
1.15 "Market Stand-Off' Agreement. Xxxxxxx hereby agrees that, during the period
of duration specified by the Company and an underwriter of common stock or other
securities of the Company, following the effective date of the first
registration statement for a public offering of securities of the Company filed
under the Act, it shall not, to the extent requested by the Company and such
underwriter, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any securities of the Company held by it at any time during such period
(the "Lock Up"); provided, however, that:
(a) Such Lock Up shall not exceed one hundred eighty (180) days, and
(b) All officers and directors of the Company who own securities of the
Company also agree to such Lock Up.
In order to enforce the foregoing covenants, the Company may impose
stop-transfer instructions with respect to the Investors' Registrable Securities
(and the shares or securities of every other person subject to the foregoing
restriction) until the end of such period.
1.16 Termination of Registration Rights. No Holder shall be entitled to exercise
any right to register the resale of its Registrable Securities provided for in
this Section 1 after the earlier of(i) five (5) years following the consummation
of the sale of securities pursuant to a registration statement filed by the
Company under the Act in connection with the initial firm commitment
underwritten offering of its securities to the general public, or (ii) such time
as the Holder can sell all of such stock pursuant to Rule 144 under the Act (or
successor rule) within a three month period.
2. Covenants of the Company.
2.1 Delivery of Financial Statements. The Company shall deliver to the Holders
as soon
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as practicable, but in any event within ninety (90) days after the end of each
fiscal year of the Company, an income statement for such fiscal year, a balance
sheet of the Company and statement of stockholder's equity as of the end of such
year such year-end financial reports to be in reasonable detail, prepared in
accordance with generally accepted accounting principles ("GAAP") and audited
and certified by independent public accountants selected by the Company.
2.2 Observation Rights. Subject to the conditions set forth in Section 2.4,
Xxxxxxx shall have the right to attend all meetings of the Board of Directors in
a nonvoting observer capacity, to receive notice of such meetings and to receive
the information provided by the Company to the Board of Directors; provided,
however, that the Company hereby requires as a condition precedent to the
Holder's rights under this Section 2.2 that each person proposing to attend any
meeting of the Board of Directors and each person to have access to any of the
information provided by the Company to the Board of Directors shall hold in
confidence and trust and to act in a fiduciary manner with respect to all
information so received during such meetings or otherwise and shall sign any
further agreement manifesting such obligations as the Company shall reasonably
require; and, provided further, that the Company reserves the right not to
provide information and to exclude Xxxxxxx (or its representative) from any
meeting or portion thereof if delivery of such information or attendance at such
meeting by Xxxxxxx (or its representative) would result in disclosure of trade
secrets to such holder or its representative or would adversely affect the
attorney-client privilege between the Company and its counsel or if Xxxxxxx or
its representative is a direct competitor of the Company.
2.3 Inspection. The Company shall permit the Holders, at the Holders' own
expense, to visit and inspect the Company's properties, to examine its books of
account and records and to discuss the Company's affairs, finances and accounts
with its officers, all at such reasonable times as may be requested by the
Holders; provided, however, that the Company shall not bc obligated pursuant to
this Section 2.3 to provide access to any information which it reasonably
considers to be a trade secret or similar confidential information. In addition,
this Section 2.3 shall not apply to, and shall become unenforceable if the
Holders are reasonably deemed by the Company's Board of Directors to have (i)
interests adverse to the Company's or (ii) to have disproportionately diverted
the Company's management in connection with the exercise of rights pursuant to
this Section 2.3.
2.4 Termination of information. Observation and Inspection Covenants. Subject to
their earlier termination pursuant to the specific terms of each Section, the
covenants set forth in Sections 2.1, 2.2 and 2.3 shall terminate and be of no
further force or effect when the sale of securities pursuant to a registration
statement filed by the Company under the Act in connection with the firm
commitment underwritten offering of its securities to the general public is
consummated or when the Company first becomes subject to the periodic reporting
requirements of Sections 12(g) or 15(d) of the 1934 Act, whichever event shall
first occur.
2.5 Indemnification. The Company shall take all actions necessary to indemnify
its directors to the maximum extent permitted by applicable law, including,
without limitation, amending the Company's Certificate of Incorporation and
Bylaws and entering into contracts with the directors to provide such
indemnification; provided, however, that the Company shall not be required to
obtain directors insurance unless directed by the Board of Directors.
3. Miscellaneous.
3.1 Successors and Assigns. Except as otherwise provided herein, the terms and
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conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties (including transferees of
any shares of Registrable Securities). Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
3.2 Governing Law. This Agreement shall be governed by and construed under the
laws of the State of New York as applied to agreements among New York residents
entered into and to be performed entirely within New York.
3.3 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
3.4 Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
3.5 Notices. Unless otherwise provided, any notice required or permitted under
this Agreement shall be sent to the address/fax number indicated for such party
on the signature page hereof (provided that any party at any time may change its
address/fax number by notice often (10) days' advance written notice to the
other parties), and shall be deemed effectively given upon (i) personal delivery
to the party to be notified, (ii) the time of successful facsimile transmission
to the party to be notified, (iii) sending by reputable overnight delivery
service, or (iv) upon deposit with the United States Post Office, by registered
or certified mail, postage p repaid.
3.6 Expenses. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
3.7 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement 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. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any Registrable Securities
then outstanding, each future holder of all such Registrable Securities, and the
Company.
3.8 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 the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
3.9 Aggregation of Stock. All shares of Registrable Securities held or acquired
by affiliated entities or persons shall be aggregated together for the purpose
of determining the availability of any rights under this Agreement.
3.10 Entire Agreement: Amendment; Waiver. This Agreement (including the
Exhibits hereto, if any) constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
LCS GOLF, INC.
By: /s/ [Illegible]
---------------------
Title: President
XXXXXXX COMMUNICATIONS, INC.
By: /s/ [Illegible]
---------------------
Title: Chairman and CEO
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