EXHIBIT 4.4
AXXESS, INC.
REGISTRATION RIGHTS AGREEMENT
March 10, 1997
To the Purchasers of the Unit (s)
of Axxess, Inc.
Reference is made to the Private Placement Memorandum (the
"Memorandum") of Axxess, Inc. (the "Company") dated March 10, 1997. Pursuant to
the Memorandum, you (the "Holder") have purchased one or more Units (the
"Units") offered by the Company, each Unit consisting of 100,000 shares of
AXXS's common stock, $0.001 par value (the "Common Stock"). The Common Stock
will have certain piggyback registration rights as defined in this Registration
Rights Agreement to be entered into between AXXS and holders of the Units;
indicated on the signature page hereof on the terms and conditions described
herein and in the Private Placement Memorandum dated March 10, 1997 (together
with all amendments thereof and supplements and exhibits thereto, the "Private
Placement Memorandum"), a copy of which has been received by the undersigned.
This sets forth the agreement of the Company to register the shares of Common
Stock, under the Securities Act of 1933), as amended.
W I T N E S S E T H:
WHEREAS, the Company will issue to Holder shares of the Company's Common
Stock (the "Shares") more specifically identified in the Memorandum.
WHEREAS, the Holder is willing to subscribe for the Shares subject to
the terms and conditions set forth herein,
NOW THEREFORE, in consideration of the agreements set forth herein the
parties agree as follows:
1. Piggyback Registration. If the Company at any time during the year
three year period commencing on the date the Company becomes subject to the
reporting requirements of the Securities Exchange Act of 1934 (the "Exchange
Act"), proposes to register any of its securities under the Securities Act of
1933, as amended (the "1933 Act"), other than pursuant to Forms X-0, X-0 or
other comparable form, the Company shall include the shares of Common Stock
issued to the Holder (the "Registrable Securities"), in such registration. The
Company shall at such time give prompt written notice to all Holders of its
intention to effect such registration and of such Holders' rights under such
proposed registration, and upon the request of any Holder delivered to the
Company within twenty (20) days after giving of such notice (which request shall
specify the Registrable Securities intended to be disposed of by such Holder and
the intended method of disposition thereof), the Company shall include such
Registrable Securities held by each such Holder requested to be included in such
registration; provided, however, that if, at any time after giving such written
notice of the Company's intention to register any of the Holder's Registrable
Securities and prior to the effective date
E-1
of the registration statement filed in connection such registration, the Company
shall determine for any reason not to register or to delay the registration of
such Registrable Securities, the Company may give written notice of such
determination to each Holder and thereupon shall be relieved of its obligation
to register any Registrable Securities issued or issuable in connection with
such registration (but not from its obligation to pay registration expenses in
connection therewith or to register the Registrable Securities in a subsequent
registration); and in the case of a determination to delay a registration shall
thereupon be permitted to delay registering any Registrable Securities for the
same period as the delay in respect of securities being registered for the
Company's own account. The Holder shall not be required to give any notice in
connection with the Company's initial public offering, in which case, the
Registrable Securities shall be automatically included in Registration
Statement.
Except in connection with the Company's initial public offering, if, in
the good faith judgment of the managing underwriter of an underwritten offering,
the inclusion of all of the Registrable Securities originally covered by a
request for registration would reduce the number of shares to be offered by the
Company or interfere with the successful. marketing of the shares of Common
Stock to be offered by the Company, the number of shares to be included in such
offering may be reduced in the following manner: (i) any shares of Common Stock
to be offered by the officers or directors of the Company shall be excluded from
such offering to the extent required by the managing underwriter, and (ii) if a
further reduction in the number of shares is required, such shares shall be
selected pro rata, among all selling stockholders whose shares are included in
such registration statement (based upon the number of shares of each stockholder
to be included in such registration statement).
2. Option to Include Registrable Securities in Offering. Notwithstanding
anything contained in Section I of this Agreement, the Company shall not be
required to include any of the Holders' Registrable Securities in an
underwritten offering of the Company's securities unless such Holders accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (provided such terms are usual and customary for
selling stockholders) and the Holders agree to execute and/or deliver such
documents in connection with such registration as the Company or the managing
underwriter may reasonably request. Nothing contained herein however, shall
require any Holder to execute an agreement to refrain from selling the
Registrable Securities, except as set forth in the Subscription Agreement.
3. Cooperation with Company. Holders will cooperate with the Company in
all respects in connection with this Agreement, including, timely supplying all
information reasonably requested by the Company and executing and returning all
documents reasonably requested in connection with the registration and sale of
the Registrable Securities.
4. Registration Procedures. If and whenever the Company is required by
any of the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Securities under the 1933 Act, the
Company shall (except as otherwise provided in this Agreement), as expeditiously
as possible:
E-2
a. prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement and shall use its best
efforts to cause such registration statement to become effective
and remain effective until all the Registrable Securities are sold
or become capable of being publicly sold without registration under
the 1933 Act; provided, however, the Company may suspend or
terminate the use of any such registration statement for a period
of up to 30 days to permit the orderly dissemination of significant
business developments.
b. 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 and to comply with the provisions
of the 1933 Act with respect to the sale or other disposition of
all securities covered by such registration statement whenever the
Holder or Holders of such securities shall desire to sell or
otherwise dispose of the same (including prospectus supplements
with respect to the sales of securities from time to time in
connection with a registration statement pursuant to Rule 415 of
the Commission);
c. furnish to each Holder such numbers of copies of a summary
prospectus or other prospectus, including a preliminary prospectus
or any amendment or supplement to any prospectus, in conformity
with the requirements of the 1933 Act, and such other documents, as
such Holder may reasonably request in order to facilitate the
public sale or other disposition of the securities owned by such
Holder;
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 each Holder shall reasonably
request, and do any and all other acts and things which may be
necessary or advisable to enable such Holder to consummate the
public sale or other disposition in such jurisdiction of the
securities owned by such Holder, except that the Company shall not
for any such purpose be required to qualify to do business as a
foreign corporation in any jurisdiction wherein it is not so
qualified or to file therein any general consent to service of
process;
e. use its best efforts to list such securities on any securities
exchange on which any securities of the Company is then listed, if
the listing of such securities is then permitted under the rules of
such exchange;
f. enter into and perform its obligations under an underwriting
agreement, if the offering is an underwritten offering, in usual
and customary form, with the managing underwriter or underwriters
of such underwritten offering;
E-3
g. Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating
thereto covered by such registration statement is required to be
delivered under the 1933 Act, of the happening of any event of
which it has knowledge 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; and
h. furnish, at the request of any Holder on the date such Registrable
Securities are delivered to the underwriters for sale pursuant to
such registration or, if such Registrable Securities are not being
sold through underwriters, on the date the registration statement
with respect to such Registrable Securities becomes effective, (i)
an opinion, dated such date, of the counsel representing the
Company for the purpose of such registration, addressed to the
underwriters, if any, and to the Holder making such request,
covering such legal matters with respect to the registration in
respect of which such opinion is being given as the Holder of such
Registrable Securities may reasonably request and are customarily
included in such an opinion and (ii) letters, dated, respectively,
(1) the effective date of the registration statement and (2) the
date such Registrable Securities are delivered to the underwriters,
if any, for sale pursuant to such registration from a firm of
independent certified public accountants of recognized standing
selected by the Company, addressed to the underwriters, if any, and
to the Holder making such request, covering such financial,
statistical and accounting matters with respect to the registration
in respect of which such letters are being given as the Holder of
such Registrable Securities may reasonably request and are
customarily included in such letters; and
i. take such other actions as shall be reasonably requested by any
Holder to facilitate the registration and sale of the Registrable
Securities; provided, however, that the Company shall not be
obligated to take any actions not specifically required elsewhere
herein which in the aggregate would cost in excess of $5,000.
5. Expenses. All expenses incurred in any registration of the Holders'
Registrable Securities under this Agreement shall be paid by the Company,
including, without limitation, printing expenses, fees and disbursements of
counsel for the Company, expenses of any audits to which the Company shall agree
or which shall be necessary to comply with governmental requirements in
connection with any such registration, all registration and filing fees for the
Holders' Registrable Securities under federal and State securities laws, and
expenses of complying with the securities or blue sky laws of any jurisdictions;
provided, however, the Company shall not be liable for (a) any discounts or
commissions to any
E-4
underwriter, (b) any stock transfer taxes incurred with respect to Registrable
Securities sold in the Offering or (c) the fees and expenses of counsel for any
Holder, provided that the Company will pay the costs and expenses of Company
counsel if the Company's counsel is representing any or all selling security
holders.
6. Indemnification. In the event any Registrable Securities are included
in a registration statement pursuant to this Agreement:
a. Company Indemnity. Without limitation of any other indemnity
provided to any Holder, either in connection with the
Offering or otherwise, to the extent permitted by law, the
Company shall indemnify and hold harmless each Holder, the
affiliates, officers, directors and partner of each holder,
any underwriter (as defined in the 0000 Xxx) for such Holder,
and each person, if any, who controls such Holder or
underwriter (within the meaning of the 1933 Act or the
Exchange Act, against any losses, claims, damages or
liabilities (joint or several) to which they may become
subject under the 1933 Act, the Exchange 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, omissions
or violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement f 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, (iii) any violation or alleges
violation by the Company of the 1933 Act, the Exchange Act,
or (iv) any state securities law or any rule or regulation
promulgated under the 1933 Act, the Exchange Act or any
state securities law, and the Company shall reimburse each
such Holder, affiliate, officer or director or partner,
underwriter or controlling person for any reasonable legal or
other expenses 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 to any Holder 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 the use in connection with such
registration by any such Holder or any other officer,
director or controlling person thereof.
x. Xxxxxx Indemnity. Each Holder shall indemnify and hold
harmless the Company, its affiliates, its counsel,
underwriter (as defined in the 0000 Xxx) and each person, if
any, who controls the Company or the underwriter (within the
meaning of the 1933 Act or liabilities (joint or several) to
which they may become subject under the 1933 Act, the
E-5
Exchange Act or any state securities law, and the Holder
shall reimburse the Company, affiliate, officer or director
or partner, underwriter or controlling person for any legal
or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action; insofar as such losses, claims, damages
or liabilities (or actions and respect thereof) arise out of
or are based upon any statements or information provided by
such Holder to the Company in connection with the offer or
sale of Registrable Securities.
c. Notice Right to Defend. Promptly after receipt by an
indemnified party under this Section 6 of Notice of the
Commencement of any action (including any governmental
action), such indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party under
this Section 6 deliver to the indemnifying party a written
notice of the commencement thereof and the indemnifying party
agrees in writing that it will be responsible for any costs,
expenses, judgments, damages and losses incurred by the
indemnified party with respect to such claim, 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 reasonable
fees and expenses to be paid by the indemnifying party, if
counsel to the indemnified party reasonably believes that
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, provided, however, that the
indemnifying party shall be responsible for one counsel. The
failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such
action shall relieve such indemnifying party of any liability
that it may have to any indemnified party otherwise than
under this Agreement.
d. Contribution. If the indemnification provided for in this
Agreement 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 thereunder, 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, or
benefit to, the indemnifying party on the one hand and the
indemnified party on the other hand in connection with the
statements or omissions which resulted in such loss,
liability, claim damage or expense as well as any of the
relevant equitable considerations. The relevant fault of the
indemnifying party and the indemnified part shall be
determined by
E-6
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. Notwithstanding the foregoing, the amount any
Holder shall be obligated to contribute pursuant to the
Agreement shall be limited to an amount equal to the proceeds
to such Holder of the Registrable Securities sold pursuant to
the registration statement which gives rise to such
obligation to contribute (less the aggregate amount of any
damages which the Holder has otherwise been required to pay
in respect of such loss, claim, damage, liability or action
or any substantially similar loss, claim, damage, liability
or action arising from the sale of such registrable
Securities). Notwithstanding any indemnification provided for
in this Section 6, in the event it is finally bad faith,
wilful misconduct or gross negligence of an indemnified
party, such indemnified party shall repay to the indemnifying
party all amounts previously paid on behalf of the
indemnified party in connection with the defense of such
Violation.
e. Survival of Indemnity. The indemnification provided by this
Agreement shall be a continuing right to indemnification and
shall survive the registration and sale of any Registrable
Securities by any person entitled to indemnification
hereunder and the expiration or termination of this
Agreement.
7. Limitation on Other Registration Rights. Except as otherwise set
forth in this Agreement, the Company shall not, without the prior written
consent of the Holders of Registrable Securities representing a majority thereof
held by all the Holders, file any registration statement filed on behalf of any
person (including the Company) other than a Holder to become effective during
any period when the Company is not in compliance with this Agreement.
8. Remedies.
a. Remedies Upon Default or Delay. The Company acknowledges the
breach of any part of this Agreement may cause irreparable harm
to a Holder and that monetary damages alone may be inadequate.
The Company therefore agrees that the Holder shall be entitled
to injunctive relief or such other applicable remedy as a court
of competent jurisdiction may provide. Nothing contained herein
will be construed to limit a Holder's right to any remedies at
law, including recovery of damages for breach of any part of
this Agreement.
9. Notices. All communications under this Agreement shall be in writing
and shall be mailed by first class mail, postage prepaid, or telegraphed or
telexed with confirmation of receipt or delivered by hand or by overnight
delivery service. Any notice, when mailed by
E-7
registered or certified mail shall be deemed to be given three days after so
mailed, when telegraphed or telexed shall be deemed to be given when
transmitted, or when delivered by hand or overnight shall be deemed to be given
when delivered.
10. Successors and Assigns. Except as other wise expressly provided
herein, this Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of the Company and each of the Holders.
11. Amendment and Waiver. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, but only with the
written consent of the Company and the Holder's of securities representing a
majority of the Registrable Securities; provided, however, that no such
amendment or waiver shall take away any registration right of any Holder of
Registrable Securities or reduce the amount f reimbursable costs to any Holder
of Registrable Securities in connection with any registration hereunder without
the consent of such Holder; further provided, however, that without the consent
of any other Holder of Registrable Securities, any Holder may from time to time
enter into one or more agreements amending, modifying or waiving the provisions
of this Agreement if such action does not adversely affect the rights or
interest of any other Holder of Registrable Securities. No delay on the part of
any party in the exercise of any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise by any party of any
right, power or remedy preclude any other or further exercise thereof, or the
exercise of any other right, power or remedy.
12. Counterparts. One or more counterparts of this Agreement may be
signed by the parties, each of which shall be an original but all of which
together shall constitute one and same instrument.
13. Governing Law. This Agreement shall be construed in accordance with
and governed by the internal laws of the State of Nevada, without giving effect
to conflicts of law principles.
14. Invalidityly of Provisions. If any provisions of this Agreement is
or becomes invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected thereby.
15. Headings. The headings in this Agreement are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
l0th day of March, 1997.
AXXESS, INC.
By: /s/ Xxxxx X. Xxxxxxxx Xxxxxx Xxxxxxx & Co., Inc.
---------------------------- ------------------------------
Xxxxx X. Xxxxxxxx, President Name of Holder
/s/ [Signature appears here]
------------------------------
Signature of Holder
E-8
