REGISTRATION RIGHTS AGREEMENT
Exhibit 4.1
THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is dated as of June 1, 2005, and
entered into, by and between XXXXXX.XXX, INC., a Delaware corporation (the “Company”), and
XXXXX X. XXXXXX, XXXXX XXXXX and XXXXXXX X. XXXXXX (the “Principals” and each a
“Principal”).
This Agreement is made pursuant to the Stock Purchase Agreement dated as of June 1, 2005 by
and among the Company, the Principals and the other parties named therein (the “Purchase
Agreement”). In order to induce the Principals to enter into the Purchase Agreement, the
Company has agreed to provide the registration rights set forth herein. The execution of this
Agreement is a condition to closing under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions. Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Purchase Agreement. As used in this Agreement, the following
capitalized terms shall have the following meanings:
Claims: A term defined under Section 7(a) hereof.
Common Stock: Common stock of the Company, however designated, which is not limited
as to the amount of dividends, or which is not limited as to the amount of distributions upon
liquidation or dissolution of the Company.
Company: Xxxxxx.xxx, Inc.
Equity Securities: Common Stock of the Company issued to the Principals pursuant to
Sections 1.3(a)(ii) and 1.3(a)(iii) of the Purchase Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended from time to time.
Holder: A Person as defined under Section 2(b) hereof.
Insiders: A term defined under Section 4 hereof.
Misstatement: The existence of any fact which results in the Registration Statement,
the Prospectus or any document incorporated therein by reference containing an untrue statement of
material fact or omitting to state a material fact required to be stated therein or necessary to
make statements therein, in light of the circumstances, not misleading.
NASD: NASD, Inc.
Piggyback Registration: A registration pursuant to Section 3 hereof.
Prospectus: The prospectus included in any Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the offering of any
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portion of the Registrable Securities covered by the Registration Statement and by all other
amendments and supplements to the prospectus, including post-effective amendments and all material
incorporated by reference in such prospectus.
Registration Expenses: See Section 6 hereof.
Registrable Securities: The Equity Securities and any other securities issued or
issuable with respect to the Equity Securities by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation or other
reorganization; provided that a security ceases to be a Registrable Security when it is no
longer a Transfer Restricted Security.
Registration Statement: Any Registration Statement of the Company under the
Securities Act on an appropriate form which covers Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments (including post-effective
amendments), and supplements to such Registration Statement and all exhibits to and all material
incorporated by reference in such Registration Statement.
Securities Act: The Securities Act of 1933, as amended from time to time.
SEC: The Securities and Exchange Commission or any successor thereto.
Transfer Restricted Securities: Securities acquired by the Holder thereof other than
pursuant to an effective registration under Section 5 of the Securities Act or pursuant to Rule 144
made under the Securities Act; provided that a Security that has ceased to be a Transfer
Restricted Security cannot thereafter become a Transfer Restricted Security.
Underwritten Offering: A registration in which securities of the Company are to be
issued by the Company and sold to an underwriter for distribution to the public.
2. Securities Subject to this Agreement.
(a) Registrable Securities. The securities entitled to the benefits of this Agreement
are the Registrable Securities. Notwithstanding anything to the contrary set forth in this
Agreement, Registrable Securities shall exclude all “Unvested Shares” (as defined in the
Restricted Stock Agreement) and all “Lock Up Securities” (as defined in the Lock-Up
Agreement).
(b) Holders of Registrable Securities. A Person is deemed to be a Holder of
Registrable Securities (a “Holder”) whenever such Person owns Registrable Securities.
3. Piggyback Registration.
(a) Inclusion in Registration. Subject to the provisions of Section 9 below, if at
any time, to the extent that Holder then holds Registrable Securities, the Company shall determine
(including pursuant to a demand of any stockholder of the Company) to file a registration statement
under the Securities Act relating to a proposed sale to the public of any of
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its securities, either for its own account or the account of a security Holder or Holders, the
Company shall:
(i) promptly give to each Holder of a Registrable Security written notice thereof
(which notice shall include the proposed offering price and the plan of distribution);
(ii) include in such registration (and any related qualification under blue sky laws
or other compliance) all the Registrable Securities specified in a written request or requests,
made within 20 days after such written notice from the Company, by any Holder of Registrable
Securities;
(iii) if the registration statement is to cover an Underwritten Offering, use all
reasonable efforts to cause the managing underwriter or underwriters of such proposed Underwritten
Offering to permit the Registrable Securities requested to be included in the Registration
Statement for such offering to be included on the same terms and conditions as any similar
securities of the Company included therein; provided, however, that if, in connection with an
Underwritten Offering involving an underwriting of Common Stock to be issued by the Company, the
managing underwriter shall impose a limitation on the number of shares of such Common Stock which
may be included in any such registration statement because, in such underwriter’s judgment, such
limitation is necessary to effect an orderly public distribution, and such limitation is imposed
pro rata with respect to all securities whose holders have a contractual, incidental or “piggyback”
right to include such securities in the registration statement and as to which inclusion has been
requested pursuant to such right and there is first excluded from such registration statement all
shares of Common Stock sought to be included therein by (i) any director, officer or employee of
the Company, (ii) any holder thereof not having any such contractual, incidental registration
rights, and (iii) any holder thereof having contractual, incidental or “piggyback” registration
rights subordinate and junior to the rights of the Holders of Registrable Securities, then the
Company shall be obligated to include in such registration statement only such limited portion
(which may be none) of the Registrable Securities with respect to which such Holder has requested
inclusion hereunder; and
(iv) the Company shall bear all Registration Expenses in connection with a piggyback
registration, except that each Holder of the Registrable Securities whose Registrable Securities
are included in such Registration shall pay its pro rata share of the Underwriters’ Commissions
incurred in such Registration, in accordance with the amount of Registrable Securities sold by all
such Holders.
(b) Time of Exercise. Holders of Registrable Securities may exercise piggyback
registration rights under this Section 3 at any time or from time to time, so long as such Holders
continue to hold Registrable Securities. The terms of this Section 3 shall not apply to any
Registration Statement filed by the Company relating solely to employees’ stock option or purchase
plans or any Registration Statement filed on Form S-4 or S-8 or any successor form thereto, nor to
any Registration Statement as to which Holder’s registration rights are not otherwise applicable
(because Holder’s Equity Securities may be sold pursuant to the term of Section 8 of this Agreement
or are then subject to the Lock Up Agreement and/or Restricted Stock Agreement).
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(c) Withdrawal. At any time prior to the effectiveness of a Registration Statement
with the SEC, any Holder of Registrable Securities may withdraw such Holder’s request for inclusion
of Registrable Securities in any piggyback registration under this Section 3 by giving written
notice to the Company of its election to withdraw prior to the effectiveness of the Registration
Statement, provided that such Holder shall be responsible for all Registration Expenses of such
Holder which may be incurred pursuant to such withdrawal. The Company may also elect to withdraw a
Registration Statement filed pursuant to this Section 3 at any time prior to the effectiveness of
such Registration Statement. Notwithstanding any such withdrawal by the Company, the Company shall
pay all Registration Expenses incurred in such piggyback registration as provided in Section
3(a)(iv).
4. Hold Back Agreements. Except as part of an underwritten registration involving the
Registrable Securities, each Holder of Registrable Securities whose Registrable Securities are
covered by a Registration Statement filed pursuant to Section 3 hereof agrees that such Holder will
not, (on the conditions that all “Insiders” (as defined below) likewise agree), effect any public
sale or distribution of securities of the Company of the same class as the securities included in
such Registration Statement, including a sale pursuant to Rule 144 under the Securities Act, during
the 7 day period prior to, and during the 90 days with respect to each other Underwritten Offering
made pursuant to such Registration Statement, in each case to the extent timely requested in
writing by the managing underwriters. Each Holder of Registrable Securities shall sign an
agreement with the underwriters to such effect if so requested by the managing underwriters in such
Underwritten Offering; provided that all Insiders do so. “Insiders” means (i) directors
and officers of the Company or any Affiliate thereof and (ii) any Persons who beneficially own
shares of Common Stock issued and outstanding on the date hereof and are involved on the date
hereof in the management of the Company.
5. Registration Procedures. In connection with the Company’s registration obligations
pursuant to Section 3 hereof, the Company shall use all reasonable efforts to effect such
registration to permit the sale of such Registrable Securities in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company will as expeditiously as
practicable:
(a) before filing a Registration Statement or Prospectus or any amendments or supplements
thereto, furnish to the Holders of the Registrable Securities covered by such Registration
Statement and the underwriters, if any, copies of all such documents proposed to be filed, which
documents shall be made available for prior review by such Holders and underwriters;
(b) prepare and file with the SEC such amendments and post effective amendments to any
Registration Statement, and such amendments or supplements to the Registration Statement or
Prospectus, as may be reasonably requested by any Holder of Registrable Securities or any
underwriter of Registrable Securities or as may be required by the rules, regulations or
instructions applicable to the registration form utilized by the Company or by the Securities Act
or otherwise necessary to keep such Registration Statement effective until (i) the completion by
the underwriters of the distribution pursuant to an Underwritten Offering or (ii) nine months after
the effectiveness of any registration statement not involving an Underwritten Offering and (iii)
file the Prospectus as supplemented pursuant to Rule 424 under
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the Securities Act; and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during the foregoing period in
accordance with the intended methods of disposition by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(c) unless the Company objects in writing on reasonable grounds, if requested by the managing
underwriter or underwriters or a Holder of Registrable Securities being sold in connection with an
Underwritten Offering, immediately incorporate in a Prospectus supplement or post effective
amendment such necessary information as the managing underwriters or the Holders of a majority in
number of the Registrable Securities being sold reasonably request to have included therein
relating to the plan of distribution with respect to such Registrable Securities, including,
without limitation, information with respect to the amount of Registrable Securities being sold to
such underwriters, the purchase price being paid therefor by such underwriters and with respect to
any other terms of the underwritten (or best efforts underwritten) offering of the Registrable
Securities to be sold in such offering; and make all required filings of such Prospectus supplement
or post effective amendment as soon as notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;
(d) at the request of any selling Holder of Registrable Securities, furnish to such selling
Holder of Registrable Securities and to each managing underwriter, without charge, at least one
signed copy of the Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by reference and all
exhibits (including those incorporated by reference);
(e) deliver to each selling Holder of Registrable Securities and the underwriters, if any,
without charge, as many copies of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons may reasonably request; the Company consents to the
use of such Prospectus (or preliminary prospectus) or any amendment or supplement thereto by each
of the selling Holders of Registrable Securities and the underwriters, if any, in connection with
the offering and sale of the Registrable Securities covered by such Prospectus (or preliminary
prospectus) or any amendment or supplement thereto;
(f) make available to a representative of the Holders of a majority in number of the
Registrable Securities, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant retained by the sellers or underwriter, all
financial and other records, pertinent corporate documents and properties of the Company, and cause
the Company’s officers, directors and employees to supply all information reasonably requested by
any such representative, underwriter, attorney or accountant in connection with the registration,
with respect to each at such time or times as the Company shall reasonably determine; provided that
any records, information or documents that are designated by the Company in writing as confidential
shall be kept confidential by such Persons unless disclosure of such records, information or
documents is required by court or administrative order;
(g) otherwise use all best efforts to comply with all applicable rules and regulations of the
SEC, and make generally available to its security Holders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act, no later than 30 days after the end
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of any 12 month period (or 45 or 90 days if the end of such 12 month period coincides with the
end of a fiscal quarter or fiscal year, respectively, of the Company, or such shorter period as the
SEC shall require from time to time with respect to the filing by a reporting company of such
documents on Forms 10-Q or 10-K, respectively) (1) commencing at the end of any month in which
Registrable Securities are sold to underwriters in an Underwritten Offering or (2) if not sold to
underwriters in such an offering, beginning with the first month commencing after the effective
date of the Registration Statement, which statements shall cover said 12-month periods;
(h) cooperate and assist in any filings required to be made with the NASD and in the
performance of any due diligence investigation by any underwriter (including any “qualified
independent underwriter” that is required to be retained in accordance with the rules and
regulations of the NASD);
(i) promptly prior to the filing of any document which is to be incorporated by reference into
the Registration Statement or the Prospectus (after initial filing of the Registration Statement)
provide copies of such document to counsel to the selling Holders of Registrable Securities and to
the managing underwriters, if any, make the Company’s representatives available for discussion of
such document and make such changes in such document prior to the filing thereof as counsel for
such selling Holders or underwriters may reasonably request.
(j) use its best efforts to register or qualify the Registrable Securities covered by said
registration statement under the applicable securities or “blue sky” laws of such jurisdiction as
any selling Holder may reasonably request;
(k) furnish to each selling holder a “signed counterpart” of: (i) an opinion of counsel for
the Company, dated the effective date of the Registration Statement; and (ii) “comfort” letters
signed by the Company’s independent public accountants who have examined and reported on the
Company’s financial statements included in the registration statement, to the extent permitted by
the standards of the American Institute of Certified Public Accountants, covering substantially the
same matters with respect to the Registration Statement (and the prospectus included therein) and
(in the case of the accountants’ “comfort” letters) with respect to events subsequent to the date
of the financial statements, as are customarily covered in opinions of issuer’s counsel and in
accountants’ “comfort” letters delivered to the underwriters in underwritten public offerings of
securities, to the extent that the Company is required to deliver or cause the delivery of such
opinion or “comfort” letters to the underwriters in an underwritten public offering of securities;
and
(l) furnish to each selling Holder a copy of all documents filed with the Commission in
connection with any such offering of securities.
The Company may require each seller of Registrable Securities as to which any registration is being
effected to furnish to the Company such information regarding such seller and the distribution of
such securities as the Company may from time to time reasonably request in writing.
6. Registration Expenses.
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(a) All expenses of the Company’s performance of or compliance with this Agreement, except (i)
where the Registration Statement is terminated prior to effectiveness at the request of, or
primarily as a result of the actions of Holders whose Registrable Securities are included in such
registration and (ii) any underwriting discounts and commissions relating to the Registrable
Securities, shall be paid by the Company, regardless of whether the Registration Statement becomes
effective, including, without limitation:
(1) all registration and filing fees (including, without limitation, with respect to filings
required to be made with the NASD);
(2) fees and expenses of compliance with securities or blue sky laws (including, without
limitation, fees and disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities and determination of their eligibility for investment
under the laws of such jurisdictions as the managing underwriters or Holders of Registrable
Securities being sold may designate);
(3) printing (including, without limitation, expenses of printing or engraving certificates
for the Registrable Securities in a Form eligible for deposit with The Depositary Trust Company and
of printing prospectuses), messenger, telephone and delivery expenses;
(4) fees and disbursements of counsel for the Company but not for the selling Holders of the
Registrable Securities;
(5) fees and disbursements of all independent certified public accountants of the Company
(including, without limitation, the expenses of any special audit and “cold comfort” letters
required by or incident to such performance);
(6) fees and disbursements of underwriters (excluding discounts, commissions or fees of
underwriters, selling brokers, dealer managers or similar securities industry professionals
relating to the distribution of the Registrable Securities or, except as provided in Section
6(a)(4), legal expenses of any Person other than the Company);
(7) securities acts liability insurance if the Company so desires or if the underwriters so
require;
(8) fees and expenses of other Persons retained by the Company; and
(9) fees and expenses associated with any NASD filing required to be made in connection with
the Registration Statement, including, if applicable, the fees and expenses of any “qualified
independent underwriter” (and its counsel) that is required to be retained in accordance with the
rules and regulations of the NASD.
(all such expenses being herein called “Registration Expenses”).
(b) The Company shall, in any event, pay its internal expenses (including, without limitation,
all salaries and expenses of its officers and employees performing legal or accounting duties), the
expense of any annual audit, the fees and expenses incurred in connection
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with the listing of the securities to be registered on each securities exchange on which
similar securities issued by the Company are then listed, rating agency fees and the fees and
expenses of any Person, including special experts, retained by the Company.
7. Indemnification.
(a) Indemnification by the Company. The Company agrees to indemnify and hold harmless
each Holder of Registrable Securities, its officers, directors, employees and agents and each
Person who controls such Holder within the meaning of either Section 15 of the Securities Act (each
such person being sometimes hereinafter referred to as an “Indemnified Holder”) from and
against all losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation and reasonable legal expenses) (a “Claim”) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus or in any amendment or supplement thereto or in any preliminary prospectus
or in any filing with any state securities commission or agency, or arising out of or based upon
any omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or any violation by the Company of any rule
or regulation promulgated under the Securities Act or any state securities laws or regulations
applicable to the Company and relating to action or inaction required of the Company in connection
with such registration. This indemnity shall be in addition to any liability which the Company may
otherwise have.
The foregoing notwithstanding, the Company shall not be liable to the extent that any such
Claim arises out of or is based upon a Misstatement or alleged Misstatement made in any preliminary
prospectus if (i) such Indemnified Holder failed to send or deliver a copy of the Prospectus with
or prior to the delivery of written confirmation of the sale of Registrable Securities giving rise
to such Claim and (ii) the Prospectus would have corrected such untrue statement or omission.
In addition, the Company shall not be liable to the extent that any such Claim arises out of
or is based upon a Misstatement or alleged Misstatement in a Prospectus, (x) if such Misstatement
or alleged Misstatement is corrected in an amendment or supplement to such Prospectus and (y)
having previously been furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Indemnified Holder thereafter fails to deliver such Prospectus as so
amended or supplemented in any case where such delivery is required by the Securities Act or any
state securities laws prior to or concurrently with the sale to the person who purchased a
Registrable Security from such Indemnified Holder and who is asserting such Claim.
The Company shall also provide customary indemnifications to underwriters, selling brokers,
dealer managers and similar securities industry professionals participating in the distribution,
their officers and directors and each Person who controls such Persons (within the meaning of
Section 15 of the Securities Act).
If any action or proceeding (including any governmental investigation or inquiry) shall be
brought or asserted against an Indemnified Holder in respect of which indemnity may be sought from
the Company, such Indemnified Holder shall promptly notify the Company in
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writing, and the Company shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to such Indemnified Holder and the payment of all expenses of such counsel.
Such Indemnified Holder shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel shall be the expense
of such Indemnified Holder unless (a) the Company has agreed in writing to pay such fees and
expenses, (b) the Company shall have failed to assume promptly the defense of such action or
proceeding or shall have failed to employ counsel reasonably satisfactory to such Indemnified
Holder in any such action or proceeding or (c) the named parties to any such action or proceeding
(including any impleaded parties) include both such Indemnified Holder and the Company, and such
Indemnified Holder shall have been advised in writing by counsel that representation of both
parties by the same counsel would be inappropriate due to actual or potential material differing
interests or conflicts between them.
The Company shall not be liable for any settlement of any such action or proceeding effected
without its written consent, but if settled with its written consent, or if there shall be a final
judgment for the plaintiff in any such action or proceeding, the Company agrees to indemnify and
hold harmless such Indemnified Holders from and against any loss or liability by reason of such
settlement or judgment, (which consent shall not be unreasonably withheld), nor shall the Company
be liable in any such case for any Claim to the extent that it arises out of or is based upon a
Misstatement or alleged Misstatement that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by such Indemnified
Holder.
(b) Indemnification by Holder of Registrable Securities. In the event that the
Company registers any of the Registrable Securities under the Securities Act, each Holder of
Registrable Securities so registered agrees to indemnify and hold harmless the Company, its
directors and officers and each Person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act to the same extent as the foregoing indemnity from the
Company to such Holder, but only with respect to information relating to such Holder furnished in
writing by such Holder expressly for use in any Registration Statement or Prospectus, or any
amendment or supplement thereto, or any preliminary prospectus. In case any action or proceeding
shall be brought against the Company or its directors or officers or any such controlling person,
in respect of which indemnity may be sought against a holder of Registrable Securities, such holder
shall have the rights and duties given the Company, and the Company or its directors or officers or
such controlling person shall have the rights and duties given to each holder, by the preceding
paragraph. Notwithstanding anything to the contrary in this Section 7(b), an Indemnified Holder’s
obligations hereunder shall be limited to an amount equal to the proceeds received by such Holder
sold in such registration.
The Company shall be entitled to receive indemnities from underwriters, selling brokers,
dealer managers and similar securities industry professionals participating in the distribution, to
the same extent as provided above with respect to information so furnished in writing by such
Persons specifically for inclusion in any Prospectus or Registration Statement or any amendment or
supplement thereto, or any preliminary prospectus.
(c) Contribution. If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under Section 7(a) or Section 7(b) hereof (other than by
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reason of exceptions provided in those Sections) in respect of any Claim referred to therein,
then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result of such Claim in
such proportion as is appropriate to reflect the relative fault of the Company, on the one hand,
and of the Indemnified Holder, on the other hand, in connection with the statements or omissions
which resulted in such Claim, as well as any other relevant equitable considerations.
The relative fault of the Company, on the one hand, and of the Indemnified Holder, on the
other hand, shall be determined by reference to, among other things, whether the Misstatement or
alleged Misstatement relates to information supplied by the Company or by the Indemnified Holder
and the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such Misstatement or alleged Misstatement. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed
to include, subject to the limitations set forth in the second paragraph of Section 7 (a) hereof,
any legal or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
The Company and each Holder of Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 7(c) were determined by pro rata allocation or
by any other method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 7(c), an Indemnified Holder shall not be
required to contribute any amount in excess of the amount by which the total proceeds received by
such Indemnified Holder from the sale of the Registrable Securities exceed the amount of any
damages which such Indemnified Holder, or its affiliated Indemnified Holders, has otherwise been
required to pay by reason of such Misstatement or alleged Misstatement.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
The parties agree that the provisions of this Section 7 shall survive termination of this
Agreement.
8. Rule 144. The Company covenants that it shall file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by
the SEC thereunder to the extent required from time to time to enable such holder to sell
Registrable Securities without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time
to time or (b) any similar rule or regulation hereafter adopted by the SEC. Upon the request of
any holder of Registrable Securities, the Company shall deliver to such holder a written statement
in reasonable detail as to whether it has complied with such information and requirements. The
Company agrees to use its reasonable efforts to facilitate and expedite transfers of the
Registrable Securities pursuant to Rule 144 under the Securities Act, which efforts shall include
timely notice to its transfer agent to expedite such transfers of Registrable Securities.
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9. Participation in Underwritten Offerings. No Holder of Registrable Securities (or
its successors or assigns) may participate in any Underwritten Offering hereunder, including any
offering pursuant to Section 3 above, unless such Person (a) agrees to sell such Person’s
securities on the basis provided in any underwriting arrangements approved by the underwriters and
other Persons entitled hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
10. Suspension of Sales. Each holder of Registrable Securities agrees by acquisition
of such Registrable Securities that, upon receipt of written notice from the Company that (i) a
Registration Statement or Prospectus contains a Misstatement or alleged Misstatement, or (ii) in
the reasonable determination of the Company, there exist circumstances not yet disclosed to the
public which would be required to be disclosed in such Registration Statement and the disclosure of
which would be materially harmful to the Company, such Holder shall forthwith discontinue
disposition of Registrable Securities until such Holder is advised in writing by the Company (which
shall in no event be more than 30 days after the initial notice) that the use of the Prospectus may
be resumed and has received copies of any additional or supplemental filings which are incorporated
by reference in the Prospectus, and, if so directed by the Company, such holder shall deliver to
the Company (at the Company’s expense) all copies, other than permanent file copies then in such
holder’s possession, of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice; provided, however, that the Company shall not utilize the right provided
under this Section 10 more than once in any 12-month period.
11. Termination. Except for Section 7 hereof, this Agreement and the rights and
obligations of the Company and the Holders hereunder shall terminate on the earlier of (a) the
first date on which no Registrable Securities remain outstanding or (b) such time as all of such
remaining Registrable Securities may be sold in any consecutive three-month period in accordance
with Rule 144.
12. Miscellaneous.
(a) Governing Law; Consent to Jurisdiction. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THE INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
CALIFORNIA (WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW) APPLICABLE TO CONTRACTS EXECUTED
AND TO BE PERFORMED IN SUCH STATE. EACH PARTY HERETO CONSENTS TO THE PERSONAL JURISDICTION OF THE
COURTS OF THE STATE OF CALIFORNIA IN CONNECTION WITH ANY CLAIM OR DISPUTE ARISING IN CONNECTION
WITH THIS AGREEMENT. ANY ACTION OR PROCEEDING SEEKING TO ENFORCE ANY PROVISION OF, OR ANY RIGHT
ARISING OUT OF THIS AGREEMENT MAY BE BROUGHT AGAINST ANY PARTY IN THE COURTS OF THE STATE OF
CALIFORNIA, COUNTY OF LOS ANGELES, OR ALTERNATIVELY, IF INVOLVING RIGHTS TO INDEMNITY OR
CONTRIBUTION PURSUANT TO SECTION 7 HEREOF, IN THE SAME FORUM AS THE ACTION OR PROCEEDING GIVING
RISE TO THE CLAIMS FOR INDEMNIFICATION OR CONTRIBUTION. Notwithstanding the foregoing, nothing in
this Section is intended to prevent a party from instituting an action in any
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jurisdiction for the sole and exclusive purpose of enforcing a judgment by a court in the
jurisdictions referred to in this Section.
(b) Notices. Any notices required or permitted by this Agreement shall be deemed
given when delivered personally or sent by one party to the other in writing by registered or
certified mail, return receipt requested, addressed as follows:
| Principals: | ||||
| Xxxxx X. Xxxxxx | ||||
| 0000 Xxxxxxxx Xxxxxx, Xxxxx X | ||||
| Xxx Xxxxx, Xxxxxx 00000 | ||||
| Facsimile: (000) 000-0000 | ||||
| Xxxxx Xxxxx | ||||
| 0000 Xxxxxxxx Xxxxxx, Xxxxx X | ||||
| Xxx Xxxxx, Xxxxxx 00000 | ||||
| Facsimile: (000) 000-0000 | ||||
| Xxxxxxx X. Xxxxxx | ||||
| 0000 Xxxxxxxx Xxxxxx, Xxxxx X | ||||
| Xxx Xxxxx, Xxxxxx 00000 | ||||
| Facsimile: (000) 000-0000 | ||||
| with a copy (which shall not constitute notice) to: | ||||
| Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx LLP | ||||
| 00000 Xxxxx Xxxxxx Xxxx., 0xx Xxxxx | ||||
| Xxx Xxxxxxx, XX 00000 | ||||
| Attention: Xxxxxx X. X. Xxxxxx | ||||
| Facsimile: (000) 000-0000 | ||||
| The Company: | ||||
| Xxxxxx.xxx, Inc. | ||||
| 0000 XxXxxx Xxxxxx | ||||
| Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000 | ||||
| Attention: Xxxxx Xxxxxxx | ||||
| Facsimile: (000) 000-0000 | ||||
| with a copy (which shall not constitute notice) to: | ||||
| Sheppard, Mullin, Xxxxxxx & Xxxxxxx LLP | ||||
| 000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000 | ||||
| Xxx Xxxxxxx, Xxxxxxxxxx 00000 | ||||
| Attention: Xxxxx Xxxxx | ||||
| Facsimile: (000) 000-0000 | ||||
-12-
Any notice pursuant to this Agreement shall be deemed to be delivered, given, and received for
all purposes as of the date received; provided that notices sent by telecopy shall not be effective
unless such notices are also sent by mail or courier as set forth herein; and provided further,
that (i) mail sent via Certified Mail, Return Receipt Requested, certified fee and normal postage
prepaid, shall be deemed to have been received on the earlier of actual receipt thereof or the date
of refusal or inability to deliver, indicated on the Receipt for Certified Mail and (ii) mail sent
via Federal Express or other recognized overnight courier shall be deemed delivered one (1)
business day after deposit with Federal Express or such other recognized overnight courier service,
charges prepaid. The above addresses may be changed from time to time by giving notice thereof in
the manner provided herein.
(c) Integration. This Agreement constitutes the complete and exclusive agreement of
the parties with respect to the matters set forth herein. The terms of this Agreement may not be
modified except by an instrument in writing signed by all parties hereto.
(d) Closing of Purchase Agreement. The effectiveness of this Agreement is conditioned
upon the Closing contemplated under the Purchase Agreement. If such Closing does not occur, then
this Agreement is rescinded and is of no force and effect.
(e) Waiver. Waiver of the benefit of any provision hereof must be in writing to be
effective. The waiver by any party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach. No action taken pursuant to this
Agreement shall be deemed to constitute a waiver by the party taking such action of compliance by
any other parties with any of the covenants or other obligations contained herein.
(f) Assignability and Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns. The obligations of the
Principals may not be delegated or assigned. The Company may assign this Agreement provided such
assignment is made in connection with the merger of the Company in which the Company is not the
surviving corporation or the sale of all or substantially all the assets of the Company.
(g) Headings. The captions in this Agreement are for the convenience of reference
only and do not affect the meaning of any terms or provisions hereof.
(h) Severability. Any provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining provisions hereof, and any such
invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction. Furthermore, in lieu of such invalid or unenforceable
provision, there shall be added automatically as a part of this Agreement a provision as similar in
terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
(i) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY,
UNCONDITIONALLY, IRREVOCABLY AND INTENTIONALLY FOREVER WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY
JURY
-13-
IN RESPECT OF ANY LITIGATION (WHETHER ARISING IN TORT OR CONTRACT) BASED ON, OR ARISING OUT
OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (VERBAL OR WRITTEN) OR ACTION OF ANY PERSON OR ANY EXERCISE BY ANY PARTY OF THEIR
RESPECTIVE RIGHTS UNDER THIS AGREEMENT (INCLUDING WITHOUT LIMITATION ANY ACTION TO RESCIND OR
CANCEL THIS AGREEMENT OR ANY CLAIMS OR DEFENSES ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY
INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS PROVISION IS A MATERIAL INDUCEMENT TO ENTER INTO
THIS AGREEMENT.
(j) No Waiver; Cumulative Remedies. No failure or delay on the part of any party to
this Agreement in exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or remedy hereunder.
The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
(k) Recovery of Fees by Prevailing Party. In the event of a lawsuit to enforce or
interpret the provisions of this Agreement, the non-prevailing party shall pay the prevailing party
reasonable attorneys’ fees and other costs and expenses in such amount as the court shall
determine. In addition, such non-prevailing party shall pay reasonable attorneys’ fees incurred by
the prevailing party in enforcing, or on appeal from, a judgment in favor of the prevailing party.
The preceding sentence is intended by the parties hereto to be severable from the other provisions
of this Agreement and to survive and not be merged into such judgment.
(l) Further Assurances. Each party agrees (i) to furnish upon request to each other
party such further information, (ii) to execute and deliver to each other party such other
documents, and (iii) to do such other acts and things, all as another party may reasonably request
for the purpose of carrying out the intent of this Agreement and the documents and transactions
referred to in this Agreement.
(m) Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same instrument. If
executed in multiple counterparts, this Agreement shall become binding when two or more
counterparts hereto, individually or taken together, bear the signatures of all of the parties
reflected hereon as the signatories. Facsimile counterpart signatures to this Agreement shall be
acceptable at the Closing if the originally executed counterpart is delivered within a reasonable
time thereafter. Any photographic, photocopy or similar reproduction copy of this Agreement, with
all signatures reproduced on one or more sets of signature pages, shall be considered for all
purposes as if it were an executed counterpart of this Agreement.
[Signature Page Follows]
-14-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of
the day and year first above written.
| COMPANY | ||
| XXXXXX.XXX, INC., | ||
| a Delaware corporation |
| By: | /s/ Xxxxxx Xxxxx | |||||
| Name: | Xxxxxx Xxxxx | |||||
| Title: | Vice President |
| PRINCIPALS | ||||
| /s/ Xxxxx X. Xxxxxx | ||||
| XXXXX X. XXXXXX | ||||
| /s/ Xxxxx Xxxxx | ||||
| XXXXX XXXXX | ||||
| /s/ Xxxxxxx X. Xxxxxx | ||||
| XXXXXXX X. XXXXXX |
Signature Page to
Registration Rights Agreement
Registration Rights Agreement
