EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of the ____ day of November 1999, executed and
delivered by xXxxxx.xxx, Inc., a Delaware corporation, having its principal
place of business at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx Xxxxx, Xxxxxxx 00000
(the "Company"), in favor of the Holders (as defined below).
WHEREAS, pursuant to the terms and conditions set forth in the
Confidential Private Offering Memorandum of the Company, dated September 1,
1999, including the exhibits thereto, and any and all supplements thereof and
amendments thereto, and all documents incorporated by reference therein
(collectively, the "Memorandum"), the Company is offering for sale (the
"Offering") up to one hundred sixty eight (168) units of the Company's
securities (the "Units"), each Unit consisting of (i) twenty five thousand
(25,000) shares (the "Unit Shares") of the common stock, par value $.001 per
share (the "Common Stock") of the Company, and (ii) twelve thousand five hundred
(12,500) warrants (tile "Warrants"), each to purchase one share of Common Stock
(the "Warrant Shares") and, pursuant to the terms and conditions set forth in
the Placement Agent Agreement entered into between the Company and Whale
Securities Co., L.P. ("Whale") in connection with the Offering (the "Placement
Agent Agreement"), the Company is issuing five-year warrants to the Placement
Agent, which are exercisable for shares of Common Stock ("Placement Agent
Warrant Shares"); and
WHEREAS, pursuant to the terms and conditions set forth in the
Memorandum, including those contained in the subscription agreement
("Subscription Agreement") which has been executed and delivered by or on behalf
of each of the initial purchasers of Units from the Company (the "Initial
Purchasers"), each of the Initial Purchasers is purchasing the Units for which
it has subscribed; and
WHEREAS, pursuant to the Subscription Agreements, the Company has
agreed to issue to the holders of the Warrants a number of shares of Common
Stock equal to one-half of the Warrants held by such holder (the "Additional
Shares") if the Common Stock has not been registered under the provisions of
Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange Act") and
listed for trading on the Nasdaq SmallCap Market within six months following the
initial closing of the offering (the "Initial Closing"); provided that if the
final closing of the Offering takes place more than 45 days after the Initial
Closing, the six months shall be increased by the number of days which elapse
between the 45th day after the Initial Closing and the final closing of the
Offering; and
WHEREAS, pursuant to the terms of the Placement Agent Agreement, Whale
is acting as placement agent for the Company in connection with the Offering;
and
WHEREAS, the terms and conditions of the Offering provide for the
execution and delivery of this Agreement;
NOW, THEREFORE, in order to induce the Initial Purchasers to purchase
the Units and Whale to act as Placement Agent for the Offering, and for other
good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged by the
Company, the Company hereby agrees as follows:
1. MANDATORY REGISTRATION OF THE REGISTRABLE SECURITIES.
(a) The Company will include the Shares, Warrant Shares,
Placement Agent Warrant Shares and Additional Shares (collectively, the
"Registrable Securities") in a registration statement (the "Mandatory
Registration Statement") which the Company will prepare and file with the
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "Act"), as soon as possible but, in any event, within twelve
(12) months following the Initial Closing, and use its best efforts to have
declared effective by the SEC within 15 months following the Initial Closing so
as to permit the public trading of the Registrable Securities no later than 15
months following the Initial Closing.
(b) Once effective, the Company covenants and agrees to use
its best efforts to maintain the effectiveness of the Mandatory Registration
Statement until the earlier of (i) the date that all of the Registrable
Securities have been sold pursuant to a Mandatory Registration Statement or Rule
144 of the General Rules and Regulations promulgated under the Act ("Rule 144"),
or (ii) the date that the Holders of the Registrable Securities receive an
opinion of counsel to the Company that all of the Registrable Securities may be
freely traded (without limitation or restriction as to quantity or timing and
without registration under the Act) pursuant to Rule 144 or otherwise. If the
Company fails to keep the Mandatory Registration Statement continuously
effective during such period, then the Company shall, promptly upon tile request
of tile Holders of at least 51% of the unsold Registrable Securities included
therein, use its best efforts to update the Mandatory Registration Statement or
file a new registration statement covering the unsold Registrable Securities,
subject to the terms and provisions hereof, and, in the event the Company fails
to do so within 90 days after receipt of such request, the Company shall issue
to the Holder, on one occasion only, such number of additional shares of Common
Stock as is equal to one-quarter of the unsold Registrable Securities held by
such Holder, subject to adjustment for stock splits, stock dividends and
recapitalization (the "Penalty Shares"), without further consideration, and the
Company shall be obligated to cause the Penalty Shares, as well as the
Registrable Securities remaining unsold, to be registered promptly under the
Act, subject to the terms and provisions hereof.
(c) Anything herein contained to the contrary notwithstanding,
the provisions of this Agreement shall not apply to, and the term "Registrable
Securities" as used in this Agreement shall not include, any securities after
they have been sold by a Holder pursuant to an effective Registration Statement
(as hereinafter defined) under the Act or pursuant to Rule 144.
2. PIGGYBACK REGISTRATION. If, at any time during the six-year
period following the Initial Closing, the Company proposes to prepare and file
one or more registration statements or amendments, including post-effective
amendments, or supplements thereto covering any of the Company's equity or debt
securities held by the Company or any of its shareholders, in such case other
than pursuant to Form S-4 or Form S-8 or successor form (collectively, a
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"Piggyback Registration Statement"), it will give written notice of its
intention to do so by registered mail ("Notice"), at least thirty (30) business
days prior to the filing of each such Registration Statement, to each Person
(defined hereafter) who beneficially holds Registrable Securities and/or Penalty
Shares and each of the successors, assigns and transferees of each of such
Persons (individually, a "Holder" and collectively, "Holders"). "Person" as used
herein shall mean any individual, sole proprietorships, partnership,
corporation, association, joint venture, trust, unincorporated entity or other
entity, or the government of any country or sovereign state, or of any state,
province, municipality or other political subdivision thereof.
Upon the written request of a Holder or Holders, made within twenty
(20) business days after receipt of the Notice, that the Company include all or
a portion of the Registrable Securities and Penalty Shares held by such Holders
("Piggyback Securities") in the proposed Piggyback Registration Statement (each
such Holder, a "Requesting Holder"), the Company shall use its best efforts to
cause such Registration Statement to be declared effective under the Act, by the
SEC so as to permit the public sale by the Requesting Holders of their Piggyback
Securities pursuant thereto, at the Company's sole cost and expense and at no
cost or expense to the Requesting Holders. However, if, in the written opinion
of the Company's managing underwriter, if any, for the offering evidenced by
such Piggyback Registration Statement, the inclusion of all or a portion of the
Piggyback Securities, when added to the securities being registered, will exceed
the maximum amount of the Company's securities which can be marketed either (i)
at a price reasonably related to their then-current market value or (ii) without
otherwise materially adversely affecting the entire offering, then the Company
may exclude from such offering all or a portion of the Piggyback Securities.
If securities are proposed to be offered for sale pursuant to such
Piggyback Registration Statement by other security holders of the Company and
the total number of securities to be offered by the Requesting Holders and such
other selling security holders is required to be reduced pursuant to a request
from the managing underwriter (which request shall be made only for the reasons
and in the manner set forth above), the aggregate number of Piggyback Securities
to be offered by Requesting Holders pursuant to such Piggyback Registration
Statement shall equal the number which bears the same ratio to the maximum
number of securities that the underwriter believes may be included for all the
selling security holders (including the Requesting Holders) as the original
number of Piggyback Securities proposed to be sold by the Requesting Holders
bears to the total original number of securities proposed to be offered by the
Requesting Holders and the other selling security holders.
Notwithstanding the provisions of this Section 2, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 2 (irrespective of whether any written request for inclusion of
Piggyback Securities shall have already been made) to elect not to file any such
proposed Piggyback Registration Statement or to withdraw the same after its
filing but prior to the effective date thereof.
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3. ADDITIONAL COVENANTS OF THE COMPANY WITH RESPECT TO
REGISTRATION.
(a) In connection with any registration of Registrable
Securities and/or Penalty Shares pursuant to Sections I or 2 above, the Company
shall furnish each Holder of Registrable Securities and/or Penalty Shares
included in a Mandatory Registration Statement or a Piggyback Registration
Statement (each of which is sometimes referred to as a "Registration Statement")
with such reasonable number of copies of such Registration Statement, related
preliminary prospectus and prospectus meeting the requirements of the Act, and
other documents necessary or incidental to the registration and public offering
of such Registrable Securities and/or Penalty Shares, as shall be reasonably
requested by the Holder to permit the Holder to make a public distribution of
such Registrable Securities and/or Penalty Shares.
(b) If any stop order shall be issued by the SEC in connection
with any Registration Statement filed pursuant to Sections I or 2 above, the
Company will use its best efforts to obtain the removal of such order.
(c) The Company shall pay all costs, fees, and expenses in
connection with all Registration Statements filed pursuant to Sections I and 2
above, including, without limitation, the Company's legal and accounting fees,
printing expenses, and blue sky fees and expenses; provided, however, that the
Holders shall be solely responsible for the fees of any counsel retained by the
Holders in connection with such registration and any transfer taxes or
underwriting discounts, commissions or fees applicable to the Registrable
Securities and Penalty Shares sold by the Holders pursuant thereto.
(d) The Company will use its best efforts to qualify any
Registrable Securities and Penalty Shares included in a Registration Statement
for sale in such states as the Holders of such securities shall reasonably
request, provided that no such qualification will be required in any
jurisdiction where, solely as a result thereof, the Company would be subject to
general service of process or to taxation or qualification as a foreign
corporation doing business in such jurisdiction.
(e) As promptly as practicable after becoming aware of such
event, and in no event later than two (2) business days after becoming aware of
such event, notify each Holder of the happening of any event of which the
Company has knowledge, as a result of which the prospectus included in the
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, in light of the circumstances under
which they were made, not misleading, and use its best efforts promptly to
prepare a supplement or amendment to the Registration Statement or other
appropriate filing with the SEC to correct such untrue statement or omission,
and deliver a number of copies Of Such Supplement or amendment to each Holder as
such Holder may reasonably request.
(f) As promptly as practicable after becoming aware of such
event, and in no event later than two (2) business days after becoming aware of
such event, notify each Holder of the issuance by the SEC or any "blue sky" or
state regulatory authorities of any
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notice of effectiveness or any stop order or other suspension of the
effectiveness of the Registration Statement.
(g) Provide a transfer agent and registrar, which may be a
single entity, for the Common Stock not later than the effective date of the
Registration Statement.
(h) Take all other reasonable actions necessary to expedite
and facilitate disposition by the Holder of the Registrable Securities and/or
Penalty Shares pursuant to the Registration Statement.
(i) Neither the filing of a Registration Statement by the
Company pursuant to this Agreement nor the making of any request for
prospectuses by the Holder shall impose upon the Holder any obligation to
exercise the Holders' Warrants or placement Agent Warrants or to sell the
Holder's Registrable Securities or Penalty Shares.
(j) The Holder, upon receipt of notice from the Company that
an event of the kind described in Sections 3(e) or (f) has occurred which
requires a post-effective amendment to the Registration Statement or a
supplement to the prospectus included therein, shall promptly discontinue the
sale of Registrable Securities and/or Penalty Shares until the Holder receives a
copy of a supplemented or amended prospectus from the Company, which the Company
shall provide immediately after such notice.
4. INDEMNIFICATION AND CONTRIBUTION.
(a) In connection with any Registration Statement covering
Registrable Securities and/or Penalty Shares, the Company agrees to indemnify
and hold harmless each Holder, the affiliates of each such Holder, the
directors, partners, officers, employees and agents of each such Holder and each
person who controls any such Holder within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in a Registration
Statement as originally filed or in any amendment thereof, or in any preliminary
prospectus or prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each Such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Company will not be liable
in any case to the extent that any Such loss, claim, damage or liability arises
out of or is based upon any Such untrue statement or alleged untrue statement or
omission of alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any such
Holder specifically for inclusion therein, (ii) the Company will not be liable
to any indemnified party under this indemnity agreement with respect to any
Registration
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Statement or prospectus to the extent that any such loss, claim, damage or
liability of such indemnified party results from the use of the prospectus
during a period when the use of the prospectus has been suspended in accordance
with Section 2(c) hereof, provided that the Holders received prior notice of
such suspension, which notice shall be deemed to have been received by such
Holders within 48 hours after the giving thereof, and (iii) the Company shall
not be liable to any indemnified party with respect to any preliminary
prospectus to the extent that any such loss, claim, damage or liability of such
indemnified party results from the fact that such indemnified party sold
Registrable Securities or Penalty Shares to a person as to whom there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the prospectus or of the prospectus as then amended or supplemented in any case
where such delivery is required by the Act, if the loss, claim, damage or
liability of such indemnified party results from an untrue statement or omission
of a material fact contained in the preliminary prospectus which was corrected
in the prospectus or in the prospectus as then amended or supplemented. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have. The Company also agrees to indemnify and provide contribution to
each person who may be deemed to be an underwriter (for purposes of the Act)
with respect to the Registrable Securities and Penalty Shares ("Underwriters"),
their officers and directors, and each person who controls each such
Underwriter, on substantially the same basis as that of the indemnification of
and contribution to the Holders provided in this Section 4.
(b) By its participation in a Registration Statement, each
Holder shall be deemed to have agreed to indemnify and hold harmless (i) the
Company, (ii) each of its directors, (iii) each of its officers who signs such
Registration Statement and (iv) each person who controls the Company within the
meaning of either the Act or the Exchange Act to the same extent as the
foregoing indemnity from the Company to each such Holder, but only with respect
to written information relating to such Holder furnished to the Company by or on
behalf of such Holder specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any such Holder may otherwise have. Each Holder shall also be
deemed to have agreed to indemnify and contribute to each Underwriter, their
officers and directors, and each person who controls each such Underwriter, on
substantially the same basis as that of the indemnification of and contribution
to the Company provided in this Section 4. Anything in this Agreement contained
to the contrary notwithstanding, the liability of each Holder for
indemnification or contribution hereunder shall be limited to the amount of
proceeds received by such Holder in the offering giving rise to such liability.
(c) Promptly after receipt by an indemnified party under this
Section 4 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 4, notify the indemnifying party in writing of the
commencement thereof, but the failure so to promptly notify the indemnifying
party will not relieve the indemnifying party from liability under Section 4(a)
or 4(b) hereof unless and to the extent that it is materially prejudiced
thereby. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which
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indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate Counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses Of
Such separate Counsel (and local Counsel) if (i) the Use of counsel chosen by
the indemnified party to represent the indemnified party would present such
Counsel with a conflict of interest, (ii) the actual or potential defendants in,
or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnified party shall not
settle or compromise any action for which it seeks indemnification or
contribution hereunder without the prior written consent of the indemnifying
party, which consent shall not be unreasonably withheld. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in Section 4(a)
or 4(b) is unavailable to or insufficient to hold harmless an indemnified party
for any reason, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively "losses") to
which such indemnified party may be subject in such proportion as is appropriate
to reflect the relative benefits received by such indemnifying party, on the one
hand, and such indemnified party, on the other hand, from the Registration
Statement which resulted in such losses.
(e) The provisions of this Section 4 shall remain in full
force and effect regardless of any investigation made by or on behalf of any
Holder or the Company or any other persons who are entitled to indemnification
pursuant to the provisions of this Section 4, and shall survive the sale by a
Holder of Registrable Securities pursuant to the Registration Statement.
5. AMENDMENTS. This Agreement may not be amended, modified or
supplemented, and waivers of or consents to departures from the provisions of
this Agreement may not be given, unless it would not have an adverse effect upon
the rights of any of the Holders and the
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Company has obtained the consent of Holders then holding a majority of the
Registrable Securities.
6. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of, and be binding upon, the Company, the Holders and the other persons
and entities described in Section 4 hereof and their respective successors,
assigns and transferees, including, without limitation and without the need for
an express assignment, subsequent Holders.
7. THIRD PARTY BENEFICIARIES. The Holders from time to time
shall each be a third party beneficiary of the agreements of the Company
contained herein.
8. HEADING. The headings which are contained in this Agreement
are for the sole purpose of convenience of reference, and shall not limit or
otherwise affect the interpretation of any of the provisions hereof.
9. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of New York applicable to contracts made and to be wholly performed
therein.
10. NOTICES. All notices and other communications hereunder
shall be in writing and shall be made by hand delivery, registered or certified
mail (postage paid, return receipt requested), telecopier or any courier
providing overnight delivery, (i) if to the Company or an Initial Purchaser, at
the address set forth in the Subscription Agreement and (ii) if to a Holder to
the address set forth on the books and records of the Company. All Such notices
and other communications shall be deemed to have been duly given upon receipt.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement of the Company with respect to the subject matter hereof.
12. SEVERABILITY. In the event that any one or more of the
provisions of this Agreement, or the application thereof in any circumstances,
is held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions of this Agreement shall not be in any
way impaired or affected thereby.
13. FURTHER ASSURANCES. The Company will from time to time
after the date hereof take any and all actions, and execute, acknowledge and
deliver any and all documents and instruments, at its cost and expense, as any
Holder may from time to time reasonably request in order to more fully perfect
or protect the rights intended to be granted to it hereunder.
14. INTERPRETATION. As used in this Agreement, unless the
context otherwise requires: words describing the singular number shall include
the plural and vice versa; words denoting any gender shall include all genders;
words denoting natural persons shall include corporations, partnerships and
other entities, and vice versa; and the words "hereof', "herein" and
"hereunder", and words of similar import, shall refer to this Agreement as a
whole, and not to any particular provision of this Agreement.
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15. WAIVER. The failure of the Company or any Holder to at any
time enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof or the right of the Company
or any Holder to thereafter enforce each and every provision of this Agreement.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Agreement as of the date above written:
XXXXXX.XXX, INC.
By: _______________________________________
Name: Xxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
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