EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of December 15, 2004 (this
"Agreement") between Advanced Technology Industries, Inc., a Delaware
corporation ("Parent"), and LTDnetwork, Inc., a Delaware corporation (the
"Company").
WHEREAS, Parent, the Company and LTDN Acquisition Corp., a Delaware
corporation ("Acquisition"), have entered into an Amended and Restated Agreement
and Plan of Merger dated as of August 11, 2004 (the "Merger Agreement") which
provides for the merger (the "Merger") of the Company with and into Acquisition;
WHEREAS, in connection with the Merger, Parent intends to issue to the
stockholders of the Company shares of series A convertible preferred stock, par
value $0.001, of Parent (the "Parent Convertible Preferred Stock") and warrants
(the "Parent Warrants") to purchase shares of Parent Convertible Preferred Stock
or shares of Common Stock, as the case may be;
WHEREAS, the shares of Parent Convertible Preferred Stock will be
converted into shares of common stock, par value $0.001, of Parent (the "Common
Stock") if the stockholders of Parent approve an amendment to Parent's
Certificate of Incorporation (the "Certificate of Incorporation Amendment") to
increase the authorized capital stock of Parent in an amount sufficient such
that all shares of Parent Convertible Preferred Stock can be converted into
shares of Common Stock and all shares Common Stock subject to the Parent
Warrants can be issued upon exercise of such Parent Warrants; and
WHEREAS, the execution of this Agreement is a condition to the closing
of the Merger under the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS.
(a) Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Merger Agreement. As used in this Agreement,
the following defined terms shall have the following meanings:
"Act" or "Securities Act" means the Securities Act of 1933, as amended.
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
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"Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.
"Deferral Notice" has the meaning assigned thereto in Section 2(c).
"Effective Time" means the date on which the Commission declares the
Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.
"Effectiveness Period" has the meaning assigned thereto in Section
2(b).
"Electing Holder" has the meaning assigned thereto in Section
3(a)(iii).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means any person that is the record owner of Registrable
Securities.
"Losses" has the meaning assigned thereto in Section 5(a).
"Material Event" has the meaning assigned thereto in Section 2(a).
"Merger Anniversary Date" means the later of (a) the date which is the
first anniversary of the date on which the Merger is consummated and (b) the
date Parent has received the Additional Company Financial Statements.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.
The term "person" means an individual, partnership, corporation, trust
or unincorporated organization, or a government or agency or political
subdivision thereof.
"Preferred Filing Date" means the later of (a) the date Parent files
the Certificate of Incorporation Amendment with the Secretary of State of the
State of Delaware and (b) the date Parent has received the Additional Company
Financial Statements.
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act) included in the
Shelf Registration Statement, as amended or supplemented by any prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by the Shelf Registration Statement and by all
other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by Parent under the Exchange Act and incorporated by
reference therein.
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"Registrable Securities" means the shares of Common Stock issuable upon
conversion of the Parent Convertible Preferred Stock or upon exercise of the
Parent Warrants, and if the Preferred Filing Date has not occurred by the Merger
Anniversary Date, the shares of Parent Convertible Preferred Stock; provided,
HOWEVER, that a security ceases to be a Registrable Security when it is no
longer a Restricted Security.
"Restricted Security" means any shares of Parent Convertible Stock or
Common Stock issuable upon conversion thereof or issuable upon exercise of a
Parent Warrant except any such shares which (i) have been effectively registered
under the Securities Act and sold in a manner contemplated by the Shelf
Registration Statement, or (ii) have been transferred in compliance with Rule
144 under the Securities Act (or any successor provision thereto) or is
transferable pursuant to Rule 144 (or any successor provision thereto) within a
single three-month period.
"Rules and Regulations" means the published rules and regulations of
the Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.
"Seller Information" has the meaning assigned thereto in Section 5(a).
"Shelf Registration" means a registration effected pursuant to Section
2.
"Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by Parent pursuant to the
provisions of Section 2, including the Prospectus contained therein, any
amendments and supplements to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement.
2. SHELF REGISTRATION.
(a) Parent shall use its reasonable efforts to, no later than 90
calendar days following the Preferred Filing Date, and, if shares of Parent
Convertible Preferred Stock are to be registered, no later than 90 days
following the Merger Anniversary Date, file with the Commission a Shelf
Registration Statement relating to the offer and sale of the Registrable
Securities by the Holders from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such Shelf Registration
Statement and, thereafter, shall use its reasonable efforts to cause such Shelf
Registration Statement to be declared effective under the Act no later than 180
calendar days following the Preferred Filing Date, and, if shares of Parent
Convertible Preferred Stock are to be registered, no later than 180 days
following the Merger Anniversary Date; PROVIDED, HOWEVER, that Parent may, upon
written notice to all Holders, postpone having the Shelf Registration Statement
declared effective for a reasonable period not to exceed 135 days if as a result
of the occurrence or existence of any pending corporate development (a "Material
Event"), including, without limitation, the acquisition or disposition of assets
and similar events, Parent determines in its reasonable discretion that it is
appropriate to postpone having the Shelf Registration Statement declared
effective. Notwithstanding any provision herein no Holder shall be entitled to
be named as a selling securityholder in the Shelf Registration Statement or to
use the Prospectus forming a part thereof for resales of Registrable Securities
unless such Holder is an Electing Holder. The offering made pursuant to the
Shelf Registration Statement shall not be underwritten.
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(b) Parent shall use its reasonable efforts to keep the Shelf
Registration Statement continuously effective in order to permit the Prospectus
forming a part thereof to be usable by Holders until the earliest of (1) the
sale of all Registrable Securities registered under the Shelf Registration
Statement; (2) the expiration of the period referred to in Rule 144(k) of the
Act with respect to all Registrable Securities held by Persons that are not
Affiliates of Parent; and (3) two years from the date such Shelf Registration
Statement is declared effective (such period being referred to herein as the
"Effectiveness Period").
(c) Upon (A) the issuance by the Commission of a stop order suspending
the effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any fact as a result of which the Shelf Registration Statement shall contain
any untrue statement of a material fact or omit to state any 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, or any
Prospectus shall contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (C) the occurrence or existence of any Material Event
that, in the reasonable discretion of Parent, makes it appropriate to suspend
the availability of the Shelf Registration Statement and the related Prospectus,
Parent shall give notice to the Electing Holders that the availability of the
Shelf Registration Statement is suspended (a "Deferral Notice") and, upon
receipt of any Deferral Notice, each Electing Holder agrees not to sell any
Registrable Securities pursuant to the Shelf Registration Statement until such
Electing Holder's receipt of copies from Parent of a supplemented or amended
Prospectus, or until it is advised in writing by Parent that the Prospectus may
be used, and has received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in such Prospectus. Parent
will use all reasonable efforts to ensure that the use of the Prospectus may be
resumed (x) in the case of clause (A) above, as promptly as is practicable, (y)
in the case of clause (B) above (other than with respect to events or
circumstances described in clause (A) or (C) above), as soon as, in the
reasonable judgment of Parent, neither the Registration Statement nor the
Prospectus contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (z) in the case of clause (C) above, as soon as, in
the discretion of Parent, such suspension is no longer appropriate.
3. REGISTRATION PROCEDURES. In connection with the Shelf Registration
Statement, the following provisions shall apply:
(a) (i) Not less than 30 calendar days prior to the time Parent intends
in good faith to have the Shelf Registration Statement declared effective,
Parent shall mail the Notice and Questionnaire to the Holders. No Holder shall
be entitled to be named as a selling securityholder in the Shelf Registration
Statement as of the Effective Time, and no Holder shall be entitled to use the
Prospectus forming a part thereof for resales of Registrable Securities at any
time, unless such Holder has returned a completed and signed Notice and
Questionnaire to Parent by the deadline for response set forth therein;
PROVIDED, HOWEVER, Holders shall have at least 20 calendar days from the date on
which the Notice and Questionnaire is first mailed to such Holders to return a
completed and signed Notice and Questionnaire to Parent.
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(ii) After the Effective Time, Parent shall, upon the request
of any Holder that is not then an Electing Holder, promptly send a
Notice and Questionnaire to such Holder. Parent shall not be required
to take any action to name such Holder as a selling securityholder in
the Shelf Registration Statement or to enable such Holder to use the
Prospectus forming a part thereof for resales of Registrable Securities
until such Holder has returned a completed and signed Notice and
Questionnaire to Parent.
(iii) The term "Electing Holder" shall mean any Holder that
has returned a completed and signed Notice and Questionnaire to Parent
in accordance with Section 3(a)(i) or 3(a)(ii).
(b) Except during any period during which the use of the Prospectus may
be suspended by Parent pursuant to Section 2(c), Parent shall promptly take such
action as may be necessary so that (i) each of the Shelf Registration Statement
and any amendment thereto and the Prospectus forming a part thereof and any
amendment or supplement thereto (and each report or other document incorporated
therein by reference in each case) complies in all material respects with the
Securities Act and the Exchange Act and the respective rules and regulations
thereunder, (ii) each of the Shelf Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) each of the
Prospectus forming part of the Shelf Registration Statement, and any amendment
or supplement to such Prospectus, does not at any time during the Effectiveness
Period include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; PROVIDED that
Parent shall be entitled to rely on any Seller Information.
(c) Parent shall promptly advise each Electing Holder, and shall
confirm such advice in writing if so requested by any such Holder when a Shelf
Registration Statement and any amendment thereto has been filed with the
Commission and when a Shelf Registration Statement or any post-effective
amendment thereto has become effective.
(d) Parent shall use its reasonable efforts to prevent the issuance,
and if issued to obtain the withdrawal, of any order suspending the
effectiveness of the Shelf Registration Statement at the earliest possible time.
(e) Parent shall furnish to each Electing Holder, if such Holder so
requests in writing, without charge, at least one copy of the Shelf Registration
Statement and all post-effective amendments thereto, including financial
statements and schedules, and all reports, other documents and exhibits that are
filed with or incorporated by reference in the Shelf Registration Statement.
(f) Parent shall, during the Effectiveness Period, deliver to each
Electing Holder, without charge, as many copies of the Prospectus (including
each preliminary Prospectus) included in the Shelf Registration Statement and
any amendment or supplement thereto as such Electing Holder may reasonably
request; and Parent consents (except during any suspension period pursuant to
Section 2(c)) to the use of the Prospectus and any amendment or supplement
thereto by each of the Electing Holders in connection with the offering and sale
of the Registrable Securities covered by the Prospectus and any amendment or
supplement thereto during the Effectiveness Period.
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(g) Prior to any offering of Registrable Securities pursuant to the
Shelf Registration Statement, Parent shall (i) register or qualify or cooperate
with the Electing Holders and their respective counsel in connection with the
registration or qualification of such Registrable Securities for offer and sale
under the securities or "blue sky" laws of such jurisdictions within the United
States as any Electing Holder may reasonably request, (ii) keep such
registrations or qualifications in effect and comply with such laws so as to
permit the continuance of offers and sales in such jurisdictions for so long as
may be necessary to enable any Electing Holder to complete its distribution of
Registrable Securities pursuant to the Shelf Registration Statement, and (iii)
take any and all other actions reasonably necessary or advisable to enable the
disposition in such jurisdictions of such Registrable Securities; PROVIDED,
HOWEVER, that in no event shall Parent be obligated to (A) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to so qualify but for this Section 3(g), (B) file any
general consent to service of process in any jurisdiction where it is not as of
the date hereof so subject or (C) subject itself to taxation in any jurisdiction
where it is not as of the date hereof so subject.
(h) Parent shall cooperate with the Electing Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to the Shelf Registration Statement, which
certificates, shall be free of any restrictive legends and in such permitted
denominations and registered in such names as Electing Holders may request in
connection with the sale of Registrable Securities pursuant to the Shelf
Registration Statement.
(i) Upon the occurrence of any fact or event contemplated by clause
(A), (B) or (C) of Section 2(c), Parent shall following the satisfaction of the
time periods set forth in the last sentence of Section 2(c), prepare, if
necessary, a post-effective amendment to any Shelf Registration Statement or any
amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to purchasers of the Registrable
Securities included therein, the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED that Parent shall be entitled to rely on any
Seller Information.
4. REGISTRATION EXPENSES. Except as otherwise provided in Section 3,
Parent shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2 and 3 hereof. Each Electing
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Electing Holder's
Registrable Securities pursuant to the Shelf Registration Statement.
5. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY PARENT. Upon the registration of the Registrable
Securities pursuant to Section 2, Parent shall indemnify and hold harmless each
Electing Holder, and each of such Electing Holder's officers and directors and
each person who controls such Electing Holder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act (each such person being
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sometimes referred to as an "Indemnified Person") against any losses, claims,
damages or liabilities (collectively, "Losses"), joint or several, to which such
Indemnified Person may become subject under the Securities Act or otherwise,
insofar as such Losses (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Shelf Registration Statement under which such Registrable
Securities are to be registered under the Securities Act, or any Prospectus
contained therein or furnished by Parent to any Indemnified Person, or any
amendment 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 (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading, and Parent hereby agrees to reimburse such Indemnified Person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that Parent shall not be liable to any such
Indemnified Person in any such case to the extent that any such Losses arise out
of or are based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in such Shelf Registration Statement or Prospectus, or
amendment or supplement, in reliance upon and in conformity with written
information furnished to Parent by any Holder, expressly for use therein (the
"Seller Information"); PROVIDED, FURTHER, that Parent shall not be liable to any
Indemnified Person on account of any such Losses arising out of or based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Prospectus if either (A) (i) the applicable Holder failed to send or
deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale by such Holder to the person asserting the claim from
which such Losses arise and (ii) the Prospectus would have corrected such untrue
statement or alleged untrue statement or such omission or alleged omission, or
(B) (x) such untrue statement or alleged untrue statement, omission or alleged
omission is corrected in an amendment or supplement to the Prospectus and (y)
having previously been furnished by or on behalf of Parent with copies of the
Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended or supplemented, with or prior to the
delivery of written confirmation of the sale of a Registrable Security to the
person asserting the claim from which such Losses arise.
(b) INDEMNIFICATION BY THE HOLDERS. Each Electing Holder agrees, as a
consequence of the inclusion of any of such Holder's Registrable Securities in
such Shelf Registration Statement, severally and not jointly, to (i) indemnify
and hold harmless Parent, its directors and officers who sign any Shelf
Registration Statement and each person, if any, who controls Parent within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, against any Losses, to which Parent or such other persons may become
subject, under the Securities Act or otherwise, insofar as such Losses (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in such Shelf
Registration Statement or Prospectus, or any amendment or supplement, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to Parent by such Holder, expressly for use therein, and (ii)
reimburse Parent for any legal or other expenses reasonably incurred by Parent
in connection with investigating or defending any such action or claim as such
expenses are incurred.
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(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under this Section 5, notify such
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under this Section 5. In
case any such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party, and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, such indemnifying party shall not be
liable to such indemnified party under this Section 5 for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.
(d) CONTRIBUTION. If the indemnification provided for in this Section 5
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any Losses (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such Losses
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the indemnifying party and the indemnified party in
connection with the statements or omissions which resulted in such Losses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation (even if the Electing Holders were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 5(d). The amount
paid or payable by an indemnified party as a result of the Losses (or actions in
respect thereof) referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. 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 obligations of the Electing
Holders in this Section 5(d) to contribute shall be several in proportion to the
number of Registrable Securities registered by them and not joint.
(e) Notwithstanding any other provision of this Section 5, in no event
will any Electing Holder be required to undertake liability to any person under
this Section 5 for any amounts in excess of the dollar amount of the proceeds to
be received by such Holder from the sale of such Holder's Registrable Securities
(after deducting any fees, discounts and commissions applicable thereto)
pursuant to any Shelf Registration Statement under which such Registrable
Securities are to be registered under the Securities Act.
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6. MISCELLANEOUS.
(a) OTHER REGISTRATION RIGHTS. Parent may grant registration rights
that would permit any person that is a third party the right to piggy-back on
any Shelf Registration Statement.
(b) AMENDMENTS AND WAIVERS. This Agreement, including this Section
6(b), may be amended, and waivers or consents to departures from the provisions
hereof may be given, only by a written instrument duly executed by Parent and
the holders of a majority of Registrable Securities then outstanding. Each
Holder of Registrable Securities outstanding at the time of any such amendment,
waiver or consent or thereafter shall be bound by any amendment, waiver or
consent effected pursuant to this Section 6(b), whether or not any notice,
writing or marking indicating such amendment, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be given to the address of the Holders as such address
appears in the records of Parent.
(d) PARTIES IN INTEREST. The parties to this Agreement intend that all
Holders of Registrable Securities shall be entitled to receive the benefits of
this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities which are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties thereto and any Holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
Holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.
(e) COUNTERPARTS. This Agreement may be executed in two counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(f) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT, AND ALL CLAIMS ARISING HEREUNDER OR
RELATING HERETO, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
(h) SEVERABILITY. In the event that any one or more of the provisions
contained herein, 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 hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
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(i) SURVIVAL. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Electing Holder, any director, officer or partner of such Holder, or any
controlling person of any of the foregoing, and shall survive the transfer and
registration of the Registrable Securities of such Holder.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
ADVANCED TECHNOLOGY INDUSTRIES, INC.
By:_________________________________
Name:
Title:
LTDNETWORK, INC.
By:_________________________________
Name:
Title:
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ADVANCED TECHNOLOGY INDUSTRIES, INC.
Notice of Registration Statement
and
Selling Securityholder Questionnaire
(Date)
Reference is hereby made to the Registration Rights Agreement (the
"Registration Rights Agreement") between Advanced Technology Industries, Inc.
("Parent") and LTDnetwork, Inc. Pursuant to the Registration Rights Agreement,
Parent has filed with the United States Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (the "Shelf Registration
Statement") for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the "Securities Act"), of Parent's [Common Stock] [Series A
Convertible Preferred Stock] (the "Securities"). A copy of the Registration
Rights Agreement is attached hereto. All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.
Each beneficial owner of Registrable Securities is entitled to have the
Registrable Securities beneficially owned by it included in the Shelf
Registration Statement. In order to have Registrable Securities included in the
Shelf Registration Statement, this Notice of Registration Statement and Selling
Securityholder Questionnaire ("Notice and Questionnaire") must be completed,
executed and delivered to Parent's counsel at the address set forth herein for
receipt ON OR BEFORE [DEADLINE FOR RESPONSE]. Beneficial owners of Registrable
Securities who do not complete, execute and return this Notice and Questionnaire
by such date (i) will not be named as selling security holders in the Shelf
Registration Statement and (ii) may not use the Prospectus forming a part
thereof for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and related Prospectus.
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in Item (3).
The undersigned, by signing and returning this Notice and Questionnaire, agrees
to be bound with respect to such Registrable Securities by the terms and
conditions of this Notice and Questionnaire and the Registration Rights
Agreement, including, without limitation, Section 5 of the Registration Rights
Agreement, as if the undersigned Selling Securityholder were an original party
thereto.
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The Selling Securityholder hereby provides the following information to
Parent and represents and warrants that such information is accurate and
complete:
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QUESTIONNAIRE
1. (a) Full Legal Name of Selling Securityholder:
_______________________________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as in (a)
above) of Registrable Securities Listed in Item (3) below:
_______________________________________________________________________
2. Address for Notice to Selling Securityholder:
__________________________
__________________________
Telephone: __________________________
Fax: __________________________
Contact Person: __________________________
3. Beneficial Ownership of Securities:
EXCEPT AS SET FORTH BELOW IN THIS ITEM (3), THE UNDERSIGNED DOES NOT
BENEFICIALLY OWN ANY SECURITIES.
(a) Principal amount of Registrable Securities beneficially owned:
_______________________________________________________________________
(b) Principal amount of Securities other than Registrable Securities
beneficially owned:
_______________________________________________________________________
(c) Principal amount of Registrable Securities which the undersigned
wishes to be included in the Shelf Registration Statement:
_______________________________________________________________________
4. Beneficial Ownership of other securities of Parent:
Except as set forth below in this Item (4), the undersigned Selling
Securityholder is not the beneficial or registered owner of any
securities of Parent, other than the Securities listed above in Item
(3).
State any exceptions here:
5. Relationships with Parent:
Except as set forth below, neither the Selling Securityholder nor any
of its affiliates, officers, directors or principal equity holders (5%
or more) has held any position or office or has had any other material
relationship with Parent (or its predecessors or affiliates) during the
past three years.
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State any exceptions here:
6. Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder
intends to distribute the Registrable Securities listed above in Item
(3) only as follows (if at all): Such Registrable Securities may be
sold from time to time directly by the undersigned Selling
Securityholder. Such Registrable Securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time
of sale, at varying prices determined at the time of sale, or at
negotiated prices. Such sales may be effected in transactions (i) on
any national securities exchange or quotation service on which the
Registrable Securities may be listed or quoted at the time of sale,
(ii) in the over-the-counter market, (iii) in transactions otherwise
than on such exchanges or services or in the over-the-counter market,
or (iv) through the writing of options. In connection with sales of the
Registrable Securities or otherwise, the Selling Securityholder may
enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the Registrable Securities in the course of
hedging the positions they assume. The Selling Securityholder may also
sell Registrable Securities short and deliver Registrable Securities to
close out such short positions, or loan or pledge Registrable
Securities to broker-dealers that in turn may sell such securities.
State any exceptions here:
Note: In no event may such method(s) of distribution take the
form of an underwritten offering of the Registrable Securities.
By signing below, the Selling Securityholder acknowledges that
it understands its obligation to comply, and agrees that it will comply, with
the provisions of the Exchange Act and the Securities Act and the rules and
regulations thereunder.
In the event that the Selling Securityholder transfers all or
any portion of the Registrable Securities listed in Item (3) above after the
date on which such information is provided to Parent, the Selling Securityholder
agrees to notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Registration Rights
Agreement.
By signing below, the Selling Securityholder consents to the
disclosure of the information contained herein in its answers to Items (1)
through (6) above and the inclusion of such information in the Shelf
Registration Statement and related Prospectus. The Selling Securityholder
understands that such information will be relied upon by Parent in connection
with the preparation of the Shelf Registration Statement and related Prospectus.
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In accordance with the Selling Securityholder's obligation
under Section 3(a) of the Registration Rights Agreement to provide such
information as may be required by law for inclusion in the Shelf Registration
Statement, the Selling Securityholder agrees to promptly notify Parent of any
inaccuracies or changes in the information provided herein which may occur
subsequent to the date hereof at any time while the Shelf Registration Statement
remains in effect. All notices hereunder and pursuant to the Registration Rights
Agreement shall be made in writing, by hand-delivery, first-class mail, or air
courier guaranteeing overnight delivery as follows:
(i) To Parent:
______________________
______________________
______________________
______________________
(ii) With a copy to:
______________________
______________________
______________________
______________________
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by Parent's counsel, the terms of this Notice and
Questionnaire, and the representations and warranties contained herein, shall be
binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives, and assigns of Parent
and the Selling Securityholder (with respect to the Registrable Securities
beneficially owned by such Selling Securityholder and listed in Item (3) above).
This Agreement, and all claims arising hereunder or relating hereto, shall be
governed in all respects by the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly given,
has caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:_________________
_____________________________________________________
Selling Securityholder
(Print/type full legal name of beneficial owner of
Registrable Securities)
By:__________________________________________________
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO PARENT AT:
Advanced Technology Industries, Inc.
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