Exhibit 4.11
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of __________ ___, 2002, by and
between Dwango North America, Inc., a Texas corporation (the "Company"), and
HCFP/Xxxxxxx Securities, LLC ("Xxxxxxx"), RG Securities LLC ("RG" and together
with Xxxxxxx, the "Agents"), and the investors listed on Schedule A hereto (the
"Investors"). The Agents and the Investors shall be collectively referred to
herein as the Rightsholders.
WHEREAS, this Agreement has been entered into in connection with the
Company's private offering (the "Offering") of shares of common stock, par value
$.001 per share (the "Common Stock"), pursuant to a Confidential Term Sheet
dated September 26, 2002;
WHEREAS, to induce the Agents to act as the placement agents for the
Offering, and for the Investors to invest in the Offering, the Company has
agreed to provide certain registration rights under the Securities Act of 1933,
as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the "Securities Act"), and applicable state securities
laws;
NOW, THEREFORE, it is agreed as follows:
1. Registerable Securities. The term "Registerable Securities" shall mean
(i) any of the shares of Common Stock sold in the Offering, (ii) the shares of
Common Stock underlying the warrants issued to the Agents or their designees as
compensation in connection with the Offering, and (iii) any Common Stock issued
as (or issuable upon the conversion or exercise of any warrant, right or other
security that is issued as) a dividend or other distribution with respect to, or
in exchange for, or in replacement of, the shares referenced in (i) and (ii)
above. For the purposes of this Agreement, securities will cease to be
Registerable Securities when (A) such Registerable Securities are distributed to
the public pursuant to the Securities Act, or pursuant to an exemption from the
registration requirements of the Securities Act, including, but not limited to,
Rules 144 and 144A promulgated under the Securities Act, (B) such Registrable
Securities are eligible for immediate resale pursuant to Rule 144(k) promulgated
under the Securities Act, or (C) such Registerable Securities have been
otherwise transferred and the Company, in accordance with applicable laws and
regulations, has delivered new certificates or other evidences of ownership for
such securities which are not subject to any stop transfer order or other
restriction on transfer and such Registrable Securities may be publicly resold
(without volume or method of sale restrictions) without registration under the
Securities Act.
2. Registration Rights.
(a) If, at any time commencing after the closing of the Offering (the
"Closing Date") and on or prior to seven years from the Closing Date, the
Company proposes to file a registration statement (a "Registration Statement")
under the Securities Act with respect to an offering by the Company or any
selling stockholders of any of its equity securities (other than a registration
statement on Form S-4 or Form S-8, or any successor form or a registration
statement filed solely in connection with an exchange offer, a business
combination transaction or an offering of securities solely to the existing
stockholders or employees of the Company), then the Company shall in each case
give written notice (the "Notice") of such proposed filing to the Rightsholders
at least twenty (20) days before the anticipated filing date of such
Registration Statement, which Notice shall offer the Rightsholders the
opportunity to include in such Registration Statement such amount of Registrable
Securities as they may request. Each of the Rightsholders electing to have his
Registrable Securities registered pursuant to this Section 2(a) shall advise the
Company of such election in writing within ten (10) days after the date of
receipt of the Notice, specifying the amount of Registrable Securities for which
registration is requested (the "Election"). The Company shall include in any
such Registration Statement all Registrable Securities so requested to be
included; provided that the Company has received the Election and subject to
limitations set forth in Section 2(b) below; and, provided, further, nothing
herein shall prevent the Company from, at any time before the effectiveness of
such Registration Statement, abandoning or delaying any registration pursuant to
this Section 2(a).
(b) Notwithstanding the foregoing, if the underwriter(s) of any such
offering of the Company shall be of the good faith opinion that the total amount
or kind of securities held by the Rightsholders and any other persons or
entities entitled to be included in such offering would adversely affect the
success of such offering, then the amount of securities to be offered for the
accounts of Rightsholders and the other selling securityholders included in the
Registration Statement shall be reduced pro rata to the extent necessary to
reduce the total amount of securities to be included in such offering to the
amount recommended by the underwriter(s) thereof, whereupon the Company shall
only be obligated to register such limited portion (which may be none) of the
Registrable Securities with respect to which such Rightsholders have provided an
Election. In no event shall the Company be required pursuant to this Section
2(b) to reduce the amount of securities proposed to be registered by it for its
own account.
3. Registration Expenses.
(a) Except as provided in Section 3(b), the Company shall pay all of
the expenses incurred in connection with a registration (whether or not
abandoned or delayed) under this Registration Rights Agreement, including, but
not limited to, (i) all registration and filing fees, (ii) "Blue Sky" fees and
expenses, (iii) all printing, duplicating, and delivery expenses, (iv) fees and
disbursements of counsel for the Company and of independent certified public
accountants of the Company, (v) all fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange, (vi)
internal expenses of the Company (e.g. salaries and expenses of its officers and
employees), and (vii) the expenses of any audit.
(b) The Company shall not be required to pay underwriting discounts,
selling commissions or transfer taxes attributable to the sale of the
Registrable Securities.
4. Registration Obligations
(a) Obligations of the Company. The Company will, in connection with
any registration pursuant to Section 2 hereof:
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(i) Prepare and file with the Commission a Registration Statement
with respect to such Registrable Securities in accordance with the method or
methods of distribution thereof as specified by the Rightsholder (except if
otherwise directed by the Rightsholder); provided, however, that not less than
three business days prior to the filing of such Registration Statement or any
related prospectus or any amendment or supplement thereto (including any
document that would be incorporated therein by reference), the Company shall (A)
furnish to the Rightsholder and its legal counsel, copies of all such documents
proposed to be filed, and (B) at the request of the Rightsholder cause its
officers and directors, counsel and independent certified public accountants to
respond to such inquiries as shall be necessary, in the reasonable opinion of
counsel to the Rightsholder, to conduct a reasonable investigation within the
meaning of the Securities Act. The Company shall prepare and file with the
Commission such post-effective amendments and supplements to the Registration
Statement as may be necessary to keep the Registration Statement continuously
effective as to the applicable Registrable Securities for a period of 120 days
following the date of its effectiveness; provided however, this provision shall
not be applicable if the Registrable Securities are eligible for resale under
Rule 144.
(ii) Notify the Rightsholder and its legal counsel as promptly as
possible (A) with respect to the Registration Statement or any post-effective
amendment, when the same has become effective; (B) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement covering any or all of the Registrable Securities or the initiation of
any action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened (each, a "Proceeding") for that purpose; (C) of
the receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; and (D) of the occurrence of any event that makes
any statement made in the Registration Statement or prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to the Registration Statement,
prospectus or other documents so that, in the case of the Registration Statement
or the prospectus, as the case may be, it will not 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. The Company shall also
use good faith efforts to keep the Agents informed as to the status of the
Registration Statement and be responsive to inquiries by the Agents or their
counsel.
(iii) Furnish to the Rightsholder and its legal counsel, without
charge, at least one conformed copy of each Registration Statement and each
amendment thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
to the extent requested by such person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the
Commission.
(iv) Promptly deliver to the Rightsholder and its legal counsel,
without charge, as many copies of the Registration Statement, prospectus or
prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such persons may reasonably request; and the Company
hereby consents to the use of such prospectus and each amendment or supplement
thereto by the Rightsholder in connection with the offering and sale of the
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Registrable Securities covered by such prospectus and any amendment or
supplement thereto.
(v) Prior to any public offering of the Registrable Securities, use
reasonable efforts to register or qualify or cooperate with the Rightsholder and
its legal counsel in connection with the registration or qualification (or
exemption from such 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 the Rightsholder requests in writing,
to keep each such registration or qualification (or exemption therefrom)
effective during the period when the Registration Statement is effective and to
do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by a
Registration Statement; provided, however, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action that would subject it to general service
of process in any such jurisdiction where it is not then so subject or subject
the Company to any material tax in any such jurisdiction where it is not then so
subject.
(vi) Cooperate with the Rightsholder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold pursuant to a Registration Statement, which certificates shall be free
of all restrictive legends, and to enable such Registrable Securities to be in
such denominations and registered in such names as the Rightsholder may request
at least two business days prior to any sale of Registrable Securities.
(vii) Use its best efforts to cause all Registrable Securities
relating to such Registration Statement to be listed on any securities exchange,
quotation system or market (including Nasdaq), if any, on which similar
securities issued by the Company are then listed.
(viii) Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
Rightsholders earning statements satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 not later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year) commencing on the first day of the first fiscal quarter of the
Company after the effective date of the Registration Statement, which statement
shall conform to the requirements of Rule 158.
(b) Obligations of Rightsholders. In connection with any registration
of Registerable Securities of a Rightsholder pursuant to Section 2 hereof:
(i) The Company may require that each Rightsholder whose
Registerable Securities are included in such Registration Statement timely
furnish to the Company such information regarding the distribution of such
Registerable Securities and such Rightsholder as the Company may from time to
time reasonably request;
(ii) Each Rightsholder, upon receipt of notice from the Company of
the occurrence of any event that makes any statement made in the Registration
Statement or prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, prospectus or other
documents so that, in the case of the Registration Statement or the
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prospectus, as the case may be, it will not 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, shall forthwith discontinue
disposition of Registerable Securities pursuant to the Registration Statement
covering such Registerable Securities until such Rightsholder is advised in
writing by the Company that the use of the applicable prospectus may be resumed
or until the Company delivers copies of supplemented or amended prospectuses.
5. Participation in Underwritten Registration. No Rightsholder may
participate in any underwritten registration hereunder unless such Rightsholder
(i) agrees to sell such Rightsholder's securities on the basis provided in any
underwriting arrangements and to comply with Regulation M under the Securities
Exchange Act of 1934, and the rules and regulations thereunder, or any similar
successor statute (collectively, the "Exchange Act") and (ii) completes and
executes all customary questionnaires, appropriate and limited powers of
attorney, escrow agreements, indemnities, underwriting agreements, lock-up
agreements with respect to securities not being sold and such other customary
documents reasonably required under the terms of such underwriting arrangement.
6. Indemnification.
(a) Indemnification by the Company. The Company agrees to indemnify
and hold harmless, to the full extent permitted by law, each Rightsholder and
their respective officers, directors, advisors and agents and employees and each
Person who controls (within the meaning of the Securities Act or the Exchange
Act) such Persons from and against any and all losses, claims, damages,
liabilities (or actions or proceedings in respect thereof, whether or not such
indemnified party is a party thereto) and expenses (including reasonable costs
of investigation and legal expenses), joint or several (each, a "Loss" and
collectively "Losses"), arising out of or based upon (i) any untrue or alleged
untrue statement of a material fact contained in any Registration Statement
under which such Registrable Securities were registered under the Securities Act
(including any final, preliminary or summary prospectus contained therein or any
amendment thereof or supplement thereto or any documents incorporated by
reference therein) or (ii) any 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 a prospectus or preliminary prospectus, in light of the
circumstances under which they were made) not misleading; provided, however,
that the Company shall not be liable to any indemnified party in any such case
to the extent that any such Loss arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any such Registration Statement in reliance upon and in conformity with written
information furnished to the Company by such Rightsholder expressly for use in
the preparation thereof. This indemnity shall be in addition to any liability
the Company may otherwise have. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such Rightsholder
or any indemnified party and shall survive the transfer of such securities by
such Rightsholder.
(b) Indemnification by the Rightsholder. Each selling Rightsholder
agrees (severally and not jointly) to indemnify and hold harmless, to the full
extent permitted by law, the Company, its directors and officers and each Person
who controls the Company (within the meaning of the Securities Act and the
Exchange Act) from and against any Losses arising out of
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or based upon any untrue statement of a material fact or any omission of a
material fact required to be stated in the Registration Statement under which
such Registrable Securities were registered under the Securities Act (including
any final, preliminary or summary prospectus contained therein or any amendment
thereof or supplement thereto or any documents incorporated by reference
therein), or necessary to make the statements therein (in the case of a
prospectus or preliminary prospectus, in light of the circumstances under which
they were made) not misleading, to the extent, but only to the extent, that such
untrue statement or omission has been contained in any information furnished in
writing by such selling Rightsholder to the Company specifically for inclusion
in such Registration Statement. This indemnity shall be in addition to any
liability such Rightsholder may otherwise have. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Company or any indemnified party. In no event shall the liability of any
selling Rightsholder hereunder be greater in amount than the dollar amount of
the proceeds received by such Rightsholder under the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided, that any delay or failure to so notify the indemnifying party shall
relieve the indemnifying party of its obligations hereunder only to the extent,
if at all, that it is actually and materially prejudiced by reason of such delay
or failure) and (ii) permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party;
provided, however, that any Person entitled to indemnification hereunder shall
have the right to select and employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such Person unless (A) the indemnifying party has agreed in writing
to pay such fees or expenses, (B) the indemnifying party shall have failed to
assume the defense of such claim within a reasonable time after having received
notice of such claim from the Person entitled to indemnification hereunder and
to employ counsel reasonably satisfactory to such Person, (C) in the reasonable
judgment of any such Person, based upon advice of its counsel, a conflict of
interest exists between such Person and the indemnifying party with respect to
such claims or (D) the indemnified party has reasonably concluded (based on
advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party (in which case, if the Person notifies the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such Person). If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any liability
for any settlement made without its consent, but such consent may not be
unreasonably withheld; provided, that an indemnifying party shall not be
required to consent to any settlement involving the imposition of any material
obligations on such indemnifying party other than financial obligations for
which such indemnified party will be indemnified hereunder. If the indemnifying
party assumes the defense, the indemnifying party shall have the right to settle
such action without the consent of the indemnified party; provided, that the
indemnifying party shall be required to obtain such consent (which consent shall
not be unreasonably withheld) if the settlement includes any admission of
wrongdoing on the part of the indemnified party or any restriction on the
indemnified party or its officers or directors. No indemnifying party shall
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the
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claimant or plaintiff to each indemnified party of an unconditional release from
all liability in respect to such claim or litigation. The indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm at any one time from all such
indemnified party or parties.
7. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8. Entire Agreement. This Agreement and the documents and instruments
and other agreements among the parties hereto as contemplated by or referred to
herein, constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof.
9. Severability. In the event that any provision of this Agreement or the
application thereof becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
Each of the parties hereto irrevocably consents to the exclusive jurisdiction of
any state or federal court within the State of Texas, in connection with any
matter based upon or arising out of this Agreement or the matters contemplated
herein, agrees that process may be served upon them in any manner authorized by
the laws of the State of Texas for such persons and waives and covenants not to
assert or plead any objection which they might otherwise have to such
jurisdiction and such process.
11. Assignment. The right to include Registerable Securities in a
Registration Statement pursuant to Section 2 may be assigned.
12. Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented
without the written consent of each of the Company and the Agents (on behalf of
themselves and the investors). Any of the Agents (on behalf of themselves and
the investors) or the Company may, by written notice to the others, (i) waive
any of the conditions to its obligations hereunder or extend the time for the
performance of any of the obligations or actions of the other, (ii) waive any
inaccuracies in the representations of the other contained in this Agreement or
in any documents delivered pursuant to this Agreement, (iii) waive compliance
with any of the covenants of the other contained in this Agreement or (iv) waive
or modify performance of any of the obligations of the other. No action
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taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action or compliance with any representation,
warranty, condition or agreement contained herein. Waiver of the breach of any
one or more provisions of this Agreement shall not be deemed or construed to be
a waiver of other breaches or subsequent breaches of the same provisions.
13. Notices. All notices, requests, demands or other communications
provided for herein shall be in writing and shall be deemed to have been given
when personally delivered or sent by (i) registered or certified mail, return
receipt requested, (ii) nationally recognized overnight courier service or (iii)
facsimile transmission electronically confirmed addressed if to the Company, to
Dwango North America, Inc., 000 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxxx 00000, Attn:
Xxxxxx X. Xxxxxxx, Chief Executive Officer, with a copy to Xxxx X. Xxxxxxxx,
Esq., Xxxxxxx & Xxxxxxxx, LLC, 00 Xxxxxxx Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxx
Xxxxx, Xxx Xxxx 00000; if to Xxxxxxx, to HCFP/Xxxxxxx Securities, LLC, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxxx X. Xxxxxxx; if to RG, to
RG Securities LLC, Xxx Xxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxxxx, Xxx Xxxx 00000,
Attn: Xxxxx Xxxxxxxx; if the an Investor, to the address set forth on Schedule A
hereto, or to such other person or address as either party shall designate to
the other from time to time in writing forwarded in like manner.
14. Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
15. Further Assurances. Each party hereto covenants and agrees with all
other parties hereto to promptly execute, deliver, file and/or record such
agreements, instruments, certificates and other documents and to do and perform
such other and further acts and things as any other party hereto may reasonably
request or as may otherwise be necessary or proper to consummate and perfect the
transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by themselves or their duly authorized respective officers, all as of the
date first written above.
DWANGO NORTH AMERICA, INC.
By:
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Name:
Title:
HCFP/XXXXXXX SECURITIES, LLC
By:
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Name:
Title:
RG SECURITIES LLC
By:
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Name:
Title:
Investor:
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Investor:
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Investor:
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Investor:
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Schedule A
Investors
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Name and Address
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