EXHIBIT 10.13
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into this _____ day of _____________ 2003, by and between XXXX.xxx,
Inc., a Delaware corporation (the "Company"), and the person executing this
Agreement on the signature page below (the "Shareholder").
RECITALS:
WHEREAS, the Shareholder concurrently with the execution of this
Agreement is acquiring shares of the Company's Series A Convertible
Preferred Stock (the "Series A Convertible Preferred Stock"), which are
convertible into shares of the Company's common stock (the "Common Stock");
and
WHEREAS, as a condition to such acquisition, the parties are willing
to enter into the agreements contained herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions
"Affiliate" means, with respect to any Person, any other Person
which, directly or indirectly, controls, is controlled by or is under
common control with such Person.
"Agreement" is defined in the Preamble to this Agreement.
"Common Stock" is defined in the Recitals to this Agreement.
"Company" is defined in the Preamble to this Agreement.
"Holder" means the Shareholder or any transferee of the
Shareholder prior to the filing of the registration statement pursuant to
the terms of this Agreement.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and government or any
department or agency thereof.
"Registerable Securities" means (i) the Common Stock issued to
the Shareholder upon conversion of the Series A Convertible Preferred
Stock, and (ii) any securities issued or issuable with
respect to the Common Stock referred to in clause (i) by way of replacement,
share dividend, share split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.
"Registration Expenses" is defined in Section 4.1 hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar federal law then in force.
"Series A Convertible Preferred Stock" is defined in the Recitals
to this Agreement.
"Shareholder" is defined in the Preamble to this Agreement.
2. Registration Obligation
2.1 Registration of Registerable Securities. The Company hereby
agrees to register the Registerable Securities by means of a registration
statement filed by the Company with the SEC on or before April 30, 2003.
The Shareholder and any Holder of the Registerable Securities shall be
bound by the terms and conditions of this Agreement.
2.2 Registration of Additional Shares. The Company may include
in the registration statement filed pursuant to this Agreement additional
securities either as a primary offering by the Company or as a secondary
offering for security holders of the Company other than the Holders of
Registerable Securities.
3. Registration Procedures.
3.1 Registration. The Company will use its reasonable best
efforts to effect the registration of such Registerable Securities in
accordance with the intended method of disposition thereof, and pursuant
thereto the Company will as expeditiously as possible:
3.1.1 Registration Statement. Prepare and file with the
SEC a registration statement with respect to such Registerable Securities
and use its reasonable best efforts to cause such registration statement to
become effective.
3.1.2 Amendments and Supplements. Promptly prepare and
file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for the period
required by the intended method of disposition and the terms of this
Agreement and comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of disposition
by the sellers thereof set forth in such registration statement.
3.1.3 Provisions of Copies. Promptly furnished to each
seller of Registerable Securities the number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included
in such registration statement (including each preliminary prospectus) and
such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registerable Securities owned by such
seller.
3.1.4 Blue Sky Laws. Use its reasonable best efforts to
register or qualify such Registerable Securities under the securities or
blue sky laws of such jurisdictions as any seller reasonably requests and
do any and all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registerable Securities owned by such seller,
provided, that the Company will not be required to (a) qualify generally to
do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3.1.4; (b) subject itself to taxation in any
such jurisdiction; or (c) consent to general service of process in any such
jurisdiction.
3.1.5 Anti-fraud Rules. Promptly notify each seller of
such Registerable Securities when a prospectus relating thereto is required
to be delivered under Securities Act, of the happening of any event as a
result of which the prospectus included in such registration statement
contains an untrue statement of a material fact or omits any material fact
necessary to make the statements therein not misleading, and in such event,
at the request of any such seller, the Company will promptly prepare a
supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registerable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading,
provided, that the Company will not take any action which causes the
prospectus included in such registration statement to contain an untrue
statement of material fact or omit any material fact necessary to make the
statements therein not misleading, except as permitted by Section 3.5.
3.1.6 Due Diligence. Make available for inspection by
any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained
by any such underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such underwriter, attorney,
accountant or agent in connection with such registration statement.
3.1.7 Deemed Underwriters or Controlling Persons.
Permit any Holder of Registerable Securities which Holder, in such Holder's
reasonable judgment, might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein
of material in form and substance satisfactory to such Holder and to the
Company and furnished to the Company in writing, which in the reasonable
judgment of such Holder and its counsel should be included.
3.1.8 Management Availability. In connection with
underwritten offerings, make available appropriate management personnel for
participation in the preparation and drafting of such registration
comparable statement, for due diligence meetings and for "road show"
meetings.
3.1.9 Stop Orders. Promptly notify Holders of the
Registerable Securities of the threat of issuance by the SEC of any stop
order suspending the effectiveness of the registration statement or the
initiation of any proceeding for that purpose, and make every reasonable
effort to prevent the entry of any order suspending the effectiveness of
the registration statement. In the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending
the qualification of any Registerable Securities included in such
registration statement for sale in any jurisdiction, the Company will use
its reasonable best efforts promptly to obtain the withdrawal of such
order.
3.2 Further Information. The Company may require each Holder of
Registerable Securities to furnish to the Company in writing such
information regarding the proposed distribution by such Holder of such
Registerable Securities as the Company may from time to time reasonably
request.
3.3 Notice to Suspend Offers and Sales. Each Holder severally
agrees that, upon receipt of any notice from the Company of the happening
of any event of the kind described in Sections 3.1.5 or 3.1.9 hereof, such
Investor will forthwith discontinue disposition of shares of Common Stock
pursuant to a registration hereunder until receipt of the copies of an
appropriate supplement or amendment to the prospectus under Section 3.1.5
or until the withdrawal of such order under Section 3.1.9.
3.4 Reference to Holders. If any such registration or
comparable statement refers to any Holder by name or otherwise as the
holder of any securities of the Company and if, in the Holder's reasonable
judgement, such Holder is or might be deemed to be a controlling person of
the Company, such Holder shall have the right to require (a) the insertion
therein of language in form and substance satisfactory to such Holder and
the Company and presented to the Company in writing, to the effect that the
holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holdings does not imply that such
Holder will assist in meeting any future financial requirements of the
Company, or (b) in the event that such reference to such Holder by name or
otherwise is not required by the Securities Act or any similar Federal
statute then in force, the deletion of the reference to such Holder,
provided that with respect to this clause (b) such Holder shall furnish to
the Company an opinion of counsel to such effect, which opinion and counsel
shall be reasonably satisfactory to the Company.
4. Registration Expenses.
4.1 Expense Borne by Company. Except as specifically otherwise
provided in Section 4.2 hereof, the Company will be responsible for payment
of all expenses incident to any registration hereunder, including, without
limitation, all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger
and delivery expenses,
road show expenses, advertising expenses and fees and disbursements of
counsel for the Company and all independent certified public accountants
and other Persons retained by the Company in connection with such
registration (all such expenses borne by the Company being herein called
the "Registration Expenses").
4.2 Expense Borne by Selling Security Holders. The selling
security holders will be responsible for payment of their own legal fees
(if they retain legal counsel separate from that of the Company),
underwriting fees and brokerage discounts, commissions and other sales
expenses incident to any registration hereunder.
5. Indemnification Section.
5.1 Indemnification by Company. The Company agrees to
indemnify, to the fullest extent permitted by law, each Holder of
Registerable Securities and each Person who controls (within the meaning of
the Securities Act) such Holder against all loses, claims, damages,
liabilities and expenses in connection with defending against any such
losses, claims, damages and liabilities or in connection with any
investigation or inquiry, in each case caused by or based on any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein
not misleading or arise out of any violation by the Company of any rules or
regulation promulgated under the Securities Act applicable to the Company
and relating to action or inaction required of the Company in connection
with such registration, except insofar as the same are (i) contained in any
information furnished in writing to the Company by such Holder expressly
for use therein; (ii) caused by such Holder's failure to deliver a copy of
the registration statement or prospectus or any amendments or supplements
thereto; or (iii) caused by such Holder's failure to discontinue
disposition of shares after receiving notice from the Company pursuant to
Section 3.3 hereof. In connection with an underwritten offering, the
Company will indemnify such underwriters, their officers and directors and
each Person who controls (within the meaning of the Securities Act) such
underwriters at least to the same extent as provided above with respect to
the indemnification of the Holders of Registerable Securities.
5.2 Indemnification by Holder. In connection with any
registration statement in which a Holder of Registerable Securities is
participating, each such Holder will furnish to the Company in writing such
information as the Company reasonably requests for use in connection with
any such registration statement or prospectus and, to the extent permitted
by law, will indemnify the Company, its directors and officers and each
Person who controls (within the meaning of the Securities Act) the Company
against any losses, claims, damages, liabilities and expenses resulting
from any untrue or alleged untrue statement of material fact contained in
the registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information so furnished in
writing by such Holder expressly for use in connection with such
registration; provided that the obligation to indemnify will be individual
to each Holder
and will be limited to the net amount of proceeds received by such Holder
from the sale of Registerable Securities pursuant to such registration
statement. In connection with an underwritten offering, each such Holder
will indemnify such underwriters, their officers and directors and each
Person who controls (within the meaning of the Securities Act) such
underwriters at least to the same extent as provided above with respect to
the indemnification of the Company.
5.3 Assumption of Defense by Indemnifying Party. Any Person
entitled to indemnification hereunder will (a) give prompt written notice
to the indemnifying party of any claim with respect to which it seeks
indemnification and (b) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying
party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will
not be unreasonably withheld). An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim will not be obligated
to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim. unless
in the reasonable judgment of any indemnified party a conflict of interest
may exist between such indemnified party and any other of such indemnified
parties with respect to such claim.
5.4 Binding Effect. The indemnification provided for under this
Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party and will survive
the transfer of securities. The Company also agrees to make such
provisions, as are reasonably requested by any indemnified party, for
contribution to such party in the event the Company's indemnification is
unavailable for any reason. Each Holder or Registerable Securities also
agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event such
Holder's indemnification is unavailable for any reason.
6. Duration of Registration Statement. The Company shall use its
best efforts to maintain the effectiveness of the registration statement
filed pursuant to the terms of this Agreement for a minimum period of one
year, or until all of the Registerable Securities included in the
registration statement have been resold by the Holders, whichever shall
first occur.
7. Miscellaneous.
7.1 Notices. All communications provided for herein shall be in
writing and shall be deemed to be given or made when served personally or
when deposited in the United States mail, certified return receipt
requested, addressed as follows, or at such other address as shall be
designated by any party hereto in written notice to the other party hereto
delivered pursuant to this subsection:
Shareholder: At the address set forth on the signature page.
Company: Xxxxxxx Xxxxxxxx, President
0000 Xxxxxx Xxxxxx Xxxx XX
Xxxxxxxxxxx, XX 00000
with copy to: Xxxxxx X. Xxxxx
Attorney at Law
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
7.2 Default. Should any party to this Agreement default in any
of the covenants, conditions, or promises contained herein, the defaulting
party shall pay all costs and expenses, including a reasonable attorney's
fee, which may arise or accrue from enforcing this Agreement, or in
pursuing any remedy provided hereunder or by statute.
7.3 Assignment. This Agreement may not be assigned in whole or
in part by the parties hereto without the prior written consent of the
other party or parties, which consent shall not be unreasonably withheld.
7.4 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, their heirs,
executors, administrators, successors and assigns.
7.5 Partial Invalidity. If any term, covenant, condition, or
provision of this Agreement or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, the remainder
of this Agreement or application of such term or provision to persons or
circumstances other than those as to which it is held to be invalid or
unenforceable shall not be affected thereby and each term, covenant,
condition, or provision of this Agreement shall be valid and shall be
enforceable to the fullest extent permitted by law.
7.6 Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all negotiations, representations, prior discussions,
and preliminary agreements between the parties hereto relating to the
subject matter of this Agreement.
7.7 Interpretation of Agreement. This Agreement shall be
interpreted and construed as if equally drafted by all parties hereto.
7.8 Survival of Covenants, Etc. All covenants, representations,
and warranties made herein to any party, or in any statement or document
delivered to any party hereto, shall survive the making of this Agreement
and shall remain in full force and effect until the obligations of such
party hereunder have been fully satisfied.
7.9 Further Action. The parties hereto agree to execute and
deliver such additional documents and to take such other and further action
as may be required to carry out fully the transactions contemplated herein.
7.10 Amendment. This Agreement or any provision hereof may not
be changed, waived, terminated, or discharged except by means of a written
supplemental instrument signed by the party or parties against whom
enforcement of the change, waiver, termination, or discharge is sought.
7.11 Full Knowledge. By their signatures, the parties
acknowledge that they have carefully read and fully understand the terms
and conditions of this Agreement, that each party has had the benefit of
counsel, or has been advised to obtain counsel, and that each party has
freely agreed to be bound by the terms and conditions of this Agreement.
7.12 Headings. The descriptive headings of the various sections
or parts of this Agreement are for convenience only and shall not affect
the meaning or construction of any of the provisions hereof.
7.13 Counterparts. This Agreement may be executed in two or more
partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument.
7.14 Governing Law and Venue. This Agreement shall be governed by
and construed in accordance with the laws of the State of New Mexico
without regard to conflict of law principles and will be binding upon and
shall inure to the benefit of the parties hereto and their successors and
assigns. Any action to enforce the provision of this Agreement shall be
brought in a court of competent jurisdiction in Bernalillo County, State of
New Mexico, and no other place.
7.15 Remedies. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically to
recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provision of this Agreement and that any party
may in its sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE COMPANY: XXXX.xxx, Inc.
By ___________________________
Xxxxxxx Xxxxxxxx, President
THE SHAREHOLDER: ______________________________
Signature
______________________________
Print Name
______________________________
Title (if applicable)
______________________________
Name of Entity (if applicable)
Address: ______________________________
______________________________
______________________________
______________________________