EXHIBIT 10.8
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, (the "Agreement"), dated as of June ___,
2002, between XXXXX SYSTEMS, INC., a Texas corporation (the "Company"), and the
undersigned holders of warrants of the Company (individually, a "Holder" and
collectively, the "Holders").
RECITALS
WHEREAS, the Company has issued to the Holders warrants (the "Warrant") to
purchase the shares of common stock, par value $.01 per share, of the Company
("Common Stock") as set forth on Schedule A attached hereto; and
WHEREAS, the Company and the Holders desire to provide for registration
rights relating to the securities underlying the Warrant.
NOW, THEREFORE, in consideration of the mutual representations and
agreements set forth in this Agreement, the Company and the Holders hereby agree
as follows:
1. Definitions. Capitalized terms used herein shall have the following
respective meanings, unless otherwise provided elsewhere herein:
"Affiliate" means, with respect to any Person, (i) each other Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, ten percent (10%) or more of the Stock having
ordinary voting power in the election of directors of such Person, (ii) each
Person that directly or indirectly controls, is controlled by or is under common
control with such Person or any Affiliate of such Person, (iii) each of such
Person's officers, directors, joint ventures and partners, and, (iv) the spouse,
each sibling and each lineal descendant and ascendant of any such specified
Person or any Affiliate of such specified Person. For the purpose of this
definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise.
"Common Stock" shall have the meaning set forth in the recitals in this
Agreement.
"Demand Registration" shall have the meaning given thereto in Section 2.2
hereto.
"Demand Request" shall have the meaning given thereto in Section 2.2
hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar Federal statute from time to time in effect, and any reference to a
particular section of such act shall include a reference to the comparable
section, if any, of any such similar Federal statute.
"Holder" means any holder of the Registrable Securities and any successor
or assign or subsequent holder as contemplated hereof.
"Indemnified Holder" shall have the meaning given thereto in Section 4
hereof.
"Majority Holders" means, at any time, the Holders of a majority of the
Registrable Securities issued or issuable at such time.
"Market Value" shall have the meaning given thereto in Section 2.1 hereof.
"Participating Holder" shall have the meaning given thereto in Section 2.2
hereof.
"Person" means any individual, sole proprietorship, partnership (including
a limited partnership), joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, limited
liability company, joint stock company, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof) or other business
entity.
"Piggyback Registration" shall have the meaning given thereto in Section
2.1 hereof.
"Prospectus" means the prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by
the Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus.
"Registrable Securities" means, as of any date, (i) any shares of Common
Stock issued or issuable upon exercise of the Warrant, and (ii) any shares of
Common Stock or any other securities issued or issuable directly or indirectly
in respect of any shares of Common Stock described in the preceding clause (i)
as a result of any stock splits, stock dividends, reclassifications,
recapitalizations, or similar events. Once issued, such securities shall cease
to be Registrable Securities when (i) a Registration Statement with respect to
the sale of such securities shall have become effective under the Securities Act
and such securities shall have been disposed of in accordance with such
Registration Statement, (ii) they shall have been distributed to the public
pursuant to Rule 144 (or any successor provision) under the Securities Act,
(iii) they shall have been otherwise transferred and new certificates for them
not bearing a legend restricting further transfer shall have been delivered by
the Company, or (iv) they shall have ceased to be outstanding.
"Registration Statement" means any registration statement of the Company
filed with the SEC under the rules and regulations promulgated under the
Securities Act, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, and all exhibits
and all material incorporated by reference in such Registration Statement.
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"Rule 144" means Rule 144 promulgated by the SEC under the Securities Act,
as such rule may be amended from time to time, or any successor Rule thereto.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute as from time to time in effect, and any reference to a
particular section of such act shall include a reference to the comparable
section, if any, of any such similar Federal statute.
"Selling Expenses" means all underwriting discounts, selling commissions,
stock transfer taxes, and fees and disbursements of counsel for, and any other
Person retained by, the Majority Holders and the Participating Holders,
applicable to the securities registered by the Majority Holders and the
Participating Holders.
"Stock" means all shares, options, warrants, general or limited partnership
interests, participations or other equivalents (regardless of how designated) of
or in a Person, whether voting or nonvoting, including, without limitation,
common stock, preferred stock, or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
SEC under the Exchange Act), including, without limitation, any securities with
profit participation features, and any rights, warrants, options or other
securities convertible into or exercisable or exchangeable for any such shares,
equity or profits interests, participations or other equivalents, or such other
securities, directly or indirectly (or any equivalent ownership interests, in
the case of a Person which is not a corporation).
2. Registration Under the Securities Act.
2.1 Piggyback Registration Rights. If, at any time and from time to time
from and after the date hereof the Company proposes to file a Registration
Statement under the Securities Act, with respect to any offering of any of its
securities, whether for the Company's own account or for the account of selling
security holders (other than a Registration Statement (x) with regard to
acquisitions of employee stock options, employee purchase plans or other
employee benefit plans on Form S-8 or any successor form thereto or (y) on Form
S-4 or any successor form thereto), the Company shall advise the Holders by
written notice at least 60 days prior to the filing of such Registration
Statement and will, upon the request of any Holder, use its best efforts to
cause the number of Registrable Securities then held by such Holder and referred
to in such request to be included in such Registration Statement (a "Piggyback
Registration"); provided, however, that in the event that the offering pursuant
to such Registration Statement shall be underwritten and the managing
underwriter advises the Company in writing that in its opinion the number of
securities requested to be included in such registration pursuant to a Piggyback
Registration exceeds the number of securities that can be sold in the offering
without adversely affecting the offering price or the marketing of the Company's
securities, the Company may first include in such registration all securities
the Company proposes to sell, and the Holders shall accept a reduction (pro rata
with any other holders of the Company's equity securities entitled to register
such securities on such Registration Statement whose registration rights are not
subordinate to the registration rights of the Holders as set forth in this
Agreement), on the
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basis of the proportion that the market value (based upon the proposed offering
price of such securities or the mid-point of the range of the proposed offering
prices, if any, of such securities) (the "Market Value") of each security
holder's aggregate securities requested to be registered bears to the Market
Value of the aggregate amount of all equity securities (other than those to be
sold for the Company's account) as to which registration is sought) in the
number of securities to be included in such registration, which reduction may,
if necessary, be total; provided, however, that as among all Holders, any such
reduction shall be made pro rata among those Holders requesting the registration
of their Registrable Securities based on the total number of Registrable
Securities so requested by Holders to be registered notwithstanding the
foregoing provisions of this Section 2.1 The Company hereby agrees that if a
reduction in the total amount of securities to be included in a Piggyback
Registration is necessary, the Company must treat the Holders more favorably
than any other director, officer or controlling stockholder of the Company
seeking rights under a Piggyback Registration. The Company shall keep any
Registration Statement contemplated by this Section 2.1 current for a period of
nine months from the effective date of such Registration Statement or until such
earlier date as all of each Holder's registered Registrable Securities have been
sold. In connection with any such Registration Statement, each Holder whose
Registrable Securities are included in such Registration Statement will execute
and deliver such customary underwriting documents as are reasonably requested by
the managing underwriter as a condition to the inclusion of the such Holder's
Registrable Securities in such Registration Statement.
2.2 Demand Registration Rights. (a) Except as provided in Section 2.2(b)
below, at any time after the date hereof the Majority Holders may, upon written
request (a "Demand Request"), require that the Company effect pursuant to this
Agreement the registration of Registrable Securities under the Securities Act (a
"Demand Registration") (which Demand Registration shall specify the amount of
Registrable Securities so requested to be registered and the intended method of
disposition by the Holders delivering such Demand Request the "Initiating
Holders"). Within twenty (20) days after receipt of any such Demand Request, the
Company will give written notice of such Demand Request to all other Holders of
Registrable Securities and will include in such registration all Registrable
Securities with respect to which the Company has received written requests from
Holders (the "Participating Holders") for inclusion therein within fifteen (15)
business days after the receipt of the Company's notice. The Company will, as
expeditiously as reasonably possible, but not later than 60 days after the date
of receipt of the Demand Request, use its best efforts to effect the
registration under the Securities Act of the Registrable Securities requested to
be registered by the Initiating Holders and any Participating Holders, for
disposition in accordance with the intended method of disposition stated in such
Demand Request. The Company has the right to defer the filing of any such
Registration Statement or any amendment to such Registration Statement: (a) in
order to enable the Company to prepare necessary financial statements for
inclusion in such Registration Statement, including any financial statements of
any corporation or other entity which has been or is expected to be acquired
(provided that no such deferral shall terminate (i) more than 45 days after the
end of the Company's most recently completed fiscal quarter prior to the date of
such Demand Request or (ii) more than 90 days after the end of the Company's
most recently completed fiscal year if the date of such Demand Request is within
Company's first fiscal quarter of any year); (b) in order that the Company not
be required to disclose material nonpublic information, provided that delays of
the type referred
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to in this clause (b) do not exceed 90 days in the aggregate; or (c) in order
that a filing not be made earlier than 180 days after the effective date of any
other Registration Statement filed by the Company. If, at the time of the Demand
Request, the Company shall be eligible to register the applicable Holders'
Registrable Securities on a Form S-3, or any successor form, in a manner which
does not require inclusion in any information concerning the Company other than
to incorporate by reference its filing under the Exchange Act, the period
referred to in clause (c) of the immediately preceding sentence shall be 90
days. The Company shall keep any Registration Statement filed pursuant a Demand
Request current and effective until the earlier of (i) nine months from the
effective date of such Registration Statement or (ii) such date as each Holder
whose Registrable Securities are included therein shall have sold all the
registered shares or shall have advised the Company that such Holder no longer
desires to sell such shares pursuant to such Registration Statement. The Holders
are entitled to two Demand Registrations pursuant to this Section 2.2. The
Company shall be entitled to include in any Registration Statement filed
pursuant to this Section 2.2: (A) securities of the Company held by any other
security holder of the Company, and (B) in an underwritten public offering,
securities of the Company to be sold by the Company for its own account;
provided, however, that if, after such Registration Statement has been filed,
the managing underwriter believes that the inclusion of all securities requested
to be included in the proposed underwritten public offering would adversely
affect the marketing of the Registrable Securities or, in the case of a
distribution that is not an underwritten public offering, the Initiating Holders
reasonably believe that the inclusion of all securities requested to be included
in such Registration Statement would adversely affect the price at which the
Registrable Securities may be sold pursuant to the intended plan of
distribution, then the aggregate amount of securities to be offered by the
Company and such other security holders of the Company shall be reduced so as to
permit the offering of all Registrable Securities requested by the Initiating
Holders and the Participating Holders without such adverse effects.
(b) The Company shall not be obligated to take any action to effect any
Demand Registrations after the Company has effected two (2) Demand Registrations
pursuant to Section 2.2(a) and each such registration has been declared or
ordered effective.
(c) Notwithstanding any other provision of this Agreement to the contrary,
a registration requested pursuant to this Section 2.2 shall not be deemed to
have been effected (i) unless it has become effective, provided that a
registration that does not become effective after the Company has filed a
Registration Statement with respect thereto solely by reason of the refusal of
the Holders whose Registrable Securities are included in such Registration
Statement to proceed shall be deemed to have been effected by the Company at the
request of Holders unless such Holders shall have elected to pay all Company
Registration Expenses in connection with such registration, (ii) if after it has
become effective such registration is interfered with by any stop order,
injunction or other order or requirement of the SEC or other governmental agency
or court for any reason other than a misrepresentation or an omission by the
Holders whose Registrable Securities are included in such Registration
Statement, or (iii) if the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection with such
registration are not satisfied other than by reason of some wrongful act or
omission, or act or omission in bad faith, by the Holders whose Registrable
Securities are included in such Registration Statement.
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2.3 Registration Procedures. If and whenever the Company is required to
effect any registration under the Securities Act as provided in Sections 2.1 and
2.2 hereof, the Company shall, as expeditiously as possible:
(a) prepare and file with the SEC (promptly and, in the case of a Demand
Registration within 30 days after the Demand Request, subject to the deferral
rights set forth in Section 2.2 hereof) a Registration Statement with respect to
such Registrable Securities on a form appropriate to permit the applicable
Holders to sell their Registrable Securities in accordance with the intended
method of distribution and use its best efforts to cause such Registration
Statement to become and remain effective in accordance with this Agreement;
(b) 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 such period as is
required by Section 2.1 or 2.2, as applicable, and to comply with all the
provisions of the Securities Act and the Exchange Act with respect to the sale
or other disposition of all Registrable Securities covered by such Registration
Statement;
(c) furnish to counsel for the applicable Holders and each underwriter of
the securities being sold, at least five days prior to the filing thereof, such
number of copies of such Registration Statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the Prospectus included in such Registration Statement (including each
preliminary Prospectus), in conformity with the requirements of the Securities
Act, and such other documents, as such counsel may reasonably request, in
substantially the form in which they are proposed to be filed with the SEC, in
order to facilitate the public sale or other disposition of the Registrable
Securities included in such Registration Statement;
(d) use its best efforts to register or qualify the Registrable Securities
covered by such Registration Statement under such other securities or blue sky
laws of such jurisdictions as the applicable Holders or any underwriter of the
securities being sold shall reasonably request, and do any and all other acts
and things which may be necessary or advisable to enable the Holders and such
underwriters to consummate the disposition in such jurisdictions of such
Registrable Securities included in such Registration Statement, except that the
Company shall not for any purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction where, but for the
requirements of this clause (d), it would not be obligated to be so qualified,
or subject itself to taxation in any such jurisdiction;
(e) use its best efforts to cause such Registrable Securities covered by
such Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
applicable Holders to consummate the disposition of such Registrable Securities;
(f) notify the applicable Holders and any underwriter, at any time when a
Prospectus relating thereto is required to be delivered under the Securities
Act, of the Company's becoming aware that the Prospectus included in such
Registration Statement, as then in effect,
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includes an 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
not misleading in light of the circumstances then existing, and promptly prepare
and furnish to the applicable Holders and each underwriter a reasonable number
of copies of a Prospectus supplement or amendment so that, as thereafter
delivered to the purchasers of such Registrable Securities, such Prospectus
shall not include 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 in the light of the circumstances then existing;
(g) otherwise use its best efforts to comply with all applicable rules and
regulations of the SEC and to make available to the applicable Holders and
Holders and any underwriter, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, beginning with the
first day of the Company's first calendar quarter after the effective date of
the Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
(h) enter into such agreements (including an underwriting agreement in
customary form) and take such other actions as the applicable Holders shall
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities;
(i) to use its best efforts to furnish to the applicable Holders an opinion
from the Company's counsel and a "cold comfort" letter from the Company's
independent public accountant (in accordance with SAS 72), addressed to the
applicable Holders, in customary form and covering such matters of the type
customarily covered by such opinions and "cold comfort" letters as the
applicable Holders shall reasonably request;
(j) make available for inspection by the applicable Holders, by any
underwriter participating in any disposition to be effected pursuant to such
Registration Statement, and by any attorney, accountant or other agent retained
by the applicable Holders or any such underwriter, all reasonably pertinent
financial and other records, reasonably pertinent corporate documents and
properties of the Company, and cause all of the Company's officers, directors,
employees and the independent public accountants who have audited its financial
statements to supply all information reasonably requested by the applicable
Holders or any such underwriter, attorney, accountant or agent in connection
with such Registration Statement; provided, however, that the applicable Holders
and each such representative, underwriter, attorney, accountant or agent must
execute and deliver to the Company a confidentiality agreement in form and
substance reasonably acceptable to the Company agreeing to keep any such
information and records concerning the Company confidential;
(k) permit the applicable Holders to participate in the preparation of such
registration or comparable statement;
(l) at or prior to the effective date of the registration use commercially
reasonable efforts to (i) secure a CUSIP number for all Registrable Securities,
and (ii) cause the Registrable Securities to be listed or included for reporting
on the NASDAQ Stock Market, or
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cause the Registrable Securities to be listed on each other national securities
exchange, if any, on which any other class of the Company's securities are then
listed; and
(m) in the case of an underwritten offering, enable the Registrable
Securities to be in such denominations or such number of shares and registered
in such names as the underwriters may reasonably request at least two business
days prior to the sale of the Registrable Securities.
In the case of an underwritten offering, the underwriters shall be selected
by the Company and reasonably acceptable to the Holders of a majority of the
Registrable Securities to be included in the applicable Registration Statement;
provided, however, that the foregoing requirement shall not apply to
underwritten offerings effected pursuant to Section 2.1 of this Agreement.
Each Holder whose Registrable Securities are included in any Registration
Statement shall, upon receipt of any notice from the Company of the happening of
any event of the kind described in subdivision (f) above, forthwith discontinue
its disposition of Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities until such Holder receives copies of the
supplemented or amended Prospectus contemplated by said subdivision and, if so
directed by the Company, will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in such Holder's possession
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
period mentioned in subdivision (b) above shall be extended by the number of
days during the period from and including the date of the giving of such notice
to and including the date when each such Holder shall have received the copies
of the supplemented or amended Prospectus contemplated by subdivision (f) above.
Each Holder whose Registrable Securities are included in any Registration
Statement shall enter into such customary agreements as requested by the Company
in connection with the registration of securities as contemplated by this
Agreement.
Each Holder whose Registrable Securities are included in any Registration
Statement shall furnish to the Company in writing such information and documents
regarding such Holder and the distribution of such securities as may be required
to be disclosed in the Registration Statement in question by the rules and
regulations under the Securities Act or under any other applicable securities or
blue sky laws of the jurisdictions referred to in Section 2.3(d) hereof.
If any such registration or comparable statement refers to any such Holder
by name or otherwise as the holder of any securities of the Company, then such
Holder shall have the right to require (i) the insertion therein of language, in
form and substance satisfactory to Holder and presented to the Company in
writing, to the effect that the holding by either such Holder of such securities
is not to be construed as a recommendation by either the such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event
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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
such reference.
3. Registration Expenses. In connection with any registration of
Registrable Securities pursuant to this Agreement the Company will, whether or
not any registration pursuant to this Agreement shall become effective, from
time to time promptly upon receipt of bills or invoices relating thereto, pay
all expenses (other than Selling Expenses) incident to its performance of or
compliance with this Agreement (the "Company Registration Expenses"), including
without limitation all registration, filing and NASD fees, fees and expenses of
compliance with securities or blue sky laws, word processing, duplicating and
printing expenses, messenger and delivery expenses, and fees and disbursements
of counsel for the Company and all independent public accountants (including the
expenses of any audit and/or "cold comfort" letter) and other Persons retained
by the Company; provided, however, that in all events, each Holder whose
Registrable Securities are included in any Registration Statement shall be
responsible for the fees and expenses of its counsel and its accountants. The
Holders and the Participating Holders shall also be responsible for all Selling
Expenses.
4. Indemnification.
(a) The Company will, and hereby does, indemnify, to the extent permitted
by law, each Holder, its officers and directors, if any, and each Person, if
any, who controls the such Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (each such person being
sometimes hereinafter referred to as an "Indemnified Holder"), against all
losses, claims, damages, liabilities (or proceedings in respect thereof) and
expenses under the Securities Act, joint or several, caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (and as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary Prospectus or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except insofar as such losses, claims, damages, liabilities (or
proceedings in respect thereof) or expenses are caused by any untrue statement
or alleged untrue statement made in reliance on or in conformity with any
information furnished in writing to the Company by such Holder expressly for use
therein. If the offering pursuant to any Registration Statement provided for
under this Agreement is made through underwriters, the Company agrees to enter
into an underwriting agreement in customary form with such underwriters and to
indemnify such underwriters, their officers and directors, if any, and each
Person, if any, who controls such underwriters within the meaning of Section 15
of the Securities Act to the same extent as hereinbefore provided with respect
to the indemnification of the Indemnified Holders of the Registrable Securities.
(b) Each Holder agrees to indemnify and hold harmless the Company, its
directors and officers and each Person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Holder, but only with respect to information relating to such Holder
furnished in writing by such Holder expressly for use in any Registration
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Statement or Prospectus, or any amendments thereto, or any preliminary
Prospectus; provided, however, that in no event shall the liability of any
Holder hereunder be greater in amount than the gross amount of the proceeds from
the sale of Registrable Securities by such Holder giving rise to such
indemnification obligation.
(c) If for any reason the indemnification under Section 4(a) or Section
4(b) is unavailable to an indemnified party, then each applicable indemnifying
party shall contribute to the amount paid or payable by the indemnified party as
a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative fault of the Company, on
the one hand, and of the Indemnified Holder, on the other, or (ii) if the
allocation provided by subdivision (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative fault of
by the Company, on the one hand, and the Indemnified Holder, on the other, but
also the relative benefits received by the Company and the Indemnified Holder as
well as any other relevant equitable considerations. 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.
(d) The indemnifying party shall make payments of all amounts required to
be made pursuant to the foregoing provisions of this Section 4 to or for the
account of the indemnified party from time to time promptly upon receipt of
bills or invoices relating thereto or when otherwise due and payable.
5. Limitations on Sale or Distribution of Securities. If a registration
under this Agreement shall be in connection with an underwritten public offering
of securities for the Company's or any security holder's account (other than any
Holders), each Holder shall be deemed to have agreed by acquisition of such
Registrable Securities not to effect any public sale or distribution, including
any sale pursuant to Rule 144 under the Securities Act, of any Registrable
Securities, during such period prior and subsequent to the commencement of the
offering of securities pursuant to such Registration Statement as may be
reasonably requested by the underwriters thereof, and in all cases to otherwise
comply with all applicable rules under the Securities Act and the Exchange Act,
including, without limitation, Rules 10b-6 and 10b-7 thereunder.
6. Registration Rights to Others. If the Company shall at any time
hereafter provide to any holder of any securities of the Company rights with
respect to the registration of such securities under the Securities Act, such
rights shall be subordinate to and shall not be in conflict with or adversely
affect any of the rights provided in this Agreement to the Holders.
7. Amendments and Waivers. This Agreement may be amended, and any provision
of this Agreement may be waived, by a writing signed by both the Holders and the
Company. Each Holder shall be bound by any consent given pursuant to this
Section 7, whether or not any affected Registrable Securities shall have been
marked to indicate such consent.
8. Notices. All notices, demands and other communications given or
delivered under this Agreement will be in writing and shall be made by hand
delivery, overnight
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courier, first-class mail, or telecopier and will be deemed to have been given
when personally delivered, four business days after being mailed by first class
mail, return receipt requested, or delivered by express courier service or
telecopied (subject to receipt of written confirmation). Notices, demands and
communications to the Company and each of the Holders will, unless another
address is specified in writing, be sent to the addresses set forth in the
Exchange Agreement and, if to a Holder, unless another address is specified in
writing, sent to such Holder's address as shown on the books of the Company or
its transfer agent.
9. Specific Performance. The parties hereto recognize and agree that money
damages may be insufficient to compensate the Holders for breaches by the
Company of the terms hereof and, consequently, that the equitable remedy of
specific performance of the terms hereof will be available in the event of any
such breach.
10. 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 contained herein shall not be in any way impaired
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.
11. Miscellaneous. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto, whether so expressed or not. Any Holders may freely assign all
or a portion of its rights under this agreement. This Agreement embodies the
entire agreement and understanding between the Company and the Holders and
supersedes all prior agreements and understandings relating to the subject
matter hereof. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAW OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICT PROVISION OR RULE WHETHER OF THE STATE OF TEXAS OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF TEXAS. The headings in this Agreement are
for purposes of reference only and shall not limit or otherwise affect the
meaning hereof. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized as of the
date first above written.
XXXXX SYSTEMS, INC.
By:
-----------------------------------------
Name:
Title:
XXXX, XXXXX & STRONG, L.P.
By:
--------------------------------------
Name:
Title:
X.X. XXXXX, XX.
By:
--------------------------------------
Name:
Title:
XXX XXXX
-----------------------------
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SCHEDULE A
LIST OF WARRANT HOLDERS
NAME NUMBER OF SHARES
---- ----------------
Xxxx, Xxxxx & Strong, L.P. 1,600,000
X. X. Xxxxx, Xx. 175,000
Xxx Xxxx 2,400,000
13