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eVENTURES GROUP, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into on the 22nd day of September, 1999, by and among eVENTURES GROUP,
INC., a Delaware corporation (the "COMPANY"), and the persons and entities
listed on Schedule 1 attached hereto (collectively, the "STOCKHOLDERS"), as
Holders of shares of common stock, par value $.00002 per share, of the Company
("COMMON STOCK").
W I T N E S S E T H:
WHEREAS, the Company, eVentures Holdings, L.L.C., a Delaware limited
liability company and wholly-owned subsidiary of the Company ("IEOH MERGER
SUBSIDIARY"), IEO Holdings Limited, a Nevis, West Indies corporation ("IEOH"),
Mick Y. Wettreich and various other persons have entered into that certain
Agreement and Plan of Reorganization dated of even date herewith (the "IEOH
REORGANIZATION AGREEMENT"), pursuant to which certain of the Stockholders
acquired shares of the Company's Common Stock; and
WHEREAS, in connection with the IEOH Reorganization Agreement, the
parties have agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and in the IEOH Reorganization Agreement, the
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. REGISTRABLE SHARES. For purposes of this Agreement "REGISTRABLE
SHARES" shall mean, at any time, and with respect to any Stockholder or
Qualified Transferee (as defined in Section 9(g) below), the shares of Common
Stock held by such Stockholder or Qualified Transferee which constitute
Restricted Securities (defined below), and "HOLDER" shall mean any Stockholder
or Qualified Transferee holding Registrable Shares. As to any particular
Registrable Shares, once issued, such Registrable Shares shall cease to be
Registrable Shares (1) when such Registrable Shares have been registered under
the Securities Act of 1933, as amended or any successor Federal statute (the
"ACT"), the Registration Statement in connection therewith has been declared
effective and they have been disposed of pursuant to and in the manner described
in such effective Registration Statement, (2) when such Registrable Shares are
sold or distributed pursuant to Rule 144, (3) when such Registrable Shares have
ceased to be outstanding or (4) when such Registrable Shares have been
transferred to a person or entity other than a Qualified Transferee. For
purposes of this Agreement, the term "RESTRICTED SECURITIES" shall mean, at any
time and with respect to any Stockholder or Qualified Transferee, the shares of
Common Stock and any other securities which by their terms are directly or
indirectly
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exercisable or exchangeable for or convertible into Common Stock (other than
stock options granted to employees or directors of the Company in their capacity
as such, or Common Stock issuable upon the exercise thereof), and any securities
received on or with respect to any of the foregoing securities, which are held
by such Stockholder or Qualified Transferee and which theretofor have not been
sold to the public pursuant to a Registration Statement or pursuant to Rule 144
under the Securities Act. For purposes of this Agreement, the term "REGISTRATION
STATEMENT" shall mean any registration statement of the Company which covers any
of the Registrable Shares, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus (defined herein) contained therein, all exhibits
thereto and all material incorporated by reference therein. For purposes of this
Agreement, the term "PROSPECTUS" shall mean the prospectus included in a
Registration Statement, including any prospectus subject to completion, and any
such Prospectus as amended or supplemented by any prospectus supplement with
respect to the terms of the offering of any portion of the Registrable Shares
and, in each case, by all other amendments and supplements to such prospectus,
including post-effective amendments, and in each case including all material
incorporated by reference therein. For purposes of this Agreement, the term
"RULE 144" shall mean Rule 144 promulgated under the Securities Act or any
successor or similar rule thereto, as may be enacted by the Securities and
Exchange Commission from time to time.
2. DEMAND REGISTRATIONS.
(a) REQUESTS FOR REGISTRATION.
(i) At any time and from time to time after the third month
following the date hereof through the fourth anniversary of the
date of this Agreement (the "DEMAND PERIOD"), Holders owning an
aggregate of at least thirty-five (35%) of the aggregate number
of Registrable Shares shall have the right to request that the
Company file a registration statement under the Securities Act
covering the registration of all or any part of their
Registrable Shares (each, a "DEMAND REGISTRATION"), provided,
however, that unless the reasonably anticipated aggregate
offering price (net of underwriting discounts and commissions)
for the Registrable Shares proposed to be registered shall equal
at least $5,000,000, then such request shall cover the
registration of at least fifty percent (50%) of the Registrable
Shares. Any request (a "REGISTRATION REQUEST") for a Demand
Registration shall specify (x) the approximate number of shares
of Registrable Shares requested to be registered, (y) the
intended method of distribution of such shares, and (z) any
Lock-up Conditions to be imposed pursuant to Section 8 hereof.
Within ten days after the date of sending of such request, the
Company will give written notice of such requested registration
to all other Holders of Registrable Shares and will include in
such registration all shares of Registrable Shares which Holders
of Registrable Shares request the Company to include in such
registration by
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REGISTRATION RIGHTS AGREEMENT-Page 2
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written notice given to the Company within thirty (30) days
after the date of sending of the Company's notice.
(ii) The Company will be required to effect up to three (3)
Demand Registrations pursuant to this Section 2(a).
(iii) A registration will not count as one of the Demand
Registrations effected by the Company unless (a) the Holders of
Registrable Shares are able to register and, if the registration
is a firm commitment public offering, sell the Registrable
Shares requested to be included in such registration or (b) the
Registration Statement relating to a registration is withdrawn
or abandoned at the request of the Holders of a majority of the
Registrable Shares covered by such Registration Statement (other
than as a result of a material adverse change to the Company or
following a postponement by the Company pursuant to Section 2(d)
herein).
(iv) The Company will not include in any Demand Registration
any securities other than Registrable Shares and securities to
be registered for offering and sale on behalf of the Company
without the prior written consent of the Holders of a majority
of the Registrable Shares included in such registration. If the
managing underwriters for any such offering advise the Company
in writing that in their opinion the number of Registrable
Shares and, if permitted hereunder, other securities in such
offering, exceeds the number of Registrable Shares and other
securities, if any, which can be sold in an orderly manner in
such offering within a price range acceptable to the Holders of
a majority of the Registrable Shares initially requesting
registration, the Company will include in such registration,
prior to the inclusion of any securities which are not
Registrable Shares, the number of Registrable Shares requested
to be included which in the opinion of such underwriters can be
sold in an orderly manner within the price range of such
offering, pro rata among the respective Holders thereof on the
basis of the number of Registrable Shares which each such Holder
has requested the Company to include in such registration.
(b) SELECTION OF UNDERWRITER. The Holders of a majority of the
Registrable Shares to be included in a registration will have the right
to select one or more underwriters to manage the offering, subject to
the Company's approval which will not be unreasonably withheld or
delayed. The Company will have no obligation, however, to locate an
underwriter for the Holders.
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(c) REGISTRATIONS ON FORM S-3. The Company shall use its reasonable
best efforts to qualify for registration on Form S-3 or any comparable
or successor form or forms. At any time during the Demand Period, after
the Company has qualified for the use of Form S-3, in addition to the
rights contained in Section 2(a), the Holders of at least 35% of the
aggregate number of Registrable Shares shall have the right to request
registrations on Form S-3; provided, that the Company shall not be
required to effect a registration on Form S-3 pursuant to this Section
2(c) unless the reasonably anticipated aggregate offering price (net of
underwriting discounts and commissions) for the Registrable Shares
proposed to be registered shall equal at least $1.5 million. Such
requests shall be in writing and shall state the number of Registrable
Shares proposed to be disposed of and the intended method of
distribution of such shares by such Holder or Holders. The Company shall
be required to effect up to two (2) registrations pursuant to this
Section 2(c), provided, however, that a registration shall not count as
one of the two unless it meets the requirements set forth in Section
2(a)(iii) above.
(d) RIGHT TO DEFER REGISTRATION. The Company shall not be obligated
to effect any registration within ninety (90) days after the effective
date of a previous registration statement in which the Holders of
Registrable Shares participated or were given an opportunity to
participate and declined to do so. The Company may postpone for up to
ninety (90) days the filing or the effectiveness of a registration
statement for a demand registration set forth above if (i) the Board of
Directors determines, reasonably and in good faith, that such
registration might have an adverse effect on any proposal or plan by the
Company, including, without limitation, a plan or proposal to engage in
any acquisition, merger, consolidation, tender offer or similar
transaction or (ii) any other material, nonpublic development or
transaction is pending and the filing of such registration would require
disclosure of such development or transaction at a time when the Company
did not otherwise have a duty to disclose such development or
transaction; provided, that the Company may not postpone the filing or
effectiveness of a registration statement pursuant to this sentence more
frequently than twice during any period of twelve (12) consecutive
months. If, after a registration statement becomes effective, the
Company advises the Holders of Registered Shares that the Company
considers it necessary in accordance with the Company's obligations
under applicable securities laws for the registration statement to be
amended, the Holders of such shares shall suspend any further sales of
their Registered Shares until the Company advises them that the
registration statement has been amended. The one (1) year time period
referred to in Section 4 during which the registration statement must
be kept current after its effective date shall be extended for an
additional number of business days equal to the number of business days
during which the rights to sell shares were suspended pursuant to the
preceding sentence.
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3. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. If the Company proposes to register any of
its securities under the Securities Act (other than pursuant to (i) a
Demand Registration, (ii) a registration solely in connection with an
employee benefit or stock ownership plan on Form S-8 or any comparable
or successor form, (iii) a registration solely in connection with an
acquisition consummated in a manner which would permit registration of
such securities to the public on Form S-4 or any comparable or successor
form or (iv) a "shelf" or similar registration for use solely in
connection with future acquisitions), and the registration form to be
used may be used for the registration of Registrable Shares (a
"PIGGYBACK REGISTRATION"), the Company will give prompt written notice
to all Holders of Registrable Shares of its intention to effect such a
registration (each a "PIGGYBACK NOTICE"). Subject to Section 3(b) below,
the Company will include in such registration all shares of Registrable
Shares which Holders of Registrable Shares request the Company to
include in such registration by written notice given to the Company
within twenty (20) days after the date of sending of the Company's
notice.
(b) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback Registration
relates to an underwritten public offering of equity securities by the
Company and the managing underwriters for such offering advise the
Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which
can be sold in an orderly manner in such offering within a price range
acceptable to the Company, the Company will include in such registration
(i) first, the securities proposed to be sold by the Company, (ii)
second, the Registrable Shares requested to be included in such
registration, pro rata among the Holders of such Registrable Shares on
the basis of the number of shares owned by each such Holder, and (iii)
third, other securities requested to be included in such registration.
(c) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback Registration
relates to an underwritten public offering of equity securities held
solely by Holders of the Company's securities and the managing
underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such
offering within a price range acceptable to the Holders initially
requesting such registration, the Company will include in such
registration (i) first, the securities requested to be included therein
by the Holders requesting such registration, (ii) second, the
Registrable Shares requested to be included in such registration, pro
rata among the Holders of such Registrable Shares on the basis of the
number of shares owned by each such Holder and (iii) third, other
securities requested to be included in such registration.
4. REGISTRATION PROCEDURES. Whenever the Holders of Registrable Shares
have requested that any Registrable Shares be registered pursuant to this
Agreement, the Company will use its best efforts to effect the registration and
the sale of such Registrable Shares in
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accordance with the intended method of distribution thereof and will as
expeditiously as possible:
(i) prepare and file with the Securities and Exchange
Commission (the "COMMISSION") a Registration Statement with
respect to such Registrable Shares on any appropriate form under
the Securities Act, which form shall be selected by the Company
and shall be available for the sale of Registrable Shares in
accordance with the intended method or methods of distribution
thereof and use its best efforts to cause such Registration
Statement to become effective, provided that before filing a
Registration Statement or prospectus or any amendments or
supplements thereto, the Company will furnish to the counsel
selected by the Holders of a majority of the Registrable Shares
included in such Registration Statement copies of all such
documents proposed to be filed, which documents will be subject
to the review of such counsel;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to such Registration Statement and
supplements to the Prospectus used in connection therewith (and
to file the Prospectus, as so supplemented, under Rule 424 under
the Securities Act, if required) as may be necessary to keep
such Registration Statement effective for a period of up to one
(1) year, and comply with the provisions of the Securities Act
with respect to the disposition of all securities included in
such Registration Statement during such period in accordance
with the intended methods of distribution by the selling Holders
thereof set forth in such Registration Statement or supplement
to such Prospectus;
(iii) furnish to each selling Holder of Registrable Shares
such number of copies of such Registration Statement, each
amendment and supplement thereto (in each case including all
exhibits), the Prospectus included in such Registration
Statement (including each preliminary Prospectus) and such other
documents as such selling Holder may reasonably request in order
to facilitate the disposition of the Registrable Shares owned by
such selling Holder;
(iv) notify the selling Holders of Registrable Shares and
the managing underwriters, if any, promptly and (if requested by
any such Stockholder) confirm such advice in writing, (A) when a
Prospectus, including any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the
same has become effective, (B) of any request by the Commission
for amendments or supplements to a Registration Statement or
related prospectus or for additional information, (C) of the
issuance by the Commission of any stop order suspending the
effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (D) of the receipt by the
Company of any notification with
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respect to the suspension of the qualification of any of the
Registrable Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose,
and (E) of the existence of any fact which results in a
Registration Statement, a Prospectus or any document
incorporated therein by reference containing an untrue statement
of a material fact or omitting to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(v) use its best efforts to register or qualify such
Registrable Shares under such other securities or blue sky laws
of such jurisdictions as any selling Holder reasonably requests
and do any and all other acts and things which may be reasonably
necessary or advisable to enable such selling Holder to
consummate the disposition in such jurisdictions of the
Registrable Shares owned by such selling Holder, provided that
the Company will not be required (A) to qualify generally to do
business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph, (B) to subject
itself to taxation in any such jurisdiction, or (C) to consent
to general service of process in any such jurisdiction;
(vi) notify each selling Holder of such Registrable Shares,
at any time when a Prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any
event referred to in clause (iv)(E) of this Section 4, and, at
the request of any such seller, prepare a supplement to such
Prospectus or a post-effective amendment to such Registration
Statement so that, as thereafter delivered to the purchasers of
such Registrable Shares, such Prospectus will not contain an
untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading;
(vii) cause all such Registrable Shares to be listed on each
securities exchange on which similar securities issued by the
Company are then listed and to be qualified for trading on each
system on which similar securities issued by the Company are
from time to time qualified;
(viii) provide a transfer agent and registrar for all such
Registrable Shares not later than the effective date of such
Registration Statement and thereafter maintain such transfer
agent and registrar;
(ix) enter into such customary agreements (including
underwriting agreements in customary form) and take all such
other actions as the Holders of a majority of the Registrable
Shares being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of
such Registrable Shares;
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(x) in connection with an underwritten offering, use its
best efforts to (A) obtain opinions of counsel to the Company
and updates thereof, which counsel and opinions (in form, scope
and substance) shall be reasonably satisfactory to the managing
underwriters, addressed to the underwriters, covering the
matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be
reasonably requested by such underwriters; and (B) obtain "cold
comfort" letters and updates thereof from the Company's
independent certified public accountants, addressed to the
underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort"
letters to underwriters in connection with underwritten
offerings; and make available for inspection during normal
business hours by any underwriter participating in any
disposition pursuant to a registration statement, and any
attorney or accountant retained by such underwriter, all
financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably
requested by such underwriter, attorney or accountant in
connection with such registration statement; provided that such
underwriters execute prior thereto an agreement with the Company
that all such records, information or documents shall be kept
confidential by such persons unless (1) disclosure of such
records, information or documents is required by law or by a
court or administrative order or (2) such records, information
or documents are or become (but only when they become) generally
available to the public other than as a result of disclosure in
violation of this paragraph; and 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;
(xi) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission;
(xii) permit any Holder of Registrable Shares which might be
deemed, in the sole and exclusive judgment of such Holder, 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, furnished to the Company in writing, which in the
reasonable judgment of such Holder and its counsel should be
included;
(xiii) in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of
any order suspending or preventing
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the use of any related prospectus or suspending the
qualification of any Registrable Shares included in such
registration statement for sale in any jurisdiction, the Company
will use its reasonable efforts promptly to obtain the
withdrawal of such order; and
(xiv) provide a CUSIP number for all Registrable Shares, not
later than the effective date of the applicable registration
statement.
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 sole and
exclusive judgment of such Holder, 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 inclusion in such registration statement of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
of such securities by such Holder 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 holding 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.
5. REGISTRATION EXPENSES.
(a) DEFINITION. The term "REGISTRATION EXPENSES" means any expenses
incident to the Company's performance of or compliance with this
Agreement, including, without limitation, all registration and filing
fees, listing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses, messenger and delivery expenses,
internal expenses, the fees and expenses of counsel for the Company (but
not the fees and expenses of counsel to the Holders of the Registrable
Shares included in such registration) and all independent certified
public accountants, underwriting fees and expenses (excluding discounts
and commissions attributable to the Registrable Shares, which shall be
paid by the selling Holders out of the proceeds of the offering) and the
fees and expenses of any other Persons (defined below) retained by the
Company. For purposes of this Agreement, the term "PERSON" shall be
construed as broadly as possible and shall include an individual or
natural person, a partnership (including a limited liability
partnership), a company, an association, a joint stock company, a
limited liability company, a trust, a joint venture, an unincorporated
entity and a governmental authority.
(b) PAYMENT. The Company shall pay the Registration Expenses in
connection with any Demand Registration, any and all registrations on
Form S-3 pursuant to Section 2(c), and any and all Piggyback
Registrations.
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6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify,
to the extent permitted by law, each Holder of Registrable Shares, such
holder's general and limited partners, officers and directors and each
Person who controls such Holder (within the meaning of the Securities
Act) against all losses, claims, damages, liabilities and expenses
caused by 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,
except insofar as the same are caused by or contained in any information
furnished in writing to the Company by such Holder expressly for use
therein. In connection with an underwritten offering, the Company will
indemnify such underwriters, their officers and directors and each
Person who controls such underwriters (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Shares.
(b) INDEMNIFICATION BY HOLDERS. In connection with any registration
statement in which a Holder of Registrable Shares is participating, each
such Holder will furnish to the Company in writing such information and
affidavits 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 the Company (within the meaning of the
Securities Act) 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 written information or affidavit so
furnished in writing by such Holder; 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
Registrable Shares pursuant to such registration statement.
(c) NOTICE; DEFENSE OF CLAIMS. 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 and (ii) 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 or delayed). 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
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expenses of more than one special and one local counsel for all parties
indemnified by such indemnifying party with respect to such claim.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 6 is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, liability, claim,
damage or expense referred to herein, then the indemnifying party, in
lieu of indemnifying such indemnified party hereunder, shall contribute
to the amount paid or payable by such indemnified party as a result of
such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party
on the other from the offering of the Registrable Shares or (ii) if the
allocation provided for by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative
fault of the indemnifying party or parties on the one hand and the
indemnified party on the other hand in connection with the statements or
omissions or alleged statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof).
The relative fault of the indemnifying party and of the indemnified
party shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission. The obligation to contribute will be
individual to each Holder of Registrable Shares and will be limited to
the amount by which the net amount of proceeds received by such Holder
from the sale of Registrable Shares exceeds the amount of losses,
liabilities, damages, and expenses which such Holder has otherwise been
required to pay by reason of such statements or omissions.
(e) SURVIVAL. 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.
(f) UNDERWRITING AGREEMENT. To the extent that the provisions on
indemnification and contribution contained in the underwriting
agreement entered into in connection with an underwritten public
offering are in conflict with the provisions of this Section 6, the
provisions contained in the underwriting agreement shall control.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any registration hereunder which is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements, (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements, provided, that no
Holder of
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Registrable Shares included in any underwritten registration shall be required
to make any representations or warranties to the Company or the underwriters
other than representations and warranties regarding such Holder and such
Holder's intended method of distribution, and (iii) if requested by the managing
underwriter or underwriters or the Demanding Persons (as defined below), agrees
not to sell Registrable Shares or other securities held by such Person in any
transaction other than pursuant to such underwriting for such period following
the effective date of the registration statement relating to such underwriting
as determined by either the Board of Directors or the Demanding Persons;
provided, that no Holder of Registrable Shares shall be required to enter into
such an agreement unless each other Holder of Registrable Shares, each director
and executive officer of the Company and each other Holder of at least one
percent of the Common Stock then outstanding enters into a substantially
identical agreement relating to such underwriting.
8. STOCKHOLDER LOCK-UP; AGREEMENT NOT TO SELL. During the two-year
period following the date hereof, no Holder of Registrable Shares may make any
public sale of Registrable Shares (pursuant to a Registration Statement, Rule
144 or otherwise) other than in compliance with any Lock-up Conditions then in
effect. If no Lock-up Conditions are then in effect, no public sales shall be
permitted by any Holder without the written consent of the Holders of
thirty-five (35%) of the Registrable Shares (such Holders consenting to a waiver
of the restrictions on the sale of Registrable Shares being referred to as
"CONSENTING HOLDERS"); provided that the Consenting Holders may not consent to
any waiver for themselves unless the same waivers are made available to all
Holders of Registrable Shares. Notwithstanding anything to the contrary
contained herein, each Holder hereby agrees to comply with the conditions or
restrictions (the "LOCK-UP CONDITIONS") imposed at the time of such demand by a
majority of Holders of a majority of the Registrable Shares (the "DEMANDING
PERSONS") making a request for such Demand Registration pursuant to Section 2(a)
of this Agreement, including, without limitation, any restriction on a Holder's
ability to sell, pledge, hypothecate, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of all or a portion of the
Registrable Shares, for a specified period following the effective date of such
registration; provided, however, that nothing herein shall prevent any Holder
(a) that is a partnership or corporation from making a distribution of
Registrable Shares to the partners or shareholders thereof that are otherwise in
compliance with applicable securities laws, so long as such permitted
distributees agree to be bound by the terms and conditions of the Lock-up
Conditions; (b) that desires to sell any Registrable Shares in a private
transaction in compliance with applicable securities laws from consummating such
a sale so long as the purchaser in any private sale agrees in writing to be
bound by the restrictions set forth in this Section 8; or (c) that is an
individual, from making a transfer of Registrable Shares by gift, will or the
laws of descent and distribution, subject to the restrictions set forth in this
Section 8. Any Lock-up Conditions imposed by a Demanding Person shall apply to
each Holder of Registrable Shares (including without limitation, any Demanding
Person).
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REGISTRATION RIGHTS AGREEMENT-Page 12
13
9. MISCELLANEOUS.
(a) INFORMATION AND REPORTING.
(i) The Company shall, at all times during which it is
neither subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), nor exempt from reporting pursuant to Rule
12g3-2(b) under the Exchange Act, upon the written request of
any Stockholder, provide in writing to such Stockholder and to
any prospective transferee of the Registrable Shares of such
Stockholder the information concerning the Company described in
Rule 144A(d)(4) or any successor rule under the Securities Act
("RULE 144A INFORMATION"). Upon the written request of any
Stockholder, the Company shall cooperate with and assist such
Stockholder or any member of the National Association of
Securities Dealers, Inc. PORTAL system in applying to designate
and thereafter maintain the eligibility of the Registrable
Shares for trading through PORTAL. The Company's obligations
under this Section 9(a)(i) shall at all times be contingent upon
receipt from the prospective transferee of Registrable Shares of
a written agreement to take all reasonable precautions to
safeguard the Rule 144A Information from disclosure to anyone
other than Persons who will assist such transferee in evaluating
the purchase of any Registrable Shares.
(ii) When it is first legally required to do so, the Company
shall register its Common Stock under Section 12 of the Exchange
Act and shall keep effective such registration and shall timely
file such information, documents and reports as the Commission
may require or prescribe under Section 13 of the Exchange Act.
From and after the effective date of the first registration
statement filed by the Company under the Securities Act, the
Company shall (whether or not it shall then be required to do
so) timely file such information, documents and reports which a
corporation, partnership or other entity subject to Section 13
or 15(d) (whichever is applicable) of the Exchange Act is
required to file. The Company shall promptly upon request
furnish any Holder of Registrable Shares (a) a written statement
by the Company that it has complied with the reporting
requirements of Section 13 or 15(d) of the Exchange Act, (b) a
copy of the most recent annual or quarterly report of the
Company, and (c) such other reports and documents filed by the
Company with the Commission as such Holder may reasonably
request in availing itself of an exemption for the sale of
Registrable Shares without registration under the Securities
Act. The Company acknowledges and agrees that the purposes of
the requirements contained in this Section 9(a)(ii) are to
enable any such Holder to comply with the current public
information requirement contained in paragraph (c) of Rule 144
under the Securities Act, should such Holder ever wish to
dispose of any of the securities of the Company acquired by it
without registration under the Securities Act in reliance upon
Rule 144 (or any other similar exemptive provision), and to
qualify the Company for the use of registration statements on
Form S-3. In addition, the Company shall
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REGISTRATION RIGHTS AGREEMENT-Page 13
14
take such other measures and file such other information,
documents and reports, as shall hereafter be required by the
Commission as a condition to the availability of Rule 144 under
the Securities Act (or any similar exemptive provision hereafter
in effect) and the use of Form S-3. The Company also covenants
to use its best efforts, to the extent that it is reasonably
within its power to do so, to qualify for the use of Form S-3.
(b) NO INCONSISTENT AGREEMENTS. The Company will not hereafter (i)
enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the Holders of
Registrable Shares in this Agreement or (ii) grant registration rights
to any other Person (unless consented to by a majority vote of the
Stockholders).
(c) ADJUSTMENTS AFFECTING REGISTRABLE SHARES. The Company will not
take any action, or permit any change to occur, with respect to its
securities for the purpose of materially and adversely affecting the
ability of the Holders of Registrable Shares to include such Registrable
Shares in a registration undertaken pursuant to this Agreement or
materially and adversely affecting the marketability of such Registrable
Shares in any such registration (including, without limitation,
effecting a stock split or a combination of shares), provided that this
Section 9(c) shall not apply to actions or changes with respect to the
Company's business, balance sheet, earnings or revenue where the effect
of such actions or changes on the Registrable Shares is merely
incidental.
(d) NOTICES. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be
deemed effectively given when delivered personally or by facsimile
transmission or by overnight delivery service or 72 hours after being
mailed by first class certified or registered mail, return recent
requested, postage prepaid:
(i) If to the Company, c/o Stuart Chasanoff, 1601 Elm
Street, Suite 4000, Dallas, Texas 75201, or at such other
address or addresses as may have been furnished in writing by
the Company to the Stockholders.
(ii) If to a Stockholder, to it at its address as set forth
in the applicable IEOH Reorganization Agreement, or at such
other address or addresses as may have been furnished in writing
by such Stockholder with a copy to (which shall not constitute
notice): Arter & Hadden LLP, 1717 Main Street, Suite 4100,
Dallas, Texas 75201, Attention: Victor B. Zanetti, Esq. (Fax:
214.741.7139).
(e) 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
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REGISTRATION RIGHTS AGREEMENT-Page 14
15
may not be an adequate remedy for any breach of the provisions 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.
(f) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, no
amendment, modification, termination or cancellation of this Agreement
shall be effective unless made in writing signed by the Company and the
Holders of a majority of the shares of Registrable Shares; provided that
no amendment may be made to Sections 8 or 9(f) of this Agreement unless
agreed upon by the Company and the Holders of all the Registrable
Shares.
(g) ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Shares pursuant to this Agreement may be
assigned (but only with all related obligations) by a Holder to any
transferee (a "QUALIFIED TRANSFEREE") that acquires from a Holder either
(i) 100,000 or more Registrable Shares or (ii) if less than 100,000
Registrable Shares are owned by a Holder at the time of a transfer, all
of the Registrable Shares owned by such Holder, in either case in
connection with the permitted transfer of Registrable Shares. Such
assignment shall not affect the rights of Holders hereunder which shall
remain in full force in accordance with the terms hereof. Any
transferring Holder shall provide the Company with prior written notice
of such transfer(s)/assignment(s), provided, however, that the failure
to provide such notice shall not be deemed to preclude assignment
hereunder.
(h) SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(i) ENTIRE AGREEMENT. This Agreement embodies the entire agreement
of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements relating to such subject matter.
(j) HEADINGS. The headings of this Agreement are for convenience
only and do not constitute a part of this Agreement.
(k) GOVERNING LAW. The construction, validity and interpretation of
this Agreement will be governed by the internal laws of the State of
Delaware without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
(l) FURTHER ASSURANCES. Each party to this Agreement hereby
covenants and agrees, without the necessity of any further
consideration, to execute and deliver any and
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REGISTRATION RIGHTS AGREEMENT-Page 15
16
all such further documents and take any and all such other actions as
may be necessary or appropriate to carry out the intent and purposes of
this Agreement and to consummate the transactions contemplated hereby.
(m) COUNTERPARTS. This Agreement may be executed by facsimile and in
one or more counterparts, each of which shall be deemed to be an
original, but all of which shall be one and the same document.
(Signature Page Follows)
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REGISTRATION RIGHTS AGREEMENT-Page 16
17
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first written above.
COMPANY:
eVENTURES GROUP, INC.
By: /s/ BARRETT WISSMAN
----------------------------
Name: Barrett Wissman
----------------------------
Title: President
----------------------------
[SIGNATURE PAGE FOR EACH STOCKHOLDER FOLLOWS]
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REGISTRATION RIGHTS AGREEMENT-Page 17
18
Signature page to Registration Rights Agreement dated September 22, 1999 among
eVentures Group, Inc. the undersigned and certain of its other Stockholders.
STOCKHOLDER:
/s/ JOHN S. ROBLING, JR.
--------------------------------------
Printed Name: John S. Robling, Jr.
-------------------------
/s/ ARNOLD GLABERSON
--------------------------------------
Printed Name: Arnold Glaberson
-------------------------
/s/ DANIEL STRYKER
--------------------------------------
Printed Name: Daniel Stryker
-------------------------
/s/ STEVEN R. LOGLISCI
--------------------------------------
Printed Name: Steven R. Loglisci
-------------------------
/s/ KEVIN J. LIDDY
--------------------------------------
Printed Name: Kevin J. Liddy
-------------------------
/s/ TREVOR L. HUFFARD
--------------------------------------
Printed Name: Trevor L. Huffard
-------------------------
/s/ KEITH OSER
--------------------------------------
Printed Name: Keith Oser
-------------------------
/s/ TOM BAINBRIDGE
--------------------------------------
Printed Name: Tom Bainbridge
-------------------------
/s/ CHARLES D. MURDOCK IV
--------------------------------------
Printed Name: Charles D. Murdock IV
-------------------------
/s/ SAMUEL LITWIN
--------------------------------------
Printed Name: Samuel Litwin
-------------------------
/s/ MICHAEL A. FISCUS
--------------------------------------
Printed Name: Michael A. Fiscus
-------------------------
/s/ ANNETTE DICKSON
--------------------------------------
Printed Name: Annette Dickson
-------------------------
/s/ WILLIAM H. CARROLL
--------------------------------------
Printed Name: William H. Carroll
-------------------------
SUISSE FINANCE CORPORATION
By: /s/ JAMES E. MARTIN
-----------------------------------
Name: James E. Martin
---------------------------------
Its: Director
----------------------------------
IEO INVESTMENTS LTD.
By: /s/ PIERCE LOUGHRAN
-----------------------------------
Name: Pierce Loughran for Dungate Ltd.
---------------------------------
Its: Director
----------------------------------
INFINITY EMERGING SUBSIDIARY LIMITED
By: /s/ PIERCE LOUGHRAN
-----------------------------------
Name: Pierce Loughran for Dungate Ltd.
---------------------------------
Its: Director
----------------------------------
IEO HOLDINGS LIMITED
By: /s/ JOHN A. BROOKS
-----------------------------------
Name: John A. Brooks
---------------------------------
Its: Director/President
----------------------------------
INFINITY INVESTORS LIMITED
By: /s/ JAMES A. LOUGHRAN
-----------------------------------
Name: James A. Loughran
---------------------------------
Its: Director
----------------------------------
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REGISTRATION RIGHTS AGREEMENT-Page 18
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SCHEDULE I
STOCKHOLDERS
NAME REGISTRABLE SHARES
Infinity Investors Limited 8,000,000
IEO Investments Limited 11,816,200
Infinity Emerging Subsidiary Limited 8,683,800
Stuart Chasanoff 45,000
Steve Loglisci 150,000
Trevor Huffard 50,000
Samuel L. Litwin 2,000,000
Mitchell C. Arthur 2,000,000
Michael Fiscus 2,000,000
Steve Robling 120,000
Thomas Bainbridge 120,000
William Carroll 120,000
Annette Dickson 15,000
Charles Murdock 30,000
Keith Oser 12,000
Daniel E. Stryker, Jr. 12,000
Kevin Liddy 12,000
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REGISTRATION RIGHTS AGREEMENT-Page 19