Exhibit 10.2
CHADMOORE WIRELESS GROUP, INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of May 1,
1998, between CHADMOORE WIRELESS GROUP, INC., a Colorado corporation
(the "Company"), and RECOVERY EQUITY INVESTORS II, L.P., a Delaware
limited partnership ("REI").
RECITALS
WHEREAS, the Company and REI have entered into that
certain Investment Agreement, dated as of May 1, 1998 (as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof, the "Investment Agreement"),
pursuant to which, among other things, REI is acquiring (a) 8,854,662
newly issued shares of Common Stock, par value $0.001 per share, of the
Company (the "Common Stock"), (b) 10,119,614 newly issued shares of
Series C Preferred Stock, par value $0.001 per share, and (c) the
Warrants, each dated as of May 1, 1998, granting REI the right to
acquire shares of Common Stock (as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
the terms thereof; and
WHEREAS, the Investment Agreement, among other
things, provides that the execution and delivery of a registration
rights agreement in substantially the form hereof is a condition to the
consummation of the other transactions contemplated by the Investment
Agreement.
NOW THEREFORE, in connection with the Investment
Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
I.1 Definitions. The following defined terms, when
used in this Agreement, shall have the respective meanings set forth
below (such definitions to be equally applicable to both singular and
plural forms of the terms defined):
"Business Day" means a day other than Saturday,
Sunday or any day on which banks located in the States of New York,
Nevada or California are authorized or obligated to close.
"Commission" means the United States Securities and
Exchange Commission.
"Common Stock" has the meaning ascribed to it in the
recitals hereto.
"Company" has the meaning ascribed to it in the
introductory paragraph of this Agreement.
"Demand Registration" means any Long-Form
Registration or Short-Form Registration requested in accordance with
Section 2.1(a), and, in the case of a Long-Form Registration, effected
in accordance with Section 2.4.
"Effective Period" has the meaning ascribed to it in
Section 2.8
"Equity Equivalents" means securities (including the
Warrants) which, by their terms, are or may be exercisable, convertible
or exchangeable for or into Common Stock at the election of the holder
thereof.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission
issued thereunder.
"Fully Diluted" means, with respect to the
calculation of the number of shares of Common Stock, (a) all shares of
Common Stock outstanding at the time of determination and (b) all
shares of Common Stock issuable upon the exercise, conversion or
exchange of any Equity Equivalents outstanding at the time of
determination.
"Investment Agreement" has the meaning ascribed to it
in the recitals hereto.
"Long-Form Registration" has the meaning ascribed to
it in Section 2.1(a).
"Piggyback Holders" has the meaning ascribed to it in
Section 3.1.
"Piggyback Registration" has the meaning ascribed to
it in Section 3.l.
"Other Piggyback Holders" has the meaning ascribed to
it in Section 2.5(a).
"Registration Expenses" has the meaning ascribed to
it in Section 7.l.
"Registrable Securities" means, at any time, (a) the
shares of Common Stock issued to REI pursuant to the Investment
Agreement and the shares of Common Stock issued or issuable upon the
conversion, exercise or exchange of the Warrants, (b) any then
outstanding securities into which shares of Common Stock referred to in
clause (a) above shall have been changed and (c) any then outstanding
securities resulting from any reclassification or recapitalization of
Common Stock; provided, however, that "Registrable Securities" shall
not include any shares of Common Stock or other securities obtained or
transferred pursuant to an effective registration statement under the
Securities Act; and provided further, that "Registrable Securities"
shall not include any shares of Common Stock or other securities which
are held by a Person who is not an REI Shareholder.
"REI" has the meaning ascribed to it in the
introductory paragraph of this Agreement.
"REI Shareholders" means (a) REI and (b) any Person
who is a transferee of Registrable Securities held by an REI
Shareholder pursuant to Section 12.5, in each case, (i) for so long as
such Person shall hold Registrable Securities and (ii) the provisions
of this Agreement applicable to REI Shareholders are applicable to such
Person.
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"Requesting Investors" means, with respect to any
Demand Registration, the Required REI Shareholders that have requested
such Demand Registration in accordance with Section 2.1(a).
"Required REI Shareholders" means, as of the date of
any determination thereof, REI Shareholders which then hold Registrable
Securities representing at least a majority (by number of shares) of
the Registrable Securities, on a Fully Diluted basis, then held by all
REI Shareholders.
"Requisite Requesting Investors" means, as of the
date of any determination thereof with respect to any Demand
Registration, Requesting Investors of such Demand Registration which
then hold at least 66-2/3% (by number of shares) of the Registrable
Securities, on a Fully Diluted basis, then held by all Requesting
Investors of such Demand Registration.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission issued
thereunder.
"Shelf-Registration" has the meaning ascribed to it
in Section 2.8.
"Short-Form Registration" has the meaning ascribed to
it in Section 2.1(a).
"Warrants" has the meaning ascribed to it in the
Investment Agreement.
ARTICLE II
DEMAND REGISTRATIONS
II.1 Requests for Registration. (a) Subject to
Sections 2.2, 2.3 and 2.7, at any time from and after the date hereof,
any or all of the Required REI Shareholders may request registration
under the Securities Act of all or part of their Registrable Securities
(i) on Form S-1 or S-2 or any similar long-form registration statement
(any such registration, a "Long-Form Registration") or (ii) on Form S-3
or any similar short-form registration statement (any such
registration, a "Short-Form Registration"), if the Company qualifies to
use such short form. Within 10 days after its receipt of any such
request, the Company shall give written notice of such request to all
other REI Shareholders. Thereafter, the Company shall use its best
efforts to effect the registration under the Securities Act on the form
requested by the Requesting Investors, and to include in such
registration, (x) all Registrable Securities which the Requesting
Investors have so requested to be included therein and (y) all other
Registrable Securities with respect to which the Company has received
written requests for inclusion therein by the REI Shareholders within
30 days after their receipt of the Company's notice, subject in each
case to the provisions of Section 2.5.
(b) Any Requesting Investors which request a Demand
Registration pursuant to Section 2.1(a) may, at any time prior to the
effective date of the registration statement relating to such Demand
Registration, revoke such request by providing written notice to the
Company; provided, however, that notwithstanding such revocation, such
Demand Registration shall be deemed a request for purposes of Section
2.2 unless, after consultation with the Company and any proposed
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underwriter, the Requesting Investors in good faith determine that the
Registrable Securities which they have requested to be registered would
not be sold pursuant to such Demand Registration at a price falling
within the range estimated at the time the request for the Demand
Registration was given by such Requesting Investors.
(c) Any request for a Demand Registration pursuant to
this Article II shall specify the number of Registrable Securities
proposed to be sold by the Requesting Investors and the intended method
of disposition thereof.
II.2. Long-Form Registrations. The Required REI
Shareholders shall be entitled to request pursuant to Section 2.1(a) up
to three Long-Form Registrations; provided, however, that such number
will be increased by one for each Long-Form Registration with respect
to which any other Person exercises "piggyback" or similar rights
requesting registration of shares which equal 5% or more of the
Registrable Securities requested to be registered by REI Shareholdes
under such Long-Term Registration. The Company will pay all
Registration Expenses in connection with such Long-Form Registration.
All Long-Form Registrations (unless otherwise requested by the relevant
Requesting Investor) shall be underwritten registrations.
II.3 Short-Form Registrations. In addition to
theLong-Form Registrations contemplated by Section 2.2, the Required
REI Shareholders shall be entitled to request an unlimited number of
Short-Form Registrations, on behalf of the REI Required Shareholders,
in which the Company shall pay all Registration Expenses; provided,
however, that (i) the Company shall have no obligation to file such
Short-Form Registration unless the reasonable anticipated aggregate
price to the public would exceed $500,000, and (ii) the Company shall
not be required to file more than one such Short-Form Registration in
any consecutive 12 month period. Demand Registrations will be
Short-Form Registrations whenever the Company is qualified to use Form
S-3 or any similar short form registration statement. The Company shall
use its best efforts to make Short-Form Registrations available for the
sale of Registrable Securities.
II.4. Effective Registration Statement. No Demand
Registration shall be deemed to have been requested or effected for
purposes of Section 2.2:
(a) unless a registration statement with
respect thereto has been declared effective by the Commission
and the Company has complied in all material respects with its
obligations under this Agreement with respect thereto (other
than in connection with a revocation notice delivered pursuant
to Section 2.1(b));
(b) if, after a registration statement has
become effective, any stop order, injunction or other order or
requirement of the Commission or any other governmental agency
or court for any reason, affecting any of the Registrable
Securities covered by such registration statement, is
threatened in writing or issued by the Commission or other
governmental agency or court;
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(c) if the conditions to closing specified
in the purchase agreement or underwriting agreement entered
into in connection with such Demand Registration are not
satisfied by reason of a failure by or inability of the
Company to satisfy any of such conditions, or the occurrence
of an event outside the reasonable control of the relevant
Requesting Investors;
(d) if the Requesting Investors have made
the determination contemplated by the proviso to Section
2.1(b) with respect to such Demand Registration and have
notified the Company of such determination in a revocation
notice delivered in accordance with Section 2.1(b);
(e) if the Requesting Investors are not able
to register and sell the at least 90% of the amount of
Registrable Securities which they requested to be included in
such registration; or
(f) the registration statement with respect
thereto does not remain effective for a period of at least 180
days beyond the effective date thereof or, with respect to an
underwritten offering of Registrable Securities, until 45 days
after the commencement of the distribution by the holders of
the Registrable Securities included in such Registration
Statement
provided, however, that the Company shall pay all Registration Expenses
in connection with any Demand Registration if pursuant to this Section
2.4 the registration is deemed not to have been requested or effected.
II.5 Priority on Demand Registrations
(a) The Company shall not include in any Demand
Registration any securities which are not Registrable Securities (other
than securities with respect to which any Person exercises "piggyback"
or similar rights as described on Exhibit B attached hereto, such
Persons being "Other Piggyback Holders") without the written consent of
the Requisite Requesting Investors.
(b) If the Requesting Investors and other holders of
Registrable Securities request Registrable Securities to be included in
a Demand Registration which is an underwritten offering and the
managing underwriters advise the Company in writing that in their
opinion the number of Registrable Securities requested to be included
exceeds the number of Registrable Securities which can be sold in such
offering within a price range reasonably acceptable to the Requisite
Requesting Investors, the Company shall include any securities to be
sold in such Demand Registration in the following order: (i) first, the
Registrable Securities requested to be included in such registration by
the Requesting Investors, pro rata, based upon their total ownership,
on a fully diluted basis, of Registrable Securities; (ii) second,
subject to Section 2.5(a), the securities which the Company proposes to
sell and (iv) third, any securities other than Registrable Securities
to be sold by Persons other than the Company included pursuant to
Section 2.5(a). If securities of Other Piggyback Holders are to be
included in such Demand Registration, the Company shall use its best
efforts to
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effect the priority required by this Section with respect to the
Requesting Investors and such Other Piggyback Holders.
(c) Any Person (other than REI Shareholders)
including any securities in a Demand Registration shall pay its share
of the Registration Expenses as provided in Article VII.
II.6 Selection of Underwriters. The Requisite
Requesting Investors shall have the right to select the underwriters
and the managing underwriter to administer any Demand Registration
(which underwriters and managing underwriter shall be reasonably
acceptable to the Company).
II.7 Other Registration Rights. Except as provided in
this Agreement, without the written consent of the Required REI
Shareholders, the Company will not grant to any Person the right to
request the Company to register any equity securities of the Company,
or any securities convertible, exchangeable or exercisable for or into
such securities, other than piggyback registration rights entitling the
holder thereof to participate in Company-initiated registrations,
subject to the prior rights of holders of Registrable Securities.
II.8 Additional Shelf Registration. In addition to
the other rights of the holders of Registrable Securities under this
Agreement, at any time from and after the date hereof, the Company
shall, at the request of the Required REI Shareholders, file and use
its best efforts to have declared effective a "shelf" registration
statement (the "Shelf Registration") on any appropriate form pursuant
to Rule 415 under the Securities Act and/or any similar rule that may
be adopted by the Commission, with respect to all Registrable
Securities. The Company shall use its best efforts to keep such Shelf
Registration continuously effective for a period of two (2) years
following the date on which the Shelf Registration is declared
effective or until all Registrable Securities included therein have
been sold (the "Effective Period"). If necessary, the Company shall
supplement or amend the Shelf Registration, as required by the
registration form used by the Company or by the instructions applicable
to such registration form or by the Securities Act and in any event the
Company shall so supplement or amend (including through the
incorporation by reference of reports filed by the Company pursuant to
the Exchange Act, if permitted by applicable forms) the Shelf
Registration at least on a quarterly and annual basis and at any other
time if necessary to keep such Shelf Registration current and the
Company shall furnish to the holders of the Registrable Securities
copies of any such supplement or amendment prior to or simultaneously
with its being used and/or filed with the Commission. The Company shall
pay all Registration Expenses in connection with the Shelf
Registration, whether or not it becomes effective. The Company shall
make available to the holders of Registrable Securities, as soon as
reasonably practicable, an earnings statement covering a period of
twelve (12) months, beginning within three (3) months after the
effective date of the Shelf Registration, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder. The provisions of Articles V, VI, VII, VIII, IX
and XI shall apply to such Shelf Registration as if it were a Demand
Registration.
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ARTICLE III
PIGGYBACK REGISTRATIONS
III.1 Right to Piggyback. Whenever the Company
proposes (other than pursuant to a Demand Registration) to register (a
"Piggyback Registration") any of its equity securities under the
Securities Act (whether for the Company's own account (other than on
Forms S-4 or S-8 or any successor forms) or for the account of any
other Person), the Company shall give prompt written (in any event
within three Business Days after its receipt of Notice of any exercise
of other demand rights) notice to all REI Shareholders (the "Piggyback
Holders") of its intention to effect such a registration, and such
notice shall offer each Piggyback Holder the opportunity to register on
the same terms and conditions such number of such Piggyback Holder's
Registrable Securities as such Piggyback Holder may request. The
Company shall include in such registration all Registrable Securities
with respect to which the Company has received written requests for
inclusion therein by the Piggyback Holders within 30 days after their
receipt of the Company's notice, subject to the provisions of Sections
3.3 and 3.4.
III.2 Piggyback Expenses. The Registration Expenses
of the holders of Registrable Securities shall be paid by the Company
in all Piggyback Registrations.
III.3 Priority on Primary Registrations. If a
Piggyback Registration is an underwritten primary registration on
behalf of the Company, and the managing underwriters advise the Company
in writing that in their reasonable opinion the number of securities
requested to be included in such registration are such that the success
of the offering would be materially and adversely affected, the Company
shall include any securities to be sold in such Piggyback Registration
in the following order: (a) first, the securities which the Company
proposes to sell, (b) second, the Registrable Securities requested to
be included in such registration by the Piggyback Holders in accordance
with Section 3.1, provided that if the managing underwriters determine
in good faith that a lower number of Registrable Securities should be
included, then the Company shall be required to include in such
registration only that lower number of Registrable Securities, and such
Piggyback Holders shall participate in such registration on a pro rata
basis in accordance with the number of Registrable Securities requested
to be included in such registration by each such Piggyback Holder, and
(c) third, any other securities proposed to be included in such
registration. If securities of Other Piggyback Holders are to be
included in such Piggyback Registration, the Company shall use its best
efforts to effect the priority required by this Section with respect to
the Piggyback Holders and the Other Piggyback Holders.
III.4 Priority on Secondary registrations. If a
Piggyback Registration is an underwritten secondary registration on
behalf of holders of the Company's securities, and the managing
underwriters advise the Company in writing that in their good faith
opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering
within a price range acceptable to the holders on whose behalf the
registration is being made, the Company shall include any securities to
be sold in such registration in the following order: (a) first, the
securities which such holders propose to sell, (b) second, the
Registrable Securities requested to be included in such registration by
the Piggyback Holders in accordance with Section
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3.1, provided that if the managing underwriters determine in good faith
that a lower number of Registrable Securities should be included, then
the Company shall be required to include in such registration only that
lower number of Registrable Securities, and such Piggyback Holders
shall participate in such registration on a pro rata basis in
accordance with the number of Registrable Securities requested to be
included in such registration by each such Piggyback Holder, and (c)
third, any other securities proposed to be included in such
registration. If securities of Other Piggyback Holders are to be
included in such Piggyback Registration, the Company shall use its best
efforts to effect the priority required by this Section with respect to
the Piggyback Holders and the Other Piggyback Holders.
ARTICLE IV
OTHER REGISTRATIONS
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IV.1 Other Registrations. If the Company has
previously filed a registration statement with respect to Registrable
Securities pursuant to Article II or III of this Agreement, and if such
previous registration has not been withdrawn or abandoned, the Company
will not file or cause to be effected any other registration of any of
its equity securities or securities convertible, exchangeable or
exercisable for or into its equity securities under the Securities Act
(except on Form S-4 or Form S-8 or any successor form), whether on its
own behalf or at the request of any holder or holders of such
securities, until the earlier of (i) the date on which the Registrable
Securities included therein have been sold or (ii) 6 months from such
effective date.
ARTICLE V
HOLDBACK AGREEMENTS
V.1 Holdback. Each holder of Registrable Securities
agrees not to effect any public sale or distribution of Registrable
Securities, or any securities convertible, exchangeable or exercisable
for or into Registrable Securities, during the seven days prior to, and
the 90-day period beginning on, the effective date of any underwritten
Demand Registration or any underwritten Piggyback Registration in which
such holder had an opportunity to participate without cutback under
Article III hereof, unless the managing underwriters of such
underwritten Demand Registration or underwritten Piggyback Registration
otherwise agree.
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V.2 Company Holdback. The Company agrees (a) not to
effect any public sale or distribution of its equity securities, or any
securities convertible, exchangeable or exercisable for or into such
securities, during the 14 days prior to, and during the 90-day period
beginning on, the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration in which
holders of Registrable Securities are selling stockholders (except as
part of such underwritten registration or pursuant to registration on
Form S-4 or S-8 or any similar successor form), unless the managing
underwriters of such underwritten Demand Registration or underwritten
Piggyback Registration otherwise agree, and (b) to use all reasonable
efforts to cause each holder of at least 5% (on a fully-diluted basis)
of its equity securities to agree not to effect any public sale or
distribution of any such equity securities or any securities
convertible, exchangeable or exercisable for or into such equity
securities during such period (except as part of such underwritten
registration, if otherwise permitted), unless the managing underwriters
of such underwritten Demand Registration or underwritten Piggyback
Registration otherwise agree.
ARTICLE VI
REGISTRATION PROCEDURES
VI.1 Registration Procedures. Whenever the Required
REI Stockholders have requested that any Registrable Securities be
registered in accordance with Article II or III, the Company shall use
its best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of
disposition thereof and pursuant thereto the Company shall as
expeditiously as possible (or, in the case of clause (p) below, shall
not):
(a) promptly prepare and file with the Commission a
registration statement with respect to such Registrable Securities
(such registration statement to include in each case all information
which the holders of the Registrable Securities to be registered
thereby shall reasonably request) and use its best efforts to cause
such registration statement to become effective, provided that as
promptly as practicable before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company shall
(i) furnish copies of all such documents proposed to be filed to one
counsel selected by the Requesting Investors, and in each case the
Company shall not file any such documents to which any such relevant
counsel shall have reasonably objected on the grounds that such
document does not comply in all material respects with the requirements
of the Securities Act, (ii) notify each holder of Registrable
Securities covered by such registration statement of (x) any request by
the Commission to amend such registration statement or amend or
supplement any prospectus or (y) any stop order issued or threatened by
the Commission and (iii) take all reasonable actions required to
prevent the entry of such stop order or to remove it if entered;
(b) (i) prepare and file with the Commission 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 at all times during the period
commencing on the effective date of such registration statement and
ending, if other than a Shelf Registration, on the earlier of (A) the
first date as of which all Registrable Securities covered by such
registration statement are sold in accordance with the intended plan of
distribution set forth in such registration
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statement, or (B) 180 days following the effective date of such
registration statement (except that such period shall be extended (x)
by the length of any period that a stop order or similar proceeding is
in effect which prohibits the distribution of the Registrable
Securities, and (y) by the number of days during the period from and
including the date on which each seller of Registrable Securities shall
have received a notice delivered pursuant to clause (f) below until the
date when such seller shall have received a copy of the supplemented or
amended Prospectus contemplated by clause (f) below) and (ii) 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;
(c) furnish, without charge, to each seller of
Registrable Securities covered by such registration statement, such
number of conformed copies of such registration statement, each
amendment and supplement thereto, the prospectus included in such
registration statement (including each preliminary prospectus and, in
each case, including all exhibits thereto and documents incorporated by
reference therein) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(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 any
seller thereof shall reasonably request, to keep such registration or
qualification in effect for so long as such registration statement
remains in effect and to 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 any such
Registrable Securities owned by such seller; provided, however, that
the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required
to qualify but for this clause (d), (ii) subject itself to taxation in
any such jurisdiction or (iii) consent to general service of process in
any such jurisdiction;
(e) furnish to each seller of the Registrable
Securities covered by such registration statement a signed copy,
addressed to such seller (and the underwriters, if any), of an opinion
of counsel for the Company, dated the effective date of such
registration statement (and, if such registration statement includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), reasonably satisfactory in form and substance
to such seller, covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) as
are customarily covered in opinions of issuer's counsel delivered to
the underwriters in underwritten public offerings, and such other legal
matters as the seller (or the underwriters, if any) may reasonably
request;
(f) notify each seller of Registrable Securities
covered by such registration statement, at a time when a prospectus
relating to such Registrable Securities is required to be delivered
under the Securities Act, of the occurrence of any event known to the
Company as a result of which the prospectus included in such
registration statement, as then in effect, contains an untrue statement
of a material fact or omits to state any fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made; and, at the
request of any seller of Registrable Securities covered by such
registration statement, the
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Company shall prepare and furnish such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary 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 under which they were
made;
(g) cause the Registrable Securities covered by such
registration statement to be listed on each securities exchange or
automated quotation system on which similar securities issued by the
Company are then listed or the New York Stock Exchange, the American
Stock Exchange or the NASDAQ National Market, if requested by the
Required REI Shareholders, and to enter into such customary agreements
as may be required in furtherance thereof, including listing
applications and indemnification agreements in customary form;
(h) provide a transfer agent, registrar and CUSIP
number for the Registrable Securities covered by such registration
statement not later than the effective date of such registration
statement;
(i) enter into such customary arrangements and take
all such other actions (including participating in "road shows") as the
holders of a majority (by number of shares) of the Registrable
Securities covered by such registration statement or the underwriters,
if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including using its best
efforts to effect a stock split or a combination of shares);
(j) make available for inspection by any seller of
Registrable Securities covered by such registration statement, any
underwriter participating in any disposition of securities pursuant to
such registration statement and any attorney, accountant or other agent
retained by any such seller or 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
seller, underwriter, attorney, accountant or agent in connection with
such registration statement;
(k) subject to other provisions hereof, use all
reasonable efforts to cause the Registrable Securities covered by such
registration statement to be registered with or approved by such
governmental agencies or authorities or self-regulatory organizations
as may be necessary to enable the sellers thereof to consummate the
disposition of such Registrable Securities;
(l) use reasonable best efforts to obtain a "comfort"
letter, dated the effective date of such registration statement (and,
if such registration includes an underwritten offering, dated the date
of the closing under the underwriting agreement), signed by the
independent public accountants who have certified the Company's
financial statements included in such registration statement, addressed
to the Company, to each seller of the Registrable Securities covered by
such registration statement, and to the underwriters, if any, covering
substantially the same matters with respect to such registration
statement (and the prospectus included therein) and with respect to
events subsequent to the date of such financial statements, as are
customarily covered in accountants' letters
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delivered to the underwriters in underwritten public offerings of
securities and such other financial matters as any such seller or the
underwriters, if any, may reasonably request;
(m) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission and make available
to its security holders, in each case as soon as practicable, an
earnings statement covering a period of at least 12 months, beginning
with the first month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act;
(n) permit any holder of Registrable Securities
covered by such registration statement which (in the sole good faith
judgment of such holder) might be deemed to be a controlling person of
the Company (within the meaning of the Securities Act or the Exchange
Act) to participate in the preparation of such registration statement
and to include therein material, furnished to the Company in writing,
which in the reasonable judgment of such holder should be included and
which is reasonably acceptable to the Company;
(o) promptly notify the holders of the Registrable
Securities covered by such registration statement of the issuance of
any stop order by the Commission or the issuance by any state
securities commission or other regulatory authority of any order
suspending the qualification or exemption from qualification of any of
the Registrable Securities under state securities or "blue sky" laws,
and use all reasonable efforts to obtain the lifting at the earliest
possible time of any stop order suspending the effectiveness of such
registration statement or of any order preventing or suspending the use
of any preliminary prospectus included therein;
(p) at any time file or make any amendment to such
registration statement, or any amendment of or supplement to the
prospectus included therein (including amendments of the documents
incorporated by reference into the prospectus), (i) of which each
seller of Registrable Securities covered by such registration statement
or the managing underwriters, if any, shall not have previously been
advised and furnished a copy or (ii) to which the sellers of a majority
(by number of shares) of the Registrable Securities covered by such
registration statement, the managing underwriters (if any) or counsel
for such sellers or any such managing underwriters shall reasonably
object;
(q) make such representations and warranties (subject
to appropriate disclosure schedule exceptions) to the sellers of the
Registrable Securities covered by such registration statement and the
underwriters, if any, in form, substance and scope as are customarily
made by issuers to underwriters and selling holders, as the case may
be, in underwritten public offerings of substantially the same type;
(r) during the period when the prospectus is required
to be delivered under the Securities Act, promptly file all documents
required to be filed with the Commission pursuant to Sections 12(a),
13(c), 14 or 15(d) of the Exchange Act; and
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(s) if such registration statement refers to any
seller of Registrable Securities covered thereby by name or otherwise
as the holder of any securities of the Company, then (whether or not
such seller is or might be deemed to be a controlling person of the
Company) (i) at the request of such seller, insert therein language, in
form and substance reasonably satisfactory to such seller, the Company
and the managing underwriters, if any, to the effect that the holding
by such seller of such securities is not to be construed as a
recommendation by such seller of the investment quality of the
Registrable Securities or the Company's other securities covered
thereby and that such holding does not imply that such seller will
assist in meeting any future financial requirements of the Company, and
(ii) in the event that such reference to such seller by name or
otherwise is not required by the Securities Act, any similar federal or
state statute, or any rule or regulation of any regulatory body having
jurisdiction over the offering, at the request of such seller, delete
the reference to such seller.
ARTICLE VII
REGISTRATION EXPENSES
VII.1 Fees Generally. All expenses incident to the
Company's performance of or compliance with this Agreement, including
without limitation internal expenses (including without limitation all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly
review, the expense of any liability insurance, the expenses and fees
for listing securities on one or more securities exchanges, all
registration and filing fees, fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities), printing expenses, messenger and delivery
expenses, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding
underwriting fees, discounts and commissions) and other Persons
retained by the Company (all such expenses being herein called
"Registration Expenses") shall be borne by the Company, except that
each REI Stockholder shall pay any underwriting fees, discounts or
commissions attributable to the sale of its Registrable Securities.
VII. Counsel Fees. In connection with each Demand
Registration, the Company shall reimburse the Requesting Investors for
the reasonable fees and disbursements of one counsel selected by the
Requisite Requesting Investors.
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ARTICLE VIII
UNDERWRITTEN OFFERINGS
VIII.1 Demand Underwritten Offerings. If requested by
the underwriters for any underwritten offering of Registrable
Securities pursuant to a Demand Registration, the Company shall enter
into an underwriting agreement with such underwriters for such
offering, provided that such agreement shall (a) be satisfactory in
substance and form to the Requesting Investor requesting such Demand
Registration and the underwriters and (b) contain such representations
and warranties by the Company and such other terms as are generally
included in agreements of this type, including indemnities customarily
included in such agreements. The holders of the Registrable Securities
to be distributed by such underwriters shall cooperate in good faith
with the Company in the negotiation of the underwriting agreement. The
holders of the Registrable Securities to be distributed by such
underwriters shall be parties to such underwriting agreement and may,
at their option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to
and for the benefit of such underwriters shall also be made to and for
the benefit of such holders of Registrable Securities and that any or
all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement also be conditions precedent to the
obligations of such holders of Registrable Securities. The Company
shall cooperate with any such holder of Registrable Securities in order
to limit any representations or warranties to, or agreements with, the
Company or the underwriters to be made by such holder only to
representations, warranties or agreements regarding such holder, such
holder's Registrable Securities, such holder's intended method of
distribution and any other representation required by applicable law.
VIII.2 Incidental Underwritten Offerings. If the
Company at any time proposes to register any of its equity securities
under the Securities Act as contemplated by Article III and such equity
securities are to be distributed by or through one or more
underwriters, the Company, if requested by any Piggyback Holder as
provided in Article III, shall arrange for such underwriters to include
all the Registrable Securities to be offered and sold by such Piggyback
Holder, subject to the limitations set forth in Article III, among the
securities to be distributed by such underwriters. The holders of the
Registrable Securities to be distributed by such underwriters shall be
parties to the underwriting agreement between the Company and such
underwriters, and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of such holders of Registrable
Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement also
be conditions precedent to the obligations of such holders of
Registrable Securities. The Company shall cooperate with any such
holder of Registrable Securities in order to limit any representations
or warranties to, or agreements with, the Company or the underwriters
to be made by such holder only to representations, warranties or
agreements regarding such holder, such holder's Registrable Securities,
such holder's intended method of distribution and any other
representation required by applicable law.
ARTICLE IX
INDEMNIFICATION
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IX.1 Indemnification by the Company. The Company
agrees to indemnify and hold harmless, to the fullest extent permitted
by law, each of the holders of any Registrable Securities covered by a
registration statement that has been filed with the Commission pursuant
to this Agreement, each other Person, if any, who controls such holder
within the meaning of the Securities Act or the Exchange Act, and each
of their respective directors, partners (general and limited),
stockholders, members, managers, officers, employees and agents, as
follows:
(a) against any and all loss, liability, claim,
damage, cost or expense (other than amounts paid in settlement)
incurred by such Person arising out of or based upon an untrue
statement or alleged untrue statement of a material fact contained in
such registration statement (or any amendment or supplement thereto),
including all documents incorporated therein by reference, or in any
preliminary prospectus or prospectus included therein (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of
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;
(b) against any and all loss, liability, claim,
damage, cost and expense incurred by such Person to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, in each
case whether commenced or threatened, or of any claim whatsoever, that
arises out of or is based upon any such untrue statement or omission or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company (which consent shall
not be unreasonably withheld or delayed); and
(c) against any and all expense incurred by such
Person in connection with investigating, preparing or defending against
any litigation or any investigation or proceeding by any governmental
agency or body, in each case whether commenced or threatened in
writing, or against any claim whatsoever, that arises out of or is
based upon any such untrue statement or omission or any such alleged
untrue statement or omission, to the extent that any such expense is
not paid under clause (a) or (b) above;
provided, however, that this indemnity does not apply to any loss,
liability, claim, damage, cost or expense to the extent arising out of
or based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of
such holder expressly for use in the preparation of any registration
statement (or any amendment or supplement thereto), including all
documents incorporated therein by reference, or in any preliminary
prospectus or prospectus included therein (or any amendment or
supplement thereto); and provided further, however, that the Company
will not be liable to any holder of Registrable Securities (or any
other indemnified Person) under the indemnity agreement in this Section
9.1, with respect to any preliminary prospectus to the extent that any
such loss, liability, claim, damage, cost or expense of such holder (or
other indemnified Person) results from the fact that such holder sold
Registrable Securities to a Person to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy of the
final prospectus, if the
16
Company has previously and timely furnished copies thereof to such
holder, and if such final prospectus would have corrected such untrue
statement or omission. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such
holder or any other Person eligible for indemnification under this
Section 8.1, and shall survive the transfer of such securities by such
seller.
IX.2 Indemnification by a Selling Stockholder. In
connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder agrees to
indemnify and hold harmless (in the same manner and to the same extent
as set forth in Section 9.1 of this Agreement), to the extent permitted
by law, the Company and its directors, officers and controlling
Persons, and their respective directors, officers and general partners,
with respect to any statement or alleged statement in or omission or
alleged omission from such registration statement, any preliminary,
final or summary prospectus included therein, or any amendment or
supplement thereto, or to any such prospectus, if such statement or
alleged statement or omission or alleged omission was made in reliance
upon and in conformity with written information that relates only to
such holder or the plan of distribution that is expressly furnished to
the Company by or on behalf of such holder for use in the preparation
of such registration statement, preliminary, final or summary
prospectus or amendment or supplement. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on
behalf of the Company, or such holder, as the case may be, or any of
their respective directors, officers, or controlling Persons and shall
survive the transfer of Registrable Securities by such holder. With
respect to each claim pursuant to this Section 9.2, each holder's
maximum liability under this Section 9.2 shall be limited to an amount
equal to the net proceeds actually received by such holder (after
deducting any underwriting fees, discount and expenses) from the sale
of Registrable Securities being sold pursuant to such registration
statement or prospectus by such holder.
IX.3 Indemnification Procedure. Within 10 days after
receipt by an indemnified party hereunder of written notice of the
commencement of any action or proceeding involving a claim referred to
in Section 9.1 or Section 9.2, such indemnified party will, if a claim
in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action;
provided, however, that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of
its obligations under Section 9.1 or Section 9.2 except to the extent
that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action or proceeding is brought against
an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified, to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party for any legal fees
and expenses subsequently incurred by the latter in connection with the
defense thereof, unless in such indemnified party's reasonable judgment
an actual or potential conflict of interest between such indemnified
and indemnifying parties may exist in respect of such claim, in which
case the indemnifying party shall not be liable for the fees and
expenses of (i) in the case of a claim referred to in Section 9.1, more
than one counsel (in addition to any local counsel) for all indemnified
parties selected by (x) REI, if REI is defending against such claim, or
(y) the holders of
17
a majority (by number of shares) of the Registrable Securities held by
such indemnified parties, if REI is not defending against such claim,
or (ii) in the case of a claim referred to in Section 9.2, more than
one counsel (in addition to any local counsel) for the Company, in each
case in connection with any one action or separate but similar or
related actions or proceedings. An indemnifying party who is not
entitled to (pursuant to the immediately preceding sentence), 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 an actual or potential
conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim, in which
event the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels as may be reasonable in
light of such conflict. The indemnifying party will not, without the
prior written consent of each indemnified party, settle or compromise
or consent to the entry of any judgment in any pending or threatened
claim, action, suit, investigation or proceeding in respect of which
indemnification may be sought hereunder (whether or not such
indemnified party or any Person who controls such indemnified party is
a party to such claim, action, suit, investigation or proceeding),
unless such settlement, compromise or consent includes an unconditional
release of such indemnified party from all liability arising out of
such claim, action, suit, investigation or proceeding and such
settlement, compromise or consent involves only the payment of money
and such money is actually paid by the indemnifying party. Whether or
not the defense of any claim or action is assumed by the indemnifying
party, such indemnifying party will not be subject to any liability for
any settlement made without its consent, which consent will not be
unreasonably withheld. Notwithstanding anything to the contrary set
forth herein, and without limiting any of the rights set forth above,
in any event any indemnified party will have the right to retain, at
its own expense, counsel with respect to the defense of a claim.
IX.4 Underwriting agtreement. The Company, and each
holder of Registrable Securities requesting registration of all or any
part of such holder's Registrable Securities pursuant to Article II or
Article III, shall provide for the foregoing indemnity (with
appropriate modifications as may be reasonably requested by the
managing underwriter) in any underwriting agreement entered into in
connection with a Demand Registration or a Piggyback Registration with
respect to any required registration or other qualification of
Registrable Securities under any federal or state law or regulation of
any governmental authority.
IX.5 Contribution. If the indemnification provided
for in Section 9.1 or 9.2 is unavailable to hold harmless an
indemnified party under such Section, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified
party as a result of the losses, claims, damages, liabilities and
expenses referred to in Section 9.1 or Section 9.2, as the case may be,
in such proportion as is appropriate to reflect the relative fault of
such indemnifying party, on the one hand, and such indemnified party,
on the other hand, in connection with statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as
well as any other relevant equitable considerations, including the
relative benefits received by each party from the offering of the
securities covered by the relevant registration statement, the parties'
relative knowledge and access to information concerning the matter with
respect to which the relevant claim was asserted and the parties'
relative opportunities to correct and prevent any relevant statement or
omission. Without limiting the generality of the foregoing, the
parties' relative fault shall be determined by reference to,
18
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access
to relevant information and opportunity to correct or prevent any such
untrue statements or omission. The parties hereto agree that it would
not be just and equitable if contributions pursuant to this Section 9.5
were to be determined by pro rata or per capita allocation (even if the
underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in the first and second sentences of this
Section 9.5. The amount paid by an indemnified party as a result of the
losses, claims, damages, liabilities or expenses referred to in the
first sentence of this Section 9.5 shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending the relevant action or
proceeding and shall be limited as provided in Section 9.3 if the
indemnifying party has assumed the defense of the relevant action or
proceeding in accordance with the provisions of Section 9.3. Promptly
after receipt by an indemnified party under this Section 9.5 of notice
of the commencement of any action or proceeding against such party in
respect of which a claim for contribution may be made against an
indemnifying party under this Section 9.5, such indemnified party shall
notify the indemnifying party in writing of the commencement thereof if
the notice specified in Section 9.3 has not been given with respect to
such action or proceeding; provided, however, that the omission to so
notify the indemnifying party shall not relieve the indemnifying party
from any liability which it may otherwise have to any indemnified party
under this Section 9.5, except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. The
Company and each holder of Registrable Securities agrees with each
other and the underwriters of the Registrable Securities, if requested
by such underwriters, that (i) the underwriters' portion of the
contribution paid to such holders pursuant to this Section 9.5 shall
not exceed the total underwriting fees, discounts and commissions in
connection with the relevant offering and (ii) that the total amount of
any such holder's contributions under this Section 9.5 shall not exceed
an amount equal to the net proceeds actually received by such holder
from the sale of Registrable Securities in the offering to which the
losses, liabilities, claims, damages or expenses of the indemnified
parties relate. 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.
IX.6 Periodic Payments. The indemnification required
by this Article IX shall be made by periodic payments of the amount
thereof during the course of the relevant investigation or defense, as
and when bills are received or expense, loss, damage or liability is
incurred.
ARTICLE X
RULE 144
X.1 Rule 144. The Company covenants that it shall
file the reports required to be filed by it under the Securities Act
and the Exchange Act (or, if the Company is not required to file such
reports, it will, upon the request of any holder of Registrable
Securities, make publicly available other information), and it will
take such further action as any holder of Registrable Securities may
reasonably request, all to the extent required from time to time to
enable such holder to sell shares of Registrable Securities without
registration under the Securities Act in compliance with (a) Rule
19
144 under the Securities Act, as such Rule may be amended from time to
time, or (b) any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any holder of Registrable Securities,
the Company will deliver to such holder (x) a written statement as to
whether it has complied with such requirements and (y) a copy of the
most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company under the Exchange Act.
ARTICLE XI
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
XI.1 Participation in Underwritten Registrations. No
holder of Registrable Securities may participate in any underwritten
registration hereunder unless such holder (a) agrees to sell such
holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled
hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting
agreements, escrow agreements and other documents reasonably required
under the terms of such underwriting arrangements and consistent with
the provisions of this Agreement.
ARTICLE XII
MISCELLANEOUS
XII.1 No Inconsistent Agreements. Except for the
arrangements described in Exhibit A attached hereto, the Company
represents and warrants that it is not currently a party to, and
covenants that it will not hereafter enter into, any agreement which is
inconsistent with, or would otherwise restrict the performance by the
Company of, its obligations hereunder.
XII.2 Adjustments Affecting Registerable Securities.
The Company will not take any action, or fail to take any action which
it may properly take, with respect to its securities if such action or
failure to act would adversely affect (a) the ability of the holders of
Registrable Securities to include Registrable Securities in a
registration undertaken pursuant to this Agreement or (b) to the extent
within the Company's control, would adversely affect the marketability
of such Registrable Securities in any such registration (it being
understood that the actions referred to in this Section 11.2 include
effecting a stock split or a combination of shares).
XII.3 Specific Performance. In the event of a breach
by any party to this Agreement of its obligations under this Agreement,
any party injured by such breach, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Agreement.
The parties agree that the provisions of this Agreement shall be
specifically enforceable, it being agreed by the parties that the
remedy at law, including monetary damages, for breach of any such
provision will be inadequate compensation for any loss and that any
defense in any action for specific performance that a remedy at law
would be adequate is waived.
20
XII.4 Actions Taken; Amendments and Waivers. Except
as otherwise provided herein, no modification, amendment or waiver of
any provision of this Agreement will be effective against the Company
or any holder of Registrable Securities, unless such modification,
amendment or waiver is approved in writing by the Company, and the
Required REI Stockholders. The failure of any party hereto to enforce
any of the provisions of this Agreement will in no way be construed as
a waiver of such provisions and will not affect the right of such party
thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
XII.5 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective successors and assigns. In
addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for the benefit of purchasers or
holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities, except
to the extent reserved to or by the transferor in connection with any
such transfer; provided, however, that the benefits of this Agreement
shall inure to and be enforceable by any transferee of Registrable
Securities only if such transferee shall have executed a Registration
Rights Joinder Agreement substantially in the form of Exhibit A hereto.
XII.6 Notices. (a) All notices, requests and other
communications hereunder must be in writing and will be deemed to have
been duly given only if delivered personally against written receipt or
by facsimile transmission against facsimile confirmation or mailed (by
registered or certified mail, postage prepaid, return receipt
requested) or delivered by reputable overnight courier, fee prepaid, to
the parties at the following addresses or facsimile numbers:
If to any REI Stockholder, to:
Recovery Equity Investors II, L.P.
901 Mariner's Island Blvd., Suite 465
San Mateo, CA 94404
Facsimile No.: (650) 578-9842
Attn: Joseph J. Finn-Egan
Jeffrey A. Lipkin
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Facsimile No.: (212) 309-6273
Attn: Ira White, Esq.
21
If to the Company, to:
Chadmoore Wireless Group, Inc.
2875 East Patrick Lane
Suite G
Las Vegas, Nevada 89120
Facsimile No.: (702) 891-5255
Attn: President & CEO
with a copy to:
Graham & James LLP
400 Capitol Mall, 24th Floor
Sacramento, California 95814-4411
Facsimile No.: (916) 441-6700
Attn: Gilles S. Attia, Esq.
(b) All such notices, requests and other
communications will (w) if delivered personally to the address as
provided in this Section 12.6, be deemed given upon delivery, (x) if
delivered by facsimile transmission to the facsimile number as provided
in this Section 12.6, be deemed given upon receipt by the sender of
confirmation of such transmission, and (y) if delivered by mail in the
manner described above to the address as provided in this Section 12.6
upon the earlier of the third Business Day following mailing or upon
receipt and (z) if delivered by overnight courier to the address as
provided in this Section 12.6, be deemed given on the earlier of the
first Business Day following the date sent by such overnight courier or
upon receipt, (in each case regardless of whether such notice, request
or other communication is received by any other Person to whom a copy
of such notice is to be delivered pursuant to this Section 12.6). Any
party hereto may from time to time change its address, facsimile number
or other information for the purpose of notices to such party by giving
notice specifying such change to the other parties hereto in accordance
with Section 12.6(a).
XII.7 Headings; Certain Conventions. The headings of
the various Articles and Sections of this Agreement are for convenience
of reference only and shall not define, limit or otherwise affect any
of the terms or provisions hereof. Unless the context otherwise
expressly requires, all references herein to Articles, Sections and
Exhibits are to Articles and Sections of, and Exhibits to, this
Agreement. The words "herein," "hereunder" and "hereof" and words of
similar import refer to this Agreement as a whole and not to any
particular Section or provision. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation".
XII.8 Gender. Whenever the pronouns "he" or "his" are
used herein they shall also be deemed to mean "she" or "hers" or "it"
or "its" whenever applicable. Words in the singular shall
22
be read and construed as though in the plural and words in the plural
shall be construed as though in the singular in all cases where they
would so apply.
XII.9 Invalid Provisions. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any
present or future law, and if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable, by) this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance here from and (d) in lieu
of such illegal, invalid or unenforceable provision, there will be
added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.
XII.10 Governing Laws. This Agreement shall be
governed by and construed in accordance with the domestic laws of the
State of New York applicable to a contract executed and performed in
such State without giving effect to any choice or conflict of law
provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.
XII.11 Waiver of Jury Trial. EACH OF THE PARTIES
HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. EACH OF
THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH
BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF SUCH PARTY. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
XII.12 Counterparts. This Agreement may be executed
in any number of counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.
23
XII.13 Entire Agreement. This Agreement supersedes
all prior discussions and agreements between the parties with respect
to the subject matter hereof and contains the sole and entire agreement
among the parties hereto with respect to the subject matter hereof.
[Signature page to follow]
24
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
CHADMOORE WIRELESS GROUP, INC.
By:
--------------------------
Name:
Title:
RECOVERY EQUITY INVESTORS II, L.P.
By Recovery Equity Partners II, L.P.,
its general partner
By:
--------------------------
Name: Joseph J. Finn-Egan
Title: General Partner
By:
--------------------------
Name: Jeffrey A. Lipkin
Title: General Partner
[Registration Rights Agreement]
Form of Registration Rights Joinder Agreement
For Permitted Transferees
Exhibit A to
Registration Rights Agreement
CHADMOORE WIRELESS GROUP, INC.
4720 Polaris Street
Las Vegas, California 89103
Attention: Chief Executive Officer
Ladies & Gentlemen:
In consideration of the transfer to the undersigned of
[describe security being transferred] of CHADMOORE WIRELESS GROUP,
INC., a Colorado corporation (the "Company"), the undersigned
represents that it is a transferee of [insert name of transferor] and
agrees that, as of the date written below, [he][she][it] shall become a
party to that certain Registration Rights Agreement dated as of
, 1998, as such agreement may have been amended from time to time
(the "Agreement"), between the Company and the persons named therein,
and shall be fully bound by, and subject to, all of the covenants,
terms and conditions of the Agreement that were applicable to the
undersigned's transferor, as though an original party thereto and shall
be deemed a REI Stockholder for all purposes thereof.
Executed as of the day of , .
SIGNATORY:
Address:
ACKNOWLEDGED AND ACCEPTED:
CHADMOORE WIRELESS GROUP, INC.
By:
--------------------------
Name:
Title:
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS......................................................2
1.1 Definitions......................................2
ARTICLE II DEMAND REGISTRATIONS............................................4
2.1 Requests for Registration........................4
2.2 Long-Form Registrations..........................5
2.3 Short-Form Registrations.........................5
2.4 Effective Registration Statement.................5
2.5 Priority on Demand Registrations.................6
2.6 Selection of Underwriters........................7
2.7 Other Registration Rights........................7
2.8 Additional Shelf Registration....................7
ARTICLE III PIGGYBACK REGISTRATIONS........................................8
3.1 Right to Piggyback...............................8
3.2 Piggyback Expenses...............................8
3.3 Priority on Primary Registrations................8
3.4 Priority on Secondary Registrations..............9
ARTICLE IV OTHER REGISTRATIONS.............................................9
4.1 Other Registrations..............................9
ARTICLE V HOLDBACK AGREEMENTS..............................................9
5.1 Holdback.........................................9
5.2 Company Holdback................................10
ARTICLE VI REGISTRATION PROCEDURES........................................10
6.1 Registration Procedures.........................10
ARTICLE VII REGISTRATION EXPENSES.........................................14
7.1 Fees Generally..................................14
7.2 Counsel Fees....................................15
ARTICLE VIII UNDERWRITTEN OFFERINGS.......................................15
8.1 Demand Underwritten Offerings...................15
8.2 Incidental Underwritten Offerings...............15
ARTICLE IX INDEMNIFICATION................................................16
9.1 Indemnification by the Company..................16
9.2 Indemnification by a Selling Stockholder........17
9.3 Indemnification Procedure.......................17
9.4 Underwriting Agreement..........................18
9.5 Contribution....................................19
9.6 Periodic Payments...............................20
ARTICLE X RULE 144........................................................20
10.1 Rule 144........................................20
ARTICLE XI PARTICIPATION IN UNDERWRITTEN REGISTRATIONS....................20
11.1 Participation in Underwritten Registrations.....20
ARTICLE XI MISCELLANEOUS..................................................20
12.1 No Inconsistent Agreements......................20
12.2 Adjustments Affecting Registrable Securities....21
12.3 Specific Performance............................21
12.4 Actions Taken; Amendments and Waivers...........21
12.5 Successors and Assigns..........................21
12.6 Notices.........................................21
12.7 Headings; Certain Conventions...................23
12.8 Gender..........................................23
12.9 Invalid Provisions..............................23
12.10 Governing Law...................................23
12.11 Waiver of Jury Trial............................23
12.12 Counterparts....................................24
12.13 Entire Agreement................................24
Exhibit A Form of Registration Rights Joinder Agreement
Exhibit B Other Piggyback Holders