REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of the 12th day of November, 2001, by and between Business
Translation Services, Inc., a Nevada Corporation (the "Company") and the
shareholders named in Appendix A to this Agreement (collectively, the
"Shareholders" and each individually a "Shareholder").
The Shareholders have provided or agreed to provide a loan and
investment banking services to the Company and in connection therewith have
acquired or will acquire from the Company and other sources shares of common
stock of the Company and Common Stock Purchase Warrants (the "Warrants") to
acquire shares of common stock of the Company. The shares of common stock owned
by the Shareholders or issuable upon exercise of the Warrants are referred to
herein as the "Shares." As used in this Agreement, the term "Shares" shall also
include any other securities issued as a dividend or other distribution with
respect to the Shares, or into which the Shares are converted or for which they
are exchanged, and any other or additional securities issuable upon exercise of
the Warrants in accordance with their terms. As an inducement to the
Shareholders to provide such loan and investment banking services to the
Company, the Company agrees with the Shareholders, for the benefit of the
Shareholders and any other persons who from time to time are holders of the
Warrants or the Shares (collectively the "Holders"), as follows:
1. Registration Rights.
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(a) Initial Registration. The Company shall promptly (but in no
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event later than 45 days after the date of this Agreement (hereinafter the
"Filing Deadline") file with the Securities and Exchange Commission (the
"Commission") and thereafter use its reasonable best efforts to cause to be
declared effective no later than 135 days after the Filing Deadline (such 135th
day being an "Effectiveness Deadline") a registration statement ("Registration
Statement") on an appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), relating to the offer and sale of the Transfer
Restricted Shares (as defined in Section 1(f) hereof) by the Holders thereof
from time to time in accordance with the methods of distribution set forth in
the Registration Statement and Rule 415 under the Securities Act (hereinafter, a
"Registration"); provided, however, that no Holder (other than Banker and
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Investor) shall be entitled to have the Shares held by it covered by such
Registration Statement unless such Holder agrees in writing to be bound by all
the provisions of this Agreement applicable to such Holder.
(b) Demand Registrations. In addition to the initial Registration
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described in Section 1(a), at any time after such initial Registration Statement
ceases to be effective the Company shall, upon the written request of Holders of
at least 25% of the Transfer Restricted Shares, promptly file with the
Commission a Registration Statement (a "Demand Registration") on an appropriate
form under the Securities Act relating to the offer and sale of the Transfer
Restricted Shares and thereafter use its reasonable best efforts to cause such
Registration Statement to be declared effective no later than 120 days after the
date of the request from the
Holders (such 120th day being the Effectiveness Deadline with respect to such
Demand Registration), provided that the Company shall not be obligated to effect
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more than one (1) Demand Registration for the Holders pursuant to this Section
1(b).
(i) If at the time of any request to register Transfer
Restricted Shares pursuant to this Section 1(b), the Company is engaged in,
or has fixed plans to engage in within thirty (30) days of the time of such
request, a registered public offering or is engaged in any other activity
which, in the good faith determination of the Board of Directors of the
Company, would be adversely affected by the Demand Registration to the
material detriment of the Company, then the Company may at its option
direct that such Demand Registration be delayed for a reasonable period not
in excess of three (3) months from the effective date of such other
offering or the date of completion of such other material activity, as the
case may be; provided, however, that such right to delay a request may be
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exercised by the Company not more than once in any period of twelve (12)
consecutive months. In addition, the Company shall not be required to
effect any registration within ninety (90) days after the effective date of
any other Registration Statement of the Company. In any such case, the
Effectiveness Deadline for the Demand Registration shall be extended by a
period equal to the period of the permitted delay.
(ii) The request for a Demand Registration by the Holders
shall state the number of Transfer Restricted Shares proposed to be sold
and the intended method of disposition thereof. Upon receiving a request
for a Demand Registration, the Company shall promptly take such steps as
are necessary or appropriate to prepare for the registration of the
Transfer Restricted Shares that are the subject of such request.
(iii) A Registration shall not constitute a Demand Registration
until it has become effective and remains continuously effective for the
Registration Period described in Section 1(d) hereof. In addition, a
Registration shall not constitute a Demand Registration if (x) after such
Demand Registration has become effective, such registration or the related
offer, sale or distribution of Transfer Restricted Shares thereunder is
interfered with by any stop order, injunction or other order or requirement
of the Commission or other governmental agency or court for any reason not
attributable to the Holders and such interference is not thereafter
eliminated or (y) the conditions to closing specified in the underwriting
agreement, if any, entered into in connection with such Demand Registration
are not satisfied or waived, other than by reason of a failure by the
Holders.
(c) Incidental Registrations. At any time after the date of this
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Agreement, if the Company proposes to file a Registration Statement under the
Securities Act with respect to an offering by the Company for its own account
(other than a registration statement on Form S-4 or S-8 or any successor
thereto), then the Company shall give written notice of such proposed filing to
each of the Holders of Transfer Restricted Shares at least thirty (30) days
before the anticipated filing date. Such notice shall describe the proposed
Registration and distribution and offer such Holders the opportunity to register
all or a portion of the Transfer Restricted Shares then owned by such Holder (an
"Incidental Registration"). The Company shall, and shall use its best efforts
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(within ten (10) days of the notice provided for in the preceding sentence) to
cause the managing underwriter or underwriters of a proposed underwritten
offering (the "Managing Underwriter") to permit each of the Holders who have
requested in writing to participate in the Incidental Registration to include
such Holder's Transfer Restricted Shares in such offering on the same terms and
conditions as the securities of the Company included therein. In connection with
any Incidental Registration under this Section 1(c) involving an underwriting,
the Company shall not be required to include any Transfer Restricted Shares in
such underwriting unless the Holders thereof accept the terms of the
underwriting as agreed upon between the Company and the Managing Underwriter,
and then only in such quantity as will not, in the opinion of the Managing
Underwriter, jeopardize the success of the offering by the Company. If in the
written opinion of the Managing Underwriter the registration of all or part of
the Transfer Restricted Shares which the Holders have requested to be included
would materially adversely affect such offering, then the Company shall include
in such Incidental Registration, to the extent of the number of shares that the
Managing Underwriter believes may be sold without causing such adverse effect,
first, all of the securities to be offered for the account of the Company;
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second the Transfer Restricted Shares to be offered for the account of
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▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.; third the Transfer Restricted Shares to be offered for
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the account of the Holders other than Investor pursuant to this Section 1(c),
pro rata based on the amount recommended by the Managing Underwriter; and
fourth, any other securities requested to be included in such underwriting.
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(d) The Company shall use its reasonable best efforts to keep any
Registration Statement filed pursuant to this Agreement continuously effective
in order to permit the prospectus included therein to be lawfully delivered by
the Holders of the relevant Shares, for a period of two years from the date of
its effectiveness (in the case of the initial Registration described in Section
1(a)), a period of nine months from the date of its effectiveness (in the case
of the Demand Registration described in Section 1(b)), or such shorter period
that will terminate when all the Shares covered by the Registration Statement
(i) have been sold pursuant thereto or (ii) are no longer restricted securities
(as defined in Rule 144 under the Securities Act) (in any such case, such period
being called the "Registration Period"). The Company shall be deemed not to have
used its best efforts to keep the Registration Statement effective during the
requisite period if it voluntarily takes any action that would result in Holders
of Shares covered thereby not being able to offer and sell such Shares during
that period, unless such action is required by applicable law.
(e) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause the Registration Statement and the related
prospectus and any amendment or supplement thereto, as of the effective date of
the Registration Statement, amendment or supplement, (i) to comply in all
material respects with the applicable requirements of the Securities Act and the
rules and regulations of the Commission and (ii) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(f) "Transfer Restricted Shares" means each Share until (i) the date
on which such Share has been effectively registered under the Securities Act and
disposed of in accordance
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with a Registration Statement or (ii) the date on which such Share is
distributed to the public pursuant to Rule 144 under the Securities Act or is
saleable pursuant to Rule 144(k) under the Securities Act.
2. Registration Procedures. In connection with the any Registration
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contemplated by Section 1 hereof the following provisions shall apply:
(a) The Company shall (i) furnish to Banker and Investor, prior to
the filing thereof with the Commission, a copy of the Registration Statement and
each amendment thereof and each supplement, if any, to the prospectus included
therein and, in the event that Banker and/or Investor is participating in the
Registration Statement, the Company shall use its reasonable best efforts to
reflect in each such document, when so filed with the Commission, such comments
as Investor and/or Banker, as the case may be, reasonably may propose; and (ii)
subject to paragraph (j) of this Section 2, include the names of the Holders who
propose to sell Shares pursuant to the Registration Statement as selling
securityholders.
(b) The Company shall give written notice to Investor and the Banker
and the Holders of the Shares (which notice pursuant to clauses (ii)-(v) hereof
shall be accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made):
(i) when the Registration Statement or any amendment thereto
has been filed with the Commission and when the Registration Statement or
any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(v) of the happening of any event that requires the Company
to make changes in the Registration Statement or the prospectus in order
that the Registration Statement or the prospectus do not contain an untrue
statement of a material fact nor omit to state a material fact required to
be stated therein or necessary to make the statements therein (in the case
of the prospectus, in the light of the circumstances under which they were
made) not misleading.
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(c) The Company shall make every reasonable effort to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Registration Statement.
(d) The Company shall furnish to each Holder of Shares included
within the coverage of the Registration, without charge, at least one copy of
the Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Holder so requests in writing,
all exhibits thereto (including those, if any, incorporated by reference).
(e) The Company shall, during the Registration Period, deliver to
each Holder of Shares included within the coverage of the Registration, without
charge, as many copies of the prospectus (including each preliminary prospectus)
included in the Registration Statement and any amendment or supplement thereto
as such person may reasonably request. The Company consents, subject to the
provisions of this Agreement, to the use of the prospectus or any amendment or
supplement thereto by each of the selling Holders of the Shares in connection
with the offering and sale of the Shares covered by the prospectus, or any
amendment or supplement thereto, included in the Registration Statement.
(f) Prior to any public offering of the Shares pursuant to any
Registration Statement the Company shall register or qualify or cooperate with
the Holders of the Shares included therein and their respective counsel in
connection with the registration or qualification of the Shares for offer and
sale under the securities or "blue sky" laws of such states of the United States
as any Holder of the Shares reasonably requests in writing and do any and all
other acts or things necessary or advisable to enable the offer and sale in such
jurisdictions of the Shares covered by such Registration Statement; provided,
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however, that the Company shall not be required to (i) qualify generally to do
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business in any jurisdiction where it is not then so qualified or (ii) take any
action which would subject it to general service of process or to taxation in
any jurisdiction where it is not then so subject.
(g) The Company shall cooperate with the Holders of the Shares to
facilitate the timely preparation and delivery of certificates representing the
Shares to be sold pursuant to any Registration Statement free of any restrictive
legends and in such denominations and registered in such names as the Holders
may request a reasonable period of time prior to sales of the Shares pursuant to
such Registration Statement.
(h) Upon the occurrence of any event contemplated by clauses (ii)
through (v) of Section 2(b) above during the Registration Period, the Company
shall promptly prepare and file a post-effective amendment to the Registration
Statement or a supplement to the related prospectus and any other required
document so that, as thereafter delivered to Holders of the Shares or purchasers
of Shares, the prospectus will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
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(i) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Registration
and will make generally available to its security holders (or otherwise provide
in accordance with Section 11(a) of the Securities Act) an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act, no later than
45 days after the end of a 12-month period (or 90 days, if such period is a
fiscal year) beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration Statement, which
statement shall cover such 12-month period.
(j) The Company may require each Holder of Shares to be sold
pursuant to the Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of the Shares as the
Company may from time to time reasonably require for inclusion in the
Registration Statement, and the Company may exclude from such registration the
Shares of any Holder that unreasonably fails to furnish such information within
a reasonable time after receiving such request.
(k) The Company shall enter into such customary agreements
(including, if requested, an underwriting agreement in customary form) and take
all such other action, if any, as any Holder of the Shares shall reasonably
request in order to facilitate the disposition of the Shares pursuant to any
Registration.
(l) The Company shall (i) make reasonably available for inspection
by the Holders of the Shares, any underwriter participating in any disposition
pursuant to the Registration Statement and any attorney, accountant or other
agent retained by the Holders of the Shares or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties of the
Company and (ii) cause the Company's officers, directors, employees, accountants
and auditors to supply all relevant information reasonably requested by the
Holders of the Shares or any such underwriter, attorney, accountant or agent in
connection with the Registration Statement, in each case, as shall be reasonably
necessary to enable such persons, to conduct a reasonable investigation within
the meaning of Section 11 of the Securities Act; provided, however, that the
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foregoing inspection and information gathering shall be coordinated on behalf of
the other Holders, by one counsel designated by and on behalf of such other
Holders as described in Section 3 hereof.
(m) The Company, if requested by any Holder of Shares covered by the
Registration Statement, shall cause (i) its counsel to deliver an opinion and
updates thereof relating to the Shares in customary form addressed to such
Holders and the managing underwriters, if any, thereof and dated, in the case of
the initial opinion, the effective date of such Registration Statement (it being
agreed that the matters to be covered by such opinion shall include, without
limitation, the due incorporation and good standing of the Company and its
subsidiaries; the qualification of the Company and its subsidiaries to transact
business as foreign corporations; the due authorization, execution and delivery
of the relevant agreement of the type referred to in Section 2(k) hereof; the
due authorization, execution, authentication and issuance, and the validity and
enforceability, of the applicable Shares; the absence of material legal or
governmental proceedings involving the Company and its subsidiaries; the absence
of governmental approvals required to be obtained in connection with the
Registration Statement,
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the offering and sale of the applicable Shares, or any agreement of the type
referred to in Section 2(k) hereof; the compliance as to form of such
Registration Statement and any documents incorporated by reference therein with
the requirements of the Securities Act; and, as of the date of the opinion and
as of the effective date of the Registration Statement or most recent post-
effective amendment thereto, as the case may be, the absence from such
Registration Statement and the prospectus included therein, as then amended or
supplemented, and from any documents incorporated by reference therein of an
untrue statement of a material fact or the omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading (in the case of any such documents, in the light of the
circumstances existing at the time that such documents were filed with the
Commission under the Exchange Act); (ii) its officers to execute and deliver all
customary documents and certificates and updates thereof requested by any
underwriters of the applicable Shares and (iii) its independent public
accountants and the independent public accountants with respect to any other
entity for which financial information is provided in the Registration Statement
to provide to the selling Holders of the applicable Shares and any underwriter
therefor a comfort letter in customary form and covering matters of the type
customarily covered in comfort letters in connection with primary underwritten
offerings, subject to receipt of appropriate documentation as contemplated, and
only if permitted, by Statement of Auditing Standards No. 72.
(n) In the event that any broker-dealer registered under the
Exchange Act shall underwrite any Shares or participate as a member of an
underwriting syndicate or selling group or "assist in the distribution" (within
the meaning of the Conduct Rules (the "Rules") of the National Association of
Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Shares
or as an underwriter, a placement or sales agent or a broker or dealer in
respect thereof, or otherwise, the Company will assist such broker-dealer in
complying with the requirements of such Rules, including, without limitation, by
(i) if such Rules, including Rule 2720, shall so require, engaging a "qualified
independent underwriter" (as defined in Rule 2720) to participate in the
preparation of the Registration Statement relating to such Shares, to exercise
usual standards of due diligence in respect thereto and, if any portion of the
offering contemplated by such Registration Statement is an underwritten offering
or is made through a placement or sales agent, to recommend the price of such
Shares, (ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 4 hereof and
(iii) providing such information to such broker-dealer as may be required in
order for such broker-dealer to comply with the requirements of the Rules.
(o) The Company shall use its best efforts to take all other steps
necessary to effect the registration of the Shares covered by the Registration
Statement contemplated hereby.
3. Registration Expenses.
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(a) All expenses incident to the Company's performance of and
compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement is ever filed or becomes effective, including
without limitation;
(i) all registration and filing fees and expenses;
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(ii) all fees and expenses of compliance with federal
securities and state "blue sky" or securities laws;
(iii) all expenses of printing, messenger and delivery services
and telephone;
(iv) all fees and disbursements of counsel for the Company;
(v) all application and filing fees in connection with listing
the Shares on a national securities exchange, quotation service or
over-the-counter market; and
(vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Company will bear its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any person, including special experts, retained by the Company.
(b) The Holders participating in any underwritten offering shall be
responsible for any expenses customarily borne by selling securityholders,
including underwriting discounts and commissions and fees and expenses of
counsel to the selling securityholders to the extent not required to be paid by
the Company pursuant to Section 3 hereof.
4. Indemnification.
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(a) The Company agrees to indemnify and hold harmless each Holder of
the Shares and each person, if any, who controls such Holder within the meaning
of the Securities Act or the Exchange Act (each Holder and such controlling
persons are referred to collectively as the "Indemnified Parties") from and
against any losses, claims, damages or liabilities, joint or several, or any
actions in respect thereof (including, but not limited to, any losses, claims,
damages, liabilities or actions relating to purchases and sales of the Shares)
to which each Indemnified Party may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities
or actions arise out of, or are based upon, any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus relating to a Registration, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse, as incurred, the Indemnified Parties for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action in respect thereof;
provided, however, that (i) the Company shall not be liable in any such case to
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the extent that such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or
8
alleged omission made in a Registration Statement or prospectus or in any
amendment or supplement thereto or in any preliminary prospectus relating to a
Registration in reliance upon and in conformity with written information
pertaining to such Holder and furnished to the Company by or on behalf of such
Holder specifically for inclusion therein and (ii) with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus relating to a Registration Statement, the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Holder from whom the person asserting any such losses, claims, damages or
liabilities purchased the Shares concerned, to the extent that a prospectus
relating to such Shares was required to be delivered by such Holder under the
Securities Act in connection with such purchase and any such loss, claim, damage
or liability of such Holder results from the fact that there was not sent or
given to such person, at or prior to the written confirmation of the sale of
such Shares to such person, a copy of the final prospectus if the Company had
previously furnished copies thereof to such Holder; provided further, however,
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that this indemnity agreement will be in addition to any liability that the
Company may otherwise have to such Indemnified Party. The Company shall also
indemnify underwriters, their officers and directors and each person who
controls such underwriters within the meaning of the Securities Act or the
Exchange Act to the same extent as provided above with respect to the
indemnification of the Holders of the Shares if requested by such Holders.
(b) Each Holder of the Shares, severally and not jointly, will
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act from
and against any losses, claims, damages or liabilities or any actions in respect
thereof, to which the Company or any such controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Registration, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein not misleading, but in each case only
to the extent that the untrue statement or omission or alleged untrue statement
or omission was made in reliance upon and in conformity with written information
pertaining to such Holder and furnished to the Company by or on behalf of such
Holder specifically for inclusion therein; and, subject to the limitation set
forth immediately preceding this clause, shall reimburse, as incurred, the
Company for any legal or other expenses reasonably incurred by the Company or
any such controlling person in connection with investigating or defending any
loss, claim, damage, liability or action in respect thereof. This indemnity
agreement will be in addition to any liability that such Holder may otherwise
have to the Company or any of its controlling persons.
(c) Promptly after receipt by an indemnified party under this Section
4 of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 4,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In case any
such action is brought against any
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indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying 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 under this Section 4 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action, and does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 4 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the sale of the Shares,
pursuant to the Registration, or (ii) if allocation provided by the foregoing
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party or parties on the
one hand and the indemnified party on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, 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 Company on the one hand or
such Holder or such other indemnified party, as the case may be, on the other,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding any other provision of this
Section 4(d), the Holders of the Shares shall not be required to contribute any
amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Shares pursuant to a Registration Statement exceeds
the amount of damages which such Holders have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. 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. For purposes
of this paragraph (d), each person, if any, who controls such indemnified party
within the meaning of the
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Securities Act or the Exchange Act shall have the same rights to contribution as
such indemnified party and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act shall have the same rights
to contribution as the Company.
(e) The agreements contained in this Section 4 shall survive the sale
of the Shares pursuant to the Registration Statement and shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.
5. Rule 144. The Company shall use its best efforts to file the reports
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required to be filed by it under the Securities Act and the Exchange Act in a
timely manner and, if at any time the Company is not required to file such
reports, it will, upon the request of any Holder of Shares, make publicly
available other information so long as necessary to permit sales of their Shares
pursuant to Rule 144. The Company covenants that it will take such further
action as any Holder of Shares may reasonably request, to the extent required
from time to time to enable such Holder to sell Shares without registration
under the Securities Act within the limitation of the exemption provided by Rule
144. The Company will provide a copy of this Agreement to prospective purchasers
of Shares identified to the Company by Investor or Banker upon request. Upon the
request of any Holder of Shares, the Company shall deliver to such Holder a
written statement as to whether it has complied with such requirements.
6. Miscellaneous.
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(a) Remedies. The Company acknowledges and agrees that any failure by
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the Company to comply with its obligations under Section 1 hereof may result in
material irreparable injury to Investor or Banker or the Holders for which there
is no adequate remedy at law, that it will not be possible to measure damages
for such injuries precisely and that, in the event of any such failure, Investor
or any Holder may obtain such relief as may be required to specifically enforce
the Company's obligations under Section 1 hereof. The Company further agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after the
--------------------------
date of this Agreement enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's securities under any
agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not
----------------------
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of the Holders of a majority of the Shares affected by such amendment,
modification, supplement, waiver or consents.
11
(d) Notices. All notices and other communications provided for or
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permitted hereunder shall be made in writing by hand delivery, first-class mail,
facsimile transmission, or air courier which guarantees overnight delivery:
(i) if to a Shareholder, to its address shown on Appendix A
hereto;:
(ii) if to the Company:
Business Translation Services, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery. Any party may change its address for notices by
giving notice as provided above to each of the other parties.
(e) Third Party Beneficiaries. The Holders shall be third party
-------------------------
beneficiaries to the agreements made hereunder between the Company and Banker,
and shall have the right to enforce such agreements directly to the extent they
may deem such enforcement necessary or advisable to protect their rights or the
rights of Holders hereunder.
(f) Successors and Assigns. This Agreement shall be binding upon the
----------------------
Company and its successors and assigns.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by, and construed
-------------
in accordance with, the laws of the State of Minnesota without regard to
principles of conflicts of laws.
(j) Severability. If any one or more of the provisions contained
------------
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
12
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first set forth above.
Company: Shareholders:
BUSINESS TRANSLATION SERVICES, INC. ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------ -------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -----------------------------
Title: President Title: Acting CEO
--------------------------- ----------------------------
EQUITY SECURITIES INVESTMENTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title: President and CEO
----------------------------
13
APPENDIX A
SHAREHOLDERS
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▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
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▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Equity Securities Investments, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇