Exhibit 10.3B
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of August
8, 2000, among LCS Golf, Inc., a Delaware corporation (the "Company") and
American Warrant Partners, LLC (the "Purchaser"). This Agreement is made
pursuant to the $300,000, 8% Convertible Note ("Convertible Note") and warrant
agreement ("Warrant Agreement") both of which are of even date herewith, by and
among the Company and the Purchaser. The Company has agreed to provide the
Purchaser and any transferees of Registrable Securities (as hereinafter defined)
that may be issued, from time to time, the registration rights with respect to
the Registrable Securities, as set forth in this Agreement. Capitalized terms
used herein without definition shall have the meanings set forth in the
Convertible Note and/or in the Warrant Agreement.
The parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized terms shall
have the following meanings:
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" means the common stock, $.001 par value per share, of
the Company.
"Convertible Note" means that certain 8% convertible subordinated
promissory note dated the date hereof between the Company and the Purchaser.
"Holder" shall mean a Purchaser or its respective transferee, who is
the owner of Registrable Securities.
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint state company trust, unincorporated
organization, joint venture, a government authority or other entity of whatever
nature.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement, and all other amendments and supplements
to the Prospectus, including post-effective amendments to the Registration
Statement of which such Prospectus is a part, and all material incorporated by
reference in such Prospectus.
"Registrable Securities" shall mean the Securities, but only so long
as they remain Restricted Securities.
"Registration Expenses" shall have the meaning ascribed thereto in
Section 6 hereof.
"Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits, and
all material incorporated by reference in such Registration Statement.
"Restricted Securities" means the Securities unless and until, in
the case of any such Securities, (i) they have been effectively registered under
the Securities Act and disposed of in accordance with the Registration Statement
covering them, (ii) they are distributed to the public pursuant to Rule 144 (or
any similar provision then in force) under the Securities Act, or (iii) they are
otherwise freely transferable without restriction under the Securities Act, and
the holders thereof have received an opinion of their legal counsel to such
effect.
"Securities" shall mean any and all shares of Common Stock issued to
Purchaser or their transferees or which may be issued upon the conversion of the
Convertible Note or the exercise of the Warrant.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Warrant" shall mean warrants issued pursuant to the Warrant
Agreement which are exercisable for five years to purchase Common Stock at an
exercise price of $.40 per share.
2. Securities Subject to this Agreement. The Securities entitled to
the benefits of this Agreement are the Registrable Securities.
3. Shelf Registration.
(a) The Company shall file with the Commission as soon as reasonably
practicable, but in no event later than September 15, 2000, a Registration
Statement on any appropriate form pursuant to Rule 415 under the Act and/or any
similar rule that may be adopted by the Commission with respect to all of the
Registrable Securities; provided, however, that if such Registration Statement
is not declared effective by November 15, 2000, the Company will (i) reduce the
exercise price of the Warrant ("Exercise Price") and the conversion price of the
Convertible Note ("Conversion Price") in an amount equal to 2% of the Exercise
Price and the Conversion Price, and (ii) increase the Interest Rate of the
Convertible Note by 2% per annum per each 30-day period until such time that the
Registration Statement is declared effective by the Commission or each of the
Exercise Price and the Conversion Price becomes equal to $0.05 per share and the
Interest Rate of the Convertible Note increases to 15% per annum. The Company
agrees (i) to use its commercially reasonable efforts to have such Registration
Statement declared effective by November 15, 2000 and (ii) to keep such
Registration Statement continuously effective (and to take any and all other
actions necessary in order to permit public resale of the Registrable Securities
covered by such Registration Statement) for a period until such date as is the
earlier of (a) the date on which at least 75% of the Registrable Securities have
been sold, (b) the date on which at least 75% of the Registrable Securities may
be immediately sold to the public without registration or restriction pursuant
to Rule 144(k) under the Securities Act or any successor provision, (c) the date
on which all restrictive legends have
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been removed from all Registrable Securities and all "stop transfer"
instructions issued to the Company's transfer agent have been canceled or (d)
two (2) years following the date on which such Registration Statement is
declared effective.
If (i) the Registration Statement is not declared effective by
November 15, or (ii) a stop order is imposed or if for any other reason the
effectiveness of the Registration Statement is suspended or the Registration
Statement is no longer current and requires amendment pursuant to Section 5
hereof during the period that the Registration Statement is required to remain
effective pursuant to this Section 3, and such suspension or period during which
the Registration Statement is not current continues for 30 consecutive days,
then the Company shall (i) reduce each of the Exercise Price and the Conversion
Price, to the extent it has not been previously exercised, in an amount equal to
2% of the Exercise Price and the Conversion, and (ii) increase the Interest Rate
of the Convertible Note by 2% per annum per each 30-day period subsequent to the
initial 30-day period previously mentioned in this sentence that such
Registration Statement is not declared effective by the Commission until each of
Exercise Price and the Conversion Price becomes $0.05 per share and the Interest
Rate of the Convertible Note is increased to 15% per annum. Notwithstanding the
foregoing, the immediately preceding sentence shall not apply if the stop order,
suspension or requirement for amendment arises out of any action, omission or
information provided to the Company by such Holder or such Holder's distribution
of the Registrable Securities.
4. Information. The Company may require the Holders to furnish to
the Company such information in writing regarding themselves and the
distribution of Registrable Securities as the Company may from time to time
reasonably request in writing in order to comply with the Securities Act. The
Holders agree to supply the Company as promptly as practicable with such
information and to notify the Company as promptly as practicable of any
inaccuracy or change in information they have previously furnished to the
Company.
5. Registration Procedures. The Company shall:
(a) In accordance with the Securities Act and the rules and
regulations of the Commission, prepare and file with the Commission a
Registration Statement in the form of an appropriate registration statement with
respect to the Registrable Securities and use its best efforts to cause such
Registration Statement to become and remain continuously effective until the
earlier of (i) the time that set forth in Section 3(a) above, and (ii) two years
after such Registration Statement has been declared effective; provided that, if
for any portion of such two year period the Registration Statement is not
effective, then such two year requirement for maintaining the effectiveness of
the Registration Statement shall be extended by the length of such
interruption(s), and shall prepare and file with the Commission such amendments
to such Registration Statement and supplements to the Prospectus contained
therein as may be necessary to keep such Registration Statement effective and
such Registration Statement and Prospectus accurate and complete during such
period;
(b) Furnish to each Holder participating in such registration (each
of such Persons being referred to herein as a "Participant" in such
registration) such reasonable number of copies of the Registration Statement and
Prospectus and such other documents as such Participant may reasonably request
in order to facilitate the public offering of the Registrable Securities;
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(c) Use its best efforts to register or qualify the Securities
covered by such Registration Statement under such state securities or blue sky
laws of such jurisdictions as such Participants may reasonably request;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
connection with any such registration or qualification of such Securities;
(d) Notify the Participants in such registration, promptly after it
shall receive notice thereof, of the date and time when such Registration
Statement and each post-effective amendment thereto has become effective or a
supplement to any Prospectus forming a part of such Registration Statement has
been filed;
(e) Notify the Participants in such registration promptly of any
request by the Commission for the amending or supplementing of such Registration
Statement or Prospectus or for additional information;
(f) Prepare and file with the Commission, promptly upon the request
of any Participant in such registration, the Registration Statement and any
amendments or supplements to such Registration Statement or Prospectus that, in
the reasonable opinion of counsel for such Participants, is required under the
Securities Act or the rules and regulations thereunder in connection with the
distribution of the Securities by such Participants or to otherwise comply with
the requirements of the Securities Act and such rules and regulations;
(g) Prepare and promptly file with the Commission and promptly
notify the Participants in such registration of the filing of such amendments or
supplements to such Registration Statement or Prospectus as may be necessary to
correct any statements or omissions if, at the time when a Prospectus relating
to such Securities is required to be delivered under the Securities Act, any
event has occurred as the result of which any such Prospectus or any other
Prospectus then in effect may include 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 not misleading;
(h) Advise the Participants in such registration, promptly after it
shall receive notice or obtain knowledge thereof, of the issuance of any stop
order by the Commission suspending the effectiveness of such Registration
Statement or the initiation or threatening of any proceeding for that purpose
and promptly use its best efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such stop order should be issued;
(i) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to the
Company's security holders earnings statements satisfying the provisions of
Section 11(a) of the Securities Act, no later than forty-five (45) days after
the end of any twelve (12) month period (or ninety (90) days, if such a period
is a fiscal year) beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of a Registration Statement;
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(j) Not file any amendment or supplement to such Registration
Statement or Prospectus to which a majority in interest of the Participants in
such registration has reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the requirements of the
Securities Act or the rules and regulations thereunder, after having been
furnished with a copy thereof at least three (3) business days prior to the
filing thereof unless the Company shall have been advised in writing by its
counsel that such amendment is required under the Securities Act or the rules or
regulations adopted thereunder in connection with the distribution of Securities
by the Company or the Participants.
6 Expenses of Registration. Except as provided in the following
sentence, all expenses of the Company incident to the Company's performance of
or compliance with the provisions of Sections 3, 4 and 5 of this Agreement shall
be borne by the Company including without limitation:
(a) All registration and filing fees (exclusive of underwriting
discounts and commissions);
(b) Fees and expenses of compliance with all securities or blue sky
laws (including fees and disbursements of counsel for the Company in connection
with blue sky qualifications of the Registrable Securities), provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation in any jurisdiction in which
it is not so qualified or to subject itself to taxation in connection with any
such registration or qualification of such Registrable Securities;
(c) Printing, messenger, telephone and delivery expenses; and
(d) Fees and disbursements of the Company's counsel and independent
auditors.
Nothing in this Section 6 shall be deemed to require the Company to
pay or bear any expenses of any Participant's attorneys or accountants or any
other personal expenses or any underwriting discounts, selling commissions or
similar fees of the Participants if such registration results in an underwritten
public offering of all or any portion of the Registrable Securities, except as
otherwise set forth herein.
7 Indemnification and Contribution.
(a) Indemnification by the Company. Whenever, pursuant to Section 3,
a Registration Statement relating to the Registrable Securities is filed under
the Securities Act, the Company will (except as to matters covered by Section
7(b) hereof) indemnify and hold harmless each Participant in the registration,
each of their officers, directors and employees, each underwriter of Registrable
Securities, and each Person, if any, who controls any such Person (collectively,
the "Participant Indemnitees" and, individually, a "Participant Indemnitee"),
against any losses, claims, damages or liabilities, joint or several, to which
such Participant Indemnitees may become subject under the
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Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
such Registration Statement, or Prospectus contained therein, or any amendment
or supplement thereto, 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, unless any such
statement or omission is based on written information provided by the
Participant Indemnitee, or a representation of a Participant Indemnitee, that
such Participant Indemnitee has requested be included in such Registration
Statement or Prospectus, and will reimburse each Participant Indemnitee for all
legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or
action.
(b) Indemnification by Participants. Each Participant in such
registration will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the Registration Statement and
each other Person, if any, who controls the Company, within the meaning of the
Securities Act, each underwriter of Registrable Securities and each Person, if
any, who controls any such underwriter within the meaning of the Securities Act
(collectively, the "Company Indemnitees" and, individually, a "Company
Indemnitee") and each other Participant Indemnitee against all losses, claims,
damages or liabilities, joint or several, to which any of the Company
Indemnitees or the other Participant Indemnitees may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
such Registration Statement, or Prospectus contained therein, or any amendment
or supplement thereto, 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, but only if, and to the
extent that, such statement or omission was in reliance upon and in conformity
with written information furnished to the Company by such participant
specifically for use in the preparation thereof. Notwithstanding the foregoing,
the indemnification obligation of each Participant herein shall be limited to
the net proceeds received by such Participant in the offering of the Registrable
Securities effected by the Registration Statement.
(c) Indemnification Procedures. Promptly after receipt by a
Participant Indemnitee or a Company Indemnitee (collectively, "Indemnitees" and,
individually, an "Indemnitee") under Section 7(a) or 7(b) hereof of notice of
the commencement of any action, such Indemnitee will, if a claim in respect
thereof is to be made against the indemnifying party under such clause, notify
the indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve the indemnifying party from
any liability that it may have to any Indemnitee otherwise than under such
clauses. In case any such action shall be brought against any Indemnitee, and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such Indemnitee, and
after notice from the indemnifying party to such Indemnitee of its election to
assume the defense thereof,
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the indemnifying party shall not be liable to such Indemnitee under such clause
for any legal or other expenses subsequently incurred by such Indemnitee in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Indemnitee shall have the right to
employ one counsel to represent such Indemnitee if, in the reasonable judgment
of such Indemnitee, it is advisable for such party to be represented by separate
counsel because separate defenses are available, or because a conflict of
interest exists between such indemnified and indemnifying party in respect of
such claim, and in that event the fees and expenses of such separate counsel
shall be paid by the indemnifying party. Notwithstanding the foregoing, if the
Company is an Indemnitee, the Company shall designate the one counsel, and in
all other circumstances, the one counsel shall be designated by a majority in
interest based upon the Registrable Securities of the Indemnitees. For purposes
of this Section 7 the terms "control," and "controlling person" have the
meanings that they have under the Securities Act.
(d) Contribution. If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an Indemnitee, then the
indemnifying party shall contribute to the amount paid or payable by the
Indemnitee as a result of such losses, claims, damages, liabilities or expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party on the one hand and the Indemnitee on the
other from the registration or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, or provides a lesser sum to the
Indemnitee than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the Indemnitee on the other but also the
relative fault of the indemnifying party and the Indemnitee as well as any other
relevant equitable considerations. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
8 Amendment and Modification. This Agreement may be amended,
modified or supplemented in any respect only by written agreement by the Company
and Holders owning a majority of the issued and outstanding shares of
Registrable Securities or Preferred Stock convertible into Registrable
Securities (provided that no such amendment shall unfairly discriminate against
a particular Holder relative to the other Holders).
9 Governing Law. This Agreement and the rights and obligations of
the parties hereunder shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York, without giving effect to the
choice of law principles thereof.
10 Invalidity of Provision. The invalidity or unenforceability of
any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction.
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11 Notices. All notices and other communications hereunder shall be
in writing and, unless otherwise provided herein, shall be deemed duly given if
delivered personally or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses or (at such other address
for the party as shall be specified by like notice):
(a) If to the Company:
[LCS Golf]
or as the Company shall designate to the Purchaser in
writing,
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ & Ball P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
12 If to a Holder, as listed on the signature pages attached hereto
or as such Holder shall designate to the Company in writing,
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
13 Headings; Execution in Counterparts. The headings and captions
contained herein are for convenience of reference only and shall not control or
affect the meaning or construction of any provision hereof. This Agreement may
be executed in any number of counterparts, each of which shall be deemed to be
an original and all of which together shall constitute one and the same
instrument.
14 Entire Agreement. This Agreement, including any exhibits hereto
and the documents and instruments referred to herein and therein, embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
representations, warranties,
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covenants or undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
15 Attorneys' Fees. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover such reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any other relief to which
it or they may be entitled, as may be ordered in connection with such
proceeding.
16 Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their successors and assigns.
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[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been signed by each of the
parties hereto as of the date first above written.
LCS GOLF, INC.
By:
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Name:
Title:
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[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been signed by each of the
parties hereto as of the date first above written.
Purchaser
AMERICAN WARRANT PARTNERS, LLC
By:
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Name:
Title:
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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