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rsearchnsearchly Reduction o Mortgagereductionmortage tsearcht Mortgagereductionmortage ncertificate%20of%20conformity%20%B8%A3%B2%BDing preemptive rights to purchase its capital stock to any person, and (ii) AAA has not granted to any person registration rights with respect to its capital stock which are more favorable than the registration rights currently held by KKK. If at any time after the date hereof, AAA grants preemptive rights to acquire any of its capital stock, and if the DDD-AAA Reorganization Agreement is terminated, AAA shall grant to KKK preemptive rights on terms equivalent to those granted to such other person(s). AAA further covenants that if the DDD-AAA Reorganization Agreement is terminated, then KKK shall continue to have the information and access rights set forth in Sections 7.1.1, 7.1.2 and 7.1.4(a) and (c) of the Series A Investment Agreement as long as it owns at least 1% of the capital stock of AAA on a fully diluted basis and KKK agrees that it shall continue to be bound by the confidentiality obligations in Section 7.3 of the Series A Investment Agreement. AAA further covenants that if the DDD-AAA Reorganization Agreement is terminated, and if at any time after the date hereof AAA grants any registration rights to any person with respect to its capital stock, then AAA shall promptly (and in any event within five days after being requested by KKK) provide KKK with copies of all agreements pertaining to the registration of shares of AAA's capital stock under the Securities Act of 1933, as amended, and applicable state securities laws, and permit KKK to elect in writing within 30 days after AAA has provided such copies to KKK to have the AAA capital stock owned by it treated as registrable securities under or otherwise covered by the provisions of any one of such agreements as KKK shall elect in lieu of the Registration Rights Agreement, it being understood that if KKK does not make such election, it shall retain all of its rights pursuant to the Registration Rights Agreement. Upon any such election AAA shall enter into a new registration rights agreement with KKK and the Registration Rights Agreement shall thereafter be of no further force and effect.
3.4. VOTING; FURTHER ACTIONS. Pursuant and subject to the terms of the Voting Agreement, JJJ agrees to vote all of its shares of capital stock of AAA entitled to vote "for" the Reorganization and all transactions contemplated thereby upon which such shares may be entitled to vote. KKK agrees to take any further action reasonably requested by AAA to facilitate the DDD-AAA Closing. Each of AAA, DDD and DDD/AAA shall use its commercial best efforts to obtain and assist JJJ in obtaining promptly all necessary waivers, consents and approvals from any governmental authority or any other person for any exercise by JJJ of its rights under this Agreement, or the New Warrants, and to take such other actions as may reasonably be requested by JJJ to effect the purposes of this Agreement, or the New Warrants. The period of time provided for any closing of the transactions pursuant to such rights may, at the option of JJJ, be extended as necessary in order to obtain any such waivers, consents and approvals.
3.5. ADDITIONAL DELAY SHARES. AAA hereby agrees that, notwithstanding any other provision of this Agreement to the contrary, JJJ shall have the right to receive the Additional Delay Shares if AAA has not completed an Initial Public Offering prior to _________,_________,_________(M/D/Y).
3.6. ADJUSTMENT TO EXCHANGE RATIO. The transactions contemplated by this Agreement will result in a change in the ratio at which shares of AAA common stock will be exchanged for shares of DDD/AAA Common Stock (in the event the Reorganization is effected through Reorganization Structure One) or DDD Common Stock (in the event the Reorganization is effected through Reorganization Structure Two) such that, upon consummation of the Reorganization and subject to any other changes in the Exchange Ratio agreed to among the parties to the DDD-AAA Reorganization Agreement after the date hereof, each share of AAA common stock and each share of AAA preferred stock (following its conversion to common stock) will be exchanged for (x) 1.796 shares of DDD/AAA Common Stock, in the event the Reorganization is effected through Reorganization Structure One, or (y) _________ shares of DDD Common Stock, in the event the Reorganization is effected through Reorganization Structure Two. Nothing in this Agreement shall preclude the amendment of the DDD-AAA Reorganization Agreement or require the consent or approval of KKK to any such amendment, including any amendment to the Exchange Ratio, provided, however, that without the written consent of KKK no amendment to the DDD-AAA Reorganization Agreement shall amend, modify or change the shares of capital stock obtainable upon the exercise of the warrants to be delivered hereunder in a manner that is adverse to the holder of such warrants unless such amendment, modification or change is uniformly applicable to all of the holders of such class and series of capital stock.
4. REPRESENTATIONS AND WARRANTIES.
4.1. REPRESENTATIONS AND WARRANTIES OF AAA AND DDD. AAA hereby represents and warrants to KKK with respect to itself and DDD/AAA, and DDD hereby separately represents and warrants to KKK with respect to itself and DDD/AAA as follows:
4.1.1. Organization and Standing. Each of AAA, DDD and DDD/AAA is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all necessary power and authority: (i) to conduct its business in the manner in which its business is currently being conducted; (ii) to own and use its assets in the manner in which its assets are currently owned and used; and (iii) to perform its obligations under this Agreement and/or the DDD-AAA Reorganization Agreement. Each of AAA, DDD and DDD/AAA is qualified to do business as a foreign corporation, and is in good standing, under the laws of all jurisdictions where the nature of its business requires such qualification and where the failure to so qualify would result in any change, event, violation, inaccuracy, circumstance or effect that is materially adverse to the business, assets (including intangible assets), financial condition or results of operations of AAA, DDD or DDD/AAA, as applicable, taken as a whole with its respective subsidiaries.
4.1.2. Authorization; Enforceability. All action on the part of AAA, DDD and DDD/AAA necessary for the authorization, execution, delivery and performance of all their respective obligations under this Agreement or any document contemplated hereby has been taken. This Agreement, when executed and delivered by each of AAA, DDD and DDD/AAA, will constitute the valid and binding obligation of such party, and will be enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally, and except that the availability of the remedy of specific performance or other equitable relief is subject to the discretion of the court before which any proceeding therefor may be brought.
4.1.3. Capitalization. As of the date of this Agreement, (i) the capitalization of AAA is as set forth on EXHIBIT 4.1(A) hereto. The representations and warranties given by DDD to AAA regarding DDD's capitalization set forth in Section 3.2 of the DDD-AAA Reorganization Agreement were true and correct as of the date thereof in all material respects.
4.1.4. Compliance with Other Instruments. The execution, delivery and performance of and compliance with this Agreement, the Registration Rights Agreement and the New Warrants and the issuance of the shares of Series F Common Stock, DDD Common Stock or DDD/AAA Common Stock upon the exercise thereof will not result in any violation or be in conflict with or constitute a default (with or without notice or lapse of time or both) under, or give rise to a right of termination, cancellation or acceleration or the loss of any material benefit under: (i) any of the terms or provisions of the Certificate of Incorporation or Bylaws of AAA, DDD or DDD/AAA (or any comparable organizational documents of such companies' subsidiaries), or (ii) any mortgage, indenture, license, lease, contract, agreement or instrument to which any of AAA, DDD, DDD/AAA, or any of their respective subsidiaries is a party, or (iii) any judgment, order, decree, statue, law, ordinance, rule or regulation applicable to AAA, DDD, DDD/AAA, or any of their respective subsidiaries, properties or assets, or (iv) result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of AAA, DDD, DDD/AAA, or any of their respective subsidiaries pursuant to any such term or provision.
4.1.5. Offering. Subject to the accuracy of the representations of KKK set forth in Section 4.2 below, the issuance of the New Warrants and the securities issuable upon exercise of the New Warrants pursuant to this Agreement constitute transactions exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "SECURITIES ACT").
4.1.6. Validity of Stock. The shares of Series F Common Stock, DDD Common Stock or DDD/AAA Common Stock, as applicable, issuable upon exercise of the New Warrants, when issued, sold and delivered in compliance with the provisions of this Agreement and the New Warrants, will be duly authorized, validly issued, fully paid and nonassessable, will be free of any liens or encumbrances, and will not be subject to any preemptive rights, rights of first refusal or redemption rights.
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