Registration Rights Agreement
REGISTRATION
RIGHTS AGREEMENT
(this
“Agreement”),
dated
as of February 28, 2007, by and among AskMeNow, Inc., a Delaware corporation
(the “Company”),
and
the persons listed on Schedule
A
annexed
hereto.
Preliminary
Statement
Pursuant
to the terms and conditions of the Note Purchase and Warrant Agreement (the
“Note
Purchase and Warrant Agreement”),
the
Company is offering on a “best efforts” no minimum basis, a bridge financing
(the “Bridge Offering”) of up to a maximum of $3,000,000 of Bridge Offering
units (each a “Bridge
Unit”).
Each
Bridge Unit consists of $1.00 principal amount of 12% Senior Promissory Notes
and Warrants to purchase four (4) shares of Common Stock. The Bridge Offering
is
being made only to Investors who qualify as “accredited investors” as such term
is defined in Rule 501 of Regulation D under the Securities Act of 1933, as
amended (the “Securities
Act”).
Partial Bridge Units may be sold.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the persons listed on Schedule
A
annexed
hereto hereby agree as follows:
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1.
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DEFINITIONS.
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As
used
in this Agreement, the following terms shall have the following
meanings:
a. “Holder”
means
the persons listed on Schedule
A
annexed
hereto, and any transferee or assignee to whom they assign rights under this
Agreement and who agrees to become bound by the provisions of this Agreement
in
accordance with Section 9.
b. “Person”
means
a
corporation, a limited liability company, an association, a partnership, an
organization, a business, an individual, a governmental or political subdivision
thereof.
c. “Register,”
“registered,”
and
“registration”
refer
to a registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities
on a
continuous basis (“Rule
415”),
and
the declaration or ordering of effectiveness of such Registration Statement(s)
by the United States Securities and Exchange Commission (the “SEC”).
d. “Registrable
Securities”
means
the shares of common stock of the Company underlying the Warrants (“Warrant
Shares”) and all Warrants issued to Xxxxxxx Capital and/or its designees and
assignees.
e. “Registration
Statement”
means
a
registration statement or registration statements of the Company filed under
the
Securities Act on Form S-3 or SB-2 if available or Form S-1 (or any other
appropriate form prescribed by the SEC) for the resale of the Registrable
Securities.
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REGISTRATION.
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a. Mandatory
Registration.
The
Company hereby agrees to file with the SEC a registration statement on Form
SB-2
or another suitable form permitted by the SEC within one hundred (100) days
from
the final closing with respect to all of the Registrable Securities (as
defined), as well as all securities issuable pursuant to the Company’s Offering
of up to $16,000,000 pursuant to a confidential private placement memorandum
(the “Memorandum”) dated August 24, 2006, as amended, unless such shares had
been previously registered.
b. Piggy-Back
Registrations.
If at
any time prior to the expiration of two-years from the completion of the Bridge
Offering the Company proposes to file with the SEC a Registration Statement
relating to an offering for its own account or the account of others under
the
Securities Act of any of its securities (other than a Registration Statement
on
Form S-4 or Form S-8 (or their equivalents at such time) relating to securities
to be issued solely in connection with any acquisition of any entity or business
or equity securities issuable in connection with stock option or other employee
benefit plans) the Company shall promptly send to each Holder written notice
of
the Company’s intention to file a Registration Statement and of such Holder’s
rights under this Section 2(a) and, if within five (5) days after receipt of
such notice, such Holder shall so request in writing, the Company shall include
in such Registration Statement all or any part of the Registrable Securities
such Holder requests to be registered, subject to the priorities set forth
in
this Section 2(a) below. No right to registration of Registrable Securities
under this Section 2(a) shall be construed to limit any registration required
under Section 2(a). The obligations of the Company under this Section 2(a)
may
be waived by Holders holding a majority of the Registrable Securities. If an
offering in connection with which a Holder is entitled to registration under
this Section 2(a) is an underwritten offering, then each Holder whose
Registrable Securities are included in such Registration Statement shall, unless
otherwise agreed to by the Company, offer and sell such Registrable Securities
in an underwritten offering using the same underwriter or underwriters and,
subject to the provisions of this Agreement, on the same terms and conditions
as
other shares of Common Stock included in such underwritten offering. If a
registration pursuant to this Section 2(a) is to be an underwritten public
offering and the managing underwriter(s) advise the Company in writing that,
in
their reasonable good faith opinion, marketing or other factors dictate that
a
limitation on the number of shares of Common Stock which may be included in
the
Registration Statement is necessary to facilitate and not adversely affect
the
proposed offering, then the Company shall include in such registration: (1)
first, all securities the Company proposes to sell for its own account, (2)
second, up to the full number of securities proposed to be registered for the
account of the holders of securities entitled to inclusion of their securities
in the Registration Statement by reason of demand registration rights, and
(3)
third, the securities requested to be registered by the Holders and other
holders of securities entitled to participate in the registration, as of the
date hereof, drawn from them pro rata based on the number each has requested
to
be included in such registration.
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c. Allocation
of Registrable Securities.
The
initial number of Registrable Securities included in any Registration Statement
and each increase in the number of Registrable Securities included therein
shall
be allocated pro rata among the Holders based on the number of Registrable
Securities held by each Holder at the time the Registration Statement covering
such initial number of Registrable Securities or increase thereof is declared
effective by the SEC. In the event that a Holder sells or otherwise transfers
any of such Holder’s Registrable Securities, each transferee shall be allocated
a pro rata portion of the then remaining number of Registrable Securities
included in such Registration Statement for such transferor. Any shares of
Common Stock included in a Registration Statement and which remain allocated
to
any Person which ceases to hold any Registrable Securities shall be allocated
to
the remaining Holders, pro rata based on the number of Registrable Securities
then held by such Holders.
3. RELATED
OBLIGATIONS.
The
Company will use its best efforts to effect the registration of the Registrable
Securities contemplated by Section 2 in accordance with the intended method
of
disposition thereof and, pursuant thereto, the Company shall have the following
obligations:
a. The
Company shall promptly prepare and file with the SEC a Registration Statement
with respect to the Registrable Securities (on or prior to the Scheduled Filing
Date) for the registration of Registrable Securities pursuant to Section 2
and
use its best efforts to cause such Registration Statements relating to the
Registrable Securities to become effective as soon as possible after such
filing. The Company shall keep the Registration Statement required to be filed
hereunder effective pursuant to Rule 415 at all times until the earlier of
(i)
the date as of which the Holders may sell all of the Registrable Securities
covered by such Registration Statement without restriction pursuant to Rule
144(k) promulgated under the Securities Act (or successor thereto), (ii) the
Expiration Date for the Warrants and/or (iii) the date on which the Holders
shall have sold all the Registrable Securities covered by such Registration
Statement (the “Registration
Period”),
which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any 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, in light of the circumstances in
which
they were made, not misleading. The term “best efforts” shall mean, among other
things, that the Company shall submit to the SEC, within five business days
after the Company learns that no review of a particular Registration Statement
will be made by the staff of the SEC or that the staff has no further comments
on the Registration Statement, as the case may be, a request for acceleration
of
effectiveness of such Registration Statement to a time and date not later than
48 hours after the submission of such request.
b. The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and
the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the Securities Act, as
may
be necessary to keep such Registration Statement effective at all times during
the Registration Period, and, during such period, comply with the provisions
of
the Securities Act with respect to the disposition of all Registrable Securities
of the Company covered by such Registration Statement until such time as all
of
such Registrable Securities shall have been disposed of in accordance with
the
intended methods of disposition by the seller or sellers thereof as set forth
in
such Registration Statement. In the case of amendments and supplements to a
Registration Statement that are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 10-KSB, Form 10-QSB or Form 8-K or any analogous report under
the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
the
Company shall file such amendments or supplements with the SEC on the same
day
or as soon as practicably thereafter on which the Exchange Act report is filed
that created the requirement for the Company to amend or supplement the
Registration Statement.
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c. The
Company shall furnish to each Holder whose Registrable Securities are included
in any Registration Statement, without charge, upon the effectiveness of any
Registration Statement, one copy of the prospectus included in such Registration
Statement and all amendments and supplements thereto as such Holder may
reasonably request and such other documents, including copies of any preliminary
or final prospectus, as such Holder may reasonably request from time to time
in
order to facilitate the disposition of the Registrable Securities owned by
such
Holder.
d. The
Company shall use reasonable efforts to (i) register and qualify the Registrable
Securities covered by a Registration Statement under such other securities
or
“blue sky” laws of such jurisdictions in the United States as any Holder
reasonably requests, unless the Holder maintains a securities brokerage account
in New York State through which the Registerable Securities may be sold, (ii)
prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary
to
maintain such registrations and qualifications in effect at all times during
the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such jurisdiction.
The Company shall promptly notify each Holder who holds Registrable Securities
of the receipt by the Company of any notification with respect to the suspension
of the registration or qualification of any of the Registrable Securities for
sale under the securities or “blue sky” laws of any jurisdiction in the United
States or its receipt of actual notice of the initiation or threatening of
any
proceeding for such purpose.
e. As
promptly as practicable after becoming aware of such event, the Company shall
notify each Holder in writing of the happening of any event as a result of
which
the prospectus included in a Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state 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, and
promptly prepare a supplement or amendment to such Registration Statement to
correct such untrue statement or omission, and deliver one copy of such
supplement or amendment to each Holder (or such other number of copies as such
Holder may reasonably request). The Company shall also promptly notify each
Holder in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration Statement
or
any post-effective amendment has become effective (notification of such
effectiveness shall be delivered to each Holder by facsimile on the same day
of
such effectiveness and by overnight mail), (ii) of any request by the SEC for
amendments or supplements to a Registration Statement or related prospectus
or
related information, and (iii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
f. The
Company shall use its best efforts to prevent the issuance of any stop order
or
other suspension of effectiveness of a Registration Statement, or the suspension
of the qualification of any of the Registrable Securities for sale in any
jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and
to
notify each Holder who holds Registrable Securities being sold of the issuance
of such order and the resolution thereof or its receipt of actual notice of
the
initiation or threat of any proceeding for such purpose.
g. The
Company shall hold in confidence and not make any disclosure of information
concerning an Holder provided to the Company unless (i) disclosure of such
information is necessary to comply with Federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to
the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure
of
such information concerning an Holder is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt written
notice to such Holder and allow such Holder, at the Holder’s expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.
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h. The
Company shall use its best efforts to (i) cause all the Registrable Securities
covered by a Registration Statement to be listed on each securities exchange
on
which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities is then permitted
under the rules of such exchange. The Company shall pay all fees and expenses
in
connection with satisfying its obligation under this Section 3(h).
i. The
Company shall provide a transfer agent and registrar of all such Registrable
Securities not later than the effective date of such Registration Statement.
j. The
Company shall use its best efforts to cause the Registrable Securities covered
by the applicable Registration Statement to be registered with or approved
by
such other governmental agencies or authorities as may be necessary to
consummate the disposition of such Registrable Securities.
k. The
Company shall otherwise use its best efforts to comply with all applicable
rules
and regulations of the SEC in connection with any registration
hereunder.
l. Within
three (3) business days after a Registration Statement that covers applicable
Registrable Securities is ordered effective by the SEC, the Company shall
deliver to the transfer agent for such Registrable Securities (with copies
to
the Holders whose Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has been declared
effective by the SEC.
m. The
Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by the Holders of Registrable Securities pursuant to
a
Registration Statement.
n. Notwithstanding
anything to the contrary in Section 3(e), at any time after the Registration
Statement has been declared effective, the Company may delay the disclosure
of
material, non-public information concerning the Company the disclosure of which
at the time is not, in the good faith opinion of the Board of Directors of
the
Company and its counsel, in the best interest of the Company and, in the opinion
of counsel to the Company, otherwise required (a “Grace
Period”);
provided, that the Company shall promptly (i) notify the Holders in writing
of
the existence of material, non-public information giving rise to a Grace Period
and the date on which the Grace Period will begin, and (ii) notify the Holders
in writing of the date on which the Grace Period ends. For purposes of
determining the length of a Grace Period above, the Grace Period shall begin
on
and include the date the Holders receive the notice referred to in clause (i)
above and shall end on and include the date the Holders receive the notice
referred to in clause (ii) above. Upon expiration of the Allowable Grace Period,
the Company shall again be bound by the first sentence of Section 3(e) with
respect to the information giving rise thereto.
4. OBLIGATIONS
OF THE HOLDERS.
a. At
least
five (5) business days prior to the first anticipated filing date of a
Registration Statement, the Company shall notify each Holder in writing of
the
information the Company requires from each such Holder if such Holder elects
to
have any of such Holder’s Registrable Securities included in such Registration
Statement. It shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Holder that such Holder shall furnish
to
the Company such information regarding itself, the Registrable Securities held
by it and the intended method of disposition of the Registrable Securities
held
by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with
such
registration as the Company may reasonably request.
b. Each
Holder by such Holder’s acceptance of the Registrable Securities agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless
such Holder has notified the Company in writing of such Holder’s election to
exclude all of such Holder’s Registrable Securities from such Registration
Statement.
c. Each
Holder agrees that, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 3(e) or the first sentence of
Section 3(f), such Holder will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e) or the first
sentence of Section 3(f).
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d. Each
Holder agrees not to take any action to cause such Holder to become a registered
broker-dealer, as defined under the Exchange Act.
5. EXPENSES
OF REGISTRATION.
All
reasonable expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to Sections
2 and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements
of
counsel for the Company, shall be paid by the Company.
6. INDEMNIFICATION.
In
the
event any Registrable Securities are included in a Registration Statement under
this Agreement:
a. To
the
fullest extent permitted by law, the Company will, and hereby does, indemnify,
hold harmless and defend each Holder who holds such Registrable Securities,
the
directors, officers, partners, and each Person, if any, who controls, any Holder
within the meaning of the Securities Act or the Exchange Act, and any
underwriter (as defined in the Securities Act) for the Holders, and the
directors and officers of, and each Person, if any, who controls, any such
underwriter within the meaning of the Securities Act or the Exchange Act (each,
an “Indemnified
Person”),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, attorneys’ fees, amounts paid in settlement or expenses, joint
or several (collectively, “Claims”),
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency
or
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified
Damages”),
to
which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of
or are based upon: (i) any untrue statement or alleged untrue statement of
a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other “blue sky” laws of any jurisdiction in
which Registrable Securities are offered (“Blue
Sky Filing”),
or
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in
any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented,
if
the Company files any amendment thereof or supplement thereto with the SEC)
or
the omission or alleged omission to state therein any material fact necessary
to
make the statements made therein, in light of the circumstances under which
the
statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other
law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any material violation
of this Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, “Violations”).
The
Company shall reimburse the Holders and each such underwriter or controlling
person, promptly as such expenses are incurred and are due and payable, for
any
legal fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation that occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified Person
or underwriter for such Indemnified Person expressly for use in connection
with
the preparation of the Registration Statement or any such amendment thereof
or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c); (ii) with respect to any preliminary prospectus,
shall
not inure to the benefit of any such person from whom the person asserting
any
such Claim purchased the Registrable Securities that are the subject thereof
(or
to the benefit of any person controlling such person) if the untrue statement
or
omission of material fact contained in the preliminary prospectus was corrected
in the prospectus, as then amended or supplemented, if such prospectus was
timely made available by the Company pursuant to Section 3(c), and the
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a violation and such Indemnified
Person, notwithstanding such advice, used it; (iii) shall not be available
to
the extent such Claim is based on a failure of the Holder to deliver or to
cause
to be delivered the prospectus made available by the Company, if such prospectus
was timely made available by the Company pursuant to Section 3(c); and (iv)
shall not apply to amounts paid in settlement of any Claim if such settlement
is
effected without the prior written consent of the Company, which consent shall
not be unreasonably withheld. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Registrable Securities by the
Holders pursuant to Section 9.
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b. In
connection with any Registration Statement in which a Holder is participating,
each such Holder agrees to severally and not jointly indemnify, hold harmless
and defend, to the same extent and in the same manner as is set forth in Section
6(a), the Company, each of its directors and officers, each Person, if any,
who
controls the Company within the meaning of the Securities Act or the Exchange
Act (collectively and together with an Indemnified Person, an “Indemnified
Party”),
against any Claim or Indemnified Damages to which any of them may become
subject, under the Securities Act, the Exchange Act or otherwise, insofar as
such Claim or Indemnified Damages arise out of or are based upon any Violation,
in each case to the extent, and only to the extent, that such Violation occurs
in reliance upon and in conformity with written information furnished to the
Company by such Holder expressly for use in connection with such Registration
Statement; and, subject to Section 6(d), such Holder will reimburse any legal
or
other expenses reasonably incurred by them in connection with investigating
or
defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of such
Holder, which consent shall not be unreasonably withheld; provided, further,
however, that the Holder shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified Damages as does not exceed the net proceeds
to
such Holder as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Holders
pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus
and such prospectus was provided to Holders as required, as then amended or
supplemented.
c. The
Company shall be entitled to receive indemnities from underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in any distribution, to the same extent as provided above, with
respect to information such persons so furnished in writing expressly for
inclusion in the Registration Statement.
d. Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section
6
of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person
or
Indemnified Party shall, if a Claim in respect thereof is to be made against
any
indemnifying party under this Section 6, deliver to the indemnifying party
a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party
so
desires, jointly with any other indemnifying party similarly noticed, assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as
the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses to
be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by
such
counsel in such proceeding. The Company shall pay reasonable fees for only
one
separate legal counsel for the Holders, and such legal counsel shall be selected
by the Holders holding a majority of the issued or issuable Registrable
Securities included in the Registration Statement to which the Claim relates.
The Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person that relates to such action or claim. The indemnifying party
shall keep the Indemnified Party or Indemnified Person fully apprised at all
times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of
any
action, claim or proceeding effected without its written consent; provided,
however, that the indemnifying party shall not unreasonably withhold, delay
or
condition its consent. No indemnifying party shall, without the consent of
the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such claim or litigation. Following indemnification as provided
for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties,
firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party
is
prejudiced in its ability to defend such action.
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e. The
indemnification required by this Section 6 shall be made by periodic payments
of
the amount thereof during the course of the investigation or defense, as and
when bills are received or Indemnified Damages are incurred.
f. The
indemnity agreements contained herein shall be in addition to (i) any cause
of
action or similar right of the Indemnified Party or Indemnified Person against
the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.
7. CONTRIBUTION.
To
the
extent any indemnification by an indemnifying party is prohibited or limited
by
law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however, that: (i) no seller of
Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received
by
such seller from the sale of such Registrable Securities.
8. REPORTS
UNDER THE EXCHANGE ACT.
With
a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Securities Act or any other similar rule or regulation of the SEC
that
may at any time permit the Holders to sell securities of the Company to the
public without registration (“Rule
144”)
during
the Registration Period, the Company agrees to:
a. make
and
keep public information available, as those terms are understood and defined
in
Rule 144;
b. file
with
the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act so long as the Company
remains subject to such requirements and the filing of such reports and other
documents as required for the applicable provisions of Rule 144;
and
c. furnish
to each Holder so long as such Holder owns Registrable Securities, promptly
upon
request, (i) a written statement by the Company that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested to permit the Holders to sell such
securities pursuant to Rule 144 without registration.
9. ASSIGNMENT
OF REGISTRATION RIGHTS.
The
rights under this Agreement shall be automatically assignable by the Holders
to
any transferee of all or any portion of Registrable Securities if: (i) the
Holder agrees in writing with the transferee or assignee to assign such rights,
and a copy of such agreement is furnished to the Company within a reasonable
time after such assignment; (ii) the Company is, within a reasonable time after
such transfer or assignment, furnished with written notice of (a) the name
and
address of such transferee or assignee, and (b) the securities with respect
to
which such registration rights are being transferred or assigned; (iii)
immediately following such transfer or assignment the further disposition of
such securities by the transferee or assignee is restricted under the Securities
Act and applicable state securities laws; (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence the
transferee or assignee agrees in writing with the Company to be bound by all
of
the provisions contained herein; and (v) such transfer shall have been made
in
accordance with the applicable requirements of the Note Purchase Agreement
and/or Warrant.
7
10. AMENDMENT
OF REGISTRATION RIGHTS.
Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and Holders who
then
hold or have the right to acquire sixty-six and two-thirds (66%) of the
Registrable Securities. Any amendment or waiver effected in accordance with
this
Section 10 shall be binding upon each Holder and the Company. No such amendment
shall be effective to the extent that it applies to less than all of the holders
of the Registrable Securities. No consideration shall be offered or paid to
any
Person to amend or consent to a waiver or modification of any provision of
any
of this Agreement unless the same consideration also is offered to all of the
parties to this Agreement.
11. MISCELLANEOUS.
a. A
Person
is deemed to be a holder of Registrable Securities whenever such Person owns
or
is deemed to own of record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon the
basis
of instructions, notice or election received from the registered owner of such
Registrable Securities.
b. Any
notices, consents, waivers or other communications required or permitted to
be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one business day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall
be:
| If to the Company: |
AskMeNow,
Inc.
00
Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx,
XX 00000
Phone:
(000) 000-0000
Facsimile:
(000) 000-0000
|
If
to a
Holder, to his or its address and facsimile number on Schedule 1 hereto, or
to
such other address and/or facsimile number and/or to the attention of such
other
person as the recipient party has specified by written notice given to each
other party five days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically generated by the sender’s
facsimile machine containing the time, date, recipient facsimile number and
an
image of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, transmission by
facsimile or overnight or courier delivery in accordance with clause (A), (B)
or
(C) above, respectively.
c. Except
as
otherwise provided in this Agreement, the failure of any party to exercise
any
right or remedy under this Agreement or otherwise, or delay by a party in
exercising such right or remedy, shall not operate as a waiver
thereof.
d. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of
California, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of California or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of California. Each party hereby irrevocably submits to
the
non-exclusive jurisdiction of the U.S. District Court, Central District of
California or the State courts of the State of California for the adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is
not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If any provision of this Agreement
shall
be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT
TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
8
e. This
Agreement constitutes the entire agreement among the parties hereto with respect
to the registration rights. There are no restrictions, promises, warranties
or
undertakings, other than those set forth or referred to herein and therein.
This
Agreement supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
f. Subject
to the requirements of Section 9, this Agreement shall inure to the benefit
of
and be binding upon the heirs, legal representatives, permitted successors
and
assigns of each of the parties hereto.
g. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
h. This
Agreement may be executed in identical counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same agreement.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
i. Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
j. All
consents and other determinations to be made by the Holders pursuant to this
Agreement shall be made, unless otherwise specified in this Agreement, by
Holders holding a majority of the Registrable Securities.
k. The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent and no rules of strict construction
will
be applied against any party.
l. This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
9
IN
WITNESS WHEREOF,
the
parties have caused this Registration Rights Agreement to be duly executed
as of
day and year first above written.
| ASKMENOW, INC. |
Holders:
|
|
By:
|
|
|
Name:
Xxxxxx Xxxxx
|
|
|
Title:
CEO
|
|
|
|
|
|
|
10
|
Schedule
A
|
|
|
Name
and
|
Number
of
|
|
Address
|
Warrant
Shares
|
Letterhead
of
AskMeNow,
Inc.
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
[Name
of Holder]
[Address
of Holder]
Attn:______________
______________,
2007
Ladies
and Gentlemen:
Please
be
advised that on __________, 2007 we filed a Registration Statement on Form
SB-2
(File No. 333-__________________) (the “Registration
Statement”)
with
the Securities and Exchange Commission (the “SEC”)
for
the resale of shares of our common stock (the “Shares”) by the selling
stockholders named therein in accordance with the Registration Rights Agreement
dated as of February 28, 2007.
In
connection with the foregoing, we advise you that a member of the SEC’s staff
has advised us by telephone that the SEC has entered an order declaring the
Registration Statement effective under the Securities Act of 1933 at
[ENTER
TIME OF EFFECTIVENESS]
on
[ENTER
DATE OF EFFECTIVENESS]
and we
have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that
any stop order suspending its effectiveness has been issued or that any
proceedings for that purpose are pending before, or threatened by, the SEC
and
the Shares are available for resale under the Securities Act of 1933 pursuant
to
the Registration Statement.
|
Very
truly yours,
|
||
|
ASKMENOW,
INC.
|
||
| |
|
|
| By: | ||
|
Name: Xxxxxx Xxxxx |
||
|
Title:
CEO
|
||
