EXHIBIT 10.20
REGISTRATION RIGHTS AGREEMENT
December 27, 2005
To Each of the Purchasers Named
On the Signature Pages Hereof
Ladies and Gentlemen:
InPlay Technologies, Inc., a Nevada corporation (the "Company"), proposes
to issue and sell to the Purchasers (as defined herein) upon the terms set forth
in the Securities Purchase Agreement (as defined herein) an aggregate of
1,272,728 shares of the common stock, par value $.001 per share, of the Company
("Common Stock") and warrants (the "Warrants") to purchase an aggregate of
381,818 shares of the Common Stock (such shares of Common Stock, together with
the shares of Common Stock issuable upon exercise of the Warrants, collectively,
the "Securities"). As an inducement to the Purchasers to enter into the
Securities Purchase Agreement and in satisfaction of a condition to the
obligations of the Purchasers thereunder, the Company agrees with the Purchasers
for the benefit of holders (as defined herein) from time to time of the
Registrable Securities (as defined herein) as follows:
1. Definitions.
(a) Capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Securities Purchase Agreement. As used in this
Registration Rights Agreement (this "Agreement"), the following defined terms
shall have the following meanings:
"Affiliate" of any specified person means any other person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with such specified person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such person whether by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York City, New York are
authorized or obligated by law or executive order to close.
"Closing Date" means the date of the consummation of the sale of the Common
Stock pursuant to the Securities Purchase Agreement.
"Commission" means the United States Securities and Exchange Commission, or
any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
"Common Stock" means the Company's common stock, par value $.001 per share.
"Delay Condition" means the Commission reviews and has oral or written
comments to the filed Shelf Registration Statement that would require the filing
of a pre-effective amendment thereto with the Commission.
"Effectiveness Deadline Date" means the earlier of (a) the 90th calendar
day following the Closing Date; provided, however, that the Effectiveness
Deadline Date may be postponed for up to the 120th day following the Closing
Date if and so long as the Delay Condition exists, or (b) the 10th trading day
following the date on which the Company is notified that the initial Shelf
Registration Statement will not be reviewed or is no longer subject to further
review and comment.
"Effectiveness Period" has the meaning assigned thereto in Section 2(b)(i)
hereof.
"Effective Time" means the date on which the Commission declares the Shelf
Registration Statement effective.
"Electing Holder" has the meaning assigned thereto in Section 3(a)(ii)
hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"Filing Deadline Date" means the 30th calendar day following the Closing
Date.
"holder" means, when used with respect to any Security, the record holder
of such Security.
"Managing Underwriters" means the investment banker or investment bankers
and manager or managers that shall administer an underwritten offering, if any,
conducted pursuant to Section 6 hereof.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire, substantially in the form of Exhibit A
attached hereto, relating to the Securities.
"person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A or Rule 430B under the
Securities Act) included in the Shelf 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 the
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Shelf Registration Statement and by all other amendments and supplements to such
prospectus, including all material incorporated by reference in such prospectus
and all documents filed after the date of such prospectus by the Company under
the Exchange Act and incorporated by reference therein.
"Purchasers" means the Investors named on the signature pages of the
Securities Purchase Agreement.
"Registrable Securities" means all or any portion of the Securities;
provided, however, that a security ceases to be a Registrable Security when it
is no longer a Restricted Security.
"Restricted Security" means any Security except any such Security that (i)
has been registered pursuant to an effective registration statement under the
Securities Act and sold in a manner contemplated by the Shelf Registration
Statement, (ii) has been transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto) or is transferable pursuant
to paragraph (k) of such Rule 144 (or any successor provision thereto) or (iii)
has otherwise been transferred and a new Security not subject to transfer
restrictions under the Securities Act has been delivered by or on behalf of the
Company.
"Rules and Regulations" means the published rules and regulations of the
Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Statement" means a "shelf" registration statement filed
under the Securities Act providing for the registration of, and the sale on a
continuous or delayed basis by the holders of, all of the Registrable Securities
pursuant to Rule 415 under the Securities Act and/or any similar rule that may
be adopted by the Commission, filed by the Company pursuant to the provisions of
Section 2 of this Agreement, including the Prospectus contained therein, any
amendments and supplements to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement.
"Securities Purchase Agreement" means the Securities Purchase Agreement,
dated as of the date hereof, between the Company and the Investors named
therein.
"underwriter" means any underwriter of Registrable Securities in connection
with an offering thereof under a Shelf Registration Statement.
2. Shelf Registration.
(a) The Company shall, (i) use its reasonable best efforts to file
with the Commission on or prior to the Filing Deadline Date, a Shelf
Registration Statement covering the offer and sale of the Registrable Securities
and (ii) use its best efforts to cause
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such Shelf Registration Statement to be declared effective under the Securities
Act on or prior to the Effectiveness Deadline Date; provided, however, that no
holder shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement or to use the Prospectus for resales of Registrable
Securities unless such holder is an Electing Holder. The Shelf Registration
Statement shall be on Form SB-2 (except if the Company is not then eligible to
use a Form SB-2 registration statement, in which case such registration shall be
on another appropriate form).
(b) The Company shall use all reasonable efforts:
(i) to keep the Shelf Registration Statement continuously
effective in order to permit the Prospectus to be usable by holders
for resales of Registrable Securities until the earlier of the date
upon which (A) all Registrable Securities registered under the Shelf
Registration Statement have been sold thereunder, and (B) all of the
Securities cease to be Restricted Securities (such period being
referred to herein as the "Effectiveness Period"); and
(ii) after the Effective Time and during the Effectiveness
Period, and promptly upon the request of any holder of Registrable
Securities that is not then an Electing Holder, to take any action
reasonably necessary to enable such holder to use the Prospectus for
resales of Registrable Securities, including, without limitation, any
action necessary to identify such holder as a selling securityholder
in the Shelf Registration Statement; provided, however, that nothing
in this subparagraph shall relieve such holder of the obligation to
return a completed and signed Notice and Questionnaire to the Company
in accordance with Section 3(a) hereof.
(c) If (i) such Shelf Registration Statement covering the Registrable
Securities is not filed with the Commission on or prior to the Filing Deadline
Date, (ii) such Shelf Registration Statement covering the Registrable Securities
is not declared effective by the Commission on or prior to the Effectiveness
Deadline Date or (iii) after the Effective Time, without regard for the reason
thereunder or efforts therefor, such Shelf Registration Statement ceases for any
reason to be effective or any Prospectus thereunder ceases to be usable with
respect to any Registrable Securities it is required to cover at any time prior
to the expiration of the Effectiveness Period for an aggregate of more than 30
trading days (which need not be consecutive), then, notwithstanding any other
provision in this Agreement, in addition to any other rights available to the
holders under the Transaction Documents or under applicable law, the Company,
within three Business Days following the occurrence of any event set forth in
subclauses (i), (ii) or (iii) above (each a "Registration Default"), will make
pro rata payments to each Purchaser, as liquidated damages and not as a penalty,
in an amount equal to 1.5% of the aggregate amount paid by such Purchaser on the
Closing Date to the Company for the Securities (the "Deadline Payment"). In
addition, the Company will make pro rata payments to each Purchaser, as
liquidated damages and not as a penalty, in an amount equal to 1.5% of the
aggregate amount paid by such Purchaser on the Closing Date to the Company for
the Securities per each 30-day period (or pro rata portion thereof if the period
is less than 30 days) after the occurrence of a Registration Default, with each
such subsequent
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payment to be due and payable (A) in the case of a payment due in respect of
clause (i) above, on the date which is 30 days following the Filing Deadline
Date and at the end of each subsequent 30-day period (or portion thereof)
thereafter until the date on which such Shelf Registration Statement is filed,
(B) in the case of a payment due in respect of clause (ii) above, on the date
which is 30 days following the Effectiveness Deadline Date and at the end of
each subsequent 30-day period (or portion thereof) thereafter until the date on
which such Shelf Registration Statement becomes effective, and (C) in the case
of clause (iii) above, on the last trading day of each subsequent period of 30
trading days (or portion thereof) in which such Shelf Registration Statement
ceases to be effective or any Prospectus thereunder ceases to be usable with
respect to any Registrable Securities. No such payments shall be payable in
respect of any Securities that are not Registrable Securities. Such payments
shall be made to each Purchaser in immediately available funds not later than
three Business Days following the end of each 30-day period or when the
Registration Default is cured.
3. Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:
(a) The Company will deliver the Notice and Questionnaire to the
holders of Registrable Securities. No holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement as of the Effective
Time, and no holder shall be entitled to use the Prospectus for resales of
Registrable Securities at any time unless such holder has returned a completed
and signed Notice and Questionnaire to the Company by the deadline for response
set forth therein; provided, however, holders of Registrable Securities shall
have at least five (5) calendar days from the date on which the Notice and
Questionnaire is first mailed to such holders to return a completed and signed
Notice and Questionnaire to the Company.
(i) After the Effective Time, the Company shall, upon the request
of any holder of Registrable Securities that is not then an Electing
Holder, promptly send a Notice and Questionnaire to such holder. The
Company shall not be required to take any action to name such holder
as a selling securityholder in the Shelf Registration Statement or to
enable such holder to use the Prospectus for resales of Registrable
Securities until such holder has returned a completed and signed
Notice and Questionnaire to the Company.
(ii) The term "Electing Holder" shall mean any holder of
Registrable Securities that has returned a completed and signed Notice
and Questionnaire to the Company in accordance with this Section 3(a).
(b) The Company shall furnish to each Electing Holder, counsel to the
Electing Holders selected in accordance with Section 4 hereof, and the Managing
Underwriters, if any, no fewer than three (3) Business Days prior to the initial
filing of the Shelf Registration Statement, a copy of such Shelf Registration
Statement, and shall furnish to such holders, counsel to such holders, and the
Managing Underwriters, if any, no fewer than two Business Days prior to the
filing of any amendment or supplement to the Prospectus, a copy of such
amendment or supplement and shall include in each such document when so
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filed with the Commission such comments as such holders and such counsel
reasonably may propose; provided, however, that the Company shall make the final
decision as to the form and content of each such document. If any such Shelf
Registration Statement refers to any Electing Holder by name or otherwise as the
holder of any securities of the Company, then such Electing Holder shall have
the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Electing Holder, to the effect that
the holding by such Electing Holder of such securities is not to be construed as
a recommendation by such Electing Holder of the investment quality of the
Company's securities covered thereby and that such holding does not imply that
such Electing Holder will assist in meeting any future financial requirements of
the Company, or (ii) in the event that such reference to such Electing Holder by
name or otherwise is not required by the Securities Act or any similar Federal
statute then in force, the deletion of the reference to such Electing Holder in
any amendment or supplement to the Registration Statement filed or prepared
subsequent to the time that such reference ceases to be required.
(c) From the date hereof until the end of the Effective Period, the
Company shall (subject to paragraph (j) below) promptly take such action as may
be necessary so that (i) each of the Shelf Registration Statement and any
amendment thereto and the Prospectus and any amendment or supplement thereto
(and each report or other document incorporated by reference therein in each
case) complies in all material respects with the Securities Act and the Exchange
Act and the respective Rules and Regulations thereunder, (ii) each of the Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) each of the Prospectus and any amendment or
supplement to the Prospectus does not at any time during the Effectiveness
Period include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(d) The Company shall promptly advise each Electing Holder, and shall
confirm such advice in writing if so requested by any such holder (which notice
pursuant to clauses (iii) through (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 Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
any proceedings for such purpose;
(iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included in the
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Shelf Registration Statement for sale in any jurisdiction or the
initiation of any proceeding for such purpose; and
(iv) if changes in the Shelf Registration Statement or the
Prospectus are required in order that the Shelf Registration Statement
and Prospectus do not contain an untrue statement of a material fact
and do not 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 light of the circumstances under which they were made)
not misleading.
(e) The Company shall use its reasonable best efforts to prevent the
issuance, and if issued to obtain the withdrawal, of any order suspending the
effectiveness of the Shelf Registration Statement at the earliest possible time.
(f) The Company shall furnish to each requesting Electing Holder,
without charge, at least one copy of the Shelf Registration Statement and all
post-effective amendments thereto, including financial statements and schedules,
and, if such holder so requests in writing, all reports, other documents and
exhibits that are filed with or incorporated by reference in the Shelf
Registration Statement.
(g) The Company shall, during the Effectiveness Period, deliver to
each Electing Holder, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) and any amendment or supplement thereto
as such Electing Holder may reasonably request; and the Company consents (except
during the continuance of any event described in Section 3(d)(iv) above) to the
use of the Prospectus and any amendment or supplement thereto by each of the
Electing Holders in connection with the offering and sale of the Registrable
Securities covered by the Prospectus and any amendment or supplement thereto
during the Effectiveness Period.
(h) Prior to any offering of Registrable Securities pursuant to the
Shelf Registration Statement, the Company shall (i) register or qualify the
registration or qualification of such Registrable Securities for offer and sale
under the securities or "blue sky" laws of such jurisdictions within the United
States as any Electing Holder may reasonably request, (ii) keep such
registrations or qualifications in effect and comply with such laws so as to
permit the continuance of offers and sales in such jurisdictions for so long as
may be necessary to enable any Electing Holder or underwriter, if any, to
complete its distribution of Registrable Securities pursuant to the Shelf
Registration Statement, and (iii) take any and all other actions necessary or
advisable to enable the disposition in such jurisdictions of such Registrable
Securities; provided, however, that in no event shall the Company be obligated
to (A) qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to so qualify but for this
Section 3(h) or (B) file any general consent to service of process in any
jurisdiction where it is not then so subject.
(i) The Company shall cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold pursuant to the Shelf Registration Statement,
which certificates shall not bear any
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restrictive legends and shall meet the requirements of any securities exchange
on which the Company's Common Stock is then listed and which certificates shall
be in such permitted denominations and registered in such names as Electing
Holders may request in connection with the sale of Registrable Securities
pursuant to the Shelf Registration Statement.
(j) Upon the occurrence of any fact or event contemplated by Section
3(d)(iv) above, the Company shall (subject to the next sentence) promptly
prepare a post-effective amendment or supplement to the Shelf Registration
Statement or the Prospectus, or any document incorporated therein by reference,
or file any other required document so that, as thereafter delivered to
purchasers of the Registrable Securities included therein, the Prospectus will
not include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If the Company notifies the Electing
Holders in accordance with clauses (ii) through (iv) of Section 3(d) above
suspend the use of the Prospectus until the requisite changes to the Prospectus
have been made, then each Electing Holder shall suspend the use of the
Prospectus until (i) such Electing Holder has received copies of the
supplemented or amended Prospectus contemplated by the preceding sentence or
(ii) such Electing Holder is advised in writing by the Company that the use of
the Prospectus may be resumed and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus.
(k) The Company shall use all reasonable efforts to comply in all
material respects with all applicable Rules and Regulations and to make
generally available to all holders as soon as practicable, but in any event not
later than eighteen months after (i) the effective date (as defined in Rule
158(c) under the Securities Act) of the Shelf Registration Statement, (ii) the
effective date of each post-effective amendment to the Shelf Registration
Statement, and (iii) the date of each filing by the Company with the Commission
of an Annual Report on Form 10-K or Form 10-KSB, as applicable, that is
incorporated by reference in the Shelf Registration Statement, an earnings
statement of the Company and its subsidiaries complying with Section 11(a) of
the Securities Act and the Rules and Regulations of the Commission thereunder
(including, at the option of the Company, Rule 158).
(l) In the event of an underwritten offering conducted pursuant to
Section 6 hereof, the Company shall (subject to Section 3(j) above), if
requested, promptly include or incorporate in a Prospectus supplement or
post-effective amendment to the Shelf Registration Statement such information as
the Managing Underwriters reasonably agree should be included therein and to
which the Company does not object and shall (subject to Section 3(j) above) make
all required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after it is notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment.
(m) The Company shall enter into such customary agreements (including
an underwriting agreement in customary form in the event of an underwritten
offering conducted pursuant to Section 6 hereof) and take all other appropriate
action in order to expedite and facilitate the registration and disposition of
the Registrable Securities, and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification provisions
and procedures substantially similar to those set forth in Section 5
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hereof with respect to all parties to be indemnified pursuant to Section 5
hereof; provided, however, the Company shall not be required to facilitate an
underwritten offering pursuant to the Shelf Registration Statement by any
holders unless the offering relates to at least 50% of the Securities sold
pursuant to the Securities Purchase Agreement.
(n) The Company shall:
(i) (A) make reasonably available for inspection by requesting
Electing Holders, any underwriter participating in any disposition
pursuant to the Shelf Registration Statement, and any attorney
selected in accordance with Section 4 hereof, one accountant and any
other agent retained by such holders or any such underwriter all
relevant financial and other records, pertinent corporate documents
and properties of the Company and its subsidiaries and (B) cause the
Company's officers, directors and employees to supply all information
reasonably requested by such holders or any such underwriter,
attorney, accountant or agent in connection with the Shelf
Registration Statement, in each case, as is customary for similar due
diligence examinations; provided, however, that all records,
information and documents that are designated in writing by the
Company, in good faith, as confidential shall be kept confidential by
such holders and any such underwriter, attorney, accountant or agent,
unless such disclosure is made in connection with a court proceeding
or required by law, or such records, information or documents become
available to the public generally or through a third party without an
accompanying obligation of confidentiality; and provided, further
that, if the foregoing inspection and information gathering would
otherwise disrupt the Company's conduct of its business, such
inspection and information gathering shall, to the greatest extent
possible, be coordinated on behalf of the requesting Electing Holders
and the other parties entitled thereto by one counsel designated by
and on behalf of Electing Holders and other parties;
(ii) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, make such representations and warranties
to the Electing Holders participating in such underwritten offering
and to the Managing Underwriters, in form, substance and scope as are
customarily made by the Company to underwriters in primary
underwritten offerings of equity securities;
(iii) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain opinions of counsel to the
Company (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the Managing Underwriters)
addressed to each requesting Electing Holder, covering such matters as
are customarily covered in opinions requested in primary underwritten
offerings of equity securities (it being agreed that the matters to be
covered shall include, without limitation, as of the date of the
opinion and as of the Effective Time or the date of the most recent
post-effective amendment thereto, as the case may be, comment of such
counsel as to the absence, to such counsel's knowledge, from the Shelf
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Registration Statement and the Prospectus, including the documents
incorporated by reference therein, of an untrue statement of a
material fact or the omission of a material fact required to be stated
therein or necessary to make the statements therein (in the case of
the Prospectus, in light of the circumstances under which they were
made) not misleading);
(iv) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain "comfort" letters and updates
thereof from the independent public accountants of the Company (and,
if necessary, from the independent public accountants of any
subsidiary of the Company or of any business acquired by the Company
for which financial statements and financial data are, or are required
to be, included in the Shelf Registration Statement), addressed to
each requesting Electing Holder (if such Electing Holder has provided
such letter, representations or documentation, if any, required for
such cold comfort letter to be so addressed) and the underwriters, in
customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with primary underwritten
offerings;
(v) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, deliver such documents and certificates
as may be reasonably requested by any Electing Holders and the
Managing Underwriters, if any, including without limitation
certificates to evidence compliance with Section 3(j) hereof and with
any conditions contained in the underwriting agreement or other
agreements entered into by the Company in connection therewith.
(o) The Company will use its reasonable best efforts to cause the
Securities to be listed or quoted on the over-the-counter bulletin board market
or other stock exchange or trading system, if any, on which the Common Stock
primarily trades on or prior to the Effective Time.
(p) The Company shall use its reasonable best efforts to take all
other steps necessary to effect the registration, offering and sale of the
Registrable Securities covered by the Shelf Registration Statement contemplated
hereby.
4. Registration Expenses. All fees and expenses incident to the performance
of or compliance with this Agreement by the Company shall be borne by it whether
or not any Shelf Registration Statement is filed or becomes effective and
whether or not any securities are issued or sold pursuant to any Shelf
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (a) all registration and filing fees
(including without limitation fees and expenses (i) with respect to filings
required to be made with the National Association of Securities Dealers, Inc. or
any securities exchange, quotation system, market or over-the-counter bulletin
board on which the Registrable Securities are then listed or quoted, and (ii) in
compliance with securities or Blue Sky laws, (b) printing expenses (including
without limitation expenses of printing certificates for Registrable Securities
and of printing Prospectuses if the printing of Prospectuses is requested by the
Managing Underwriters, if any), (c) messenger, telephone and delivery
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expenses, (d) fees and disbursements of counsel for the Company, (e) fees and
disbursements of all independent certified public accountants referred to in
Section 3(n)(iv) hereof (including without limitation the expenses of any
special audit and "comfort" letters required by or incident to such
performance), (f) Securities Act liability insurance, if the Company desires
such insurance, and (g) fees and expenses of all other persons retained by the
Company. In addition, the Company shall pay its internal expenses (including
without limitation all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, and the
fees and expenses incurred in connection with the listing of the Securities on
the over-the-counter bulletin board market or such other stock exchange or
trading system, if any, on which the Common Stock then trades. Notwithstanding
the foregoing or anything in this Agreement to the contrary, each holder of the
Registrable Securities being registered shall pay all commissions, placement
agent fees and underwriting discounts and commissions with respect to any
Registrable Securities sold by it and the fees and disbursements of any counsel
or other advisors or experts retained by such holders (severally or jointly),
other than counsel referred to in clause (iv) above.
5. Indemnification and Contribution.
(a) Indemnification by the Company.
(i) The Company shall indemnify and hold harmless each Electing
Holder and each underwriter, selling agent or other securities
professional, if any, which facilitates the disposition of Registrable
Securities, and each of their respective officers and directors and
each person who controls such Electing Holder, underwriter, selling
agent or other securities professional within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act (each such
person being sometimes referred to as an "Indemnified Person") against
any losses, claims, damages or liabilities, joint or several, to which
such Indemnified Person 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 an untrue
statement or alleged untrue statement of a material fact contained in
any Shelf Registration Statement or any Prospectus contained therein
or furnished by the Company to any Indemnified Person, 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, in
light of the circumstances in which they were made, not misleading,
and
(ii) the Company hereby agrees to reimburse such Indemnified
Person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that the Company shall
not be liable to any such Indemnified Person in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such Shelf Registration Statement
or Prospectus, or amendment or supplement
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thereto, in reliance upon and in conformity with written information
relating to such Indemnified Person furnished to the Company by or on
behalf of such Indemnified Person expressly for use therein; provided,
further, however, that the foregoing indemnity agreement with respect
to any Prospectus shall not inure to the benefit of any Indemnified
Person who failed to deliver a final Prospectus or an amendment or
supplement thereto (provided by the Company to the several Indemnified
Persons in the requisite quantity and on a timely basis to permit
proper delivery on or prior to the relevant transaction date) to the
person asserting any losses, claims, damages and liabilities and
judgments caused by any untrue statement or alleged untrue statement
of a material fact contained in any Prospectus, or caused by any
omission or alleged omission to state therein 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,
if such material misstatement or omission or alleged material
misstatement or omission was cured in the final Prospectus or an
amendment or supplement thereto.
(b) Indemnification by the Holders and any Agents and Underwriters.
Each Electing Holder agrees, as a consequence of the inclusion of any of such
holder's Registrable Securities in any Shelf Registration Statement, and each
underwriter, selling agent or other securities professional, if any, which
facilitates the disposition of Registrable Securities shall agree, as a
consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors, officers who sign such Shelf Registration Statement and each person,
if any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which the Company or such other persons 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 an untrue statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement or Prospectus, 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, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information relating to such holder, underwriter,
selling agent or other securities professional furnished to the Company by or on
behalf of such holder, underwriter, selling agent or other securities
professional expressly for use therein and (ii) reimburse the Company and its
directors and officers who sign such Shelf Registration Statement for any legal
or other expenses reasonably incurred by the Company and such directors and
officers in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) of this Section 5 of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 5, notify
such indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve
12
it from any liability which it may have to any indemnified party otherwise than
under this Section 5. In case any such action shall be brought against any
indemnified party and it shall notify an indemnifying party of the commencement
thereof, such indemnifying party shall be entitled to participate therein and,
to the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel 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, such indemnifying party shall not be liable to such
indemnified party under this Section 5 for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, which consent will not be unreasonably withheld, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) 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) Contribution. If the indemnification provided for in this Section
5 is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) of this Section 5 in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which 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 such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information about such
indemnifying party or indemnified party supplied by such indemnifying party or
by such indemnified party, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation (even if
the Electing Holders or any underwriters, selling agents or other securities
professionals or all of them were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the equitable
considerations referred to in this Section 5(d). The amount paid or payable by
an indemnified party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. 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. The obligations of the Electing
Holders and any
13
underwriters, selling agents or other securities professionals in this Section
5(d) to contribute shall be several in proportion to the percentage of
Registrable Securities registered or underwritten, as the case may be, by them
and not joint.
(e) Notwithstanding any other provision of this Section 5, in no event
will any (i) Electing Holder be required to undertake liability to any person
under this Section 5 for any amounts in excess of the dollar amount of the
proceeds to be received by such holder from the sale of such holder's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Shelf Registration Statement and (ii)
underwriter, selling agent or other securities professional be required to
undertake liability to any person hereunder for any amounts in excess of the
discount, commission or other compensation payable to such underwriter, selling
agent or other securities professional with respect to the Registrable
Securities underwritten by it and distributed to the public.
(f) The obligations of the Company under this Section 5 shall be in
addition to any liability that the Company may otherwise have to any Indemnified
Person and the obligations of any Indemnified Person under this Section 5 shall
be in addition to any liability that such Indemnified Person may otherwise have
to the Company. The remedies provided in this Section 5 are not exclusive and
shall not limit any rights or remedies that may otherwise be available to an
indemnified party at law or in equity.
6. Underwritten Offering. Any holder of Registrable Securities who desires
to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided, however, the Company shall not be required to
facilitate an underwritten offering pursuant to the Shelf Registration Statement
by any holders unless the offering relates to at least 50% of the Securities
sold pursuant to the Securities Purchase Agreement. In any such underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by, and the underwriting
arrangements with respect thereto (including the size of the offering) will be
approved by, the holders of a majority of the Registrable Securities to be
included in such offering; provided, however, that such investment bankers and
managers and underwriting arrangements must be reasonably satisfactory to the
Company. No holder may participate in any underwritten offering contemplated
hereby unless (a) such holder agrees to sell such holder's Registrable
Securities to be included in the underwritten offering in accordance with any
approved underwriting arrangements, (b) such holder completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
approved underwriting arrangements and (c) if such holder is not then an
Electing Holder, such holder returns a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a) hereof within a
reasonable amount of time before such underwritten offering. The holders
participating in any underwritten offering shall be responsible for any
underwriting discounts and commissions and fees and, subject to Section 4
hereof, expenses of their own counsel. The Company shall pay all expenses
customarily borne by issuers, including but not limited to filing fees, the fees
and disbursements of its counsel and independent public accountants and any
printing expenses incurred in connection with such underwritten offering.
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7. Rules 144. The Company agrees, for so long as any Registrable Securities
remain outstanding and during any period in which the Company is subject to
Section 13 or Section 15(d) of the Exchange Act, to make all filings required
thereby in a timely manner in order to permit resales of such Registrable
Securities pursuant to Rule 144 of the Securities Act.
8. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under this Agreement may result in
material irreparable injury to the Purchasers or the holders of Registrable
Securities 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, the Purchasers or any holder of Registrable Securities may
obtain such relief as may be required to specifically enforce the Company's
obligations hereunder. The Company further agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) Other Registration Rights. 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 of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
Without the consent of the holders of 50% of the Registrable Securities, the
Company shall not permit any securities other than the Registrable Securities to
be included in any Shelf Registration Statement hereunder.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 2
hereof and this Section 8(c)(i), the Company has obtained the written consent of
holders of all outstanding Registrable Securities and (ii) in the case of all
other provisions hereof, the Company has obtained the written consent of holders
of a majority of the Registrable Securities (excluding Registrable Securities
held by the Company or its Affiliates). Notwithstanding the foregoing, a waiver
or consent to departure from the provisions hereof that relates exclusively to
the rights of holders whose Registrable Securities are being sold pursuant to a
Shelf Registration Statement and that does not affect directly or indirectly the
rights of other holders of Registrable Securities may be given by the holders of
a majority of Registrable Securities being sold by such holders pursuant to such
Shelf Registration Statement.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided in the Securities Purchase
Agreement.
(e) Parties in Interest. The parties to this Agreement intend that all
holders of Registrable Securities shall be entitled to receive the benefits of
this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities that are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any holder from time to time of the Registrable
Securities to
15
the aforesaid extent. In the event that any transferee of any holder of
Registrable Securities shall acquire Registrable Securities, in any manner,
whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent. Anything in this Agreement to the
contrary notwithstanding, the parties hereto acknowledge and agree that (i) in
connection with the transactions contemplated by the Purchase Agreement, the
Company is issuing to Xxxx Capital Partners, LLC ("RCP") a warrant to purchase
Common Stock, (ii) the shares of Common Stock issuable upon exercise of the
Warrant shall, for all purposes, be deemed to be, and shall be treated as,
Registrable Securities hereunder, and (iii) RCP shall be an express third party
beneficiary of this Agreement and shall be entitled to the benefits of, and to
enforce the provisions of, this Agreement to the same extent as if it were a
Purchaser or an Electing Holder, as defined herein.
(f) 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.
(g) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning, construction
or interpretation hereof.
(h) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Arizona without giving effect to
provisions relating to conflicts of law to the extent the application of the
laws of another jurisdiction would be required thereby.
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
(j) Survival. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Electing Holder, any director, officer or partner of such holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or
any controlling person of any of the foregoing, and shall survive the transfer
and registration of the Registrable Securities of such holder.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter hereof.
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There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein, with respect to the registration rights
granted with respect to the Registrable Securities. This Agreement supersedes
all prior agreements and understandings between the parties with respect to such
subject matter.
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Please confirm by signing in the space provided below that the
foregoing correctly sets forth the agreement between the Company and you.
Very truly yours,
INPLAY TECHNOLOGIES, INC.
By:
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Xxxxxx X. Xxxxxx, President
REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE
Accepted and Agreed
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Name (Print)
By:
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Name:
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Title:
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Date:
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Address:
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Telephone:
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Facsimile:
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