EXHIBIT 4.12.1
ANNEX IV
TO
SECURITIES PURCHASE
AGREEMENT
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of December 30th, 1999 (this
"Agreement"), is made by and between Global MAINTECH Corp., a Minnesota
corporation (the "Company"), and the each entity named on the signature page
hereto (individually referred to as the "Initial Investor" and collectively
referred to as the "Initial Investors").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the Securities
Purchase Agreement, dated as of December 30, 1999, between the Initial Investors
and the Company (the "Securities Purchase Agreement"; capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Securities Purchase Agreement), the Company has agreed to issue and sell to the
Initial Investors an aggregate of up to 2,500 shares of Series E Cumulative
Convertible Redeemable Preferred Stock, no par value, $1,000 stated value (the
"Preferred Stock," which term, as used herein shall have the meaning ascribed to
it in the Securities Purchase Agreement); and
WHEREAS, the Company has agreed to issue the Warrants to the Initial
Investors in connection with the issuance of the Preferred Stock; and
WHEREAS, the Preferred Stock is convertible into shares of Common Stock
(the "Conversion Shares") upon the terms and subject to the conditions contained
in the Certificate of Designation; and
WHEREAS, the Warrants to be issued to the Initial Investors may be
exercised for the purchase of shares of Common Stock (the "Warrant Shares") upon
the terms and conditions of the Warrants; and
WHEREAS, to induce the Initial Investors to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Conversion Shares and the Warrant Shares;
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 Initial
Investor hereby agree as follows:
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1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
(a) "Investors" means the Initial Investors and any permitted
transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof.
(b) "Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for disclosure
in a registration statement, which shall be evidenced by determinations in
good faith by the Board of Directors of the Company that disclosure of such
information in the registration statement would be detrimental to the
business and affairs of the Company; or (ii) any material engagement or
activity by the Company which would, in the good faith determination of the
Board of Directors of the Company, be adversely affected by disclosure in a
registration statement at such time, which determination shall be
accompanied by a good faith determination by the Board of Directors of the
Company that the registration statement would be materially misleading
absent the inclusion of such information.
(c) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act 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 by the United
States Securities and Exchange Commission (the "SEC").
(d) "Registrable Securities" means the Conversion Shares and the
Warrant Shares.
(e) "Registration Statement" means a registration statement of the
Company under the Securities Act.
2. Registration.
(a) Mandatory Registration. The Company shall prepare and file with
the SEC, as soon as possible after the Closing Date, but no later than
thirty (30) days following the Closing Date, a Registration Statement on
Form SB-2, registering for resale by the Investors all of the Registrable
Securities, but in no event less than two hundred percent (200%) of the
aggregate number of shares into (i) which the Preferred Stock would be
convertible at the time of filing of the Registration Statement (assuming
for such purposes that all shares of Preferred Stock had been eligible to
be converted, and had been converted, into Conversion Shares in accordance
with their terms, whether or not such eligibility or conversion had in fact
occurred as of such date), and (ii) which would be issued upon exercise of
all of the Warrants at the time of filing of the Registration Statement
(assuming for such purposes that all such Warrants had been eligible to be
exercised and had been exercised in accordance with their terms, whether or
not such eligibility or exercise had in fact occurred as of such date). The
Registration Statement shall also state that, in accordance with Rule 416
and 457 under the Securities Act, it also covers such indeterminate number
of additional
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shares of Common Stock as may become issuable upon conversion of the
Preferred Stock and the exercise of the Warrants (and the Existing
Warrants) to prevent dilution resulting from stock splits, or stock
dividends. The Company will use its best efforts to cause the Registration
Statement to be declared effective no later than one hundred twenty days
(120) days after the Closing Date. If at any time the number of shares of
Common Stock into which the Preferred Stock may be converted and which
would be issued upon exercise of the Warrants equals more than seventy five
percent (75%) of the aggregate number of shares of Common Stock then
registered, the Company shall, within ten (10) business days after receipt
of a written notice from any Investor, either (i) further amend the
Registration Statement filed by the Company pursuant to the preceding
sentence, if such Registration Statement has not been declared effective by
the SEC at that time, to register 200% of the aggregate of all shares of
Common Stock into which the Preferred Stock may then or in the future be
converted and which would be issued currently or in the future upon
exercise of the Warrants, or (ii) if such Registration Statement has been
declared effective by the SEC at that time, file with the SEC an additional
Registration Statement on Form SB-2, as may be appropriate, to register (A)
200% of the aggregate shares of Common Stock into which the unconverted
Preferred Stock may then or in the future be converted and which would be
issued currently or in the future upon exercise of the unexercised
Warrants, less (B) the aggregate number of shares of Common Stock already
registered which have not been issued upon conversions of Preferred Stock
or the exercise of Warrants. The Registration Statement shall not include
any shares other than the Registrable Securities, and certain other shares
that the Company is obligated to Register as set forth in Schedule 5(b),
without the consent of the Investors.
(b) Payments by the Company.
(i) If the Registration Statement covering the Registrable
Securities is not filed with the SEC on or before thirty (30) days
after the Closing Date (the "Required Filing Date"), then the Company
shall pay each Investor a late filing penalty (collectively "Late
Filing Penalties"), (i) on the first day after the Required Filing
Date, an amount equal to two percent (2%) of the purchase price paid
pursuant to the Securities Purchase Agreement (the "Purchase Price")
for the Preferred Stock then held by each such Investor on such date,
and (ii) on each subsequent monthly anniversary of the Required Filing
Date, if the Registration Statement has not been filed in proper form
on or before such date, an amount equal to three percent (3%) of the
Purchase Price for the Preferred Stock held by each such Investor on
each such subsequent monthly anniversary date.
(ii) If the Registration Statement covering the Registrable
Securities is not effective within the earlier of (a) five (5) days
after notice by the SEC that it may be declared effective (including
the issuance by the SEC of a "no review letter"), or (b) one hundred
twenty (120) days following the Closing Date (the "Required Effective
Date"), then the Company shall pay each Investor a late effective date
penalty (collectively "Late Effective Date Penalties")(sometimes Late
Filing Penalties and Late Effective Penalties are collectively
referred to as "Late Penalties"), (i) on the first day after the
Required Effective Date, an amount equal to three percent (2%) of the
Purchase Price for the Preferred Stock then held by each such Investor
on such date and (ii) on each subsequent monthly anniversary of the
Required Effective Date, if the Registration Statement has not been
declared effective on or before such date, an amount equal to three
percent (3%) of the
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Purchase Price for the Preferred Stock held by each such Investor on
each such subsequent monthly anniversary date.
(iii) By way of illustration and not in limitation of the
foregoing, assuming a Closing Date of February 3, 2000 (X) if the
Registration Statement is timely filed but is not declared effective
until July 15, 2000 (assuming for the purpose of this example that the
SEC has not previously provided notice that it may be declared
effective), the aggregate Late Effective Date Penalty will equal 5%
percent of the Purchase Price (2% on June 4, the 120th day after the
Closing Date, plus 3% on July 2) or (Y) if the Registration is filed
on April 9 and is not declared effective until June 15, 2000 (assuming
for the purpose of this example that the SEC has not previously
provided notice that it may be declared effective), the aggregate Late
Filing Penalty will equal 8% of the Purchase Price (2% on March 5, the
30th day after the Closing Date, plus 3% on April 4 and May 4) and the
aggregate Late Effective Date Penalty will equal 2% percent of the
Purchase Price (2% on June 4, the 120th day after the Closing Date).
(iv) Additionally, if the Registration Statement is not filed
within sixty (60) days from the Closing Date, each Investor may, at
its option, require the Company to redeem the Preferred Shares in
full, within three (3) days, in cash, in accordance with Section 6(b)
of the Certificate of Designation.
(v) Late Penalties will be payable to the Investor by the Company
in cash or other immediately available funds on the date such Late
Penalty is incurred.
(vi) The parties acknowledge that the damages which may be
incurred by the Investors if the Registration Statement is not filed
by the Required Filing Date or if the Registration Statement has not
been declared effective by the Required Registration Date may be
difficult to ascertain. The parties agree that the Late Penalties
represent a reasonable estimate on the part of the parties, as of the
date of this Agreement, of the amount of such damages. The payment of
the Late Penalties to the Investors shall not limit the Investors'
other rights and remedies hereunder or under any other document
entered into in connection herewith.
(vii) Notwithstanding the foregoing, the amounts payable by the
Company pursuant to this provision shall not be payable to the extent
any delay in the effectiveness of the Registration Statement occurs
because of an act of, or a failure to act or to act timely by the
Investors or their counsel if the Company timely forwards to counsel
any required documents or in the event all of the Registrable
Securities may be sold pursuant to Rule 144 or another available
exemption under the Act.
3. Obligations of the Company. In connection with the registration of the
Registrable Securities, the Company shall do each of the following.
(a) Prepare promptly, and file with the SEC by the Required Filing
Date, the Registration Statement with respect to not less than the number
of Registrable Securities provided in Section 2(a) above, and thereafter
use its reasonable best efforts to cause each Registration Statement
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relating to Registrable Securities to become effective by the Required
Effective Date and keep the Registration Statement effective at all times
until the earliest (the "Registration Period") of (i) the date that is two
(2) years after the Closing Date, (ii) the date when the Investors may sell
all Registrable Securities under Rule 144 or (iii) the date the Investors
no longer own any of the Registrable Securities, 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;
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement
and the prospectus used in connection with the Registration Statement as
may be necessary to keep the Registration effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of
in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in the Registration Statement;
(c) The Company shall permit a single firm or counsel designated by
the Investors to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time (but not less than three
(3) business days) prior to their filing with the SEC, and not file any
document in a form to which such counsel reasonably objects.
(d) Notify the Investors, their counsel and managing underwriters, if
any, immediately (and, in the case of (i)(A) below, not less than five (5)
days prior to such filing) and (if requested by any such Person) confirm
such notice in writing no later than one (1) Business Day following the day
(i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to the Registration Statement is proposed to be filed; (B)
whenever the Commission notifies the Company whether there will be a
"review" of such Registration Statement; (C) whenever the Company receives
(or representatives of the Company receive on its behalf) any oral or
written comments from the Commission in respect of a Registration Statement
(copies or, in the case of oral comments, summaries of such comments shall
be promptly furnished by the Company to the Investors); and (D) with
respect to the Registration Statement or any post-effective amendment, when
the same has become effective; (ii) of any request by the Commission or any
other Federal or state governmental authority for amendments or supplements
to the Registration Statement or Prospectus or for additional information;
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) if at any time any of the representations or warranties of
the Company contained in any agreement (including any underwriting
agreement) contemplated hereby ceases to be true and correct in all
material respects; (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (vi) of the occurrence of any event that to the best knowledge
of the Company makes any statement made in the
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Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement, Prospectus or
other documents so that, in the case of the Registration Statement or the
Prospectus, as the case may be, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. In addition, the
Company shall furnish the Investors with copies of all intended written
responses to the comments contemplated in clause (C) of this Section 3(d)
not later than one (1) Business Day in advance of the filing of such
responses with the Commission so that the Investors shall have the
opportunity to comment thereon.
(e) Furnish to each Investor whose Registrable Securities are included
in the Registration Statement and its legal counsel identified to the
Company, (i) promptly after the same is prepared and publicly distributed,
filed with the SEC, or received by the Company, one (1) copy of the
Registration Statement, each preliminary prospectus and prospectus, and
each amendment or supplement thereto, and (ii) such number of copies of a
prospectus, and all amendments and supplements thereto and such other
documents, as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor;
(f) As promptly as practicable after becoming aware of such event,
notify each Investor of the happening of any event of which the Company has
knowledge, as a result of which the prospectus included in the 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 use its best efforts
promptly to prepare a supplement or amendment to the Registration Statement
or other appropriate filing with the SEC to correct such untrue statement
or omission, and deliver a number of copies of such supplement or amendment
to each Investor as such Investor may reasonably request;
(g) As promptly as practicable after becoming aware of such event,
notify each Investor who holds Registrable Securities being sold (or, in
the event of an underwritten offering, the managing underwriters) of the
issuance by the SEC of a Notice of Effectiveness or any notice of
effectiveness or any stop order or other suspension of the effectiveness of
the Registration Statement at the earliest possible time;
(h) Notwithstanding the foregoing, if at any time or from time to time
after the date of effectiveness of the Registration Statement, the Company
notifies the Investors in writing of the existence of a Potential Material
Event, the Investors shall not offer or sell any Registrable Securities, or
engage in any other transaction involving or relating to the Registrable
Securities, from the time of the giving of notice with respect to a
Potential Material Event until such Investor receives written notice from
the Company that such Potential Material Event either has been disclosed to
the public or no longer constitutes a Potential Material Event; provided,
however, that the Company may not so suspend the right to such holders of
Registrable Securities for more than two twenty (20) day periods in the
aggregate during any 12-month period ("Suspension Period") with at least a
ten (10)
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business day interval between such periods, during the periods the
Registration Statement is required to be in effect;
(i) Use its reasonable efforts to secure or maintain, as applicable,
NASDAQ/OTC Bulletin Board authorization and quotation for such Registrable
Securities and, without limiting the generality of the foregoing, to
arrange for at least two market makers to register with the National
Association of Securities Dealers, Inc. ("NASD") as such with respect to
such Registrable Securities;
(j) Provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the effective date of
the Registration Statement;
(k) Cooperate with the Investors who hold Registrable Securities (or,
subject to receipt by the Company of appropriate notice and documentation,
as may be required by the Securities Purchase Agreement, the Certificate of
Designations, the Warrants or this Agreement, securities convertible into
Registrable Securities) being offered to facilitate the timely preparation
and delivery of certificates for the Registrable Securities to be offered
pursuant to the Registration Statement and enable such certificates for the
Registrable Securities to be in such denominations or amounts as the case
may be, as the Investors may reasonably request, and, within five (5)
business days after a Registration Statement which includes Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and
shall cause legal counsel selected by the Company to deliver, to the
transfer agent for the Registrable Securities (with copies to the Investors
whose Registrable Securities or securities convertible into Registrable
Securities are included in such Registration Statement) an appropriate
instruction and opinion of such counsel; provided, however, that nothing in
this subparagraph (j) shall be deemed to waive any of the provisions
regarding the conditions or method of conversion of Preferred Stock or
exercise of Warrants into Registrable Securities; and
(l) Take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities
pursuant to the Registration Statement.
4. Obligations of the Investors. In connection with the registration of the
Registrable Securities, each Investor shall have the following obligations:
(a) As 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 Investor, such Investor 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. At least five (5) days prior to the first anticipated
filing date of the Registration Statement, the Company shall notify each
Investor of the information the Company requires from each such Investor
(the "Requested Information") if such Investor elects to have any of such
Investor's Registrable Securities included in the Registration Statement.
If at least two (2) business days prior to the filing date the Company has
not received the Requested Information from an Investor (a "Non-
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Responsive Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive Investor;
(b) To cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Investor has notified the Company in
writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statement; and
(c) Upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 3(e) or 3(f), above, such
Investor shall immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Investor's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 3(e) or 3(f) and, if so
directed by the Company, such Investor shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in such Investor's possession, of
the prospectus covering such Registrable Securities current at the time of
receipt of such notice.
5. Expenses of Registration. (a) All reasonable expenses (other than
underwriting discounts and commissions of each Investor and legal fees of
counsel to each Investor) incurred in connection with registrations, filings or
qualifications pursuant to Section 3, including, without limitation, all
registration, listing, and qualifications fees, printers and accounting fees,
the fees and disbursements of counsel for the Company, and a fee for a single
counsel for the Investors not exceeding $3,500, shall be borne by the Company.
(b) Except as and to the extent specifically set forth in Schedule
5(b) attached hereto, neither the Company nor any of its subsidiaries has,
as of the date hereof, nor shall the Company nor any of its subsidiaries,
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 Investors herein or otherwise conflicts with the provisions hereof.
Except as and to the extent specifically set forth in Schedule 5(b)
attached hereto, neither the Company nor any of its subsidiaries has
previously entered into any agreement granting any registration rights with
respect to any of its securities to any person or entity. Without limiting
the generality of the foregoing, without the written consent of the
Investors of a majority of the then outstanding Registrable Securities, the
Company shall not grant to any person the right to request the Company to
register any securities of the Company under the Securities Act unless the
rights so granted are subject in all respects to the prior rights in full
of the Investors set forth herein, and are not otherwise in conflict or
inconsistent with the provisions of this Agreement.
6. Indemnification. In the event any Registrable Securities are included in
a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Investor who holds such Registrable Securities, the
directors, if any, of such Investor, the officers, if any, of such
Investor, each person, if any, who controls any Investor within the
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meaning of the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (each, an "Indemnified Person" or "Indemnified
Party"), against any losses, claims, damages, liabilities or expenses
(joint or several) incurred (collectively, "Claims") to which any of them
may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration
Statement, or any post-effective amendment thereof, or any prospectus
included therein: (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any post-effective
amendment thereof or 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, (ii) any untrue statement or alleged
untrue statement of a material fact 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 or (iii) any violation or alleged violation by
the Company of the Securities Act, the Exchange Act, any state securities
law or any rule or regulation under the Securities Act, the Exchange Act or
any state securities law (the matters in the foregoing clauses (i) through
(iii) being, collectively, "Violations"). Subject to clause (b) of this
Section 6, the Company shall reimburse the Investors, 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) shall not (I) apply to a Claim arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any 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) hereof; (II) be available to the extent such Claim is based on
a failure of the Investor to deliver or cause to be delivered the
prospectus made available by the Company; or (III) 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. Each Investor will indemnify the Company and its officers,
directors and agents against any claims arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company, by or on behalf of such Investor,
expressly for use in connection with the preparation of the Registration
Statement, subject to such limitations and conditions as are applicable to
the Indemnification provided by the Company to this Section 6. 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 Investors
pursuant to Section 9.
(b) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), 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
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similarly noticed, to 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. In case any such action is
brought against any Indemnified Person or Indemnified Party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent
that it may wish, jointly with any other indemnifying party similarly
notified, assume the defense thereof, subject to the provisions herein
stated and after notice from the indemnifying party to such Indemnified
Person or Indemnified Party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such Indemnified
Person or Indemnified Party under this Section 6 for any reasonable legal
or other reasonable out-of-pocket expenses subsequently incurred by such
Indemnified Person or Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation, unless the
indemnifying party shall not pursue the action of its final conclusion. The
Indemnified Person or Indemnified Party shall have the right to employ
separate counsel in any such action and to participate in the defense
thereof, but the fees and reasonable out-of-pocket expenses of such counsel
shall not be at the expense of the indemnifying party if the indemnifying
party has assumed the defense of the action with counsel reasonably
satisfactory to the Indemnified Person or Indemnified Party. 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. 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 such expense,
loss, damage or liability is incurred and is due and payable.
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 (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6; (b) 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 such fraudulent misrepresentation; and (c)
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 Exchange Act. With a view to making available to the
Investors 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
Investors to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) use its best efforts to 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; and
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(c) furnish to each Investor so long as such Investor 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 Investors to sell such securities pursuant to Rule
144 without registration.
9. Assignment of the Registration Rights. The rights to have the Company
register Registrable Securities pursuant to this Agreement shall be
automatically assigned by an Investor to any transferee of the Registrable
Securities (or all or any portion of any Preferred Stock of the Company which is
convertible into such securities) permitted or allowable by the terms of the
Securities Purchase Agreement only if: (a) such Investor 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, (b)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (i) the name and address of such transferee or
assignee and (ii) the securities with respect to which such registration rights
are being transferred or assigned, (c) 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, and (d) at or before the time the Company received the written notice
contemplated by clause (b) of this sentence the transferee or assignee agrees in
writing with or in favor of the Company to be bound by all of the provisions
contained herein, a copy of which shall be provided to the Company. The copies
referred to in clauses (a) and (d) of the immediately preceding sentence may be
redacted to delete certain financial and other details of the transaction
between the Investor and its transferee if the same is included in the document
to be provided to the Company. In the event of any delay in filing or
effectiveness of the Registration Statement as a result of such assignment, the
Company shall not be liable for any damages arising from such delay, or the
payments set forth in Section 2(c) hereof.
10. Amendment of Registration Rights. Any provision of each such 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 Investors who hold collectively eighty (80%)
percent of the Preferred Shares. Any amendment or waiver effected in accordance
with this Section 10 shall be binding upon each Investor and the Company.
11. Miscellaneous.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities 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.
11
(b) Any notice or communication required or permitted by this
Agreement shall be given in writing addressed as follows:
If to Company: Global MAINTECH Corp.
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
ATTN: CEO
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxxx LLP
Pillsbury Center South
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Investors: Xxxx, LLC
c/o Thomson Kernaghan & Co.
000 Xxx Xxxxxx, Xxxxx 0000, 10th Fl.
Xxxxxxx, Xxxxxxx X0X 0X0
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to: Xxxxxxx X. Xxxxxxxxx, Esq.
Law Offices of Xxxxxxx X. Xxxxxxxxx
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
All notices shall be served personally by telecopy, by telex, by overnight
express mail service or other overnight courier, or by first class
registered or certified mail, postage prepaid, return receipt requested. If
served personally, or by telecopy, notice shall be deemed delivered upon
receipt (provided that if served by telecopy, sender has written
confirmation of delivery); if served by overnight express mail or overnight
courier, notice shall be deemed delivered forty-eight (48) hours after
deposit; and if served by first class mail, notice shall be deemed
delivered seventy-two (72) hours after mailing. Any party may give written
notification to the other parties of any change of address for the sending
of notices, pursuant to any method provided for herein.
(c) 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.
12
(d) This Agreement shall be governed by and interpreted in accordance
with the laws of the State of California for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Any litigation based thereon, or arising
out of, under, or in connection with, this agreement or any course of
conduct, course of dealing, statements (whether oral or written) or actions
of the Company or Purchaser shall be brought and maintained exclusively in
the state or Federal courts of the State of California, sitting in the City
of Los Angeles. The Company hereby expressly and irrevocably submits to the
jurisdiction of the state and federal Courts of the State of California for
the purpose of any such litigation as set forth above and irrevocably
agrees to be bound by any final judgment rendered thereby in connection
with such litigation. The Company further irrevocably consents to the
service of process by registered mail, postage prepaid, or by personal
service within or without the State of California. The Company hereby
expressly and irrevocably waives, to the fullest extent permitted by law,
any objection which it may have or hereafter may have to the laying of
venue of any such litigation brought in any such court referred to above
and any claim that any such litigation has been brought in any inconvenient
forum. To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid
of execution or otherwise) with respect to itself or its property, the
Company hereby irrevocably waives such immunity in respect of its
obligations under this Agreement and the related agreements entered into in
connection herewith.
(e) 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 or the validity or enforceability of this Agreement in any other
jurisdiction.
(f) Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(h) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning thereof.
(i) This Agreement may be executed in one or more 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 telephone line facsimile
transmission of a copy of this Agreement bearing the signature of the party
so delivering this Agreement.
(j) The Company acknowledges that any failure by the Company to
perform its obligations under Section 3(a) hereof, or any delay in such
performance could result in loss to the Investors, and the Company agrees
that, in addition to any other liability the Company may have by
13
reason of such failure or delay, the Company shall be liable for all direct
damages caused by any such failure or delay, unless the same is the result
of force majeure. Neither party shall be liable for consequential damages.
(k) This Agreement, the Securities Purchase Agreement and the other
documents referenced therein constitute the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein. This Agreement supersedes all prior agreements
and understandings among the parties hereto with respect to the subject
matter hereof. This Agreement may be amended only by an instrument in
writing signed by the party to be charged with enforcement thereof.
(l) Any default by an individual Investor hereunder or any related
agreement, including, without limitation, the Securities Purchase
Agreement, shall not be deemed a default by any other Investor and shall
not excuse the Company's performance hereunder or thereunder with respect
to the non-defaulting Investors.
(m) In the event of any action for breach of or to enforce or declare
rights under any provision of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees and costs, to be paid by the losing
party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
14
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
Global MAINTECH Corp., a Minnesota
corporation
By:
Name:
Title:
Xxxx, LLC, a Cayman Islands limited
liability company
By:
Manager
Greenfield Capital Partners, LLC, a
Delaware limited liability company
By:
Manager
Carbon Mesa, LLC, a Bahamian limited
liability company
By:
Manager
