Exhibit 10.19
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
___________, 2002, by and among ALPHA VIRTUAL, INC., a Delaware Corporation,
with headquarters located at 00000 Xxxxxxx Xxxxxxxxx Xxxxx 000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000 (the "Company"), and Manhattan Capital Partners LLC, a
California Limited Liability Company, (the "Consultant").
WHEREAS:
A. In connection with a Consulting Agreement by and between the parties
hereto of even date herewith (the "Consulting Agreement"), the Company has
agreed, upon the terms and subject to the conditions of the Consulting
Agreement, to issue and sell to the Consultants warrants (the "Warrant") to
purchase 2,000,000 shares of the Company's common stock, par value $0.001 per
share (the "Common Stock) ("Warrant Shares").
B. To induce the Consultants to execute and deliver the Consulting
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 "1933 Act"), and
applicable state securities laws.
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
Consultant hereby agree as follows:
1. DEFINITIONS
-----------
As used in this Agreement, the following terms shall have the
following meanings:
a. "Investor" means the Consultant and any transferee or
assignee thereof to whom the Consultant assigns its rights under this Agreement
and who agrees to become bound by the provisions of this Agreement in accordance
with Section 8.
b. "Person" means a corporation, a limited liability company,
an association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.
c. "Register," "registered," and "registration" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis ("Rule 415"), and the declaration or
ordering of effectiveness of such Registration Statement(s) by the United States
Securities and Exchange Commission (the "SEC").
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d. "Registerable Securities" means the Warrant Shares issued
or issuable upon the exercise of the Warrant and any shares of capital stock
issued or issuable with respect to the Warrant Shares or the Warrant as a result
of any stock split, stock dividend, recapitalization, exchange or similar event
or otherwise. Notwithstanding the foregoing, Registerable Securities shall not
include any securities sold by a person to the public either pursuant to a
registration statement or Rule 144 of the 1933 Act.
e. "Registration Statement" means one or more registration
statements of the Company under the 1933 Act registering all of the Registrable
Securities.
2. REGISTRATION
------------
a. Mandatory Registration. The Company shall prepare, and, as
soon as practicable but in no event later than 45 days from the date of Closing
(the "Filing Deadline"), file with the SEC a Registration Statement or
Registration Statements (as necessary) on Form SB-2 covering the resale of all
of the Registerable Securities. The Registration Statement, to the extent
allowable under the 1933 Act, shall state that such Registration Statement also
covers such indeterminate number of additional shares of Common Stock as may
become issuable upon exercise of the Warrant to prevent dilution resulting from
stock splits, stock dividends or similar transactions. In the event that Form
SB-2 is unavailable for such a registration, the Company shall use such other
form as is available for such a registration. The Company shall use its best
efforts to cause such Initial Registration Statement to be declared effective by
the SEC as soon as practicable.
b. Legal Counsel. Subject to Section 5 hereof, the Consultant
shall have the right to select one legal counsel to review and oversee any
offering pursuant to this Section 2 ("Legal Counsel") at the expense of the
Company, which expense shall not exceed $5,000.00. The Company shall reasonably
cooperate with Legal Counsel in performing the Company's obligations under this
Agreement.
3. RELATED OBLIGATIONS
-------------------
At such time as the Company is obligated to file a
Registration Statement with the SEC pursuant to Section 2(a), the Company will
use its best efforts to effect the registration of the Registerable Securities
in accordance with the intended method of disposition thereof; and pursuant
thereto, the Company shall have the following obligations:
a. The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the applicable Registerable Securities
(as soon as practicable but in no event later than the applicable Filing
Deadline) and use its best efforts to cause such Registration Statement relating
to the Registerable Securities to become effective as soon as practicable after
such filing. The Company shall keep such Registration Statement effective
pursuant to Rule 415 at all times until the earlier of (i) the date as of which
the Investors may (in the reasonable opinion of Legal Counsel) sell all of the
Registerable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) promulgated under the 1933 Act (or successor
thereto) or (ii) the date on which the Investors shall have sold all the
Registerable Securities covered by such Registration Statement (the
"Registration Period"), which Registration Statement (including any amendments
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or supplements thereto and prospectuses contained therein) (i) shall comply in
all material respects with the requirements of the 1933 Act and the rules and
regulations of the SEC promulgated thereunder and (ii) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading. The financial statements
of the Company included in the Registration Statement or incorporated by
reference therein will comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC applicable with respect thereto. Such financial statements shall be
prepared in accordance with U.S. generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and shall fairly present in
all material respects the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to immaterial year-end adjustments). The term
"best efforts" shall mean, among other things, that the Company shall submit to
the SEC, within two business days after the Company learns that no review of a
particular Registration Statement will be made by the staff of the SEC or that
the staff has no further comments on the Registration Statement, as the case may
be, a request for acceleration of effectiveness of such Registration Statement
to a time and date not later than 48 hours after the submission of such request.
b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registerable Securities of the Company covered by such
Registration Statement until such time as all of such Registerable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to
this Section 3(b)) by reason of the Company filing a report on Form 10-KSB, Form
10-QSB or Form 8-K or any analogous report under the Securities Exchange Act of
1934, as amended (the "1934 Act"), the Company shall have incorporated such
report by reference into the Registration Statement, if applicable, or shall
file such amendments or supplements with the SEC on the same day on which the
1934 Act report is filed which created the requirement for the Company to amend
or supplement the Registration Statement.
c. The Company shall (a) permit Legal Counsel to review and
comment upon (i) the Registration Statement at least seven (7) days prior to its
filing with the SEC and (ii) all other Registration Statements and all
amendments and supplements to all such Registration Statements (except for
Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current
Reports on Form 8-K and any similar or successor reports) within a reasonable
number of days prior to the their filing with the SEC and (b) not file any
document in a form to which Legal Counsel reasonably objects. The Company shall
not submit a request for acceleration of the effectiveness of a Registration
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Statement or any amendment or supplement thereto without the prior approval of
Legal Counsel, which consent shall not be unreasonably withheld. The Company
shall furnish to Legal Counsel, without charge, (i) any correspondence from the
SEC or the staff of the SEC to the Company or its representatives and
correspondence to the SEC from the Company relating to any Registration
Statement, (ii) promptly after the same is prepared and filed with the SEC, one
copy of any Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits and (iii) upon the effectiveness of any Registration
Statement, one copy of the prospectus included in such Registration Statement
and all amendments and supplements thereto. The Company shall reasonably
cooperate with Legal Counsel in performing the Company's obligations pursuant to
this Section 3.
d. The Company shall furnish to each Investor whose
Registerable Securities are included in any Registration Statement, without
charge, (i) promptly after the same is prepared and filed with the SEC, at least
one copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, all exhibits and each preliminary prospectus, (ii) upon the
effectiveness of any such Registration Statement, five (5) copies of the
prospectus included in such Registration Statement and all amendments and
supplements thereto (or such other number of copies as such Investor may
reasonably request) and (iii) such other documents, including copies of any
preliminary or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the Registerable
Securities owned by such Investor. In responding to comments from the staff of
the SEC, the Company shall cooperate with any Investor that notifies the Company
that it desires to be consulted with respect to such process. Such cooperation
shall solely consist of providing any such Investor with: a reasonable
opportunity to comment on the text and substance of proposed written responses
to the extent such comment relates to such investor or its plan of distribution
of the Registrable Securities. To the extent that issues raised by the staff of
the SEC have an impact primarily on any such Investor rather than the Company,
the Company shall give reasonable deference to such Investor's requests with
respect to the process and substance of responses with respect to such issues.
e. The Company shall use its best efforts to (i) register and
qualify the Registerable Securities covered by a Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in the United
States as any Investor reasonably requests, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registerable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (w) make any change to its certificate of incorporation or by-laws,
which in each case the Board of Directors of the Company determines to be
contrary to the best interests of the Company and its stockholders, (x) qualify
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(e), (y) subject itself to general taxation in any
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such jurisdiction, or (z) file a general consent to service of process in any
such jurisdiction. The Company shall promptly notify Legal Counsel and each
Investor who holds Registerable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or qualification
of any of the Registerable Securities for sale under the securities or "blue
sky" laws of any jurisdiction in the United States or its receipt of actual
notice of the initiation or threat of any proceeding for such purpose.
f. As promptly as practicable after becoming aware of such
event, the Company shall notify each Investor by telephone or facsimile 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 omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and use its best efforts promptly to prepare a supplement or
amendment to the Registration Statement to correct such untrue statement or
omission and deliver such number of copies of such supplement or amendment to
each Investor as such Investor may reasonably request.
g. The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest practicable date (including in each
case by amending or supplementing such Registration Statement) and to notify
each Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance of such
order and the resolution thereof (and if such Registration Statement is
supplemented or amended, deliver such number of copies of such supplement or
amendment to each Investor as such Investor may reasonably request).
h. The Company shall make available for inspection by (i) any
Investor whose Registrable Securities are included in a Registration Statement,
and (ii) one firm of attorneys and one firm of accountants or other agents
retained by the Investors, (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "Records"), as shall be reasonably deemed
necessary by each Inspector to enable each Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request
for purposes of such due diligence.
i. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
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written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
j. At the request of an Initial Investor or Investors who
holds a majority-in-interest of the Registrable Securities, the Company shall
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the prospectus used
in connection with the Registration Statement each as approved by the Company,
which approval shall not be unreasonably withheld or delayed, as may be
necessary in order to change the plan of distribution set forth in such
Registration Statement.
k. The Company shall cooperate with the Investors who hold
Registerable Securities being offered and, to the extent applicable, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registerable Securities to be offered
pursuant to a Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the Investors may reasonably
request and registered in such names as the Investors may request.
l. The Company shall use its best efforts to cause the
Registerable Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to consummate the disposition of such Registerable
Securities.
m. The Company shall otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC in connection with any
registration hereunder.
n. The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investors of
Registerable Securities pursuant to a Registration Statement.
4. OBLIGATIONS OF THE INVESTORS
----------------------------
a. At least ten (10) days prior to the first anticipated
filing date of the Registration Statement, the Company shall notify each
Investor in writing of the information the Company reasonably requires from each
such Investor if such Investor elects to have any of such Investor's
Registerable Securities included in such Registration Statement. It shall be a
condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registerable
Securities of a particular Investor that such Investor shall furnish to the
Company such information regarding itself, the Registerable Securities held by
it and the intended method of disposition of the Registerable Securities held by
it as shall be reasonably required to effect the registration of such
Registerable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request.
b. Each Investor by such Investor's acceptance of the
Registerable Securities agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any
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Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registerable Securities from such Registration Statement.
5. EXPENSES OF REGISTRATION
------------------------
All reasonable expenses (other than underwriting discounts and
commissions) incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers, legal and accounting
fees shall be paid by the Company. In addition, the Company shall reimburse the
Investors for the reasonable fees and disbursements of Legal Counsel in
connection with registrations, filings or qualifications pursuant to Section 2
and 3 of this Agreement.
6. INDEMNIFICATION
---------------
In the event any Registerable Securities are included in a
Registration Statement under this Agreement:
a. To the fullest extent permitted by law, the Company will,
and hereby does, indemnify, hold harmless and defend each Investor, the
directors, officers, partners, employees, agents, representatives of, and each
Person, if any, who controls any Investor within the meaning of the 1933 Act or
the Securities Exchange Act of 1934, as amended (the "1934 Act") (each, an
"Indemnified Person"), against any losses, claims, damages, liabilities,
judgments, fines, penalties, charges, costs, reasonable attorneys' fees, amounts
paid in settlement or expenses, joint or several, (collectively, "Claims")
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto ("Indemnified Damages"), to which any of them
may become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registerable Securities
are offered ("Blue Sky Filing"), or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading or (iii) any violation or alleged violation by the Company
of the 1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the offer
or sale of the Registerable Securities pursuant to a Registration Statement (the
matters in the foregoing clauses (i) through (iii) being, collectively,
"Violations"). The Company shall reimburse the Investors and each such
underwriter or controlling person, promptly as such expenses are incurred and
10.19-7
are due and payable, for any legal fees or disbursements or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall not apply to
a Claim by an Indemnified Person arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information furnished in writing
to the Company by such Indemnified Person expressly for use in connection with
the preparation of the Registration Statement or any such amendment thereof or
supplement thereto; (ii) shall not be available to the extent such Claim is
based on a failure of the Investor to deliver or to cause to be delivered the
prospectus made available by the Company, if such prospectus was timely made
available by the Company pursuant to Section 3(d); and (iii) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the transfer of the Registerable Securities by the Investors
pursuant to Section 9.
b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the Registration Statement and each Person, if any,
who controls the Company within the meaning of the 1933 Act or the 1934 Act
(each an "Indemnified Party"), against any Claim or Indemnified Damages to which
any of them may become subject, under the 1933 Act, the 1934 Act or otherwise,
insofar as such Claim or Indemnified Damages arise out of or are based upon any
Violation, in each case to the extent, and only to the extent, that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with
such Registration Statement; and subject to Section 6(c), such Investor will
reimburse any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 6(b) and the agreement with
respect to contribution contained in Section 7 shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall be liable under
this Section 6(b) and Section 7 for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to such Investor as a result of the
sale of Registerable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the Registerable Securities by the Investors pursuant to Section 9.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the prospectus was corrected on a timely
basis and such new prospectus was delivered to each Investor prior to such
Investor's use of the prospectus to which the Claim relates.
c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
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a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section
6, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, 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; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. In the case of an
Indemnified Person, legal counsel referred to in the immediately preceding
sentence shall be selected by the Investors holding a majority in interest of
the Registerable Securities included in the Registration Statement to which the
Claim relates. The Indemnified Party or Indemnified Person shall cooperate fully
with the indemnifying party in connection with any negotiation or defense of any
such action or claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified Party
or Indemnified Person which relates to such action or claim. The indemnifying
party shall keep the Indemnified Party or Indemnified Person fully apprised at
all times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its prior written consent,
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person, consent to entry
of any judgment or enter into any settlement or other compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such claim or litigation. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action. 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.
d. The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
7. CONTRIBUTION
------------
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
10.19.9
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that
(i) no 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, (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any other person who was not guilty of such fraudulent misrepresentation, and
(iii) contribution (together with any indemnification or other obligations under
this Agreement) 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. ASSIGNMENT OF REGISTRATION RIGHTS
---------------------------------
The rights under this Agreement shall be automatically
assignable by the Investors to any transferee of all or any portion of
Registerable Securities if: (i) the 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; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act and applicable state securities laws;
and (iv) at or before the time the Company receives the written notice
contemplated by clause (ii) of this sentence the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained
herein.
9. AMENDMENT OF REGISTRATION RIGHTS
--------------------------------
Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and Investors who then hold at least a majority of the Registerable Securities.
Any amendment or waiver effected in accordance with this Section 9 shall be
binding upon each Investor and the Company. No such amendment shall be effective
to the extent that it applies to less than all of the holders of the
Registerable Securities
10. MISCELLANEOUS
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a. A Person is deemed to be a holder of Registerable
Securities whenever such Person owns or is deemed to own of record such
Registerable Securities. If the Company receives conflicting instructions,
notices or elections from two or more Persons with respect to the same
Registerable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registerable
Securities.
b. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
10.19.10
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
Alpha Virtual, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Company's Legal Counsel:
Law Offices of Xxxxxxx X. Xxxxxxx
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
If to Consultant:
Manhattan Capital Partners, LLC
00000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxx
If to Consultant's Legal Counsel:
Xxxxxxxxxxx & Xxxxxxxx
00000 Xxxxx Xxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
Each party hereto may, from time to time, change its address or facsimile number
for notices under this Section 10(b) by giving prior written notice of such
changed address or facsimile number.
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.
d. The corporate laws of the State of California shall govern
all issues concerning the relative rights of the Company and the Consultant as
its stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of California, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of California or
10.19-11
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California. Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the state and federal courts
sitting in the City of Los Angeles, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
e. This Agreement and the Consulting Agreement constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein. This
Agreement and the Consulting Agreement supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.
f. Subject to the requirements of Section 8, this Agreement
shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.
g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in identical counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.
i. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
j. All consents and other determinations to be made by the
Investors pursuant to this Agreement shall be made, unless otherwise specified
in this Agreement, by Investors holding a majority of the Registerable
Securities.
10.19-12
[Signature page follows on next page]
IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be duly executed as of day and year first above written.
COMPANY: Consultant
------- ----------
ALPHA VIRTUAL, INC. Manhattan Capital Partners, LLC
By: By:_____________________________
---------------------------
Name: Xxxx Xxxxxxx Name: Xxxx Xxxxxx
Title: President Title: Managing Director
10.19-13
[Signature page to Registration Rights Agreement]
SCHEDULE OF PURCHASERS
Purchaser's: Name
Address Purchaser's Signature
Telephone Number
Facsimile Number
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
10.19-14
SCHEDULE OF PURCHASERS (Continued)
Purchaser's: Name
Address Purchaser's Signature
Telephone Number
Facsimile Number
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
10.19-15
SCHEDULE OF PURCHASERS (Continued)
Purchaser's: Name
Address Purchaser's Signature
Telephone Number
Facsimile Number
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
____________________________________ ________________________________
(Name) (Signature)
Address: ___________________________
___________________________
___________________________
( )
---------------------------
( ) Facsimile
---------------------------
10.19-16
