EXHIBIT 10.13
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into as of
July 22, 1998, by and between CyNet Inc., a Texas corporation (the "Company"),
and CyNet Holdings, LLC., a Nevada limited liability company (the "Holder").
INTRODUCTION
Concurrently with the execution and delivery of this Agreement, Holder has
entered into a Subscription Agreement, pursuant to which, among other things,
the Holder has agreed to purchase up to 10,000,000 shares of the Company's Class
A Common Stock, no par value (the "Common Stock") at a purchase price of $1.00
per share (the "Subscription Agreement"). In order to induce the Holder to
complete the transactions contemplated by the Subscription Agreement, the
Company has agreed to enter into this Registration Rights Agreement.
In consideration of the mutual promises and covenants hereinafter set
forth, the parties hereby agree as follows;
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall
have the following respective meanings:
"BEST LAWFUL EFFORTS" shall mean the efforts that a prudent
business person desirous of achieving a result would use under similar
circumstances to ensure that such result is achieved as expeditiously as
possible.
"COMMISSION" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"COMMON STOCK" means the Class A Common Stock, no par value,
of the Company.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the
time.
"REGISTRABLE SECURITIES" means any Common Stock of the Company
issued or issuable by the Company to the Holder pursuant to the
Subscription Agreement, including shares of the Common Stock issuable to
the Holder upon exercise of the Warrant (as defined below), and other
securities issued or issuable to the Holder in respect of the Subscription
Agreement or the Warrant upon any stock split, stock dividend,
recapitalization, or similar event; PROVIDED HOWEVER, that shares of
Common Stock or other securities shall no longer be treated as Registrable
Securities if (a) they have been sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction,
or (b) they have been sold within any three month period n the opinion of
counsel to the Company, in an open
market transaction under Rule 144 of the Securities Act so that all
transfer restrictions and restrictive legends with respect thereto were or
could be removed upon the consummation of such sale (at which time the
registration rights hereunder shall terminate pursuant to Section 3.1).
The terms "REGISTER," "REGISTERED" AND "REGISTRATION" refer to
a registration effected by preparing and filing a registration statement
in compliance with the Securities Act, and the declaration or ordering of
the effectiveness of such registration statement.
"REGISTRATION EXPENSES" shall mean all expenses, other than
Selling Expenses (as defined below), incurred by the Company in complying
with Section 2.1 hereof, including, without limitation, all registration,
qualification and filing fees, exchange listing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky
fees and expenses, and the expense of any special audits incident to or
required by any such registration (but excluding the compensation of
regular employees of the Company which shall be paid in any event by the
Company).
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to the securities
registered by the Holders and all fees and disbursements of counsel for
any Holder.
"WARRANT" shall mean that certain warrant (subject to the
adjustment provisions therein) issued to the Holder pursuant to the
Subscription Agreement entitling the Holder to purchase up to $4,800,000
shares of the Common Stock at an exercise price of $1.00 per share on or
before July 22, 2003.
2. REGISTRATION RIGHTS.
2.1 REQUESTED REGISTRATION.
(a) REQUEST FOR REGISTRATION. Subject to the provisions of Section
__ hereof, in case the Company shall receive from the Holder a written request
that the Company effect any registration, qualification or compliance with
applicable registration provisions of the Securities Act with respect to shares
of Registrable Securities then outstanding, the Company will, as soon as
practicable, use its best lawful efforts to effect such registration,
qualification or compliance (including, without limitation, appropriate
qualification under applicable blue sky or other state
-2-
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act and any other governmental requirements or regulations)
as may be so requested and as may be reasonably required to permit or facilitate
the sale and distribution of all or such portion of such Registrable Securities
as are specified in such request; PROVIDED, HOWEVER, that the Company shall not
be obligated to take any action to effect any such registration, qualification
or compliance pursuant to this Section 2.1:
(i) In any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless the
Company is already subject to service in such jurisdiction and except as
may be required by the Securities Act;
(ii) Prior to the first anniversary of the closing of the
transactions contemplated by the Subscription Agreement;
(iii) If the Company has effected one such registration
pursuant to this subparagraph 2.1(a) and such registration has been
declared or ordered effective provided, however, that in the event that
less than 80% of the shares requested to be registered by the Holder are
in fact registered and sold in connection with any registration, such
registration shall not be counted as the registration permitted by this
Section 2.1(a)(iii);
(iv) If the Company shall furnish to Holder a certificate
signed by the President or Chief Executive Officer of the Company stating
that in the good faith judgment of the Board of Directors of the Company
it would be seriously detrimental to the Company or its shareholders for a
registration statement to be filed in the near future, or that delay in
the filing of any registration statement is necessary in light of a
pending corporate development, then the Company's obligation to use its
best lawful efforts to register under this Section 2.1 shall be deferred
(with respect to any demand for registration hereunder) for a period not
to exceed one hundred twenty (120) days from the date of receipt of
written request from the Holder, provided that the Company cannot,
pursuant to this Section 2.1(a)(iv), delay implementation of a demand for
registration more than once in any twelve (12) month period or;
(v) If the registration or qualification requested does not
relate to at least fifty percent (50%) of all Registrable Securities held
by the Holder; or
Subject to the foregoing clauses (i) through (v), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable after receipt of the request of the
Holder.
-3-
(b) UNDERWRITERS. In the event that a registration pursuant to
Section 2.1 is for a registered public offering involving an underwriting, the
right of the Holder to registration pursuant to Section 2.1 shall be conditioned
upon the Holder's participation in the underwriting arrangements required by
this Section 2.1, and the inclusion of the Holder's Registrable Securities in
the underwriting to the extent requested shall be limited to the extent provided
herein.
The Company shall (together with the Holder and any other holders of
Company securities who have rights to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Holder, but subject
to the Company's reasonable approval. Notwithstanding anything herein to the
contrary, if the managing underwriter advises the Holder in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall so advise the Holder that the number of
shares that may be included in the registration and underwriting shall be
limited according to the requirements of the managing underwriter, but only
after eliminating from such registration the securities held by other holders of
Company securities whose rights to distribute their securities through such
underwriting are junior to those of the Holder. No Registrable Securities
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration.
(c) ONE DEMAND. The Company is obligated to effect only one (1)
demand registration pursuant to this Section 2.1.
(d) JOINDER OF COMPANY AND OTHER SECURITY HOLDERS. In any
registration requested pursuant to this Section 2.1, the Company shall be
entitled to register securities for sale for its own account or for the account
of any other holder or holders of Company securities with rights to include
their securities in such registration, unless the underwriter shall indicate in
writing to the Holder that the inclusion of the shares to be sold for the
account of the Company will adversely affect the registration, the price of the
shares to be sold or the number of shares to be sold for the account of the
Holder. Without the consent of the Holder, the Company may not otherwise cause
any other registration of securities for sale for its own account (other than a
registration effected solely to implement a stock option plan or other employee
benefit plan or a transaction contemplated by Rule 145 of the Commission) to
become effective less than ninety (90) days after the effective date of any
registration requested pursuant to Section 2.1.
2.2 COMPANY REGISTRATION.
(a) NOTICE OF REGISTRATION. If at any time or from time to time the
Company shall determine to register on a form that permits the sale of
Registrable Securities an underwritten public offering of any of its securities
for cash, either for its own account or the account of a security holder or
holders, other than (i) on Form S-4 or S-8 or any successor or similar form,
(ii) relating to any
-4-
capital stock of the Company under options, warrants or other rights to acquire
any such capital stock issued or to be issued primarily to directors, officers
or employees of the Company, or any of its subsidiaries or affiliates, (iii)
filed pursuant to Rule 145 under the Securities Act or any successor or similar
provision, (iv) relating to any employee benefit plan or interests therein, or
(v) relating principally to preferred stock or debt securities of the Company,
the Company will:
(A) promptly give the Holder written notice thereof, and
(B) use its best lawful efforts to include in such
registration (and any related qualification under blue sky laws or other
compliance), all the Registrable Securities specified in a written request
or requests, made within fifteen (15) days after receipt of such written
notice from the Company, by the Holder.
(b) UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holder as a part of the written notice given
pursuant to Section 2.2(a)(i). In such event the right of the Holder's
participation in such underwriting, and the inclusion of Registrable Securities
in the underwriting shall be limited to the extent provided herein. The Holder
shall (together with the Company and the other holders distributing their
securities through such underwriting) enter into any underwriting agreement in
customary form with the managing underwriter selected for such underwriting by
the Company.
Notwithstanding anything herein to the contrary, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the managing underwriter may limit some or all of
the Registrable Securities that may be included in the registration and
underwriting; provided, however, that the securities held by holders of Company
securities whose rights to distribute their securities through such underwriter
are junior to the Holder shall be cut back first in proportion to their
respective holdings to the extent required by such limitation.
If the Holder disapproves of the terms of any such underwriting, he
may elect to withdraw therefrom by written notice to the Company and the
managing underwriter, delivered not less than seven days before the effective
date. Any securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration, and shall be withdrawn from the market for a
period of one hundred twenty (120) days after the effective date of the
registration statement relating thereto, or such other shorter period of time as
the underwriters may require.
(c) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.1 prior to the effectiveness of such registration whether or not the
Holder has elected to include securities in such registration.
-5-
2.3 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. The Company agrees and
covenants that it will not grant or allow any persons any registration rights
with respect to any securities of the Company which are superior to the rights
granted hereunder without the prior written consent of the Holder. In the event
that the Company authorizes registration rights which are superior in any way to
those granted herein to the Holder without such prior written consent, the
Holder shall be entitled to the same rights.
2.4 EXPENSES OF REGISTRATION. All Registration Expenses shall be borne by
the Company. Unless otherwise agreed by the Company, all Selling Expenses
relating to securities registered on behalf of the Holder shall be borne by the
Holder.
2.5 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement
the Company will keep the Holder advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion thereof. At
its expense, the Company will:
(a) Subject to Section 2.1(c), prepare and file with the Commission
a registration statement with respect to such securities and use its best lawful
efforts to cause such registration statement to become and remain effective for
at least ninety (90) days or until the distribution described in the
Registration Statement has been completed;
(b) Furnish to each underwriter such number of copies of a
prospectus, a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as such underwriter may reasonably
request in order to facilitate the public sale of the shares by such
underwriter, and promptly furnish to each underwriter and Holder notice of any
stop-order or similar notice issued by the Commission or any state agency
charged with the regulation of securities; and
(c) Use its best lawful efforts to cause all Registrable Securities
included in such registration to be listed or authorized for inclusion on each
securities exchange or similar trading system on which similar securities issued
by the Company are then listed or authorized for trading.
2.6 INDEMNIFICATION.
(a) To the extent permitted by law, the Company will indemnify the
Holder participating in a registration pursuant to this Agreement, each of its
officers and directors and partners, and each person controlling the Holder
within the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter of the Company's securities covered by such a
registration and each
-6-
person who controls such underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, to the extent such
expenses, claims, losses, damages or liabilities arise out of or are based on
any untrue statement (or alleged untrue statement) of a material fact contained
in any registration statement, prospectus, or any amendment or supplement
thereto, incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
promulgated under the Securities Act applicable to the Company in connection
with any such registration, qualification or compliance, and the Company will
reimburse the Holder, each of its officers and directors and partners, and each
person controlling the Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action; provided, however, that the indemnity
contained herein shall not apply to amounts paid in settlement of any claim,
loss, damage, liability or expense if settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld); and provided
further, that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission or alleged untrue statement or omission, made
in reliance upon and in conformity with written information furnished to the
Company by the Holder, controlling person or underwriter specifically for use
therein. Notwithstanding the foregoing, insofar as the foregoing indemnity
relates to any such untrue statement (or alleged untrue statement) or omission
(or alleged omission) made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time the
registration statement becomes effective or in the final prospectus filed with
the Commission pursuant to Rule 424 of the Commission, the indemnity agreement
herein shall not inure to the benefit of any underwriter if a copy of the final
prospectus filed pursuant to Rule 424 was not furnished to the person or entity
asserting the loss, liability, claim or damage at or prior to the time such
furnishing is required by the Securities Act.
(b) To the extent permitted by law, each Holder will, if Registrable
Securities owned by the Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, and each underwriter, of the
Company's securities covered by such a registration, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and the Holder, its officers and directors and partners and each
person controlling the Holder within the meaning of Section 15 of the Securities
Act, against all expenses, claims, losses, damages and liabilities (or actions
in respect thereof), including any of the foregoing incurred in settlement of
any litigation, commenced or threatened, to the extent such expenses, claims,
losses, damages or liabilities arise out of or are based on any untrue statement
(or alleged untrue statement) by the Holder of a
-7-
material fact contained in any such registration statement, prospectus, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission by the Holder (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Holder of the Securities Act or any rule or regulation promulgated under the
Securities Act applicable to the Holder and relating to action or inaction
required of the Holder in connection with any such registration, qualification
or compliance, and the Holder will reimburse the Company, such directors,
officers, underwriters or control persons for any legal or other expenses
reasonably incurred in connection with defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, in reliance upon
and in conformity with written information furnished to the Company by the
Holder specifically for use therein; provided, however, that the indemnity
contained herein shall not apply to amounts paid in settlement of any claim,
loss, damage, liability or expense if settlement is effected without the consent
of the Holder from whom such payment is sought (which consent shall not be
unreasonably withheld). Notwithstanding the foregoing, the liability of the
Holder under this subsection (b) shall be limited to an amount equal to the net
proceeds from the sale of the shares sold by the Holder, unless such liability
arises out of or is based on intentional misstatements by the Holder. In
addition, insofar as the foregoing indemnity relates to any such untrue
statement (or alleged untrue statement) or omission (or alleged omission) made
in a preliminary prospectus but eliminated or remedied in the amended prospectus
on file with the Commission at the time the registration statement becomes
effective or in the final prospectus filed pursuant to Rule 424 of the
Commission, the indemnity agreement herein shall not inure to the benefit of the
Company or any underwriter if a copy of the final prospectus filed pursuant to
Rule 424 was not furnished to the person or entity asserting the loss,
liability, claim or damage at or prior to the time such furnished is required by
the Securities Act.
(c) Each party entitled to indemnification under this Section 2.6
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Agreement unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or separate or different
defenses. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to the entry
of any judgment or enter into any settlement which does not include as an
-8-
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. No Indemnified Party shall consent to entry of any judgment or enter
into any settlement without the consent of each Indemnifying Party.
(d) If the indemnification provided for in this Section 2.6 is
unavailable to an Indemnified Party in respect of any losses, claims, damages or
liabilities referred to herein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and all shareholders offering
securities in the offering (the "Selling Shareholders") on the other from the
offering of the Company securities, or (ii) if the allocation provided by the
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the Selling
Shareholders on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Selling Shareholders on the other shall be the net
proceeds from the offering (before deducting expenses) received by the Company
on the one hand and the Selling Shareholders on the other. The relative fault of
the Company on the one hand and the Selling Shareholders on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the Selling
Shareholders and the parties' relevant intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Selling Shareholders agree that it would not be just and equitable if
contribution pursuant to this Section 2.4(d) were based solely upon the number
of entities from whom contribution was requested or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 2.6(d). The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages and liabilities referred to
above in this Section 2.6(d) shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
defending any such action or claim, subject to the provisions of Section 2.6(c)
hereof. Notwithstanding the provisions of this Section 2.6(d) or any other
provision of this Article 2, no Holder shall be required to contribute any
amount or make any other payments under this Agreement which in the aggregate
exceed the net proceeds received in the offering by such Holder. No person
guilty of fraudulent misrepresentation (within the meaning of the Securities
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(e) Notwithstanding the foregoing provisions of this Section 2.6, if
pursuant to an underwritten public offering of capital stock of the Company, the
Company, the Selling Shareholders and the underwriters enter into an
underwriting or purchase agreement relating to such offering which contains
provisions covering indemnification among the parties thereto in connection
-9-
with such offering, the indemnification provisions of this Section 2.6, to the
extent they are in conflict therewith, shall be deemed inoperative for the
purpose of such offering, except as to any parties to this Agreement who are not
parties to such subsequent underwriting or purchase agreement.
2.7 CERTAIN INFORMATION.
(a) As a condition to exercising the registration rights provided
for herein, the Holder, with respect to any Registrable Securities included in
any registration, shall furnish the Company such information regarding the
Holder and the Registrable Securities as the Company may request in writing and
as shall be required in connection with any registration, qualification or
compliance referred to in Section 2.
(b) The Holder, with respect to any Registrable Securities included
in any registration, shall cooperate in good faith with the Company and its
underwriters, in connection with such registration, including placing such
shares in escrow or custody to facilitate the sale and distribution thereof.
(c) The Holder, with respect to any Registrable Securities included
in any registration, shall make no further sales or other dispositions, or
offers therefor, of such shares under such registration statement if, during the
effectiveness of such registration statement, the Holder is informed that an
intervening event has occurred which, in the opinion of counsel to the Company,
makes the prospectus included in such registration statement no longer comply
with the Securities Act until such time as such holder has received from the
Company copies of a new, amended or supplemented prospectus complying with the
Securities Act.
2.8 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best lawful efforts to:
(a) Make and keep public information available, as those terms are
defined in Rule 144 under the Securities Act, at all times that the Company is
subject to the reporting requirements of the Securities Act or the Exchange Act;
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) So long as the Holder owns any Registrable Securities, to
furnish to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of such Rule 144, and of
the Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
-10-
Company and other information in the possession of or reasonably obtainable by
the Company as the Holder may reasonably request in order to comply with any
rule or regulation of the Commission allowing the Holder to sell any such
securities without registration.
2.9 TRANSFER OF REGISTRATION RIGHTS. The rights granted to the Holder
hereunder may be assigned to a transferee or assignee in connection with any
transfer or assignment of Registrable Securities by Holder provided that: (i)
such transfer is otherwise effected in accordance with applicable securities
laws, (ii) the Holder notifies the Company in writing prior to the transfer or
assignment and the assignee or transferee agrees in writing to be bound by the
provisions of this Agreement, and (iii) such transfer is not pursuant to a
registration statement under the Securities Act or Rule 144 promulgated under
the Securities Act.
2.9.1 STANDSTILL AGREEMENT. The Holder agrees upon request of the
underwriter(s) managing any underwritten public offering of the Company's
securities, not to sell, make any short sale of, loan, grant any option for the
purchase of or otherwise dispose of any equity securities of the Company (other
than those included in the registration) without the prior written consent of
such underwriter(s), for such period of time following the effective date of the
registration statement relating to each such underwritten public offering as may
be requested by the underwriter(s).
3. MISCELLANEOUS.
3.1 TERM. The registration rights granted pursuant to this Agreement shall
begin on the date of this Agreement and shall terminate at such time as all
Registrable Securities held by such Holder can be sold in any three month period
without compliance with the registration requirements of the Securities Act
pursuant to Rule 144 (including Rule 144(k)) promulgated thereunder.
3.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS BY THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
3.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
3.4 ENTIRE AGREEMENT: AMENDMENT. This Agreement shall constitute the full
and entire understanding and agreement between the parties with regard to the
subject hereof. Except as expressly provided herein, this Agreement, or any
provision hereof may be amended, waived, discharged or terminated upon the
written consent of the Company and the Holder.
-11-
3.5 NOTICES. ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
including Federal Express or similar courier service, addressed (a) if to the
Holder, at such Holder's address set forth on the signature pages hereof or at
such other address as such party shall have furnished to the Company in writing,
or (b) if to the Company, at 00000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000,
ATTN: Corporate Secretary, or at such other address as the Company shall have
furnished to the Holder.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective upon receipt.
3.6 DELAYS OR OMISSIONS. Except as expressly provided herein, no delay or
omission to exercise any right, power, or remedy accruing to any party to this
Agreement shall impair any such right, power or remedy of such party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party to this Agreement, shall be cumulative and not alternative.
3.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the parties
hereto, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
3.8 VALIDITY. In the event that any provisions hereof are held to be
invalid, illegal or against public policy, the remaining provisions hereof shall
not be affected thereby. In such event, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible with respect to those provisions which were held
to be invalid, illegal or against public policy.
3.9 CONSTRUCTION. Each party to this Agreement has had the opportunity to
review this Agreement with legal counsel. This Agreement shall not be construed
or interpreted against any party on the basis that such party drafted or
authored a particular provision, parts of or the entirety of this Agreement.
3.10 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
-12-
IN WITNESS WHEREOF, the undersigned or each of their respective duly
authorized officers or representatives have executed this Agreement effective as
of the date first set forth above.
"COMPANY"
CYNET, INC.
By:/s/XXXXXXX X. XXXXX
Name: Xxxxxxx X. Xxxxx
Title: EX. V.P.
"HOLDER"
CYNET HOLDINGS, LLC.
By:/s/XXXXXXX X. XXXXX, XX.
Name: Xxxxxxx X. Xxxxx, Xx.
Title: President
-13-
