REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (the "Agreement")
is
made and entered into as of 3rd day of August, 2006 by and among
Wireless Age Communications, Inc., a
corporation organized and existing under the laws of the State of Delaware
(“Wireless
Age”
or
the
“Company”),
and
Xxxxxx Partners L.P., a Delaware limited partnership (hereinafter referred
to as
the “Investor”).
Unless defined otherwise, capitalized terms herein shall have the identical
meaning as in the Preferred Stock Purchase Agreement.
PRELIMINARY
STATEMENT
WHEREAS,
pursuant to the Preferred Stock Purchase Agreement, of even date herewith,
by
and among the Company and the Investor, as part of the consideration, Investor
shall receive Preferred Stock and Warrants, which upon conversion and exercise,
in accordance with the terms of the Preferred Stock Purchase Agreement and
Warrant Agreement, entitle the Investor to receive Shares of the Company;
and
WHEREAS,
the
ability of the Investors to sell their Shares of Common Stock is subject to
certain restrictions under the 1933 Act; and
WHEREAS,
as a
condition to the Preferred Stock Purchase Agreement, The Company has agreed
to
provide the Investor with a mechanism that will permit such Investor, to sell
its Shares of Common Stock in the future.
NOW,
THEREFORE,
in
consideration of the premises and of the mutual covenants and agreements, and
subject to the terms and conditions herein contained, the parties hereto hereby
agree as follows:
ARTICLE
I
INCORPORATION
BY REFERENCE, SUPERSEDER
1.1 Incorporation
by Reference.
The
foregoing recitals and the Exhibits attached hereto and referred to herein,
are
hereby acknowledged to be true and accurate, and are incorporated herein by
this
reference.
1.2 Supersede.
This
Agreement, to the extent that it is inconsistent with any other instrument
or
understanding among the parties governing the affairs of the Company, shall
supersede such instrument or understanding to the fullest extent permitted
by
law. A copy of this Agreement shall be filed at the Company’s principal
office.
ARTICLE
II
DEMAND
REGISTRATION RIGHTS
2.1 Registrable
Securities.
Means
and includes the Shares of the Company underlying the Preferred Stock and
Warrants issued pursuant to the Preferred Stock Purchase Agreement and Warrant
Agreement. As to any particular Registrable Securities, such securities will
cease to be Registrable Securities when (a) they have been effectively
registered under the 1933 Act and disposed of in accordance with the
registration statement covering them, (b) they are or may be freely traded
without registration pursuant to Rule 144 under the 1933 Act (or any similar
provisions that are then in effect), or (c) they have been otherwise transferred
and new certificates for them not bearing a restrictive legend have been issued
by the Company and the Company shall not have "stop transfer" instructions
against them. "Shares"
shall
mean, collectively, the shares of Common Stock of the Company issuable upon
conversion of the Preferred Stock and those shares of Common Stock of the
Company issuable to the Investor upon exercise of the Warrants.
2.2 Registration
of Registrable Securities.
The
Company shall prepare and file within thirty (30) days following the date hereof
(the "Filing
Date")
a
registration statement (the "Registration
Statement")
covering the resale of such number of shares of the Registrable Securities
as
the Investor shall elect by written notice to the Company, and absent such
election, covering the resale of all of the shares of the Registrable
Securities. The Company shall use its best efforts to cause the Registration
Statement to be declared effective by the SEC on the earlier of (i) 150 days
following the Closing Date with respect to the Registration Statement, (ii)
ten
(10) days following the receipt of a "No Review" or similar letter from the
SEC
or (iii) the first business day following the day the SEC determines the
Registration Statement eligible to be declared effective (the "Required
Effectiveness Date").
Nothing contained herein shall be deemed to limit the number of Registrable
Securities to be registered by the Company hereunder. As a result, should the
Registration Statement not relate to the maximum number of Registrable
Securities acquired by (or potentially acquirable by) the holders of the Shares
of the Company issued to the Investor pursuant to the Preferred Stock Purchase
Agreement, the Company shall be required to promptly file a separate
registration statement (utilizing Rule 462 promulgated under the 1933 Act,
where
applicable) relating to such Registrable Securities which then remain
unregistered. The provisions of this Agreement shall relate to any such separate
registration statement as if it were an amendment to the Registration
Statement.
2.3 Demand
Registration.
Subject
to the limitations of Section 2.2, at any time and from time to time, the
Investor may request the registration under the 1933 Act of all or part of
the
Registrable Shares then outstanding (a "Demand
Registration").
Subject to the conditions of Section 3, the Company shall use its best efforts
to file such registration statement under the 1933 Act as promptly as
practicable after the date any such request is received by the Company and
to
cause such registration statement to be declared effective. The Company shall
notify the Investor promptly when any such registration statement has been
declared effective. If more than eighty percent (80%) of the Shares issuable
under the Preferred Stock Purchase Agreement have been registered or sold,
this
provision shall expire.
2.4 Registration
Statement Form.
Registrations under Section 2.2 and Section 2.3 shall be on the appropriate
registration form of the SEC as shall permit the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
specified in the Registration Statement; provided, however, such intended method
of disposition shall not include an underwritten offering of the Registrable
Securities.
2.5 Expenses.
The
Company will pay all Registration expenses in connection with any registration
required by under Sections 2.2 and Section 2.3 herein.
2.6 Effective
Registration Statement.
A
registration requested pursuant to Sections 2.2 and Section 2.3 shall not be
deemed to have been effected (i) unless a registration statement with respect
thereto has become effective within the time period specified herein, provided
that a registration which does not become effective after the Company filed
a
registration statement with respect thereto solely by reason of the refusal
to
proceed of any holder of Registrable Securities (other than a refusal to proceed
based upon the advice of counsel in the form of a letter signed by such counsel
and provided to the Company relating to a disclosure matter unrelated to such
holder) shall be deemed to have been effected by the Company unless the holders
of the Registrable Securities shall have elected to pay all Registration
Expenses in connection with such registration, (ii) if, after it has become
effective, such registration becomes subject to any stop order, injunction
or
other order or extraordinary requirement of the SEC or other governmental agency
or court for any reason or (iii) if, after it has become effective, such
registration ceases to be effective for more than the allowable Black-Out
Periods (as defined herein).
2.7 Plan
Of Distribution.
The
Company hereby agrees that the Registration Statement shall include a plan
of
distribution section reasonably acceptable to the Investor; provided, however,
such plan of distribution section shall be modified by the Company so as to
not
provide for the disposition of the Registrable Securities on the basis of an
underwritten offering.
2.8 Liquidated
Damages.
If,
after 150 days from the date hereof, in the event the Company does not register
Registrable Securities pursuant to the requirements of Section 2.2 herein,
or if
the Registration Statement filed pursuant to Section 2.2 herein is not declared
effective, or if the Registrable Securities are registered pursuant to an
effective Registration Statement and such Registration Statement or other
Registration Statement(s) demanded by Investor including the Registrable
Securities is not effective in the period from five months from the date hereof
through two years following the date hereof, the Company shall, for each such
day issue to the Investor, as liquidated damages and not as a penalty, Six
Thousand, Five Hundred and Seventy (6,570) shares of Preferred Stock for any
such day, such issuance shall be made no later than the tenth business day
of
the calendar month next succeeding the month in which such day occurs. In
addition, if the Company has not filed a registration statement within the
thirty day period after closing as specified in Section 2.2, the Company shall,
for each such day after thirty days from closing and until the filing of a
registration statement, issue to the Purchaser, as liquidated damages and not
as
a penalty, Six Thousand, Five Hundred and Seventy (6,570) shares of Preferred
Stock and for any such day, such payment shall be made no later than the tenth
business day of the calendar month next succeeding the month in which such
day
occurs. However, in no event shall the Company be required to pay any liquidated
damages under this Section 2.8 in an amount exceeding Three Million, Three
Hundred Thirty-Three Thousand, Three Hundred and Thirty Three (3,333,333) of
the
shares underlying the Preferred Stock in the aggregate (as adjusted pursuant
to
the terms of the Certificate of Designation).
The
parties agree that the only damages payable for a violation of the terms of
this
Agreement with respect to which liquidated damages are expressly provided shall
be such liquidated damages. Nothing shall preclude the Investor from pursuing
or
obtaining specific performance or other equitable relief with respect to this
Agreement.
The
parties hereto agree that the liquidated damages provided for in this Section
2.8 constitute a reasonable estimate of the damages that may be incurred by
the
Investor by reason of the failure of the Registration Statement(s) to be filed
or declared effective in accordance with the provisions hereof.
The
obligation of the Company terminates when the holder of shares of Registrable
Securities no longer holds more than five percent (5%) of its shares of
Registrable Securities.
ARTICLE
III
INCIDENTAL
REGISTRATION RIGHTS
3.1 Right
To Include (“Piggy-Back”) Registrable Securities.
Provided that the Registrable Securities have not been registered, if at any
time after the date hereof but before the second anniversary of the date hereof,
the Company proposes to register any of its securities under the 1933 Act (other
than by a registration in connection with an acquisition in a manner which
would
not permit registration of Registrable Securities for sale to the public, on
Form S-8, or any successor form thereto, on Form S-4, or any successor form
thereto and other than pursuant to Section 2), on an underwritten basis (either
best-efforts or firm-commitment), then, the Company will each such time give
prompt written notice to all holders of Registrable Securities of its intention
to do so and of such holders of Registrable Securities' rights under this
Section 3.1. Upon the written request of any such holders of Registrable
Securities made within ten (10) days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be disposed of
by
such holders of Registrable Securities and the intended method of disposition
thereof), the Company will, subject to the terms of this Agreement, use its
commercially reasonable best efforts to effect the registration under the 1933
Act of the Registrable Securities, to the extent requisite to permit the
disposition (in accordance with the intended methods thereof as aforesaid)
of
such Registrable Securities so to be registered, by inclusion of such
Registrable Securities in the registration statement which covers the securities
which the Company proposes to register, provided that if, at any time after
written notice of its intention to register any securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason either not to register
or to delay registration of such securities, the Company may, at its election,
give written notice of such determination to each holders of Registrable
Securities and, thereupon, (i) in the case of a determination not to register,
shall be relieved of this obligation to register any Registrable Securities
in
connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith), without prejudice, however,
to
the rights of any holder or holders of Registrable Securities entitled to do
so
to request that such registration be effected as a registration under Section
2,
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities, for the same period as the
delay in registering such other securities. No registration effected under
this
Section 3.1 shall relieve the Company of its obligation to effect any
registration upon request under Section 2. The Company will pay all Registration
Expenses in connection with each registration of Registrable Securities
requested pursuant to this Section 3.1. The right provided the Holders of the
Registrable Securities pursuant to this Section shall be exercisable at their
sole discretion and will in no way limit any of the Company's obligations to
pay
the Securities according to their terms.
3.2 Priority
In Incidental Registrations.
If the
managing underwriter of the underwritten offering contemplated by this Section
3
shall inform the Company and holders of the Registrable Securities requesting
such registration by letter of its belief that the number of securities
requested to be included in such registration exceeds the number which can
be
sold in such offering, then the Company will include in such registration,
to
the extent of the number which the Company is so advised can be sold in such
offering, (i) first securities proposed by the Company to be sold for its own
account, and (ii) second Registrable Securities and (iii) securities of other
selling security holders requested to be included in such
registration.
ARTICLE
IV
REGISTRATION
PROCEDURES
4.1 Registration
Procedures.
If and
whenever the Company is required to effect the registration of any Registrable
Securities under the 1933 Act as provided in Section 2.2 and, as applicable,
2.3, the Company shall, as expeditiously as possible:
(i) prepare
and file with the SEC the Registration Statement, or amendments thereto, to
effect such registration (including such audited financial statements as may
be
required by the 1933 Act or the rules and regulations promulgated thereunder)
and thereafter use its commercially reasonable best efforts to cause such
registration statement to be declared effective by the SEC, as soon as
practicable, but in any event no later than the Required Effectiveness Date
(with respect to a registration pursuant to Section 2.2); provided, however,
that before filing such registration statement or any amendments thereto, the
Company will furnish to the counsel selected by the holders of Registrable
Securities which are to be included in such registration, copies of all such
documents proposed to be filed;
(ii) with
respect to any registration statement pursuant to Section 2.2 or Section 2.3,
prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be
necessary to keep such registration statement effective and to comply with
the
provisions of the 1933 Act with respect to the disposition of all Registrable
Securities covered by such registration statement until the earlier to occur
of
thirty six (36) months after the date of this Agreement (subject to the right
of
the Company to suspend the effectiveness thereof for not more than 10
consecutive Trading Days or an aggregate of 10 Trading Days during each year
(each a "Black-Out
Period"))
or
such time as all of the securities which are the subject of such registration
statement cease to be Registrable Securities (such period, in each case, the
"Registration
Maintenance Period").
The
Company must notify the Investor within twenty four (24) hours prior to any
Black-Out Period;
(iii) furnish
to each holder of Registrable Securities covered by such registration statement
such number of conformed copies of such registration statement and of each
such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any
other
prospectus filed under Rule 424 under the 1933 Act, in conformity with the
requirements of the 1933 Act, and such other documents, as such holder of
Registrable Securities and underwriter, if any, may reasonably request in order
to facilitate the public sale or other disposition of the Registrable Securities
owned by such holder of Registrable Securities;
(iv) use
its
commercially reasonable best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such other U.S. federal or state securities laws or U.S. state blue sky laws
as
any U.S. holder of Registrable Securities thereof shall reasonably request,
to
keep such registrations or qualifications in effect for so long as such
registration statement remains in effect, and take any other action which may
be
reasonably necessary to enable such holder of Registrable Securities to
consummate the disposition in such jurisdictions of the securities owned by
such
holder of Registrable Securities, except that the Company shall not for any
such
purpose be required to qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the requirements of this
subdivision (iv) be obligated to be so qualified or to consent to general
service of process in any such jurisdiction;
(v) use
its
commercially reasonable best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the U.S.
holder of Registrable Securities thereof to consummate the disposition of such
Registrable Securities;
(vi) furnish
to each holder of Registrable Securities a signed counterpart, addressed to
such
holder of Registrable Securities, and the underwriters, if any, of an opinion
of
counsel for the Company, dated the effective date of such registration statement
(or, if such registration includes an underwritten public offering, an opinion
dated the date of the closing under the underwriting agreement), reasonably
satisfactory in form and substance to such holder of Registrable Securities)
including that the prospectus and any prospectus supplement forming a part
of
the Registration Statement does not contain an untrue statement of a material
fact or omits a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, and
(vii) notify
the Investor and its counsel promptly and confirm such advice in writing
promptly after the Company has knowledge thereof:
(a) when
the
Registration Statement, the prospectus or any prospectus supplement related
thereto or post-effective amendment to the Registration Statement has been
filed, and, with respect to the Registration Statement or any post-effective
amendment thereto, when the same has become effective;
(b) of
any
request by the SEC for amendments or supplements to the Registration Statement
or the prospectus or for additional information;
(c) of
the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings by any Person for
that purpose; and
(d) of
the
receipt by the Company of any notification with respect to the suspension of
the
qualification of any Registrable Securities for sale under the securities or
blue sky laws of any jurisdiction or the initiation or threat of any proceeding
for such purpose;
(viii) notify
each holder of Registrable Securities covered by such registration statement,
at
any time when a prospectus relating thereto is required to be delivered under
the 1933 Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such registration statement, as
then
in effect, includes an untrue statement of a material fact or omits to state
any
material facts required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and
at
the request of any such holder of Registrable Securities promptly prepare and
furnish to such holder of Registrable Securities a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit
to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing; use its best efforts to obtain the withdrawal of any order suspending
the effectiveness of the Registration Statement at the earliest possible
moment;
(ix) otherwise
use its commercially reasonable best efforts to comply with all applicable
rules
and regulations of the SEC, and make available to its security holders, as
soon
as reasonably practicable, an earnings statement covering the period of at
least
twelve months, but not more than eighteen months, beginning with the first
full
calendar month after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the 1933
Act
and Rule 158 thereunder;
(x) enter
into such agreements and take such other actions as the Investors shall
reasonably request in writing (at the expense of the requesting or benefiting
Investors) in order to expedite or facilitate the disposition of such
Registrable Securities; and
(xi) use
its
commercially reasonable best efforts to list all Registrable Securities covered
by such registration statement on any securities exchange on which any of the
Registrable Securities are then listed.
The
Company may require each holder of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such holder of Registrable Securities and the distribution of such securities
as
the Company may from time to time reasonably request in writing.
4.2 The
Company will not file any registration statement pursuant to Section 2.2 or
Section 2.3, or amendment thereto or any prospectus or any supplement thereto
to
which the Investors shall reasonably object, provided that the Company may
file
such documents in a form required by law or upon the advice of its
counsel.
4.3 The
Company represents and warrants to each holder of Registrable Securities that
it
has obtained all necessary waivers, consents and authorizations necessary to
execute this Agreement and consummate the transactions contemplated hereby
other
than such waivers, consents and/or authorizations specifically contemplated
by
the Preferred Stock Purchase Agreement.
4.4 Each
holder of Registrable Securities agrees that, upon receipt of any notice from
the Company of the occurrence of any event of the kind described in subdivision
(viii) of Section 4.1, such Holder will forthwith discontinue such holder of
Registrable Securities’ disposition of Registrable Securities pursuant to the
Registration Statement relating to such Registrable Securities until such holder
of Registrable Securities’ receipt of the copies of the supplemented or amended
prospectus contemplated by subdivision (viii) of Section 4.1 and, if so directed
by the Company, will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Holder's possession
of
the prospectus relating to such Registrable Securities current at the time
of
receipt of such notice.
ARTICLE
V
UNDERWRITTEN
OFFERINGS
5.1 Incidental
Underwritten Offerings.
If the
Company at any time proposes to register any of its securities under the 1933
Act as contemplated by Section 3.1 and such securities are to be distributed by
or through one or more underwriters, the Company will, if requested by any
holder of Registrable Securities as provided in Section 3.1 and subject to
the
provisions of Section 3.2, use its commercially reasonable best efforts to
arrange for such underwriters to include all the Registrable Securities to
be
offered and sold by such holder among the securities to be distributed by such
underwriters. In no event shall any Investor be deemed an underwriter for
purposes of this Agreement.
5.2 Participation
In Underwritten Offerings.
No
holder of Registrable Securities may participate in any underwritten offering
under Section 3.1 unless such holder of Registrable Securities (i) agrees to
sell such Person's securities on the basis provided in any underwriting
arrangements approved, subject to the terms and conditions hereof, by the
holders of a majority of Registrable Securities to be included in such
underwritten offering and (ii) completes and executes all questionnaires,
indemnities, underwriting agreements and other documents (other than powers
of
attorney) required under the terms of such underwriting arrangements.
Notwithstanding the foregoing, no underwriting agreement (or other agreement
in
connection with such offering) shall require any holder of Registrable
Securities to make a representation or warranty to or agreements with the
Company or the underwriters other than representations and warranties contained
in a writing furnished by such holder of Registrable Securities expressly for
use in the related registration statement or representations, warranties or
agreements regarding such holder of Registrable Securities, such holder's
Registrable Securities and such holder's intended method of distribution and
any
other representation required by law.
5.3 Preparation;
Reasonable Investigation.
In
connection with the preparation and filing of each registration statement under
the 1933 Act pursuant to this Agreement, the Company will give the holders
of
Registrable Securities registered under such registration statement, and their
respective counsel and accountants, the opportunity to participate in the
preparation of such registration statement, each prospectus included therein
or
filed with the SEC, and each amendment thereof or supplement thereto, and will
give each of them such access to its books and records and such opportunities
to
discuss the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the reasonable opinion of such holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the 1933
Act.
ARTICLE
VI
INDEMNIFICATION
6.1 Indemnification
by the Company.
In the
event of any registration of any securities of the Company under the 1933 Act,
the Company will, and hereby does agree to indemnify and hold harmless the
holder of any Registrable Securities covered by such registration statement,
its
directors and officers, each other Person who participates as an underwriter
in
the offering or sale of such securities and each other Person, if any, who
controls such holder or any such underwriter within the meaning of the 1933
Act
against any losses, claims, damages or liabilities, joint or several, to which
such holder or any such director or officer or underwriter or controlling person
may become subject under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether commenced
or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
1933 Act, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or any omission
or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and the Company
will
reimburse such holder and each such director, officer, underwriter and
controlling person for any legal or any other expenses reasonably incurred
by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding, provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability,
(or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
holder or underwriter stating that it is for use in the preparation thereof
and,
provided further that the Company shall not be liable to any Person who
participates as an underwriter in the offering or sale of Registrable Securities
or to any other Person, if any, who controls such underwriter within the meaning
of the 1933 Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of such Person's failure to send or give a copy of the final prospectus,
as
the same may be then supplemented or amended, within the time required by the
1933 Act to the Person asserting the existence of an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus or an amendment
or
supplement thereto. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such holder or any
such
director, officer, underwriter or controlling person and shall survive the
transfer of such securities by such holder.
6.2 Indemnification
by the Investor.
The
Company may require, as a condition to including any Registrable Securities
in
any registration statement filed pursuant to this Agreement, that the Company
shall have received an undertaking satisfactory to it from the prospective
holder of such Registrable Securities, to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 6.1) the Company,
each director of the Company, each officer of the Company and each other Person,
if any, who controls the Company within the meaning of the 1933 Act, with
respect to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was
made
in reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such holder of Registrable
Securities specifically stating that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Any such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by such Investor. The indemnification by the
Investors shall be limited to Fifty Thousand ($50,000) Dollars.
6.3 Notices
Of Claims, Etc.
Promptly after receipt by an indemnified party of notice of the commencement
of
any action or proceeding involving a claim referred to in Sections 6.1 and
Section 6.2, such indemnified party will, if claim in respect thereof is to
be
made against an indemnifying party, give written notice to the latter of the
commencement of such action, provided that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party
of
its obligations under Sections 6.1 and Section 6.2, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice.
In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that the indemnifying party may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an unconditional term thereof
the
giving by the claimant or plaintiff to such indemnified party of a release
from
all liability, or a covenant not to xxx, in respect to such claim or litigation.
No indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party.
6.4 Other
Indemnification.
Indemnification similar to that specified in Sections 6.1 and Section 6.2 (with
appropriate modifications) shall be given by the Company and each holder of
Registrable Securities (but only if and to the extent required pursuant to
the
terms herein) with respect to any required registration or other qualification
of securities under any Federal or state law or regulation of any governmental
authority, other than the 1933 Act.
6.5 Indemnification
Payments.
The
indemnification required by Sections 6.1 and Section 6.2 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or expense, loss, damage or liability
is incurred.
6.6 Contribution.
If the
indemnification provided for in Sections 6.1 and Section 6.2 is unavailable
to
an indemnified party in respect of any expense, loss, claim, damage or liability
referred to therein, 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 expense, loss, claim, damage or liability
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the holder of Registrable Securities
or underwriter, as the case may be, on the other from the distribution of the
Registrable Securities or (ii) if the allocation provided by 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 of the holder of Registrable
Securities or underwriter, as the case may be, on the other in connection with
the statements or omissions which resulted in such expense, loss, damage or
liability, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the holder of Registrable
Securities or underwriter, as the case may be, on the other in connection with
the distribution of the Registrable Securities shall be deemed to be in the
same
proportion as the total net proceeds received by the Company from the initial
sale of the Registrable Securities by the Company to the purchasers bear to
the
gain, if any, realized by all selling holders participating in such offering
or
the underwriting discounts and commissions received by the underwriter, as
the
case may be. The relative fault of the Company on the one hand and of the holder
of Registrable Securities or underwriter, as the case may be, on the other
shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission to state a material fact relates
to information supplied by the Company, by the holder of Registrable Securities
or by the underwriter and the parties' relative intent, knowledge, access to
information supplied by the Company, by the holder of Registrable Securities
or
by the underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission,
provided that the foregoing contribution agreement shall not inure to the
benefit of any indemnified party if indemnification would be unavailable to
such
indemnified party by reason of the provisions contained herein, and in no event
shall the obligation of any indemnifying party to contribute under this Section
6.6 exceed the amount that such indemnifying party would have been obligated
to
pay by way of indemnification if the indemnification provided for hereunder
had
been available under the circumstances.
The
Company and the holders of Registrable Securities agree that it would not be
just and equitable if contribution pursuant to this Section 6.6 were determined
by pro rata allocation (even if the holders of Registrable Securities and any
underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth herein, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
Notwithstanding
the provisions of this Section 6.6, no holder of Registrable Securities or
underwriter shall be required to contribute any amount in excess of the amount
by which (i) in the case of any such holder, the net proceeds received by such
holder from the sale of Registrable Securities in the applicable Registration
Statement or (ii) in the case of an underwriter, the total price at which the
Registrable Securities purchased by it and distributed to the public were
offered to the public exceeds, in any such case, the amount of any damages
that
such holder or underwriter has otherwise been required to pay by reason of
such
untrue or alleged untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall
be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
ARTICLE
VII
RULE
144
7.1 Rule
144.
The
Company shall file in a timely manner the reports required to be filed by the
Company under the 1933 Act and the 1934 Act (including but not limited to the
reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 adopted by the SEC under the 0000 Xxx) and the
rules and regulations adopted by the SEC thereunder (or, if the Company is
not
required to file such reports, will, upon the request of any holder of
Registrable Securities, make publicly available other information) and will
take
such further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder
to
sell Registrable Securities without registration under the 1933 Act within
the
limitation of the exemptions provided by (a) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of any holder of
Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with the requirements of this Section
7.1.
ARTICLE
VIII
MISCELLANEOUS
8.1 Amendments
And Waivers.
This
Agreement may be amended and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, only if the
Company shall have obtained the written consent to such amendment, action or
omission to act, of the holder or holders of the sum of the fifty-one percent
(51%) or more of the shares of (i) Registrable Securities issued at such time,
plus (ii) Registrable Securities issuable upon exercise or conversion of the
Securities then constituting derivative securities (if such Securities were
not
fully exchanged or converted in full as of the date such consent if sought).
Each holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any consent authorized by this Section 8.1, whether or not
such Registrable Securities shall have been marked to indicate such
consent.
8.2 Nominees
For Beneficial Owners.
In the
event that any Registrable Securities are held by a nominee for the beneficial
owner thereof, the beneficial owner thereof may, at its election, be treated
as
the holder of such Registrable Securities for purposes of any request or other
action by any holder or holders of Registrable Securities pursuant to this
Agreement or any determination of any number of percentage of shares of
Registrable Securities held by a holder or holders of Registrable Securities
contemplated by this Agreement. If the beneficial owner of any Registrable
Securities so elects, the Company may require assurances reasonably satisfactory
to it of such owner's beneficial ownership or such Registrable
Securities.
8.3 Notices.
Except
as
otherwise provided in this Agreement, all notices, requests and other
communications to any Person provided for hereunder shall be in writing and
shall be given to such Person (a) in the case of a party hereto other than
the
Company, addressed to such party in the manner set forth in the Preferred Stock
Purchase Agreement or at such other address as such party shall have furnished
to the Company in writing, or (b) in the case of any other holder of Registrable
Securities, at the address that such holder shall have furnished to the Company
in writing, or, until any such other holder so furnishes to the Company an
address, then to and at the address of the last holder of such Registrable
Securities who has furnished an address to the Company, or (c) in the case
of
the Company, at the address set forth on the signature page hereto, to the
attention of its President, or at such other address, or to the attention of
such other officer, as the Company shall have furnished to each holder of
Registrable Securities at the time outstanding. Each such notice, request or
other communication shall be effective (i) if given by mail, 72 hours after
such
communication is deposited in the mail with first class postage prepaid,
addressed as aforesaid or (ii) if given by any other means (including, without
limitation, by fax or air courier), when delivered at the address specified
above, provided that any such notice, request or communication shall not be
effective until received.
8.4 Assignment.
This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto. In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the benefit
of the parties hereto other than the Company shall also be for the benefit
of
and enforceable by any subsequent holder of any Registrable Securities. Each
of
the Holders of the Registrable Securities agrees, by accepting any portion
of
the Registrable Securities after the date hereof, to the provisions of this
Agreement including, without limitation, appointment of the Investors'
Representative to act on behalf of such Holder pursuant to the terms hereof
which such actions shall be made in the good faith discretion of the Investors'
Representative and be binding on all persons for all purposes.
8.5 Descriptive
Headings.
The
descriptive headings of the several sections and paragraphs of this Agreement
are inserted for reference only and shall not limit or otherwise affect the
meaning hereof.
8.6 Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York, without giving effect to applicable principles of
conflicts of law.
8.7 Jurisdiction.
This
Agreement shall be exclusively governed by and construed in accordance with
the
laws of the State of New York. If any action is brought among the parties with
respect to this Agreement or otherwise, by way of a claim or counterclaim,
the
parties agree that in any such action, and on all issues, the parties
irrevocably waive their right to a trial by jury. Exclusive jurisdiction and
venue for any such action shall be the State or Federal Courts serving the
State
of New York. In the event suit or action is brought by any party under this
Agreement to enforce any of its terms, or in any appeal therefrom, it is agreed
that the prevailing party shall be entitled to reasonable attorneys fees to
be
fixed by the arbitrator, trial court, and/or appellate court.
8.8 Entire
Agreement.
This
Agreement embodies the entire agreement and understanding between the Company
and each other party hereto relating to the subject matter hereof and supercedes
all prior agreements and understandings relating to such subject
matter.
8.9 Severability.
If any
provision of this Agreement, or the application of such provisions to any Person
or circumstance, shall be held invalid, the remainder of this Agreement, or
the
application of such provision to Persons or circumstances other than those
to
which it is held invalid, shall not be affected thereby.
8.10 Binding
Effect.
All the
terms and provisions of this Agreement whether so expressed or not, shall be
binding upon, inure to the benefit of, and be enforceable by the parties and
their respective administrators, executors, legal representatives, heirs,
successors and assignees.
8.11 Preparation
of Agreement.
This
Agreement shall not be construed more strongly against any party regardless
of
who is responsible for its preparation. The parties acknowledge each contributed
and is equally responsible for its preparation.
8.12 Failure
or Indulgence Not Waiver; Remedies Cumulative.
No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, covenant or
agreement herein, nor shall nay single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights
and
remedies existing under this Agreement are cumulative to, and not exclusive
of,
any rights or remedies otherwise available.
8.13 Counterparts.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall
be
deemed to be an original, but all of which taken together shall constitute
one
and the same agreement. A facsimile transmission of this signed Agreement shall
be legal and binding on all parties hereto.
[SIGNATURES
ON FOLLOWING PAGE]
IN
WITNESS WHEREOF,
the
Investors and the Company have as of the date first written above executed
this
Agreement.
WIRELESS
AGE COMMUNICATIONS, INC.
_____________________________
By:
______________________________
Title:
_____________________________
INVESTOR
XXXXXX
PARTNERS LP
By:
Xxxxxx Capital Advisors, LLC, its General Partners
By:
_____________________________
Xxxxxx
Xxxxxx Xxxxxx
President
000
Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx
Xxxx
XX 00000
