EXHIBIT 10.69
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of the 1st day of
June 1998 between DATASAFE PUBLICATIONS, INC., a New Mexico corporation
("DataSafe"), and GALACTICOMM TECHNOLOGIES, INC., a Florida corporation (the
"Company").
RECITALS:
A. An Escrow Agreement, dated as of June 1, 1998 (the "Escrow
Agreement"), was entered into by Galacticomm Technologies, Inc. and DataSafe
Publications, Inc. as part of the settlement of litigation among such parties.
Pursuant to the Escrow Agreement, DataSafe has the right to acquire up to
420,744 shares of common stock, par value $.0001 per share, of the Company.
B. As an inducement to DataSafe to enter into the Escrow Agreement, the
Company has agreed to grant the rights set forth herein for all "Demand
Registrable Securities" of DataSafe (as such term is defined in Section 1.2
hereof).
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms have the following
meanings and include the plural as well as the singular:
1.1 "Commission" means the United States Securities and Exchange
Commission.
1.2 "Demand Registrable Securities" means the shares of Common Stock
issued to and owned by DataSafe and that are to be distributed pursuant to the
terms of the Escrow Agreement. However, any such shares shall be "Demand
Registrable Securities" only so long as they are "Restricted Securities". Any
share or other security shall be deemed a "Restricted Security" until such time
as such share or other security: (a) has been effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering it to a Person who is eligible to resell such share or other security
under Section 4(1) of the Securities Act (or any similar provision then in
force) without compliance with Rule 144 (or any similar rule then in effect) or
any other rule under the Securities Act; or (b) has been sold pursuant to
Rule 144 (or any similar provision then in force) under the Securities Act to a
Person who is eligible to resell such share or other security under Section 4(1)
of the Securities Act (or any similar provision then in force) without
compliance with Rule 144 (or any similar rule then in effect) or any other rule
under the Securities Act.
1.3 "Demand Registration" shall have the meaning set forth in Section
2.1 hereof.
1.4 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.5 "IPO" means the initial underwritten public offering of the
Company's securities.
1.6 "Person" means any individual, partnership, firm, corporation,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity, as well as any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of the Exchange Act.
1.7 "Registration Expenses" shall have the meaning set forth in Article
II hereof.
1.8 "Securities Act" means the Securities Act of 1933, as amended.
ARTICLE II
DEMAND REGISTRATION RIGHTS
2.1 REQUESTS FOR REGISTRATION. Subject to the limitations set forth in
Section 2.4 hereof, DataSafe may request registration under the Securities Act
of all or part of their Demand Registrable Securities on Form S-1 or any other
registration form available for use by the Company (a "Demand Registration").
The request for a Demand Registration shall specify the number of Demand
Registrable Securities requested to be registered and the anticipated per share
price range for such offering. However, (a) the Company shall not be required to
effectuate the Demand Registration if the Company promptly delivers to DataSafe
an unqualified written opinion, addressed to DataSafe, of the Company's legal
counsel to the effect that DataSafe could immediately sell all of the Demand
Registrable Securities requested to be included in such Demand Registration,
under Rule 144 promulgated under the Securities Act; (b) after written notice
given to DataSafe within seven (7) days of DataSafe's demand for registration
the Company may postpone, for a reasonable period of time not to exceed 120 days
(but in any event not to extend beyond the date of public disclosure of the
information, or the date of abandonment or termination of the transactions or
negotiations, hereinafter referred to), the filing of a registration statement
otherwise required to be prepared and filed by it pursuant to this subsection
2.1 if: (i) at the time the Company receives a registration request, the
Company's Board of Directors determines, in good faith and in its reasonable
business judgment, that (A) such Demand Registration would require the public
disclosure of material non-public information concerning any pending or ongoing
material transaction or negotiations involving the Company which, in the opinion
of the Company's outside legal counsel, is not yet required to be publicly
disclosed, and (B) such disclosure would materially interfere with such
transaction or negotiations or have a material adverse effect on the Company,
and (ii) the Company diligently and in good faith continues to pursue such
transaction or negotiations throughout the period of such postponement.
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2.2 SELECTION OF UNDERWRITERS. If the Demand Registration is solely for
an underwritten offering of the Demand Registerable Securities, DataSafe shall
select the managing underwriter or underwriters to administer such offering, who
shall be reasonably satisfactory to the Company.
2.3 DEMAND EXPENSES. Subject to the limitations set forth in Section
2.4 hereof, the Company shall pay for all Registration Expenses relating to the
Demand Registration.
2.4 LIMITATIONS ON DEMAND RIGHTS. Commencing twelve (12) months from
and ending eighteen (18) months from, the closing of the IPO, DataSafe shall
have the right to request one (1) Demand Registration. A registration will not
count as a Demand Registration until the registration statement relating to such
Demand Registration has been declared effective by the Commission.
ARTICLE III
REGISTRATION PROCEDURES
3.1 PROCEDURE. With respect to a Demand Registration, the Company,
subject to Article II hereof, shall use its best efforts to effect the
registration of all the Demand Registrable Securities, which DataSafe has
requested to be included therein, as expeditiously as possible. In connection
with any such request, the Company shall do the following:
(a) subject to Section 2.1 hereof, prepare and file with the
Commission, no later than ninety (90) days after the Company's receipt of a
request for a Demand Registration, a registration statement on any form for
which the Company then qualifies and which is available for the registration of
the Demand Registrable Securities requested to be registered;
(b) include in the registration on such form all the Demand
Registrable Securities requested to be included and use its best efforts to
cause such registration statement to become effective; provided, however, that
at least ten (10) days before filing such registration statement or any
prospectus or any amendment or supplement thereto, including documents to be
incorporated by reference upon or after the initial filing of such registration
statement, the Company will furnish to DataSafe copies of all such documents
proposed to be filed (including documents to be incorporated by reference
therein), which documents will be subject to the reasonable review and comments
of DataSafe;
(c) unless the Company qualifies to use a Form S-3 registration
statement or any similar form then in effect, prepare and file with the
Commission such amendments and post-effective amendments and supplements to the
registration statement or any prospectus as may be necessary to keep the
registration statement effective for a period of not more than one hundred
twenty (120) days and comply with the provisions of the Securities Act
applicable to the Company with respect to the disposition of all the Demand
Registrable Securities covered by such registration statement or any supplement
to any such prospectus provided that the Company will use its best efforts to
file in a timely manner all reports and information required
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to be filed during the twelve (12) calendar months and any portion of a calendar
month immediately preceding the filing of the registration statement so as to
permit the use of Form S-3;
(d) if the Company qualifies to use a Form S-3 registration
statement or any similar form then in effect and if the Company receives a
request for a Demand Registration, prepare and file with the Commission such
registration statement to permit the offering of the Demand Registrable
Securities to be made on a continuous basis pursuant to Rule 415 (or any similar
rule that may be adopted by the Commission) under the Securities Act (a "Shelf
Registration") and keep the Shelf Registration current and continuously
effective until DataSafe is legally able to sell all of the Demand Registrable
Securities in a consecutive three-month period without registration under the
Securities Act in accordance with Rule 144 under the Securities Act, as such
Rule may be amended from time to time;
(e) furnish to DataSafe such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement and such other documents as DataSafe may reasonably
request;
(f) use its best efforts to register or qualify such Demand
Registrable Securities under such other securities or blue sky laws of such
jurisdiction as DataSafe reasonably requests and do any and all other acts and
things which may be reasonably necessary or advisable to enable DataSafe to
consummate the disposition in such jurisdiction; provided, however, that the
Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subparagraph, (ii) subject itself to taxation in any such jurisdiction, (iii)
consent to general service of process in any such jurisdiction); or (iv) (A)
amend its Articles of Incorporation or Bylaws or (B) rescind, modify or amend
any action taken by the Board of Directors of the Company in accordance with
their fiduciary obligations to the Company and its shareholders.
(g) notify DataSafe at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such registration
statement contains an untrue statement of material fact or omits any fact
necessary to make the statements therein not misleading, and, at the request of
DataSafe, the Company will prepare a supplement or amendment to such prospectus
so that, as thereafter delivered to subsequent purchasers of such Demand
Registrable Securities, such prospectus will not contain an untrue statement of
a material fact or omit to state any fact necessary to make the statements
therein not misleading;
(h) cause all such Demand Registrable Securities, to be listed on
each securities exchange on which similar securities issued by the Company are
then listed and, if not so listed, to be listed on the NASD automated quotation
system ("NASDAQ");
(i) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as DataSafe or the
underwriters, if any,
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reasonably request in order to expedite or facilitate the disposition of such
Demand Registrable Securities;
(j) make available for inspection by DataSafe, any underwriter
participating in any distribution pursuant to such registration statement and
any attorney, accountant or other agent retained by DataSafe or such
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company (collectively, the "Records") to the extent reasonably
necessary to enable such persons to exercise their due diligence
responsibilities and cause the Company's officers, directors, employees and
independent accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
registration statement. Records and other information which the Company
determines, in good faith, to be confidential and of which determination
DataSafe is notified shall not be disclosed by DataSafe unless (i) the
disclosure of such Records or other information, in the opinion of counsel
reasonably acceptable to the Company, is necessary to avoid or correct a
misstatement or omission in the registration statement, any preliminary
prospectus, any prospectus or prospectus supplement, or (ii) the release of such
Records or other information is ordered pursuant to subpoena, court order or
request by a governmental authority or otherwise is required by applicable law
or (iii) the information in such Records or such other information is generally
available to the public. DataSafe shall, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction or by governmental
authority, give notice to the Company and allow the Company, at the expense of
the Company, to undertake appropriate action to prevent disclosure of the
Records deemed confidential; and
(k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, use its reasonable best efforts promptly to obtain the withdrawal
of such order.
3.2 DATASAFE INFORMATION. With respect to any Demand Registration,
DataSafe shall furnish to the Company in writing such information and affidavits
as the Company reasonably requests for use in connection with the registration
of the Demand Registrable Securities.
ARTICLE IV
REGISTRATION EXPENSES
4.1 REGISTRATION EXPENSES. The Company shall pay for all costs and
expenses ("Registration Expenses") of the Demand Registration, including, but
not limited to, the following: (i) registration and filing fees, (ii) fees and
expenses relating to the Company's compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications), (iii) expenses incident to the preparation, printing and
filing of the registration statement, each preliminary prospectus and definitive
prospectus and each amendment or supplement to any of the foregoing and copies
thereof, (iv)
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internal expenses (including, without limitation, all salaries and expenses of
officers and employees of the Company performing legal or accounting duties),
(v) fees and expenses incurred in connection with the listing of the Demand
Registrable Securities, (vi) fees and disbursements of counsel for the Company
and fees and expenses of independent certified public accountants retained by
the Company, (vii) fees and expenses of any special experts retained by the
Company in connection with such registration, and (viii) fees and expenses
associated with any filings with or submission to the NASD (including, if
applicable, the fees and expenses of any "qualified independent underwriters,"
as such term is defined in Schedule E of the By-laws of the NASD, and its
counsel). The Company shall not have any obligation to pay any underwriting
fees, discounts or commissions attributable to the sale of Demand Registrable
Securities, as the case may be, by DataSafe, or fees and disbursements of any
counsel or other advisors for DataSafe.
ARTICLE V
INDEMNIFICATION AND CONTRIBUTION
5.1 INDEMNIFICATION BY THE COMPANY. The Company shall indemnify
DataSafe, its officers and directors and each Person who controls DataSafe
(within the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses caused by any untrue or alleged untrue statement of
material fact contained in any registration statement, preliminary prospectus or
definitive prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are caused by or contained in any information furnished in writing to the
Company by DataSafe specifically for use in the preparation thereof or by
DataSafe's failure, if required, to deliver a copy of the registration statement
or prospectus or any amendments or supplements thereto after the Company has
furnished DataSafe with a sufficient number of copies of the same. In connection
with an underwritten offering, the Company will indemnify such underwriters,
their officers and directors and each Person who controls such underwriters
(within the meaning of the Securities Act) to the same extent as provided above
with respect to the indemnification of DataSafe.
5.2 INDEMNIFICATION BY DATASAFE. In connection with any registration
statement in which DataSafe is participating, DataSafe shall indemnify the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged untrue statement
of material fact contained in the registration statement, preliminary prospectus
or definitive prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in information furnished in
writing by DataSafe to the Company specifically for use in the preparation of
such registration statement or prospectus.
5.3 PROCEDURE. Any Person entitled to indemnification hereunder will:
(a) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks
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indemnification, provided that the failure of any indemnified party to give
notice shall not relieve the indemnifying party of its obligations hereunder
except to the extent the indemnifying party is actually prejudiced by such
failure; and (b) unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
with respect to such claim, permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party. If
such defense is assumed, the indemnifying party will not be subject to any
liability for any settlement made by the indemnified party without its consent
(but such consent will not be unreasonably withheld). An indemnifying party who
is not entitled to, or elects not to assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim.
5.4 SURVIVAL. The indemnification provided for under this Agreement
will remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and will survive the transfer of securities.
5.5 CONTRIBUTION. If the indemnification provided for in this Article V
from the indemnifying party is unavailable to the indemnified party, then the
indemnifying party, instead of indemnifying the indemnified party, shall
contribute to and pay the amount paid or payable by such indemnified party as a
result of the loss, claim, damage, liability or expenses (collectively, the
"Claim") giving rise to indemnification hereunder in such proportion as is
appropriate to reflect the relative fault of the indemnifying and indemnified
party in connection with the actions which gave rise to the Claim. The relative
fault of the indemnifying party and the indemnified party shall be determined by
reference to, among other things, whether the action in question has been made
by, or relates to, information supplied by such indemnifying party or
indemnified party, and the parties' relevant intent, knowledge, access to
information and opportunity to correct or prevent such action. The Company and
DataSafe agree that it would not be just and equitable if contribution and
payment pursuant to this Section 5.5 were determined by pro rata allocation or
by any other allocation method which does not take into account the equitable
considerations referred to in the preceding sentence. The amount paid or payable
as a result of a Claim shall include any legal or other fees and expenses
reasonably incurred by such party in connection with such Claim subject to the
limitation that DataSafe shall not contribute in excess of the proceeds received
by Data Safe from the sale of Demand Registrable Securities. However, no Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contributions and payment from any
Person who was not guilty of such fraudulent misrepresentation.
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ARTICLE VI
MISCELLANEOUS
6.1 RULE 144. After the IPO, the Company shall file, on a timely basis,
any reports required to be filed by it under the Securities Act and the Exchange
Act so as to enable DataSafe to sell the Demand Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by: (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time; or (b) any similar rule adopted by the Commission.
6.2 AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers of or consents to departures from the provisions hereof may not be
given, unless approved in writing by the Company and DataSafe.
6.3 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made) upon the earliest to occur of
(a) receipt, if made by personal service, (b) three days after dispatch, if made
by reputable overnight courier service, (c) upon the delivering party's receipt
of a written confirmation of a transmission made by cable, by telecopy, by
telegram, or by telex or (d) seven days after being mailed by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 6.3):
(a) if to THE COMPANY:
Galacticomm Technologies, Inc.
0000 X.X. 47 Avenue
Suite 101
Ft. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Telecopy: (000) 000-0000
with a copy to:
Xxxxx, Mandler, Croland, Bronstein, Garbett,
Stiphany & Xxxxxxxx, P.A.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
(b) if to DATASAFE:
0000 X. Xxxx Xxxxxx, Xxxxx 000
Xxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Telecopy: (000) 000-0000
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with a copy to:
Xxxxxxxx, Xxxxxxx & Xxxxxxx LLP
0000 Xxxxxx Xxxx. X.X., Xxxxx 000-Xxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
6.4 ENTIRE AGREEMENT. This Agreement constitutes the final written
expression of all of the agreements between the parties as to the subject matter
hereof.
6.5 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida as such laws are applied by
Florida courts to agreements entered into and to be performed in Florida by and
between residents of Florida (without regard to its principles regarding
conflicts of law).
6.6 HEADINGS. Headings of the Sections of this Agreement are for the
convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
6.7 SEVERABILITY. If for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid as applied to any particular case or in all cases, such
circumstances shall not have the effect of rendering such provision invalid in
any other case or of rendering any of the other provisions of this Agreement
inoperative, unenforceable or invalid.
6.8 ASSIGNABILITY. This Agreement and the rights and duties hereunder
may not be assigned or assumed by operation of law or otherwise without the
express prior written consent of the other party hereto (which consent may be
granted or withheld in the sole discretion of such other party.
6.9 ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or its breach which is not settled between the parties, shall be
settled by arbitration in accordance with the then governing rules of the
American Arbitration Association, with proceedings to take place in Albuquerque,
New Mexico. Judgment upon any arbitration award may be entered and enforced in
any court of competent jurisdiction. An arbitration award may cover all costs,
legal fees and other charges reasonably incurred by the prevailing party in such
proceedings.
6.10 BINDING EFFECT; BENEFITS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Notwithstanding anything contained in this Agreement to
the contrary, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective heirs,
successors, executors, administrators or permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
DATASAFE PUBLICATIONS, INC. GALACTICOMM TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxx Xxxx
----------------- ---------------
Name: Xxxx X. Xxxx Name: Xxxxx Xxxx
Title: President Title: CEO
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