REGISTRATION RIGHTS AGREEMENT
EXECUTION
VERSION
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into as of November 29, 2007, by and among Juma Technology
Corp., a Delaware corporation (the “Company”),
and
the purchasers listed on Schedule
I
hereto
(the “Purchasers”).
This
Agreement is being entered into pursuant to the Note and Warrant Purchase
Agreement dated as of the date hereof among the Company and the Purchasers
(the
“Purchase
Agreement”).
The
Company and the Purchasers hereby agree as follows:
1.
Definitions.
Capitalized
terms used and not otherwise defined herein shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:
“Advice”
shall
have meaning set forth in Section
3(m).
“Affiliate”
means,
with respect to any Person, any other Person that directly or indirectly
controls or is controlled by or under common control with such Person. For
the
purposes of this definition, “control,”
when
used with respect to any Person, means the possession, direct or indirect,
of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract
or
otherwise; and the terms of “affiliated,”
“controlling”
and
“controlled”
have
meanings correlative to the foregoing.
“Board”
shall
have meaning set forth in Section
3(n).
“Business
Day”
means
any day except Saturday, Sunday and any day which shall be a legal holiday
or a
day on which banking institutions in the State of New York generally are
authorized or required by law or other government actions to close.
“Closing
Date”
means
the date of the initial closing of the purchase and sale of the Notes and the
Warrants pursuant to the Purchase Agreement.
“Commission”
means
the Securities and Exchange Commission.
“Common
Stock”
means
the Company's Common Stock, par value $0.0001 per share.
“Conversion
Shares”
means
any shares of Common Stock issuable upon conversion of the Notes.
“Demand
Notice”
shall
have the meaning set forth in Section
2.
“Effectiveness
Date”
means,
subject to Section
2
hereof,
with respect to the Registration Statement the earlier of (A) the ninetieth
(90th)
day
following the Filing Date (or in the event the Registration Statement receives
a
“full review” by the Commission and/or the Company uses its Extensions, the one
hundred tenth (110th)
day
following the Filing Date) or (B) the date which is within three (3) Business
Days after the date on which the Commission informs the Company (i) that the
Commission will not review the Registration Statement or (ii) that
the
Company may request the acceleration of the effectiveness of the Registration
Statement.
“Effectiveness
Period”
shall
have the meaning set forth in Section
2.
“Event”
shall
have the meaning set forth in Section
7(e).
“Event
Date”
shall
have the meaning set forth in Section
7(e).
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Extensions”
shall
have the meaning set forth in Section
7(e).
“Filing
Date”
means,
subject to Section
2(b)
hereof,
the thirtieth (30th)
day
following the receipt by the Company of the Demand Notice.
“Holder”
or
“Holders”
means
the holder or holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified
Party”
shall
have the meaning set forth in Section
5(c).
“Indemnifying
Party”
shall
have the meaning set forth in Section
5(c).
“Initiating
Holders”
shall
have the meaning set forth in Section
2.
“Losses”
shall
have the meaning set forth in Section
5(a).
“Notes”
means
the Senior Secured 10% Convertible Promissory Notes issued to the Purchasers
pursuant to the Purchase Agreement.
“Person”
means
an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.
“Proceeding”
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Prospectus”
means
the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference in such
Prospectus.
“Registrable
Securities”
means
(i) the shares of Common Stock issuable upon conversion of the Notes and any
interest accrued thereon; (ii) the shares of Common Stock issuable upon payment
of interest on the Notes; and (iii) the shares of Common Stock issuable upon
exercise of the Warrants.
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“Registration
Statement”
means
the registration statements and any additional registration statements
contemplated by Section
2,
including (in each case) the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference
in
such registration statement.
“Rule
144”
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Rule
144(k)”
means
Rule 144(k) promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Rule
158”
means
Rule 158 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Rule
415”
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Rule
424”
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Special
Counsel”
means
Sadis & Xxxxxxxx LLP.
“Warrants”
means
the warrants to purchase shares of Common Stock issued to the Purchasers
pursuant to the Purchase Agreement.
2.
Demand
Registration.
(a) If
the
Company shall receive at any time after the six month anniversary of the date
hereof, a written request from the Holders of a majority in interest of the
Registrable Securities (the “Initiating
Holders”)
that
the Company file a registration statement under the Securities Act of 1933,
as
amended, (the “Securities
Act”),
then
the Company shall, within fifteen (15) days after the receipt of such
written request, give written notice of such request (the “Demand
Notice”)
to all
Holders, and file the Registration Statement under the Securities Act of all
Registrable Securities by the Filing Date. The Registration Statement required
hereunder shall be on Form SB-2 (except if the Company is not then eligible
to
register for resale the Registrable Securities on Form SB-2, in which case
the
Registration Statement shall be on another appropriate form). The Registration
Statement required hereunder shall contain the Plan of Distribution, attached
hereto as Annex
A
(which
may be modified to respond to comments, if any, received by the Commission).
The
Company shall (i) not permit any securities other than the Registrable
Securities to be included in the Registration Statement and (ii) use its best
efforts to cause the Registration Statement to be declared effective under
the
Securities Act as promptly as possible after the filing thereof, and to keep
such Registration Statement continuously effective under the Securities Act
until such date as is the earlier of (x) the date when all Registrable
Securities covered by such Registration Statement have been sold or (y) the
date
on which the Registrable Securities may be sold without any restriction pursuant
to Rule 144(k) as determined by the counsel to the Company pursuant to a written
opinion letter, addressed to the Company's transfer agent to such effect (the
“Effectiveness
Period”).
3
(b) Notwithstanding
anything to the contrary set forth in this Section
2,
in the
event the Commission does not permit the Company to register all of the
Registrable Securities in the Registration Statement because of the Commission’s
application of Rule 415, the Company shall register in the Registration
Statement such number of Registrable Securities as is permitted by the
Commission, provided,
however,
that
the number of Registrable Securities to be included in such Registration
Statement or any subsequent registration statement shall be determined in the
following order: (i) first, the shares of Common Stock issuable upon conversion
of the Notes shall be registered on a pro
rata
basis
among the holders of such Notes and (ii) second, the shares of Common Stock
issuable upon exercise of the Series A Warrants shall be registered on a
pro
rata
basis
among the holders of such Series A Warrants. In the event the Commission does
not permit the Company to register all of the Registrable Securities in the
initial Registration Statement, the Company shall use its best efforts to file
subsequent Registration Statements to register the Registrable Securities that
were not registered in the initial Registration Statement as promptly as
possible and in a manner permitted by the Commission. For purposes of this
Section
2(b),
“Filing
Date”
means
with respect to each subsequent Registration Statement filed pursuant hereto,
the later of (i) sixty (60) days following the sale of substantially all of
the
Registrable Securities included in the initial Registration Statement or any
subsequent Registration Statement and (ii) six (6) months following the
effective date of the initial Registration Statement or any subsequent
Registration Statement, as applicable, or such earlier date as permitted by
the
Commission. For purposes of this Section
2(b),
“Effectiveness
Date”
means
with respect to each subsequent Registration Statement filed pursuant hereto,
the earlier of (A) the one hundred twentieth (120th)
day
following the filing date of such Registration Statement (or in the event such
Registration Statement receives a “full review” by the Commission, the one
hundred fortieth (140th)
day
following such filing date) or (B) the date which is within three (3) Business
Days after the date on which the Commission informs the Company (i) that the
Commission will not review such Registration Statement or (ii) that
the
Company may request the acceleration of the effectiveness of such Registration
Statement and the Company makes such request.
3.
Registration
Procedures.
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a) Prepare
and file with the Commission, on or prior to the Filing Date, a Registration
Statement on Form SB-2 (or if the Company is not then eligible to register
for
resale the Registrable Securities on Form SB-2 such registration shall be on
another appropriate form in accordance herewith and the Securities Act and
the
rules promulgated thereunder) in accordance with the plan of distribution as
set
forth on Exhibit
A
hereto
and in accordance with applicable law, and cause the Registration Statement
to
become effective and remain effective as provided herein; provided,
however,
that
not less than five (5) Business Days prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto,
the
Company shall (i) furnish to the Holders and Special Counsel, copies of all
such
documents proposed to be filed, which documents will be subject to the review
of
such Holders and such Special Counsel, and (ii) cause its officers and
directors, counsel and independent certified public accountants to respond
to
such inquiries as shall be necessary, in the reasonable opinion of Special
Counsel, to conduct a reasonable review of such documents. The Company shall
not
file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities or Special Counsel shall reasonably object in writing within three
(3) Business Days of their receipt thereof.
4
(b)
(i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement as may be necessary to keep the
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission
such additional Registration Statements as necessary in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule
424
(or any similar provisions then in force); (iii) respond as promptly as
possible, but in no event later than ten (10) Business Days, to any comments
received from the Commission with respect to the Registration Statement or
any
amendment thereto and as promptly as possible provide the Holders true and
complete copies of all correspondence from and to the Commission relating to
the
Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement
during the Effectiveness Period in accordance with the intended methods of
disposition by the Holders thereof set forth in the Registration Statement
as so
amended or in such Prospectus as so supplemented.
(c) Notify
the Holders of Registrable Securities and Special Counsel as promptly as
possible (and, in the case of (i)(A) below, not less than three (3) Business
Days prior to such filing, and in the case of (iii) below, on the same day
of
receipt by the Company of such notice from the Commission) and confirm such
notice in writing no later than one (1) Business Day following the day (i)(A)
when a Prospectus or any Prospectus supplement or post-effective amendment
to
the Registration Statement is filed; (B) when the Commission notifies the
Company whether there will be a “review” of such Registration Statement and
whenever the Commission comments in writing on such Registration Statement
and
(C) with respect to the Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission or
any
other Federal or state governmental authority for amendments or supplements
to
the Registration Statement or Prospectus or for additional information; (iii)
of
the issuance by the Commission of any stop order suspending the effectiveness
of
the Registration Statement covering any or all of the Registrable Securities
or
the initiation or threatening of any Proceedings for that purpose; (iv) when
any
of the representations and warranties of the Company contained in any agreement
contemplated hereby ceases to be true and correct in all material respects;
(v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any
Proceeding for such purpose; and (vi) of the occurrence of any event that makes
any statement made in the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to the Registration Statement,
Prospectus or other documents so that, in the case of the Registration Statement
or the Prospectus, as the case may be, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) Use
its
best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of,
as promptly as possible, (i) any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities
for sale in any jurisdiction.
(e) If
requested by the Holders of a majority in interest of the Registrable
Securities, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as
the
Company reasonably agrees should be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to
be
incorporated in such Prospectus supplement or post-effective
amendment.
5
(f) If
requested by any Holder, furnish to such Holder, without charge, at least one
conformed copy of each Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference, and all exhibits to the extent
requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the
Commission.
(g) Promptly
deliver to each Holder and Special Counsel, without charge, as many copies
of
the Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request; and
subject to the provisions of Sections
3(m) and 3(n),
the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus
and
any amendment or supplement thereto.
(h) Prior
to
any public offering of Registrable Securities, use its best efforts to register
or qualify or cooperate with the selling Holders and Special Counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and
sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any Holder requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things necessary or advisable to enable
the
disposition in such jurisdictions of the Registrable Securities covered by
a
Registration Statement; provided,
however,
that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action that would
subject it to general service of process in any such jurisdiction where it
is
not then so subject or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.
(i) Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to a
Registration Statement, which certificates, to the extent permitted by the
Purchase Agreement and applicable federal and state securities laws, shall
be
free of all restrictive legends, and to enable such Registrable Securities
to be
in such denominations and registered in such names as any Holder may request
in
connection with any sale of Registrable Securities.
(j) Upon
the
occurrence of any event contemplated by Section
3(c)(vi),
as
promptly as possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to
the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain 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,
in the light of the circumstances under which they were made, not
misleading.
(k) Use
its
best efforts to cause all Registrable Securities relating to the Registration
Statement to be listed or quoted on the OTC Bulletin Board or any other
securities exchange, quotation system or market, if any, on which similar
securities issued by the Company are then listed or quoted, as and when required
pursuant to the Purchase Agreement.
(l) Comply
in
all material respects with all applicable rules and regulations of the
Commission and make generally available to its security holders earning
statements satisfying the provisions of Section 11(a) of the Securities Act
and
Rule 158 not later than 45 days after the end of any 12-month period (or 90
days
after the end of any 12-month period if such period is a fiscal year) commencing
on the first day of the first fiscal quarter of the Company after the effective
date of the Registration Statement, which statement shall conform to the
requirements of Rule 158. For the avoidance of doubt, the filing and continued
availability of the information on the XXXXX electronic filing system shall
satisfy the requirements of this subsection (l).
6
(m) The
Company may require each selling Holder to furnish to the Company information
regarding such Holder and the distribution of such Registrable Securities as
is
required by law to be disclosed in the Registration Statement, Prospectus,
or
any amendment or supplement thereto, and the Company may exclude from such
registration the Registrable Securities of any such Holder who unreasonably
fails to furnish such information within a reasonable time after receiving
such
request.
If
the
Registration Statement refers to any Holder by name or otherwise as the holder
of any securities of the Company, then such Holder shall have the right to
require (if such reference to such Holder by name or otherwise is not required
by the Securities Act or any similar federal statute then in force) the deletion
of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference is required.
Each
Holder covenants and agrees that it will not sell any Registrable Securities
under the Registration Statement until the Company has electronically filed
the
Prospectus as then amended or supplemented as contemplated in Section
3(g)
and
notice from the Company that the Registration Statement and any post-effective
amendments thereto have become effective as contemplated by Section
3(c).
Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the
kind
described in Section
3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), 3(c)(vi) or
3(n),
such
Holder will forthwith discontinue disposition of such Registrable Securities
under the Registration Statement until such Holder's receipt of the copies
of
the supplemented Prospectus and/or amended Registration Statement in the same
manner as contemplated by Section
3(j),
or
until it is advised in writing (the “Advice”)
by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.
(n) If
(i)
there is material non-public information regarding the Company which the
Company's Board of Directors (the “Board”)
reasonably determines not to be in the Company's best interest to disclose
and
which the Company is not otherwise required to disclose, (ii) there is a
significant business opportunity (including, but not limited to, the acquisition
or disposition of assets (other than in the ordinary course of business) or
any
merger, consolidation, tender offer or other similar transaction) available
to
the Company which the Board reasonably determines not to be in the Company's
best interest to disclose, or (iii) the Company is required to file a
post-effective amendment to the Registration Statement to incorporate the
Company’s quarterly and annual reports and audited financial statements on Forms
10-QSB and 10-KSB, then the Company may postpone or suspend filing or
effectiveness of a registration statement for a period not to exceed thirty
(30)
consecutive days; provided
that the
Company may not postpone or suspend filing or effectiveness of a registration
statement under this Section
3(n)
for more
than sixty (60) days in the aggregate during any three hundred sixty (360)
day
period; and provided,
further,
that no
such postponement or suspension shall be permitted for consecutive thirty (30)
day periods arising out of the same set of facts, circumstances or
transactions.
7
4.
Registration
Expenses.
All
fees
and expenses incident to the performance of or compliance with this Agreement
by
the Company, except as and to the extent specified in this Section
4,
shall
be borne by the Company whether or not the Registration Statement is filed
or
becomes effective and whether or not any Registrable Securities are sold
pursuant to the Registration Statement. The fees and expenses referred to in
the
foregoing sentence shall include, without limitation, (i) all registration
and
filing fees (including, without limitation, fees and expenses (A) with respect
to filings required to be made with the OTC Bulletin Board and
each
other securities exchange or market on which Registrable Securities are required
hereunder to be listed, (B) with respect to filing fees required to be paid
to
the Financial
Industry Regulatory Authority (“FINRA”),
(including, without limitation, pursuant to FINRA Rule 2710) and (C) in
compliance with state securities or Blue Sky laws (including, without
limitation, fees and disbursements of counsel for the Holders in connection
with
Blue Sky qualifications of the Registrable Securities and determination of
the
eligibility of the Registrable Securities for investment under the laws of
such
jurisdictions as the Holders of a majority of Registrable Securities may
designate)), (ii) printing expenses (including, without limitation, expenses
of
printing certificates for Registrable Securities and of printing prospectuses
if
the printing of prospectuses is requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for
the
Company and Special Counsel for the Holders (which fees shall not to exceed
$7,500), (v) Securities Act liability insurance, if the Company desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated
by
this Agreement, including, without limitation, the Company's independent public
accountants (including the expenses of any comfort letters or costs associated
with the delivery by independent public accountants of a comfort letter or
comfort letters). In addition, the Company shall be responsible for all of
its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation,
all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. The Company shall not be responsible
for any discounts, commissions, transfer taxes or other similar expenses
incurred by the Holders in connection with the sale of the Registrable
Securities.
5.
Indemnification.
(a)
Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless each Holder, the officers, directors, managers, partners, members,
shareholders, agents, brokers (including brokers who offer and sell Registrable
Securities as principal as a result of a pledge or any failure to perform under
a margin call of Common Stock), investment advisors and employees of each of
them, each Person who controls any such Holder (within the meaning of Section
15
of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, managers, partners, members, shareholders, agents and employees
of
each such controlling Person, to the fullest extent permitted by applicable
law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, costs of preparation and attorneys' fees) and
expenses (collectively, “Losses”),
as
incurred, arising out of or relating to (i) any violation of securities laws
or
(ii) untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising
out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case
of
any Prospectus or form of prospectus or supplement thereto, in the light of
the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that such untrue statements or omissions are based
solely upon information regarding such Holder or such other Indemnified Party
furnished in writing to the Company by such Holder expressly for use therein,
which information was reasonably relied on by the Company for use therein.
The
Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with
the
transactions contemplated by this Agreement.
8
(b) Indemnification
by Holders.
Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, managers, partners, members, shareholders, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
the
directors, managers, partners, members, shareholders, officers, agents and
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, based solely upon
any
untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto or in any preliminary prospectus, or based
solely upon any omission or alleged omission of a material fact required to
be
stated therein or necessary to make the statements therein (in the case of
any
Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, to the extent, but
only to the extent, that such untrue statement or omission is contained in
any
information so furnished in writing by such Holder to the Company expressly
for
use therein and that such information was reasonably relied upon by the Company
for use therein and was reviewed and expressly approved in writing by such
Holder expressly for use in the Registration Statement or such Prospectus or
such form of Prospectus or any amendment or supplement thereto. Notwithstanding
anything to the contrary contained herein, each Holder shall be liable under
this Section
5(b)
for only
that amount as does not exceed the net proceeds to such Holder as a result
of
the sale of Registrable Securities pursuant to such Registration
Statement.
(c) Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”),
such
Indemnified Party promptly shall notify the Person from whom indemnity is sought
(the “Indemnifying
Party”)
in
writing, and the Indemnifying Party shall be entitled to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided
that the
failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume
the
defense of such Proceeding and to employ counsel reasonably satisfactory to
such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and any such party shall have been advised by
counsel that a conflict of interest is likely to exist if the same counsel
were
to represent such Indemnified Party and the Indemnifying Party (in which case,
if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party,
the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld or delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or
threatened Proceeding in respect of which any Indemnified Party is a party
and
indemnity has been sought hereunder, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
9
All
fees
and expenses of the Indemnified Party (including reasonable fees and expenses
to
the extent incurred in connection with investigating or preparing to defend
such
Proceeding in a manner not inconsistent with this Section) shall be paid to
the
Indemnified Party, as incurred, within ten (10) Business Days of written notice
thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided
that the
Indemnified Party shall reimburse all such fees and expenses to the extent
it is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).
(d) Contribution.
If a
claim for indemnification under Section
5(a) or 5(b)
is due
but unavailable to an Indemnified Party because of a failure or refusal of
a
governmental authority to enforce such indemnification in accordance with its
terms (by reason of public policy or otherwise), 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, in such
proportion as is appropriate to reflect the relative benefits received by the
Indemnifying Party on the one hand and the Indemnified Party on the other from
the offering of the Notes and Warrants. If, but only if, the allocation provided
by the foregoing sentence is not permitted by applicable law, the allocation
of
contribution shall be made in such proportion as is appropriate to reflect
not
only the relative benefits referred to in the foregoing sentence but also the
relative fault, as applicable, of the Indemnifying Party and Indemnified Party
in connection with the actions, statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party and Indemnified Party shall be determined
by
reference to, among other things, whether any action in question, including
any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and
the parties'
relative intent, knowledge, access to information and opportunity to correct
or
prevent such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include, subject to the
limitations set forth in Section
5(c),
any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have
been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms. In no
event shall any selling Holder be required to contribute an amount under this
Section
5(d)
in
excess of the net proceeds received by such Holder upon sale of such Holder’s
Registrable Securities pursuant to the Registration Statement giving rise to
such contribution obligation.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section
5(d)
were
determined by pro
rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties pursuant to the law.
6.
Rule
144.
As
long
as any Holder owns Notes, Conversion Shares, Warrants or Warrant Shares, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by
the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act. As long as any Holder owns Notes, Conversion Shares, Warrants or
Warrant Shares, if the Company is not required to file reports pursuant to
Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to
the
Holders and make publicly available in accordance with Rule 144(c) promulgated
under the Securities Act annual and quarterly financial statements, together
with a discussion and analysis of such financial statements in form and
substance substantially similar to those that would otherwise be required to
be
included in reports required by Section 13(a) or 15(d) of the Exchange Act,
as
well as any other information required thereby, in the time period that such
filings would have been required to have been made under the Exchange Act.
The Company further covenants that it will take such further action as any
Holder may reasonably request, all to the extent required from time to time
to
enable such Person to sell Conversion Shares and Warrant Shares without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 promulgated under the Securities Act, including providing
any legal opinions relating to such sale pursuant to Rule 144. Upon the
request of any Holder, the Company shall deliver to such Holder a written
certification of a duly authorized officer as to whether it has complied with
such requirements.
10
7.
Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, such Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under
this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement.
The Company and each Holder agree that monetary damages would not
provide adequate
compensation for any losses incurred by reason of a breach by it of any of
the
provisions of this Agreement and hereby further agrees that, in the event of
any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) No
Inconsistent Agreements.
Neither
the Company nor any of its subsidiaries has, as of the date hereof entered
into
and currently in effect, nor shall the Company or any of its subsidiaries,
on or
after the date of this Agreement, enter into any agreement with respect to
its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. Except as disclosed
in the Purchase Agreement, neither the Company nor any of its subsidiaries
has
previously entered into any agreement currently in effect granting any
registration rights with respect to any of its securities to any Person. Without
limiting the generality of the foregoing, without the written consent of the
Holders of a majority of the then outstanding Registrable Securities, the
Company shall not grant to any Person the right to request the Company to
register any securities of the Company under the Securities Act unless the
rights so granted are subject in all respects to the prior rights in full of
the
Holders set forth herein, and are not otherwise in conflict with the provisions
of this Agreement.
(c) No
Piggy-Back on Registrations.
Neither
the Company nor any of its security holders (other than the Holders in such
capacity pursuant hereto or as disclosed in the Purchase Agreement) may include
securities of the Company in the Registration Statement, and the Company shall
not after the date hereof enter into any agreement providing such right to
any
of its security holders, unless the right so granted is subject in all respects
to the prior rights in full of the Holders set forth herein, and is not
otherwise in conflict with the provisions of this Agreement.
11
(d) Piggy-Back
Registrations.
If at
any time when there is not an effective Registration Statement covering (i)
the
Conversion Shares or (ii) Warrant Shares, the Company shall determine to prepare
and file with the Commission a registration statement relating to an offering
for its own account or the account of others under the Securities Act of any
of
its equity securities, other than on Form S-4 or Form S-8 (each as promulgated
under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or
other employee benefit plans, the Company shall send to each Holder of
Registrable Securities written notice of such determination and, if within
thirty (30) days after receipt of such notice, or within such shorter period
of
time as may be specified by the Company in such written notice as may be
necessary for the Company to comply with its obligations with respect to the
timing of the filing of such registration statement, any such Holder shall
so
request in writing (which request shall specify the Registrable Securities
intended to be disposed of by the Purchasers), the Company will cause the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by the Holder, to the extent requisite
to permit the disposition of the Registrable Securities so to be registered;
provided
that if
at any time after giving 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
not to register or to delay registration of such securities, the Company may,
at
its election, give written notice of such determination to such Holder and,
thereupon, (i) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Securities in connection with
such
registration (but not from its obligation to pay expenses in accordance with
Section
4
hereof),
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities being registered pursuant to
this Section
7(d)
for the
same period as the delay in registering such other securities. The Company
shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered; provided,
however,
that
the Company shall not be required to register any Registrable Securities
pursuant to this Section
7(d)
that are
eligible for sale pursuant to Rule 144(k) of the Securities Act. In the case
of
an underwritten public offering, if the managing underwriter(s) or
underwriter(s) should reasonably object to the inclusion of the Registrable
Securities in such registration statement, then if the Company after
consultation with the managing underwriter should reasonably determine that
the
inclusion of such Registrable Securities would materially adversely affect
the
offering contemplated in such registration statement, and based on such
determination recommends inclusion in such registration statement of fewer
or
none of the Registrable Securities of the Holders, then (x) the number of
Registrable Securities of the Holders included in such registration statement
shall be reduced pro-rata among such Holders (based
upon the number of Registrable Securities requested to be included in the
registration), if the Company after consultation with the underwriter(s)
recommends the inclusion of fewer Registrable Securities, or (y) none of the
Registrable Securities of the Holders shall be included in such registration
statement, if the Company after consultation with the underwriter(s) recommends
the inclusion of none of such Registrable Securities; provided,
however,
that if
securities are being offered for the account of other persons or entities as
well as the Company, such reduction shall not represent a greater fraction
of
the number of Registrable Securities intended to be offered by the Holders
than
the fraction of similar reductions imposed on such other persons or entities
(other than the Company).
12
(e) Failure
to File Registration Statement and Other Events.
The
Company and the Purchasers agree that the Holders will suffer damages if the
Registration Statement is not filed on or prior to the Filing Date and not
declared effective by the Commission on or prior to the Effectiveness Date
and
maintained in the manner contemplated herein during the Effectiveness Period
or
if certain other events occur. The Company and the Holders further agree that
it
would not be feasible to ascertain the extent of such damages with precision.
Accordingly, if (A) the Registration Statement is not filed on or prior to
the
Filing Date, or (B) the Registration Statement is not declared effective by
the
Commission on or prior to the Effectiveness Date, or (C) the Company fails
to
file with the Commission a request for acceleration in accordance with Rule
461
promulgated under the Securities Act within three (3) Business Days of the
date
that the Company is notified (orally or in writing, whichever is earlier) by
the
Commission that a Registration Statement will not be “reviewed,” or is not
subject to further review, or (D) the Registration Statement is filed with
and
declared effective by the Commission but thereafter ceases to be effective
as to
all Registrable Securities at any time prior to the expiration of the
Effectiveness Period, without being succeeded immediately by a subsequent
Registration Statement filed with and declared effective by the Commission
in
accordance with Section
2(a)
hereof,
or (E) the Company has breached Section
3(n),
or (F)
trading in the Common Stock shall be suspended or if the Common Stock is no
longer quoted on or is delisted from the OTC Bulletin Board (or other principal
exchange on which the Common Stock is traded) for any reason for more than
three
(3) Business Days in the aggregate (any such failure or breach being referred
to
as an “Event,”
and
for purposes of clauses (A) and (B) the date on which such Event occurs, or
for
purposes of clause (C) the date on which such three (3) Business Day period
is
exceeded, or for purposes of clause (D) after more than fifteen (15) Business
Days, or for purposes of clause (F) the date on which such three (3) Business
Day period is exceeded, being referred to as “Event
Date”),
the
Company shall pay an amount in cash or registered Common Stock (at the Company’s
sole discretion) to each Holder, as partial liquidated damages and not as a
penalty, equal to two percent (2%) of the amount of the Holder’s total
investment in the Notes for each calendar month or portion thereof thereafter
from the Event Date until the applicable Event is cured; provided,
however,
that
(x) for those certain Registrable Securities not permitted to be registered
by
the Commission in any such Registration Statement pursuant to Rule 415, late
effectiveness penalties pursuant to this Section shall only be payable on the
portion of the Holder’s total investment in the Notes that corresponds to the
number of such Registrable Securities allowed to be registered by the Commission
and (y) in no event shall the amount of liquidated damages payable at any time
and from time to time to any Holder pursuant to this Section
7(e)
exceed
an aggregate of eighteen percent (18%) of the amount of the Holder’s total
investment in the Notes and Warrants. Notwithstanding anything to the contrary
in this paragraph (e), if (i) any of the Events described in clauses (A), (B),
(C), (D) or (F) shall have occurred, (ii) on or prior to the applicable Event
Date, the Company shall have exercised its rights under Section
3(n) hereof
and (iii) the postponement or suspension permitted pursuant to such Section
3(n)
shall
remain effective as of such applicable Event Date, then the applicable Event
Date shall be deemed instead to occur on the second Business Day following
the
termination of such postponement or suspension. Liquidated damages payable
by
the Company pursuant to this Section
7(e)
shall be
payable on the first (1st)
Business Day of each thirty (30) day period following the Event Date. In the
event that the Company exercises its right to pay the amounts due under this
Section
7(e)
in
registered Common Stock, such shares shall be valued in a manner consistent
with
valuation of such shares in the Note, in connection with payments of shares
of
Common Stock for interest thereon. Notwithstanding the foregoing provisions
of
this Section
7(e), the
Company may not exercise its right to pay the amounts due under this
Section
7(e)
in
registered Common Stock, unless such shares meet all the requirements under
this
Agreement for transferability set forth in this Agreement applicable to shares
of Common Stock registered in accordance with this Agreement.
In
the
event the Commission does not permit all of the Registrable Securities to be
included in the Registration Statement because of its application and issuance
of comments concerning Rule 415 then the Company shall be allowed to respond
to
such comments within ten (10) calendar days after its receipt and shall be
entitled to an additional ten (10) calendar day period to exchange comments
with
the Commission before any liquidated damages pursuant to this Section shall
occur (each such ten day period, an “Extension”).
No
more than two (2) Extensions shall be available to the Company, such that the
time before such liquidated damages will be incurred will not exceed one hundred
sixty (160) days from the Filing Date. Subsequent to any and all Extensions,
liquidated damages payable to the Holders shall follow the foregoing
provisions.
13
(f) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless the same shall be in writing
and
signed by the Company and the Holders of a majority of the Registrable
Securities outstanding. No
consideration shall be offered or paid to any Holders of Notes or Holders of
the
Warrants to amend or consent to a waiver or modification of any provision of
any
of the Transaction Documents unless the same consideration also is offered
to
all of the parties to the Transaction Documents, Holders of Notes or Holders
of
the Warrants, as the case may be. The Company has not, directly or indirectly,
made any agreements with any Purchasers relating to the terms or conditions
of
the transactions contemplated by the Transaction Documents except as set forth
in the Transaction Documents. Without limiting the foregoing, the Company
confirms that, except as set forth in this Agreement, no Purchaser has made
any
commitment or promise or has any other obligation to provide any financing
to
the Company or otherwise. No
failure or delay on the part of the Holder in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege, nor shall
any waiver by the Holder of any such right or rights on any one occasion be
deemed a waiver of the same right or rights on any future occasion.
(g) Notices.
Any
notice, demand, request, waiver or other communication required or permitted
to
be given hereunder shall be in writing and shall be effective (a) upon facsimile
at the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business
day
during normal business hours where such notice is to be received) or (b) on
the
second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The addresses for such communications
shall be:
|
If
to the Company:
|
Juma
Technology, Inc
000
Xxxxxx Xxxxxx
Xxxxxxxxxxx,
Xxx Xxxx 00000
Attention:
Chief Executive Officer
Tel.
No.: (000) 000-0000
Fax
No.: (000) 000-0000
|
|
|
|
|
|
|
with
copies to:
|
Xxxxxxx
Xxxxxx LLP
000
Xxxxxxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxx Xxxxxxxxx, Esq.
Tel.
No.: (000) 000-0000
Fax
No.: (000) 000-0000
|
|
|
If
to any Purchaser:
|
At
the address of such Purchaser set forth on Schedule
I
to
this Agreement, with copies to Purchaser’s counsel (which copies shall not
constitute notice to such purchaser) as set forth on Schedule
I
or
as specified in writing by such Purchaser.
|
|
|
|
|
|
|
with
copies to:
|
Sadis
& Xxxxxxxx LLP
000
Xxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxx Xxxxxxx, Esq.
Tel.
No.: (000) 000-0000
Fax
No.: (000) 000-0000
|
14
Any
party
hereto may from time to time change its address for notices by giving at least
ten (10) days written notice of such changed address to the other parties
hereto.
(h)
Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns and shall inure to the benefit of each
Holder and its successors and assigns. The Company may not assign this Agreement
or any of its rights or obligations hereunder without the prior written consent
of each Holder. Each Purchaser may assign its rights hereunder in the manner
and
to the Persons as permitted under the Purchase Agreement.
(i)
Assignment
of Registration Rights.
The
rights of each Holder hereunder, including the right to have the Company
register for resale Registrable Securities in accordance with the terms of
this
Agreement, shall be automatically assignable by each Holder if: (i) the Holder
agrees in writing with the transferee or assignee to assign such rights, and
a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (ii) the Company is, within a reasonable time after
such
transfer or assignment, furnished with written notice of (A) the name and
address of such transferee or assignee, and (B) the securities with respect
to
which such registration rights are being transferred or assigned, (iii)
following such transfer or assignment the further disposition of such securities
by the transferee or assignees is restricted under the Securities Act and
applicable state securities laws unless such securities are registered in a
Registration Statement under this Agreement (in which case the Company shall
be
obligated to amend such Registration Statement to reflect such transfer or
assignment) or are otherwise exempt from registration, (iv) at or before the
time the Company receives the written notice contemplated by clause (ii) of
this
Section, the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions of this Agreement, and (v) such transfer shall
have been made in accordance with the applicable requirements of the Purchase
Agreement. In addition, each Holder shall have the right to assign its rights
hereunder to any other person with the prior written consent of the Company,
which consent shall not unreasonably be withheld. The rights to assignment
shall
apply to the Holders (and to subsequent) successors and assigns.
(j) Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement and shall become effective when
counterparts have been signed by each party and delivered to the other parties
hereto, it being understood that all parties need not sign the same counterpart.
In the event that any signature is delivered by facsimile or electronic mail
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile or electronic mail signature
were
the original thereof.
(k) Governing
Law; Jurisdiction.
The
parties acknowledge and agree that any claim, controversy, dispute or action
relating in any way to this agreement or the subject matter of this agreement
shall be governed solely by the laws of the State of Delaware, without regard
to
any conflict of laws doctrines. The parties irrevocably consent to being served
with legal process issued from the state and federal courts located in New
York
and irrevocably consent to the exclusive personal jurisdiction of the federal
and state courts situated in the State of New York. The parties irrevocably
waive any objections to the personal jurisdiction of these courts. Said courts
shall have sole and exclusive jurisdiction over any and all claims,
controversies, disputes and actions which in any way relate to this agreement
or
the subject matter of this agreement. The parties also irrevocably waive any
objections that these courts constitute an oppressive, unfair, or inconvenient
forum and agree not to seek to change venue on these grounds or any other
grounds. The parties hereby agree that the prevailing party in any suit, action
or proceeding arising out of or relating to this Agreement or the Purchase
Agreement, shall be entitled to reimbursement for reasonable legal fees from
the
non-prevailing party. The parties hereby waive all rights to a trial by jury.
Nothing
in this Section
7(k)
shall
affect or limit any right to serve process in any other manner permitted by
law.
15
(l) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
(m) Severability.
The
provisions of this Agreement are severable and, in the event that any court
of
competent jurisdiction shall determine that any one or more of the provisions
or
part of the provisions contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision or part
of a
provision of this Agreement and such provision shall be reformed and construed
as if such invalid or illegal or unenforceable provision, or part of such
provision, had never been contained herein, so that such provisions would be
valid, legal and enforceable to the maximum extent possible.
(n) Headings.
The
article, section and subsection headings in this Agreement are for convenience
only and shall not constitute a part of this Agreement for any other purpose
and
shall not be deemed to limit or affect any of the provisions
hereof.
(o) Shares
Held by the Company and its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the
Company or its Affiliates (other than any Holder or transferees or successors
or
assigns thereof if such Holder is deemed to be an Affiliate solely by reason
of
its holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
(p) Independent
Nature of Purchasers.
The
Company acknowledges that the obligations of each Purchaser under the
Transaction Documents are several and not joint with the obligations of any
other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under the Transaction
Documents. The Company acknowledges that the decision of each Purchaser to
purchase Securities pursuant to the Purchase Agreement has been made by such
Purchaser independently of any other Purchaser and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company or of its Subsidiaries
which may have made or given by any other Purchaser or by any agent or employee
of any other Purchaser, and no Purchaser or any of its agents or employees
shall
have any liability to any Purchaser (or any other person) relating to or arising
from any such information, materials, statements or opinions. The Company
acknowledges that nothing contained herein, or in any Transaction Document,
and
no action taken by any Purchaser pursuant hereto or thereto (including, but
not
limited to, the (i) inclusion of a Purchaser in the Registration Statement
and
(ii) review by, and consent to, such Registration Statement by a Purchaser)
shall be deemed to constitute the Purchasers as a partnership, an association,
a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents.
The
Company acknowledges that each Purchaser shall be entitled to independently
protect and enforce its rights, including without limitation, the rights arising
out of this Agreement or out of the other Transaction Documents, and it shall
not be necessary for any other Purchaser to be joined as an additional party
in
any proceeding for such purpose. The Company acknowledges that for reasons
of
administrative convenience only, the Transaction Documents have been prepared
by
counsel for one of the Purchasers and such counsel does not represent all of
the
Purchasers. The Company acknowledges that it has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience
of
the Company and not because it was required or requested to do so by the
Purchasers. The Company acknowledges that such procedure with respect to the
Transaction Documents in no way creates a presumption that the Purchasers are
in
any way acting in concert or as a group with respect to the Transaction
Documents or the transactions contemplated hereby or thereby.
[remainder
of page intentionally left blank]
16
IN
WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed by their respective authorized persons as of
the
date first indicated above.
| |
|
|
| By: |
/s/
Xxxxx Xxxxxxxx
|
|
|
Name:
Xxxxx Xxxxxxxx
|
||
|
Title:
Chief Executive Officer
|
||
|
PURCHASER
|
||
|
Vision
Opportunity Master Fund, Ltd.
|
||
| |
|
|
| By: |
/s/
Xxxx Xxxxxxxx
|
|
|
Name:
Xxxx Xxxxxxxx
|
||
|
Title:
Director
|
||
17
Schedule
I
|
Names
and Addresses of the Purchasers
|
Investment
Amount
|
Shares
& Warrants Purchased
|
||
|
Vision
Opportunity Master Fund, Ltd.
c/o
Vision Capital Advisors, LLC
00
Xxxx 00xx
Xxxxxx
Xxx
Xxxx, XX 00000
Attn:
Antti Uusiheimala
|
$6,000,000
|
$6,000,000
principal amount of Note
Series
A Warrant: 7,300,000
|
||
i
EXHIBIT
A
Plan
of Distribution
The
selling security holders and any of their pledgees, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock being offered under this prospectus on any stock exchange,
market or trading facility on which shares of our common stock are traded or
in
private transactions. These sales may be at fixed or negotiated prices. The
selling security holders may use any one or more of the following methods when
disposing of shares:
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resales by the broker-dealer
for its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
to
cover short sales made after the date that the registration statement
of
which this prospectus is a part is declared effective by the
Commission;
|
|
·
|
broker-dealers
may agree with the selling security holders to sell a specified number
of
such shares at a stipulated price per
share;
|
|
·
|
a
combination of any of these methods of sale;
and
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
shares may also be sold under Rule 144 under the Securities Act of 1933, as
amended (“Securities
Act”),
if
available, rather than under this prospectus. The selling security holders
have
the sole and absolute discretion not to accept any purchase offer or make any
sale of shares if they deem the purchase price to be unsatisfactory at any
particular time.
The
selling security holders may pledge their shares to their brokers under the
margin provisions of customer agreements. If a selling security holder defaults
on a margin loan, the broker may, from time to time, offer and sell the pledged
shares.
Broker-dealers
engaged by the selling security holders may arrange for other broker-dealers
to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling security holders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, which
commissions as to a particular broker or dealer may be in excess of customary
commissions to the extent permitted by applicable law.
If
sales
of shares offered under this prospectus are made to broker-dealers as
principals, we would be required to file a post-effective amendment to the
registration statement of which this prospectus is a part. In the post-effective
amendment, we would be required to disclose the names of any participating
broker-dealers and the compensation arrangements relating to such
sales.
ii
The
selling security holders and any broker-dealers or agents that are involved
in
selling the shares offered under this prospectus may be deemed to be
“underwriters” within the meaning of the Securities Act in connection with these
sales. Commissions received by these broker-dealers or agents and any profit
on
the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Any broker-dealers or agents
that are deemed to be underwriters may not sell shares offered under this
prospectus unless and until we set forth the names of the underwriters and
the
material details of their underwriting arrangements in a supplement to this
prospectus or, if required, in a replacement prospectus included in a
post-effective amendment to the registration statement of which this prospectus
is a part.
The
selling security holders and any other persons participating in the sale or
distribution of the shares offered under this prospectus will be subject to
applicable provisions of the Exchange Act, and the rules and regulations under
that act, including Regulation M. These provisions may restrict activities
of,
and limit the timing of purchases and sales of any of the shares by, the selling
security holders or any other person. Furthermore, under Regulation M, persons
engaged in a distribution of securities are prohibited from simultaneously
engaging in market making and other activities with respect to those securities
for a specified period of time prior to the commencement of such distributions,
subject to specified exceptions or exemptions. All of these limitations may
affect the marketability of the shares.
If
any of
the shares of common stock offered for sale pursuant to this prospectus are
transferred other than pursuant to a sale under this prospectus, then subsequent
holders could not use this prospectus until a post-effective amendment or
prospectus supplement is filed, naming such holders. We offer no assurance
as to
whether any of the selling security holders will sell all or any portion of
the
shares offered under this prospectus.
We
have
agreed to pay all fees and expenses we incur incident to the registration of
the
shares being offered under this prospectus. However, each selling security
holder and purchaser is responsible for paying any discounts, commissions and
similar selling expenses they incur.
We
and
the selling security holders have agreed to indemnify one another against
certain losses, damages and liabilities arising in connection with this
prospectus, including liabilities under the Securities Act.
iii
