REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
dated
as of June 30, 2005, by and between Global IT Holdings, Inc., a corporation
organized under the laws of Nevada (the “Company”),
and
Highgate House, LLC, whose address is 0000 Xxxxxxxxxx Xxxx Xxxx., Xxxxx 000,
Xxxxxxxxxxx, Xxxxxxxxx 00000 (the “Purchaser”).
On
or
prior to the date hereof, (i) the Company issued certain a Secured Convertible
Debenture (the “Debenture
A”)
to the
Purchaser on the date hereof that may be converted to common stock, par value
$.001 (the “Common
Stock”)
of the
Company (the “Underlying
Shares”)
and
(ii) the Company has issued Common Stock Purchase Warrants (the “Warrants”)
that
are exercisable into Common Stock (the “Warrant
Shares”),
all
as more particularly provided therein.
The
Company and the Holder hereby agree as follows:
1. Definitions.
As used
in this Agreement, the following terms shall have the following
meanings:
“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 only, the term “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 “affiliated,”
“controlling”
and
“controlled”
have
meanings correlative to the foregoing.
“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 are authorized or
required by law or other government actions to close between the hours of 9:30
a.m. and 5:00 p.m. New York Time.
“Commission”
means
the United States Securities and Exchange Commission.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Holder”
or
“Holders”
means
the Purchaser and any other 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)
hereof.
“Indemnifying
Party”
shall
have the meaning set forth in Section
5(c)
hereof.
“Inspectors”
shall
have the meaning set forth in Section
4(a)(ix)
hereof.
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“Losses”
shall
have the meaning set forth in Section
5(a)
hereof.
“New
York Courts”
shall
have the meaning set forth in Section
9(e)
hereof.
“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 a 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 such Registration Statement,
and all other amendments and supplements to the prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such prospectus.
“Registrable
Securities”
means
the Underlying Shares, the Warrant Shares and any other shares of Common Stock
issued as (or issuable upon the conversion or exercise of any warrant, right,
or
other security which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of the Debenture A, the Warrants,
Underlying Shares or the Warrant Shares, excluding in all cases, however, any
Registrable Securities sold by a Person in a transaction in which the seller’s
rights under this Agreement are not assigned.
“Registration”
shall
have the meaning set forth in Section 2(a) hereof.
“Registration
Expenses”
means
all expenses incurred in effecting any registration pursuant to this Agreement,
including, without limitation, all registration, qualification, and filing
fees,
printing expenses, escrow fees, fees and disbursements of counsel for the
Company, blue sky fees and expenses, and expenses of any regular or special
audits incident to or required by any such registration, but shall not include
selling expenses, fees and disbursements of counsel for the Holders and the
compensation of regular employees of the Company, which shall be paid in any
event by the Company.
“Registration
Statement”
means
each registration statement, contemplated by Section 2(a) hereof, including
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 or deemed to be incorporated by
reference in such registration statement.
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“Rule
144"
means
Rule 144 promulgated by the Commission under 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
144A”
means
Rule 144A promulgated by the Commission under 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"
shall
mean Rule 415 promulgated by the Commission under 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.
“Selling
Holders”
means
each Holder any of whose Registrable Securities are being registered pursuant
to
a Registration Statement.
“Underwritten
Offering”
means
a
registration in connection with which securities of the Company are sold to
an
underwriter for sale to the public pursuant to an effective registration
statement.
2. “Piggy-back”
Registrations.
(a) If
the
Company decides to register any of its Common Stock or securities convertible
into or exchangeable for Common Stock under the Securities Act (a “Registration”)
on a
form that is suitable for an offering of shares of Common Stock by the Company
or by third parties and that is not a registration solely to implement an
employee benefit plan on Commission Form S-8, a registration statement on
Commission Form S-4 (or successor form) or a transaction to which Rule 145
or
any other similar rule of the Commission is applicable (such form, a
“Registration
Statement”),
the
Company shall give written notice to the Holders of its intention to effect
such
a Registration. Subject to Section
2(b)
below,
the Company shall use all reasonable efforts to effect Registration under the
Securities Act of all Registrable Securities that the Holders request be
included in such Registration by a written notice delivered to the Company
within thirty (30) days after the notice given by the Company. Each of the
Holders agrees that any Registrable Securities which such Holder requests to
be
included in a Registration pursuant to this Section
2
shall be
included by the Company on the same form of Registration Statement as selected
for the Registration.
(b) If
a
Registration involves an Underwritten Offering, the Company shall not be
required to register securities in excess of the amount that the principal
underwriter reasonably and in good faith recommends in writing for inclusion
in
such offering (a “Cutback”),
a
copy of which recommendation, and supporting reasoning, shall be delivered
to
each Holder. If such a Cutback occurs, the number of shares that are entitled
to
be included in the Registration and underwriting shall be allocated in the
following manner: (i) first, to the Company for any securities it proposes
to
sell for its own account, (ii) second, to any Person with demand registration
rights requiring such registration, and (iii) third, to the Holders and other
holders of Company securities with piggy-back registration rights requesting
inclusion in the Registration, pro
rata
among
the respective holders thereof on the basis of the number of shares for which
each such requesting holder has requested registration.
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(c) If
the
Registration of which the Company gives notice is for an underwritten public
offering, the Company shall so advise the Holders as a part of the written
notice given pursuant to Section
2(a).
In such
event, the right of any Holder to have its Registrable Securities included
in
the Registration pursuant to this Section
2
shall be
conditioned upon such Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company and its other
security holders with registration rights to participate therein distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the representative of the underwriters or the managing
underwriter selected by the Company.
(d) If
the
Company elects to terminate any Registration after a Registration Statement
for
such Registration shall have been filed, the Company will have no obligation
to
register the Registrable Securities that the Holders sought to have included
in
such Registration. The Company shall bear all Registration Expenses of the
Holders in connection with any Registration.
3. Representations
and Warranties.
(a)
The
Company hereby makes the following representations and warranties to the
Purchaser:
(i) The
Company has the requisite corporate power and authority to enter into, execute
and deliver this Agreement, and to consummate the transactions contemplated
hereby and to carry out its obligations hereunder. The execution and delivery
of
this Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Company. This Agreement has been duly executed and delivered by
the
Company and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium, liquidation or similar laws relating
to,
or affecting generally the enforcement of, creditors’ rights or by other
equitable principles of general application;
(ii) The
Warrants and Debenture A are validly issued, fully paid and non-assessable.
The
Underlying Shares and the Warrant Shares have been duly authorized for issuance,
offer and sale, and when issued and delivered, in accordance with the Warrants
or Debenture A, respectively, shall be validly issued, fully paid and
non-assessable;
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(iii) The
Company has and at all times while Warrants and the Debenture A remain
outstanding will continue to maintain an adequate reserve of shares of Common
Stock to enable it to perform its obligations under this Agreement, the
Debenture A and the Warrants;
(iv) The
execution, delivery and performance of this Agreement, and the consummation
by
the Company of the transactions contemplated hereby do not and will not (i)
conflict with or violate any provision of its or any of its subsidiaries’s
articles of incorporation, resolutions or bylaws or (ii) require the consent
of
any third party, conflict with, or constitute a default (or an event which
with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which
the
Company is subject (including federal and state securities laws and
regulations), or by which any property or assets of the Company or any of its
Subsidiaries is bound or affected, except in the case of each of clauses (ii)
and (iii), such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate,
have a material adverse effect on the Company;
(v) Neither
the Company nor any of its subsidiaries is required to obtain any consent,
permit, waiver, authorization or order of, or make any filing or registration
with, any court or other federal, state, local or other governmental authority
or other Person in connection with the execution, delivery and performance
by
the Company of this Agreement;
(vi) Neither
the Company nor any of its subsidiaries (i) is in default under or in violation
of any indenture, loan or credit agreement or any other agreement or instrument
to which it is a party or by which it or any of its properties is bound, except
such conflicts or defaults as do not have a material adverse effect on the
Company, (ii) is in violation of any order of any court, arbitrator or
governmental body, except for such violations as do not have a material adverse
effect on the Company, or (iii) is in violation of any statute, rule or
regulation of any governmental authority which could (individually or in the
aggregate) (x) adversely affect the legality, validity or enforceability of
this
Agreement, (y) have a material adverse effect on the Company or (z) adversely
impair the Company’s ability or obligation to perform fully on a timely basis
its obligations under this Agreement;
(b)
The
Purchaser hereby represents and warrants to the Company as follows:
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(i) Such
Purchaser has the requisite capacity or, as the case may be, authority to enter
into and to consummate the transactions contemplated hereby and otherwise to
carry out its obligations hereunder. The execution and delivery of this
Agreement have been duly authorized by all necessary action or corporate action,
as the case may be, on the part of such Purchaser. This Agreement has been
duly
executed and delivered by such Purchaser or on its behalf and constitutes the
valid and legally binding obligation of such Purchaser, enforceable against
it
in accordance with its terms; except as such enforceability may be limited
by
applicable bankruptcy, insolvency, liquidation, fraudulent transfer,
reorganization, moratorium laws and remedies or by other equitable principles
of
general application or similar laws relating to or affecting generally the
enforcement of creditors’ rights.
(iii)
Purchaser is acquiring the Debenture A, the Warrant, the Warrant Shares and
Underlying Shares for its own account for investment purposes only and without
a
view toward the resale or distribution thereof, without prejudice, however,
to
the Purchaser’s right, subject to the provisions of this Agreement, at all times
to sell or otherwise dispose of all or any part of such Debenture A, Warrant,
Warrant Shares or Underlying Shares in compliance with applicable federal and
state securities laws.
4. Procedures
for Registration.
(a) Whenever
the Company is required to register Registrable Securities under this Agreement,
it agrees to do the following at its sole cost and expense:
(i) advise
the underwriter(s), if any, and the Selling Holders promptly and, if requested
by such Persons, to confirm such advice in writing: (A) when the Prospectus,
or
any Prospectus supplement or post-effective amendment has been filed, and,
with
respect to the Registration Statement or any post-effective amendment thereto,
when the same has become effective; (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto; (C) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Securities Act or of the suspension by any
state securities commission of the qualification of the Registrable Securities
for qualification, offering or sale in any jurisdiction, or the initiation
of
any Proceeding for any of the preceding purposes; and (D) of the existence
of
any fact or the happening of any event that makes any statement of a material
fact made in the Registration Statement, the Prospectus, any amendment or
supplement thereto, or any document incorporated by reference therein untrue,
or
that requires the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make the statements therein not
misleading. If, at any time, the Commission issues any stop order suspending
the
effectiveness of the Registration Statement or any state securities commission
or other regulatory authority issues an order suspending the qualification
or
exemption from qualification of any Registrable Securities under state
securities or blue sky laws, the Company shall use its best efforts to obtain
the withdrawal or lifting of such order at the earliest possible
time;
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(ii) if
requested by any Selling Holder or the underwriter(s), if any, incorporate
in
the Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such Selling Holder
and the underwriter(s), if any, may reasonably request to have included therein,
with respect to the number of Registrable Securities, if any, being sold to
such
underwriter(s), the purchase price being paid therefor and any other terms
of
the offering of the Registrable Securities to be sold in such offering, and
the
Company shall make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Company is notified
of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(iii) furnish
to the Selling Holders and each of the underwriter(s), if any, without charge,
before filing with the Commission, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment thereto,
including the Prospectus and all documents incorporated by reference therein
and
all exhibits (including exhibits incorporated therein by
reference);
(iv) consult
with the Selling Holders and the underwriter(s), if any, prior to the filing
of
such Registration Statement or Prospectus;
(v) deliver
to each of the Selling Holders and underwriter(s), if any, without charge,
as
many copies of the Prospectus (including each preliminary Prospectus) and any
amendment or supplement thereto as such Persons may reasonably request, the
Company hereby consenting to the use of the Prospectus and any amendment or
supplement thereto by each of the Selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of any
Registrable Securities covered by the Prospectus or any amendment or supplement
thereto;
(vi) use
its
best efforts, prior to any public offering of Registrable Securities, to
register or qualify the Registrable Securities under the securities or blue
sky
laws of such jurisdictions as the Holder or underwriter(s), if any, may
reasonably request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement; provided,
however,
that
the Company shall not be required to register or qualify as a foreign
corporation where it is not now so qualified or to take any action that would
subject it to the service of process in suits or to taxation, other than as
to
matters and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(vii) cooperate
with the Selling Holders and the underwriter(s), if any, to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities covered by a Registration Statement and not bearing any restrictive
legends, except as required by law, and enable such Registrable Securities
to be
in such denominations and registered in such names as the Holders may request
prior to any sale of Registrable Securities made by the underwriter(s), if
any;
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(viii) in
connection with the preparation and filing of each Registration Statement under
the Securities Act pursuant to this Agreement, the Company shall give Selling
Holders, their underwriters, if any, and one counsel or firm of counsel and
one
accountant or firm of accountants representing all Selling Holders the
opportunity to participate in the preparation of such Registration Statement,
each Prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto.
(ix) make
available for inspection by the Selling Holders, any underwriter participating
in any disposition pursuant to a Registration Statement, and any attorney,
accountant or other agent retained by any Holder or underwriter (collectively,
the “Inspectors”), all financial and other records, pertinent corporate
documents and properties of the Company necessary to enable them to exercise
their due diligence responsibility, and cause the Company’s officers, directors
and employees to supply all information reasonably requested by any such
Inspector in connection with such Registration Statement;
(x) notify
each seller of Registrable Securities covered by a Registration Statement 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 the Registration Statement, as then in effect, includes and untrue
statement of a material fact or omits to state a material fact required to
be
stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing, and, at the request
of any such seller, prepare and furnish to such seller a reasonable number
of
copies of a supplement to be an amendment of such Prospectus as may be necessary
so that, as thereafter delivered to the purchasers of any Registrable
Securities, such Prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or incomplete in the light of
the
circumstances then existing;
(xi) keep
such
registration effective for a period of one hundred eighty (180) days or until
the Selling Holders have completed the distribution described in any
Registration Statement relating thereto, whichever first occurs; provided,
however,
that
(A) such 180-day period shall be extended for a period of time equal to the
longer of (1) the period the Holder refrains from selling any securities
included in such registration at the request of an underwriter of securities
of
the Company and (2) the period ending on the date on which Rule 144(k) first
becomes available for transfers of Registrable Securities and (B) in the case
of
any Registration of Registrable Securities on Form S-3 which are intended to
be
offered on a continuous or delayed basis, such 180-day period shall be extended,
if necessary, to keep the Registration Statement effective until all such
Registrable Securities are sold, however in no event longer than one year from
the Effective Date of the Registration Statement and provided that Rule 415
permits an offering on a continuous or delayed basis;
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(xii) cause
all
such Registrable Securities registered hereunder to be listed on each securities
exchange on which similar securities issued by the Company are then
listed;
(xiii) provide
a
transfer agent and registrar for all Registrable Securities registered pursuant
to a Registration Statement and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such Registration
Statement;
(xiv) otherwise
use its best efforts to comply with all applicable rules and regulations of
the
Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least 12 months,
but not more than 18 months, beginning with the first month after the effective
date of the Registration Statement, which earnings statement shall satisfy
the
provisions of Section 11(a) of the Securities Act; and
(xv) at
such
time as a Registration Statement covering a resale of any Registrable Securities
has been declared effective by the Commission, cause its counsel to deliver
to
the transfer agent for the Common Stock an opinion, subject to the making by
Selling Holders of such representations and warranties to Company counsel as
it
may reasonably require, certifying that such Registrable Securities may be
sold
by the Selling Holders pursuant to such Registration Statement with the
purchasers thereof receiving share certificates without restrictive legend,
which opinion shall remain effective so long as such Registration Statement
remains in full force and effect;
(b) Each
Selling Holder shall, upon receipt of notice from the Company of the occurrence
of any event of the kind described in Section
4(a)(x),
forthwith discontinue disposition of Registrable Securities following the
effective date of a Registration Statement covering Registrable Securities
until
such Holder’s receipt of copies of the Prospectus supplement and/or
post-effective amendment or until it is advised in writing 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.
(c) Each
Holder covenants and agrees that (i) it will not offer or sell any Registrable
Securities being registered pursuant to any Registration Statement until such
Holder shall have received copies of the related Prospectus and notice from
the
Company that such Registration Statement has become effective and (ii) such
Holder and its officers, directors and Affiliates, if any, will comply with
the
Prospectus delivery requirements of the Securities Act as applicable to them
in
connection with sales of Registrable Securities pursuant to any Registration
Statement.
5. Indemnification.
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(a) Indemnification
by the Company.
The
Company shall, notwithstanding termination of this Agreement and without
limitation as to time, indemnify and hold harmless each Holder, the officers,
directors, agents (including any underwriters retained by the Holders in
connection with the offer or sale of Registrable Securities), brokers,
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, agents and employees of
each such controlling Person, 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 any untrue or alleged untrue statement
of a material fact contained in such 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
amendment or supplement thereto, in light of the circumstances under which
they
were made) not misleading, except solely to the extent that (I) such untrue
statements or omissions are based solely upon information regarding such Holder
furnished in writing to the Company by or on behalf of such Holder expressly
for
use therein, which information was relied on by the Company for use therein
or
(ii) such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was furnished in writing to the
Company by or on behalf of such Holder expressly 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.
(b) Indemnification
by Holders.
In
connection with each Registration Statement, each Selling Holder shall furnish
to the Company in writing such information as the Company reasonably requests
for use in connection with such Registration Statement or the related Prospectus
and agrees, severally and not jointly, to indemnify and hold harmless the
Company, their directors, 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, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses (as determined by a court of
competent jurisdiction in a final judgment not subject to appeal or review)
arising solely out of or based solely upon any untrue statement of a material
fact contained in such Registration Statement, such Prospectus, or any form
of
Prospectus, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading solely to the extent that (I) such untrue statement
or
omission is contained in any information furnished in writing by such Holder
to
the Company specifically for inclusion in such Registration Statement or such
Prospectus and such information was relied upon by the Company for use in such
Registration Statement, such Prospectus or such form of Prospectus, or (ii)
such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was furnished in writing by or on
behalf of such Holder to the Company specifically for inclusion in such
Registration Statement or such Prospectus and such information was relied upon
by the Company for use in such Registration Statement, such Prospectus or such
form of Prospectus; provided,
however,
that
anything contained herein to the contrary notwithstanding, no Holder shall
be
liable for any claims hereunder in an amount in excess of the net proceeds
received by such Holder from the sale of its Registrable Securities pursuant
to
a Registration Statement. In addition, the foregoing shall not inure to the
benefit of any Holder if a copy of such Prospectus (as then amended or
supplemented) was furnished by the Company to such Holder and was not sent
or
given by or on behalf of such Holder to such Holder’s purchaser of Registrable
Securities if required by law to have been so delivered.
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(c) Conduct
of Indemnification Proceedings.
If any
Proceeding is 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 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 is 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: (I) the Indemnifying Party has agreed to pay such fees and expenses;
or
(ii) the Indemnifying Party shall have failed to assume promptly the defense
of
such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in such Proceeding; or (iii) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such Indemnified 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 of the
claim against the Indemnified Party but shall retain the right to control the
overall Proceedings out of which the claim arose, and counsel employed by the
Indemnified Party 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. No Indemnifying Party shall, without the prior written consent of
the
Indemnified Party, effect any settlement of any pending Proceeding in respect
of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
C-11
All
fees
and expenses of the Indemnified Party to which the Indemnified Party is entitled
hereunder (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 after the Indemnified Party gives
written notice thereof to the Indemnifying Party.
(d) Contribution.
If a
claim for indemnification under Section
5(a)
or
5(b)
of this
Agreement is unavailable to an Indemnified Party or is insufficient to hold
such
Indemnified Party harmless for any Losses in respect of which this Section
would
apply by its terms (other than by reason of exceptions provided in this
Section),
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, (i) 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 distribution of the Registrable Securities or (ii)
if the allocation provided by clause (i) above in this paragraph is not
permitted by applicable law, in such proportion as is appropriate to reflect
not
only the relative benefits referred to in such clause (i) but also the relative
fault 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)
hereof,
any attorneys’ or other 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.
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.
Notwithstanding the provisions of this Section
5(d),
no
Holder shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the proceeds actually received by such Holder from the
sale of its Registrable Securities subject to the Proceeding exceeds the amount
of any damages that such Holder has otherwise been required to pay by reason
of
such untrue or alleged untrue statement or omission or alleged omission. 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.
C-12
(e) The
indemnity and contribution agreements contained in this Section
5
and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of any Holder or any Person controlling Holder, the
Company, its directors or officers or any Person controlling the
Company.
(f) No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending or threatened action, suit or
proceeding in respect of which any Indemnified Party is or could have been
a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such action,
suit or proceeding.
(g) 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.
6. Rule
144.
The
Company shall file the reports required to be filed by it under the Securities
Act and the Exchange Act in a timely manner and, if at any time the Company
is
not required to file such reports, it will, upon the request of any Holder,
make
publicly available other information for as long as necessary to permit sales
of
its securities pursuant to Rule 144. 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 Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by 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.
7. Rule
144A.
The
Company agrees that, upon the request of a Holder or any prospective purchaser
of Registrable Securities designated by a Holder, the Company shall promptly
provide (but in any case within fifteen (15) days of a request) to such Holder
or potential purchaser, the following information:
(a) a
brief
statement of the nature of the business of the Company and any subsidiaries
and
the products and services each of them offers;
(b) the
most
recent consolidated balance sheets and profit and losses and retained earnings
statements, and similar financial statements of the Company for the two (2)
most
recent fiscal years (such financial information shall be audited, to the extent
reasonably available); and
(c) such
other information about the Company, any subsidiaries, and their business,
financial condition and results of operations as such Holder or purchaser of
such Registrable Securities shall request in order to comply with Rule 144A,
as
amended, and in connection therewith the anti-fraud provisions of the federal
and state securities laws.
C-13
The
Company hereby represents and warrants to the Holders and any prospective
purchaser of Registrable Securities from a Holder that the information provided
by the Company pursuant to this Section
7
will, as
of the dates of such information, not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not
misleading.
8. Consent
to be Bound; Assignability of Registration Rights.
Each
subsequent holder of Registrable Securities must consent in writing to be bound
by the terms and conditions of this Agreement in order to acquire the rights
granted pursuant to this Agreement. Subject to the foregoing sentence, the
registration rights set forth in this Agreement are assignable to each assignee
of Registrable Securities conveyed in accordance herewith who agrees in writing
to be bound by the terms and conditions of this Agreement.
9. Miscellaneous.
(a) No
amendment, modification, termination or cancellation of this Agreement shall
be
effective unless made in a writing signed by the Company and all of the Persons
who are then Holders of Registrable Securities;
(b) The
Company and the Holders agree that the rights created by this Agreement are
unique, and that the loss of any such right is not susceptible to monetary
quantification. Consequently, the parties agree that an action for specific
performance (including for temporary and/or permanent injunctive relief) of
the
obligations created by this Agreement is a proper remedy for the breach of
the
provisions of this Agreement, without the necessity of proving actual damages.
If the parties hereto are forced to institute legal proceedings to enforce
their
rights in accordance with the provisions of this Agreement, the prevailing
party
shall be entitled to recover its reasonable expenses, including attorneys’ fees,
in connection with any such action;
(c) Except
as
otherwise specifically provided herein, all notices, requests, demands and
other
communications provided for hereunder shall be in writing and shall be deemed
duly given to the Person for whom intended (i) upon receipt when personally
delivered, (ii) one (1) day after being sent by a nationally recognized
overnight courier for next day delivery or telecopy providing confirmation
or
receipt of delivery, or (iii) three (3) days after being sent by certified
or
registered mail, postage and certified or registered mail fees prepaid, return
receipt requested, if sent to such Person at the address for such Person
indicated below or to such other address as may be designated by such Person
in
writing sent by such Person in the manner required by this Section:
C-14
|
If
to the Company:
|
Global
IT Holdings, Inc.
|
|
000
0xx Xxxxxx, 00xx Xxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
|
|
Attn:
Xxxxx Xxxxx
|
|
|
Tel:
(000) 000-0000
|
|
|
Fax:
(000) 000-0000
|
|
|
With
copies to:
|
Xxxxxx
& Jaclin, LLP
|
|
000
Xxxxx 0 Xxxxx, Xxxxx 000
|
|
|
Xxxxxxxxx,
XX 00000
|
|
|
Attn:
Xxxxx X. Xxxxxx, Esq.
|
|
|
Tel:
(000) 000-0000
|
|
|
Fax:
(000) 000-0000
|
|
|
If
to the Holder:
|
Highgate
House, LLC
|
|
0000
Xxxxxxxxxx Xxxx Xxxx.
|
|
|
Xxxxx
000
|
|
|
Xxxxxxxxxxx,
Xxxxxxxxx 00000
|
|
|
With
a copy to:
|
Gottbetter
& Partners
|
|
000
Xxxxxxx Xxxxxx
|
|
|
Xxx
Xxxx, Xxx Xxxx 00000
|
|
|
Attn:
Xxxx X. Xxxxxxxxxx
|
|
|
Tel:
(000) 000-0000
|
|
|
Fax:
(000) 000-0000
|
(d) 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. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid and
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 signature
were the original thereof;
(e) This
Agreement shall be governed by and construed in accordance with the laws of
the
state of New York without regard to principles thereof relating to the conflict
of laws. Each of the Company and each Holder hereby irrevocably submits to
the
jurisdiction of any New York state court or any federal court sitting in the
city and county of New York (collectively, the “New York Courts”) in respect of
any Proceeding arising out of or relating to this Agreement and irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, jurisdiction of the New York Courts. Each of the Company and
each Holder irrevocably waives, to the fullest extent it may effectively do
so
under applicable law, any objection that it may now or hereafter have to the
laying of the venue of any such Proceeding brought in any New York Court and
any
claim that any such Proceeding brought in any New York Court has been brought
in
an inconvenient forum;
(f) The
remedies provided herein are cumulative and not exclusive of one another or
of
any remedies provided by law;
C-15
(g) If
any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(h) The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
[Signatures
on following page]
C-16
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
| COMPANY | ||
| GLOBAL IT HOLDINGS, INC. | ||
| |
|
|
| By: | ||
|
Name: Xxxxx Press |
||
| Title: Chairman and Senior Vice President | ||
| PURCHASER | ||
| HIGHGATE HOUSE, LLC | ||
| |
|
|
| By: | HH Advisors, LLC, its managing member | |
| By: Xxxxxxx Investment Group, Inc., its managing member | ||
| By: | ||
|
Name: Xxxx X. Xxxxxxxxxx |
||
| Title: President | ||
C-17
