REGISTRATION RIGHTS AGREEMENT
Exhibit
4.19
THIS
REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), dated as of August 24,2004,
by
and among GLOBAL
IT
HOLDINGS,
INC., a
Nevada
corporation, with its principal office located at 000 0xx Xxxxxx, Xxxxx 0000,
Xxx Xxxx, XX
00000
(the "Company"), and ADVANTAGE
CAPITAL DEVELOPMENT CORP. ("ACDC"),
a Nevada corporation with its principal office at 2999 NE 00 0Xx
Xxxxxx,
XX Xxxxxxxx, Xxxxxxx 33 180.
WHEREAS:
A.
The
Company has agreed to issue and sell to the Investors secured convertible
debentures
(the "Convertible Debentures") which shall be convertible into that number
of
shares of the Company's common stock, $.001 par value per share (the "Common
Stock"). Capitalized terms not defined herein shall have the meaning ascribed
to
them in the Convertible Debenture.
B.
To
induce the Investors to execute and deliver the Convertible Debenture, the
Company
has agreed to provide certain registration rights under the Securities Act
of
1933, as amended,
and the rules and regulations there under, or any similar successor statute
(collectively, the "1 933 Act"), and applicable state securities laws.
NOW,
THEREFORE, in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the Investors hereby agree as follows:
1.
DEFINITIONS.
As
used
in this Agreement, the following terms shall have the following meanings:
(a)
"Person" means a corporation, a limited liability company, an association,
a
partnership, an organization, a business, an individual, a governmental or
political subdivision thereof or a governmental agency.
(b)
"Register," "registered," and "registration" refer to a registration effected
by
preparing and filing one or more Registration Statements (as defined below)
in
compliance with the 1933 Act and pursuant to Rule 41 5 under the 1933 Act
or any
successor rule providing for offering securities on a continuous or delayed
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement(s) by the United States Securities and Exchange SEC
(the
"SEC").
(c)
"Registrable Securities" means the shares of Common Stock issuable to Investors
upon conversion of the Convertible Debentures.
(d)
"Registration Statement" means a registration statement under the 1933 Act
which
covers the Registrable Securities.
2.
REGISTRATION.
(a)
Subject to the terms an d conditions of this
Agreement, the Company shall prepare
and file, no later than thirty (30) days fi-om the date hereof (the "Scheduled
Filing Deadline"), with the SEC a registration statement on Form S-1 or SB-2
(or, if the Company is then eligible, on Form S-3) under the 1933 Act (the
"Initial Registration Statement") for the registration for the resale by
ACDC
shares of the Common Stock to be issued upon conversion of the Convertible
Debentures. The Company shall cause the Registration Statement to remain
effective until all of the Registrable Securities have been sold. Prior to
the
filing of the Registration Statement with the SEC, the Company shall furnish
a
copy of the Initial Registration Statement to ACDC for their review and comment.
The ACDC shall furnish comments on the Initial Registration Statement to
the
Company within twenty-four (24) hours of the receipt thereof fi-om the Company.
(b)
Effectiveness
of the Initial Registration Statement. The Company shall use its best efforts
(i) to have the Initial Registration Statement declared effective by the
SEC no
later than ninety (90) days after the date hereof (the "Scheduled Effective
Deadline") and (ii) to insure that the Initial Registration Statement and
any
subsequent Registration Statement remains in effect until all of the Registrable
Securities have been sold, subject to the terms and conditions of this
Agreement.
(c)
Failure to File or Obtain Effectiveness of the Registration Statement.
In
the
event
the Registration Statement is not filed by the Scheduled Filing Deadline
or is
not declared effective by the SEC on or before the Scheduled Effective Date,
or
if after the Registration Statement has been declared effective by the SEC,
sales cannot be made pursuant to the Registration Statement (whether because
of
a failure to keep the Registration Statement effective, failure to disclose
such
information as is necessary for sales to be made pursuant to the Registration
Statement, failure to register sufficient shares of Common Stock or otherwise
then as partial relief for the damages to any holder of Registrable Securities
by reason of any such delay in or reduction of its ability to sell the
underlying shares of Common Stock (which remedy shall not be exclusive of
any
other remedies at law or in equity), the Company will pay as liquidated damages
(the "Liquidated Damages") to the holder, at the holder's option, either
a cash
amount or shares of the Company's Common Stock within three (3) business
days,
after demand therefore, equal to two percent (2%) of the liquidated value
of the
Convertible Debentures outstanding as Liquidated Damages for each thirty
(30)
day period after the Scheduled Filing Deadline or the Scheduled Effective
Date
as the case may be.
(d)
Liquidated Damages. The Company and ACDC hereto acknowledge and agree that
the
sums payable under subsection 2(c) above shall constitute liquidated damages
and
not penalties and are in addition to all other rights of the Investor, including
the right to call a default. The parties further acknowledge that (i) the
amount
of loss or damages likely to be incurred is incapable or is difficult to
precisely estimate, (ii) the amounts specified in such subsections bear a
reasonable relationship to, and are not plainly or grossly disproportionate
to,
the probable loss llkely to be incurred in connection with any failure by
the
Company to obtain or maintain the effectiveness of a Registration Statement,
(iii) one of the reasons for the Company and the Investor reaching an agreement
as to such amounts was the uncertainty and cost of litigation regarding the
question of actual damages, and (iv) the Company and the Investor
are sophisticated business parties and have been represented by sophisticated
and able legal counsel and negotiated this Agreement at arm's length.
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3. RELATED
OBLIGATIONS.
(a)
The Company shall keep the Registration Statement
effective pursuant to Rule
415
at all times until the date on which the ACDC shall have sold all the
Registrable Securities covered by such Registration Statement (the "Registration
Period"), which Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any 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 light of
the
circumstances in which they were made, not misleading.
(b)
The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and
the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424
promulgated
under the 1933 Act, as may be necessary to keep such Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition
of
all Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in such Registration Statement. In the case
of
amendments and supplements to a Registration Statement which are required
to be
filed pursuant to this Agreement (including pursuant to this Section 3(b))
by
reason of the Company's filing a report on Form 1 0-KSB, Form 10-QSB or Form
8-K
or any analogous report under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), the Company shall incorporate such report by reference
into
the Registration Statement, if applicable, or shall file such amendments
or
supplements with the SEC on the same day on which the 1934 Act report is
filed
which created the requirement for the Company to amend or supplement the
Registration Statement.
(c)
The
Company shall furnish to ACDC whose Registrable Securities are included in
any
Registration Statement, without charge, (i) at least one (1) copy of such
Registration Statement as declared effective by the SEC and any amendment(s)
thereto, including financial statements and schedules, all documents
incorporated therein by reference, all exhibits and each preliminary prospectus,
(ii) ten (10) copies of the final prospectus included in such Registration
Statement and all amendments and supplements thereto (or such other number
of
copies as ACDC may reasonably request) and (iii) such other documents as
ACDC
may reasonably request from time to time in order to facilitate the disposition
of the Registrable Securities owned by such Investor.
(d)
The
Company shall use its best efforts to (i) register and qualify the Registrable
Securities covered by a Registration Statement under such other securities
or
"blue sky" laws of such jurisdictions in the United States as any Investor
reasonably requests, (ii) prepare and file in those jurisdictions, such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may
be
necessary to maintain such registrations and qualifications in effect at
all
times during the Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in
such
jurisdictions; provided, however, that the Company shall not be required
in
connection therewith or as a condition thereto to (w) make any change to
its
certificate of incorporation or by-laws, (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this
Section 3(d), (y) subject itself to general taxation in any such jurisdiction,
or (z)
file
a
general consent to service of process in any such jurisdiction. The Company
shall promptly notify ACDC who holds Registrable Securities of the receipt
by
the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United
States
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.
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(e)
As
promptly as practicable after becoming aware of such event or development,
the
Company shall notify ACDC in writing of the happening of any event as a result
of whch the prospectus included in a Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading
(provided that in no event shall such notice contain any material, nonpublic
information), and promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and
deliver
ten (10)
copies
of
such supplement or amendment to ACDC. The Company shall also promptly notify
ACDC in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration Statement
or
any post-effective amendment has become effective (notification of such
effectiveness shall be delivered to ACDC by facsimile on the same day of
such
effectiveness), (ii) of any request by the SEC for amendments or supplements
to
a Registration Statement or related prospectus or related information, and
(iii)
of the Company's reasonable determination that a post-effective amendment
to a
Registration Statement would be appropriate.
(f)
The
Company shall use its best efforts to prevent the issuance of any stop order
or
other suspension of effectiveness of a Registration Statement, or the suspension
of the qualification of any of the Registrable Securities for sale in any
jurisdiction within the United States of America and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension
at
the earliest possible moment and to notify ACDC who holds Registrable Securities
being sold of the issuance of such order and the resolution thereof or its
receipt of actual notice of the initiation or threat of any proceeding for
such
purpose.
(g)
At
the reasonable request of any Investor, the Company shall furnish to such
Investor, on the date of the effectiveness of the Registration Statement
and
thereafter from time to time on such dates as ACDC may reasonably request
(i) a
letter, dated such date, from the Company's independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
and (ii) an opinion, dated as of such date, of counsel representing the Company
for purposes of such Registration Statement, in form, scope and substance
as is
customarily given in an underwritten public offering, addressed to the
Investors.
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(h)
The
Company shall make available for inspection by (i) ACDC and (ii) one
(1)
firm
of
accountants or other agents retained by ACDC (collectively, the "Inspectors")
all pertinent financial and other records, and pertinent corporate documents
and
properties of the Company (collectively, the "Records"), as shall be reasonably
deemed necessary by each Inspector, and cause the Company's officers, directors
and employees to supply all information which any Inspector may reasonably
request; provided, however, that each Inspector shall agree, and ACDC hereby
agrees, to hold in strict confidence and shall not make any disclosure or
use
any Record or other information which the Company determines in good faith
to be
confidential, and of which determination the Inspectors are so notified,
unless
(a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is otherwise required
under the 1933 Act, (b)
the
release of such Records is ordered pursuant to a final, non-appealable subpoena
or order fiom a court or government body of competent jurisdiction, or (c)
the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement of which
the Inspector and ACDC has knowledge. ACDC agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental
body
of competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential.
(i)
The
Company shall hold in confidence and not make any disclosure of information
concerning ACDC provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws,
(ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release
of
such information is ordered pursuant to a subpoena or other final,
non-appealable order fiom a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available
to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure
of
such information concerning ACDC is sought in or by a court or governmental
body
of competent jurisdiction or through other means, give prompt written notice
to
such Investor and allow such Investor, at the Investor's expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.
(j)
The
Company shall use its best efforts either to cause all the Registrable
Securities covered by a Registration Statement (i) to be listed on each
securities exchange on which securities of the same class or series issued
by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii) the
inclusion for quotation on the National Association of Securities Dealers,
Inc.
OTC Bulletin Board for such Registrable Securities. The Company shall pay
all
fees and expenses in connection with satisfjrlng its obligation under this
Section 36).
(k)
The
Company shall cooperate with the Investors who hold Registrable Securities
being
offered and, to the extent applicable, to facilitate the timely preparation
and
delivery of certificates (not bearing any restrictive legend) representing
the
Registrable Securities to be offered pursuant to a Registration Statement
and
enable such certificates to be in such denominations or amounts, as the case
may
be, as the Investors may reasonably request and registered in such names
as the
Investors may request.
-5-
(1)
The
Company shall use its best efforts to cause the Registrable Securities covered
by the applicable Registration Statement to be registered with or approved
by
such other governmental agencies or authorities as may be necessary to
consummate the disposition of such Registrable Securities.
(m)
The
Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90)
days
after the close of the period covered thereby, an earnings statement (in
form
complying with the provisions of Rule 158
under
the
0000 Xxx) covering a twelve (12) month period beginning not later than the
first
day of the Company's fiscal quarter next following the effective date of
the
Registration Statement.
(n)
The
Company shall otherwise use its best efforts to comply with all applicable
rules
and regulations of the SEC in connection with any registration hereunder.
(o)
Within two (2) business days after a Registration Statement which covers
Registrable Securities is declared effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective
by the
SEC in the form attached hereto as E ~ b iA.t
(p)
The
Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by the Investors of Registrable Securities pursuant
to a
Registration Statement.
4.
OBLIGATIONS OF THE INVESTORS.
ACDC
agrees that, upon receipt of any notice from the Company of the happening
of any
event of the kind described in Section 3(f) or the first sentence of 3(e),
such
Investor will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities
until such Investor's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(e) or receipt of notice that no supplement
or amendment is required. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended certificates for shares
of
Common Stock to a transferee of ACDC in connection with any sale of Registrable
Securities with respect to which ACDC has entered into a contract for sale
prior
to the Investor's receipt of a notice from the Company of the happening of
any
event of the kind described in Section 3(f) or the first sentence of 3(e)
and
for which the Investor has not yet settled.
5.
EXPENSES OF REGISTRATION.
All
expenses incurred in connection with registrations, filings or qualifications
pursuant to Sections 2 and 3, including, without limitation, all registration,
listing and qualifications fees, printers, legal and accounting fees shall
be
paid by the Company.
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6.
INDEMNIFICATION.
With
respect to Registrable Securities which are included in a Regstration Statement
under this Agreement:
(a)
To
the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend ACDC, the directors, officers, partners,
employees, agents, representatives of, and each Person, if any, who controls
any
Investor within the meaning of the 1933 Act or the 1934 Act (each, an
"Indemnified Person"), against any losses, claims, damages, liabilities,
judgments, fines, penalties, charges, costs, reasonable attorneys' fees,
amounts
paid in settlement or expenses, joint or several (collectively, "Claims")
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken fiom the foregoing by
or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto ("Indemnified Damages"), to which any
of them
may become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon:
(i)
any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any
filing
made in connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities
are
offered ("Blue Skv Filing"), or the omission or alleged omission to state
a
material fact required to be stated therein or necessary to make the statements
therein not misleading; (ii) any untrue statement or alleged untrue statement
of
a material fact contained in any final prospectus (as amended or supplemented,
if the Company files any amendment thereof or supplement thereto with the
SEC)
or the omission or alleged omission to state therein any material fact necessary
to make the statements made therein, in light of the circumstances under
which
the statements therein were made, not misleading; or (iii) any violation
or
alleged violation by the Company of the 1933 Act, the 1934 Act, any other
law,
including, without limitation, any state securities law, or any rule or
regulation there under relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, "Violations"). The Company
shall
reimburse the Investors and each such controlling person promptly as such
expenses are incurred and are due and payable, for any legal fees or
disbursements or other reasonable expenses incurred by them in connection
with
investigating or defending any such Claim. Notwithstanding anythmg to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (x)
shall
not
apply to a Claim by an Indemnified Person arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Indemnified Person expressly
for use
in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto; (y) shall not be available to the
extent such Claim is based on a failure of the Investor to deliver or to
cause
to be delivered the prospectus made available by the Company, if such prospectus
was timely made available by the Company pursuant to Section 3(c); and
(z)
shall
not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not
be
unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9
hereof.
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(b)
In
connection with a Registration Statement, ACDC agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the
same
manner as
is set
forth in Section 6(a), the Company, each of its directors, each of its officers,
employees, representatives, or agents and each Person, if any, who controls
the
Company within the meaning of the 1933 Act or the 1934 Act (each an "Indemnified
Party"), against any Claim or Indemnified Damages to which any of them may
become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as
such
Claim or Indemnified Damages arise out of or is based upon any Violation,
in
each case to the extent, and only to the extent, that such Violation occurs
in
reliance upon and in conformity with written information furnished to the
Company by such Investor expressly for use in connection with such Registration
Statement; and, subject to Section 6(d), such Investor will reimburse any
legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of
such
Investor, which consent shall not be unreasonably withheld; provided, further,
however, that the Investor shall be liable under this Section 6(b) for only
that
amount of a Claim or Indemnified Damages as does not exceed the net proceeds
to
such Investor as a result of the sale of Registrable Securities pursuant
to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified
Party
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6@) with
respect
to any prospectus shall not inure to the benefit of any Indemnified Party
if the
untrue statement or omission of material fact contained in the prospectus
was
corrected and such new prospectus was delivered to ACDC prior to such Investor's
use of the prospectus to which the Claim relates.
(c)
Promptly after receipt by an Indemnified Person or Indemnified Party under
this
Section 6 of notice of the commencement of any action or proceeding (including
any governmental action or proceeding) involving a Claim, such Indemnified
Person or Indemnified Party shall, if a Claim in respect thereof is to be
made
against any indemnifylng party under this Section 6, deliver to the indemnifylng
party a written notice of the commencement thereof, and the indemnifjmg party
shall have the right to participate in, and, to the extent the indemnifylng
party so desires, jointly with any other indemnifylng party similarly noticed,
to assume control of the defense thereof with counsel mutually satisfactory
to
the indemnifylng party and the Indemnified Person or the Indemnified Party,
as
the case may be; provided, however, that an Indemnified Person or Indemnified
Party shall have the right to retain its own counsel with the fees and expenses
of not more than one (1) counsel for such Indemnified Person or Indemnified
Party to be paid by the indemnifylng party, if, in the reasonable opinion
of
counsel retained by the indemnifylng party, the representation by such counsel
of the Indemnified Person or Indemnified Party and the indemnifylng party
would
be inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by
such
counsel in such proceeding. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifylng party in connection with any negotiation
or defense of any such action or claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to
the
Indemnified Party or Indemnified Person which relates to such action or claim.
The indemnifylng party shall keep the Indemnified Party or Indemnified Person
fully apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. No indemnifying party shall be liable
for any
settlement of any action,
claim or proceeding effected without its prior written consent; provided,
however, that the indemnifylng party shall not unreasonably withhold, delay
or
condition its consent. No indemnifylng party shall, without the prior written
consent of the Indemnified Party or Indemnified Person, consent to entry
of any
judgment or enter into any settlement or other compromise whch does not include
as an unconditional term thereof the giving by the claimant or plaintiff
to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such claim or litigation. Following indemnification as provided
for
hereunder, the indemnifymg party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties,
firms
or corporations relating to the matter for whch indemnification has been
made.
The failure to deliver written notice to the indemnifjmg party within a
reasonable time of the commencement of any such action shall not relieve
such
indemnifylng party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifylng party
is
prejudiced in its ability to defend such action.
-8-
(d)
The
indemnification required by this Section 6 shall be made by periodic payments
of
the amount thereof during the course of the investigation or defense, as
and
when bills are received or Indemnified Damages are incurred.
(e)
The
indemnity agreements contained herein shall be in addition to (i) any cause
of
action or similar right of the Indemnified Party or Indemnified Person against
the indemnifylng party or others, and (ii) any liabilities the indemnifylng
party may be subject to pursuant to the law.
7.
CONTRIBUTION.
To
the
extent any indemnification by an indemnifylng party is prohibited or limited
by
law, the indemnifylng party agrees to make the maximum contribution with
respect
to any amounts for which it would otherwise be liable under Section 6 to
the
fullest extent permitted by law; provided, however, that: (i) no seller of
Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 1 l(f) of the 0000 Xxx) shall be entitled to contribution
from any seller of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such
seller
from the sale of such Registrable Securities.
8.
REPORTS
UNDER THE 1934 ACT.
With
a
view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act or any similar rule or regulation of the SEC that may
at any
time permit the Investors to sell securities of the Company to the public
without registration ("Rule 144") the Company agrees to:
(a)
make
and keep public information available, as those terms are understood and
defined
in Rule 144;
(b)
file
with the SEC in a timely manner all reports and other documents required
of the
Company under the 1933 Act and the 1934 Act so long as the Company
remains subject
to such requirements and the filing of such reports and other documents as
are
required by the applicable provisions of Rule 144; and
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(c)
furnish to ACDC so long as such Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company that it has complied
with
the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii)
a
copy of the most recent annual or quarterly report of the Company and such
other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
9.
AMENDMENT OF REGISTRATION RIGHTS.
Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors
who
then hold at least two-thirds (213) of the Registrable Securities. Any amendment
or waiver effected in accordance with this Section 9 shall be binding upon
ACDC
and the Company. No such amendment shall be effective to the extent that
it
applies to fewer than all of the holders of the Registrable Securities. No
consideration shall be offered or paid to any Person to amend or consent
to a
waiver or modification of any provision of any of this Agreement unless the
same
consideration also is offered to all of the parties to this Agreement.
10. MISCELLANEOUS.
(a)
A
Person is deemed to be a
holder of Registrable Securities whenever such Person
owns or is deemed to own of record such Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two (2) or more
Persons with respect to the same Registrable Securities, the Company shall
act
upon the basis of instructions, notice or election received fiom the registered
owner of such Registrable Securities.
(b)
Any
notices, consents, waivers or other communications required or permitted
to be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending
party);
or (iii) one (1) business day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party
to
receive the same. The addresses and facsimile numbers for such communications
shall be:
|
If
to the Company, to:
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|||
|
000
0xxXxxxxx,
Xxxxx 0000
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|||
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Xxx
Xxxx, XX 00000
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|||
|
Attention:
|
Xxxxx Xxxxx, President | ||
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Telephone:
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(000)
000-0000
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||
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Facsimile:
|
(0
00) 000-0000
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||
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|
If
to the ACDC, to:
|
Advantage
Capital Development Corp.
|
|
|
0000
XX 000XxXxxxxx, Xxxxxxxxx 0
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||
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Xxxxxxxx,
Xxxxxxx 33 180
|
||
|
Attention:
Xxxx Xxxxxxxxx, President
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||
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Telephone:
|
(56 l)000- 0000 | |
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Telefax:
|
(000)000-0000 | |
Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated
by
the sender's facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided
by a
courier or overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt fkom a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.
(c)
Failure of any party to exercise any right or remedy under this Agreement
or
otherwise, or delay by a party in exercising such right or remedy, shall
not
operate as a waiver thereof.
(d)
The
laws of the State of Florida shall govern all issues concerning the relative
rights of the Company and the Investors as its stockholders. All other questions
concerning the construction, validity, enforcement ,and interpretation of
this
Agreement shall be governed by the internal laws of the State of Florida,
without giving effect to any choice of law or conflict of law provision or
rule
(whether of the State of Florida or any other jurisdiction) that would cause
the
application of the laws of any jurisdiction other than the State of Florida.
Each party hereby irrevocably submits to the non-exclusive jurisdiction of
the
Superior Courts of the State of Florida and federal courts for the District
of
Florida, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an inconvenient
forum
or that the venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
to
such party at the address for such notices to it under this Agreement and
agrees
that such service shall constitute good and sufficient service of process
and
notice thereof. Nothing contained herein shall be deemed to limit in any
way any
right to serve process in any manner permitted by law. If any provision of
this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT
TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR
IN
CONNECTION
HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
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(e)
This
Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.
(f)The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(g)
This
Agreement may be executed in identical counterparts, each of which shall
be
deemed an original but all of which shall constitute one and the same agreement.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
(h)
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
The
language used in this Agreement will be deemed to be the language chosen
by the
parties to express their mutual intent and no rules of strict construction
will
be applied against any party.
(i)
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may
any
provision hereof be enforced by, any other Person.
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