REGISTRATION RIGHTS AGREEMENT
Exhibit 99.4
This
Registration Rights Agreement (this "Agreement")
is
dated as of February 12, 2007, by and among Commerce Planet, Inc., a Utah
corporation (the "Company"),
and
the investors signatory hereto (each a "Investor"
and
collectively, the "Investors").
This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of
the
date hereof among the Company, Selling Stockholders and the Investors (the
"Purchase
Agreement").
The
Company and the Investors hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
Purchase Agreement will have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms have the respective
meanings set forth in this Section 1:
"Advice"
has
the
meaning set forth in Section 6(d).
"Commission"
means
the Securities and Exchange Commission.
"Effective
Date"
means,
as to a Registration Statement, the date on which such Registration Statement
is
first declared effective by the Commission.
"Effectiveness
Date"
means
with respect to the Registration Statement required to be filed with the
Commission under Section 2(a), the earlier of: (i)(A) the 60th
calendar
day following the date on which the Company files its Annual Report on Form
10-KSB for the fiscal year ended December 31, 2006, provided,
that,
if the Commission reviews and has written comments to the filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (i)(A) shall
be the 90th
calendar
day following the date on which the Company files its Annual Report on Form
10-KSB for the fiscal year ended December 31, 2006, and (B) the 150th
calendar
day following the Closing Date, and (ii) the fifth Trading Day following the
date on which the Company is notified by the Commission that the initial
Registration Statement will not be reviewed or is no longer subject to further
review and comments.
"Effectiveness
Period"
has the
meaning set forth in Section 2(a).
"Exchange
Act"
means
the Securities Exchange Act of 1934, as amended.
"Filing
Date"
means
with respect to the Registration Statement required to be filed under Section
2(a), the earlier of the (i) 15th
calendar
day following the date on which the Company files its Annual Report on Form
10-KSB for the fiscal year ended December 31, 2006 and (ii) 60th
calendar
day following the Closing Date.
"Holder"
or
"Holders"
means
the holder or holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified
Party”
has the
meaning set forth in Section 5(c).
“Indemnifying
Party”
has the
meaning set forth in Section 5(c).
“Losses”
has the
meaning set forth in Section 5(a).
“New
York Courts”
means
the state and federal courts sitting in the City of New York, Borough of
Manhattan.
"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 a 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:
(i) the Shares, and (ii) any securities issued or issuable upon any stock split,
dividend or other distribution, recapitalization or similar event, or any
conversion price adjustment with respect to any of the Shares.
"Registration
Statement"
means
the registration statement required to be filed in accordance with Section
2(a),
including the Prospectus, amendments and supplements to such registration
statements or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference therein.
"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
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.
“Selling
Stockholders”
has the
meaning set forth in the Purchase Agreement.
“Shares”
means
those shares of Common Stock being offered and sold by the Selling Stockholders
to Investors pursuant to the Purchase Agreement.
2. Registration.
(a) On
or
prior to the Filing Date, the Company shall prepare and file with the Commission
a Registration Statement covering the resale of all Registrable Securities
for
an offering to be made on a continuous basis pursuant to Rule 415, on Form
SB-2
(or on such other form appropriate for such purpose). Such Registration
Statement shall contain (except if otherwise required pursuant to written
comments received from the Commission upon a review of such Registration
Statement) the "Plan of Distribution" attached hereto as Annex A. The Company
shall use its reasonable best efforts to cause such Registration Statement
to be
declared effective under the Securities Act as soon as possible but, in any
event, no later than the Effectiveness Date, and shall use its reasonable best
efforts to keep the Registration Statement continuously effective under the
Securities Act until the date which is the earliest of (i) such time as all
of the Registrable Securities covered by such Registration Statement have been
publicly sold by the Holders, or (ii) such time as all of the Registrable
Securities covered by such Registration Statement may be sold by the Holders
pursuant to Rule 144(k) as determined by the counsel to the Company pursuant
to
a written opinion letter to such effect, addressed and acceptable to the
Company's transfer agent and the affected Holders (the "Effectiveness
Period").
By
9:30 a.m. (New York City time) on the Trading Day immediately following the
Effective Date, the Company shall file with the Commission in accordance with
Rule 424 under the Securities Act the final prospectus to be used in connection
with sales pursuant to such Registration Statement (whether or not such filing
is technically required under such Rule).
(b) If:
(i)
the Registration Statement is not filed on or prior to the Filing Date covering
all of the Registrable Securities required under this Agreement to be included
therein (if the Company files a Registration Statement without affording the
Holders the opportunity to review and comment on the same as required by Section
3(a) hereof, the Company shall not be deemed to have satisfied this clause
(i)),
or (ii) the Registration Statement is not declared effective by the Commission
on or prior to the Effectiveness Date or if by the Business Day immediately
following the Effective Date the Company shall not have filed a “final”
prospectus for the Registration Statement with the Commission under Rule 424(b)
(whether or not such a prospectus is technically required by such Rule), or
(iii) after the Effective Date, without regard for the reason therefor or
efforts therefor, such Registration Statement ceases for any reason to be
effective and available to the Holders as to all Registrable Securities to
which
it is required to cover at any time prior to the expiration of the Effectiveness
Period for more than an aggregate of 45 Trading Days during any 365 calendar
day
period (any such failure or breach being referred to as an "Event,"
and for
purposes of clauses (i) or (ii) the date on which such Event occurs, or for
purposes of clause (iii) the date which such 45 Trading Day-period is exceeded
being referred to as "Event
Date"),
then
in addition to any other rights the Holders may have hereunder or under
applicable law: on each such Event Date, and on each monthly anniversary of
each
such Event Date (if the applicable Event shall not have been cured by such
date)
until the applicable Event is cured, the Company shall pay to each Holder an
amount in cash, as partial liquidated damages and not as a penalty, equal to
1.0% of the aggregate Investment Amount paid by such Holder for Shares pursuant
to the Purchase Agreement; provided,
however,
that
the total amount of partial liquidated damages payable by the Company pursuant
to all Events under this Section shall be capped at an aggregate of 8% of the
aggregate Investment Amount paid by the Investors for Shares under the Purchase
Agreement. The partial liquidated damages pursuant to the terms hereof shall
apply on a daily pro-rata basis for any portion of a month prior to the cure
of
an Event, except in the case of the first Event Date. In no event will the
Company be liable for liquidated damages under this Agreement in excess of
1.0%
of the aggregate Investment Amount of the Investors for Shares in any 30-day
period.
(c) Each
Holder agrees to furnish to the Company a completed Questionnaire in the form
attached to this Agreement as Annex
B
(a
“Selling
Holder Questionnaire”).
The
Company shall not be required to include the Registrable Securities of a Holder
in a Registration Statement and shall not be required to pay any liquidated
or
other damages under Section 2(b) to any Holder who fails to furnish to the
Company a fully completed Selling Holder Questionnaire at least two Trading
Days
prior to the Filing Date (subject to the requirements set forth in Section
3(a)).
3. Registration
Procedures.
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a) Not
less
than four Trading Days prior to the filing of a Registration Statement or any
related Prospectus or any amendment or supplement thereto, the Company shall
furnish to each Holder copies of the “Selling Stockholders” section of such
document, the “Plan of Distribution” and any risk factor contained in such
document that addresses specifically the Selling Stockholders (other than risk
factors contained in a subsequently prepared Quarterly Report on Form 10-QSB),
as proposed to be filed which documents will be subject to the review of such
Holder. The Company shall not file a Registration Statement, any Prospectus
or
any amendments or supplements thereto in which the “Selling Stockholder” section
thereof differs from the disclosure received from a Holder in its Selling Holder
Questionnaire (as amended or supplemented).
(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective as to the applicable Registrable Securities for its Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements as may be 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 by 9:30
a.m.
on the next Trading Day; (iii) respond as promptly as reasonably possible to
any
comments received from the Commission with respect to each Registration
Statement or any amendment thereto and, as promptly as reasonably possible
provide the Holders true and complete copies of all correspondence from and
to
the Commission relating to such Registration Statement that would not result
in
the disclosure to the Holders of material and non-public information concerning
the Company; and (iv) comply in all material respects with the provisions of
the
Securities Act and the Exchange Act with respect to the Registration Statements
and the disposition of all Registrable Securities covered by each Registration
Statement.
(c) Notify
the Holders as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than three Trading Days prior to such filing and, in the case
of
(v) below, not less than three Trading Days prior to the financial statements
in
any Registration Statement becoming ineligible for inclusion therein) (or,
in
the case of (i)(C) below, immediately) and (if requested by any such Person)
confirm such notice in writing no later than one Trading Day following the
notice (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement (other than with respect to any prospectus
supplements filed with the Commission by the Company solely to include the
contents of a Quarterly Report on Form 10-QSB or a Current Report on Form 8-K)
is proposed to be 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 (the Company
shall
provide true and complete copies thereof and all written responses thereto
to
each of the Holders that pertain to the Holders as a Selling Stockholder or
to
the Plan of Distribution, but not information which the Company believes would
constitute material and non-public information); and (C) with respect to each
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 a Registration Statement
or Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation
of
any Proceedings for that purpose; (iv) 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 (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such 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
such
Registration Statement, Prospectus or other documents so that, in the case
of
such 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 light of the circumstances under which they were made, not
misleading.
(d) Use
its
reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(e) Hold
in
confidence and not make any disclosure of information concerning an Investor
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 from 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 an Investor 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.
(f) Furnish
to each Holder, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto and all exhibits to the extent requested
by
such Person (including those previously furnished) promptly after the filing
of
such documents with the Commission, unless such documents are available on
the
Commission’s website.
(g) Promptly
deliver to each Holder, without charge, as many copies of each Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request. 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, register or qualify such
Registrable Securities for offer and sale under the securities or Blue Sky
laws
of all jurisdictions within the United States, 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
the
Registration Statements.
(i) Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee
pursuant to the Registration Statements, and to enable such Registrable
Securities to be in such denominations and registered in such names as any
such
Holders may request.
(j) Upon
the
occurrence of any event contemplated by Section 3(c)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statements 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, no Registration Statement nor any 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
light of the circumstances under which they were made, not
misleading.
4. Registration
Expenses.
All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a 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 any
Trading Market on which the Common Stock is then listed for trading, and (B)
in
compliance with applicable state securities or Blue Sky laws), (ii) printing
expenses (including, without limitation, expenses of printing certificates
for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably 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, (v) Securities Act liability insurance, if the Company so 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. 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 and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.
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, agents, investment advisors,
partners, members 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, to the fullest extent permitted by applicable
law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable costs of preparation and reasonable
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 any 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 light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (1) such
untrue statements or omissions are based solely upon information regarding
such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use
in
the Registration Statement, such Prospectus or such form of Prospectus or in
any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (2) in the case of an occurrence
of
an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder
of an outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior to
the
receipt by such Holder of an Advice or an amended or supplemented Prospectus,
but only if and to the extent that following the receipt of the Advice or the
amended or supplemented Prospectus the misstatement or omission giving rise
to
such Loss would have been corrected. 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.
Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its 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 incurred, arising solely out of or based solely
upon: (x) such Holder's failure to comply with the applicable prospectus
delivery requirements of the Securities Act or (y) any untrue statement of
a
material fact contained in any Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto, 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 to
the
extent, but only to the extent that, (1) such untrue statements or omissions
are
based solely upon information regarding such Holder furnished in writing to
the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement (it
being understood that the Holder has approved Annex A hereto for this purpose),
such Prospectus or such form of Prospectus or in any amendment or supplement
thereto or (2) in the case of an occurrence of an event of the type specified
in
Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder
of
an Advice or an amended or supplemented Prospectus, but only if and to the
extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have
been
corrected. In no event shall the liability of any selling Holder hereunder
be
greater in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(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 shall promptly 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 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; (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 at any time thereafter shall have
failed to diligently defend 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 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
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, conditioned or delayed. 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 imposes no obligations on the Indemnified Party other than the
payment of monetary damages (which damages shall be paid solely by the
Indemnifying Party) and includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
Proceeding.
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 Trading 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 Indemnifying Party may require such Indemnified
Party to undertake to 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 unavailable to an
Indemnified Party (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
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(b) and (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.
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
net proceeds actually received by such Holder from the sale of the 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.
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. Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, each 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) Compliance.
Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.
(c) Discontinued
Disposition.
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), 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 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. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.
(d) Piggy-Back
Registrations.
If at
any time during the Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and 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, then the Company
shall send to each Holder written notice of such determination and, if within
fifteen calendar days after receipt of such notice, any such Holder shall so
request in writing, the Company shall include in such registration statement
all
or any part of such Registrable Securities such holder requests to be
registered, subject to customary underwriter cutbacks applicable to all holders
of registration rights; provided that the Registrable Securities shall have
priority over all other equity securities proposed to be offered for sale in
such registration statement.
(e) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this Section 7(f),
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.
(f) Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (a) the date of transmission, if such notice or communication
is delivered via facsimile (provided the sender receives a machine-generated
confirmation of successful transmission) at the facsimile number specified
in
this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (b)
the
next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in this Section
on
a day that is not a Trading Day or later than 6:30 p.m. (New York City time)
on
any Trading Day, (c) the Trading Day following the date of mailing (provided
that next day delivery is specified), if sent by U.S. nationally recognized
overnight courier service, or (d) upon actual receipt by the party to whom
such
notice is required to be given. The address for such notices and communications
shall be as follows:
|
If to the Company:
|
00
X. Xx Xxxxxx Xxxx, Xxxxx 0
Xxxxxx,
XX 00000
Facsimile
No.: (000) 000-0000
Attn:
President
|
|
|
With a copy to:
(which shall not constitute notice)
|
Xxxxxxxx
Xxxxxx Xxxxxxx & Hampton LLP
0000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxx
Xxxxxxx, XX 00000
Facsimile
No.: (000) 000-0000
Attn:
C. Xxxxxx Xxxxxxx, Esq.
|
|
| If to a Selling Stockholder: | To the address set forth on its signature page hereto; | |
| If to a Investor: | To the address set forth on its signature page hereto. | |
| If to any other Person who is then the registered Holder: | To the address of such Holder as it appears in the stock transfer books of the Company |
or
such
other address as may be designated in writing hereafter, in the same manner,
by
such Person.
(g) Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties and shall inure to the benefit of
each
Holder. The Company may not assign its rights or obligations hereunder without
the prior written consent of each Holder. Each Holder may assign their
respective rights hereunder in the manner and to the Persons as permitted under
the Purchase Agreement.
(h) Execution
and 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. In the event that any signature
is
delivered by facsimile 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 signature
were the original thereof.
(i) Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all Proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement (whether brought against a party hereto or its
respective Affiliates, employees or agents) will be commenced in the New York
Courts. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts 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 Proceeding, any claim that it is not personally subject to the jurisdiction
of any New York Court, or that such Proceeding has been commenced in an improper
or inconvenient forum. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such Proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for 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. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
Proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. Without limiting Section 5 hereof or any provision of
the
Purchase Agreement, if either party shall commence a Proceeding to enforce
any
provisions of this Agreement, then the prevailing party in such Proceeding
shall
be reimbursed by the other party for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Proceeding.
(j) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
(k) Severability.
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.
(l) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(m) Independent
Nature of Investors' Obligations and Rights.
The
obligations of each Investor under this Agreement are several and not joint
with
the obligations of each other Investor, and no Investor shall be responsible
in
any way for the performance of the obligations of any other Investor under
this
Agreement. Nothing contained herein or in any Transaction Document, and no
action taken by any Investor pursuant thereto, shall be deemed to constitute
the
Investors as a partnership, an association, a joint venture or any other kind
of
group or entity, or create a presumption that the Investors are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement or any other Transaction Document.
Each Investor acknowledges that no other Investor will be acting as agent of
such Investor in enforcing its rights under this Agreement. Each Investor shall
be entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Investor to be joined as an additional party in any
Proceeding for such purpose. The Company acknowledges that each of the Investors
has been provided with the same Registration Rights Agreement for the
convenience of the Company for the purpose of closing a transaction with
multiple Investors and not because it was required or requested to do so by
any
Investor.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE
PAGES TO FOLLOW]
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
COMMERCE
PLANET, INC.
By:
/s/ Xxxxxxx Xxxx
Name:
Xxxxxxx Xxxx
Title:
Chairman of the Board and Chief Executive Officer
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES OF INVESTORS TO FOLLOW]
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
NAME
OF INVESTOR
CAMOFI
Master LDC
By:
/s/
Xxxxxxx X. Xxxx
Name:
Xxxxxxx X. Xxxx
Title:
Authorized Signatory
ADDRESS
FOR NOTICE
c/o:
Centrecourt
Asset Management LLC
Street:
000
Xxxxxxx Xxx, 0xx Xx
City/State/Zip:
Xxx
Xxxx, XX 00000
Attention:
Xxxxxxx
X. Xxxx
Tel: 000-000-0000
Fax: 000-000-0000
Email: xxxxx@xxxxxxxxxxxxx.xxx
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
NAME
OF INVESTOR
Crestview
Capital Master, LLC
By:
/s/
Xxxxxx Xxxx
Name:
Xxxxxx Xxxx
Title:
Manager
ADDRESS
FOR NOTICE
c/o:
Xxxxxxxxx
Xxxxxxx
Xxxxxx:
00
Xxxxxx Xxxxx, Xxx X
Xxxx/Xxxxx/Xxx:
Xxxxxxxxxx,
XX 00000
Attention:
Xxxxx
Xxxxxxx/ Xxxx Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
Email: xxxx@xxxxxxxxxxxx.xxx
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
NAME
OF INVESTOR
Bear
Xxxxxxx Security Corp FBO J. Xxxxxx Xxxxxxx
XXX
R/O II
By:
/s/
Xxxxx Xxxxxxx
Name:
J.
Xxxxxx Xxxxxxx
Title:
Sole Beneficiary, Self-directed XXX
ADDRESS
FOR NOTICE
c/o:
Xxxxxxxx
Xxxxxxxx Xxxxxx
Street:
0000
00xx Xx. Xx.
Xxxx/Xxxxx/Xxx:
Xxxxxxxxx,
XX 00000
Attention:
Xxxxxxx
Xxxx
Tel: 000-000-0000
Fax: Not
Available
Email: Not
Available
Annex
A
PLAN
OF DISTRIBUTION
Resales
by selling stockholders
We
are
registering the resale of the shares on behalf of the selling stockholders.
The
selling stockholders may offer and resell the shares from time to time, either
in increments or in a single transaction. They may also decide not to sell
all
the shares they are allowed to resell under this prospectus. The selling
stockholders will act independently of us in making decisions with respect
to
the timing, manner, and size of each sale.
Donees
and pledgees
The
term
“selling stockholders” includes persons who receive shares from a selling
stockholder after the date of this prospectus by gift. The term also includes
persons who, upon contractual default by a selling stockholder, may seize shares
which the selling stockholder pledged to such person. If a selling stockholder
notifies us that a donee or pledgee intends to sell more than 500 shares, we
will file a supplement to this prospectus.
Costs
and commissions
We
will
pay all costs, expenses, and fees in connection with the registration of the
shares. The selling stockholders will pay all brokerage commissions and similar
selling expenses, if any, attributable to the sale of shares. These discounts,
concessions or commissions as to a particular broker, dealer, underwriter or
agent might be greater or less than those customary in this type of transaction.
Underwriters
The
selling stockholders and any brokers, dealers or other agents that participate
in the distribution may be deemed to be “underwriters” within the meaning of the
Securities Act, and any discounts, commissions or concessions received by the
selling stockholders and any brokers, dealers or other agents might be deemed
to
be underwriting discounts and commissions under the Securities Act. Neither
we
nor any selling stockholder can presently estimate the amount of any
compensation. We know of no existing arrangements between any selling
stockholder and any other selling stockholder, broker, dealer or other agent
relating to the sale or distribution of the shares.
Types
of sale transactions
The
selling stockholders may sell the shares in one or more of the following types
of transactions (which may include block transactions):
·
in
the
over-the-counter market;
·
in
negotiated transactions;
·
through
put or call option transactions;
·
through
short sales;
·
any
combination of such methods of sale; or
·
any
other
method permitted pursuant to applicable law.
The
shares may be sold at market prices prevailing at the time of sale or at
negotiated prices. These transactions may or may not involve brokers or dealers.
The selling stockholders have informed us that they have not entered into any
agreements, understandings, or arrangements with any underwriters or
broker-dealers regarding sale of the shares. They have also informed us that
no
one is acting as underwriter or coordinating broker in connection with the
proposed sale of shares.
The
selling stockholders may pledge or grant a security interest in some or all
of
the warrants or shares of common stock owned by them and, if they default in
the
performance of their secured obligations, the pledgees or secured parties may
offer and sell the shares of common stock from time to time pursuant to this
prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933, as amended, amending, if
necessary, the list of selling stockholders to include the pledgee, transferee
or other successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer and donate the shares of common
stock
in other circumstances in which case the transferees, donees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.
Prospectus
delivery requirements
Because
they may be deemed underwriters, the selling stockholders may be required to
deliver this prospectus and any supplements to this prospectus in the manner
required by the Securities Act. Under applicable rules and regulations under
the
Securities Exchange Act of 1934, as amended, any person engaged in the
distribution of any of the shares may not simultaneously engage in market
activities with respect to our common stock for the applicable period under
Regulation M, to the extent applicable, prior to commencing the distribution.
In
addition, and without limiting the foregoing, the selling stockholders will
be
subject to the applicable provisions of the Exchange Act and the rules and
regulations thereunder, including without limitation Rule 10b-5 and, to the
extent applicable, Regulation M, which may limit the timing of purchases and
sales of any of the shares by the selling stockholders. All of the foregoing
may
affect the marketability of the shares offered hereby.
State
requirements
Some
states require that any shares sold in that state only be sold through
registered or licensed brokers or dealers. In addition, some states require
that
the shares have been registered or qualified for sale in that state, or that
an
exemption from the registration or qualification requirement exist and that
the
registrant has complied with the exemption.
Sales
under Rule 144
Selling
stockholders may also resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act. To do so,
they
must meet the criteria and conform to the requirements of Rule 144.
Distribution
arrangements with broker-dealers
If
a
selling stockholder notifies us that any material arrangement has been entered
into with a broker-dealer for the sale of shares through:
|
·
|
a
block trade;
|
|
·
|
special
offering;
|
|
·
|
exchange
distribution or secondary distribution;
or
|
|
·
|
a
purchase by a broker or dealer,
|
We
will
then file, if required, a supplement to this prospectus under Rule 424(b) under
the Securities Act. The supplement will disclose:
|
·
|
the
name of each such selling stockholder and of the participating
broker-dealer(s);
|
|
·
|
the
number of shares involved;
|
|
·
|
the
price at which such shares were sold;
|
|
·
|
the
commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
|
|
·
|
that
such broker-dealer(s) did not conduct any investigation to verify
the
information in this prospectus; and
|
|
·
|
any
other facts material to the transaction.
|
The
SEC
may deem the selling stockholders and any underwriters, broker-dealers or agents
that participate in the distribution of the shares of common stock to be
“underwriters” within the meaning of the Securities Act. The SEC may deem any
profits on the resale of the shares of common stock and any compensation
received by any underwriter, broker-dealer or agent to be underwriting discounts
and commissions under the Securities Act. Each selling stockholder has purchased
the shares of common stock in the ordinary course of its business, and at the
time the selling stockholder purchased the shares of common stock, it was not
a
party to any agreement or other understanding to distribute the securities,
directly or indirectly.
Annex
B
COMMERCE
PLANET, INC.
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of common stock (the “Common
Stock”),
of
COMMERCE
PLANET, INC.
(the
“Company”)
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”)
a
Registration Statement for the registration and resale of the Registrable
Securities, in accordance with the terms of the Registration Rights Agreement,
dated as of February 12, 2007 (the “Registration
Rights Agreement”),
among
the Company and the Investors named therein. A copy of the Registration Rights
Agreement is available from the Company upon request at the address set forth
below. All capitalized terms used and not otherwise defined herein shall have
the meanings ascribed thereto in the Registration Rights Agreement.
The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
QUESTIONNAIRE
1. Name.
|
(a)
|
Full
Legal Name of Selling
Securityholder
|
|
(b)
|
Full
Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are
held:
|
|
(c)
|
Full
Legal Name of Natural Control Person (which means a natural person
who
directly or indirectly alone or with others has power to vote or
dispose
of the securities covered by the
questionnaire):
|
2.
Address for Notices to Selling Securityholder:
|
Telephone:
|
|
Fax:
|
|
Contact
Person:
|
3.
Beneficial Ownership of Registrable Securities:
|
Type
and Principal Amount of Registrable Securities beneficially
owned:
|
4.
Broker-Dealer Status:
|
(a)
|
Are
you a broker-dealer?
|
Yes
¨ No
¨
|
Note:
|
If
yes, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
|
(b)
|
Are
you an affiliate of a
broker-dealer?
|
Yes
¨ No
¨
|
(c)
|
If
you are an affiliate of a broker-dealer, do you certify that you
bought
the Registrable Securities in the ordinary course of business, and
at the
time of the purchase of the Registrable Securities to be resold,
you had
no agreements or understandings, directly or indirectly, with any
person
to distribute the Registrable
Securities?
|
Yes
¨ No
¨
|
Note:
|
If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
5.
Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.
Except
as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
|
Type
and Amount of Other Securities beneficially owned by the Selling
Securityholder:
|
6.
Relationships with the Company:
Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.
State
any
exceptions here:
The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
and prior to the Effective Date for the Registration Statement.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
and Questionnaire to be executed and delivered either in person or by its duly
authorized agent.
Dated:
Beneficial
Owner:
By:
Name:
Title:
PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:
[
]
