EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement dated as of September 30, 1999,
between eSynch Corporation, a Delaware corporation (hereinafter
referred to as the "Corporation"), and Norton Xxxxxxxxx,
individually and as trustee of each of The Xxxxxxx Xxxxxxxxx S
Corporation Trust and The Xxxxxxxx Xxxxxxxxx S Corporation Trust
(hereinafter referred to, collectively, as the "Stockholders").
W I T N E S S E T H :
WHEREAS, the Corporation and the Stockholders, inter alia, are
parties to an Agreement and Plan of Reorganization dated the date
hereof (hereinafter referred to as the "Merger Agreement")
providing for, among other matters, the acquisition by the
Corporation of Oxford Media Corporation in exchange for an
aggregate of 450,000 shares (hereinafter referred to as the
"Shares") of the common stock, $.001 par value (as the same may be
constituted from time to time hereinafter referred to as the
"Common Stock"), of the Corporation; and
WHEREAS, it is a condition of the Merger Agreement that the
Corporation execute and deliver this Agreement to the Stockholders;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements herein contained the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following additional terms
shall have the following respective meanings:
The term "Demand Registration" shall have the meaning set
forth in Paragraph A of Article III hereof.
The term "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended from time to time.
The term "Incidental Registration" shall have the meaning set
forth in Paragraph B of Article IV.
The term "a majority of the Registrable Securities" shall mean
more than 50% of the number of shares of the Registrable Secu-
rities, and shall apply mutatis mutandi whenever a percentage of
Registrable Securities greater than a majority is required in this
Agreement.
The term "Person" shall mean an individual, partnership,
corporation, trust or unincorporated organization, or a government
or agency or political subdivision thereof.
The term "Prospectus" shall mean the prospectus included in
any Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of
any portion of the Registrable Securities covered by the
Registration Statement and all other amendments and supplements to
the Prospectus, including post-effective amendments and all
material incorporated by reference in such Prospectus.
The term "Registration Expenses" shall have the meaning set
forth in Article VII.
The term "Registrable Securities" shall mean (i) the Shares,
and (ii) any securities issued or issuable with respect to the
Common Stock referred to in clause (i) immediately preceding by way
of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or
other reorganization; provided, however, that a security ceases to
be a Registrable Security when it is no longer a Restricted
Security.
The term "Registration Statement" shall mean any registration
statement of the Corporation which covers Registrable Securities
pursuant to the provisions of this Agreement, including the
Prospectus, amendments (including post-effective amendments) and
supplements to such Registration Statement, all exhibits and all
material incorporated by reference in such Registration Statement.
The term "Restricted Securities" shall mean any security
unless or until: (i) it has been effectively registered under the
Securities Act and disposed of in accordance with the Registration
Statement covering it; (ii) it is distributed to the public
pursuant to Rule 144 (or any similar provisions then in force)
under the Securities Act; or (iii) it has otherwise been
transferred and a new certificate or other evidence of ownership
for it not bearing a restrictive legend pursuant to the Securities
Act and not subject to any stop transfer order has been delivered
by or on behalf of the Corporation and no other restriction on
transfer exists.
The term "Securities Act" shall mean the Securities Act of
1933, as amended from time to time.
The term "Selling Expenses" shall have the meaning set forth
in Article VII.
The term "SEC" shall mean the Securities and Exchange
Commission.
The term "underwritten registration" or "underwritten
offering" shall mean a registration in which securities of the
Corporation are sold pursuant to a firm commitment underwriting to
an underwriter at a fixed price for reoffering or pursuant to
agency or best efforts arrangements with an underwriter.
ARTICLE II
SECURITIES SUBJECT TO THIS AGREEMENT
A. Registrable Securities. The securities entitled to the
benefits of this Agreement are the Registrable Securities.
B. Holders of Registrable Securities. A Person is deemed to
be a holder of Registrable Securities whenever such Person owns
Registrable Securities or has the right to acquire such Registrable
Securities, whether or not such acquisition has actually been
effected, and whether or not such Registrable Securities or such
rights are in the name of a nominee or custodian, and disregarding
any legal restrictions upon the exercise of such right.
ARTICLE III
DEMAND REGISTRATION
The following registration rights shall exist until terminated
pursuant to Paragraph B of Article XI hereof:
A. Requests for Registration. Subject to the provisions of
Paragraph B of this Article III hereof, any holder or holders of at
least 225,000 of the Registrable Securities may, subsequent to six
months after the date hereof, make a written request for a
registration with the SEC under and in accordance with the
provisions of the Securities Act of all or part of his Registrable
Securities (herein referred to as a "Demand Registration"). Within
ten days after receipt of such request, the Corporation shall give
written notice of such registration request to all holders of
Registrable Securities and shall include in any such registration
all Registrable Securities with respect to which the Corporation
shall have received written requests for inclusion therein within
15 business days after the receipt by the applicable holder of the
Corporation's notice. All requests made pursuant to this Paragraph
A shall specify the number of Registrable Securities to be
registered and shall also specify the intended methods of
disposition thereof; provided, however, that if the holders of a
majority of the Registrable Securities requested to be included in
such registration request an underwritten offering, the method of
disposition shall be such an offering.
B. Restrictions on Registrations. The holders of Registrable
Securities shall be entitled to two Demand Registrations; provided,
however, in all cases that either such obligation shall be deemed
satisfied only when a Registration Statement or Registration
Statements covering all Restricted Securities specified in a
request for a Demand Registration received as aforesaid, for sale
in accordance with the method of disposition specified in such
request, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, all
such shares have been sold pursuant thereto. The Corporation shall
not be obligated to proceed with any Demand Registration if the
Corporation shall deliver to the holders of Registrable Securities
demanding a registration an opinion reasonably satisfactory in form
and substance to such holders, of counsel, reasonably satisfactory
to such holders, that the registration of such Registrable Shares
is not necessary to permit such sale in the manner set forth in
such holders' request. In addition, the Corporation shall not be
obligated to proceed with any Demand Registration during any period
during which the Corporation would be required to undertake an
audit in order to have available for inclusion in the registration
statement current financial statements as required in accordance
with the Securities Act, unless the holders of Registrable
Securities demanding a registration undertake to bear the
reasonable costs of such audit. In each case in which the
Corporation is not required to take any action, such holders shall
be deemed not to have given the request giving rise thereto, and
shall be free to deliver a new notice requesting the registration
of Registrable Securities.
C. Expenses. The Corporation shall pay all Registration
Expenses related to such registration, whether or not the
Registration Statement with respect to such registration has become
effective, and all other expenses incurred by the Corporation in
complying with this Article III. All Selling Expenses related to
such registration shall be borne by the participating sellers
(including the Corporation, if a seller), in proportion to the
number of shares sold by each, or by such sellers as they may
agree.
D. Incidental Rights to Demand Registrations
(i) Conditions. Neither the Corporation nor any of its
securityholders (other than the holders of Registrable Securities)
shall have the right to include any of the Corporation's securities
in any registration initiated as a Demand Registration unless:
(a) such securities are of the same class as the
Registrable Securities included in such registration;
(b) if any of the Registrable Securities covered by
such registration are sold in an underwritten offering, the
Corporation or such securityholders, as applicable, agree in
writing to sell their securities on the same terms and
conditions as apply to the Registrable Securities being sold;
and
(c) if any of the Registrable Securities covered by
such registration are to be sold in an underwritten offering,
the managing underwriters shall not have advised the
Corporation or the holders of Registrable Securities demanding
a registration that, in their opinion, the total number of
dollar amount of the securities requested to be included in
such registration by the Corporation and/or such other
securityholders, together with the Registrable Securities
demanded to be registered hereunder, exceeds the number of
securities which can be sold in such offering.
(ii) If the Corporation registers any of its securities
on its own behalf in a registration initiated as a Demand
Registration (in accordance with the provisions of this Paragraph
D), such Demand Registration shall not count for the purpose of
determining the number of Demand Registrations to which the holders
of Registrable Securities are entitled under Paragraph B of this
Article III and the Corporation shall pay the Registration Expenses
of such registration.
(iii) If any securityholders of the Corporation (other
than the holders of Registrable Securities in such capacity)
register securities of the Corporation in a Demand Registration (in
accordance with the provisions of this Paragraph D), such holders
shall pay the fees and expenses of counsel to such holders and the
incremental amount of Registration Expenses incurred as a result of
their participation unless the Corporation has agreed to pay such
expenses and, in the opinion of counsel to the Corporation, such
payment shall not affect the ability of the Registrable Shares to
be qualified under the blue sky laws of any jurisdiction.
E. Selection of Underwriters. If any of the Registrable
Securities covered by a Demand Registration are to be sold in an
underwritten offering, the investment banker or investment bankers
and manager or managers that will administer the offering shall be
selected by the holders of a majority of the Registrable Securities
included in such offering; provided, however, that such investment
bankers and managers must be reasonably satisfactory to the
Corporation.
ARTICLE IV
INCIDENTAL REGISTRATIONS
A. Not a Demand. A registration of Registrable Securities
pursuant to this Article IV shall not be counted as a Demand
Registration under Article III hereof.
B. Notice and Request for Incidental Registration. Whenever,
after January 1, 2000, the Corporation proposes to register any of
its securities under the Securities Act, other than pursuant to a
Demand Registration or a registration on Forms S-4 or S-8 or
comparable forms (hereinafter referred to as an "Incidental
Registration"), the Corporation shall give written notice to all
holders of Registrable Securities of its intention to effect such
a registration not later than the earlier to occur of (i) the tenth
day following receipt by the Corporation of notice of exercise of
other demand registration rights or (ii) 45 days prior to the
anticipated filing date. Subject to the provisions of Paragraphs D
and E of this Article IV, the Corporation shall include in such
Incidental Registration all Registrable Securities with respect to
which the Corporation has received written requests for inclusion
therein within 15 business days after the receipt by the applicable
holder of the Corporation's notice. The holders of Registrable
Securities shall be permitted to withdraw all or any part of the
Registrable Securities from a Incidental Registration at any time
prior to the effective date of such Incidental Registration. If an
Incidental Registration is an underwritten offering effected:
(i) under Paragraph D of this Article IV hereof, all
Persons whose securities are included in the Incidental
Registration shall be obligated to sell their securities on
the same terms and conditions as apply to the securities being
issued and sold by the Corporation; or
(ii) under Paragraph E of this Article IV hereof, all
Persons whose securities are included in the Incidental
Registration shall be obligated to sell their securities on
the same terms and conditions as apply to the securities being
sold by the Person or Persons who initiated the Incidental
Registration under said paragraph.
C. Incidental Registration Expenses. The Corporation shall
pay all Registration Expenses related to such registration, or
incurred as a result of the participation in an Incidental
Registration of the holders of Registrable Securities, whether or
not the Registration Statement with respect to such registration
has become effective,and all other expenses incurred by the
Corporation in complying with this Article IV. All Selling Expenses
related to such registration shall be borne by the participating
sellers (including the Corporation, if a seller), in proportion to
the number of shares sold by each, or by such sellers as they may
agree.
D. Priority on Underwritten Primary Registration. If an
Incidental Registration is an underwritten primary registration on
behalf of the Corporation, and the managing underwriters advise the
Corporation in writing that in their opinion the total number or
dollar amount of securities requested to be included in such
registration exceeds the number or dollar amount of securities
which can be sold in such offering, the Corporation shall include
in such registration:
(i) first, all securities the Corporation proposes to
sell; and
(ii) second, the Registrable Securities and such other
securities (provided such securities are of the same class as
the securities being sold by the Corporation) requested to be
included in such registration in excess of the number of
securities the Corporation proposes to sell which, in the
opinion of such underwriters, can be sold (allocated pro rata
among the holders of such Registrable Securities and other
securities on the basis of the number of securities requested
to be included therein by each such holder).
E. Priority on Underwritten Secondary Registration. If an
Incidental Registration is an underwritten secondary registration
on behalf of holders of the Corporation's securities, and the
managing underwriters advise the Corporation in writing that in
their opinion the number of securities requested to be included in
such registration exceeds the number of securities which can be
sold in such offering, the Corporation shall include in such
registration:
(i) first, all securities requested to be included in
such registration by the securityholders initiating such
registration; and
(ii) second, up to the full number of Registrable
Securities and such other securities (provided such securities
are of the same class as the securities being sold by the
Corporation) requested to be included in such registration in
excess of the number of securities the securityholders
initiating such registration propose to sell which, in the
opinion of such underwriters, can be sold (allocated pro rata
among the holders of such Registrable Securities and other
securities on the basis of the number of securities requested
to be included therein by each such holder).
F. Selection of Underwriters. If any Incidental Registration
is an underwritten offering, the Corporation shall have the right
to select the investment banker or investment bankers and manager
or managers to administer the offering.
ARTICLE V
HOLDBACK AGREEMENTS
A. Restrictions on Public Sale by Holder of Registrable
Securities. Each holder of Registrable Securities whose Registrable
Securities are covered by a Registration Statement filed pursuant
to Article III or IV hereof agrees, if requested by the managing
underwriters, not to effect any public sale or distribution of
securities of the Corporation of the same class as the securities
included in such Registration Statement, including a sale pursuant
to Rule 144 under the Securities Act (except as part of such
underwritten registration) during the ten-day period prior to, and
during the 90-day period beginning on, the closing date of each
underwritten offering (or best efforts underwritten offering in the
case of a Registration Statement filed under Article III) of
Registrable Securities made pursuant to such Registration
Statement, to the extent timely notified in writing by the
Corporation or the managing underwriters. The foregoing provisions
shall not apply to any holder of Registrable Securities if such
holder is prevented by applicable statute or regulation from
entering any such agreement; provided, however, that any such
holder shall undertake, in its request to participate in any such
underwritten offering, not to effect any public sale or
distribution of the applicable class of Registrable Securities
commencing on the date of sale of such applicable class of
Registrable Securities unless it has provided 45 days' prior
written notice of such sale or distribution to the underwriter or
underwriters.
B. Restrictions on Public Sale by the Corporation and
Others. The Corporation agrees:
(i) not to effect any public or private sale or
distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such
equity securities, including a sale pursuant to Regulation D
under the Securities Act, during the ten-day period prior to,
and during the 90-day period beginning on, the closing date of
each underwritten offering made pursuant to a Registration
Statement filed under Section 3 hereof, without the consent of
the managing underwriters of such underwritten offering, to
the extent timely notified in writing by a holder of
Registrable Securities or the managing underwriters (except as
part of such underwritten registration or pursuant to
registrations on Form S-4 or S-8 or any successor form to such
Forms); and
(ii) to cause each officer and director of the
Corporation who is a holder of its equity securities, or any
securities convertible into or exchangeable or exercisable for
such equity securities to agree not to effect any public sale
or distribution of any such securities during such period,
including a sale pursuant to Rule 144 under the Securities Act
(except as part of such underwritten registration, if
permitted, or with the consent of the managing underwriter of
such underwritten offering).
ARTICLE VI
REGISTRATION PROCEDURES
Whenever the holders of Registrable Securities have requested
that any Registrable Securities be registered pursuant to this
Agreement, the Corporation shall use its best efforts to effect
such registration to permit the sale of such Registrable Securities
in accordance with the intended method or methods of disposition
thereof, and pursuant thereto the Corporation shall as
expeditiously as possible:
A. prepare and file with the SEC, not later than six months
after receipt of a request to file a Registration Statement for a
Demand Registration, a Registration Statement on a form for which
the Corporation then qualifies which is satisfactory to the
Corporation and the holders of a majority of the Registrable
Securities being registered (unless the offering is made on an
underwritten basis, including on a best efforts underwriting basis,
in which event the managing underwriter or underwriters shall
determine the form to be used) and which form shall be available
for the sale of the Registrable Securities in accordance with the
intended method or methods of distribution thereof, and use its
best efforts to cause such Registration Statement to become
effective; provided, however, that before filing a Registration
Statement or Prospectus or any amendments or supplements thereto,
including documents incorporated by reference after the initial
filing of the Registration Statement, the Corporation shall furnish
to the holders of the Registrable Securities covered by such
Registration Statement and the underwriters, if any, copies of all
such documents proposed to be filed, which documents will be
subject to the review of such holders and underwriters, and the
Corporation shall not file any Registration Statement or amendment
thereto or any Prospectus or any supplement thereto (including such
documents incorporated by reference) to which the holders of a
majority of the Registrable Securities covered by such Registration
Statement or the underwriters, if any, shall reasonably object;
B. prepare and file with the SEC such amendments and post-
effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for a period
of not less than six months, or such shorter period which will
terminate when all Registrable Securities covered by such
Registration Statement have been sold or withdrawn; cause the
Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period
in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;
C. notify the selling holders of Registrable Securities and
the managing underwriters, if any, promptly, and (if requested by
any such Person) confirm such advice in writing,
(i) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to
the Registration Statement or any post-effective amendment,
when the same has become effective;
(ii) of any request by the SEC for amendments or
supplements to the Registration Statement or the Prospectus or
for additional information;
(iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose;
(iv) if at any time the representations and warranties of
the Corporation contemplated by Paragraph O below cease to be
true and correct in all material respects;
(v) of the receipt by the Corporation of any notification
with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
and
(vi) of the happening of any event which makes any
statement made in the Registration Statement, the Prospectus
or any document incorporated therein by reference untrue or
which requires the making of any changes in the Registration
Statement, the Prospectus or any document incorporated therein
by reference in order to make the statements therein not
misleading;
D. make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of the Registration
Statement at the earliest possible moment;
E. if requested by the managing underwriters or a holder of
Registrable Securities being sold, immediately incorporate in a
Prospectus supplement or post-effective amendment such information
as the managing underwriters and the holders of a majority of the
Registrable Securities being sold and their respective counsel
reasonably conclude should be included in the Registration
Statement, so that such Registration Statement conforms in both
form and substance to the requirements of the Securities Act,
including without limitation with respect to the number of
Registrable Securities being sold to such underwriters, the
purchase price being paid therefor by such underwriters and with
respect to any other terms of the underwritten offering of the
Registrable Securities to be sold in such offering; and make all
required filings of such Prospectus supplement or post-effective
amendment as soon as notified of the matters to be incorporated in
such Prospectus supplement or posteffective amendment;
F. promptly prior to the filing of any document which is to
be incorporated by reference into the Registration Statement or the
Prospectus (after initial filing of the Registration Statement)
provide copies of such document to counsel to the selling holders
of Registrable Securities and to the managing underwriters, if any,
make the Corporation's representatives available for discussion of
such document and make such changes in such document prior to the
filing thereof as counsel for such selling holders or underwriters
may reasonably request;
G. furnish to each selling holder of Registrable Securities
and each managing underwriter, without charge, at least one signed
copy of the Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
H. deliver to each selling holder of Registrable Securities
and the underwriters, if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons may reasonably
request (and the Corporation hereby consents to the use of the
Prospectus or any amendment or supplement thereto by each of the
selling holders of Registrable Securities and the underwriters, if
any, in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or supplement
thereto);
I. prior to any public offering of Registrable Securities,
register or qualify or cooperate with the selling holders of
Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale
under the securities or blue sky laws of such jurisdictions as any
seller or underwriter reasonably requests in writing and do any and
all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities
covered by the Registration Statement; provided, however, that the
Corporation shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or
to take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
J. cooperate with the selling holders of Registrable
Securities and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing
underwriters may request at least two business days prior to any
sale of Registrable Securities to the underwriters;
K. use its best efforts to cause the Registrable Securities
covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may
be necessary to enable the seller or sellers thereof or the
underwriters, if any, to consummate the disposition of such
Registrable Securities;
L. upon the occurrence of any event contemplated by clause
(vi) of Paragraph C of this Article VI, prepare a supplement or
post-effective amendment to the Registration Statement or the
Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities, the Prospectus
shall not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein
not misleading;
M. cause all Registrable Securities covered by the
Registration Statement to be listed on each securities exchange on
which similar securities issued by the Corporation are then listed
if requested by the holders of a majority of such Registrable
Securities or the managing underwriters, if any;
N. provide a transfer agent and registrar for all
Registrable Securities and a CUSIP number for all Registrable
Securities, in each case not later than the effective date of such
registration statement;
O. enter into such agreements (including an underwriting
agreement reasonably satisfactory to the Corporation, containing
customary representations, warranties and agreements) and take all
such other actions in connection therewith in order to expedite or
facilitate the disposition of such Registrable Securities and in
such connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an underwritten
registration:
(i) make such representations and warranties to the
holders of such Registrable Securities and the underwriters,
if any, in such form, substance and scope as are customarily
made by issuers to underwriters in primary underwritten
offerings and covering matters including but not limited to,
those set forth in the Merger Agreement;
(ii) obtain opinions of counsel to the Corporation and
updates thereof (which counsel and opinions, in form, scope
and substance, shall be reasonably satisfactory to the
managing underwriters, if any, and the holders of a majority
of the Registrable Securities being sold) addressed to each
selling holder and the underwriters, if any;
(iii) obtain "cold comfort" letters and updates thereof
from the Corporation's independent certified public
accountants addressed to the selling holders of Registrable
Securities and the underwriters, if any, such letters to be in
customary form and covering matters of the type customarily
covered in "cold comfort" letters to underwriters in
connection with primary underwritten offerings;
(iv) if an underwriting agreement is entered into, cause
the same to set forth in full the indemnification and
contribution provisions and procedures of Article VIII hereof,
or language at least as favorable to the holders of the
Registrable Securities, with respect to all parties to be
indemnified pursuant to said Article; and
(v) deliver such documents and certificates as may be
requested by the holders of a majority of the Registrable
Securities being sold and the managing underwriters, if any,
to evidence compliance with clause (i) of this Paragraph O and
with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Corporation.
The obligations under this Paragraph O above shall be performed at
each closing under such underwriting or similar agreement or as and
to the extent required thereunder.
P. make available for inspection by a representative of the
sellers of Registrable Securities, any underwriter participating in
any disposition pursuant to such registration statement, and any
attorney, accountant or other agent retained by the sellers or
underwriter, all financial and other records, pertinent corporate
documents and properties of the Corporation, and cause the
Corporation's officers, directors and employees to supply all
information reasonably requested by any such representative,
underwriter, attorney, accountant or agent solely for use in
connection with such registration statement; provided, however,
that any records, information or documents that are designated by
the Corporation in writing as confidential shall be kept
confidential by such Persons pursuant to such reasonable
confidentiality agreements as the Corporation may request;
Q. otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make generally
available to its security holders, earnings statements satisfying
the provisions of Section 11(a) of the Securities Act, no later
than 45 days after the end of any twelve-month period (or 90 days,
if such period is a fiscal year): (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to
underwriters in an underwritten offering, or, if not sold to
underwriters in such an offering; and (ii) beginning with the first
month of the Corporation's first fiscal quarter commencing after
the effective date of the Registration Statement, which statements
shall cover said twelve-month periods.
ARTICLE VII
REGISTRATION AND SELLING EXPENSES
For purposes of this Agreement, all underwriting discounts and
selling commissions applicable to the sale of Registrable
Securities (all such expenses being herein referred to as "Selling
Expenses"), and all expenses incident to the Corporation's
performance of or compliance with this Agreement, including without
limitation:
A. all registration and filing fees (including with respect
to filings required to be made with the National Association of
Securities Dealers, Inc.);
B. fees and expenses of compliance with securities or blue
sky laws (including fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the
Registrable Securities and determination of their eligibility for
investment under the laws of such jurisdictions as the managing
underwriters or holders of a majority of the Registrable Securities
being sold may designate);
C. printing, messenger, telephone and delivery expenses;
D. fees and disbursements of counsel for the Corporation,
the underwriters and for the sellers of the Registrable Securities;
E. fees and disbursements of all independent certified
public accountants of the Corporation (including the expenses of
any "cold comfort" letters required by or incident to such
performance);
F. fees and disbursements of underwriters (excluding Selling
Expenses)
G. securities acts liability insurance if the Corporation so
desires or if the underwriters or selling holders of Registrable
Securities so require;
H. reasonable fees and expenses of any special experts
retained by selling holders of Registrable Securities, by the
Corporation at its own initiative or at the request of the managing
underwriters in connection with such registration; and
I. fees and expenses of other Persons retained by the
Corporation;
(all such expenses being herein called "Registration Expenses")
shall be borne as provided in this Agreement; it being understood
and agreed that the Corporation shall, in any event, pay its
internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit conducted at
the end of the Corporation's fiscal year in the ordinary course of
business, and the fees and expenses incurred in connection with the
listing of the securities to be registered on each securities
exchange and securities association.
ARTICLE VIII
INDEMNIFICATION
A. Indemnification by Corporation. The Corporation agrees to
indemnify, to the full extent permitted by law, each holder of
Registrable Securities, its officers, directors, employees and
Agents and each Person who controls such holder (within the meaning
of the Securities Act) against all losses, claims, damages,
liabilities and expenses caused by any untrue or alleged untrue
statement of a material fact contained in any Registration
Statement, Prospectus or preliminary prospectus or any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained
in any information furnished in writing to the Corporation by such
holder expressly for use therein or by such holder's failure to
deliver a copy of the Registration Statement or Prospectus after
the Corporation has furnished such holder with a sufficient number
of copies of the same. The Corporation shall also indemnify
underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the
distribution, their officers and directors and each Person who
controls such Persons (within the meaning of the Securities Act) to
the same extent as hereinabove provided with respect to the
indemnification of the holders of Registrable Securities.
B. Indemnification by Holder of Registrable Securities. In
connection with any Registration Statement in which a holder of
Registrable Securities is participating, each such holder will
furnish to the Corporation in writing such information and
affidavits as the Corporation reasonably requests for use in
connection with any Registration Statement or Prospectus and agrees
to indemnify, to the full extent permitted by law, the Corporation,
its directors and officers and each Person who controls the
Corporation (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses resulting from
any untrue or alleged untrue statement of a material fact or any
omission or alleged omission of a material fact required to be
stated in the Registration Statement or Prospectus or preliminary
Prospectus or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information or affidavit
so furnished in writing by such holder to the Corporation
specifically for inclusion in such Registration Statement or
Prospectus. In no event shall the liability of any selling holder
of Registrable Securities hereunder be greater in amount than the
dollar amount of the proceeds received by such holder upon the sale
of the Registrable Securities giving rise to such indemnification
obligation. The Corporation shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the
distribution, to the same extent as provided above with respect to
information so furnished in writing by such Persons specifically
for inclusion in any Prospectus or Registration Statement.
C. Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder shall (i) give prompt notice
to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) permit such indemnifying party to
assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided, however, that any
Person entitled to indemnification hereunder shall have the right
to employ separate counsel and to participate in the defense of
such claim, but the fees and expenses of such counsel shall be at
the expense of such Person unless (a) the indemnifying party has
agreed to pay such fees or expenses, or (b) the indemnifying party
shall have failed to assume the defense of such claim and employ
counsel reasonably satisfactory to such Person, or (c) in the
reasonable judgment of any such Person and the indemnifying party,
based upon advice of their respective counsel, a conflict of
interest may exist between such Person and the indemnifying party
with respect to such claims (in which case, if the Person notifies
the indemnifying party in writing that such Person elects to employ
separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense
of such claim on behalf of such Person). If such defense is not
assumed by the indemnifying party, the indemnifying party shall not
be subject to any liability for any settlement made without its
consent (but such consent will not be unreasonably withheld). No
indemnifying party shall be required to consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in
respect to such claim or litigation. An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim
will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with
respect to such claim, in which event the indemnifying party shall
be obligated to pay the fees and expenses of such additional coun-
sel or counsels.
D. Contribution. If the indemnification provided for in this
Article VIII is unavailable or insufficient to hold harmless an
indemnified party under Paragraphs A or B immediately preceding,
then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in said Paragraphs A or
B, in such proportion as is appropriate to reflect the relative
fault of the Corporation, on the one hand, and the participating
holders of Registrable Securities, on the other, in connection with
the statements or omissions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the
Corporation on the one hand or such holders on the other, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or
omission. The parties agree that it would not be just and equitable
if contributions pursuant to this Paragraph D were to be determined
by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to
in the prior provisions of this Paragraph D. The amount paid by an
indemnified party as a result of the losses, claims, damages or
liabilities referred to in the prior provisions of this Paragraph
D shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating
or defending against any action or claim that is the subject of
this Paragraph D. Notwithstanding the provisions of this Paragraph
D, no participating holder of Registrable Securities shall be
required to contribute any amount in excess of the amount by which
the net proceeds received from the sale of its shares exceeds the
amount of any damages that it has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. For purposes of this Paragraph D no person guilty
of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
ARTICLE IX
RULE 144
The Corporation covenants that it shall file the reports
required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC
thereunder, and it shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell
Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule
144 under the Securities Act, as such rule may be amended from time
to time, or (ii) any similar rule or regulation hereafter adopted
by the SEC. Upon the request of any holder of Registrable Secu-
rities, the Corporation shall deliver to such holder a written
statement as to whether it has complied with such information and
requirements.
ARTICLE X
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Person may participate in any underwritten registration
hereunder unless such Person (i) agrees to sell such Person's
securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other
documents required under the terms of such underwriting
arrangements.
ARTICLE XI
MISCELLANEOUS
A. Remedies. Each holder of Registrable Securities, in
addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, shall be entitled
to specific performance of its rights under this Agreement. The
Corporation agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of
the provisions of this Agreement and hereby agrees to waive the
defense in any action for specific performance that a remedy at law
would be adequate.
B. Term. The registration rights granted under Article III
hereof shall terminate on the tenth anniversary of the date hereof,
and the registration rights granted under Article IV hereof shall
terminate on the third anniversary of the maturity of the Note.
C. Notices. All notices, requests or instructions hereunder
shall be in writing and delivered personally or sent by registered
or certified mail, postage prepaid, as follows:
(1) if to the Corporation:
15502 Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
(2) if to the Stockholders:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any of the above addresses may be changed at any time by notice
given as provided above; provided, however, that any such notice of
change of address shall be effective only upon receipt.
D. Entire Agreement. This Agreement and the documents
referred to herein contain the entire agreement of the parties
hereto with respect to the transactions contemplated hereby, and
supersede all prior understandings, arrangements, and agreements
with respect to the subject matter hereof. No modification hereof
shall be effective unless in writing and signed by the party
against Which it is sought to be enforced.
E. Further Action. Each of the parties hereto shall use such
party's best efforts to take such actions as may be necessary or
reasonably requested by the other party hereto to carry out and
consummate the transactions contemplated by this Agreement.
F. Successors and Assigns. The registration rights granted
to the Stockholders under Article III and under Article IV may be
transferred to a transferee who acquires any Shares, which transfer
shall be effective when the Corporation is given written notice by
the transferor at the time of such transfer stating the name and
address of the transferee and identifying the securities with
respect to which the rights under Article III and IV are being
assigned.
G. Notice of Shares. All references herein to numbers of
shares of Registrable Securities shall be subject to appropriate
adjustment for stock splits, stock dividends and recapitalizations
of the Corporation.
H. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York
applicable in the case of agreements made and to be performed
entirely within such State.
I. Captions. The captions appearing herein are for the
convenience of the parties only and shall not be construed to
affect the meaning of the provisions of this Agreement.
J. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but
all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
eSynch Corporation
By s/Xxxxxx Xxxxxxxxx
------------------------------
s/Norton Xxxxxxxxx
--------------------------------
Norton Xxxxxxxxx
s/Norton Xxxxxxxxx
--------------------------------
Norton Xxxxxxxxx, as Trustee of
The Xxxxxxx Xxxxxxxxx S Corporation
Trust
s/Norton Xxxxxxxxx
--------------------------------
Norton Xxxxxxxxx, as Trustee of
The Xxxxxxxx Xxxxxxxxx S Corporation
Trust
