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EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of September 14, 2000
(this "Agreement"), is made by and between SATX, INC., a Nevada corporation,
with headquarters located at 0000 Xxxxxxxxxx Xxxx, Xxxxx X-0, Xxxxx, Xxxxxxx
00000 (the "Company"), and each entity named on a signature page hereto (each,
an "Investor") (each agreement with an Investor being deemed a separate and
independent agreement between the Company and such Investor, except that each
Investor acknowledges and consents to the rights granted to each other Investor
under such agreement).
WITNESSETH:
WHEREAS, upon the terms and subject to the conditions of the
Securities Purchase Agreement, dated as of September 14, 2000, between the
Investor and the Company (the "Securities Purchase Agreement"; terms not
otherwise defined herein shall have the meanings ascribed to them in the
Securities Purchase Agreement), the Company has agreed to issue and sell to the
Investor one or more 8% Convertible Debentures of the Company, in an aggregate
principal amount not exceeding $1,000,000 (the "Debentures"); and
WHEREAS, the Debentures are convertible into shares of Common Stock
(the "Conversion Shares"; which term, for purposes of this Agreement, shall
include shares of Common Stock of the Company issuable in lieu of accrued
interest on conversion as contemplated by the Debentures) upon the terms and
subject to the conditions contained in the Debentures, and the Warrants may be
exercised for the purchase of shares of Common Stock (the "Warrant Shares")
upon the terms and conditions of the Warrants; and
WHEREAS, to induce the Investor to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Conversion Shares and the Warrant
Shares; and
WHEREAS, the Company has agreed to issue the Warrants to the Investor
and to the Placement Agent in connection with the issuance of the Debentures;
and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Investor hereby agree as follows:
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1. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
(a) "Investor" means the Investor and any permitted
transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof and who holds Debentures,
Warrants or Registrable Securities.
(b) "Potential Material Event" means any of the
following: (i) the possession by the Company of material information not ripe
for disclosure in a registration statement, which shall be evidenced by
determinations in good faith by the Board of Directors of the Company that
disclosure of such information in the registration statement would be
detrimental to the business and affairs of the Company; or (ii) any material
engagement or activity by the Company which would, in the good faith
determination of the Board of Directors of the Company, be adversely affected
by disclosure in a registration statement at such time, which determination
shall be accompanied by a good faith determination by the Board of Directors of
the Company that the registration statement would be materially misleading
absent the inclusion of such information.
(c) "Register," "Registered," and "Registration" refer
to a registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(d) "Registrable Securities" means the Conversion Shares
and the Warrant Shares applicable to the Debentures and Warrants issued on the
Closing Date or the relevant Additional Closing Date, as the case may be.
(e) "Registration Statement" means a registration
statement of the Company under the Securities Act.
2. REGISTRATION.
(a) MANDATORY REGISTRATION.
(i) The Company shall promptly prepare and file
with the SEC, as soon as possible after the Initial Closing Date but no later
than sixty (60) days after the Initial Closing Date (the "Required Filing
Date"), either a Registration Statement or an amendment to an existing
Registration Statement, in either event registering for resale by the Investor
a sufficient number of shares of Common Stock for the Investors to sell the
Registrable Securities (or such lesser number as may be required by the SEC,
but in no event less than two hundred percent (200%) of the aggregate
number of shares (A) into which the relevant Debentures and all interest
thereon through their respective Maturity Dates would be convertible at the
Fixed Conversion Rate (as defined in the
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Debenture) as in effect of the date hereof at the time of filing of such
Registration Statement (assuming for such purposes that all such Additional
Debentures had been eligible to be converted, and had been converted, into
Conversion Shares in accordance with their terms, whether or not such accrual
of interest, eligibility or conversion had in fact occurred as of such date)
and (B) which would be issued upon exercise of all of the relevant Warrants at
the time of filing of the Registration Statement (assuming for such purposes
that such Warrants had been eligible to be exercised and had been exercised in
accordance with their terms, whether or not such eligibility or exercise had in
fact occurred as of such date). The Registration Statement (W) shall include
only the Registrable Securities and (X) shall also state that, in accordance
with Rule 416 and 457 under the Securities Act, it also covers such
indeterminate number of additional shares of Common Stock as may become
issuable upon conversion of the Additional Debentures and the exercise of the
Warrants to prevent dilution resulting from stock splits or stock dividends.
The Company will use its reasonable best efforts to cause such Registration
Statement to be declared effective on a date (a "Required Effective Date") no
later than is the earlier of (Y) five (5) days after notice by the SEC that it
may be declared effective or (Z) ninety (90) days after the Initial Closing
Date.
(ii) If at any time (an "Increased Registered
Shares Date"), the number of shares of Common Stock represented by the
Registrable Shares, issued or to be issued as contemplated by the [Transaction
Agreements], exceeds the aggregate number of shares of Common Stock then
registered, the Company shall, within ten (10) business days after receipt of a
written notice from any Investor, either (X) amend the relevant Registration
Statement filed by the Company pursuant to the preceding provisions of this
Section 2, if such Registration Statement has not been declared effective by
the SEC at that time, to register two hundred percent (200%) of such
Registrable Shares, computed as contemplated by the immediately preceding
subparagraph (i), or (Y) if such Registration Statement has been declared
effective by the SEC at that time, file with the SEC an additional Registration
Statement (an "Additional Registration Statement") to register two hundred
percent (200%) of the shares of Common Stock represented by the Registrable
Shares, computed as contemplated by the immediately preceding subparagraph (i),
that exceed the aggregate number of shares of Common Stock already registered.
The Company will use its reasonable best efforts to cause such Registration
Statement to be declared effective on a date (a "Required Effective Date")
which is no later than (Q) with respect to a Registration Statement under
clause (X) of this subparagraph (ii), the Required Effective Date contemplated
by the immediately preceding subparagraph (i) and (R) with respect to an
Additional Registration Statement, the earlier of (I) five (5) days after
notice by the SEC that it may be declared effective or (II) ninety (90) days
after the Increased Registered Shares Date.
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(b) PAYMENTS BY THE COMPANY.
(i) If the Registration Statement covering the
Registrable Securities is not declared effective by the SEC by the Required
Effective Date, the Company will make payment to the investor in such amounts
and at such times as shall be determined pursuant to this Section 2(b).
(ii) The amount (the "Periodic Amount") to be
paid by the Company to the Investor shall be determined as of each Computation
Date (as defined below) and such amount shall be equal to the Periodic Amount
Percentage (as defined below) of the Purchase Price for all unconverted
Debentures purchased by the Investor for the period from the date following
the, Required Effective Date or Restricted Sale Date, as the case may be, to
the first relevant Computation Date, and thereafter to each subsequent
Computation Date. The "Periodic Amount Percentage" means (A) two percent (2%)
for each thirty (30) day period beginning on the Required Effective Date during
which the Effective Statement is not effective.
(iii) Each Periodic Amount will be payable by the
Company in cash or other immediately available funds to the Investor monthly,
upon demand therefor by the Investor.
(iv) The parties acknowledge that the damages
which may be incurred by the Investor if the Registration Statement is not
effective by the Required Effective Date, including if the right to sell
Registrable Securities under a previously effective Registration Statement is
suspended, may be difficult to ascertain. The parties agree that the Periodic
Amounts represent a reasonable estimate on the part of the parties, as of the
date of this Agreement, of the amount of such damages, and shall be the
exclusive remedy.
(v) Notwithstanding the foregoing, the amounts
payable by the Company pursuant to this provision shall not be payable to the
extent any delay in the effectiveness of the Registration Statement occurs
because of an act of, or as a result of force majeure or a failure to act or to
act timely by the Investor or its counsel, or in the event all of the
Registrable Securities may be sold pursuant to Rule 144 or another available
exemption under the Act.
(vi) "Computation Date" means (A) the date which
is thirty (30) days after the Required Effective Date or a Restricted Sale
Date, as the case may be, and (B) each date which is the earlier of (1) thirty
(30) days after the previous Computation Date or (2) the date after the
previous Computation Date on which the Registration Statement is declared
effective.
(c) ISSUANCE OF WARRANTS BY THE COMPANY.
(i) If the Registration Statement covering the
Registrable Securities is not declared effective by the SEC within one hundred
twenty (120) days of the Initial Closing Date, the Company agrees to issue to
the Buyer transferable, divisible warrants with a cashless exercise
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provision (the "Warrants") for the purchase of two hundred thousand (200,000)
shares of the Common Stock of the Company (such number subject to equitable
adjustment in the event of a stock split or similar event after the date of
this Agreement and prior to the relevant Closing Date) and shall bear an
exercise price per share equal to (x) 120% of (y) Weighted Average Conversion
Price (as defined below).
"W.A.C.P." means (i) the sum of the Conversion Principal (as defined
below) for all conversions of the Debenture prior to such exercise, divided by
(ii) the aggregate principal of the Debenture converted prior to such exercise.
"Conversion Principal" means, for each conversion, (x) the principal
amount of the Debenture converted by such conversion, multiplied by (y) the
Conversion Price applicable to that conversion.
The Warrants will expire on the last day of the month in which the
SECOND ANNIVERSARY of the initial Closing Date occurs and shall be in the form
annexed hereto as ANNEX VI, together with registration rights as provided in
the Registration Rights Agreement and piggy-back registration after the
expiration of the effectiveness of the Registration Statement contemplated by
the Registration Rights Agreement;
(ii) If the Registration Statement covering the
Registrable Securities is not declared effective by the SEC within one hundred
eighty (180) days of the Initial Closing Date, the Company agrees to issue to
the Buyer additional transferable, divisible warrants with a cashless exercise
provision (the "Warrants") for the purchase of one hundred thousand (100,000)
shares of the Common Stock of the Company on the same terms as those Warrants
contemplated in this Section 2(c)(i);
(iii) For each sixty (60) day period thereafter
that the Registration Statement covering the Registrable Securities is not
declared effective by the SEC the Company agrees to issue to the Buyer
additional transferable, divisible warrants with a cashless exercise provision
(the "Warrants") for the purchase of one hundred thousand (100,000) shares of
the Common Stock of the Company on the same terms as those Warrants
contemplated in this Section 2(c)(i).
3. OBLIGATIONS OF THE COMPANY. In connection with the
registration of the Registrable Securities, the Company shall do each of the
following.
(a) Prepare promptly, and file with the SEC by the
Required Filing Date a Registration Statement with respect to not less than the
number of Registrable Securities provided in Section 2(a) above, and
thereafter use its reasonable best efforts to cause such Registration Statement
relating to Registrable Securities to become effective by the Required
Effective Date and keep the Registration Statement effective at all times
during the period (the "Registration Period")
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continuing until the earliest of (i) the date that is three (3) years after the
last day of the calendar month following the month in which the Effective Date
occurs, (ii) the date when the Investors may sell all Registrable Securities
under Rule 144 or (iii) the date the Investors no longer own any of the
Registrable Securities, which Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading;
(b) Prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the Registration Statement
as may be necessary to keep the Registration Statement effective at all times
during the Registration Period, and, during the Registration Period, comply
with the provisions of the Securities Act with respect to the disposition of
all Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;
(c) The Company shall permit a single firm of counsel
designated by the Investors to review the Registration Statement and all
amendments and supplements thereto a reasonable period of time (but not less
than three (3) business days) prior to their filing with the SEC, and not file
any document in a form to which such counsel reasonably objects. If such
counsel objects, the Required Filing Date shall be extended by the number of
days from the date the Registration Statement was delivered to such counsel to
the date such counsel no longer objects.
(d) Notify each Investor, such Investor's legal counsel
identified to the Company (which, until further notice, shall be deemed to be
Xxxxxxx & Xxxxxx LLP, ATTN: Xxxxxx Xxxxxxx, Esq.; (the "Investor's Counsel")),
and any managing underwriters immediately (and, in the case of (i)(A) below,
not less than five (5) days prior to such filing) and (if requested by any such
Person) confirm such notice in writing no later than one (1) business day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed;
(B) whenever the SEC notifies the Company whether there will be a "review" of
such Registration Statement; (C) whenever the Company receives (or a
representative of the Company receives on its behalf) any oral or written
comments from the SEC relating to a Registration Statement (copies or, in the
case of oral comments, summaries of such comments shall be promptly furnished
by the Company to the Investors); and (D) with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC or any other Federal or state governmental
authority for amendments or supplements to the Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the SEC of
any stop order suspending the effectiveness of the Registration Statement
covering any or all of the Registrable Securities or the initiation of any
proceedings for that purpose; (iv) if at any time any of the representations or
warranties of the Company contained in any agreement (including any
underwriting agreement) contemplated hereby ceases to be true and correct in
all material
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respects; (v) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose; and (vi) of the occurrence of
any event that to the best knowledge of the Company makes any statement made in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. In addition, the Company shall furnish the Investors
with copies of all intended written responses to the comments contemplated in
clause (C) of this Section 3(d) not later than one (1) business day in advance
of the filing of such responses with the SEC so that the Investors shall have
the opportunity to comment thereon.
(e) Furnish to each Investor and such Investor's Counsel
(i) promptly after the same is prepared and publicly distributed, filed with
the SEC, or received by the Company, one (1) copy of the Registration
Statement, each preliminary prospectus and prospectus, and each amendment or
supplement thereto, and (ii) such number of copies of a prospectus, and all
amendments and supplements thereto and such other documents, as such Investor
may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Investor;
(f) Notwithstanding the foregoing, if at any time or
from time to time after the date of effectiveness of the Registration
Statement, the Company notifies the Investors in writing of the existence of a
Potential Material Event, the Investors shall not offer or sell any Registrable
Securities, or engage in any other transaction involving or relating to the
Registrable Securities, from the time of the giving of notice with respect to
a Potential Material Event until such Investor receives written notice from the
Company that such Potential Material Event either has been disclosed to the
public or no longer constitutes a Potential Material Event; provided, however,
that the Company may not so suspend the right to such holders of Registrable
Securities for more than two twenty (20) business day periods in the aggregate
during any 12-month period ("Suspension Period") with at least a ten (10)
business day interval between such periods, during the periods the Registration
Statement is required to be in effect;
(g) Use its reasonable efforts to secure and maintain
the designation of all the Registrable Securities covered by the Registration
Statement on the Nasdaq/OTC Bulletin Board of the National Association of
Securities Dealers Automated Quotations System ("NASDAQ") within the meaning of
Rule 11Aa2-1 of the SEC under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the quotation of the Registrable Securities on The
Nasdaq/OTC Bulletin Board (and further use its best efforts to arrange for at
least two market makers to register with the
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National Association of Securities Dealers, Inc. ("NASD") as such with respect
to such Registrable Securities;)
(j) Provide a transfer agent and registrar, which may be
a single entity, for the Registrable Securities not later than three (3) days
after the effective date of the Registration Statement;
(k) Cooperate with the Investors to facilitate the
timely preparation and delivery of certificates for the Registrable Securities
to be offered pursuant to the Registration Statement and enable such
certificates for the Registrable Securities to be in such denominations or
amounts as the case may be, as the Investors may reasonably request, and,
within three (3) business days after a Registration Statement which includes
Registrable Securities is ordered effective by the SEC, the Company shall
deliver, and shall cause legal counsel selected by the Company to deliver, to
the transfer agent for the Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement) an
appropriate instruction and opinion of such counsel; and
(l) Take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of the Registrable
Securities pursuant to the Registration Statement.
4. OBLIGATIONS OF THE INVESTORS. In connection with the
registration of the Registrable Securities, the Investors shall have the
following obligations:
(a) It shall be a condition precedent to the obligations
of the Company to complete the registration pursuant to this Agreement with
respect to the Registrable Securities of a particular Investor that such
Investor shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
the Registrable Securities held by it, as shall be reasonably required to
effect the registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may reasonably
request. At least ten (10) days prior to the first anticipated filing date of
the Registration Statement, the Company shall notify each Investor of the
information the Company requires from each such Investor (the "Requested
Information") if such Investor elects to have any of such Investor's
Registrable Securities included in the Registration Statement. If at least two
(2) business days prior to the filing date the Company has not received the
Requested Information from an Investor (a "Non-Responsive Investor"), then the
Company may file the Registration Statement without including Registrable
Securities of such Non-Responsive Investor;
(b) Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statement; and
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(c) Each Investor agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 3(f) or 3(g), above, such Investor will immediately discontinue
disposition of Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities until such Investor's receipt of the
copies of the supplemented or amended prospectus contemplated by Section 3(f)
or 3(g) and, if so directed by the Company, such Investor shall deliver to the
Company (at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in such Investor's possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice.
5. EXPENSES OF REGISTRATION. (a) All reasonable expenses (other
than underwriting discounts and commissions of the Investor) incurred in
connection with registrations, filings or qualifications pursuant to Section 3,
but including, without limitation, all registration, listing, and
qualifications fees, printers and accounting fees, the fees and disbursements
of counsel for the Company and a fee for a single counsel for the Investors (as
a group and not individually) not exceeding $4,500 for the Initial Registration
Statement and $2,000 for each Additional Registration Statement covering the
Registrable Securities applicable to the Debentures and Warrants issued on the
Closing Date shall be borne by the Company.
(b) Except as set forth in Annex 5 of the Securities
Purchase Agreement, neither the Company nor any of its subsidiaries has, as of
the date hereof, nor shall the Company nor any of its subsidiaries, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Investors in
this Agreement or otherwise conflicts with the provisions hereof. Except as set
forth in Annex 5 of the Securities Purchase Agreement, neither the Company nor
any of its subsidiaries has previously entered into any agreement granting any
registration rights with respect to any of its securities to any Person.
Without limiting the generality of the foregoing, without the written consent
of the Investors holding a majority of the Registrable Securities, the Company
shall not grant to any person the right to request the Company to register any
securities of the Company under the Securities Act unless the rights so granted
are subject in all respects to the prior rights in full of the Investors set
forth herein, and are not otherwise in conflict or inconsistent with the
provisions of this Agreement and the other Transaction Agreements.
6. INDEMNIFICATION. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Investor who holds such Registrable
Securities, the directors, if any, of such Investor, the officers, if any, of
such Investor, each person, if any, who controls any Investor within the
meaning of the Securities Act or the Exchange Act (each, an "Indemnified
Person" or "Indemnified Party"), against any losses, claims, damages,
liabilities or expenses (joint or several) incurred (collectively, "Claims") to
which any of them may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such Claims (or actions or proceedings, whether
commenced
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or threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included therein: (i)
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any post-effective amendment thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained
in the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the
statements therein were made, not misleading or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation under the Securities Act, the Exchange
Act or any state securities law (the matters in the foregoing clauses (i)
through (iii) being, collectively, "Violations"). Subject to clause (b) of this
Section 6, the Company shall reimburse the Investors, promptly as such expenses
are incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any
such Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a) shall not (I) apply to
a Claim arising out of or based upon a Violation which occurs in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of any Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) hereof; (II) be available to the extent such Claim is
based on a failure of the Investor to deliver or cause to be delivered the
prospectus made available by the Company; (III) apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld; or (IV) any violation or alleged violation by an Indemnified Person
of the Securities Act, the Exchange Act, any state securities laws or any rule
or regulation under the Securities Act, the Exchange Act, or any state
securities laws. Each Investor will indemnify the Company and its officers,
directors and agents (each, an "Indemnified Person" or "Indemnified Party")
against any claims arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company, by or on behalf of such Investor, expressly for use in connection with
the preparation of the Registration Statement, subject to such limitations and
conditions as are applicable to the Indemnification provided by the Company to
this Section 6. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of the Indemnified Person and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9.
(b) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against
any indemnifying party under this Section 6, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate
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in, and, to the extent the indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to assume control of the defense
thereof with counsel mutually satisfactory to the indemnifying party and the
Indemnified Person or the Indemnified Party, as the case may be. In case any
such action is brought against any Indemnified Person or Indemnified Party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party similarly notified,
assume the defense thereof, subject to the provisions herein stated and after
notice from the indemnifying party to such Indemnified Person or Indemnified
Party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such Indemnified Person or Indemnified Party under this
Section 6 for any legal or other reasonable out-of-pocket expenses subsequently
incurred by such Indemnified Person or Indemnified Party in connection with the
defense thereof unless the indemnifying party shall not pursue the action to
its final conclusion. The Indemnified Person or Indemnified Party shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and reasonable out-of-pocket expenses of such
counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel
reasonably satisfactory to the Indemnified Person or Indemnified Party. The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnified Person or Indemnified Party under
this Section 6, except to the extent that the indemnifying party is prejudiced
in its ability to defend such action. The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
7. CONTRIBUTION. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which
it would otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that (a) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6; (b) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
seller of Registrable Securities who was not guilty of such fraudulent
misrepresentation; and (c) contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such
seller from the sale of such Registrable Securities.
8. REPORTS UNDER SECURITIES ACT AND EXCHANGE ACT. With
a view to making available to the Investors the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of
the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:
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(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) furnish to each Investor so long as such Investor
owns Registrable Securities, promptly upon request, (i) a written statement by
the Company that it has complied with the reporting requirements of Rule 144,
the Securities Act and the Exchange Act, (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so
filed by the Company and (iii) such other information as may be reasonably
requested to permit the Investors to sell such securities pursuant to Rule 144
without registration.
(d) The Company will, at the request of any Holder of
Registrable Securities, upon receipt from such Holder of a certificate
certifying (i) that such Holder has held such Registrable Securities for a
period of not less than one (1) year, (ii) that such Holder has not been an
affiliate (as defined in Rule 144) of the company for more than ninety (90)
preceding days, (iii) a sale has occurred under Rule 144 (which certificate
shall come from the Holder's broker) and (iv) as to such other matters as may
be appropriate in accordance with such Rule, remove from the stock certificate
representing such Registrable Securities that portion of any restrictive legend
which relates to the registration provisions of the Securities Act, provided,
however, counsel to Investor may provide such instructions and opinion to the
transfer agent regarding the removal of the restrictive legend.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the
Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any transferee of the Registrable
Securities (or all or any portion of any unconverted Debenture or unexercised
Warrant) only if: (a) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to
the Company within a reasonable time after such assignment, (b) the Investor
transfers or assign to such transferee or assignee Registrable Securities which
have a market value as defined in the Securities Purchase Agreement upon
conversion in excess of $1,000,000, (c) the Company consents to such transfer
or assignment and is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to which such
registration rights are being transferred or assigned, (d) immediately
following such transfer or assignment the further disposition of such
securities by the transferee or assignee is restricted under the Securities Act
and applicable state securities laws, and (e) at or before the time the
Company received the written notice contemplated by clause (c) of this sentence
the transferee or assignee agrees in writing with the Company to be bound by
all of the provisions contained herein. In the event of any delay in filing or
effectiveness of the Registration Statement as a result of such assignment, the
Company shall not be liable for any damages arising from such delay, or the
payments set forth in Section 2(c) hereof arising from such delay.
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10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors who
hold a eighty (80%) percent interest of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 10 shall be
binding upon each Investor and the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.
(b) Notices required or permitted to be given hereunder
shall be given in the manner contemplated by the Securities Purchase Agreement,
(i) if to the Company or to the Investor, to their respective address
contemplated by the Securities Purchase Agreement, and (iii) if to any other
Investor, at such address as such Investor shall have provided in writing to
the Company, or at such other address as each such party furnishes by notice
given in accordance with this Section 11(b).
(c) Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non coveniens, to the bringing of any
such proceeding in such jurisdictions. To the extent determined by such court,
the Company shall reimburse the Buyer for any reasonable legal fees and
disbursements incurred by the Buyer in enforcement of or protection of any of
its rights under this Agreement.
(e) If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
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(f) Subject to the requirements of Section 9 hereof,
this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
(h) The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning thereof.
(i) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a
party, may be delivered to the other party hereto by telephone line facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
(j) This Agreement and the Securities Purchase Agreement
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the parties hereto
with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
COMPANY:
SATX, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxx
-----------------------------
Title: President & CEO
----------------------------
NASIMIA, INC.
By: /s/ Xxxxx Management S.A.
-------------------------------
Name: Xxxxx Management S.A.
-----------------------------
Title: Director
----------------------------
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