REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of July 26, 1999, is made and entered into by and between Telenetics
Corporation, a California corporation ("Company"), and T. Xxxxx Xxxxxxxxx
("Holder").
RECITALS
A. Holder has been issued 58,207 shares (the "Shares") of the
Company's Common Stock, no par value per share (the "Common Stock"), pursuant to
the terms and conditions of that certain Asset Purchase Agreement dated of even
date herewith among the Company, Holder, Xxxxxx XxXxxx, Xxxx Xxxxx and Xxx
Xxxxxx (the "Asset Purchase Agreement").
B. In accordance with the requirements of the Asset Purchase
Agreement, the Company desires to provide Holder with registration rights with
respect to the Shares owned by Holder upon the terms and conditions hereinafter
set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and conditions hereinafter set forth, the parties hereto hereby
agree as follows:
1. DEFINITIONS.
1.1 "COMMON STOCK" shall mean the Common Stock, no par value
per share, of the Company.
1.2 "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.
1.3 "REGISTRABLE SECURITIES" shall mean (i) the Shares and
(ii) any securities issued or issuable with respect to such Shares by way of a
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consideration or other reorganization. As to any
particular Registrable Securities, once issued, such shares shall cease to be
Registrable Securities when (a) such shares shall have been registered under the
Securities Act, the registration statement with respect to the sale of such
shares shall have become effective under the Securities Act and such shares
shall have been disposed of pursuant to such effective registration statement,
(b) such shares shall have been distributed pursuant to Rule 144 (or any similar
provision relating to the disposition of securities then in force) under the
Securities Act, (c) such shares shall have been otherwise transferred, new
certificates or other evidences of ownership for them not bearing a legend
restricting further transfer and not subject to any stop-transfer order or other
restrictions on transfer shall have been delivered by the Company and subsequent
disposition of such shares shall not require registration or qualification of
such shares under the Securities Act or any state securities laws then in force,
or (d) such shares shall cease to be outstanding, including as a result of the
provisions of Section 2(c) of the Asset Purchase Agreement.
1.4 "REGISTRATION EXPENSES" shall have the meaning set forth
in Section 2.4.
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1.5 "SEC" shall mean the Securities and Exchange Commission.
1.6 "SECURITIES ACT" shall mean the Securities Act of 1993, as
amended.
1.7 "SHARES" shall have the meaning set forth in the recitals
to this Agreement.
2. REGISTRATION UPON OCCURRENCE OF CERTAIN EVENT.
2.1 REGISTRATION OBLIGATION. The Company shall use its best
efforts to file with the SEC on or before July 31, 1999 a registration statement
with respect to the Registrable Securities in the manner described in Section 3
hereof and use its best efforts to cause such registration statement to become
effective on or before November 1, 1999.
2.2 REGISTRATION EXPENSES. The Company will pay all
Registration Expenses (as defined in Section 2.4) in connection with a
registration requested pursuant to this Section 2, whether or not such
registration becomes effective under the Securities Act.
2.3 EFFECTIVE REGISTRATION STATEMENT. A registration pursuant
to this Section 2 will not be deemed to have been effected unless the
registration statement relating thereto has become effective under the
Securities Act; PROVIDED, HOWEVER, that if, after such registration statement
has become effective, the offering of Registrable Shares pursuant to such
registration is interfered with by any stop order, injunction or other order or
requirement of the SEC or other governmental agency or court, such registration
will be deemed not to have been effected.
2.4 REGISTRATION EXPENSES. As used in this Agreement,
"Registration Expenses" shall mean all expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
all SEC, stock exchange, National Association of Securities Dealers, Inc. or
Nasdaq registration and filing fees and expenses, fees and expenses of
compliance with securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the Company in connection with
blue sky qualification of the Registrable Securities), rating agency fees,
printing expenses, messenger and delivery expenses, fees and disbursements of
counsel for the Company and all independent certified public accountants
(including the expenses of any annual audit, special audit or "cold comfort"
letters required by or incident to such performance and compliance), securities
acts liability insurance (if the Company so desires), the reasonable fees and
expenses of any special experts retained by the Company in connection with such
registration, and fees and expenses of other persons retained by the Company.
3. REGISTRATION PROCEDURE. In effecting the registration of the
Registrable Securities as provided in this Agreement, the Company shall, at its
sole expense:
(a) Prepare and file with the SEC a registration statement
with respect to the Registrable Securities and use its best efforts to cause
such registration statement to become effective; PROVIDED, HOWEVER, that before
filing with the SEC a registration statement or prospectus or any amendments or
supplements thereto, the Company will (i) furnish to counsel selected by Holder
copies of all such documents proposed to be filed, which documents will be
subject to the review of such counsel, and (ii) notify Holder of any stop order
issued or threatened by the SEC and take all reasonable actions required to
prevent the entry of such stop order or to remove it if entered;
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(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to keep such registration
statement effective until April 15, 2002 or such shorter period which will
terminate when all Registrable Securities covered by such registration statement
have been sold, and comply with the provisions of the Act with respect to the
disposition of all the Registrable Securities covered by such registration
statement during such period;
(c) Furnish to Holder copies of the registration statement,
each amendment and supplement thereto (in each case including all exhibits
thereto), the prospectus included in such registration statement (including each
preliminary prospectus) in conformity with the requirements of the Securities
Act and such other documents as Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by Holder;
(d) Use its best efforts to register or qualify the
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as shall be reasonably requested by Holder and do any and all
other acts and things which may be reasonably necessary or advisable to enable
Holder to consummate the disposition in such jurisdictions of the Registrable
Securities owned by Holder; PROVIDED, that the Company shall not be required in
connection therewith or as a condition thereto to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (d), (ii) subject itself to taxation in any such
jurisdiction, or (iii) file a general consent to service of process in any such
jurisdiction;
(e) Use its best efforts to cause the Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable Holder to consummate the
disposition of such Registrable Securities;
(f) Immediately notify Holder at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and the Company will promptly prepare and
furnish to Holder a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an 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 not misleading;
(g) Enter into such customary agreements and take all such
other actions as Holder reasonably requests in order to expedite or facilitate
the disposition of such Registrable Securities, including customary
indemnification;
(h) Make available for inspection by Holder and any attorney,
accountant or other agent retained by Holder (collectively, the "Inspectors"),
all financial and other records, pertinent corporate documents and properties of
the Company as shall be reasonably necessary to enable them to exercise their
due diligence responsibility, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Inspector
in connection with such registration statement; and
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(i) Otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC.
The Company may require Holder to furnish to the Company such
information regarding the distribution of such Registrable Securities as the
Company may from time to time reasonably request in writing.
Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in paragraph 3(f),
Holder will forthwith discontinue disposition of Registrable Securities,
pursuant to the registration statement covering such Registrable Securities
until Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph 3(f), and, if so directed by the Company, Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in Holder's possession, of the prospectus covering
such Registrable Securities current at the time of receipt of such notice. In
the event the Company shall give any such notice, the period mentioned in
paragraph 3(b) shall be extended by the greater of (i) three months or (ii) the
number of days during the period from and including the date of the giving of
such notice pursuant to paragraph 3(f) to and including the date when Holder
shall have received the copies of the supplemented or amended prospectus
contemplated by paragraph 3(f).
4. INDEMNIFICATION.
4.1 INDEMNIFICATION BY THE COMPANY. In connection with the
registration of the Registrable Securities under the Securities Act pursuant to
this Agreement, the Company will, and it hereby does, indemnify and hold
harmless, to the full extent permitted by law, Holder, each other person who
participates as an underwriter in the offering or sale of such securities and
each other person, if any, who controls Holder or any such underwriter within
the meaning of the Securities Act, against any and all losses, claims, damages
or liabilities, joint or several, and expenses (including any amounts paid in
any settlement effected with the Company's prior written consent) to which
Holder or any such underwriter or controlling person may become subject under
the Securities Act, common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) or
expenses arising out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement thereto, or (ii) 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, and the Company will reimburse Holder and each such
underwriter and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending such
loss, claim, liability, action or proceedings; PROVIDED, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expenses arises out of
or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement or amendment or supplement
thereto or in any such preliminary, final or summary prospectus in reliance upon
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and in conformity with written information furnished to the Company through an
instrument duly executed by Holder or underwriter or controlling person
specifically stating that it is for use in the preparation thereof; and
PROVIDED, FURTHER, that the Company will not be liable to Holder or any person
who participates as an underwriter in the offering or sale of Registrable
Securities or any other person, if any, who controls such underwriter within the
meaning of the Securities Act, under the indemnity agreement in this Section 4.1
with respect to any preliminary prospectus as then amended or supplemented as
the case may be, to the extent that any such loss, claim, damage or liability of
Holder, underwriter or controlling person results from the fact that Holder or
underwriter or controlling person sold Registrable Securities to a person to
whom there was not sent or give, at or prior to the written confirmation of such
sale, a copy of the final prospectus (including any documents incorporated by
reference therein), whichever is most recent, if the Company has previously
furnished copies thereof to Holder or underwriter or controlling person and such
final prospectus, as then amended or supplemented, has corrected any such
misstatement or omission. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of Holder or any
underwriter or controlling person and shall survive the transfer of such
securities by Holder.
4.2 INDEMNIFICATION BY HOLDER. The Company may require, as a
condition to including the Registrable Securities in any registration statement
filed in accordance with this Agreement, that the Company shall have received an
undertaking reasonably satisfactory to it from Holder or any underwriter, to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 4.1) the Company and its controlling persons and all other
prospective sellers and their respective controlling persons with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary, final or summary prospectus contained
therein, or any amendment or supplement, if such statement or alleged statement
or omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company through an instruction duly
executed by Holder or underwriter specifically stating that it is for use in the
preparation of such registration statement, preliminary, final or summary
prospectus or amendment or supplement, or a document incorporated by reference
into any of the foregoing. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or Holder
and shall survive the transfer of such securities by Holder; PROVIDED, HOWEVER,
that Holder shall not be liable to the Company under this Section 4.2 for any
amounts exceeding the product of the purchase price per Registrable Security and
the number of Registrable Securities being sold pursuant to such registration
statement or prospectus by Holder.
4.3 NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 4, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, promptly give written
notice to the latter of the commencement of such action; PROVIDED, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding
subsections of this Section 4, except to the extent that the indemnifying party
is actually materially prejudiced by such failure to give notice. In case any
such action is brought against an indemnified party, unless in such indemnified
party's reasonable judgement a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
will be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
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wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties arises in respect of such claim after the assumption of the
defense thereof, and the indemnifying party will not be subject to any liability
for any settlement made without its consent (which consent shall not be
unreasonably withheld). No indemnifying party will 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 counsel or counsels.
4.4 OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding Sections 4.1, 4.2 and 4.3 (with appropriate
modifications) shall be give by the Company and Holder with respect to any
required registration or other qualification of securities under any federal or
state law or regulation of governmental authority other than the Securities Act.
5. RULE 144. The Company hereby covenants that the Company
shall file in a timely manner all reports required to be filed by it under the
Securities Act and the Exchange Act (to the extent the Company is subject to the
Exchange Act) and the rules and regulations adopted by the SEC thereunder, and
it will take such further action as Holder may reasonably request, all to the
extent required from time to time to enable 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 relating to the disposition of securities. Upon the
request of Holder, the Company will deliver to Holder a written statement as to
whether it has complied with such requirements, in addition, the Company hereby
agrees that for a period of three months following the date on which a
registration statement filed pursuant to this Agreement shall have become
effective, the Company shall not deregister such securities under Section 12 of
the Exchange Act (even if then permitted to do so pursuant to the Exchange Act
and the rules and regulations promulgated thereunder).
6. NO INCONSISTENT AGREEMENTS. The Company will not hereafter
enter into any agreement with respect to any of its securities which is
inconsistent with the rights granted to Holder in this Agreement.
7. REMEDIES. The Company acknowledges and agrees that in the
event of any breach of this Agreement by it, Holder would be irreparably harmed
and could not be made whole by monetary damages. The Company accordingly agrees
to waive the defense in any action for specific performance that a remedy at law
would be adequate and that Holder, in addition to any other remedy to which they
may be entitled at law or in equity, shall be entitled to compel specific
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performance of this Agreement in any action instituted in any court of the
United States or any state thereof having subject matter jurisdiction for such
action.
8. SALE WITHOUT REGISTRATION. At the time of any transfer of
any Registrable Securities which shall not be registered under the Securities
Act, the Company may require, as a condition of allowing such transfer, that
Holder or the transferee furnish to the Company: (a) such information as is
reasonably necessary in order to establish that such transfer may be made
without registration under the Securities Act; and (b) at the expense of Holder
or the transferee, an opinion of counsel, satisfactory in form and substance to
the Company, to the effect that such transfer may be made without registration
under the Securities Act; PROVIDED, that nothing contained in this Section 8
shall relieve the Company from complying with any request for registration,
qualification or compliance made pursuant to these registration rights
provisions.
9. GENERAL PROVISIONS.
9.1 WAIVERS. No action taken pursuant to this Agreement,
including any investigation by or on behalf of any party hereto, shall be deemed
to constitute a waiver by the party taking such action or compliance with any
representation, warranty, covenant, or agreement contained herein or in any
ancillary document. The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach. The waiver by any party of any of the conditions precedent to
its respective obligations under this Agreement shall not preclude it from
seeking redress for breach of this Agreement.
9.2 NOTICES. All notices and other communications which are
required or may be given under this Agreement shall be in writing and shall be
deemed to have been duly given if delivered personally, by courier service,
telecopied, or mailed by registered or certified mail, postage prepaid, return
receipt requested, to the party to whom the same is so delivered or mailed:
(a) if to the Company:
Telenetics Corporation
00000 Xxxxx Xxxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Armani
With a copy to:
Xxxxx & Xxxxxx, L.L.P.
000 Xxxxx Xxxx., Xxx. 0000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
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(b) if to Holder:
T. Xxxxx Xxxxxxxxx
0000 Xxxx Xxxxxx Xxxxx
Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000-0000
or to such other address as any of the above shall have specified by notice
hereunder. Notices delivered personally, by mail or telecopied shall be deemed
communicated as of actual receipt.
9.3 ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes
the entire agreement among the parties hereto with respect to the subject matter
hereof, and supersedes any and all prior agreements and undertakings, oral or
written, concerning the subject matter hereof. This Agreement may not be changed
or terminated orally, and may only be changed or terminated by a writing signed
by the party against whom such change or termination is sought.
9.4 BINDING EFFECT; BENEFITS. This Agreement shall inure to
the benefit of and shall be binding upon and enforceable by the parties hereto
and their respective heirs, legal representatives, successors, and assigns.
Nothing in this Agreement, expressed or implied, is intended to or shall confer
on any person other than the parties hereto any rights, remedies, obligations,
or liabilities under or by reason of this Agreement.
9.5 HEADINGS. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
9.6 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument.
9.7 RULES OF CONSTRUCTION. In this Agreement, unless the
context otherwise requires, words in the singular include the plural, and in the
plural include the singular, and words of the masculine gender include the
feminine and the neuter, and, when the sense so indicates, words of the neuter
gender may refer to any gender.
9.8 ASSIGNMENT. This Agreement is not assignable without the
prior written consent of the nonassigning party or parties.
9.9 GOVERNING LAW; VENUE. The validity, performance, and
enforcement of this Agreement shall be governed by the laws of the State of
California. Any action commenced hereunder shall be conducted before a court of
appropriate jurisdiction in Orange County, California.
9.10 COOPERATION. The parties agree to execute such further
documents and take such further actions as necessary to carry out the provisions
of this Agreement and to fully accomplish its purpose and intent.
9.11 DISPUTE RESOLUTION. Except for matters with respect to
which injunctive relief is sought, all claims, disputes and other matters in
controversy (a "dispute") arising directly or indirectly out of or related to
this Agreement, or the breach thereof, whether contractual or noncontractual,
and whether during the term or after the termination of this Agreement, shall be
resolved exclusively according to the procedures set forth in this Section 9.11.
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(a) MEDIATION. Neither party shall commence an
arbitration proceeding pursuant to the provisions of Section 9.11(b) unless that
party first gives a written notice (a "Dispute Notice") to the other party
setting forth the nature of the dispute. The parties shall attempt in good faith
to resolve the dispute by mediation under the Commercial Mediation Rules of the
American Arbitration Association ("AAA") in effect on the date of the Dispute
Notice. If the parties cannot agree on the selection of a mediator within twenty
(20) days after delivery of the Dispute Notice, the mediator will be selected by
the AAA. If the dispute has not been resolved by mediation as provided above
within sixty (60) days after delivery of the Dispute Notice, then the dispute
shall be determined by arbitration in accordance with the provisions of Section
9.11(b).
(b) ARBITRATION.
(1) Any dispute that is not settled through mediation
as provided in Section 9.11(a) above shall be resolved by arbitration in Orange
County, California, governed by the Federal Arbitration Act, 9 U.S.C. ss. 1 et
seq, and administered by the American Arbitration Association under its
Commercial Arbitration Rules in effect on the date of the Dispute Notice, as
modified by the provisions of this Section 9.11(b), by a single arbitrator.
Persons eligible to be selected as an arbitrator shall be limited to lawyers
with excellent academic and professional credentials (i) who are or have been a
partner in a highly respected law firm for at least 15 years specializing in
either general commercial litigation or general corporate and commercial matters
and (ii) who have had both training and experience as an arbitrator. Each party
shall be entitled to strike on a peremptory basis, for any reason or no reason,
any or all of the names of potential arbitrators on the list submitted to the
parties by the AAA as being qualified in accordance with the criteria set forth
herein. If the parties cannot agree on a mutually acceptable single arbitrator
from the one or more lists submitted by the AAA, the AAA shall designate three
persons who, in its opinion, meet the criteria set forth herein, which designees
may include persons named on any list previously submitted by the AAA. Each
party shall be entitled to strike one of such three designees on a peremptory
basis, indicating its order of preference with respect to the remaining
designees, and the selection of the arbitrator shall be made from among such
designee(s) which have not been so stricken by either party in accordance with
their indicated order of mutual preference to the extent possible. The
arbitrator shall base the award on applicable law and judicial precedent and,
unless both parties agree otherwise, shall include in such award the findings of
fact and conclusions of law upon which the award is based. Judgment on the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof.
(2) Notwithstanding the foregoing, if the dispute is
determined by a single arbitrator as contemplated, or if the parties agree to a
panel of three arbitrators to be selected in accordance with the applicable AAA
rules, and in the event the dispute is determined by less than the unanimous
decision of the three arbitrators, then upon the application by either party to
a court for an order confirming, modifying or vacating the award, the court
shall have the power to review whether, as a matter of law based on the findings
of fact determined by the arbitrator, the award should be confirmed, modified or
vacated in order to correct any errors of law made by the arbitrator. In order
to effectuate judicial review limited to issues of law, the parties agree (and
shall stipulate to the court) that the findings of fact made by the arbitrator
shall be final and binding on the parties and shall serve as the facts to be
submitted to and relied on by the court in determining the extent to which the
award should be confirmed, modified or vacated.
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(c) COSTS AND ATTORNEYS' FEES. If either party fails to
proceed with mediation or arbitration as provided herein or unsuccessfully seeks
to stay such mediation or arbitration, or fails to comply with any arbitration
award, or is unsuccessful in vacating or modifying the award pursuant to a
petition or application for judicial review, the other party shall be entitled
to be awarded costs, including reasonable attorneys' fees, paid or incurred by
such other party in successfully compelling such arbitration or defending
against the attempt to stay, vacate or modify such arbitration award and/or
successfully defending or enforcing the award.
(d) TOLLING STATUTE OF LIMITATIONS. All applicable
statutes of limitations and defenses based upon the passage of time shall be
tolled while the procedures specified in this Section 9.11 are pending. The
parties will take such action, if any, required to effectuate such tolling.
9.12 ATTORNEYS' FEES. The prevailing party in any proceedings
(including, without limitation any arbitration proceedings) arising in
connection with this Agreement shall be entitled to reimbursement for his or its
reasonable costs incurred in connection therewith, including attorneys' fees.
9.13 SET-OFF. Each party hereto shall be entitled to set-off
against any amount it may owe to any other party under this Agreement or any
other agreement executed in connection herewith any and all amounts that are due
to that party by such other party under or in connection with the terms of this
Agreement.
9.14 TIME OF ESSENCE. Time is of essence in connection with
the performance of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day and date first above written.
TELENETICS CORPORATION
By:/S/ Xxxxxxx X. Armani
---------------------------------
Xxxxxxx X. Armani, President
"Company"
/S/ T. Xxxxx Xxxxxxxxx
---------------------------------
T. Xxxxx Xxxxxxxxx
"Holder"
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