EXHIBIT 4.10
EXHIBIT D
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FORM OF REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of March 3, 2000 (this
"Agreement"), is entered into by and between INFORMATION XXXXXXX.XXX, INC., a
Florida corporation (the "Company") and Senasqua Investors LLC, a Delaware
limited liability company (the "Purchaser").
W I T N E S S E T H:
WHEREAS, pursuant to a Securities Purchase Agreement, dated as of March 3,
2000, by and between the Purchaser and the Company (the "Securities Purchase
Agreement"), the Company has agreed to issue and sell to the Purchaser
$1,500,000 principal amount of the Company's 5% Convertible Debentures due 2002
(the "Debentures") and two year Warrants to purchase 225,000 shares of Common
Stock of the Company (the "Warrants"; the Debentures and the Warrants
collectively, the "Securities");
WHEREAS, pursuant to the terms of the Debentures and the Warrants, (i) upon
the conversion of the Debentures and (ii) upon exercise of the Warrants, the
Company will issue shares of the Company's common stock, par value $.0001 per
share (the "Common Stock") (the shares of Common Stock issued or issuable to the
Purchaser upon the conversion the Debentures and/or upon the exercise of the
Warrants are collectively referred to herein as the "Shares") to the Purchaser;
and
WHEREAS, to induce the Purchaser 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 (the "Securities Act"), and
applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Purchaser
hereby agree as follows:
1. Definitions.
(a) As used in this Agreement, the following terms shall have the
following meanings:
(i) "Minimum Conversion Shares" on any date means a number of shares
equal to at least the sum of: (x) two (2) times the number of shares of Common
Stock that are issuable upon conversion of the Debentures on such date, without
regard to any limitation on any holder's ability to convert the Debentures and
(y) the number of shares of Common Stock issuable upon exercise of the
Warrants.
(ii) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing one or more 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 Securities and Exchange Commission (the "Commission").
(iii) "Registrable Securities" means collectively, the Shares
and the Warrants.
(iv) "Registration Statement" means a registration statement of
the Company under the Securities Act.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the Securities Purchase Agreement, the Debentures or
the Warrants, as the case may be.
2. Registration.
Mandatory Registration. The Company shall prepare and, as soon as
practicable but in no event later than thirty (30) days after the Closing Date
(the "Required Filing Date"), file with the Commission a Registration Statement
on Form SB-2, or an amendment to any pending Registration Statement on Form SB-2
of the Company, covering resales of (a) the Warrants and (b) the Minimum
Conversion Shares on the filing date. In the event that Form SB-2 is
unavailable for such a registration, the Company shall use such other form as is
available for such a registration. Such Registration Statement or amended
Registration Statement, as the case may be, shall state that, in accordance with
Rule 416 under the Securities Act, it also covers such indeterminate number of
additional Shares as may become issuable upon conversion of the Debentures and
exercise of the Warrants (i) to prevent dilution resulting from stock splits,
stock dividends or similar transactions and (ii) to the extent consistent with
the interpretations of the Commission of such rule at such time, resulting from
any adjustment in the applicable Conversion Price of such Debentures or the
Current Warrant Price of such Warrants. If on any date the Minimum Conversion
Shares exceed the total number of Shares so registered, the Company shall (i)
if such Registration Statement has not been declared effective by the Commission
at that time, amend the Registration Statement filed by the Company pursuant to
the preceding portions of this paragraph, to register all of such Minimum
Conversion Shares, or (ii) if such Registration Statement has been declared
effective by the Commission at that time, file with the Commission an additional
Registration Statement on SB-2 (or, in the event that Form SB-2 is unavailable
for such a registration, on such other form as is available) to register all of
such Minimum Conversion Shares that have not already been so registered. The
Company shall use its best efforts to cause any such Registration Statement or
amended Registration Statement, as the case may be, to become effective within
the earliest to occur of (i) ninety (90) days following the Closing Date; or
(ii) if the Commission elects not to conduct a review of the Registration
Statement, the date which is five (5) business days after the date upon which
either the Company or its counsel is so notified, whether orally or in writing,
whether orally or in writing, that the Commission has no further comments with
respect to the Registration Statement, or that the Registration Statement may be
declared effective. The earliest of such dates is referred to herein as the
"Required Effective Date." Notwithstanding the use of the terms "Required
Filing Date" and "Required Effective Date" herein, the Company shall at all
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times use its best efforts to file each required Registration Statement or
amendment to a Registration Statement as soon as possible after the Closing Date
or after the date the Company becomes obligated to file such Registration
Statement or amendment, as the case may be, and to cause each such Registration
Statement or amendment to become effective as soon as possible thereafter. No
securities of the Company other than the Registrable Securities shall be
included in any such Registration Statement. The Company shall keep each
Registration Statement effective pursuant to Rule 415 at all times until such
date as is the earlier of (i) the date on which all of the Registrable
Securities have been sold and (ii) the date which is two (2) years following the
date hereof.
(b) Payments by the Company.
(i) (A) If the Registration Statement covering the Registrable
Securities is not filed in proper form with the Commission on or prior to the
Required Filing Date, (B) if the Registration Statement covering the Registrable
Securities is not effective on or prior to the Required Effective Date, (C) if
the number of Shares qualified for trading on the OTC Bulletin Board or NASDAQ
SmallCap Stock Market or reserved by the Company for issuance shall be
insufficient for issuance upon the conversion of the outstanding Debentures and
the exercise of the Warrants, or (D) upon the occurrence of a Blackout Event (as
described in Section 3(f) or Section 3(g) below) (each of the events described
in clauses (A) through (D) of this paragraph are referred to herein as a
"Registration Default"), the Company will make payments to the Purchaser 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 Purchaser for each thirty (30) day period, or portion thereof, during which
a Registration Default shall be in effect (each such period, a "Default Period")
shall be equal to two percent (2%) of the sum of (a) the principal amount of
Debentures outstanding and (b) the principal amount of Debentures converted into
shares of Common Stock (the "Purchase Price"); provided, with respect to any
Default Period during which the relevant Registration Defaults shall have been
cured, the Periodic Amount shall be pro rated for the number of days during such
period during which the Registration Defaults were pending; and provided
further, that the payment of such Periodic Amounts shall not relieve the Company
from its continuing obligations to register the Registrable Securities pursuant
to Section 2(a).
(iii) Each Periodic Amount shall be payable by the Company, in cash or
other immediately available funds, to the Purchaser on the last day of each
month during which a Registration Default occurred or was continuing, without
demand therefor by the Purchaser. If the Company shall not remit the Periodic
Amounts payable to the Purchaser as set forth in paragraph (ii) above, the
Company will pay the Purchaser reasonable costs of collection, including
attorneys' fees, in addition to the Periodic Amounts.
(iv) The parties acknowledge that the damages which may be incurred by
the Purchaser if the Registration Statement is not filed by the Required Filing
Date, if the Registration Statement has not been declared effective by the
Required Effective Date, if an insufficient number of shares of Common Stock
shall be qualified for trading or reserved for issuance, or if the provisions of
Section 3(f) or 3(g) become applicable, may be difficult to
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ascertain. The parties agree that the Periodic Amount represents a reasonable
estimate on the part of the parties, as of the date of this Agreement, of the
amount of such damages.
(c) Piggyback Registration. (i) If at any time or from time to time, the
Company shall determine to register any of its securities, for its own account
or the account of any of its shareholders, other than a Registration Statement
relating solely to employee share option plans or pursuant to an acquisition
transaction on Form S-4, the Company will:
(A) provide to the Purchaser written notice thereof as soon as
practicable prior to filing the Registration Statement; and
(B) include in such Registration Statement and in any underwriting
involved therein, all of the Registrable Securities specified in a
written request by the Purchaser made within fifteen (15) days after
receipt of such written notice from the Company.
(ii) If the Registration is for a registered public offering
involving an underwriting, the Company shall so advise the Purchaser as a part
of the written notice given pursuant to this Section. In such event, the rights
of the Purchaser hereunder shall include participation in such underwriting and
the inclusion of the Registrable Securities in the underwriting to the extent
provided herein. To the extent that the Purchaser proposes to distribute its
securities through such underwriting, the Purchaser shall (together with the
Company and any other securityholders of the Company distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this
Section, if the managing underwriter of such underwriting determines that
marketing factors require a limitation of the number of shares to be offered in
connection with such underwriting, the managing underwriter may limit the number
of Registrable Securities to be included in the Registration and underwriting
(provided, however, that (a) the Registrable Securities shall not be excluded
from such underwritten offering prior to the exclusion of any securities held by
officers and directors of the Company or their affiliates, (b) the Registrable
Securities shall be entitled to at least the same priority in an underwritten
offering as any securities included in such offering by any of the Company's
other existing securityholders, and (c) the Company shall not enter into any
agreement that would provide any securityholder with priority in connection with
an underwritten offering greater than the priority granted to the Purchaser
hereunder). The Company shall so advise any of its other securityholders who
are distributing their securities through such underwriting pursuant to their
respective piggyback registration rights, and the number of shares of
Registrable Securities and other securities that may be included in the
registration and underwriting shall be allocated among the Purchaser and all
other securityholders of the Company in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities held by the Purchaser and such
other securityholders at the time of the filing of the registration statement.
If the Purchaser disapproves of the terms of any such underwriting, it may elect
to withdraw therefrom by written notice to the Company. Any Registrable
Securities so excluded or withdrawn from such underwriting shall be withdrawn
from such Registration.
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(d) Eligibility for Form SB-2. The Company represents and warrants that
it meets all of the requirements for the use of Form SB-2 for the Registration
of the sale by the Purchaser and any transferee who purchases the Registrable
Securities, and the Company covenants that it shall file all reports required to
be filed by the Company with the Commission in a timely manner, and shall take
such other actions as may be necessary to maintain such eligibility for the use
of Form SB-2.
(e) Priority in Filing. The Company covenants that beginning on the
Closing Date and ending on the date that is one hundred and eighty (180) days
after the Registration Statement filed pursuant to Section 2(a) of this
Agreement becomes effective ( provided that if, after the effective date of such
Registration Statement, the Purchaser shall be unable to sell Registrable
Securities pursuant to such Registration Statement for any number of days, the
provisions of this Section 2(e) shall apply for an additional number of days
equal to the number of days during which any Purchaser is unable to sell
Registrable Securities pursuant to such Registration Statement), the Company
will not file any Registration Statement, other than a Registration Statement
required by Section 2(a) hereof, without the written consent of the Purchaser,
except that the Company may include on the Registration Statement securities to
be sold by the selling stockholders in the amounts listed on Schedule 2(e)
hereto.
3. Obligations of the Company.
In connection with the registration of the Registrable Securities, the
Company shall do each of the following:
(a) Prepare and file with the Commission the Registration Statements
required by Section 2 of this Agreement and such amendments (including post-
effective amendments) and supplements to the Registration Statements and the
prospectuses used in connection with such Registration Statements, each in such
form as to which the Purchasers and its counsel shall not have objected, as may
be necessary to keep the Registration 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 of the
Registrable Securities of the Company covered by the Registration Statements
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 Statements;
(b) Furnish to each Purchaser, if the Registrable Securities of such
Purchaser are included in the Registration Statement, and its legal counsel
identified to the Company, promptly after the same is prepared and publicly
distributed, filed with the Commission, or received by the Company, a copy of
the Registration Statement, each preliminary prospectus, each final prospectus,
and all amendments and supplements thereto and such other documents, as such
Purchaser may reasonably request in order to facilitate the disposition of its
Registrable Securities;
(c) Furnish to each Purchaser and its counsel copies of any
correspondence between the Company and the Commission with respect to any
Registration Statement or amendment or supplement thereto filed pursuant to this
Agreement;
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(d) Use all reasonable efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statements under such other
securities or blue sky laws of such jurisdictions as each Purchaser may
reasonably request, (ii) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof at all
times during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all
times during the Registration Period and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions, provided that in connection therewith, the Company shall not be
required to qualify as a foreign corporation or to file a general consent to the
service of process in any jurisdiction;
(e) Qualify such securities for trading on the OTC Bulletin Board and
list such securities on all the other national securities exchanges on which any
securities of the Company are then listed, and file any filings required by
Nasdaq and/or such other exchanges;
(f) As promptly as practicable after becoming aware of such event,
notify each Purchaser of the occurrence of any event, as a result of which the
prospectus included in any Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, and to use its
best efforts to promptly prepare a supplement or amendment to such Registration
Statement or other appropriate filing with the Commission to correct such untrue
statement of omission, and to deliver a number of copies of such supplement or
amendment to each Purchaser as such Purchaser may reasonably request;
(g) As promptly as practicable after becoming aware of such event,
notify each Purchaser (or, in the event of an underwritten offering, the
managing underwriters) of the issuance by the Commission or any stop order or
other suspension of the effectiveness of any Registration Statement at the
earliest possible time, and to use its best efforts to promptly obtain the
withdrawal of such stop order or other suspension of effectiveness (the
occurrence of any of the events described in paragraphs (f) and (g) of this
Section 3 is referred to herein as a BlackoutEvent);
(h) During the period commencing upon (i) the Purchasers' receipt of a
notification pursuant to Section 3(f) above or (ii) the entry of a stop order or
other suspension of the effectiveness of the Registration Statement described in
Section 3(g) above, and ending at such time as (x) the Company shall have
completed the applicable filings (and if applicable, such filings shall have
been declared effective) and shall have delivered to the Purchasers the
documents required pursuant to Section 3(f) above or (y) such stop order or
other suspension of the effectiveness of the Registration Statement shall have
been removed, the Company shall be liable to remit the payments required to be
paid to the Purchasers pursuant to Section 2(b) above;
(i) Suspend the use of any prospectus used in connection with any
Registration Statement only in the event, and for such period of time as, such a
suspension is required by the rules and regulations of the Commission;
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(j) Enter into such customary agreements for secondary offerings
(including a customary underwriting agreement with the underwriter or
underwriters, if any) and take all such other actions reasonably requested by
the Purchaser in connection therewith in order to expedite or facilitate the
disposition of such Registrable Securities. Whether or not an underwriting
agreement is entered into and whether or not the Registrable Securities are to
be sold in an underwritten offering the Company shall:
(i) make such representations and warranties to the Purchaser and the
underwriter or underwriters, if any, in form, substance and scope as are
customarily made by issuers to selling stockholders and underwriters in
secondary offerings;
(ii) cause to be delivered to the sellers of Registrable Securities
and the underwriter or underwriters, if any, opinions of independent
counsel to the Company (which counsel and opinions shall be reasonably
satisfactory in form, scope and substance to Purchaser and the
underwriter(s), if any, and their counsel), (A) on and dated as of the
effective day of the applicable Registration Statement (and in the case of
an underwritten offering, dated the date of delivery of any Registrable
Securities sold pursuant thereto) stating that (x) such Registration
Statement complies in all material respects with the requirements of the
Securities Act and the rules and regulations of the Commission thereunder,
(y) such Registration Statement does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (z)
the documents incorporated by reference in the prospectus accompanying such
Registration Statement, at the time they were filed with the Commission or
as amended, complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
rules and regulations thereunder and, when read together with the other
information in such prospectus, do not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (B)
within fifteen (15) days following the filing of the Company's Annual
Report on Form 10-K for each fiscal year thereafter, an opinion of
independent counsel to the Company, updating the opinion referred to in
clause (A) of this paragraph;
(iii) cause to be delivered, immediately prior to the effectiveness
of the applicable Registration Statement (and, in the case of an
underwritten offering, at the time of delivery of any Registrable
Securities sold pursuant thereto), and at the beginning of each fiscal year
following a year during which the Company's independent certified public
accountants shall have reviewed any of the Company's books or records, a
"comfort" letter from the Company's independent certified public
accountants addressed to the Purchaser and each underwriter, if any,
stating that such accountants are independent public accountants within the
meaning of the Securities Act and the applicable published rules and
regulations thereunder, and otherwise in customary form and covering such
financial and accounting matters as are customarily covered by letters of
the independent certified public accountants delivered in connection with
secondary offerings; such accountants shall have undertaken in each such
letter to update the same during each such fiscal year in which such books
or records are being reviewed so that each such letter shall remain
current, correct and complete throughout such fiscal year;
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and each such letter and update thereof, if any, shall be reasonably
satisfactory to the Purchaser;
(iv) if an underwriting agreement is entered into, the same shall
include customary indemnification and contribution provisions to and from
the underwriters and procedures for secondary underwritten offerings;
(v) deliver such documents and certificates as may be reasonably
requested by any purchaser of the Registrable Securities being sold or the
managing underwriter or underwriters, if any, to evidence compliance with
clause (i) above and with any customary conditions contained in the
underwriting agreement, if any; and
(vi) deliver to Purchaser on the effective day of the applicable
Registration Statement (and, in the case of an underwritten offering, on
the date of delivery of any Registrable Securities sold pursuant thereto),
and at the beginning of each fiscal quarter thereafter, a certificate in
form and substance as shall be reasonably satisfactory to Purchaser,
executed by an executive officer of the Company and to the effect that all
the representations and warranties of the Company contained in the
Securities Purchase Agreement are still true and correct except as
disclosed in such certificate; the Company shall, as to each such
certificate delivered at the beginning of each fiscal quarter, update or
cause to be updated each such certificate during such quarter so that it
shall remain current, complete and correct throughout such quarter; and
such updates received by Purchaser during such quarter, if any, shall have
been reasonably satisfactory to Purchaser.
(k) Make available for inspection by Purchasers, their
representative(s), any underwriter participating in any disposition pursuant to
a Registration Statement, and any attorney or accountant retained by any
Purchaser or underwriter, all financial and other records customary for purposes
of a Purchasers' and underwriters' due diligence examination of the Company and
review of any Registration Statement, all filings made with the Commission
subsequent to the Closing, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees to supply all
information reasonably requested by any such representative, underwriter,
attorney or accountant in connection with such Registration Statement, provided
that such parties agree to keep such information confidential;
(l) Cooperate with the Purchasers to facilitate the timely preparation
and delivery of certificates for the Registrable Securities to be offered
pursuant to any Registration Statement and to enable such certificates for the
Registrable Securities to be in such denominations or amounts, as the case may
be, as the Purchasers may reasonably request, and registered in such names as
the Purchasers may request; and, within three (3) business days after a
Registration Statement which includes Registrable Securities is ordered
effective by the Commission, 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 Purchasers) an appropriate
instruction and opinion of such counsel; and
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(m) Permit counsel to Purchaser to review the Registration Statement
and all amendments and supplements thereto within a reasonable period of time
(but not less than five (5) business days) prior to each filing, and to
incorporate those changes, if provided to the Company or its counsel within such
five (5) business day period, suggested by such counsel.
4. Obligations of the Purchaser.
Obligations of the Purchasers. In connection with the registration of
the Registrable Securities, the Purchaser shall have the following obligations:
(a) 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. The intended method or methods of
disposition and/or sale (Plan of Distribution) of the Registrable Securities as
so provided by the participating Purchaser shall be included without alteration
in any Registration Statement covering the Registrable Securities and shall not
be changed without written consent of the Purchaser. At least five (5) business
days prior to the first anticipated filing date of any Registration Statement,
the Company shall notify the Purchaser of the information the Company requires
from the Purchaser if the Purchaser elects to have any of its Registrable
Securities included in such Registration Statement; and
(b) The Purchaser agrees that, upon receipt of any notice from the
Company of the happening of any Blackout Event of the kind described in Section
3(f) or 3(g) above, it will immediately discontinue disposition of its
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such copies of the supplemented or amended
prospectus contemplated by Section 3(f) or 3(g) shall be furnished to the
Purchaser.
5. Expenses of Registration.
Other than underwriting discounts and commissions, all expenses
incurred in connection with registrations, filings or qualifications pursuant to
this Agreement, including, without limitation, all registration, listing, and
qualification fees, printing and accounting fees, and the fees and disbursements
of counsel for the Company, and the fees of one counsel to the Purchaser with
respect to the Registration Statement filed pursuant hereto, shall be borne by
the Company, up to a maximum of three thousand dollars ($3,000).
6. Indemnification.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
(a) The Company will indemnify and hold harmless each Purchaser, each
of its officers, directors and partners, and each person, if any, who controls
such Purchaser within the meaning of the Securities Act or the Exchange Act
(each, an Indemnified Person), 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 or
threatened, in respect thereof) arise out of or are based upon: (i) any untrue
or alleged untrue statement of a
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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 in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading, (ii) any untrue or alleged statement of a material fact contained in
any preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the Commission) or the omission or alleged omission to state therein any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state or foreign securities law or any rule or regulation
under the Securities Act, the Exchange Act or any state or foreign securities
law (the matters in foregoing clauses (i) through (iii) being, collectively,
Violations). The Company shall, subject to the provisions of Section 6(b) below,
reimburse each Purchaser, promptly as such expenses are incurred and are due and
payable, for any legal and other costs, expenses and disbursements in giving
testimony or furnishing documents in response to a subpoena or otherwise,
including without limitation, the costs, expenses and disbursements, as and when
incurred, of investigating, preparing or defending any such action, suit,
proceeding or investigation (whether or not in connection with litigation in
which such Purchaser is a party), incurred by it in connection with the
investigation or defense of any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a) shall not (i) apply to any 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 supplement thereto; (ii) with respect to
any preliminary prospectus, inure to the benefit of any such person from whom
the person asserting any such Claim purchased the Registrable Securities that
are the subject thereof (or to the benefit of any person controlling such
person) if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the final prospectus, as then amended or
supplemented, if such final prospectus was timely made available by the Company
pursuant to Section 3(b) hereof; (iii) be available to the extent that such
Claim is based upon a failure of any Purchaser to deliver or to cause to be
delivered the prospectus made available by the Company, if such prospectus was
timely made available by the Company pursuant to Section 3(b) hereof; or (iv)
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the transfer of the Registrable Securities by the Purchaser
pursuant to Section 9. Each Purchaser will indemnify the Company and its
officers and directors 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 Purchaser,
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 in this Section 6.
(b) Promptly after receipt by an Indemnified Person under this Section
6 of notice of the commencement of any action (including any governmental
action), such Indemnified Person shall, if a Claim in respect thereof is to be
made against any indemnifying party under
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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 in, and to the extent that the indemnifying party so desires,
jointly with any other indemnifying party similarly notified, to assume control
of the defense thereof with counsel mutually satisfactory to the indemnifying
party and the Indemnified Person; provided, however, that an Indemnified Person
shall have the right to retain its own counsel with the reasonable fees and
expenses to be paid by the indemnifying party, if, in the reasonable opinion of
counsel retained by the indemnifying party, the representation by such counsel
of the Indemnified Person and the indemnifying party would be inappropriate due
to actual or potential differing interests between such Indemnified Person and
any other party represented by such counsel in such proceeding. In such event,
the Company shall pay for only one separate legal counsel for the Purchasers,
and such legal counsel shall be selected by the Purchasers holding a majority of
the Shares outstanding (assuming conversion and/or exercise of all outstanding
Securities and Warrant Debentures). The failure to deliver written notice to an
indemnifying party within a reasonable time after the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person under this Section 6, except to the extent that the
indemnifying party is materially 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.
(c) No indemnifying party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, 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 Person of an unconditional and irrevocable release from all
liability in respect of such claim or litigation.
(d) Notwithstanding the foregoing, to the extent that any provisions
relating to indemnification or contribution contained in the underwriting
agreements entered into among the Company, the underwriters and the Purchaser in
connection with an underwritten public offering are in conflict with the
foregoing provisions, the provisions in such underwriting agreements shall be
controlling as to the Registrable Securities included in the public offering;
provided, however, that if, as a result of this Section 6(d), any Purchaser, its
officers, shareholders, members, directors, partners or any person controlling
such Purchaser is or are held liable with respect to any Claim for which they
would be entitled to indemnification hereunder but for this Section 6(d) in an
amount which exceeds the aggregate proceeds received by such Purchaser from the
sale of Registrable Securities included in a registration pursuant to such
underwriting agreement (the "Excess Liability"), the Company shall reimburse
such Purchaser for such Excess Liability.
7. Contribution.
To the extent any indemnification by an indemnifying party is
prohibited or limited under applicable law, the indemnifying party agrees to
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage, liability or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the Indemnified Person on the other hand in connection with the
statements or omissions which resulted in such Claim, as well as any other
relevant equitable considerations. The
11
relative fault of the indemnifying party and the Indemnified Person shall be
determined by reference to, among other things, whether the untrue statement of
a material fact or the omission to state a material fact on which such Claim is
based relates to information supplied by the indemnifying party or by the
Indemnified Person, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the forgoing, (a) 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 (b)
contribution by any seller of Registrable Securities shall be limited in amount
to the net proceeds received by such seller from the sale of such Registrable
Securities. The Company and the Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Purchaser and any other party were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in this Section.
8. Reports Under Exchange Act.
With a view to making available to the Purchaser the benefits of Rule
144 promulgated under the Securities Act or any other similar rule or regulation
of the Commission that may at any time permit the Purchaser to sell securities
of the Company to the public without registration ("Rule 144"), the Company
agrees to:
(i) make and keep public information available, as those terms are
understood and defined in Rule 144;
(ii) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(iii) furnish to the Purchaser, so long as the Purchaser owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of the Securities
Act and the Exchange Act, (ii) a copy of the most recent annual or periodic
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 such Purchaser to sell such securities pursuant to Rule 144 without
registration.
9. Assignment of the Registration Rights.
The rights to have the Company register Registrable Securities pursuant to
this Agreement shall be automatically assigned by any Purchaser to any
transferee of all or any portion of the Securities or Shares held by such
Purchaser if: (a) such Purchaser 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 Company 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 or Shares with respect to which such registration rights are
being transferred or assigned; (c) at or before the time the Company receives
the written notice contemplated by clause (b) of this sentence, the transferee
or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein; and
12
(d) the transferee of the relevant Securities or Shares complies with the
restrictions on the Purchaser set forth in Section 4 of the Securities Purchase
Agreement.
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 holders of 75% of the Registrable Securities from time to time. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon the Purchaser 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 the
instructions, notice or election received from the registered owner of such
Registrable Securities.
(b) Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be effective upon personal
delivery, via facsimile (upon receipt of confirmation of error-free
transmission) or two business days following deposit of such notice with an
internationally recognized courier service, with postage prepaid and addressed
to each of the other parties thereunto entitled at the following addresses, or
at such other addresses as a party may designate by five days advance written
notice to each of the other parties hereto.
Company: Information Xxxxxxx.xxx, Inc.
#000-00000 Xxxxxxxxxxx Xxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxxxxx, President
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxx Xxxxxx Xxxxxxx P.L.L.C.
2100 Westlake Center Tower
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
13
Purchaser: Senasqua Investors LLC
c\o WEC Asset Management LLC
000 Xxxxxxxxx Xxxx Xxxx
Xxxxxx-xx-Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
(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, except for provisions with respect to
internal corporate matters of the Company which shall be governed by the
corporate laws of the State of Florida. 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 conveniens, to the bringing of any such
proceeding in such jurisdictions. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original. The headings of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement. This Agreement has been entered into
freely by each of the parties, following consultation with their respective
counsel, and shall be interpreted fairly in accordance with its terms, without
any construction in favor of or against either party. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such validity
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. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
(e) This 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 and in the other Primary Documents. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof.
14
(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 Company acknowledges that any failure by the Company to
perform its obligations under Section 2(a), or any delay in such performance
could result in direct damages to the Purchaser, and the Company agrees that, in
addition to any other liability the Company may have by reason of any such
failure or delay, the Company shall be liable for all direct damages caused by
any such failure or delay.
[SIGNATURE PAGE TO FOLLOWS, REMAINDER OF PAGE INTENTIONALLY BLANK]
15
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed.
INFORMATION XXXXXXX.XXX, INC.
By:
--------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
SENASQUA INVESTORS LLC
By: WEC Asset Management LLC, Manager
By:
--------------------------------------
Name: Xxxxxx X. Xxxx
Title: Managing Director
16
SCHEDULE 2(e)
ADDITIONAL COMMON STOCK
TO BE INCLUDED ON THE REGISTRATION STATEMENT
Name of Selling Shareholder Number of Shares of Number of Warrants Number of Shares that
Common Stock to be Shares that may be may be acquired upon
Qualified acquired upon exercise of Stock
exercise of Option
Warrants
--------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxx 75,000
--------------------------------------------------------------------------------------------------
Xxxxx Xxxx 300,000
--------------------------------------------------------------------------------------------------
Xxxx Xxxxxxxxx 100,000
--------------------------------------------------------------------------------------------------
JGR Petroleum Inc. 50,000
--------------------------------------------------------------------------------------------------
IP Equity Inc. 225,000 125,000
--------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx 30,000
--------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxxxx Associates 5,000
Limited
--------------------------------------------------------------------------------------------------
Xxxx Xxxxxxxx 5,000
--------------------------------------------------------------------------------------------------
World of Xxxxxxxx.xxx AG 20,000
--------------------------------------------------------------------------------------------------
K & D Equities, Inc. 400,000
--------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx 100,000
--------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxxxx Trust 5,000
Share
--------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx 12,500
--------------------------------------------------------------------------------------------------
Xxx Xxxxx 25,000
--------------------------------------------------------------------------------------------------
Xxxx X. Xxxxxx 5,000
--------------------------------------------------------------------------------------------------
F.S.D.R.H. Trust 12,500
--------------------------------------------------------------------------------------------------
Xxxx Xxxxxxxxxx Living Trust 25,000
--------------------------------------------------------------------------------------------------
X. Xxxxx 5,000
--------------------------------------------------------------------------------------------------
The Sunrise Trust 15,000
--------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 3,000
--------------------------------------------------------------------------------------------------
T.H. Xxxxxx 13,150
--------------------------------------------------------------------------------------------------
Name of Selling Shareholder Number of Shares of Number of Warrants Number of Shares that
Common Stock to be Shares that may be may be acquired upon
Qualified acquired upon exercise of Stock
exercise of Option
Warrants
--------------------------------------------------------------------------------------------------
Xxxxx Xxx 6,600
--------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxx 2,000
--------------------------------------------------------------------------------------------------
2
