EXHIBIT 10.2
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EXHIBIT A TO PRIVATE EQUITY CREDIT AGREEMENT
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement"), dated as of July 5,
2005, is made by and between GLOBAL MATRECHS, INC., a Delaware corporation
("Company"), and BRITTANY CAPITAL MANAGEMENT LTD, a Bahamian corporation (the
"Subscriber").
RECITALS
WHEREAS, upon the terms and subject to the conditions of the Private
Equity Credit Agreement (the "Equity Credit Agreement"), between the Subscriber
and the Company, the Company has agreed to issue and sell to the Subscriber up
to Fifteen Million Dollars ($15,000,000) of the common stock of the Company
("Subscribed Shares"), $.01 par value per share (the "Common Stock"), and
WHEREAS, to induce the Subscriber to execute and deliver the Equity
Credit 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"), and applicable state securities laws with respect to the Subscribed
Shares;
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
Subscriber hereby agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have
the following meaning:
(i) "Potential Material Event" means any of the
following: (A) 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 (B) 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.
(ii) "Prospectus" means the prospectus included in
the Registration Statement (including, without limitation, a prospects that
includes any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A promulgated under
the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the prospectus, including post-effective amendments, and all
material incorporated by reference in such prospectus.
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(iii) "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 delayed or 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").
(iv) "Registrable Securities" means the Subscribed
Shares.
(v) "Registration Statement" means a registration
statement of the Company under the Securities Act.
(vi) "Subscription Date" means the date of this
Agreement.
(vii) "Subscriber" has the meaning set forth in the
preamble to this Agreement.
(b) Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Equity Credit
Agreement.
2. REGISTRATION.
(A) MANDATORY REGISTRATION. The Company shall prepare and file
with the SEC, no later than thirty (30) business days form the date of this
Agreement ("Filing Date"), a Registration Statement registering for distribution
by the Subscriber pursuant to Rule 457(o) of the Securities Act, no less than
125% of the Minimum Commitment Amount under the Equity Credit Agreement. Such
Registration Statement shall state that, in accordance with the Securities Act,
it also covers such indeterminate number of additional shares of Common Stock as
may become issuable to prevent dilution resulting from stock splits or stock
dividends. If at any time the number of Subscribed Shares exceeds the aggregate
number of shares of Common Stock then registered, the Company shall, within ten
(10) business days after receipt of written notice from the Subscriber, file
with the SEC an additional Registration Statement to register the Subscribed
Shares that exceed the aggregate number of shares of Common Stock already
registered.
(B) TERMINATION. If the Registration Statement covering the
Registrable Securities required to be filed by the Company pursuant to Section
2(a) hereof is not declared effective within two hundred and seventy (270) days
from the Filing Date (the "Effective Date"), then the commitment contained in
the Equity Credit Agreement and in this Agreement (the "Commitment") shall, at
the option of the Subscriber, and upon written notice to the Company, terminate.
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 Filing
Date, a Registration Statement with respect to not less than the number of
Registrable Securities provided in Section 2(a)
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above, and, thereafter, use all diligent efforts to cause the Registration
Statement relating to the Registrable Securities to become effective the earlier
of (i) five (5) business days after notice from the SEC that the Registration
Statement may be declared effective, or (ii) the Effective Date, and keep the
Registration Statement effective at all times until the earliest of (A) the date
that is one year after the completion of the last Closing Date under the Equity
Credit Agreement, (B) the date when the Subscriber may sell all Registrable
Securities under Rule 144 without volume limitations, or (C) the date the
Subscriber no longer owns any of the Registrable Securities (collectively, the
"Registration Period"), 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 the light of
the circumstances under 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, and 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 the expiration of the Registration Period;
(c) Permit a single firm of counsel designated by Subscriber
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, it being understood that such review and objections
shall relate exclusively to matters in the Registration Statement or omitted
therefrom affecting any or all of the Equity Credit Agreement, Subscriber and
the Registrable Securities or compliance with the terms of this Agreement or the
other Transaction Documents;
(d) Notify Subscriber and Subscriber's legal counsel
identified to the Company ("Subscriber's Counsel") (and, in the case of (i)(A)
below, not less than five (5) business 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; and (C) 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 the 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 contemplated hereby
ceases to be true and correct in all material 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
knowledge of the Company makes any statement made in the Registration Statement
or the 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, the prospectus or other documents so
that, in the case of the Registration
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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 the light of the
circumstances under which they were made, not misleading;
(e) Furnish to Subscriber and Subscriber'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 the prospectus, and each amendment or supplement
thereto, all correspondence to, with, or from the SEC and (ii) such number of
copies of a prospectus, including a preliminary prospectus, and all amendments
and supplements thereto and such other documents, as the Subscriber may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by the Subscriber;
(f) Use all diligent efforts to (i) register and/or qualify
the Registrable Securities covered by the Registration Statement under such
other securities or blue sky laws of such jurisdictions as the Subscriber may
reasonably request and in which significant volumes of shares of Common Stock
are traded, (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 qualification 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, however, that the Company shall not be required in
connection therewith or as a condition thereto to (A) qualify to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(f), (B) subject itself to general taxation in any such
jurisdiction, (C) file a general consent to service of process in any such
jurisdiction, (D) provide any undertakings that cause more than nominal expense
or burden to the Company or (E) make any change in its charter or by-laws or any
then existing contracts;
(g) As promptly as practicable after becoming aware of such
event, notify the Subscriber of the happening of any event of which the Company
has knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes any untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading ("Registration Default"), and use all diligent efforts
to promptly prepare a supplement or amendment to the Registration Statement or
other appropriate filing with the SEC to correct such untrue statement or
omission, and any other necessary steps to cure the Registration Default, and
deliver a number of copies of such supplement or amendment to the Subscriber as
the Subscriber may reasonably request. Failure to file such supplement or
amendment to the Registration Statement with the SEC within twenty (20) business
days shall result in the Company incurring liquidated damages of 1% of the cost
of all Registrable Securities then held by the Subscriber for each twenty (20)
business day period or portion thereof, beginning on the twenty-first (21st)
business day after the Registration Default and terminating on the date such
supplement or amendment to the Registration Statement is filed with the SEC.
(h) As promptly as practicable after becoming aware of such
event, notify the Subscriber (or, in the event of an underwritten offering, the
managing underwriters) of the issuance
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by the SEC of any notice of effectiveness or any stop order or other suspension
of the effectiveness of the Registration Statement;
(i) Notwithstanding the foregoing, if at any time or from time
to time after the date of effectiveness of the Registration Statement, the
Company notifies Subscriber in writing of the existence of a Potential Material
Event ("Blackout Notice"), Subscriber 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 Subscriber 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 ten (10) day periods in the aggregate during any
12-month period ("Blackout 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;
(j) Use its commercially reasonable efforts, if eligible,
either to (i) cause all the Registrable Securities covered by the Registration
Statement to be listed on a national securities exchange and on each additional
national securities exchange on which securities of the same class or series
issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, or
(ii) secure designation of all the Registrable Securities covered by the
Registration Statement as a National Association of Securities Dealers Automated
Quotations System ("Nasdaq") "Small Capitalization" 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
Small Cap Market; or if, despite the Company's commercially reasonable efforts
to satisfy the preceding clause (i) or (ii), the Company is unsuccessful in
doing so, to secure NASD authorization and quotation for such Registrable
Securities on the over-the-counter bulletin board and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register with the National Association of Securities Dealers, Inc. ("NASD") as
such with respect to such Registrable Securities; provided, however, that the
Subscriber acknowledges that the Company does not currently meet the
requirements for listing on a national securities exchange or the Nasdaq Small
Cap Market pursuant to (i) or (ii) and that nothing in this section shall be
construed to require the Company to pursue such qualification until such time as
the Company satisfies such requirements for a period of not less than forty-five
(45) days;
(k) Provide a transfer agent for the Registrable Securities
not later than the Effective Date;
(l) Cooperate with the Subscriber 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 Subscriber may reasonably request and registration in such names
as the Subscriber may request; and, within five (5) 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 Subscriber) an appropriate instruction and
opinion of such counsel, if so required by the Company's transfer agent; and
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(m) Take all other reasonable actions necessary to expedite
and facilitate distribution to the Subscriber of the Registrable Securities
pursuant to the Registration Statement.
4. OBLIGATIONS OF THE SUBSCRIBER. In connection with the registration
of the Registrable Securities, the Subscriber 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 the Subscriber that the Subscriber shall timely
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 timely execute such
documents in connection with such registration as the Company may reasonably
request;
(b) The Subscriber, by such Subscriber'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; and
(c) The Subscriber agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
3(g) or 3(h) above (except for an SEC notice of effectiveness), the Subscriber
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until the
Subscriber receives the copies of the supplemented or amended prospectus
contemplated by Section 3(g) or 3(h) and, if so directed by the Company, the
Subscriber 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
the Subscriber'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) incurred in connection with
Registrations, filings or qualifications pursuant to Section 3, including,
without limitation, all Registration, listing, and qualifications fees, printers
and accounting fees, and the fees and disbursements of counsel for the Company
shall be borne by the Company.
(b) Except as otherwise provided for in Schedule 5(b) attached
hereto, the Company nor any of its subsidiaries has, as of the date hereof, and
the Company shall not 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 Subscriber in this Agreement or otherwise conflicts with the
provisions hereof. Except as otherwise provided for in Schedule 5(b), the
Company has not previously entered into any agreement granting any registration
rights with respect to any of its securities to any person.
Except as otherwise provided for in this Section 5, and
without limiting the generality of the foregoing, without the written consent of
Subscriber, 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
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Subscriber set forth herein, and are not otherwise in conflict or inconsistent
with the provisions of this Agreement and the other Transaction Documents.
6. INDEMNIFICATION. After 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, the Subscriber, the directors, if any, of such Subscriber,
the officers, if any, of such Subscriber, each person, if any, who controls the
Subscriber 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
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 made therein, in the light of the
circumstances under which the statements therein were made, 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 the 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 referred to as "Violations"). Subject to clause (b) of this Section
6, the Company shall reimburse the Subscriber, promptly as such expenses are
incurred and are due and payable, for any reasonable 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 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 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 Registration Statement was
timely made available by the Company pursuant to Section 3(b) hereof; (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 such Claim is based on a failure of the Subscriber to deliver or
cause to be delivered the Prospectus made available by the Company; (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; or (v) apply to the extent that such Claims are caused
by, result from or arise out of any breach of this Agreement by the Subscriber
or any intentionally wrongful or grossly negligent conduct by the Subscriber.
The Subscriber will indemnify the Company and its officers, directors and agents
(including legal counsel) (each, an "Indemnified Person") against any claims
arising out of or based upon a Violation which occurs in reliance upon and in
conformity with
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information furnished in writing to the Company, by or on behalf of such
Subscriber, expressly for use in connection with the preparation of the
Registration Statement, or arising out of or based upon a failure of the
Subscriber to deliver or cause to be delivered the Prospectus made available by
the Company, subject to such limitations and conditions set forth in the
previous sentence. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any Indemnified Person.
(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 this Section 6,
deliver to the indemnifying party a written notice of the commencement thereof.
In case any such action is brought against any Indemnified Person, 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 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. Subject to the provisions herein stated and
after notice from the indemnifying party to such Indemnified Person of its
election to assume control of the defense thereof, the indemnifying party will
not be liable to such Indemnified Person under this Section 6 for any legal or
other out-of-pocket expenses subsequently incurred by such Indemnified Person in
connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action to its
final conclusion. The Indemnified Person 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. 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 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 proceeds received by such seller from the sale of such Registrable
Securities.
8. REPORTS UNDER EXCHANGE ACT. With a view to making available to the
Subscriber 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
Subscriber to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees to use its reasonable best efforts 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 Exchange Act;
(c) furnish to the Subscriber so long as the Subscriber 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 solely if unavailable by XXXXX, and (iii) such other information as
may be reasonably requested to permit the Subscriber to sell such securities
pursuant to Rule 144 without registration; and
(d) at the request of the Subscriber, give its Transfer Agent
instructions (supported by an opinion of Company counsel, if required or
requested by the Transfer Agent) to the effect that, upon the Transfer Agent's
receipt from such Subscriber of:
(i) a certificate (a "Rule 144 Certificate") certifying (A)
that such Subscriber has held the shares of Registrable
Securities which the Subscriber proposes to sell (the
"Securities Being Sold") for a period of not less than (1)
year and (B) as to such other matters as may be appropriate in
accordance with Rule 144 under the Securities Act, and
(ii) an opinion of Subscriber's counsel, acceptable to the
Company, that, based on the Rule 144 Certificate, the
Securities Being Sold may be sold pursuant to the provisions
of Rule 144, even in the absence of an effective Registration
Statement,
the Transfer Agent is to effect the transfer of the Securities Being Sold and
issue to the buyer(s) or transferee(s) thereof one or more stock certificates
representing the transferred Securities Being Sold without any restrictive
legend and without recording any restrictions on the transferability of such
shares on the Transfer Agent's books and records (except to the extent any such
legend or restriction results from facts other than the identity of the
Subscriber, as the seller or transferor thereof, or the status, including any
relevant legends or restrictions, of the shares of the Securities Being Sold
while held by the Subscriber). If the Transfer Agent requires any additional
documentation at the time of the transfer, the Company shall deliver or cause to
be delivered all such reasonable additional documentation as may be necessary to
effectuate the issuance of an unlegended certificate.
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9. MISCELLANEOUS.
(A) REGISTERED OWNERS. 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, who shall provide a bond or other form of satisfactory
protection to the Company so as to cover contingent liability against other
claimants.
(B) RIGHTS CUMULATIVE; WAIVERS. The rights of each of the
parties under this Agreement are cumulative. The rights of each of the parties
hereunder shall not be capable of being waived or varied other than by an
express waiver or variation in writing. Any failure to exercise or any delay in
exercising any of such rights shall not operate as a waiver or variation of that
or any other such right. Any defective or partial exercise of any of such rights
shall not preclude any other or further exercise of that or any other such
right. No act or course of conduct or negotiation on the part of any party shall
in any way preclude such party from exercising any such right or constitute a
suspension or any variation of any such right.
(C) BENEFIT; SUCCESSORS BOUND. This Agreement and the terms,
covenants, conditions, provisions, obligations, undertakings, rights, and
benefits hereof, shall be binding upon, and shall inure to the benefit of, the
undersigned parties and their heirs, executors, administrators, representatives,
successors, and permitted assigns.
(D) ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof. There
are no promises, agreements, conditions, undertakings, understandings,
warranties, covenants or representations, oral or written, express or implied,
between them with respect to this Agreement or the matters described in this
Agreement, except as set forth in this Agreement and in the other documentation
relating to the transactions contemplated by this Agreement. Any such promises,
agreements, conditions, undertakings, understandings, warranties, covenants or
representations shall not be used to interpret or constitute this Agreement.
(E) ASSIGNMENT. The rights to have the Company register
Registrable Securities pursuant to this Agreement may be assigned by the
Subscribers to any transferee, only if (a) the Company receives a legal opinion
in form and substance satisfactory to the Company that the proposed transfer
complies with federal and state securities laws and does not adversely effect
the validity of the transactions executed (or to be executed) under this
Agreement and the Equity Credit Agreement under federal and state securities
laws; (b) the assignment requires that the transferee or assignee (the
"Transferee") be bound by all of the provisions contained in this Agreement, and
Subscriber, the Company and the Transferee enter into a written agreement, which
shall be enforceable by the Company against the Transferee and by the Transferee
against the Company, to assign such rights; and (c) 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. Prior to the assignment, the Company shall have the right
to perform its own due diligence regarding the Transferee and have the right to
approve the assignment, provided that
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such approval shall not be unreasonably withheld. 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.
(F) AMENDMENT. 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 Subscriber. Any amendment or waiver affected in
accordance with this Section 9 shall be binding upon the Company and any
subsequent Transferees.
(G) SEVERABILITY. Each part of this Agreement is intended to
be severable. In the event that any provision of this Agreement is found by any
court or other authority of competent jurisdiction to be illegal or
unenforceable, such provision shall be severed or modified to the extent
necessary to render it enforceable and as so severed or modified, this Agreement
shall continue in full force and effect.
(H) NOTICES. Notices required or permitted to be given
hereunder shall be in writing and shall be deemed to be given as provided in the
Equity Credit Agreement.
(I) GOVERNING LAW. 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
EXCLUSIVE JURISDICTION OF THE FEDERAL COURTS WHOSE DISTRICTS ENCOMPASS THE
COUNTY OF NEW YORK OR THE XXXXX XXXXXX XX XXX XXXXX XX XXX XXXX SITTING IN THE
COUNTY 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.
(J) JURY TRIAL WAIVER. THE COMPANY AND SUBSCRIBER HEREBY WAIVE
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF
THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR
IN CONNECTION WITH THE TRANSACTION DOCUMENTS
(K) CONSENTS. The person signing this Agreement on behalf of
each party hereby represents and warrants that he has the necessary power,
consent and authority to execute and deliver this Agreement on behalf of that
party.
(L) FURTHER ASSURANCES. In addition to the instruments and
documents to be made, executed and delivered pursuant to this Agreement, the
parties hereto agree to make, execute and deliver or cause to be made, executed
and delivered, to the requesting party such other instruments and to take such
other actions as the requesting party may reasonably require to carry out the
terms of this Agreement and the transactions contemplated hereby.
(M) SECTION HEADINGS. The Section headings in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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(N) CONSTRUCTION. Unless the context otherwise requires, when
used herein, the singular shall be deemed to include the plural, the plural
shall be deemed to include each of the singular, and pronouns of one or no
gender shall be deemed to include the equivalent pronoun of the other or no
gender.
(O) EXECUTION IN COUNTERPARTS. This Agreement may be executed
in two 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. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto.
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:
GLOBAL MATRECHS, INC.
By:_____________________________
Name: __________________________
Title:__________________________
SUBSCRIBER:
BRITTANY CAPITALMANAGEMENT LTD
By:____________________________
Name:__________________________
Title:_________________________
