REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.9
THIS
REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
is
made and entered into effective as of the 11th day of July 2006 by and among
VendingData Corporation, a Nevada corporation (the “Company”),
Xxxxxxx Xxxxxxxx Purton (“Purton”)
and
Synwood Pty Ltd ACN 005 506 150 (“Synwood”).
For
good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company, Purton and Synwood hereby agree as
follows.
1.
Definitions.
As
used
in this Agreement, the following terms, not previously defined, will have the
meanings as set forth herein:
1.1 “Commission”
means
the United States Securities and Exchange Commission, and any successor thereto.
1.2 “Common
Stock”
means
the Company’s Common Stock, $.001 par value.
1.3 “Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated from time to time thereunder.
1.4 “Holder”
means
Purton, Synwood, each assignee of Purton’s or Synwood’s rights hereunder in
accordance with Section 8.9 of this Agreement, and the holder of a Note (as
that
expression is defined in a Share Sale Agreement) at the time (if any) that
the
principal amount of that Note converts into shares of Common Stock.
1.5 “Person”
means
an individual, partnership, limited partnership, corporation, business trust,
limited liability company, an association, joint stock company, a trust,
unincorporated organization, joint venture or other entity of whatever nature.
1.6 “Registrable
Common”
means
any shares of Common Stock issued to the Holders or issuable to the Holders
pursuant to a Share Sale Agreement, including any shares of Common Stock issued
upon conversion of the principal amount of a Note or as a dividend, stock split,
reclassification, recapitalization or other distribution with respect to or
in
exchange for replacement of any such shares of Common Stock; provided,
however,
that
Registrable Common will not include any shares, the sale of which has been
registered pursuant to the Securities Act or which have been or could be sold
to
the public pursuant to Rule 144 promulgated by the Commission under the
Securities Act without restriction under the volume limitations of Rule
144.
1.7 “Register,”
“registered”
and
“registration”
refer
to a registration effected by preparing and filing a registration statement
in
compliance with the Securities Act and the declaration or ordering of the
effectiveness of such Registration Statement.
1.8 “Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated from time to time thereunder.
1.9 “Share
Sale Agreement”
means
the Share Sale Agreement of even date herewith between the Company, Purton
and
Synwood whereby the Company has agreed to issue to Purton and Synwood an
aggregate of up to 4,114,286 shares of Common Stock.
2. Registration
Rights.
2.1. Subject
to the limitations and requirements set forth in this Section 2, the Company
will use commercially reasonable efforts to prepare and file a registration
statement under the Securities Act, on the appropriate form covering resale
of
the Registrable Common on or before the later of (i) August 11, 2006, or (ii)
the fifth business day following Purton’s and Synwood’s delivery of the
consolidated financial statements of Dolphin Advanced Technologies Pty Limited
ACN 000 000 000 in accordance with clause 9.1(a) of the Share Sale Agreement,
and will use commercially reasonable efforts to cause such registration
statement to become effective as soon as is practicable after such filing.
2.2. If
the
Company furnishes to such Holders a certificate signed by the Chief Executive
Officer of the Company stating that in the good faith judgment of the Board
of
Directors of the Company it would be seriously detrimental to the Company and
its stockholders for such registration statement to be filed at such time,
then
the Company will have the right to defer such filing for a period ending not
later than thirty (30) days from the latest filing date of such offering as
required herein.
2.3 The
Company represents and warrants that it has not, and agrees that it will not,
enter into any agreement with respect to any of its securities which will grant
to any Person piggyback rights with respect to any registration statement filed
pursuant to Section 2.1 of this Agreement.
3.
Registration
Procedures.
When
the Company is required by the terms of this Agreement to effect the
registration of Registrable Common under the Securities Act, the Company
will:
3.1. Filing.
Prepare
and file with the Commission a registration statement with respect to such
securities on a form that is available for the sale of the Registrable Common
in
accordance with the intended methods of distribution thereof, and use
commercially reasonable efforts to cause such registration statement to become
and remain effective for such period as may be reasonably necessary to effect
the sale of such securities, but not to exceed the lesser of (i) two years
from
the date of the effectiveness of such registration statement, (ii) until the
distribution described in the registration statement has been completed or
(iii)
such time as the securities may be sold to the public pursuant to Rule 144
promulgated by the Commission under the Securities Act without restriction
under
the volume limitations of Rule 144. If the registration statement refers to
any
Holder by name or otherwise as the holder of the Registrable Common, the Company
must furnish to that Holder and its counsel, as promptly as practicable but
in
any event by no later than three business days before filing the registration
statement with the SEC, copies of all documents proposed to be filed as part
of
or accompanying the registration statement, which documents will be subject
to
the review of the Holder’s counsel.
3.2. Period
of Effectiveness.
Prepare
and file with the Commission such amendments to such registration statement
and
supplements to the prospectus contained therein as may be necessary to keep
such
registration statement effective for the period described in Section
3.1.
3.3. Copies.
Furnish
to the Holders participating in such registration and, if applicable, to the
underwriters of the securities being registered such reasonable number of copies
of the registration statement, preliminary prospectus, final prospectus and
such
other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities.
3.4. Blue
Sky.
Use its
commercially reasonable efforts to register or qualify the securities covered
by
such registration statement under such state securities or blue sky laws of
such
jurisdictions within the United States of America as such participating Holder
may reasonably request in writing within twenty (20) days following the original
filing of such registration statement, and do any and all other acts and things
as may be reasonably necessary or advisable to enable the Holders and the
underwriter, if any, to consummate the disposition in such jurisdictions of
the
Registrable Common, except that the Company will not for any purpose be required
to execute a general consent to service of process or to qualify to do business
as a foreign corporation or subject itself to taxation in any jurisdiction
wherein it is not so qualified or taxed.
3.5. Notification.
Notify
the Holders participating in such registration, promptly after it receives
notice thereof, of the time when such registration statement has become
effective or a supplement to any prospectus forming a part of such registration
statement has been filed.
3.6. Amendment
Notice.
Notify
the Holders participating in such registration promptly of any request by the
Commission for the amending or supplementing of such registration statement
or
prospectus or for additional information.
3.7. Update.
Prepare
and promptly file with the Commission and promptly notify the Holders
participating in such registration of the filing of such amendment or supplement
to such registration statement or prospectus as may be necessary to keep such
registration statement effective for the period referred to in Section 3.1,
including any such amendment or supplement that is necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event
has
occurred as the result of which any such prospectus or any other prospectus
as
then in effect would include an untrue statement of a material fact or omit
to
state any material fact necessary to make the statements therein, in light
of
the circumstances in which they were made, not misleading.
3.8. Stop
Orders.
Advise
the Holders participating in such registration, promptly after it receives
notice or obtains knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for that purpose and promptly use
its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued.
4.
Expenses.
With
respect to the registration pursuant to Section 2 hereof (except as otherwise
provided in such Section) and with respect to each inclusion of Registrable
Common in a registration statement pursuant to Section 2 hereof (except as
otherwise provided in such Section), the Company will bear all fees, costs
and
expenses incident to the Company’s performance of or compliance with this
Agreement, including, without limitation: all registration, filing and NASD
fees, printing expenses, fees and disbursements of counsel and accountants
for
the Company, all internal Company expenses, all legal fees and disbursements
and
other expenses of complying with state securities or blue sky laws of any
jurisdictions in which the securities to be offered are to be registered or
qualified, and the premiums and other costs of policies of insurance against
liability (if any) arising out of such public offering. Fees and disbursements
of counsel and accountants for the selling security Holders, underwriting
discounts and commissions and transfer taxes relating to the shares included
in
the offering by the selling security Holders, and any other expenses incurred
by
the selling security Holders not included above, will be borne by the selling
security Holders.
5. Cooperation.
Any
Holder whose Registrable Common are to be included in a Registration Statement
filed hereunder agrees to cooperate with all reasonable requests by the Company
necessary to effectuate the purposes of this Agreement, including by timely
providing the Company with all information necessary to prepare and file a
registration statement.
6.
Dispositions.
Each
Holder agrees that it will comply with the prospectus delivery requirements
of
the Securities Act as applicable to it in connection with sales of Registrable
Common pursuant to the registration statement. Each Holder further agrees that,
upon receipt of a notice from the Company of the occurrence of any event which
causes the prospectus made part of the Registration Statement to longer to
be
current, complete or accurate in any material respect, such Holder will
discontinue disposition of such Registrable Common under the registration
statement until such Holder’s receipt of the copies of the supplemented
prospectus and/or amended registration statement or until it is advised in
writing by the Company that the use of the applicable prospectus may be resumed,
and, in either case, has received copies of any additional or supplemental
filings that are incorporated or deemed to be incorporated by reference in
such
prospectus or Registration Statement. The Company may provide appropriate stop
orders to enforce the provisions of this paragraph.
7.
Indemnification.
7.1. Indemnification
by Company.
To the
fullest extent permitted by law, the Company will indemnify and hold harmless
each Holder which has Registrable Common included in a registration statement
pursuant to the provisions hereof, its directors and officers, and any
underwriter (as defined in the Securities Act) for such Holder and each Person,
if any, who controls such Holder or such underwriter within the meaning of
the
Securities Act, from and against, and will reimburse such Holder and each such
underwriter and controlling Person with respect to, any and all loss, damage
and
liability (collectively, “Losses”) to which such Holder or any such underwriter
or controlling Person may become subject under the Securities Act, state
securities laws or otherwise, and the Company will pay to each such Holder,
underwriter or controlling person any legal or other costs or expenses
reasonably incurred by such person in connection with investigating or defending
any such Loss, insofar as such Losses arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which
they were made, not misleading; provided, however, that the Company will not
be
liable in any such case to the extent that any such Loss arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by such
Holder, such underwriter or such controlling Person in writing specifically
for
use in the preparation thereof; provided, however, that the indemnity agreement
in this Section 7.1 will not apply to amounts paid in settlement of any such
Loss if such settlement is effected without the consent of the Company, which
consent will not be unreasonably withheld, and that the foregoing indemnity
obligation with respect to any preliminary prospectus or final prospectus (if
such final prospectus has been amended or supplemented and such amendments
or
supplements have been furnished to such Holder prior to the written confirmation
of the sale involved) will not inure to the benefit of any Holder on account
of
any Loss whatsoever arising from the sale of any Registrable Common by such
Holder to any person if (A) a copy of the final prospectus (as amended or
supplemented if such amendments or supplements have been furnished to such
Holder prior to the written confirmation of the sale involved) has not been
sent
or given by or on behalf of such Holder to such person, if required by law,
with
or prior to the written confirmation of the sale involved, and (B) the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such preliminary prospectus or final prospectus
from
which such Loss arose was corrected in the final prospectus (as amended or
supplemented if such amendments or supplements thereto have been furnished
as
aforesaid).
7.2. Indemnification
by Holder.
Each
Holder which has Registrable Common included in a registration statement
pursuant to the provisions hereof will severally, but not jointly, indemnify
and
hold harmless the Company, its directors and officers, each Person, if any,
who
controls the Company within the meaning of the Securities Act, any other Holder
selling securities pursuant to such registration statement, any controlling
Person of any such selling Holder, any underwriter and any controlling Person
of
any such underwriter (each, an “Indemnitee”) from and against, and will
reimburse any Indemnitee with respect to, any and all Losses to which such
Indemnitee may become subject under the Securities Act, state securities laws
or
otherwise, and such Holder will pay to each Indemnitee, any legal or other
costs
or expenses reasonably incurred by such person in connection with investigating
or defending any such Loss, insofar as such Losses are caused by any untrue
or
alleged untrue statement of any material fact contained in such registration
statement, any prospectus contained therein or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances in which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was so made in reliance upon and in conformity with written information
furnished by such Holder specifically for use in the preparation thereof;
provided, however, that the indemnity agreement in this Section 7.2 will not
apply to amounts paid in settlement of any such Loss if such settlement is
effected without, and that the foregoing indemnity obligation with respect
to
any preliminary prospectus or final prospectus (if such final prospectus has
been amended or supplemented and such amendments or supplements have been
furnished to such Indemnitee prior to the written confirmation of the sale
involved) will not inure to the benefit of any Indemnitee on account of any
Loss
whatsoever arising from the sale of any Registrable Common by the Holder to
any
person if (A) a copy of the final prospectus (as amended or supplemented if
such
amendments or supplements have been furnished to such Indemnitee prior to the
written confirmation of the sale involved) has not been sent or given by or
on
behalf of such Indemnitee to such person, if required by law, with or prior
to
the written confirmation of the sale involved, and (B) the untrue statement
or
alleged untrue statement or omission or alleged omission of a material fact
contained in such preliminary prospectus or final prospectus from which such
Loss arose was corrected in the final prospectus (as amended or supplemented
if
such amendments or supplements thereto have been furnished as
aforesaid.
7.3. Indemnification
Procedures.
Promptly after receipt by a party entitled to indemnification pursuant to this
Section (each, an “Indemnified Party”) of notice of the commencement of any
action involving the subject matter of the foregoing indemnity provisions such
Indemnified Party will, if a claim is to be made against the party obligated
to
provide indemnification pursuant to this section (each, an “Indemnifying
Party”), promptly notify the Indemnifying Party of the commencement thereof; but
the omission to provide such notice will not relieve the Indemnifying Party
from
any liability hereunder, except to the extent that the delay in giving, or
failing to give, such notice has a material adverse effect upon the ability
of
the Indemnifying Party to defend against the claim. In case such action is
brought against an Indemnified Party, the Indemnifying Party will have the
right
to participate in and, at the Indemnifying Party’s option, to assume the defense
thereof, singly or jointly with any other Indemnifying Party similarly notified,
with counsel or reasonably satisfactory to the Indemnified Party; provided,
however, that if the defendants in any action include both the Indemnified
Party
and the Indemnifying Party and the Indemnified Party reasonably concludes that
there may be legal defenses available to any Indemnified Parties that are
different from or additional to those available to the Indemnifying Party,
or if
there is a conflict of interest which would prevent counsel for the Indemnifying
Party from also representing the Indemnified Party, the Indemnified Party will
have the right to select counsel to participate in the defense of such action
on
behalf of such Indemnified Party at the expense of the Indemnifying Party;
provided further, however, that the Indemnifying Party will be responsible
for
the expenses of only one such special counsel (and one local counsel if
necessary for jurisdictional purposes) selected jointly by the Indemnified
Parties if there is more than one Indemnified Party. After notice from an
Indemnifying Party to any Indemnified Party of such Indemnifying Party’s
election to assume the defense or the action, the Indemnifying Party will not
be
liable to such Indemnified Party pursuant to this Section 7 for any legal or
other expense subsequently incurred by such Indemnified Party in connection
with
the defense thereof, unless (i) the Indemnified Party has employed counsel
in
accordance with the proviso of the preceding sentence, or (ii) the Indemnifying
Party has not employed counsel satisfactory to the Indemnified Party to
represent the Indemnified Party within a reasonable time after the notice of
the
commencement of the action, or (iii) the Indemnifying Party has authorized
the
employment of counsel for the Indemnified Party at the expense of the
Indemnifying Party.
8.
Miscellaneous.
8.1. Waivers,
Amendments and Approvals.
In each
case in which the approval of the Holder is required by the terms of this
Agreement, such requirement will be satisfied by a vote or the written action
of
Holders of at least a majority of the Registrable Common held by all the
Holders. Any term or provision of this Agreement requiring performance by or
binding upon the Company or the Holders may be amended, and the observance
of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), by a writing signed by
the
Company and the Holders of at least a majority of the Registrable Common held
by
all the Holders. Any amendment or waiver effected in accordance with this
Section will be binding upon all of the Holders (including permitted assigns
pursuant to Section 8.9 hereof). The waiver by a party of any breach hereof
or
default in payment of any amount due hereunder or default in the performance
hereof will not be deemed to constitute a waiver of any other default or
succeeding breach or default. Written notice of any such waiver, consent or
agreement of amendment, modification or supplement will be given to the record
Holder of Registrable Common who did not give written consent
thereto.
8.2. Notices.
All
notices, requests, consents and other communications required or permitted
hereunder will be in writing and will be delivered either by (i) personal
delivery, (ii) registered or certified airmail, postage prepaid or (iii)
facsimile, to the party’s address set forth in the Share Sale Agreement (or
transfer documents in the case of permitted assigns pursuant to Section 8.9
hereof) and such notices and other communications will for all purposes of
this
Agreement be treated as being effective or having been given if delivered
personally, or, if sent by mail or facsimile, when received. Any party may
change its address for such communications by giving notice thereof to the
other
parties in conformity with this Section.
8.3. Entire
Agreement.
This
Agreement, the schedules hereto, the documents referenced herein and the
exhibits thereto, constitute the entire understanding and agreement of the
parties hereto with respect to the subject matter hereof and thereof and
supersede all prior and contemporaneous agreements or understandings,
inducements or conditions, express or implied, written or oral, between the
parties with respect hereto and thereto. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with
any
of the terms hereof.
8.4. Other
Remedies.
Any and
all remedies herein expressly conferred upon a party will be deemed cumulative
with, and not exclusive of, any other remedy conferred hereby or by law on
such
party, and the exercise of any one remedy will not preclude the exercise of
any
other.
8.5. Delays
or Omissions.
Except
as expressly provided herein, no delay or omission to exercise any right, power
or remedy accruing to any party under this Agreement will impair any such right,
power or remedy of such party nor will it be construed to be a waiver of any
such breach or default, or an acquiescence thereto, or of a similar breach
of
default thereafter occurring; nor will any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party hereto of any breach or default under the
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement must be in writing and will be effective only
to
the extent specifically set forth in such writing.
8.6. Governing
Law.
This
Agreement will be governed by and construed under the laws of the State of
Nevada, without regard to the conflict of laws principles thereof.
8.7. Counterparts.
This
Agreement may be executed concurrently (including facsimile signatures) in
two
or more counterparts, each of which will be deemed an original, but all of
which
together will constitute one and the same instrument.
8.8. Severability.
Should
any one or more of the provisions of this Agreement or of any agreement entered
into pursuant to this Agreement be determined to be illegal or unenforceable,
all other provisions of this Agreement and of each other agreement entered
into
pursuant to this Agreement, will be given effect separately from the provision
or provisions determined to be illegal or unenforceable and will not be affected
thereby.
8.9 Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties and shall inure to the benefit of
each
Holder. The Company may not assign its rights or obligations hereunder without
the prior written consent of each Holder. Each Holder may assign its rights
and
obligations hereunder in connection with the Holder’s private sale or transfer
of no less than 500,000 shares of Common Stock to the transferee wishing to
take
an assignment of Holder’s rights hereunder; provided that such transferee agrees
in writing to be bound by the provisions of this Agreement.
[Signatures
appear on next page]
IN
WITNESS WHEREOF, this Agreement is hereby executed as of the date first written
above.
| “Company” | ||
| VENDINGDATA CORPORATION | ||
| |
|
|
| By: | /s/ Xxxx XxxXxxx | |
|
Xxxx Xxxxxxx, Chief Executive Officer |
||
| “Synwood” | ||
| SYNWOOD PTY LTD ACN 005 506 150 | ||
| |
|
|
| By: | /s/ Xxxxxxx Xxxxxxxx Purton | |
|
|
||
| “Purton” | ||
| |
|
|
| By: | /s/ Xxxxxxx Xxxxxxxx Purton | |
|
Xxxxxxx Xxxxxxxx Purton, an individual |
||
