REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of December 21, 2005, by and
between Datawave Systems Inc., a Delaware corporation (the "Company"), Sigma
Opportunity Fund, LLC, a Delaware limited liability company (the
"Rightsholder"), and, solely for purposes of Section 3 and the last sentence of
Section 4(a)(i) hereof, Integrated Technologies & Systems Ltd., a British Virgin
Islands company ("IT&S").
WHEREAS, this Agreement has been entered into in connection with the
purchase by the Rightsholder from Integrated Technologies & Systems Ltd. of a
Promissory Note (the "Note"), dated February 1, 2005, in the aggregate principal
amount of $600,000, which Note is convertible into 7,500,000 shares (the
"Shares") of common stock (the "Common Stock") of the Company;
WHEREAS, the Company has consented to the transfer of the Note to
Rightsholder; and
WHEREAS, in consideration of the Rightsholder purchasing the Note and
becoming involved with the Company, 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.
NOW, THEREFORE, it is agreed as follows:
1. Registerable Securities. The term "Registerable Securities" shall mean
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(i) the Shares, and (ii) any Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right or other security that is issued
as) a dividend or other distribution with respect to, or in exchange for, or in
replacement of, the Shares. For the purposes of this Agreement, securities will
cease to be Registerable Securities when (A) such Registerable Securities are
distributed to the public pursuant to the Securities Act, or pursuant to an
exemption from the registration requirements of the Securities Act, including,
but not limited to, Rules 144 and 144A promulgated under the Securities Act, (B)
such Registerable Securities are eligible for immediate resale pursuant to Rule
144(k) promulgated under the Securities Act, or (C) such Registerable Securities
have been otherwise transferred and the Company, in accordance with applicable
laws and regulations, has delivered new certificates or other evidences of
ownership for such securities which are not subject to any stop transfer order
or other restriction on transfer and such Registerable Securities may be
publicly resold (without volume or method of sale restrictions) without
registration under the Securities Act.
2. Registration Rights.
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(a) The Company shall file a registration statement to register the
Registerable Securities, or the resale thereof, within 60 days after the date
hereof, and will use its best commercially reasonable efforts to cause such
registration statement to become effective as soon as practicable thereafter.
(b) If, at any time commencing after the date hereof and on or prior to
two years from the date hereof, the Company proposes to file a registration
statement (a "Registration Statement") under the Securities Act with respect to
an offering by the Company or any selling stockholders of any of its equity
securities (other than a registration statement on Form S-4 or Form S-8, or any
successor form or a registration statement filed solely in connection with an
exchange offer, a business combination transaction or an offering of securities
solely to the existing stockholders or employees of the Company), then the
Company shall in each case give written notice (the "Notice") of such proposed
filing to the Rightsholder at least twenty (20) days before the anticipated
filing date of such Registration Statement, which Notice shall offer the
Rightsholder the opportunity to include in such Registration Statement such
amount of Registerable Securities that are not then registered pursuant to an
effective registration statement as they may request. The Rightsholder shall
advise the Company of such election in writing within ten (10) days after the
date of receipt of the Notice, specifying the amount of Registerable Securities
for which registration is requested (the "Election"). The Company shall include
in any such Registration Statement all Registerable Securities so requested to
be included. Notwithstanding the foregoing, if the underwriter(s) of any such
offering of the Company shall be of the good faith opinion that the total amount
or kind of securities held by the Rightsholder and any other persons or entities
entitled to be included in such offering would adversely affect the success of
such offering, then the amount of securities to be offered for the accounts of
Rightsholder and the other selling securityholders included in the Registration
Statement shall be reduced pro rata to the extent necessary to reduce the total
amount of securities to be included in such offering to the amount recommended
by the underwriter(s) thereof, whereupon the Company shall only be obligated to
register such limited portion (which may be none) of the Registerable Securities
with respect to which such Rightsholder have provided an Election. In no event
shall the Company be required pursuant to this Section 2(b) to reduce the amount
of securities proposed to be registered by it for its own account.
3. Registration Expenses.
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IT&S shall pay all of the out-of-pocket expenses of the Company incurred
in connection with preparation and filing of the registration statement required
to be filed pursuant to Section 2 hereof and any amendments or supplements
thereto (including compliance with its obligations under Section 4(a) below),
and IT&S is included as a party to this Agreement expressly and solely for the
purposes of this Section 3 and the last sentence in Section 4(a)(i) hereof.
Rightsholder shall be responsible for and pay its own costs and expenses,
including without limitation the costs of its legal counsel in connection with
the Registration Statement, and any expenses or commissions in connection with
the sale of its Registrable Securities.
4. Registration Obligations
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(a) Obligations of the Company. The Company will, in connection with
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any registration pursuant to Section 2 hereof:
(i) Prepare and file with the Securities and Exchange Commission (the
"Commission") a Registration Statement with respect to the Registerable
Securities in accordance with the method or methods of distribution thereof as
specified by the Rightsholder
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(except if otherwise directed by the Rightsholder); provided, however, that not
less than three business days prior to the filing of such Registration Statement
or any related prospectus or any amendment or supplement thereto (including any
document that would be incorporated therein by reference), the Company shall (A)
furnish to the Rightsholder and its legal counsel, copies of all such documents
proposed to be filed, and (B) at the request of the Rightsholder cause its
officers and directors, counsel and independent certified public accountants to
respond to such inquiries as shall be necessary, in the reasonable opinion of
counsel to the Rightsholder, to conduct a reasonable investigation within the
meaning of the Securities Act. The Company shall prepare and file with the
Commission such post-effective amendments and supplements to the Registration
Statement as may be necessary to keep the Registration Statement continuously
effective as to the applicable Registerable Securities until (A) such the
securities cease to be Registerable Securities or (B) two (2) years after the
effective date of the Registration Statement, whichever is earlier. Rightsholder
will reimburse the Company for any reasonable out of pocket expenses that the
Company may incur for preparing and filing with the Commission such
post-effective amendments and supplements, other than ordinary filing and
administrative expenses associated with preparing and filing such post-effective
amendments and supplements, if IT&S fails to compensate the Company for such
expenses, as provided in Section 3 of this Agreement, within 45 days after a
request for compensation is made to IT&S by the Company. Upon Rightsholder
providing such compensation, Rightsholder will succeed the Company in the
Company's right to collect such expenses from IT&S.
(ii) Notify the Rightsholder and its legal counsel as promptly as
possible (A) with respect to the Registration Statement or any post-effective
amendment, when the same has become effective; (B) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement covering any or all of the Registerable Securities or the initiation
of any action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened (each, a "Proceeding") for that purpose; (C) 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 Registerable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; and (D) of the occurrence of any event that makes
any statement made in the Registration Statement or prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to the Registration Statement,
prospectus or other documents so that, in the case of the Registration Statement
or the prospectus, as the case may be, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(iii) Furnish to the Rightsholder and its legal counsel, without
charge, at least one conformed copy of the Registration Statement and each
amendment thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
to the extent requested by such person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the
Commission.
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(iv) Prior to any public offering of the Registerable Securities, use
reasonable efforts to register or qualify or cooperate with the Rightsholder and
its legal counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registerable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions within the United States as the Rightsholder requests in writing,
to keep each such registration or qualification (or exemption therefrom)
effective during the period when the Registration Statement is effective and to
do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registerable Securities covered by the
Registration Statement; provided, however, that the Company shall not be
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required to qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action that would subject it to general service
of process in any such jurisdiction where it is not then so subject or subject
the Company to any material tax in any such jurisdiction where it is not then so
subject.
(v) Cooperate with the Rightsholder to facilitate the timely
preparation and delivery of certificates representing Registerable Securities
that Rightsholder confirms to have been sold pursuant to the Registration
Statement, which certificates shall be free of all restrictive legends, and to
enable such Registerable Securities to be in such denominations and registered
in such names as the Rightsholder may request.
(vi) Use its reasonable efforts to cause all Registerable Securities
relating to the Registration Statement to be listed on any securities exchange,
quotation system or market (including Nasdaq), if any, on which similar
securities issued by the Company are then listed.
(vii) Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period is a
fiscal year) commencing on the first day of the first fiscal quarter of the
Company after the effective date of the Registration Statement, which statement
shall conform to the requirements of Rule 158.
(b) Obligations of Rightsholder. In connection with any registration
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of Registerable Securities of the Rightsholder pursuant to Section 2 hereof:
(i) It shall be a condition precedent to the obligations of the
Company to file the registration statement pursuant to this Agreement that
Rightsholder furnish to the Company such information regarding the distribution
of such Registerable Securities and Rightsholder and of the intended method of
disposition of such securities as shall be reasonably required to effect the
registration of the Registerable Securities, all as the Company may from time to
time reasonably request;
(ii) Rightsholder shall notify the Company in writing two business
days in advance of selling any Shares pursuant to the Registration Statement.
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(iii) Rightsholder, upon receipt of notice from the Company of the
occurrence of any event that makes any statement made in the Registration
Statement or prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, prospectus or other
documents so that, in the case of the Registration Statement or the prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, shall forthwith discontinue disposition of
Registerable Securities pursuant to the Registration Statement covering such
Registerable Securities until Rightsholder is advised in writing by the Company
that the use of the applicable prospectus may be resumed or until the Company
delivers copies of supplemented or amended prospectuses.
5. Regulation M; Participation in Underwritten Registration.
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Rightsholder is familiar with the provisions and restrictions of Regulation M
under the Securities Exchange Act of 1934, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "Exchange Act"),
and understands that the anti-manipulation rules of Regulation M may apply to
sales of Shares in the market and to the activities of the Rightsholder and its
affiliates. Rightsholder shall comply with Regulation M in connection with any
sales of its Registerable Securities. Rightsholder further agrees that it may
not participate in any underwritten registration hereunder unless such
Rightsholder (i) agrees to sell such Rightsholder's securities on the basis
provided in any underwriting arrangements and (ii) completes and executes all
customary questionnaires, appropriate and limited powers of attorney, escrow
agreements, indemnities, underwriting agreements, lock-up agreements with
respect to securities not being sold and such other customary documents
reasonably required under the terms of such underwriting arrangement.
6. Indemnification.
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(a) Indemnification by the Company. The Company agrees to indemnify
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and hold harmless, to the full extent permitted by law, Rightsholder and its
respective officers, directors, and members and each Person who controls (within
the meaning of the Securities Act or the Exchange Act) such Persons from and
against any and all losses, claims, damages, liabilities (or actions or
proceedings in respect thereof, whether or not such indemnified party is a party
thereto) and expenses (including reasonable costs of investigation and legal
expenses), joint or several (each, a "Loss" and collectively "Losses"), arising
out of or based upon (i) any untrue or alleged untrue statement of a material
fact contained in any Registration Statement under which Registerable Securities
were registered under the Securities Act (including any final, preliminary or
summary prospectus contained therein or any amendment thereof or supplement
thereto or any documents incorporated by reference therein) or (ii) any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of a prospectus
or preliminary prospectus, in light of the circumstances under which they were
made) not misleading; provided, however, that the Company shall not be liable to
any indemnified party 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 made in any such Registration Statement (including
any final, preliminary or summary prospectus contained therein or any amendment
thereof or supplement thereto or any documents incorporated by reference
therein) in reliance upon and in conformity with written information furnished
to the Company by Rightsholder expressly for use in connection with such
registration; This indemnity shall be in addition to any liability the Company
may otherwise have. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of Rightsholder or any
indemnified party and shall survive the transfer of such securities by
Rightsholder.
(b) Indemnification by the Rightsholder. Rightsholder agrees to
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indemnify and hold harmless, to the full extent permitted by law, the Company,
its directors and officers and each Person who controls the Company (within the
meaning of the Securities Act and the Exchange Act) from and against any Losses
arising out of or based upon any untrue statement of a material fact or any
omission of a material fact required to be stated in the Registration Statement
under which such Registerable Securities were registered under the Securities
Act (including any final, preliminary or summary prospectus contained therein or
any amendment thereof or supplement thereto or any documents incorporated by
reference therein), or necessary to make the statements therein (in the case of
a prospectus or preliminary prospectus, in light of the circumstances under
which they were made) not misleading, to the extent, but only to the extent,
that such untrue statement or omission has been contained in any information
furnished in writing by Rightsholder to the Company specifically for inclusion
in such Registration Statement. This indemnity shall be in addition to any
liability such Rightsholder may otherwise have. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Company or any indemnified party. In no event shall the liability of
Rightsholder hereunder be greater in amount than the dollar amount of the gross
proceeds before expenses and commissions to the Rightsholder under the sale of
the Registerable Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
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indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided, that any delay or failure to so notify the indemnifying party shall
relieve the indemnifying party of its obligations hereunder only to the extent,
if at all, that it is actually and materially prejudiced by reason of such delay
or failure) and (ii) permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party;
provided, however, that any Person entitled to indemnification hereunder shall
have the right to select and employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such Person unless (A) the indemnifying party has agreed in writing
to pay such fees or expenses, (B) the indemnifying party shall have failed to
assume the defense of such claim within a reasonable time after having received
notice of such claim from the Person entitled to indemnification hereunder and
to employ counsel reasonably satisfactory to such Person, (C) in the reasonable
judgment of any such Person, based upon advice of its counsel, a conflict of
interest exists between such Person and the indemnifying party with respect to
such claims or (D) the indemnified party has reasonably concluded (based on
advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party (in which case, if the Person notifies the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such
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claim on behalf of such Person). If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any liability
for any settlement made without its consent, but such consent may not be
unreasonably withheld; provided, that an indemnifying party shall not be
required to consent to any settlement involving the imposition of any material
obligations on such indemnifying party other than financial obligations for
which such indemnified party will be indemnified hereunder. If the indemnifying
party assumes the defense, the indemnifying party shall have the right to settle
such action without the consent of the indemnified party; provided, that the
indemnifying party shall be required to obtain such consent (which consent shall
not be unreasonably withheld) if the settlement includes any admission of
wrongdoing on the part of the indemnified party or any restriction on the
indemnified party or its officers or directors. No indemnifying party shall
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 each indemnified party of an unconditional release from all liability in
respect to such claim or litigation. The indemnifying party or parties shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other charges
of more than one separate firm at any one time from all such indemnified party
or parties.
7. Counterparts. This Agreement may be executed in one or more
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counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8. Entire Agreement. This Agreement and the documents and instruments
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and other agreements among the parties hereto as contemplated by or referred to
herein, constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof.
9. Severability. In the event that any provision of this Agreement or
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the application thereof becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
10. Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of New York, regardless of the laws
that might otherwise govern under applicable principles of conflicts of law
thereof. Each of the parties hereto irrevocably consents to the exclusive
jurisdiction of any state or federal court within the State and City of New
York, in connection with any matter based upon or arising out of this Agreement
or the matters contemplated herein, agrees that process may be served upon them
in any manner authorized by the laws of the State of New York for such persons
and waives and
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covenants not to assert or plead any objection which they might otherwise have
to such jurisdiction and such process.
11. Assignment. The right to include Registerable Securities in a
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Registration Statement pursuant to Section 2 may not be assigned.
12. Amendments and Waivers. Except as otherwise provided herein, the
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provisions of this Agreement may not be amended, modified or supplemented
without the written consent of the Company and the Rightsholder. The
Rightsholder or the Company may, by written notice to the others, (i) waive any
of the conditions to its obligations hereunder or extend the time for the
performance of any of the obligations or actions of the other, (ii) waive any
inaccuracies in the representations of the other contained in this Agreement or
in any documents delivered pursuant to this Agreement, (iii) waive compliance
with any of the covenants of the other contained in this Agreement or (iv) waive
or modify performance of any of the obligations of the other. No action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action or compliance with any representation, warranty, condition or
agreement contained herein. Waiver of the breach of any one or more provisions
of this Agreement shall not be deemed or construed to be a waiver of other
breaches or subsequent breaches of the same provisions.
13. Notices. All notices, requests, demands or other communications
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provided for herein shall be in writing and shall be deemed to have been given
when personally delivered or sent by (i) registered or certified mail, return
receipt requested, (ii) nationally recognized overnight courier service or (iii)
facsimile transmission electronically confirmed addressed if to the Company, to
Datawave Systems Inc., Wayne Interchange Plaza One, 000 Xxxxx 00 Xxxx, 0xx
Xxxxx, Xxxxx, XX 00000, Attn: Xxxxxx Xxxxxxx, Facsimile: (000) 000-0000; if to
Rightsholder, to Sigma Opportunity Fund, LLC, c/o Sigma Capital Advisors,
managing member, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000, Attn: Xxxx
Xxxx, Facsimile: (000) 000-0000; with a copy to Xxxxxxxx & Xxxxx, LLP, 000
Xxxxxxx Xxxxxxxxxx, Xxxxxxx, XX 00000, Attn: Xxxxx X. Xxxxx, Esq., Facsimile:
(000) 000-0000, if to IT&S, to Integrated Technologies & Systems Ltd., Akara
Buildings, 24, Xx Xxxxxx Street, Road Town, Tortola, British Virgin Islands,
Facsimile: 011-44-208-871-1836; or to such other person or address as either
party shall designate to the other from time to time in writing forwarded in
like manner.
14. Other Remedies. Except as otherwise provided herein, any and all
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remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
15. Further Assurances. Each party hereto covenants and agrees with
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all other parties hereto to promptly execute, deliver, file and/or record such
agreements, instruments, certificates and other documents and to do and perform
such other and further acts and things as any other party hereto may reasonably
request or as may otherwise be necessary or proper to consummate and perfect the
transactions contemplated hereby.
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16. Representations. The parties hereto warrant and agree as follows:
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(a) Available Information. Rightsholder acknowledges to the Company
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that it is familiar with the business, management, operations, financial
condition and affairs of the Company and is therefore able to evaluate the
merits and risks of a purchase of the Note. The Company represents to the
Rightsholder that, to the best of the Company's knowledge, the reports it has
filed with the Commission do not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. To the best of the Company's knowledge, the Company has filed all
reports required to be filed with the Commission since January 1, 2005.
(b) Restricted Securities. The Company covenants that, concurrently
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with the execution of this Agreement, it consents to the transfer of the Note to
Rightsholder and that, upon request of Rightsholder, it will reissue a new
promissory note in exchange for the Note upon the same terms to Rightsholder in
the name of Rightsholder. Rightsholder acknowledges that the Company's consent
to the transfer of the Note from IT&S to Rightsholder is based on the exemption
referred to as the "Section 4(1-1/2)" exemption and is in reliance on the
opinion provided by legal counsel for IT&S, a copy of which was provided to
Rightsholder and its legal counsel, and is in reliance on the representations
made by Rightsholder in this Section 16. Rightsholder understands and agrees
that the Note (including any new note issued in exchange therefor) will be
restricted within the meaning of the Securities Act, and may not be sold,
transferred or otherwise disposed of without registration under the Securities
Act or an exemption therefrom. The Company warrants that the Note (and any new
note issued in exchange therefor) is valid and enforceable, cannot be prepaid
and is convertible into 7,500,000 shares of Common Stock (subject to adjustment
for stock splits, stock dividends, reorganizations and the like).
(c) Legend. Rightsholder understands and acknowledges that the Note
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and the certificates representing the Shares upon conversion of the Note shall
bear a legend substantially as follows until (i) such securities shall have been
registered under the Act; or (ii) in the opinion of counsel for the Company such
securities may be sold without registration under the Securities Act as well as
any applicable "Blue Sky" or state securities laws:
"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE
CORPORATION HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED."
(d) Investment. The Note and, until effectiveness of a registration
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statement registering the Shares for resale by Rightsholder, any Shares to be
acquired by Rightsholder, will be acquired for investment purposes only for
Rightsholder's own account and not with a view to
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the distribution thereof.
(e) Accredited Investor. Rightsholder is an "Accredited Investor" as
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that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act. Rightsholder is able to bear the economic risk of the purchase
of the Note, including a complete loss of Rightsholder's investment in the Note.
(f) Financial Experience. The Rightsholder represents and warrants
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thatby reason of Rightsholder's business or financial experience, Rightsholder
has the capacity to protect Rightsholder's own interests in connection with the
transactions contemplated by this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by themselves or their duly authorized respective officers, all as of
the date first written above.
DATAWAVE SYSTEMS INC.
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: CEO
SIGMA OPPORTUNITY FUND, LLC
By: Sigma Capital Advisors, LLC,
managing member
By: /s/ Xxxx Xxxx
---------------------------------
Xxxx Xxxx
Manager
INTEGRATED TECHNOLOGIES & SYSTEMS LTD.
By: /s/ Xxxx Xxxxxxx
---------------------------------
Xxxx Xxxxxxx
President
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