EXHIBIT 10.9.3
EXHIBIT B
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FORM OF REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of January 26, 2000 (this
"Agreement"), is entered into by and between Max Internet Communications, Inc.
(the "Company"), and Boxer Partners, LLC, a Delaware limited liability company
(the "Purchaser").
W I T N E S S E T H:
WHEREAS, pursuant to a Securities Purchase Agreement, dated as of
January 26, 2000, by and between the Purchaser and the Company (the "Securities
Purchase Agreement"), the Company has agreed to issue and sell to the Purchaser
(i) 727,273 shares of the Company's Common Stock par value $.0001 per share (the
"Common Stock") and (ii) warrants (the "Warrants") to purchase four hundred
thousand (400,000) shares of the Company's common stock, for the aggregate
purchase price of four million dollars ($4,000,000) (the "Purchase Price") (the
"Common Stock, the Warrants and any Common Stock underlying the Warrants and
issuable upon exercise thereof are collectively referred to herein as the
"Securities"; and all shares of Common Stock acquired by the Purchaser pursuant
to the Securities Purchase Agreement or exercise of the Warrants, and any
Additional Shares are collectively referred to herein as the "Shares");
WHEREAS, the Purchaser has previously loaned to the Company the sum of
two million dollars ($2,000,000), which loan is represented by a promissory
note, dated January 20, 2000, issued by the Company (the Note"), and the
Purchaser may apply the principal and accrued interest under the Note towards
payment of the Purchase Price under the Securities Purchase Agreement; and
WHEREAS, to induce the Purchaser to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Purchaser hereby agree as follows:
1. Definitions.
(a) As used in this Agreement, the following terms shall have the
following meanings:
(i) "Additional Shares" shall mean any shares of Common Stock
issuable to Purchasers pursuant to a stock split, recapitalization, stock
dividends or similar transactions or additional shares of Common Stock issuable
pursuant to Section 4 of the Warrant.
(ii) "Minimum Conversion Shares" on any date means a number of
shares equal the number of shares of Common Stock issuable upon exercise of the
Warrants.
(ii) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing one or more Registration Statement
or Statements in compliance with the Securities Act and pursuant to Rule 415
under the Securities Act or any successor rule providing for offering securities
on a continuous basis ("Rule 415"), and the declaration or ordering of
effectiveness of such Registration Statement by the Securities and Exchange
Commission (the "Commission").
(iii) "Registrable Securities" means collectively, the Shares,
the Warrants and Additional Shares, if any.
(iv) "Registration Statement" means a registration statement
of the Company under the Securities Act.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth in the Securities Purchase Agreement, or the
Warrants, as the case may be.
2. Registration.
(a) Mandatory Registration. The Company shall prepare and, as soon as
practicable, but in no event later than February 29, 2000 (the "Required Filing
Date"), file with the Commission a Registration Statement on Form SB-2 or S-3
covering resales of (a) the Shares and (b) the Warrants on the filing date. In
the event that Form SB-2 or S-3 is unavailable for such a registration, the
Company shall use such other form as is available for such a registration. Such
Registration Statement or amended Registration Statement, as the case may be,
shall in accordance with Rule 416 under the Securities Act, state that it also
covers such indeterminate number of additional Shares as may become issuable (i)
upon exercise of the Warrants (ii) to prevent dilution resulting from stock
splits, stock dividends or similar transactions and (iii) to the extent
consistent with the interpretations of the Commission of such rule at such time,
resulting from any adjustment in the Current Warrant Price of such Warrants. The
Company shall use its best efforts to cause any such Registration Statement or
amended Registration Statement, as the case may be, to become effective within
the earliest to occur of (i) ninety (90) days following the Closing Date; (ii)
if the Commission elects not to conduct a review of the Registration Statement,
the date which is five (5) business days after the date upon which either the
Company or its counsel is so notified, whether orally or in writing; or (iii) if
the Registration Statement is reviewed by the Commission, the earlier of (x)
ninety (90) days following the Closing Date or (y) the date which is five (5)
business days after the date upon which the Company or its counsel is notified
by the Commission, whether orally or in writing, that the Commission has no
further comments with respect to the Registration Statement, or that the
Registration Statement may be declared effective. The earliest of such dates is
referred to herein as the "Required Effective Date." Notwithstanding the use of
the terms "Required Filing Date" and "Required Effective Date" herein, the
Company shall at all times use its best efforts to file each required
Registration Statement or amendment to a Registration Statement as soon as
possible after the Closing Date or after the date the Company becomes obligated
to file such Registration Statement or amendment, as the case may be, and to
cause each such Registration Statement or amendment to become effective as soon
as possible thereafter. No securities of the Company other than the Registrable
Securities and securities issued to Xxxxxxx & Co. in connection with this
transaction shall be included in any such Registration Statement. The Company
shall keep each Registration Statement effective pursuant to Rule 415 at all
times until such date as is the earlier of (i) the date on which all of the
Registrable Securities have been sold and (ii) the date on which the Registrable
Securities (in the opinion of counsel to the Company) may be immediately sold
without restriction (including without limitation as to volume by each holder
thereof) without registration under the Securities Act (the "Registration
Period").
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(b) Payments by the Company.
(i) (A) If the Registration Statement covering the Registrable
Securities is not filed in proper form with the Commission on or prior to the
Required Filing Date, or (B) if the Registration Statement covering the
Registrable Securities is not effective on or prior to the Required Effective
Date, or (C) if the number of Shares qualified for trading on the OTC Bulletin
Board or the NASDAQ SmallCap Market, if applicable, or reserved by the Company
for issuance shall be insufficient for issuance upon the exercise of the
Warrants, or (D) upon the occurrence of a Blackout Event (as described in
Section 3(f) or Section 3(g) below) (each of the events described in clauses (A)
through (D) of this paragraph are referred to herein as a "Registration
Default"), the Company will make payments to the Purchaser in such amounts and
at such times as shall be determined pursuant to this Section 2(b),.
(ii) The amount (the "Periodic Amount") to be paid by the
Company to the Purchaser as of each thirty (30) day period during which a
Registration Default shall be in effect (each such period, a "Default Period")
shall be equal to (x) with respect to the first Default Period, one percent (1%)
of the Purchase Price paid by the Purchaser and (y) thereafter, two percent (2%)
of the Purchase Price; provided that, with respect to any Default Period during
which the relevant Registration Defaults shall have been cured, the Periodic
Amount shall be pro rated for the number of days during such period during which
the Registration Defaults were pending; and provided, however, that the payment
of such Periodic Amounts shall not relieve the Company from its continuing
obligations to register the Warrants and Shares pursuant to Section 2(a).
(iii) Each Periodic Amount shall be payable by the Company,
in cash or other immediately available funds, to the Purchaser on the last day
of each month during which a Registration Default occurred or was continuing,
without demand therefor by the Purchaser. If the Company shall not remit the
Periodic Amounts payable to the Purchaser as set forth in paragraph (ii) above,
the Company will pay the Purchaser reasonable costs of collection, including
attorneys' fees, in addition to the Periodic Amounts.
(iv) The parties acknowledge that the damages which may be
incurred by the Purchaser if the Registration Statement is not filed by the
Required Filing Date, if the Registration Statement has not been declared
effective by the Required Effective Date, if an insufficient number of shares of
Common Stock shall be qualified for trading or reserved for issuance, or if the
provisions of Section 3(f) or 3(g) become applicable, may be difficult to
ascertain. The parties agree that the Periodic Amount represents a reasonable
estimate on the part of the parties, as of the date of this Agreement, of the
amount of such damages.
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(c) Piggyback Registration. (i) If at any time or from time to time,
the Company shall determine to register any of its securities, for its own
account or the account of any of its shareholders, other than a Registration
Statement relating solely to employee share option plans or pursuant to an
acquisition transaction on Form S-4, the Company will:
(A) provide to the Purchaser written notice thereof as soon as
practicable prior to filing the Registration Statement; and
(B) include in such Registration Statement and in any
underwriting involved therein, all of the Registrable
Securities specified in a written request by the Purchaser
made within fifteen (15) days after receipt of such written
notice from the Company.
(ii) If the Registration is for a registered public offering
involving an underwriting, the Company shall so advise the Purchaser as a part
of the written notice given pursuant to this Section. In such event, the rights
of the Purchaser hereunder shall include participation in such underwriting and
the inclusion of the Registrable Securities in the underwriting to the extent
provided herein. To the extent that the Purchaser proposes to distribute its
securities through such underwriting, the Purchaser shall (together with the
Company and any other securityholders of the Company distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this
Section, if the managing underwriter of such underwriting determines that
marketing factors require a limitation of the number of shares to be offered in
connection with such underwriting, the managing underwriter may limit the number
of Registrable Securities to be included in the Registration and underwriting
(provided, however, that (a) the Registrable Securities shall not be excluded
from such underwritten offering prior to the exclusion of any securities held by
officers and directors of the Company or their affiliates, (b) the Registrable
Securities shall be entitled to at least the same priority in an underwritten
offering as any securities included in such offering by any of the Company's
other existing securityholders, and (c) the Company shall not enter into any
agreement that would provide any securityholder with priority in connection with
an underwritten offering greater than the priority granted to the Purchaser
hereunder). The Company shall so advise any of its other securityholders who are
distributing their securities through such underwriting pursuant to their
respective piggyback registration rights, and the number of shares of
Registrable Securities and other securities that may be included in the
registration and underwriting shall be allocated among the Purchaser and all
other securityholders of the Company in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities held by the Purchaser and such
other securityholders at the time of the filing of the registration statement.
If the Purchaser disapproves of the terms of any such underwriting, it may elect
to withdraw therefrom by written notice to the Company. Any Registrable
Securities so excluded or withdrawn from such underwriting shall be withdrawn
from such Registration.
(d) Eligibility for Form SB-2. The Company represents and warrants that
it meets all of the requirements for the use of Form SB-2 for the Registration
of the sale by the Purchaser and any transferee who purchases the Registrable
Securities, and the Company shall file all reports required to be filed by the
Company with the Commission in a timely manner, and shall take such other
actions as may be necessary to maintain such eligibility for the use of Form
SB-2.
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(e) Priority in Filing. The Company covenants that beginning on the
Closing Date and ending on the date that is one hundred and twenty (120) days
after the Registration Statement filed pursuant to Section 2(a) of this
Agreement becomes effective (provided that if, after the effective date of such
Registration Statement, the Purchaser shall be unable to sell Registrable
Securities pursuant to such Registration Statement for any number of days, the
provisions of this Section 2(e) shall apply for an additional number of days
equal to the number of days during which any Purchaser is unable to sell
Registrable Securities pursuant to such Registration Statement), the Company
will not file any Registration Statement, other than a Registration Statement
required by Section 2(a) hereof, without the written consent of the Purchaser.
3. Obligations of the Company.
In connection with the registration of the Registrable Securities, the
Company shall do each of the following:
(a) Prepare and file with the Commission the Registration
Statements required by Section 2 of this Agreement and such amendments
(including post-effective amendments) and supplements to the Registration
Statements and the prospectuses used in connection with such Registration
Statements, each in such form as to which the Purchaser and its counsel shall
not have objected, as may be necessary to keep the Registration Statements
effective at all times during the Registration Period, and, during the
Registration Period, comply with the provisions of the Securities Act with
respect to the disposition of all of the Registrable Securities of the Company
covered by the Registration Statements until such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in the
Registration Statements;
(b) Furnish to the Purchaser and its legal counsel identified
to the Company, promptly after the same is prepared and publicly distributed,
filed with the Commission, or received by the Company, a copy of the
Registration Statement, each preliminary prospectus, each final prospectus, and
all amendments and supplements thereto and such other documents, as the
Purchaser may reasonably request in order to facilitate the disposition of its
Registrable Securities;
(c) Furnish to the Purchaser and its counsel copies of any
correspondence between the Company and the Commission with respect to any
Registration Statement or amendment or supplement thereto filed pursuant to this
Agreement;
(d) Use all reasonable efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statements under such other
securities or blue sky laws of such jurisdictions as the Purchaser may
reasonably request, (ii) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof at all
times during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all
times during the Registration Period and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions, provided that in connection therewith, the Company shall not be
required to qualify as a foreign corporation or to file a general consent to the
service of process in any jurisdiction;
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(e) Qualify such securities for trading on the Nasdaq OTC
Bulletin Board and list such securities on all the other national securities
exchanges on which any securities of the Company are then listed, and file any
filings required by NASDAQ and/or such other exchanges;
(f) As promptly as practicable after becoming aware thereof,
notify the Purchaser of any need to suspend use of the prospectus included in
the Registration Statement, including as a result of the occurrence of any
event, as a result of which the prospectus included in any Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and to use its best efforts to promptly prepare a
supplement or amendment to such Registration Statement or other appropriate
filing with the Commission to allow the resumption of the use of such prospectus
and to deliver a number of copies of such supplement or amendment to the
Purchaser as the Purchaser may reasonably request;
(g) As promptly as practicable after becoming aware of such
event, notify the Purchaser (or, in the event of an underwritten offering, the
managing underwriters) of the issuance by the Commission or any stop order or
other suspension of the effectiveness of any Registration Statement at the
earliest possible time, and to use its best efforts to promptly obtain the
withdrawal of such stop order or other suspension of effectiveness (the
occurrence of any of the events described in paragraphs (f) and (g) of this
Section 3 is referred to herein as a "Blackout Event");
(h) During the period commencing upon (i) the Purchaser's
receipt of a notification pursuant to Section 3(f) above or (ii) the entry of a
stop order or other suspension of the effectiveness of the Registration
Statement described in Section 3(g) above, and ending at such time as (x) the
Company shall have completed the applicable filings (and if applicable, such
filings shall have been declared effective) and shall have delivered to the
Purchaser the documents required pursuant to Section 3(f) above or (y) such stop
order or other suspension of the effectiveness of the Registration Statement
shall have been removed, the Company shall be liable to remit the payments
required to be paid to the Purchaser pursuant to Section 2(b) above;
(i) Suspend the use of any prospectus used in connection with
any Registration Statement only in the event, and for such period of time as,
such a suspension is required by the rules and regulations of the Commission;
(j) Enter into such customary agreements for secondary
offerings (including a customary underwriting agreement with the underwriter or
underwriters, if any) and take all such other actions reasonably requested by
the Purchaser in connection therewith in order to expedite or facilitate the
disposition of such Registrable Securities. Whether or not an underwriting
agreement is entered into and whether or not the Registrable Securities are to
be sold in an underwritten offering the Company shall:
(i) make such representations and warranties to the Purchaser
and the underwriter or underwriters, if any, in form, substance and
scope as are customarily made by issuers to selling stockholders and
underwriters in secondary offerings;
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(ii) cause to be delivered to the sellers of Registrable
Securities and the underwriter or underwriters, if any, opinions of
independent counsel to the Company (which counsel and opinions shall be
reasonably satisfactory in form, scope and substance to Purchaser and
the underwriter(s), if any, and their counsel), (A) on and dated as of
the effective day of the applicable Registration Statement (and in the
case of an underwritten offering, dated the date of delivery of any
Registrable Securities sold pursuant thereto) stating that (x) such
Registration Statement complies in all material respects with the
requirements of the Securities Act and the rules and regulations of the
Commission thereunder, (y) such Registration Statement does not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (z) the documents incorporated by reference
in the prospectus accompanying such Registration Statement, at the time
they were filed with the Commission or as amended, complied in all
material respects with the requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and the rules and regulations
thereunder and, when read together with the other information in such
prospectus, do not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B) within
fifteen (15) days following the filing of the Company's Annual Report
on Form 10-K for each fiscal year thereafter, an opinion of independent
counsel to the Company, updating the opinion referred to in clause (A)
of this paragraph;
(iii) cause to be delivered, immediately prior to the
effectiveness of the applicable Registration Statement (and, in the
case of an underwritten offering, at the time of delivery of any
Registrable Securities sold pursuant thereto), and at the beginning of
each fiscal year following a year during which the Company's
independent certified public accountants shall have reviewed any of the
Company's books or records, a "comfort" letter from the Company's
independent certified public accountants addressed to the Purchaser and
each underwriter, if any, stating that such accountants are independent
public accountants within the meaning of the Securities Act and the
applicable published rules and regulations thereunder, and otherwise in
customary form and covering such financial and accounting matters as
are customarily covered by letters of the independent certified public
accountants delivered in connection with secondary offerings; such
accountants shall have undertaken in each such letter to update the
same during each such fiscal year in which such books or records are
being reviewed so that each such letter shall remain current, correct
and complete throughout such fiscal year; and each such letter and
update thereof, if any, shall be reasonably satisfactory to the
Purchaser;
(iv) if an underwriting agreement is entered into, the same
shall include customary indemnification and contribution provisions to
and from the underwriters and procedures for secondary underwritten
offerings;
(v) deliver such documents and certificates as may be
reasonably requested by any purchaser of the Registrable Securities
being sold or the managing underwriter or underwriters, if any, to
evidence compliance with clause (i) above and with any customary
conditions contained in the underwriting agreement, if any; and
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(vi) deliver to Purchaser on the effective day of the
applicable Registration Statement (and, in the case of an underwritten
offering, on the date of delivery of any Registrable Securities sold
pursuant thereto), and at the beginning of each fiscal quarter
thereafter, a certificate in form and substance as shall be reasonably
satisfactory to Purchaser, executed by an executive officer of the
Company and to the effect that all the representations and warranties
of the Company contained in the Securities Purchase Agreement are still
true and correct except as disclosed in such certificate; the Company
shall, as to each such certificate delivered at the beginning of each
fiscal quarter, update or cause to be updated each such certificate
during such quarter so that it shall remain current, complete and
correct throughout such quarter; and such updates received by Purchaser
during such quarter, if any, shall have been reasonably satisfactory to
Purchaser.
(k) Make available for inspection by Purchaser, its
representative(s), any underwriter participating in any disposition pursuant to
a Registration Statement, and any attorney or accountant retained by the
Purchaser or underwriter, all financial and other records customary for purposes
of Purchaser's and underwriters' due diligence examination of the Company and
review of any Registration Statement, all filings made with the Commission
subsequent to the Closing, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees to supply all
information reasonably requested by any such representative, underwriter,
attorney or accountant in connection with such Registration Statement, provided
that such parties agree to keep such information confidential;
(l) Cooperate with the Purchaser to facilitate the timely
preparation and delivery of certificates for the Registrable Securities to be
offered pursuant to any Registration Statement and to enable such certificates
for the Registrable Securities to be in such denominations or amounts, as the
case may be, as the Purchaser may reasonably request, and registered in such
names as the Purchaser may request; and, within three (3) business days after a
Registration Statement which includes Registrable Securities is ordered
effective by the Commission, the Company shall deliver, and shall cause legal
counsel selected by the Company to deliver, to the transfer agent for the
Registrable Securities (with copies to the Purchaser) an appropriate instruction
and opinion of such counsel; and
(m) Permit counsel to Purchaser to review the Registration
Statement and all amendments and supplements thereto within a reasonable period
of time (but not less than five (5) business days) prior to each filing, and to
incorporate those changes, if provided to the Company or its counsel within such
five (5) business day period, suggested by such counsel.
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4. Obligations of the Purchaser.
In connection with the registration of the Registrable Securities, the
Purchaser shall have the following obligations:
(a) Furnish to the Company such information regarding itself,
the Registrable Securities held by it, and the intended method of disposition of
the Registrable Securities held by it, as shall be reasonably required to effect
the registration of such Registrable Securities. The intended method or methods
of disposition and/or sale (Plan of Distribution) of the Registrable Securities
as so provided by the participating Purchaser shall be included without
alteration in any Registration Statement covering the Registrable Securities and
shall not be changed without written consent of the Purchaser. At least five (5)
business days prior to the first anticipated filing date of any Registration
Statement, the Company shall notify the Purchaser of the information the Company
requires from the Purchaser if the Purchaser elects to have any of its
Registrable Securities included in such Registration Statement; and
(b) The Purchaser agrees that, upon receipt of any notice from
the Company of the happening of any Blackout Event of the kind described in
Section 3(f) or 3(g) above, it will immediately discontinue disposition of its
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such copies of the supplemented or amended
prospectus contemplated by Section 3(f) or 3(g) shall be furnished to the
Purchaser.
(c) The Purchaser agrees that, for a period of that is thirty
(30) days from the date the Registration Statement filed pursuant to Section
2(a) of this Agreement becomes effective, it will not sell, pursuant to such
Registration Statement, in excess of one-half of the Registrable Securities
registered pursuant to such Registration Statement; provided, however, that such
limitation shall not apply (i) in the event and to the extent such thirty (30)
day period is more than one hundred twenty (120) days after the Closing Date or
(ii) to any shares of Common Stock acquired by the Purchaser upon exercise of
the Warrant after a Call Notice (as that term is defined in the Warrant), has
been sent by the Company to the Purchaser.
5. Expenses of Registration.
Other than underwriting discounts and commissions, all expenses
incurred in connection with registrations, filings or qualifications pursuant to
this Agreement, including, without limitation, all registration, listing, and
qualification fees, printing and accounting fees, and the fees and disbursements
of counsel for the Company, and the fees of one counsel to the Purchaser with
respect to each Registration Statement filed pursuant hereto, shall be borne by
the Company.
6. Indemnification.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
(a) The Company will indemnify and hold harmless the
Purchaser, each of its officers, shareholders, members, directors and partners,
and each person, if any, who controls the Purchaser within the meaning of the
Securities Act or the Exchange Act (each, an "Indemnified Person"), against any
losses, claims, damages, liabilities or expenses (joint or several) incurred
(collectively, "Claims") to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
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arise out of or are based upon: (i) any untrue 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 in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading, (ii) any untrue or alleged statement of a material fact contained in
any preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the Commission) or the omission or alleged omission to state therein any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state or foreign securities law or any rule or regulation
under the Securities Act, the Exchange Act or any state or foreign securities
law (the matters in foregoing clauses (i) through (iii) being, collectively,
"Violations"). The Company shall, subject to the provisions of Section 6(b)
below, reimburse each Purchaser, promptly as such expenses are incurred and are
due and payable, for any legal and other costs, expenses and disbursements in
giving testimony or furnishing documents in response to a subpoena or otherwise,
including without limitation, the costs, expenses and disbursements, as and when
incurred, of investigating, preparing or defending any such action, suit,
proceeding or investigation (whether or not in connection with litigation in
which the Purchaser is a party), incurred by it in connection with the
investigation or defense of any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a) shall not (i) apply to any Claim arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof supplement thereto; (ii) with respect to
any preliminary prospectus, inure to the benefit of any such person from whom
the person asserting any such Claim purchased the Registrable Securities that
are the subject thereof (or to the benefit of any person controlling such
person) if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the final prospectus, as then amended or
supplemented, if such final prospectus was timely made available by the Company
pursuant to Section 3(b) hereof; (iii) be available to the extent that such
Claim is based upon a failure of the Purchaser to deliver or to cause to be
delivered the prospectus made available by the Company, if such prospectus was
timely made available by the Company pursuant to Section 3(b) hereof; or (iv)
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the transfer of the Registrable Securities by the Purchaser
pursuant to Section 9. The Purchaser will indemnify the Company and its officers
and directors against any Claims arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information furnished in writing
to the Company, by or on behalf of the Purchaser, expressly for use in
connection with the preparation of the Registration Statement, subject to such
limitations and conditions as are applicable to the Indemnification provided by
the Company in this Section 6.
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(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,
and the indemnifying party shall have the right to participate in, and to the
extent that the indemnifying party so desires, jointly with any other
indemnifying party similarly notified, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person; provided, however, that an Indemnified Person shall have the right to
retain its own counsel with the reasonable fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Indemnified Person
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person and any other party
represented by such counsel in such proceeding. In such event, the Company shall
pay for only one separate legal counsel for the Purchaser, and such legal
counsel shall be selected by the Purchaser. The failure to deliver written
notice to an indemnifying party within a reasonable time after the commencement
of any such action shall not relieve such indemnifying party of any liability to
the Indemnified Person under this Section 6, except to the extent that the
indemnifying party is materially prejudiced in its ability to defend such
action. The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable.
(c) No indemnifying party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Person of an unconditional and irrevocable release from all
liability in respect of such claim or litigation.
(d) Notwithstanding the foregoing, to the extent that any
provisions relating to indemnification or contribution contained in the
underwriting agreements entered into among the Company, the underwriters and the
Purchaser in connection with an underwritten public offering are in conflict
with the foregoing provisions, the provisions in such underwriting agreements
shall be controlling as to the Registrable Securities included in the public
offering; provided, however, that if, as a result of this Section 6(d), any
Purchaser, its officers, shareholders, members, directors, partners or any
person controlling such Purchaser is or are held liable with respect to any
Claim for which they would be entitled to indemnification hereunder but for this
Section 6(d) in an amount which exceeds the aggregate proceeds received by such
Purchaser from the sale of Registrable Securities included in a registration
pursuant to such underwriting agreement (the "Excess Liability"), the Company
shall reimburse such Purchaser for such Excess Liability.
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7. Contribution.
To the extent any indemnification by an indemnifying party is
prohibited or limited under applicable law, the indemnifying party agrees to
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage, liability or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the Indemnified Person on the other hand in connection with the
statements or omissions which resulted in such Claim, as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and the Indemnified Person shall be determined by reference to, among other
things, whether the untrue statement of a material fact or the omission to state
a material fact on which such Claim is based relates to information supplied by
the indemnifying party or by the Indemnified Person, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. Notwithstanding the forgoing, (a) no seller of
Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
such fraudulent misrepresentation and (b) contribution by any seller of
Registrable Securities shall be limited in amount to the net proceeds received
by such seller from the sale of such Registrable Securities. The Company and the
Purchaser agree that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by pro rata allocation (even if the Purchaser
and any other party were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in this Section.
8. Reports Under Exchange Act.
With a view to making available to the Purchaser the benefits of
Rule 144 promulgated under the Securities Act or any other similar rule or
regulation of the Commission that may at any time permit the Purchaser to sell
securities of the Company to the public without registration ("Rule 144"), the
Company agrees to:
(i) make and keep public information available, as those terms
are understood and defined in Rule 144;
(ii) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act; and
(iii) furnish to the Purchaser, so long as Purchaser owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of the Securities
Act and the Exchange Act, (ii) a copy of the most recent annual or periodic
report of the Company and such other reports and documents so filed by the
Company and (iii) such other information as may be reasonably requested to
permit such Purchaser to sell such securities pursuant to Rule 144 without
registration.
9. Assignment of the Registration Rights.
The rights to have the Company register Registrable Securities pursuant
to this Agreement shall be automatically assigned by any Purchaser to any
transferee of all or any portion of the Securities or Shares held by such
Purchaser if: (a) such Purchaser agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment; (b) the Company is,
within a reasonable time after such transfer or assignment, furnished with
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written notice of (i) the name and address of such transferee or assignee and
(ii) the Securities or Shares with respect to which such registration rights are
being transferred or assigned; (c) at or before the time the Company receives
the written notice contemplated by clause (b) of this sentence, the transferee
or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein; and (d) the transferee of the relevant Securities
or Shares complies with the restrictions on the Purchaser set forth in Section 4
of the Securities Purchase Agreement.
10. Amendment of Registration Rights.
Any provision of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and holders of 75% of the Registrable Securities from time to time. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon the Purchaser and the Company.
11. Miscellaneous.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of the
instructions, notice or election received from the registered owner of such
Registrable Securities.
(b) Any notice required or permitted hereunder shall be given
in writing (unless otherwise specified herein) and shall be effective upon
personal delivery, via facsimile (upon receipt of confirmation of error-free
transmission) or two business days following deposit of such notice with an
internationally recognized courier service, with postage prepaid and addressed
to each of the other parties thereunto entitled at the following addresses, or
at such other addresses as a party may designate by five days advance written
notice to each of the other parties hereto.
If to the Company to: MAX Internet Communications, Inc.
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Att.: Xxxxxxxx X. Xxxxx, Xx.
Tel.: (000) 000-0000
Fax: (000) 000-0000
with a copy to: Glast, Xxxxxxxx & Xxxxxx
2200 One Galleria Tower
00000 Xxxx Xxxx, X.X. 00
Xxxxxx, Xxxxx 00000-0000
Att.: Xxxxxx X. Xxxxx, Esq.
Tel.: (000) 000-0000
Fax: (000) 000-0000
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If to the Purchaser to: Boxer Partners LLC
c\o WEC Asset Management LLC
Xxx Xxxxx Xxxxx Xxxxxx, Xxxxx #0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to: Xxxxx Xxxxxx Xxxxxxx & Xxxxxx LLP
1350 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att.: Xxx Xxxxxxx, Esq.
Tel.: (000) 000-0000
Fax: (000) 000-0000
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York, except for provisions with
respect to internal corporate matters of the Company which shall be governed by
the corporate laws of the State of Nevada. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original. The headings of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement. This Agreement has been entered into
freely by each of the parties, following consultation with their respective
counsel, and shall be interpreted fairly in accordance with its terms, without
any construction in favor of or against either party. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such validity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
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(e) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth,
or referred to herein and in the other Primary Documents. This Agreement
supersedes all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
(h) The Company acknowledges that any failure by the Company
to perform its obligations under Section 2(a), or any delay in such performance
could result in direct damages to the Purchaser, and the Company agrees that, in
addition to any other liability the Company may have by reason of any such
failure or delay, the Company shall be liable for all direct damages caused by
any such failure or delay.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK, SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed.
Max Internet Communications, INC.
By:______________________________
Name:
Title:
Boxer Partners, LLC
By: WEC Asset Management LLC, Managing Member
By:______________________________
Name: Xxxxx Xxxxxxxx
Title: Managing Director
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