REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of May 1, 2000, among Cedar Avenue LLC (the "Purchaser"), a limited
liability Company organized under the laws of the Cayman Islands, THOMSON
KERNAGHAN & CO. LIMITED (the "Placement Agent,"), an Ontario (Canada)
corporation, and WAVETECH INTERNATIONAL, INC. (the "Company"), a Nevada
corporation.
This Agreement is made with reference to the following facts and
circumstances:
A. The Purchaser and the Company have entered into a Securities Purchase
Agreement dated May 1, 2000 (the "Securities Purchase Agreement). Capitalized
terms used but not defined in this Agreement shall have the meanings ascribed to
them in the Securities Purchase Agreement. The term "Holder" shall mean the
Company, the Transfer Agent, any assignee or transferee of a Warrant, and any
other owner of Registrable Securities.
B. It is a condition to the consummation of the transactions contemplated
by the Securities Purchase Agreement that the parties hereto enter into this
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
REGISTRATION OF REGISTRABLE SECURITIES
Section 1.01. REGISTRABLE SECURITIES. As used in this Agreement the term
"Registrable Securities" means the Conversion Shares and the Warrant Shares;
PROVIDED, HOWEVER, that with respect to any particular Registrable Security,
such security shall cease to be a Registrable Security when, as of the date of
determination, (i) it has been effectively registered under the Securities Act
of 1933, as amended (the "Securities Act") and disposed of pursuant thereto,
(ii) registration under the Securities Act is no longer required for the
immediate public distribution of such security as a result of the provisions of
Rule 144(k) promulgated under the Securities Act, or (iii) it has ceased to be
outstanding. In the event of any merger, reorganization, consolidation,
recapitalization or other change in corporate structure affecting the Common
Stock, the term "Registrable Securities" shall also include any securities
issued or issuable in exchange for the Conversion Shares or the Warrant Shares.
Section 1.02. REGISTRATION RIGHTS.
(a) The Company shall, at its at the sole expense (except as provided in
Section 1.02(c) hereof), prepare and file with the Securities and Exchange
Commission ("the SEC"), within forty-five (45) days after the Subscription Date
(the "Registration Deadline"), a registration statement on Form S-3 under the
Securities Act (the "Registration Statement"), providing for a public offering
to be made on a continuous basis pursuant to Rule 415 under the Securities Act,
relating to the offer and sale of all Registrable Securities. The Company shall
use its best efforts to cause the Registration Statement to become effective as
soon as practical after its filing and in any event within one hundred twenty
(120) days from the Subscription Date or within five (5) days after the
Company's receipt of a "no review" letter from the SEC (whichever occurs first,
the "Effectiveness Deadline"). The number of shares of Common Stock designated
in the Registration Statement to be registered shall be two hundred (200%)
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percent of the number of shares that would be required if all the Registrable
Securities were issued on the day before the filing of the Registration
Statement.
(b) The Company shall use its best efforts to keep the Registration
Statement continuously effective, and shall file in a timely manner all post
effective amendments and supplements thereto, in order to permit the prospectus
forming part thereof to be useable by the Holders until the earliest of (i) the
date that all of the Registrable Securities have been sold pursuant to the
Registration Statement, (ii) the date the Holders receive an opinion of counsel
that all of the Registrable Securities may be sold under the provisions of SEC
Rule 144(k), or (iii) five and one half years after the Subscription Date.
(c) The Company shall pay all fees, disbursements and out-of-pocket
expenses and costs incurred by it in connection with the preparation, filing and
maintaining the current status of the Registration Statement under this Article
I, and in complying with applicable securities and Blue Sky laws (including,
without limitation, all reasonable attorneys' fees). Each Holder shall bear the
cost of underwriting discounts, if any, applicable to the Registrable Securities
being registered and the fees and expenses of its counsel. The Company shall
qualify any of the securities for sale in such states as the Holders reasonably
designate. However, the Company shall not be required to qualify in any state
that will require an escrow or other restriction relating to the Company or the
sellers. The Company at its expense will supply the Holders with copies of the
Registration Statement and prospectus or offering circular included tin this
Agreement, all exhibits, amendments and supplements thereto, and other related
documents in such quantities the Holders may reasonably request.
(d) As used in this Agreement, the term "Registration Default Day" shall
mean: (i) If the Company has not filed the Registration Statement by the
Registration Deadline, then each day thereafter until the Company files the
Registration Statement; (ii) if the SEC has not declared the Registration
Statement effective by the Effectiveness Deadline, then each day thereafter
until the SEC declares the Registration Statement effective; and (iii) each day,
from the effective date of the Registration Statement until the date that the
Company is no longer required to keep the Registration Statement effective, that
the Registration Statement is not effective and current. For each Registration
Default Day, the Company shall pay each Holder, on demand, an amount equal to 2%
per month of the product of the number of Registrable Securities then held by
such Holder multiplied by the price paid or payable to the Company for each such
Registrable Security. The Company shall pay Liquidated Damages to each Holder,
at the Company's option, either (i) in cash, or (ii) in Registrable Securities,
the number of which shall be determined by multiplying the amount of Liquidated
Damages by the Bid Price on the date of the Company's election to be paid in
Registrable Securities. If the Company elects to pay Liquidated Damages in
Registrable Securities, then it shall promptly file an amendment (including a
post-effective amendment, to the extent the SEC rules permit, if necessary) to
the Registration Statement registering the resale of those Registrable
Securities. The parties hereto agree that it would be difficult, if not
impossible to accurately fix the amount of damages that Holders would incur
because of the occurrence of Registration Default Days, and that the Liquidated
Damages are a fair, reasonable and equitable under the circumstances. The
payment of Liquidated Damages shall not relieve the Company from its obligations
to register the Registrable Securities pursuant to this Section. The provisions
of this paragraph shall not prevent any Holder from obtaining specific
performance of the Company's obligations under Section 1.02.
Section 1.03. INCIDENTAL REGISTRATION. If, at any time following the
Effective Time, The Company proposes to file a Registration Statement other than
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the Shelf Registration Statement (an "Incidental Registration") under the
Securities Act with respect to an offering of Common Stock (i) for its own
account (other than a Registration Statement on Form S-4 or S-8 (or any filing
on any substitute form that may be adopted by the Commission for a transaction
for which Form S-4 or S-8 is currently available)) or (ii) the account of any
holder of Common Stock, the Company shall give written notice of such proposed
filing (including the proposed date thereof) to the Holders as soon as
practicable, but in any event not less than 10 days before the anticipated
filing date and such notice shall offer each Holder the opportunity to register
such number of Registrable Securities as such Holder shall request. Upon the
written direction of any such Holder (which direction shall specify the number
of Registrable Securities intended to be disposed of by any Holder), given
within 10 days following the receipt by the Holders of any such written notice,
The Company shall use its reasonable best efforts to cause to be registered
under the Securities Act all of the Registrable Securities that each such Holder
has requested to be registered; PROVIDED, that, if The Company does not file
such registration statement by the proposed filing date, the Company shall again
comply with the notice provisions of this Section 1.03 prior to filing such
registration statement. Notwithstanding anything contained herein, if the lead
underwriter of an offering involving an Incidental Registration notifies The
Company that the inclusion of such Registrable Securities would (i) materially
and adversely affect the price of the Common Stock to be offered or (ii) result
in a greater amount of Common Stock being offered than the market could
reasonably absorb, then the number of Registrable Securities to be registered by
Holders shall be reduced to the extent that, in the lead underwriter's
reasonable judgment, neither of the effects in the foregoing clauses (i) and
(ii) would result from the number of shares of Common Stock proposed to be
issued by The Company. Any reduction in the amount of a Holder's Registrable
Securities to be included in an Incidental Registration shall be made on a pro
rata basis with other holders of registration rights participating in such
Incidental Registration.
Section 1.04. UNDERWRITING REQUIREMENTS. In connection with any
underwritten offering, the Company shall not be required under Section 1.02 of
this Agreement to include shares of Registrable Securities in such underwritten
offering unless the holder of such shares of Registrable Securities accepts the
terms of the underwriting of such offering that have been reasonably agreed upon
between the Company and the underwriters selected by the Company.
Section 1.05. REGISTRATION PROCEDURES. If and whenever the Company is
required by any of the provisions of this Agreement to effect the registration
of any of the Registrable Securities under the Securities Act, the Company shall
(except as otherwise provided in this Agreement), as expeditiously as possible:
(a) prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of all securities covered by such registration statement whenever the Holder of
such securities shall desire to sell or otherwise dispose of the same (including
prospectus supplements with respect to the sales of securities from time to time
in connection with a registration statement pursuant to Rule 415 promulgated
under the Securities Act);
(b) furnish to each Holder such numbers of copies of a summary prospectus
or other prospectus, including a preliminary prospectus or any amendment or
supplement to any prospectus, in conformity with the requirements of the
Securities Act, and such other documents, as such Holder may reasonably request
in order to facilitate the public sale or other disposition of the securities
owned by such Holder;
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(c) use its best effort to register and qualify the securities covered by
the Registration Statement under such other securities or blue sky laws of such
jurisdictions as the Holder shall reasonably request, and do any and all other
acts and things which may be necessary or advisable to enable each Holder to
consummate the public sale or other disposition in such jurisdiction of the
securities owned by such Holder, except that the Company shall not for any such
purpose be required to qualify to do business as a foreign corporation in any
jurisdiction win this Agreement it is not so qualified or to file tin this
Agreement any general consent to service of process;
(d) use its best efforts to list such securities on the Principal Market;
(e) enter into and perform its obligations under an underwriting agreement,
if the offering is an underwritten offering, in usual and customary form, with
the managing underwriter or underwriters of such underwritten offering;
(f) notify each Holder at any time when a prospectus relating to
Registrable Securities covered by the Registration Statement is required to be
delivered under the Securities Act, of the occurrence of any event of which it
has knowledge as a result of which the prospectus included in the 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 tin this Agreement or
necessary to make the statements tin this Agreement not misleading in the light
of the circumstances then existing.
Section 1.06. INFORMATION BY HOLDER. Each Holder included in any
registration shall furnished to the Company such information regarding such
Holder and the distribution proposed by such Holder as the Company may request
in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
Section 1.07. TRANSFER OF REGISTRATION RIGHTS. Any holder of a Warrant or
Registrable Securities may transfer its rights under this Agreement in
connection with any transfer of such Warrant or Registrable Securities effected
in compliance with applicable law.
Section 1.08. PUBLIC INFORMATION. The Company covenants to make available
"adequate current public information" concerning the Company within the meaning
of Rule 144(c) under the Securities Act so long as any Holder holds any
Registrable Securities.
ARTICLE II
INDEMNIFICATION
Section 2.01. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall, and it hereby agrees
to, indemnify and hold harmless each Holder, such Holder's directors and
officers, each person, if any, who controls, is subject to control of or who is
in common control with such Holder (an "Affiliate"), and each person who
participates as a placement or sales agent or as an underwriter (within the
meaning of the Securities Act) in any offering or sale of Registrable
Securities, against any losses, claims, damages or liabilities ("Losses") to
which such Holder, Affiliate, agent or underwriter may become subject under
Securities Act or otherwise, insofar as such Losses (or actions or proceedings
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or prospectus contained therein or arise out of or are based upon any
omission or alleged omission to state therein a material fact required to be
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stated therein or necessary to make the statements therein not misleading, and
the Company shall, and it hereby agrees to, reimburse such Holder or any such
Affiliate, agent or underwriter for any legal or other out-of-pocket expenses
reasonably incurred by them (but not in excess of expenses incurred in respect
of one counsel for all of them unless there is an actual conflict of interest
between any indemnified parties, which indemnified parties may be represented by
separate counsel) in connection with investigating or defending any such action,
proceeding or claim; PROVIDED, HOWEVER, that the indemnity agreement contained
in this Section 2.01(a) shall not apply to amounts paid in settlement of any
such Loss or action if such settlement is effected without the consent of the
Company which consent shall not be unreasonably withheld; PROVIDED, FURTHER,
that the Company shall not be liable to any such person in any such case to the
extent that any such Loss or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement or prospectus contained therein, in reliance upon
and in conformity with written information furnished to the Company by such
Holder or any Affiliate, agent, underwriter or representative of such Holder
expressly for use therein, or by such Holder's failure to furnish the Company,
upon request, with the information with respect to such Holder, such Holder's
directors and officers, or any agent, underwriter or representative of such
Holder, or such Holder's intended method of distribution, that is the subject of
the untrue statement or omission or if the Company shall sustain the burden of
proving that such Holder, such Holder's directors and officers, or such agent or
underwriter sold securities to the person alleging such Loss without sending or
giving, at or prior to the written confirmation of such sale, a copy of the
applicable prospectus (excluding any documents incorporated by reference
therein) or of the applicable prospectus, as then amended or supplemented
(excluding any documents incorporated by reference therein) if the Company had
previously furnished copies thereof to such Holder or such agent or underwriter,
and such prospectus corrected such untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement.
(b) INDEMNIFICATION BY HOLDERS. Each Holder participating in a registration
pursuant to this Agreement shall severally and not jointly indemnify and hold
harmless the Company, each of its directors and officers, each person, if any,
who controls the Company within the meaning of the Securities Act, and each
agent and any underwriter for the Company (within the meaning of the Securities
Act) against any Losses, joint or several, to which the Company or any such
director, officer, controlling person, agent or underwriter may become subject,
under the Securities Act or otherwise, insofar as such Losses (or proceedings in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such registration statement
on the effective date thereof (including any prospectus filed under Rule 424
under the Securities Act or any amendments or supplements 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 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 made in such registration statement or prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with written information
furnished by or on behalf of such Holder expressly for use in connection with
such registration statement or prospectus, or by such Holder's failure to
furnish the Company, upon request, with the information with respect to such
Holder, such Holder's directors and officers, or any agent, underwriter or
representative of such Holder, or such Holder's intended method of distribution,
that is the subject of the untrue statement or omission; and such Holder shall
reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer, controlling person, agent or underwriter (but not in
excess of expenses incurred in respect of one counsel for all of them unless
there is an actual conflict of interest between any indemnified parties, which
indemnified parties may be represented by separate counsel) in connection with
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investigating or defending any such Loss or action; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 2.01(b) shall not apply to amounts
paid in settlement of any such Loss or action if such settlement is effected
without the consent of the Holder which consent shall not be unreasonably
withheld.
(c) NOTICE OF CLAIMS. Promptly after receipt by an indemnified party under
subsection (a) or (b) above of written notice of the commencement of any action
or proceeding for which indemnification under subsection (a) or (b) may be
requested, such indemnified party shall, without regard to whether a claim in
respect thereof is to be made against an indemnifying party pursuant to the
indemnification provisions of, or as contemplated by, this Section 2.01, notify
such indemnifying party in writing of the commencement of such action or
proceeding; but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party in
respect of such action or proceeding on account of the indemnification
provisions of or contemplated by Section 2.01(a) or Section 2.01(b) hereof
unless the indemnifying party was materially prejudiced by such failure of the
indemnified party to give such notice, and in no event shall such omission
relieve the indemnifying party from any other liability it may have to such
indemnified party. In case any such action or proceeding shall be brought
against any indemnified party and it shall notify an indemnifying party of the
commencement thereof, such indemnifying party shall be entitled to participate
therein and, to the extent that it shall determine, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal or any other expenses subsequently incurred by
such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation (unless such indemnified party reasonably
objects to such assumption on the grounds that there may be defenses available
to it which are different from or in addition to the defenses available to such
indemnifying party, in which event the indemnified party shall have the right to
control its defense and shall be reimbursed by the indemnifying party for the
expenses incurred in connection with retaining separate counsel). If the
indemnifying party is not entitled to, or elects not to, assume the defense of a
claim, it will not be obligated to pay the fees and expenses of more than one
counsel (in addition to local counsel) for each indemnified party with respect
to such claim. The indemnifying party will not be subject to any liability for
any settlement made without its consent, which consent shall not be unreasonably
withheld or delayed. No indemnifying party will consent to entry of any judgment
or enter into any settlement agreement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation.
(d) CONTRIBUTION. Each Holder participating in a registration pursuant to
this Agreement and the Company agree that if, for any reason, the
indemnification provisions contemplated by Section 2.01(a) or Section 2.01(b)
hereof are unavailable to or are insufficient to hold harmless an indemnified
party in respect of any Losses (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses (or actions
or proceedings in respect thereof) in such proportion as is appropriate to
reflect the relative fault of, and benefits derived by, the indemnifying party
and the indemnified party, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by such
indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
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and equitable if contribution pursuant to this Section 2.01(d) were determined
(i) by pro rata allocation (even if the Holder or any agents for, or
underwriters of, the Registrable Securities, or all of them, were treated as one
entity for such purpose); or (ii) by any other method of allocation which does
not take account of the equitable considerations referred to in this Section
2.01(d). The amount paid or payable by an indemnified party as a result of the
Losses (or actions or proceedings in respect thereof) referred to above shall be
deemed to include (subject to the limitations set forth in Section 2.01(c)
hereof) any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action,
proceeding or claim. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) BENEFICIARIES OF INDEMNIFICATION. The obligations of the Company under
this Section 2.01 shall be in addition to any liability that it may otherwise
have and shall extend, upon the same terms and conditions, to each officer,
director, partner and member of each Holder requesting or joining in a
registration pursuant to this Agreement and each agent and underwriter of the
Registrable Securities and each person, if any, who controls such Holder or any
such agent or underwriter within the meaning of the Securities Act; and the
obligations of such Holder and any agents or underwriters contemplated by this
Section 2.01 shall be in addition to any liability that such Holder or its
respective agent or underwriter may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company
(including any person who, with his consent, is named in any Registration
Statement as about to become a director of the Company) and to each person, if
any, who controls the Company within the meaning of the Securities Act.
ARTICLE III
GENERAL PROVISIONS
Section 3.01. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) IF TO THE COMPANY:
Wavetech International Inc.
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, President
Facsimile No. (000) 000-0000
WITH A COPY THAT DOES NOT CONSTITUTE NOTICE TO:
Squire, Xxxxxxx & Xxxxxxx L.L.P.
00 Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Facsimile No. (000) 000-0000
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(b) IF TO THE INVESTOR:
Cedar Avenue LLC
Corporate Center
Windward One, West Bay Road
PO Box 31106 SMB
Grand Cayman, Cayman Islands
Attention: Xxxxx Xxxx
Facsimile No. (000) 000-0000
WITH A COPY THAT DOES NOT CONSTITUTE NOTICE TO:
Xxxx X. Xxxx
Attorney at Law
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Facsimile No. (000) 000-0000
(c) IF TO THE PLACEMENT AGENT:
Thomson Kernaghan & Col Limited
000 Xxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0, Xxxxxx
Attention: Xx. Xxxxxxxx XxXxxxxx
Facsimile No. (000) 000-0000
WITH A COPY THAT DOES NOT CONSTITUTE NOTICE TO:
Xxxx X. Xxxx
Attorney at Law
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Facsimile No. (000) 000-0000
Section 3.02, AMENDMENT. This Agreement may not be amended or modified
except (a) by an instrument in writing signed by, or on behalf of, the parties
hereto or (b) by a waiver in accordance with Section 3.05 of this Agreement.
Section 3.03. WAIVER. Any party to this Agreement may as to it (a) extend
the time for the performance of any obligations or other acts of any other party
hereto or (b) waive compliance with any agreements or conditions contained
herein. Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party to be bound thereby. Any waiver of any
term or condition shall not be construed as a waiver of any subsequent breach or
a subsequent waiver of the same term or condition, or as a waiver of any other
term or condition, of this Agreement. The failure of any party to assert any of
its rights hereunder shall not constitute a waiver of any of such rights.
Section 3.04. SURVIVAL. The several indemnities, agreements,
representations, warranties and each other provision set forth in this Agreement
and made pursuant hereto shall remain in full force and effect regardless of any
investigation (or statement as to the results thereof) made by or on behalf of
any party, any director or officer of such party, or any controlling person of
any of the foregoing, and shall survive the transfer of any Registrable
Securities by the Stockholder, and the indemnification and contribution
provisions set forth in Section 2.01 hereof shall survive termination of this
Agreement. Section 3.05. COUNTERPARTS. This Agreement may be executed in one or
more 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.
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Section 3.06. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, the schedules
and Exhibits hereto, together with the other Transaction Documents: (a)
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;
and (b) shall not be assigned by operation of law or otherwise except as
otherwise specifically provided.
Section 3.07. SEVERABILITY. In the event that any provision of this
Agreement or 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 so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. The parties further agree to negotiate
in good faith 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.
Section 3.08. CHOICE OF LAW; VENUE; JURISDICTION. This Agreement and the
other Transaction Documents shall be construed and enforced in accordance with
the laws of the State of Arizona, except for (i) matters arising under the
federal securities laws, which shall be construed and enforced in accordance
with those laws, (ii) matters relating to the Company's organization, which
shall be governed by the laws of the jurisdictions of its incorporation, and
(iii) if any provision of this Agreement or any other Transaction Document is
unenforceable under Arizona law but is enforceable under the laws of the State
of New York, then New York law shall govern the construction and enforcement of
that provision. Any controversy or claim arising out of or relating to this
Agreement or any other Transaction Document (whether in contract or tort, or
both, or at law or in equity) shall be determined by binding arbitration in the
Borough of Manhattan, City of New York, in accordance with the Commercial
Arbitration Rules (the "Rules") of the American Bar Association, before a panel
of three arbitrators, one appointed by each of the Investor and the Company, and
the third chosen by the two so appointed. If the two arbitrators chosen by the
parties cannot agree on a third, then the third shall be selected in accordance
with the Rules. The prevailing party in any arbitration proceeding shall be
awarded reasonable attorneys fees and costs of the proceeding. The arbitration
award shall be final, and may be entered in any court having jurisdiction.
Nothing in this paragraph shall preclude either party from applying to a court
for temporary equitable relief, when appropriate, pending and subject to such
temporary orders and permanent award as the arbitrator or arbitrators may make.
The parties hereby consent to the exclusive jurisdiction of the United States
District Court for the Southern District of New York for that purpose.
Section 3.08. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized or in their individual capacities, as applicable.
WAVETECH INTERNATIONAL, INC.
By /s/ Xxxxxx X. Xxxxx
---------------------------------
Xxxxxx X. Xxxxx, President
Date Signed May 1, 2000
------------------------
CEDAR AVENUE LLC
By Navigator Management Ltd., Director
By /s/ Xxxxx Xxxx
---------------------------------
Xxxxx Xxxx, Director
Date Signed April 28, 2000
------------------------
THOMSON KERNAGHAN & CO. LIMITED
By /s/ Xxxxxxxx XxXxxxxx
---------------------------------
Xxxxxxxx XxXxxxxx
Date Signed May 11, 2000
------------------------
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