Exhibit 10.26
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of
April 3, 2001 ("Effective Date") between STRATEGIC SOLUTIONS GROUP, INC., a
Delaware corporation (the "Company"), and XXXXXX XXXXX (the "Investor").
RECITALS
A. The Investor has executed a Subscription Agreement of even date hereof
("Subscription Agreement") for the purchase of "Units", with each Unit
consisting of 50,000 shares of the Company's common stock, par value $.0001 (the
"Common Stock") and a Convertible Subordinated Debenture for the principal
amount of Twenty Five Thousand Dollars ($25,000) (the "Debenture").
B. The Company has agreed to enter this Agreement with each investor
(collectively, "Investors") that subscribes to purchase Units pursuant to a
Subscription Agreement in substantially the form executed by the Investor.
NOW, THEREFORE, in consideration of these premises, the terms and
conditions set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the Company and the Investor
agree as follows:
1. Registration.
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(a) Agreement to Register. The Company covenants and agrees to
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cause the Investor's Common Stock and the Registrable Securities (as defined
below) to be registered with the Securities and Exchange Commission
("Commission") under the Securities Act of 1933 (the "Securities Act"), within
365 days from the Effective Date ("Registration Deadline"). The securities
entitled to the benefits of this Agreement ("Registrable Securities") are (i)
the shares of Common Stock subscribed and purchased by the Investor pursuant to
the Subscription Agreement, and (ii) any securities issued or issuable upon the
Investor's conversion of the Debentures (and after giving effect to any stock
split, recapitalization, reclassification, merger, consolidation or exchange
offer). For purposes of this Agreement, a Registrable Security ceases to be a
Registrable Security when it has been sold or distributed to any person pursuant
to Rule 144 of the Securities Act.
(b) Procedure and Duration. The Company will prepare and file with
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the Commission the necessary registration statement, amendments, supplements and
other filings (collectively, "Registration Statement") for an offering to be
made covering the resale by the Investors thereof of all the Registrable
Securities. The registration will be on Form S-3 or another appropriate form
permitting registration of such Registrable Securities for resale by the
Investors. The Company will cause the Registration Statement to remain
continuously effective under the Securities Act for a period of thirty (30) days
(the "Effectiveness Period").
2. Failure to Register. In the event that the Registration Statement is
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not declared
effective by the Commission on or before the Registration Deadline, then the
Company shall pay to the Investor an amount equal to three percent (3%) of the
Investor's original purchase price of the Registrable Securities per month, for
each month that the Registration Statement has not been declared effective.
Payment of amounts due and owing under this Section 2 shall be payable by the
Company within thirty (30) days of its receipt of a written demand from the
Investor.
3. Company Covenants.
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(a) If the Registration Statement ceases to be effective for any reason
at any time during the Effectiveness Period (other than because of the sale of
all of the securities registered thereunder), the Company will obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and will within
thirty (30) days of such cessation of effectiveness amend the Registration
Statement in a manner reasonably expected to obtain the withdrawal of the order
suspending the effectiveness thereof, or file an additional Registration
Statement covering all of the Registrable Securities (that have not otherwise
been sold or transferred).
(b) The Company will supplement and amend the Registration Statement if
required by the rules, regulations or instructions applicable to the
registration form used by the Company, if required by the Securities Act, or if
reasonably requested by the Investors holding a majority in aggregate principal
amount of the Registrable Securities ("Majority Registrable Investors").
(c) The Company will notify the Investors (providing, if requested by
any such persons, confirmation in writing) as soon as practicable after becoming
aware of: (A) the filing of the Registration Statement or any post-effective
amendment thereto; (B) any request by the Commission for amendments or
supplements to such Registration Statement or for additional information; (C)
the receipt by the Company of any notification with respect to the suspension of
the qualification or registration (or exemption therefrom) of any Registrable
Securities for sale in any jurisdiction in the United States or the initiation
or threatening of any proceeding for such purposes; or (E) the happening of any
event that makes any statement made in such Registration Statement or any
supplement, amendment or document incorporated therein by reference untrue in
any material respect or that requires the making of any changes in such
Registration Statement or in any such supplement, amendment or other such
document so that 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 not misleading.
(d) As soon as practicable after filing such documents with the
Commission, the Company will furnish to the Investor, without charge, at least
one manually signed or conformed copy of the Registration Statement and any
post-effective amendment thereto, including financial statements and schedules;
and as soon as practicable after the request of any Investor furnish to such
Investor at least one copy of any document incorporated by reference in such
Registration Statement or in any supplement or amendment, together with all
exhibits thereto (including those previously furnished or incorporated by
reference).
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(e) The Company will cooperate with the Investors and their respective
counsel in connection with the registration or qualification (or exemption
therefrom) of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions in the United States as the
Investor will reasonably request in writing; and do any and all other acts and
things reasonably necessary or advisable to facilitate the disposition in such
jurisdictions of the Registrable Securities covered by such Registration
Statement; provided that the Company will not be required to qualify generally
to do business in any jurisdiction where it would not be required to qualify but
for this Agreement.
(f) The Company shall make available for inspection during reasonable
business hours by the Investor, and any attorney, accountant or other
representative retained by such selling Investor (provided that no more than two
law firms and one accounting firm will be retained by the Investor) all
pertinent financial and other records, 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
underwriter, attorney, accountant or other representative in connection with
such registration; provided, however, that if any information is determined in
good faith by the Company to be of a confidential nature at the time of delivery
of such information, then prior to delivery of such information, the Company and
the Investor will enter into a confidentiality agreement reasonably acceptable
to the Company and the Investor.
4. Investor Covenants. The Investor hereby covenants and agrees to use
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its best efforts to cooperate with the Company in all reasonable respects in
connection with the preparation and filing of the Registration Statement in
which such Registrable Securities are included or requested to be included.
5. Registration Expenses. All expenses incident to the Company's
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performance of or compliance with this Agreement, including without limitation
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications or registrations (or the
obtaining of exemptions therefrom) of the Registrable Securities), printing
expenses, messenger and delivery expenses, internal expenses, fees and
disbursements of its counsel and its independent certified public accountants,
securities acts liability insurance (if the Company elects to obtain such
insurance), reasonable fees and expenses of any special experts retained by the
Company in connection with any registration hereunder and reasonable fees and
expenses of other persons retained by the Company (all such expenses being
herein referred to as "Registration Expenses"), will be borne by the Company;
provided that Registration Expenses will not include any commissions or fees
attributable to the sale of the Registrable Securities or fees and expenses of
counsel for any Investor or out-of-pocket expenses of any Investor which will be
paid by the Investor as incurred.
6. Indemnification; Contribution.
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(a) Indemnification by the Company. The Company will indemnify, to
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the full extent permitted by law, each Investor holding Registrable Securities
and any investment
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adviser thereof or agent therefor, against all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and legal
expenses) arising out of or based upon any untrue or alleged untrue statement of
a material fact contained in any Registration Statement covering any Registrable
Securities, or any amendment or supplement thereto, or any omission or alleged
omission to state in any thereof a material fact required to be stated therein
or necessary to make the statements therein not misleading, except in each case
insofar, but only insofar, as the liability arises out of or is based upon an
untrue statement or alleged untrue statement of a material fact or an omission
or alleged omission to state a material fact in such Registration Statement,
amendment or supplement, as the case may be, made or omitted, as the case may
be, in reliance upon and in conformity with written information furnished to the
Company by such Investor expressly for use therein. This indemnity is in
addition to any liability that the Company may otherwise have.
(b) Indemnification by Investor of Registrable Securities. Each
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Investor whose Registrable Securities are covered by an applicable Registration
Statement must furnish to the Company in writing such information and affidavits
with respect to such Investor as the Company reasonably requests for use in
connection with such Registration Statement, or any amendment or supplement
thereto, and will indemnify, to the full extent permitted by law, the Company,
the Company's directors, officers, employees and agents, each person or entity
who controls the Company (within the meaning of the Securities Act) and any
investment adviser thereof or agent therefor, against all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation
and legal expenses) arising out of or based upon any untrue or alleged untrue
statement of a material fact contained in any Registration Statement covering
any Registrable Securities, or any amendment or supplement thereto, or any
omission or alleged omission to state in any thereof 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 the same arises out of or
is based upon an untrue statement or alleged untrue statement of a material fact
or an omission or alleged omission to state a material fact in such Registration
Statement, amendment or supplement, as the case may be, made or omitted, as the
case may be, in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use therein; provided,
however, that in no event will the liability of any Investor for indemnification
under this Section 6(b) exceed the proceeds received by such Investor from the
sale of Registrable Securities under the applicable Registration Statement. This
indemnity is in addition to any liability that an Investor may otherwise have.
(c) Conduct of Indemnification Proceedings. Any party entitled to
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indemnification under this Section 6 agrees to give prompt written notice to the
indemnifying party after the receipt by such party of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which such party will claim indemnification or contribution
pursuant to this Agreement and, unless in the reasonable judgment of such
indemnified party a conflict of interest may exist between such indemnified
party and the indemnifying party with respect to such claim, permit the
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to such indemnified party. If the indemnifying party is not
entitled to, or elects not to, assume the defense of a
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claim, it will not be obligated to pay the reasonable fees and expenses of more
than one counsel with respect to such claim, unless in the reasonable judgment
of counsel to such indemnified party, expressed in a writing delivered to the
indemnifying party, a conflict of interest may exist between such indemnified
party and any other indemnified party with respect to such claim, in which event
the indemnifying party will be obligated to pay the reasonable fees and expenses
of such additional counsel or counsels (which will be limited to one counsel per
indemnified party). The indemnifying party will not be subject to any liability
for any settlement made without its consent, which consent will not be
unreasonably withheld.
(d) Contribution.
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(i) If the indemnification provided for in this Section 6 from
the indemnifying party is unavailable to an indemnified party for any losses,
claims, damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, will
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations; provided, however, that in no event will the liability
of any of the Investors for contribution under this Section 6(d) exceed the
proceeds received by such Investor from the sale of Registrable Securities under
the applicable Registration Statement. The relative fault of such indemnifying
party and indemnified parties will be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to above will be deemed to
include, subject to the limitations set forth in Section 6(c) hereof, any legal
or other fees or expenses reasonably incurred by such indemnified party in
connection with any investigation or proceeding.
(iii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No party guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from
any party who was not guilty of such fraudulent misrepresentation.
(iii) If indemnification is available under this Section 6, the
indemnifying parties will indemnify each indemnified party to the full extent
provided in Section 6(a) and Section 6(b) hereof without regard to the relative
fault of said indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 6(d).
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7. Miscellaneous.
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(a) No Inconsistent Agreements. The Company will not hereafter
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enter into any agreement with respect to any of its securities that contains
provisions more favorable to the holders thereof than the provisions contained
in this Agreement without providing for the granting of comparable rights to the
Investor in this Agreement or that contains provisions that conflict with the
provisions hereof.
(b) Amendments and Waivers. Except as otherwise provided herein,
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the provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company will have obtained the prior written consent of (i) the
Majority Registrable Investors and (ii) each Investor materially and adversely
affected by such amendment, modification, supplement, waiver or departure.
(c) Notices. All notices and other communications required or
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permitted under to this Agreement must be in writing and will be deemed given if
sent by personal delivery, faxed with electronic confirmation of delivery, or if
sent by a nationally-recognized overnight courier or registered or certified
mail (return receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as will be specified
by like notice):
(i) if to an Investor of Registrable Securities, at
the address indicated on the Company's registrar maintained by the Company's
transfer agent, relating to such securities or at such other address as such
Investor may have furnished to the Company in writing; and
(ii) if to the Company, at:
Strategic Solutions Group, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxx X
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Powell, Goldstein, Xxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxx, Esquire
Telephone Number: (000) 000-0000
Fax Number: (000) 000-0000
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(d) Headings. The headings contained in this Agreement are for
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convenience purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
(e) Governing Law. This Agreement will be governed by and
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construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.
(f) Counterparts. This Agreement may be executed in one or more
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counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
(g) Fax Execution. This Agreement may be executed by delivery of
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executed signature pages by fax and such fax execution will be effective for all
purposes.
(h) Severability; Successors and Assigns. If one or more of the
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provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in any respect, for any reason, the
validity, legality and enforceability of the remaining provisions contained
herein will not be in any way affected or impaired thereby, and the provision
held to be invalid, illegal or unenforceable will be reformed to the minimum
extent necessary, and in a manner as consistent with the purposes thereof as is
practicable, so as to render it valid, legal and enforceable, it being intended
that all of the rights and privileges of the Investor hereunder will be
enforceable to the fullest extent permitted by law. This Agreement will inure
to, and be binding upon, the successors and assigns of the parties hereto.
(i) Agreement. This Agreement, together with the Subscription
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Agreement, the Debenture, and the Letter of even date herewith are intended by
the Company and the Investor to be a final expression of the parties agreement
and are intended to be a complete and exclusive statement of the agreement and
understanding of the Company and the Investor in respect of the subject matter
contained herein and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the Company and any
Investor with respect to the subject matter hereof.
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IN WITNESS WHEREOF, this Registration Rights Agreement is executed as of
the date first above noted.
STRATEGIC SOLUTIONS GROUP, INC.,
A Delaware Corporation
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
President
INVESTOR:
/s/ Xxxxxx Xxxxx
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XXXXXX XXXXX
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