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Exhibit 10.7
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Registration Rights
Agreement"), dated as of May 19, 2000, by and between Eagletech Communications,
Inc., a corporation organized under the laws of the State of Nevada, with
headquarters located at 305 South Andrews Avenue, Fort Lauderdale, FL 33301 (the
"Company"), and the buyers set forth on the execution page hereof (the
"Buyers").
RECITALS
A. Under the Securities Purchase Agreement by and between the parties
of even date (the "Securities Purchase Agreement"), the Company has agreed to
issue and sell to the Buyer (i) a number of the Company's Series A Convertible
Preferred Stock (the "Preferred Stock"), and (ii) a number of Warrants (as
defined in the Securities Purchase Agreement). The Preferred Stock and dividends
on the Preferred Stock are convertible in accordance with their respective terms
into common stock of the Company, $.001 par value per share (the "Shares" of
"Common Stock"). The Warrants are exercisable in accordance with their terms for
Common Stock. The Shares of Common Stock issuable upon conversion of the
Preferred Stock, issuable as dividends on the Preferred Stock or issuable upon
exercise of the Warrants are referred to in this Registration Rights Agreement
as the "Registerable Securities."
B. To induce the Buyers 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, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"), and
applicable state securities laws.
AGREEMENTS
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 by all parties hereto,
and intending to be legally bound, the Company and the Buyers hereby agree as
follows:
1. DEFINITIONS.
a. As used in this Registration Rights Agreement, the following terms
shall have the following meanings:
(i). "Preferred Stock" means the Company's Series A
Convertible Preferred Stock to be issued under the Securities Purchase
Agreement.
(ii). "Investor" or "Investors" means the Buyers and any
permitted transferee(s) or assignee(s) to whom the Buyers assigns this
Registration Rights Agreement and who agrees to become bound by the
provisions of this Registration Rights Agreement in accordance with
Section 9, below.
(iii). "Register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement
or Statements in compliance with the 1933 Act and pursuant to Rule 415
under the 1933 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 "SEC").
(iv). "Registerable Securities" means the Shares underlying or
issued in
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accordance with or upon conversion of the Preferred Stock or exercise
of the Warrants, and any shares of capital stock issued or issuable
from time to time (with any adjustments) on or in exchange for or
otherwise with respect to either of the foregoing (including without
limitation any shares issued pursuant to Section 2(b), below).
(iv). "Registration Statement" or "Registration Statements"
means a registration statement or statements of the Company filed under
the 1933 Act.
b. Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement.
2. REGISTRATION.
a. Mandatory Registration.
(i). The Company shall use its best efforts to prepare, and,
on or before the date that is forty-five (45) days after the date of
the Closing, file with the SEC a Registration Statement or Registration
Statements (as necessary) on Form SB-2 (or, if such form is unavailable
for such a registration, on such other form as is available for such a
registration of all of the Registerable Securities) (any of which may
contain a combined prospectus with other registrations by the Company),
covering the resale of all of the Registerable Securities, which
Registration Statement(s), to the extent allowable under the 1933 Act
and the rules promulgated thereunder (including without limitation Rule
415), shall state that such Registration Statement(s) also covers such
indeterminate number of additional Shares (the "Indeterminate Shares")
as may become issuable upon conversion of the Preferred Stock or
exercise of the Warrants to prevent dilution resulting from stock
splits, stock dividends or similar transactions.
(ii) To the extent the Indeterminate Shares for any reason can
not be registered under the Registration Statement(s) required under
Section 2(a)(i) above, then with respect to such Indeterminate Shares,
the Company shall use its best efforts to prepare, and, on or before
the date that is fifteen (15) days after the Indeterminate Shares
become issuable, file with the SEC a Registration Statement or
Registration Statements (as necessary) on Form SB-2 (or, if such form
is unavailable for such a registration, on such other form as is
available for such a registration of all of the Indeterminate Shares)
(any of which may contain a combined prospectus with other
registrations by the Company), covering the resale of all of the
Indeterminate Shares.
(iii) The Investors may engage the services of an underwriter
in connection with the sale of the Registerable Securities under the
Registration Statement. If Investors owning a majority of the
Registerable Securities agree to engage an underwriter, all Investors
must either enter into customary agreements with the underwriter or
notify the Company in writing of his or her election to exclude all of
the Investor's Registerable Securities from the underwritten offering.
A copy of the Registration Statement(s) (and each amendment or
supplement thereto, and each request for acceleration of effectiveness thereof)
shall be provided to the Buyers and their counsel before its filing or other
submission.
b. The Company shall use its best efforts to obtain effectiveness of
the Registration Statement as soon as practicable. If (i) the Registration
Statement required to be filed by the Company pursuant to Section 2(a) hereof is
not declared effective by the SEC within one hundred twenty (120) days after the
date of its filing with the SEC (other than by reason of any act or failure to
act in a timely manner by the Investor or its counsel) (the "Registration
Deadline") or if, after the Registration Statement has been declared effective
by the SEC, sales
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cannot be made pursuant to the Registration Statement (by reason of a
suspension, a stop order, the Company's failure to update the Registration
Statement, or any other reason outside the control of the Investor), or (ii) the
Common Stock is not listed or included for quotation on the OTC Bulletin Board,
or a United States national securities exchange or market (in either case, a
"Delay"), then the Company will allow cashless exercise of the Warrants
c. Piggy-Back Registrations. If at any time prior to the expiration of
the Registration Period (as defined below in Section 3(a)) the Company shall
decide to file with the SEC a Registration Statement relating to an offering for
its own account or the account of others under the 1933 Act of any of its equity
securities (other than on Form S-4 or Form S-8 or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans), the Company shall
send the Investor written notice of such determination. If within twenty (20)
days after receipt of such notice, the Investor shall so request in writing, the
Company, to the extent permitted by law, shall include in such Registration
Statement all or any part of the Registerable Securities such Investor requests
to be registered, subject to the following sentence. However, if, in connection
with any underwritten public offering for the account of the Company, the
managing underwriter(s) impose a limitation on the number of shares of Common
Stock which may be included in the Registration Statement because, in such
underwriter(s)' reasonable good faith judgment, marketing or other factors
dictate such limitation is necessary to facilitate public distribution, then
only such limited portion of the Registerable Securities will be included in the
Registration Statement; provided that no portion of the equity securities which
the Company is offering for its own account shall be excluded; provided, further
that the Company shall be entitled to exclude Registerable Securities to the
extent necessary to avoid breaching obligations existing prior to the date
hereof to other shareholders of the Company.
Any exclusion of Registerable Securities shall be made pro rata among
the Investors seeking to include Registerable Securities, in proportion to the
number of Registerable Securities sought to be included by such Investors. No
right of the Investor to registration of Registerable Securities under this
Section 2(c) shall be construed to limit any registration required under Section
2(a) hereof. If an offering in connection with which an Investor is entitled to
registration under this Section 2(c) is an underwritten offering, then each
Investor whose Registerable Securities are included in such Registration
Statement shall, unless otherwise agreed by the Company, offer and sell such
Registerable Securities in an underwritten offering using the same underwriter
or underwriters and, subject to the provisions of this Registration Rights
Agreement, on the same terms and conditions as other shares of Common Stock
included in such underwritten offering.
d. Eligibility for Form SB-2.The Company represents and warrants that
it meets the requirements for the use of Form SB-2 for registration of the sale
by the Buyers of the Registerable Securities. In the event that Form SB-2 is not
available for registration of the Registerable Securities, the Company shall
register the securities on another appropriate form.
e. Existing Registration Rights. Attached to this Agreement as Schedule
2(e) is a listing of all persons (including entities) having registration rights
covering shares of Common Stock or securities convertible into or exercisable
for shares of Common Stock.
3. RELATED OBLIGATIONS. Concerning the registration of the Registerable
Securities, the Company shall have the following obligations:
a. The Company shall use its best efforts to cause such Registration
Statement(s) for Registerable Securities to become effective as soon as possible
after such filing, but in no event later than the Registration Deadline, and
keep the Registration Statement(s) effective pursuant to Rule 415 at all times
until the earliest of: (i) the date on which all of the Registerable Securities
have been sold (and no further Registerable Securities may be issued in the
future); (ii) the date
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as of which the Investors may immediately sell all of the Registerable
Securities without restriction; or (iii) the date on which none of the Preferred
Stocks is outstanding (the "Registration Period"), which Registration
Statement(s) (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any 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, in light of the circumstances in which they were
made, not misleading.
b. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement as may be necessary to keep the Registration Statement effective at
all times during the Registration Period, and, during such period, comply with
the provisions of the 1933 Act with respect to the disposition of all
Registerable Securities of the Company covered by the Registration Statement. In
the event the number of shares available under a Registration Statement filed
pursuant to this Registration Rights Agreement is insufficient to cover all of
the Registerable Securities issued or issuable upon conversion of the Preferred
Stocks, the Company shall amend the Registration Statement, or file a new
Registration Statement (on the short form available therefor, if applicable), or
both, so as to cover all of the Registerable Securities, in each case, as soon
as practicable, but in any event within fifteen (15) days after the need
therefor arises (based on the market price of the Common Stock and other
relevant factors on which the Company reasonably elects to rely). The Company
shall use its best efforts to cause such amendment and/or new Registration
Statement to become effective as soon as practicable following such filing.
c. The Company shall furnish to each Investor whose Registerable
Securities are included in the Registration Statement(s): (i) one copy of the
Registration Statement and any amendment thereto, each preliminary prospectus
and prospectus and each amendment or supplement thereto in each case relating to
such Registration Statement (other than any portion thereof which contains
information for which the Company has sought confidential treatment) and, in the
case of the Registration Statement referred to in Section 2(a), each letter
written by or on behalf of the Company to the SEC or the staff of the SEC, and
each item of correspondence from the SEC or the staff of the SEC, in each case
relating to such Registration Statement; and (ii) such number of copies of a
prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as such Investor may reasonably
request in order to facilitate the disposition of the Registerable Securities
owned (or to be owned) by such Investor.
d. If required, the Company shall use reasonable efforts to: (i)
register and qualify the Registerable Securities covered by the Registration
Statement(s) under such other securities or "blue sky" laws of such
jurisdictions in the United States as each Investor who holds (or has the right
to hold) Registerable Securities being offered reasonably requests, (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 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
Registerable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required to (A) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (B) subject itself to general taxation in any such jurisdiction,
(C) file a general consent to service of process in any such jurisdiction, (D)
provide any undertakings that cause more than nominal expense or burden to the
Company, or (E) make any change in its charter or bylaws, which in each case the
Board of Directors of the Company determines to be contrary to the best
interests of the Company and its shareholders.
e. As promptly as practicable after becoming aware of such event, the
Company shall notify each Investor of the happening of any event, of which the
Company has knowledge, as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be
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stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and use its best
efforts promptly to prepare a supplement or amendment to the Registration
Statement to correct such untrue statement or omission, and deliver such number
of copies of such supplement or amendment to each Investor as such Investor may
reasonably request.
f. The Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
and, if such an order is issued, to obtain the withdrawal of such order at the
earliest possible moment and to notify each Investor who holds Registerable
Securities being sold (or, in the event of an underwritten offering, the
managing underwriters) of the issuance of such order and the resolution thereof.
g. As of the date of this Registration Rights Agreement, the Company is
subject to the reporting requirements ("Reporting Requirements") of Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act").
For so long as the Buyers beneficially own any of the Securities, the Company
shall file all reports required to be filed with the SEC pursuant to the 1934
Act, and the Company shall not terminate its status as a reporting issuer even
if the 1934 Act would permit such termination.
h. At the request of the Investor, but no more than three (3) times in
any one ninety (90) day period, the Company shall furnish, on the date of
effectiveness of the Registration Statement and thereafter from time to time on
such dates as the Investor may reasonably request an opinion, dated as of such
requested date, of counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in
an underwritten public offering, addressed to the Company's transfer agent
and/or to the Investors. Such opinion shall be substantially as set forth in
Exhibit I attached hereto.
i. The Company shall make available for inspection by any Investor or
such Investor's professional advisors such financial information about the
Company as may be reasonably necessary for purposes of due diligence, including
monthly balance sheets. To the extent such information is not public, the
Company may require such Investor and its advisors to execute confidentiality
agreements (in form and substance reasonably satisfactory to the Company) with
the Company with respect to such information.
j. The Company shall hold in confidence and not make any disclosure of
information concerning an Investor including, but not limited to, the name of an
Investor, unless (i) disclosure of such information is necessary to comply with
federal or state securities laws, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered pursuant to a
subpoena or other final, non-appealable order from a court or governmental body
of competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this or any
other agreement. The Company agrees that it shall, upon learning that disclosure
of such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to such Investor and allow such Investor, at the Investor's expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.
k. The Company shall cooperate with the Investors who hold Registerable
Securities being offered to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the Registerable
Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, the
Investors may reasonably request and registered in such names as the
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Investors may request. Provided that the Investor has given the Company all
required information regarding proposed transferees, not later than the date on
which any Registration Statement registering the resale of Registerable
Securities is declared effective, the Company shall deliver (at its expense) to
its transfer agent instructions, accompanied by any required opinion of counsel,
that permit sales of unlegended securities in a timely fashion that complies
with then mandated securities settlement procedures for regular market
transactions.
l. Listing. At the time the SEC declares the Company's registration
statement on Form SB-2 effective, the Company shall promptly secure the listing
upon notice of issuance of the Registerable Securities underlying the Preferred
Stock and the Warrants then purchased by the Buyers upon each national
securities exchange or automated quotation system, if any, upon which Shares of
Common Stock are then listed and shall maintain, so long as any other Shares of
Common Stock shall be so listed, such listing until all Registerable Securities
have been issued. The Company shall at all times comply in all respects with the
Company's reporting, filing and other obligations under the by-laws or rules of
any national securities exchange or market on which the Common Stock may then be
listed, as applicable.
m. The Company shall comply with all applicable laws relating to a
Registration Statement and offering and sale of securities and all applicable
rules and regulations of governmental authorities in connection therewith
(including without limitation the 1933 Act and the 1934 Act, as amended, and all
the rules and regulations promulgated by the SEC).
n. The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investors of Registerable Securities
through a Registration Statement.
4. OTHER OBLIGATIONS. In connection with the registration of the
Registerable Securities, the Investors shall have the following obligations:
a. At least fifteen (15) days prior to the first anticipated filing
date of the Registration Statement, the Company shall notify each Investor of
the information the Company requires from each such Investor if such Investor
elects to have any of such Investor's Registerable Securities included in the
Registration Statement. It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Registration Rights
Agreement with respect to the Registerable Securities of a particular Investor
that such Investor shall furnish to the Company such information regarding
itself, the Registerable Securities held by it and the intended method of
disposition of the Registerable Securities held by it as shall be reasonably
required to effect the registration of such Registerable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.
b. Each Investor by such Investor's acceptance of the Registerable
Securities agrees to cooperate with the Company and its counsel as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement(s) hereunder, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such Investor's
Registerable Securities from the Registration Statement.
c. In the event Investors holding a majority of the Registerable
Securities being registered determine to engage the services of an underwriter,
each Investor agrees to enter into and perform such Investor's obligations under
an underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of the
Registerable Securities, unless such Investor notifies the Company in writing of
such Investor's election to exclude all of such Investor's Registerable
Securities from the Registration Statement(s).
d. Each Investor agrees that, upon receipt of any notice from the
Company of the
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happening of any event of the kind described in Section 3(e) or 3(f), such
Investor will immediately discontinue disposition of Registerable Securities
pursuant to the Registration Statement(s) covering such Registerable Securities
until such Investor's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(e) or 3(f) and, if so directed by the
Company, such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor's possession, of the prospectus covering such
Registerable Securities current at the time of receipt of such notice.
e. No Investor may participate in any underwritten registration
hereunder unless such Investor (i) agrees to sell such Investor's Registerable
Securities on the basis provided in any underwriting arrangements approved by
the Investors entitled hereunder to approve such arrangements, (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements, and (iii) agrees to pay its pro rata share of all
underwriting discounts and commissions and any expenses incurred by the Company
pursuant to Section 5 below.
5. EXPENSES OF REGISTRATION. The Company agrees to pay all reasonable
expenses, other than underwriting discounts and commissions, incurred in
connection with registrations, filings or qualifications pursuant to Sections 2
and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements of
counsel for the Company. If Investors who hold a majority of Registerable
Securities undertake to resell the Registerable Securities in an underwritten
public offering, the Company will reasonably cooperate as is customarily
required in an underwritten public offering. The Investors who participate in
such a public offering shall pay all expenses incurred in connection with such
registration, whether incurred by them or the Company, including without
limitation, underwriting discounts and commissions, all registration, listing
and qualification fees, printing charges, and fees and disbursements of
accountants and counsel for the Company.
6. INDEMNIFICATION. In the event any Registerable Securities are
included in a Registration Statement under this Registration Rights Agreement:
a. To the extent permitted by law, the Company will indemnify, hold
harmless and defend each Investor who holds such Registerable Securities, the
directors, officers and each person who controls any Investor within the meaning
of the 1933 Act or the 1934 Act, if any, and any underwriter (as defined in the
1933 Act) for the Investors, and the directors and the officers of, and each
person, if any, who controls, any such underwriter within the meaning of the
1933 Act or the 1934 Act (each, an "Indemnified Person"), against any losses,
claims, damages, liabilities or expenses (joint or several) (collectively,
together with actions, proceedings or inquiries by any regulatory or self
regulatory organization, whether commenced or threatened, in respect thereof,
"Claims") to which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of a material
fact in a Registration Statement or Blue Sky filing or the omission or alleged
omission to state a material fact therein required to be stated or necessary to
make the statements therein not misleading; (ii) any untrue statement or alleged
untrue 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 SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading; or (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registerable Securities pursuant to a
Registration Statement (the matters in the foregoing clauses (i) through (iii)
being, collectively, "Violations"). Subject to the restrictions set forth in
Section 6(d) with respect to the number of legal counsel, the Company shall
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reimburse the Investors and each such underwriter or controlling person,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other expenses reasonably incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (i) shall not apply to a 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 any Indemnified Person or underwriter for
such Indemnified Person expressly for use in connection with the preparation of
the Registration Statement or any such amendment thereof or supplement thereto,
if such prospectus was timely made available by the Company pursuant to Section
3(c) hereof; (ii) with respect to any preliminary prospectus, shall not inure to
the benefit of any such person from whom the person asserting any such Claim
purchased the Registerable Securities that are the subject thereof (or to the
benefit of any person controlling such person) if the untrue statement or
omission of the material fact contained in the preliminary prospectus was
corrected in the prospectus, as then amended or supplemented, if such prospectus
was timely made available by the Company pursuant to Section 3(c) hereof; (iii)
shall not be available to the extent such Claim is based on a failure of the
Investor to deliver or to cause to be delivered the prospectus made available by
the Company or the failure of the Investor to comply with federal or state law
relating to the offering or sale of the Registerable Securities; and (iv) shall
not 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 Registerable Securities by the
Investors pursuant to Section 9.
b. In connection with any Registration Statement in which an Investor
is participating, each such Investor agrees to indemnify, hold harmless and
defend, to the same extent and in the same manner as is set forth in Section
6(a), the Company, each of its directors, each of its officers who signs the
Registration Statement, each person, if any, who controls the Company within the
meaning of the 1933 Act or the 1934 Act, any underwriter and any other
shareholder selling securities pursuant to the Registration Statement or any of
its directors or officers or any person who controls such shareholder or
underwriter within the meaning of the 1933 Act or the 1934 Act (collectively and
together with an Indemnified Person, an "Indemnified Party"), against any Claim
to which any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim arises out of or is based upon any Violation,
in each case to the extent (and only to the extent) that such violation occurs
in reliance upon and in conformity with written information furnished to the
Company by such Investor expressly for use in connection with such Registration
Statement or to the extent such Claim is based upon any violation or alleged
violation by the Investor of the 1933 Act, 1934 Act or any other law; and such
Investor will reimburse any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6(b) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of such Investor, which consent shall not be
unreasonably withheld; provided, further, however, that the Investor shall be
liable under this Section 6(b) for only that amount of a Claim as does not
exceed the net proceeds to such Investor as a result of the sale of Registerable
Securities pursuant to such Registration Statement. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
such Indemnified Party and shall survive the transfer of the Registerable
Securities by the Investors under Section 9. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(b) with respect to any preliminary prospectus shall not inure to the
benefit of any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected on a timely basis in
the prospectus, as then amended or supplemented.
c. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in any distribution, to the same extent as provided
above, with respect to information such persons so furnished in writing by such
persons expressly for inclusion in the Registration Statement.
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d. Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action (including any
governmental action), such Indemnified Person or Indemnified Party 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 the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the 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 or
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. The Company shall pay reasonable fees for only one separate legal
counsel for the Investors, and such legal counsel shall be selected by the
Investors holding a majority in interest of the Registerable Securities included
in the Registration Statement to which the Claim relates; provided, that the
Company shall have the right to approve the selection of counsel and legal fees
and expenses of such firm shall be reasonable. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to
the Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is 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.
7. CONTRIBUTION. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; provided,
however, that (i) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6, (ii) no seller of Registerable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any seller of Registerable
Securities who was not guilty of fraudulent misrepresentation, and (iii)
contribution by any seller of Registerable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registerable Securities.
8. REPORTS UNDER THE 1934 ACT. With a view to making available to the
Investors the benefits of Rule 144 promulgated under the 1933 Act or any other
similar rule or regulation of the SEC that may at any time permit the Investors
to sell securities of the Company to the public without registration ("Rule
144"), the Company agrees to:
a. make and keep public information available, as those terms are
defined in Rule 144;
b. file with the SEC in a timely manner all reports and other documents
required of the Company under the 1933 Act and the 1934 Act so long as the
Company remains subject to such requirements (it being understood that nothing
herein shall limit the Company's obligations under Section 4(c) of the
Securities Purchase Agreement) and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and
c. furnish to each Investor so long as such Investor owns Registerable
Securities,
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promptly upon request, (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the 1933 Act and the 1934
Act, (ii) a copy of the most recent annual or quarterly 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 the Investor to sell
such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to have the Company
register Registerable Securities pursuant to this Registration Rights Agreement
shall be automatically assignable by the Investors to any transferee of all or
any portion of Registerable Securities if: (i) the Investor 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, (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned, (iii) immediately
following such transfer or assignment the further disposition of such securities
by the transferee or assignee is restricted under the 1933 Act and applicable
state securities laws, (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
contained herein, (v) such transfer shall have been made in accordance with the
applicable requirements of the Securities Purchase Agreement, (vi) such
transferee shall submit evidence reasonably satisfactory to the Company that the
Transferee is an "accredited investor" as that term is defined in Rule 501 of
Regulation D promulgated under the 1933 Act; and (vii) in the event the
assignment occurs subsequent to the date of effectiveness of the Registration
Statement required to be filed pursuant to Section 2(a), the transferee agrees
to pay all reasonable expenses of amending or supplementing such Registration
Statement to reflect such assignment. Notwithstanding anything herein to the
contrary, no assignment of the rights represented by this Registration Rights
Agreement shall be effective unless in compliance with any applicable securities
laws of any applicable jurisdiction.
10. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Registration
Rights 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 Investors who hold a majority
of the Registerable Securities and including the affirmative vote of Trinity
Technology Management Incorporated. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each Investor and the
Company.
11. LOCK-UP PROVISIONS. From the date of this Agreement until 90 days
after the Company's SB-2 Registration Statement required by Sections 2 and 3 of
this Agreement becomes effective, none of the Company's five percent (5%) or
greater shareholders ("5% Shareholders") may sell more than ten percent (10%) of
their holdings. Each of the 5% Shareholders will be required to enter into a
lock-up agreement substantially in the form attached as Exhibit 11.
11. MISCELLANEOUS.
a. A person or entity is deemed to be a holder of Registerable
Securities whenever such person or entity owns of record such Registerable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registerable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registerable
Securities.
b. Any notices required or permitted to be given under the terms of
this Registration Rights Agreement shall be sent by registered or certified
mail, return receipt requested, or delivered personally or by courier and shall
be effective five days after being placed in the mail, if mailed, or upon
receipt, if delivered personally or by courier or facsimile, in each case
properly addressed to the party to receive such notice. The addresses for such
communications
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shall be:
To the Company: Mr. Robert J. Dobbs, Jr., President
Eagletech Communications, Inc.
305 South Andrews Avenue
Fort Lauderdale, FL 33301
TEL.: 954-462-1494
If to the Buyers, at the addresses on the signature page of the
Securities Purchase Agreement. Each party shall provide written notice to the
other party of any change in address.
c. Failure of any party to exercise any right or remedy under this
Registration Rights Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof.
d. This Registration Rights Agreement shall be governed by and
interpreted in accordance with the laws of the state of Florida without regard
to the principles of conflict of laws. If any provision of this Registration
Rights Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability
of the remainder of this Registration Rights Agreement in that jurisdiction or
the validity or enforceability of any provision of this Registration Rights
Agreement in any other jurisdiction. The Company irrevocably consents to the
jurisdiction of the state and federal courts of the state of Florida in any suit
or proceeding arising out of or based on this Registration Rights Agreement and
irrevocably agrees that all claims in respect of such suit or proceeding may be
determined in such courts. The Company irrevocably waives the defense of
inconvenient forum to the maintenance of such suit or proceeding. Service of
process in any civil action relating to or arising out of this Registration
Rights Agreement (including also all Exhibits or Addenda hereto) or the
transaction(s) contemplated herein may be accomplished in any manner provided by
law.
e. This Registration Rights Agreement, the Preferred Stock, the
Warrants and the Securities Purchase Agreement (including all exhibits and
addenda thereto) constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Registration Rights Agreement and the other agreements
previously identified supersede all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and thereof.
f. Subject to the requirements of Section 9 hereof, this Registration
Rights Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.
g. The headings in this Registration Rights Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
h. This Registration Rights Agreement may be executed in two or more
identical counterparts, each of which shall be deemed an original but all of
which shall constitute the same agreement. This Registration Rights Agreement,
once executed by a party, may be delivered to the other party hereto by
facsimile transmission of the signature page of this Registration Rights
Agreement bearing the signature of the party so delivering to the other party,
with the original executed Registration Rights Agreement to be delivered to the
other party via overnight delivery.
i. Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the
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intent and accomplish the purposes of this Registration Rights Agreement and the
consummation of the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
EAGLETECH COMMUNICATIONS, INC.
By: _______________________________________
Robert J. Dobbs, Jr., President
SIGNATURE PAGE CONTINUED ON NEXT PAGE
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___________________________________________
Buyer
Buyers Information Name: _____________________________________
Address: __________________________________
__________________________________
Telephone: ________________________________
Tax I.D. No.: _____________________________
___________________________________________
Buyer
Buyers Information Name: _____________________________________
Address: __________________________________
__________________________________
Telephone: ________________________________
Tax I.D. No.: _____________________________
___________________________________________
Buyer
Buyers Information Name: _____________________________________
Address: __________________________________
__________________________________
Telephone: ________________________________
Tax I.D. No.: _____________________________
___________________________________________
Buyer
Buyers Information Name: _____________________________________
Address: __________________________________
__________________________________
Telephone: ________________________________
Tax I.D. No.: _____________________________
13
