Exhibit 4.15
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement, is entered into as of February 23, 2001 (the
"Agreement"), by and among iExalt, Inc., a Nevada corporation (the
"Corporation"), and those purchasers listed on Exhibit A and/or the signature
page (each, a "Purchaser").
RECITALS
A. Each Purchaser has received a Warrant (collectively, the "Warrants")
from the Corporation to purchase certain shares of common stock, par value $
.001 per share, of the Corporation (the "Common Stock).
B. The Corporation deems it desirable for the Corporation to grant certain
registration rights to the Purchasers in order to induce the Purchasers to make
a loan to the Corporation in partial consideration for receipt of the Warrants
and to specify in one agreement the relative registration rights of the
Corporation and the Purchasers.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
parties' mutual covenants herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Definitions. As used in this Agreement:
(a) "Affiliate" means: (i) any Person directly or indirectly
controlling, controlled by, or under common control with, another Person;
(ii) any Person owning or controlling ten (10%) percent or more of the
outstanding voting securities of another Person; (iii) any officer,
director or partner of a Person; and (iv) if a Person is an officer,
director or partner, any such company for which such Person acts in such
capacity.
(b) "Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
(c) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect from time to
time.
(d) "Holder" means Purchaser or any Affiliate thereof.
(e) "Person" means a natural person, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization or a governmental entity
or any department, agency or political subdivision thereof.
(f) "Registrable Shares" means at any time any Common Stock owned by
any Holder which is or may be acquired through the exercise of the
Warrants and any other shares of Common Stock issued in respect of such
shares by way of a stock dividend or stock split, or in connection with a
combination of shares, recapitalization, merger, consolidation or
reorganization; provided, however, that shares of Common Stock shall cease
to be Registrable Shares as soon as they are: (i) eligible for sale
without restriction under Rule 144(k) of the Securities Act (provided that
the Company's Secretary or transfer agent has removed all transfer
restrictions and restrictive legends with respect to such Common Stock);
(ii) sold or otherwise disposed of pursuant to a registration statement
that was filed with the
1
Commission and declared effective under the Securities Act (provided that
the Company's Secretary or transfer agent has removed all transfer
restrictions and restrictive legends with respect to such Common Stock);
(iii) sold, transferred or disposed of by a Holder to any Person that is
not a Purchaser or an Affiliate of a Purchaser; or (iv) no longer
outstanding.
(g) "Registration Expenses" has the meaning ascribed to it in
Section 5 of this Agreement.
(h) "Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to
time.
1A. Imminent Registration.
As soon as possible after the Closing described in the Loan Agreement (the
"Closing"), the Corporation will file a registration statement covering (i)
Common Stock subject to Warrant rights held by Woodcrest Capital, L.L.C.
pursuant to section 1.4 of the Loan Agreement entered into this same date
between the Corporation and the Purchaser (the "Loan Agreement"), (ii) Common
Stock subject to Warrants rights held by Purchaser pursuant to section 2. of the
Warrant Agreement attached as Exhibit C to the Loan Agreement, and (iii) the
93,750 shares of Common Stock to be issued to Purchaser's counsel immediately
after Closing pursuant to Section 1.3 of the Loan Agreement. In addition, the
Company will use its best efforts to declare the Common Stock subject to such
Warrant rights and the Common Stock to be issued to Purchaser's counsel
effective as soon as possible. The Company must consummate [a] the filing of
such registration statement within 45 days of Closing, and [b] the declaration
that such underlying Common Stock is effective within 120 days of Closing.
2. Demand Registrations.
Requests for Registration
(i) Upon written request of the Holders of a majority of the
Registrable Shares, the Corporation shall use its reasonable best efforts to
file within 45 days of such request a registration statement intended to effect
a registration pursuant to Rule 415 of the Securities Act on the appropriate
form with the Commission (the "Required Shelf"). The Corporation shall use its
best efforts to keep the registration statement associated with the Required
Shelf effective with the Commission for the shorter of (A) such time as all
securities that were Registrable Shares on the date hereof cease to be
Registrable Shares, or (B) the date that all the Registrable Shares have been
sold.
(ii) In addition to the registration required pursuant to
Section 2(a)(i), the Purchasers may on an unlimited basis request
registration of all or part of their Registrable Shares on Form S-3
(or any other appropriate form registration); provided, however,
that (A) the Corporation shall be required to register any
Registrable Shares on Form S-1 (rather than Form S-3 or any similar
short-form registration) pursuant to this Section 2(a)(ii) in the
event that the Corporation is not eligible to effect registrations
of its securities on Form S-3 (or any other appropriate form
registration) prior to 45 days from the date of such request and (B)
the Corporation shall be obligated to register Registrable Shares
pursuant to this Section 2(a)(ii) no more than twice in any twelve
month period,; and further provided that the Corporation shall not
be obligated to register Registrable Shares pursuant to this Section
2(a)(ii) if gross proceeds of such registered offering would be less
than $250,000. The Corporation will use its best efforts to make
registrations on Form S-3 (or any other appropriate form) or Form
S-1 available for the sale of Registrable Shares. All registrations
requested pursuant to Sections 2(a)(i) and (ii) are referred to
herein as "Demand Registrations."
(iii) A registration will not count as a Demand Registration
until it has become effective and unless the holders of Registrable
Shares requesting such 75% of the Registrable
2
Shares requested to be included in such registration; provided that,
in any event, the Corporation will pay all Registration Expenses in
connection with any registration requested hereunder.
3. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Corporation proposes to
register any of its securities under the Securities Act (other than the
Secondary), and the registration form to be used may be used for the
registration of Registrable Shares (a "Piggyback Registration"), the
Corporation will give prompt written notice to all holders of Registrable
Shares of its intention to effect such a registration (which notice shall
be given not less than thirty (30) days prior to the date the registration
statement is to be filed) and, subject to the terms hereof, will include
in such registration all Registrable Shares with respect to which the
Corporation has received written requests for inclusion therein within 15
days after the receipt of the Corporation's notice.
(b) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the
Corporation's securities, and the managing underwriters advise the
Corporation in writing that in their opinion the number of securities
requested to be included in such registration: (i) creates a substantial
risk that the price per share in such registration will be materially and
adversely affected; or (ii) exceeds the number which can reasonably be
sold in such offering, then the Corporation will include in such
registration (x) first, the securities requested to be included therein by
the holders requesting such registration including those requested to be
registered by the Corporation, (y) second, the Registrable Shares (which
shall not included in clause (x) if the Corporation desires to sell
securities in such offering) requested to be included in such registration
which in such opinion of such underwriters can be sold, pro rata among the
holders of such Registrable Shares on the basis of the number of
Registrable Shares owned or deemed to be owned by such holders, and (z)
third, other securities requested to be included in such registration;
provided, however, that notwithstanding anything in this Section 3(b) to
the contrary, every Piggyback Registration shall include at least thirty
percent (30%) of the Registrable Shares requested to be included in such
registration (which for purposes of this Section 3(b) shall include any
Registrable Shares registered pursuant to clause (x) above).
(c) Other Registrations. If the Corporation has previously received
a request for a Demand Registration pursuant to Section 2 or has
previously filed a registration statement with respect to Registrable
Securities subject to this Section 3, and if such previous request or
registration has not been withdrawn or abandoned, the Corporation will not
file or cause to be effected any other registration of any of its equity
securities or securities convertible or exchangeable into or exercisable
for its equity securities under the Securities Act (except on Form S-4,
Form S-8 or any successor forms), whether on its own behalf or at the
request of any holder or holders of such securities, until a period of 6
months has elapsed from the effective date of such Demand Registration or
previous registration, as the case may be.
4. Registration Procedures. Whenever the holders of Registrable Shares
have requested that any Registrable Shares be registered pursuant to this
Agreement, the Corporation will use its best efforts to effect the registration
of such Registrable Shares in accordance with the intended method of disposition
thereof, and pursuant thereto the Corporation will as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
with respect to such Registrable Shares and use all reasonable efforts to
cause such registration statement to become and remain effective for such
period as may be reasonably necessary to effect the sale of such
securities, not to exceed the period specified in Section 2(a)(i);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of not less than the period specified in
Section 2(a)(i) and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by
3
such registration statement during such period in accordance with the
intended methods of disposition by the Holders thereof set forth in such
registration statement;
(c) furnish to each Holder of Registrable Shares and the
underwriters of the securities being registered such number of copies of
such registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such Holder or
underwriters may reasonably request in order to facilitate the disposition
of the Registrable Shares owned by such Holder or the sale of such
securities by such underwriters;
(d) use its best efforts to register or qualify such Registrable
Shares under such other securities or blue sky laws of such jurisdictions
as any Holder reasonably requests and do any and all other acts and things
which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of the Registrable Shares
owned by such Holder (provided, however, that the Corporation will not be
required to (i) qualify generally to do business in any jurisdiction where
it would not otherwise be required to qualify but for this subparagraph,
or (ii) consent to general service of process in any such jurisdiction);
(e) cause all such Registrable Shares to be listed or authorized for
quotation on each securities exchange or automated quotation system on
which similar securities issued by the Corporation are then listed or
quoted;
(f) provide a transfer agent and registrar for all such Registrable
Shares not later than the effective date of such registration statement;
(g) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
Holders of a majority of the Registrable Shares being sold or the
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Shares;
(h) make available for inspection by the Holder of Registrable
Shares, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent
retained by any such Holder or underwriter, all financial and other
records, pertinent corporate documents and properties of the Corporation,
and cause the Corporation's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
Holder, underwriter, attorney, accountant or agent in connection with the
preparation of such registration statement;
(i) notify each Holder of such Registrable Shares, promptly after it
shall receive notice thereof, of the time when such registration statement
has become effective or a supplement to any prospectus forming a part of
such registration statement has been filed;
(j) notify each Holder of such Registrable Shares of any request by
the Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;
(k) prepare and file with the Commission, promptly upon the request
of any Holder of such Registrable Shares, any amendments or supplements to
such registration statement or prospectus which, in the opinion of counsel
selected by the Holders of a majority of the Registrable Shares being
registered, is required under the Securities Act in connection with the
distribution of Registrable Shares by such Holder;
(l) prepare and promptly file with the Commission, and promptly
notify each Holder of such filing, such amendment or supplement to any
registration statement or prospectus as may be necessary to correct any
statements or omissions in a registration statement or prospectus relating
to any Registrable Shares if any event shall have occurred which had the
effect of making such registration statement or prospectus include an
untrue statement of a material fact, or omit a material fact required to
be stated therein or necessary to make the statements therein not
misleading;
4
(m) advise each Holder of such Registrable Shares, promptly after it
shall receive notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any proceeding
for such purpose, and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order
should be issued;
(n) at least forty-eight hours prior to the filing of any
registration statement or prospectus (or any amendment or supplement to
such registration statement or prospectus), furnish a copy thereof to each
Holder of such Registrable Shares and refrain from filing any such
registration statement, prospectus, amendment or supplement to which
counsel selected by the Holders of a majority of the Registrable Shares
being registered shall have objected on the grounds that such amendment or
supplement does not comply in all material respects with the requirements
of the Securities Act;
(o) at the request of any Holder of such Registrable Shares in
connection with an underwritten offering, furnish on the date or dates
provided for in the underwriting agreement: (i) an opinion of counsel,
addressed to the underwriters and the Holders of Registrable Shares,
covering such matters as such underwriters and Holders may reasonably
request and as are customarily covered by the issuer's counsel in an
underwritten offering; and (ii) a letter or letters from the independent
certified public accountants of the Corporation addressed to the
Corporation, underwriters and the Holders of Registrable Shares, covering
such matters as such underwriters and Holders may reasonably request and
as are customarily covered in accountants' letters in connection with an
underwritten offering; and
(p) otherwise use its best efforts to comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement in accordance with the intended
method of disposition.
(q) Each Holder of Registrable Shares that sells Registrable Shares
pursuant to a registration under this Agreement agrees as follows:
(i) Such Holder shall: (A) cooperate as reasonably requested
by the Corporation with the Corporation in connection with the
preparation of the registration statement, and for so long as the
Corporation is obligated to file and keep effective the registration
statement, and (B) shall provide to the Corporation, in writing, for
use in the registration statement, all such information regarding
such Holder and its plan of distribution of the Registrable Shares
as may be reasonably necessary to enable the Corporation to prepare
the registration statement and prospectus covering the Registrable
Shares, to maintain the currency and effectiveness thereof, and to
otherwise comply with all applicable requirements of law in
connection therewith.
(ii) During such time as such Holder may be engaged in a
distribution of the Registrable Shares, such Holder shall comply
with Regulation M promulgated under the Exchange Act and pursuant
thereto it shall, among other things: (A) not engage in any
stabilization activity in connection with the securities of the
Corporation in contravention of such regulation; (B) distribute the
Registrable Shares under the registration statement solely in the
manner described in the registration statement; and (C) cease
distribution of such Registrable Shares pursuant to such
registration statement upon receipt of written notice from the
Corporation that the prospectus covering the Registrable Shares
contains any untrue statement of a material fact or omits a material
fact required to be stated therein or necessary to make the
statements therein not misleading.
(r) In the event that any public offering pursuant to this Agreement
shall involve, in whole or in part, an underwritten offering, the
Corporation shall have the right to designate an underwriter or
underwriters as the lead or managing underwriters of such underwritten
offering who shall be reasonably acceptable to Holders owning a majority
of the Registrable Shares proposed to be sold therein.
5
(s) Notwithstanding any other provision of this Agreement to the
contrary, upon a request for a Demand Registration or if at any time while
the Required Shelf is effective, the Corporation provides written notice
to each Holder that in the Corporation's good faith and reasonable
judgment it would be materially disadvantageous to the Corporation because
the sale of Registrable Shares covered by or to be covered by such
registration statement or the disclosure of information therein or in any
related prospectus or prospectus supplement would materially interfere
with any acquisition, financing or other material event or transaction in
connection with which a registration of securities under the Securities
Act for the account of the Corporation is then intended or the public
disclosure of which at the time would be materially prejudicial to the
Corporation (a "Disadvantageous Condition") for sales of Registrable
Shares thereunder to then be permitted, and setting forth the general
reasons for such judgment, then the Corporation may refrain from filing
the registration statement for the Demand Registration or maintaining
current the prospectus contained in the Shelf Registration until such
Disadvantageous Condition no longer exists (notice of which the
Corporation shall promptly deliver to each Holder). Furthermore,
notwithstanding anything else contained in this Agreement, with respect to
any registration statement filed, or to be filed, pursuant to Section 2,
if the Corporation provides written notice to each Holder that in the
Corporation's good faith and reasonable judgment it would be materially
disadvantageous to the Corporation (because of a Disadvantageous
Condition) for such a registration statement to be maintained effective,
or to be filed and become effective, and setting forth the general reasons
for such judgment, the Corporation shall be entitled to cause such
registration statement to be withdrawn or the effectiveness of such
registration statement terminated, or, in the event no registration
statement has yet been filed, shall be entitled not to file any such
registration statement, until such Disadvantageous Condition no longer
exists (notice of which the Corporation shall promptly deliver to each
Holder). With respect to each Holder, upon the receipt by such Holder of
any such notice of a Disadvantageous Condition in connection with the
Required Shelf Registration (a) such Holder shall forthwith discontinue
use of the prospectus and any prospectus supplement under such
registration statement and shall suspend sales of Registrable Shares until
such Disadvantageous Condition no longer exists and (b) if so directed by
the Corporation by notice as aforesaid, such Holder will deliver to the
Corporation all copies, other than permanent filed copies then in such
Holder's possession, of the prospectus and prospectus supplements then
covering such Registrable Shares at the time of receipt of such notice as
aforesaid. Notwithstanding anything else contained in this Agreement, (a)
the maintaining current of a prospectus (and the suspension of sales of
Registrable Shares) in connection with the Required Shelf may not be
delayed or withdrawn under this Section 3 for more than a total of 60 days
in any six-month period and (b) that the Corporation may not otherwise
utilize this deferral, termination or withdrawal right more than once in
any twelve-month period. In the event of any such withdrawal contemplated
hereunder, then, upon the first to occur of the abatement of the
Disadvantageous Condition or the elapsing of the period contained in the
preceding sentence, the Corporation shall promptly, at its own expense,
take all action to make effective any such withdrawn item pursuant to the
terms of Section 2.
5. Registration Expenses.
(a) All expenses incident to the Corporation's performance of or
compliance with this Agreement, including, without limitation, all
registration and filing fees, fees of transfer agents and registrars, fees
and expenses of compliance with securities or blue sky laws, fees of the
National Association of Securities Dealers, Inc., printing expenses, fees
and disbursements of counsel for the Corporation, fees and expenses of the
Corporation's independent certified public accountants, and the fees and
expenses of any underwriters and other Persons retained by the Corporation
(but excluding all underwriting discounts and commissions, selling or
placement agent or brokers fees' and commissions, and transfer taxes, if
any, attributable to the Registrable Shares included in such registration,
which discounts, commissions and fees shall be paid by the Holders), will
be borne by the Corporation. (All such expenses being herein called
"Registration Expenses"). In addition, the Corporation will pay its
internal expenses (including, without
6
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance obtained by the
Corporation, and the expenses and fees for listing or authorizing for
quotation the securities to be registered on each securities exchange or
automated quotation system on which any shares of common stock are then
listed or quoted.
(b) In connection with the Demand Registration described in Section
2(a)(i) effected pursuant to this Agreement, the Corporation will
reimburse the Holders of Registrable Shares covered by such registration
for the reasonable fees and disbursements of one counsel for the Holders
chosen by the Holders of a majority of such Registrable Shares, which fees
and disbursements shall not exceed $15,000.
6. Indemnification.
(a) The Corporation agrees to indemnify, to the fullest extent
permitted by law, each seller of Registrable Shares, its officers and
directors and each Person who controls such seller (within the meaning of
the Securities Act or the Exchange Act) against any and all losses,
claims, damages, liabilities and expenses (including, without limitation,
attorneys' fees except as limited by Section 6(c)) caused by any untrue or
alleged untrue statement of a material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof
or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are caused by or
contained in any information furnished in writing to the Corporation or
any underwriter by such seller expressly for use therein. In connection
with an underwritten offering, the Corporation will indemnify such
underwriters, their officers and directors and each Person who controls
such underwriters (within the meaning of the Securities Act or the
Exchange Act) to the same extent as provided above with respect to the
indemnification of the sellers of Registrable Shares and in connection
therewith the Corporation shall enter into an underwriting agreement in
customary form containing such provisions for indemnification and
contribution as shall be reasonably requested by the underwriters. The
reimbursements required by this Section 6(a) will be made by periodic
payments during the course of the investigation or defense, as and when
bills are received or expenses incurred.
(b) In connection with any registration statement in which a seller
of Registrable Shares is participating, each such seller will furnish to
the Corporation in writing such information and affidavits as the
Corporation reasonably requests for use in connection with any such
registration statement or prospectus and, to the fullest extent permitted
by law, will indemnify the Corporation, its directors and officers and
each Person who controls the Corporation (within the meaning of the
Securities Act) against any and all losses, claims, damages, liabilities
and expenses (including, without limitation, attorneys' fees except as
limited by Section 6(c)) caused by any untrue or alleged untrue statement
of a material fact contained in the registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or
any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in
any information or affidavit so furnished in writing to the Corporation or
any underwriter by such seller; provided, that, the obligation to
indemnify will be several, not joint and several, among such sellers of
Registrable Shares, and the liability of each such seller of Registrable
Shares will be limited to the net amount received by such seller from the
sale of Registrable Shares pursuant to such registration statement. The
reimbursements required by this Section 6(b) will be made by periodic
payments during the course of the investigation or defense, as and when
bills are received or expenses incurred.
(c) Any Person entitled to indemnification hereunder will: (i) give
prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give such
notice shall not limit the rights of such Person except to the extent such
failure to give notice shall materially prejudice the rights of the
indemnifying party); and (ii) unless in such indemnified party's
reasonable judgment (with written advice of counsel) a conflict of
interest between such
7
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. If such defense
is assumed, the indemnifying party will not be subject to any liability
for any settlement made by the indemnified party without its consent (but
such consent will not be unreasonably withheld). An indemnifying party who
is not entitled to, or elects not to, assume the defense of a claim will
not be obligated to pay the fees and expenses of more than one counsel for
all parties indemnified by such indemnifying party with respect to such
claim, unless in the reasonable judgment (with written advice of counsel)
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect
to such claim.
(d) Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 6(a) or Section 6(b)
are unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, claims, damages, liabilities or expenses (or
actions 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, claims, damages, liabilities or expenses
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative fault of 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 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 and equitable
if contribution pursuant to this Section 6(d) were determined by pro rata
allocation (even if the holders or any underwriters or all of them were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in this Section 6(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities
or expenses (or actions in respect thereof) referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred
by such indemnified party in connection with investigating or, except as
provided in Section 6(c), defending any such action or claim.
Notwithstanding the provisions of this Section 6(d), no seller shall be
required to contribute an amount greater than the dollar amount of the
proceeds received by such seller with respect to the sale of any
Registrable Shares. 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. The sellers' obligations in this Section
6(d) to contribute shall be several in proportion to the amount of
Registrable Shares registered by them and not joint.
(e) The indemnification and contribution provided for under this
Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any
officer, director or controlling Person of such indemnified party.
7. Compliance with Rule 144. In the event that the Corporation: (a)
registers a class of securities under Section 12 of the Exchange Act; or (b)
commences to file reports under Section 13 or 15(d) of the Exchange Act, then
the Corporation shall (i) make and keep public information available, as those
terms are understood and defined in Rule 144 of the Commission, (ii) file with
the Commission in a timely manner all reports and other documents required of
the Corporation under the Securities Act and the Exchange Act, and (iii) at the
request of any Holder who proposes to sell securities in compliance with Rule
144, forthwith furnish to such Holder a written statement of compliance with the
reporting requirements of the Commission as set forth in Rule 144 and make
available to the public and such Holder such information as will enable the
Holder to make sales pursuant to Rule 144.
8. Participation in Underwritten Registrations. No Person may participate
in any registration hereunder which is underwritten unless such Person: (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements; and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.
8
9. No Inconsistent Agreements. The Corporation will not hereafter enter
into any agreement with respect to its securities which materially diminishes,
in the reasonable judgement of the Holders of a majority of the Registrable
Shares, the rights granted to the Holders of the Registrable Shares in this
Agreement.
10. Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement, and
to exercise all other rights granted by law.
11. Amendments and Waivers. Except as otherwise expressly provided herein,
the provisions of this Agreement may be amended or waived at any time only by
the written agreement of the Corporation and the Holders of at least 50% of the
Registrable Shares; provided that any such amendment or waiver shall apply
equally to all Holders of Registrable Shares. Any waiver, permit, consent or
approval of any kind or character on the part of any such holders of any
provision or condition of this Agreement must be made in writing and shall be
effective only to the extent specifically set forth in writing.
12. Successors and Assigns. This Agreement and the rights and obligations
hereunder may not be assigned or delegated with the prior written consent of the
other parties, which consent shall not be unreasonably withheld or delayed,
except that a Purchaser may assign this Agreement and all rights and
responsibilities of such Purchaser hereunder to an Affiliate without any written
consent. However, any successor, permitted assign or Holder to have the benefits
of this Agreement must, at the request of the Corporation or any other
Purchaser, agree to be bound by the terms hereof.
13. Final Agreement. This Agreement constitutes the final agreement of the
parties concerning the matters referred to herein, and supersedes all prior
agreements and understandings.
14. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
15. Descriptive Heading. The descriptive headings of this Agreement are
inserted for convenience of reference only and do not constitute a part of and
shall not be utilized in interpreting this Agreement.
16. Notices. Any notices required or permitted to be sent hereunder shall
be delivered personally or mailed, certified mail, return receipt requested, or
delivered by overnight courier service to the following addresses, or such other
addresses as shall be given by notice delivered hereunder, and shall be deemed
to have been given upon delivery, if delivered personally, three business days
after mailing, if mailed, or one business day after delivery to the courier, if
delivered by overnight courier service. Notices to the Holders of Registrable
Shares shall be sent to the addresses set forth on the stock record books of the
Corporation.
17. GOVERNING LAW. THE VALIDITY, MEANING AND EFFECT OF THIS AGREEMENT
SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE WITHOUT REFERENCE TO THE
CONFLICTS OF LAWS PRINCIPLES OF THE STATE OF TEXAS. THE EXCLUSIVE VENUE FOR
RESOLUTION, MEDIATION, ARBITRATION OR LITIGATION OF ALL DISPUTES, CLAIMS, OR
CAUSES ARISING OUT OF OR IN CONNECTION WITH AGREEMENT SHALL BE TARRANT COUNTY,
TEXAS.
18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one instrument. Each
party shall receive a duplicate original of the counterpart copy or copies
executed by it and the Corporation.
9
20. Attorneys' Fees. In the event of any action, arbitration or suit based
upon or arising out of any actual or alleged breach by any party of any
representation, warranty, covenant or agreement in this Agreement, the
prevailing party shall be entitled to recover its reasonable attorneys' fees and
expenses of such action, arbitration or suit from the other party, in addition
to any other relief ordered by any proper arbitration proceeding or court.
IN WITNESS WHEREOF, this Registration Rights Agreement has been executed
on the date first set forth above.
iEXALT, INC., a Nevada corporation
By: /s/Donald W. Sapaugh
--------------------
Donald W. Sapaugh, CEO
Woodcrest Capital II Limited Partnership,
A Texas Limited Partnership
By: /s/James A. Ryffel
------------------
James A. Ryffel, Manager
Woodcrest Capital, L.L.C., general partner
Woodcrest Capital, L.L.C.,
A Texas Limited Liability Company
By: /s/James A. Ryffel
------------------
James A. Ryffel, Manager
10