REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of February 18, 2005, between
INCENTRA SOLUTIONS, INC., a Nevada corporation (the "Company"), and Alfred Curmi
("Curmi").
W I T N E S S E T H:
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger dated
as of February 18, 2005 (the "Merger Agreement") by and among the Company,
Curmi, Star Solutions of Delaware, Inc., a Delaware corporation and Incentra
Merger Corp., a Delaware corporation, the Company has agreed to issue to Curmi
such number of shares of Common Stock, $.001 par value, of the Company (the
"Common Stock") as determined pursuant to the Merger Agreement and upon
conversion of the Convertible Promissory Note dated as of the date hereof (the
"Note") by the Company in favor of Curmi in the original principal amount of
$2,500,000; and
WHEREAS, as a condition precedent to the consummation of the
transactions contemplated by the Merger Agreement, the Company has agreed to
provide certain registration rights pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement, capitalized terms used
herein shall have the meanings set forth in the preambles hereto and in this
Section 1.
1.1 "COMMISSION" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
1.2 "COMMON STOCK" shall mean the common stock, par value
$.001 per share, of the Company or, in the case of a conversion,
reclassification or exchange of such shares of such Common Stock, shares of the
stock issued or issuable in respect of such shares of Common Stock, and all
provisions of this Agreement shall be applied appropriately thereto and to any
stock resulting therefrom.
1.3 "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended, or any similar federal statute enacted hereafter, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect from time to time.
1.4 "EXISTING RIGHTS AGREEMENTS" shall mean (i) the warrant
agreements originally dated as of October 10, 2000 between the Company and the
Original Warrantholders for the purchase of an aggregate of 800,000 shares of
Common Stock and any warrant agreement executed and delivered by the Company
upon the registration or transfer of any warrants evidenced by such warrant
agreements, (ii) the Registration Rights Agreement dated as of October 10, 2000
between the Company and Equity Pier LLC, (iii) the warrant agreement
1
between the Company and Equity Pier LLC dated February 28, 2001, (iv) the Form
SB-2 filed on or about June 29, 2004, and (v) the Registration Rights Agreement
between the Company and former ManagedStorage International, Inc. shareholders
dated August 18, 2004.
1.5 "HOLDER" shall mean any holder of Registrable Securities
and any Person having the right to acquire Registrable Securities, and any
transferee or assignee thereof in accordance with Section 8 of this Agreement;
provided, however, that any Person who acquires any of the Registrable
Securities in a distribution pursuant to a registration statement filed by the
Company under the Securities Act or pursuant to a public sale under Rule 144
under the Securities Act or any similar or successor rule shall not be
considered a Holder.
1.6 "INITIATING HOLDERS" shall mean Holders representing (on a
fully diluted basis) at least fifty-one percent (51%) of the total number of
Registrable Securities outstanding at any point of determination.
1.7 "ORIGINAL WARRANTHOLDERS" shall mean Hawke Company Ltd,
Tillgrove Investments Ltd and Notel Group Limited.
1.8 "PERSON" shall mean any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind.
1.9 "REGISTER", "registered" and "registration" shall refer to
a registration effected by preparing and filing a registration statement with
the Commission in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement by the Commission.
1.10 "REGISTRABLE SECURITIES" shall mean (A) the shares of
Common Stock issued to Curmi and/or his designee(s) pursuant to the Merger
Agreement, (B) the shares of Common Stock issuable or issued upon conversion of
all or any portion of the principal and/or accrued interest under the Note, (C)
any stock of the Company issued as a dividend or other distribution with respect
to, or in exchange for or in replacement of, the shares of Common Stock referred
to in clause (A) and/or clause (B); provided, however, that such shares of
Common Stock shall only be treated as Registrable Securities hereunder if and so
long as they have not been sold in a registered public offering or have not been
sold to the public pursuant to Rule 144 under the Securities Act or any similar
or successor rule.
1.11 "REGISTRATION EXPENSES" shall mean all expenses incurred
by the Company in compliance herewith, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, the reasonable fees and
expenses (subject to documentation thereof) of one counsel for all Holders and
Other Stockholders that offer securities being sold pursuant to the Existing
Rights Agreements selected by them, and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company, which shall be paid in any event by the
Company).
2
1.12 "SECURITIES ACT" shall mean the Securities Act of 1933,
as amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
1.13 "SELLING EXPENSES" shall mean all underwriting discounts
and commissions applicable to the sale of Registrable Securities.
2. REQUESTED REGISTRATION.
2.1 REQUEST FOR REGISTRATION. At any time after March 1, 2006
(such date being hereinafter referred to as the "Demand Date"), if the Company
shall receive from Initiating Holders a written request that the Company effect
any registration with respect to Registrable Securities the Company will:
(a) promptly give written notice of the proposed
registration to all other Holders; and
(b) as soon as practicable, use all reasonable
efforts to effect such registration (including, without
limitation, the execution of an undertaking to file post-
effective amendments, appropriate qualification under the blue
sky or other state securities laws requested by Initiating
Holders and appropriate compliance with applicable regulations
issued under the Securities Act) as may be so requested and as
would permit or facilitate the sale and distribution of all or
such portion of such Registrable Securities as are specified
in such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request given
within thirty (30) days after receipt of such written notice
from the Company; provided, that the Company shall not be
obligated to effect, or to take any action to effect, any such
registration pursuant to this Section 2:
(i) in any particular jurisdiction in which
the Company would be required to execute a general
consent to service of process in effecting such
registration, qualification or compliance, unless the
Company is already subject to service in such
jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations
thereunder;
(ii) less than ninety (90) calendar days
after the effective date of any other registration
declared or ordered effective other than a
registration on Form S-3 or Form S-8;
(iii) if, while a registration request is
pending pursuant to this Section 2, the Company
determines, in the good faith judgment of the Board
of Directors of the Company, with the advice of
counsel, that the filing of a registration statement
would require the disclosure of non-public material
information the disclosure of which would have a
material adverse effect on the Company or would
otherwise materially adversely affect a financing,
acquisition, disposition, merger or other significant
3
transaction involving the Company, the Company shall
deliver a certificate to such effect signed by its
President to the proposed selling Holders and the
Company shall not be required to effect a
registration pursuant to this Section 2 until the
earlier of (A) three (3) days after the date upon
which such material information is disclosed to the
public or ceases to be material or (B) 90 days after
the Company makes such good faith determination;
provided, however, that the Company shall not utilize
this right more than once in any twelve month period;
or
(iv) except as set forth in Section 2.5,
after the second such registration pursuant to this
Section 2.1 has been declared or ordered effective.
Subject to the foregoing clauses (i), (ii), (iii) and (iv), the Company
shall file a registration statement covering the Registrable Securities so
requested to be registered as soon as practicable after receipt of the request
or requests of the Initiating Holders.
2.2 ADDITIONAL SHARES TO BE INCLUDED. The registration
statement filed pursuant to the request of the Initiating Holders may, subject
to the provisions of Sections 2.4 and 3.3 below, include (a) other securities of
the Company (the "Additional Shares") which are held by (i) officers or
directors of the Company who, by virtue of agreements with the Company, are
entitled to include their securities in any such registration or (ii) other
persons who, by virtue of agreements with the Company, including the Existing
Rights Agreements, are entitled to include their securities in any such
registration (the "Other Stockholders"), and (b) securities of the Company being
sold for the account of the Company.
2.3 UNDERWRITING.
(a) If the Initiating Holders intend to distribute
the Registrable Securities covered by their request by means
of an underwriting, they shall so advise the Company as a part
of their request made pursuant to this Section 2 and the
Company shall include such information in the written notice
to other Holders referred to in Section 2.1 above. The right
of any Holder to registration pursuant to this Section 2 shall
be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable
Securities in the underwriting to the extent provided herein
and subject to the limitations provided herein. A Holder may
elect to include in such underwriting all or a part of the
Registrable Securities he holds.
(b) The Company shall (together with all Holders,
officers, directors and Other Stockholders proposing to
distribute their securities through such underwriting)
negotiate and enter into an underwriting agreement in
customary form with the representative of the underwriter or
underwriters selected for such underwriting by a majority in
interest of the Initiating Holders, which underwriter(s) shall
be reasonably acceptable to the Company.
4
2.4 LIMITATIONS ON SHARES TO BE INCLUDED. Notwithstanding any
other provision of this Section 2, if the representative of the underwriters
advises the Initiating Holders in writing that marketing factors require a
limitation on the number of shares to be underwritten, the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated in the following order of priority: first, among the Holders,
in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities which they had requested to be included in such
registration; second, among the Other Stockholders that offer securities being
sold pursuant to the Existing Rights Agreements, in proportion, as nearly as
practicable, to the respective amounts of Additional Shares which they had
requested to be included in such registration pursuant to the Existing Rights
Agreements or such other proportion among the Other Stockholders as otherwise
provided in the Existing Rights Agreements; third, to the Company for securities
being sold for its own account; and thereafter, the number of shares that may be
included in the registration statement and underwriting shall be allocated among
all officers or directors or remaining Other Stockholders, in each case in
proportion, as nearly as practicable, to the respective amounts of Additional
Shares which they had requested to be included in such registration at the time
of filing the registration statement. If the Company or any Holder, officer,
director or Other Stockholder who has requested inclusion in such registration
as provided above disapproves of the terms of any such underwriting, such Person
may elect to withdraw such Person's Registrable Securities or Additional Shares
therefrom by written notice to the Company and the underwriter and the
Initiating Holders. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall also be withdrawn from such registration.
No Registrable Securities or Additional Shares excluded from such registration
by reason of such underwriters' marketing limitation shall be included in such
registration. To facilitate the allocation of shares in accordance with this
Section 2.4, the Company or underwriter or underwriters selected as provided
above may round the number of Registrable Securities of any Holder which may be
included in such registration to the nearest 100 shares. Notwithstanding
anything contained in this Agreement to the contrary, the Holders shall have
priority over all other Persons with respect to the inclusion of any securities
in any registration requested pursuant to this Section 2.
2.5 ADDITIONAL DEMAND REGISTRATION. If with respect to the
last registration permitted to be exercised by the Holders of Registrable
Securities under Section 2.1, the Holders are unable to register all of their
Registrable Securities because of the operation of Section 2.4 hereof, such
Holders shall be entitled to require the Company to effect one additional
registration to afford the Holders an opportunity to register all such
Registrable Securities. Such additional registration shall again be subject to
the provisions of this Section 2, including this Section 2.5.
3. COMPANY REGISTRATION.
3.1 At any time after March 1, 2006, if the Company shall
determine to register under the Securities Act any of its equity securities or
securities convertible into equity securities either for its own account or the
account of a security holder or holders exercising any demand registration
rights, other than a registration relating solely to employee benefit plans, or
a registration relating solely to a Commission Rule 145 transaction, or a
registration on Form S-4 or S-8, or the Registration Statement of the Company on
Form SB-2 filed on or about June 29, 2004, (or any successor forms thereto), the
Company will:
5
(a) promptly give to each Holder written notice
thereof (which shall include a list of the jurisdictions in
which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state
securities laws); and
(b) include in such registration (and, subject to
Section 2.1(b)(i), any related qualification under blue sky
laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written
request or request, made by any Holder within thirty (30) days
after receipt of the written notice from the Company described
in clause (a) above, except as set forth in Section 3.3 below.
Such written request may specify all or a part of a Holder's
Registrable Securities.
3.2 UNDERWRITING. If the registration of which the Company
gives notice pursuant to Section 3.1 is for a registered public offering
involving an underwriting, the Company shall so advise the Holders as a part of
the written notice given pursuant to Section 3.1(a). The right of any Holder to
registration pursuant to this Section 3 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and any officers, directors or Other Stockholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company. A Holder may elect to
include in such underwriting all or a part of the Registrable Securities he
holds.
3.3 LIMITATIONS ON SHARES TO BE INCLUDED. Notwithstanding any
other provision of this Section 3, if the representative of the underwriters of
an offering described in Section 3.2 advises the Company in writing that
marketing factors require a limitation or elimination on the number of shares to
be underwritten, the representative may (subject to the allocation priority set
forth below) limit the number of or eliminate the Registrable Securities to be
included in the registration and underwriting pursuant to this Section 3. The
Company shall so advise all holders of securities requesting registration in
such offering, and the number of shares of securities that are entitled to be
included in such registration and underwriting shall be allocated in the
following order of priority: first, if such underwritten offering shall have
been initiated by the Company for the sale of securities for its own account, to
the Company for securities being sold for its own account; second, among the
Other Stockholders that offer securities being sold pursuant to the Existing
Rights Agreements, in proportion, as nearly as practicable, to the respective
amounts of such Additional Shares which they had requested to be included in
such registration pursuant to the Existing Rights Agreements or such other
proportion among the Other Stockholders as otherwise provided in the Existing
Rights Agreements; third, among the Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities which they had
requested to be included in such registration; and fourth, if such registration
shall not have been initiated by the Company, to the Company for securities
being sold for its own account; and thereafter, the number of shares that may be
included in the registration statement and underwriting shall be allocated among
all officers or directors or remaining Other Stockholders, in each case in
proportion, as nearly as practicable, to the respective amounts of Additional
Shares which they had requested to be included in such
6
registration at the time of filing the registration statement. If any Holder of
Registrable Securities or any officer, director or Other Stockholder disapproves
of the terms of any such underwriting, he may elect to withdraw therefrom by
written notice to the Company and the underwriter. Any Registrable Securities or
other securities excluded or withdrawn from such underwriting shall also be
withdrawn from such registration. The Company shall have the right to terminate
or withdraw any registration initiated by it under this Section 3 prior to the
effectiveness of such registration whether or not any Holder has elected to
include securities in such registration.
4. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 2, 3 or 4 of this Agreement shall be borne by the Company, except that
Selling Expenses shall be borne pro rata by each Holder in accordance with the
number of shares sold.
5. REGISTRATION PROCEDURES.
5.1 In the case of each registration effected by the Company
pursuant to this Agreement, the Company will keep each Holder advised in writing
as to the initiation of each registration and as to the completion thereof and
will, at its expense:
(a) prepare and file with the Commission a
registration statement with respect to such Registrable
Securities and use all reasonable efforts to cause such
registration statement to become effective,
(b) use all reasonable efforts to keep such
registration effective for a period of 180 days or until the
Holder or Holders have completed the distribution described in
the registration statement relating thereto, whichever first
occurs; provided, however, that the Company will keep such
registration effective for longer than 180 days if the costs
and expenses associated with such extended registration are
borne by the selling Holders;
(c) prepare and file with the Commission such
amendments (including post-effective amendments) and
supplements to such registration statement and the prospectus
used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by
such registration statement;
(d) furnish such number of prospectuses (including
preliminary prospectuses) and other documents incident
thereto, including any amendment (and post-effective
amendments) of or supplement to the prospectus, as a Holder
from time to time may reasonably request;
(e) promptly notify each seller of Registrable
Securities covered by such registration statement and the
underwriters, if any, at any time:
(i) when the prospectus or any prospectus
supplement or post-effective amendment has been
filed, and, with respect to the registration
statement or any post-effective amendment, when the
same has become effective;
7
(ii) of any request by the Commission for
amendments or supplements to the registration
statement or the prospectus or for additional
information;
(iii) of the issuance by the Commission of
any stop order suspending the effectiveness of the
registration statement or the initiation of any
proceedings for that purpose;
(iv) if at any time the representations and
warranties of the Company set forth in the
underwriting agreement cease to be true and correct;
(v) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Registrable Securities for sale
in any jurisdiction or the initiation or threatening
of any proceeding such purpose; and
(vi) when a prospectus relating thereto is
required to be delivered under the Securities Act of
the happening of any event as a result of which the
prospectus included in such registration statement,
as then in effect, includes an untrue statement of a
material fact or omits to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading or incomplete
in the light of the circumstances then existing, and
at the request of any such seller, prepare and
furnish to such seller a reasonable number of copies
of a supplement to or an amendment of such prospectus
as may be necessary so that, as thereafter delivered
to the purchasers of such shares, such prospectus
shall not include an untrue statement of a material
fact or omit to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading or incomplete in the light of
the circumstances then existing;
(f) use reasonable efforts to obtain the withdrawal
of any order suspending the effectiveness of the registration
statement at the earliest possible time;
(g) promptly incorporate in a prospectus supplement
or post-effective amendment such necessary information as the
underwriters and the Holders of a majority of the Registrable
Securities being sold in connection with an underwritten
offering reasonably request to have included therein relating
to the plan of distribution with respect to such Registrable
Securities, including, without limitation, information with
respect to the amount of Registrable Securities being sold to
such underwriters, the purchase price being paid therefor by
such underwriters and with respect to any other terms of the
underwritten (or best efforts underwritten) offering of the
Registrable Securities to be sold in such offering; and make
all required filings of such prospectus supplement or
post-
8
effective amendment as soon as notified of the matters to be
incorporated in such prospectus supplement or post-effective
amendment;
(h) use all reasonable efforts to register and
qualify the securities covered by such registration statement
under such other securities or blue sky laws of such
jurisdictions as shall be reasonably requested by the Holders,
subject to Section 2.1(b)(i);
(i) List all such Registrable Securities registered
in such registration on each securities exchange or automated
quotation system on which the Common Stock of the Company is
then listed;
(j) Provide a transfer agent and registrar for all
Registrable Securities and a CUSIP number for all such
Registrable Securities, in each case not later than the
effective date of such registration;
(k) Make available for inspection by any seller of
Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement, and any
attorney or accountant retained by any such seller or
underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause
the Company's officers and directors to supply all information
reasonably requested by any such seller, underwriter, attorney
or accountant in connection with such registration statement;
(l) Furnish to each selling Holder upon request a
signed counterpart, addressed to each such selling Holder, of
(i) an opinion of counsel for the Company,
dated the effective date of the registration
statement in form reasonably acceptable to the
Company and such counsel, and
(ii) "comfort" letters signed by the
Company's independent public accountants who have
examined and reported on the Company's financial
statements included in the registration statement, to
the extent permitted by the standards of the American
Institute of Certified Public Accountants, covering
such matters as are customarily covered in opinions
of issuer's counsel and accountants' "comfort"
letters delivered to underwriters in underwritten
public offerings of securities;
(iii) Furnish to each selling Holder upon
request a copy of all documents filed with and all
correspondence from or to the Commission in
connection with any such offering; and
(m) Make available to its security holders, as soon
as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen
months, beginning with the first month after the effective
date of the Registration Statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the
Securities Act.
9
5.2 It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Agreement that the Holders
proposing to register Registrable Securities shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them, and
their intended method of distribution of such Registrable Securities as the
Company shall reasonably request and as shall be required in connection with the
action to be taken by the Company.
5.3 In connection with the preparation and filing of each
registration statement under this Agreement, the Company will give the Holders
on whose behalf such Registrable Securities are to be registered and their
underwriters, if any, and their respective counsel and accountants, the
opportunity to review such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or supplement
thereto, and will give each such Holder such access to the Company's books and
records and such opportunities to discuss the business of the Company with its
officers, its counsel and the independent public accountants who have certified
the Company's financial statements, as shall be necessary, in the opinion of
such Holders or such underwriters or their respective counsel, in order to
conduct a reasonable and diligent investigation within the meaning of the
Securities Act.
6. INDEMNIFICATION.
6.1 INDEMNIFICATION BY THE COMPANY. The Company will indemnify
each Holder, each of its officers, directors and partners, and each person
controlling such Holder, with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each Person who controls any underwriter, against all claims,
losses, damages and liabilities (or actions, proceedings or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Securities Act or
any rule or regulation thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each such Holder,
each of its officers, directors and partners, and each Person controlling such
Holder, each such underwriter and each Person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating and defending or settling any such claim, loss, damage, liability
or action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission made in reliance upon and based
upon written information furnished to the Company by such Holder or underwriter
and stated to be specifically for use therein.
6.2 INDEMNIFICATION BY THE HOLDERS. Each Holder will, if
Registrable Securities held by him are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company (other than such Holder) or such underwriter within the
10
meaning of the Securities Act and the rules and regulations thereunder, each
other such Holder and each of their officers, directors and partners, and each
Person controlling such Holder or other stockholder, against all claims, losses,
damages, expenses and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, each of its directors
and officers, each underwriter or control Person, each other Holder and each of
their officers, directors and partners and each Person controlling such Holder
or other stockholder for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use
therein.
6.3 NOTICES OF CLAIMS, PROCEDURES, ETC. Each party entitled to
indemnification under this Section 6 (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at the Indemnified Party's
sole expense, and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 7 unless such failure is prejudicial to the
ability of Indemnifying Party to defend such claim or action. Notwithstanding
the foregoing, such Indemnified Party shall have the right to employ its own
counsel in any such litigation, proceeding or other action if (i) the employment
of such counsel has been authorized by the Indemnifying Party, in its sole and
absolute discretion, or (ii) the named parties in any such claims (including any
impleaded parties) include any such Indemnified Party and the Indemnified Party
and the Indemnifying Party shall have been advised in writing (in suitable
detail) by counsel to the Indemnified Party either (A) that there may be one or
more legal defenses available to such Indemnified Party which are different from
or additional to those available to the Indemnifying Party, or (B) that there is
a conflict of interest by virtue of the Indemnified Party and the Indemnifying
Parties having common counsel, in any of which events, the legal fees and
expenses of a single counsel for all Indemnified Parties with respect to each
such claim, defense thereof, or counterclaims thereto shall be borne by
Indemnifying Party. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall cooperate to the extent reasonably
required and furnish such information regarding itself or the claim in question
as an Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with defense of such claim and litigation
resulting therefrom.
11
7. INFORMATION BY HOLDER. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.
8. TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register securities granted by the Company under this Agreement
may be transferred or assigned by a Holder to a transferee or assignee of any
Registrable Securities; provided that the Company is given written notice at or
prior to the time of said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned; and provided
further that the transferee or assignee of such rights assumes in writing the
obligations of a Holder under this Agreement to the Company and other Holders in
effect at the time of transfer under all effective agreements.
9. EXCHANGE ACT COMPLIANCE. So long as the Company remains subject to
the reporting requirements of the Exchange Act, the Company shall file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the Commission thereunder, and will
take all actions reasonably necessary to enable holders of Registrable
Securities to sell such securities without registration under the Securities Act
within the limitation of the provisions of (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, (b) Rule 144A under the
Securities Act, as such Rule may be amended from time to time, if applicable or
(c) any similar rules or regulations hereunder adopted by the Commission. Upon
the request of any Holder of Registrable Securities, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
10. NO CONFLICT OF RIGHTS. The Company will not hereafter enter into
any agreement with respect to its securities which is inconsistent with the
rights granted to the Holders in this Agreement. Without limiting the generality
of the foregoing, the Company will not hereafter enter into any agreement with
respect to its securities which grants or modifies any existing agreement with
respect to its securities to grant to the holder of its securities in connection
with an incidental registration of such securities equal or higher priority to
the rights granted to the Holders under Sections 2 and 3 of this Agreement.
11. BENEFITS OF AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns, legal representatives and heirs. This
Agreement does not create, and shall not be construed as creating, any rights
enforceable by any other Person.
12. COMPLETE AGREEMENT. This Agreement constitutes the complete
understanding among the parties with respect to its subject matter and
supersedes all existing agreements and understandings, whether oral or written,
among them. No alteration or modification of any provisions of this Agreement
shall be valid unless made in writing and signed, on the one hand, by the
Holders of a majority of the Registrable Securities then outstanding and, on the
other, by the Company.
12
13. SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14. NOTICES. All notices, offers, acceptances and other communications
required or permitted to be given or to otherwise be made to any party to this
Agreement shall be deemed to be sufficient if contained in a written instrument
delivered by hand, first class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery,
if to the Company, at 1140 Pearl Street, Boulder, Colorado 80302, Attention:
Chief Financial Officer, with a copy to Reed Guest, Esq., 94 Underhill Road,
Orinda, CA 94563, and if to Curmi, to 910 Seasage Drive, Delray Beach, FL 33483,
with a copy to David Bates, Esq., Gunster, Yoakley & Stewart, P.A., 777 South
Flagler Drive, Suite 500, East Tower, West Palm Beach, FL 33401, or at such
other address as may have been furnished the Company in writing.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and the next business day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any party may change the address to which each such notice or communication
shall be sent by giving written notice to the other parties of such new address
in the manner provided herein for giving notice.
15. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware without
giving effect to the provisions, policies or principles thereof respecting
conflict or choice of laws.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original but all of which taken
together shall constitute one and the same agreement.
17. SEVERABILITY. Any provision of this Agreement which is determined
to be illegal, prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such illegality, prohibition or
unenforceability without invalidating the remaining provisions hereof which
shall be severable and enforceable according to their terms and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
[The remainder of this page is intentionally left blank.]
13
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first set forth above.
INCENTRA SOLUTIONS, INC.
By: /s/Thomas P. Sweeney III
-------------------------------
Name: Thomas P. Sweeney III
Title: Chief Executive Officer
CURMI
/s/Alfred Curmi
-----------------------------------
ALFRED CURMI
MIAMI 406162.5
2/14/05
14