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EXHIBIT 10.21
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of December 29,1999 (this
"Agreement"), is made by and between IBIZ TECHNOLOGY CORP., a Florida
corporation, with headquarters located at 1919 West Lone Cactus, Phoenix,
Arizona 85027 (the "Company") and GLOBE UNITED HOLDINGS, INC., a British Virgin
Islands corporation, (the "Purchaser").
WITNESSETH:
WHEREAS, pursuant to a Securities Purchase Agreement, dated as of the date
hereof, among the Purchaser and the Company (the "Securities Purchase
Agreement"), the Company has agreed to issue and sell to the Purchaser, (i)
$1,000,000 aggregate principal amount of the Company's 7% Convertible Debentures
(the "Debentures") and (ii) warrants (the "Warrants") to purchase 200,000 shares
of the Company's Common Stock, par value $.001 per share (the "Common Stock");
WHEREAS, pursuant to the terms of the Debentures and the Warrants, (i)
upon the conversion of the Debentures, (ii) in lieu of dividend payments on the
Debentures and (iii) upon exercise of the Warrants, the Company will, in each
case, issue to the Purchaser shares of Common Stock (such shares of Common Stock
are collectively referred to herein as the "Shares"); and
WHEREAS, to induce the Purchasers 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 (the "Securities Act"), and
applicable state securities laws.
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, the Company and the Purchaser
hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
(a) "Effectiveness Deadline" shall have the meaning set forth
in section 2(a)(i) hereof.
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(b) "Filing Deadline" shall have the meaning set forth in
Section 2(a)(i) hereof.
(c) "Registration Statement" means a registration statement or
registration statements of the Company filed under the Securities Act covering
Registrable Securities relating to the Debentures and Warrants.
(d) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities 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 United States Securities and Exchange
Commission (the "Commission").
(e) "Registrable Securities" means the Shares.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the Securities Purchase Agreement.
2. REGISTRATION.
(a) MANDATORY REGISTRATIONS.
(i) Registration Statement. The Company shall prepare, as
soon as practicable, but in no event later than 45 days after the Closing Date
(as defined in the Securities Purchase Agreement) (the "Filing Deadline"), file
with the Commission a Registration Statement or Registration Statements (as
necessary) on Form SB-2, covering the resale of all of the Registrable
Securities. In the event that Form SB-2 is unavailable and/or inappropriate for
such a registration, the Company shall use such other form as is available and
appropriate for such a registration. Any Registration Statement prepared
pursuant hereto shall register for resale at least that number of shares of
Common Stock equal to the product of (x) 2.0 and, (y) the sum of (i) the maximum
number of Shares that are issuable upon conversion of the Debentures, on the
date of filing, and (ii) the maximum number of Shares issuable upon exercise of
the Warrants, in each case, without regard to any limitation on any holder's
ability to convert any of the Warrants or the Debentures. Such Registration
Statement shall state that, in accordance with Rule 416 under the Securities
Act, it also covers such indeterminate number of additional Shares as may become
issuable upon conversion of such Debentures or exercise of such Warrants (i)
resulting from any adjustment in the applicable Conversion Price of such
Debentures or the Exercise Price of such Warrants or (ii) to prevent dilution
resulting from stock splits or stock dividends. If at any time two (2.0) times
the sum of (i) the maximum number of Shares into which the Debentures may be
converted and (ii) the maximum number of Shares issuable upon exercise of the
Warrants, exceeds the total number of Shares so registered, the Company shall,
within five (5) business days after receipt of a written
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notice from the Purchaser, either (i) amend the Registration Statement or
Registration Statements filed by the Company pursuant to this section, if such
Registration Statement has not been declared effective by the Commission at that
time, to register all of the Shares into which the Debentures and the Warrants
may be converted, or (ii) if such Registration Statement has been declared
effective by the Commission at that time, file with the Commission an additional
Registration Statement on Form SB-2, or such other appropriate form, to register
the number of Shares into which the Debentures may be converted that exceed the
number of Shares already registered. The Company shall use its best efforts to
have the Registration Statement declared effective within the earliest to occur
of (i) ninety (90) days following the Closing Date (ii) if the Commission elects
not to conduct a review of the Registration Statement, the date which is three
(3) business days after the date upon which either the Company or its counsel is
so notified, whether orally or in writing that the Commission will not conduct a
review of such Registration Statement; or (iii) if the Registration Statement is
reviewed by the Commission, the date which is three (3) business days after the
date upon which the Company or its counsel is notified by the Commission,
whether orally or in writing, that the Commission has no further comments with
respect to the Registration Statement or that the Registration Statement may be
declared effective (the earliest of such dates is referred to herein as the
"Effectiveness Deadline.") Notwithstanding anything to the contrary contained
herein or in any of the Securities Purchase Agreement, the Debentures or the
Warrants (collectively, the "Primary Documents"), the Company shall take all
action necessary to ensure that the Registration Statement includes only the
Registrable Securities and those securities set forth on Schedule 1 hereto.
(ii) The Company shall keep each Registration Statement
effective pursuant to Rule 415 at all times until such date as is the earlier of
(i) the date on which all of the Registrable Securities have been sold and (ii)
the date on which the Registrable Securities (in the opinion of counsel to the
Purchaser) may be immediately sold without restriction (including without
limitation as to volume by each holder thereof) without registration under the
Securities Act (the "Registration Period").
(b) PAYMENTS BY THE COMPANY.
(i) (A) If the Registration Statement covering the
Registrable Securities is not filed with the Commission on or prior to the
Filing Deadline, (B) if the Registration Statement covering the Registrable
Securities is not effective on or prior to the Effectiveness Deadline, (C) if
the number of Shares listed for trading on the OTC Bulletin Board or reserved by
the Company for issuance shall be insufficient, for any period of five (5)
consecutive days at any time after the Effectiveness Deadline, for issuance upon
the conversion of the Debentures and the exercise of the Warrants, or (D) upon
the occurrence of a Blackout Event (as described in Section 3(f) or Section 3(g)
below), for any period of five (5) consecutive days at any time after the
Effectiveness Deadline (each of the events
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described in clauses (A) through (D) of this paragraph are referred to herein as
a "Registration Default"), the Company will make payments to the Purchaser in
such amounts and at such times as shall be determined pursuant to this Section
2(b).
(ii) The amount (the "Periodic Amount") to be paid by the
Company to the Purchaser as of each thirty (30) day period during which a
Registration Default shall be in effect (each such period, a "Default Period")
shall be equal to two percent of the purchase price paid by such Purchaser for
all of the Debentures and Warrants (the "Purchase Price"); provided that, with
respect to any Default Period during which the relevant Registration Defaults
shall have been cured, the Periodic Amount shall be pro rated for the number of
days during such period during which the Registration Defaults were pending; and
provided, further, that the payment of such Periodic Amounts shall not relieve
the Company from its continuing obligations to register the Warrants and Shares
pursuant to Section 2(a).
(iii) Each Periodic Amount shall be payable by the Company in
cash or other immediately available funds to the Purchaser monthly, without
demand therefor by the Purchaser.
(iv) The parties acknowledge that the damages which may be
incurred by the Purchaser if the Registration Statement is not filed by the
Filing Deadline, if the Registration Statement has not been declared effective
by the Effectiveness Deadline, or if the provisions of Section 3(e) or 3(f)
become applicable, may be difficult to ascertain. The parties agree that the
Periodic Amount represents a reasonable estimate on the part of the parties, as
of the date of this Agreement, of the amount of such damages.
(c) PIGGYBACK REGISTRATION. (i) If at any time or from time to time,
the Company shall determine to register any of its securities, for its own
account or the account of any of its shareholders, other than a Registration
relating solely to employee share option plans or pursuant to an acquisition
transaction on Form S-4, the Company will:
(A) provide to the Purchaser written notice thereof as
soon as practicable prior to filing the Registration Statement; and
(B) include in such Registration Statement and in any
underwriting involved therein, all of the Registrable Securities specified in a
written request by the Purchaser made within fifteen (15) days after receipt of
such written notice from the Company.
(ii) If the Registration is for a registered public offering
involving an underwriting, the Company shall so advise the Purchaser as a part
of the written notice given pursuant to this Section. In such event, the rights
of the Purchaser hereunder shall include participation in such underwriting and
the inclusion
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of the Registrable Securities in the underwriting to the extent provided herein.
To the extent that the Purchaser proposes to distribute its securities through
such underwriting, the Purchaser shall (together with the Company and any other
security holders of the Company distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Section, if the managing underwriter
of such underwriting determines that marketing factors require a limitation of
the number of shares to be offered in connection with such underwriting, the
managing underwriter may limit the number of Registrable Securities to be
included in the Registration and underwriting (provided, however, (a) the
Registrable Securities shall not be excluded from such underwritten offering
prior to any securities held by officers and directors of the Company or their
affiliates, (b) the Registrable Securities shall be entitled to at least the
same priority in an underwritten offering as any of the Company's existing
security holders, and (c) the Company shall not enter into any agreement that
would provide any security holder with priority in connection with an
underwritten offering greater than the priority granted to the Purchaser
hereunder). The Company shall so advise any of its other security holders who
are distributing their securities through such underwriting pursuant to their
respective piggyback registration rights, and the number of shares of
Registrable Securities and other securities that may be included in the
registration and underwriting shall be allocated among the Purchaser and all
other security holders of the Company in proportion, as nearly as practicable,
to the respective amounts of Registrable Securities held by the Purchaser and
such other security holders at the time of the filing of the registration
statement. If the Purchaser disapproves of the terms of any such underwriting,
it may elect to withdraw therefrom by written notice to the Company. Any
Registrable Securities so excluded or withdrawn from such underwriting shall be
withdrawn from such Registration.
(d) INTENTIONALLY OMITTED.
(e) PRIORITY IN FILING. Subject to the terms of the Securities
Purchase Agreement, from the date hereof until 180 days following the effective
date of the Registration Statement pursuant to Section 2(a) of this Agreement,
the Company shall not permit the registration of any of its securities under the
Securities Act to become effective, other than those covered by this Agreement
and that certain Registration Rights Agreement dated as of November 9, 1999
between Globe United Holdings, Inc. and the Company, without the prior written
approval of the Purchaser. The foregoing notwithstanding, the Company may permit
a registration statement to become effective during the foregoing period
provided that such registration statement relates to a firm commitment
underwritten offering of the Company's securities that provides the Company with
at least $7.5 million.
3. OBLIGATIONS OF THE COMPANY. In connection with the registration of the
Registrable Securities, the Company shall do each of the following:
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(a) Prepare and file with the Commission the registration statements
required by Section 2 of this Agreement and such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectuses used in connection with the Registration Statement, each in such
form as to which the Purchaser and its counsel shall not have objected, as may
be necessary to keep the Registration current at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all of the
Registrable Securities until such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof as set forth in the Registration Statement;
(b) Furnish to the Purchaser, if the Registrable Securities of the
Purchaser are included in the Registration Statement, and its legal counsel
identified to the Company, promptly after the same is prepared and publicly
distributed, filed with the Commission, or received by the Company, a copy of
the Registration Statement, each preliminary prospectus, each final prospectus,
and all amendments and supplements thereto and such other documents, as the
Purchaser may reasonably request in order to facilitate the disposition of its
Registrable Securities;
(c) As soon as practicable, furnish to the Purchaser and its counsel
copies of any correspondence between the Company and the Commission with respect
to any registration statement or amendment or supplement thereto filed pursuant
to this Agreement;
(d) Use all best efforts to (i) register and qualify the Registrable
Securities covered by the Registration Statement under such other securities or
blue sky laws of such jurisdictions as the Purchaser may request, (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 at all times 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 necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions;
(e) List such securities on the OTC Bulletin Board and all the other
national securities exchanges on which any securities of the Company are then
listed, and file any filings required by the OTC Bulletin Board and/or such
other exchanges;
(f) As promptly as practicable after becoming aware of such event,
notify each Purchaser of the occurrence of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and to use its
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best efforts to promptly prepare a supplement or amendment to the Registration
Statement or other appropriate filing with the Commission to correct such untrue
statement of omission, and to deliver a number of copies of such supplement or
amendment to the Purchaser as the Purchaser may reasonably request;
(g) As promptly as practicable after becoming aware of such event,
notify the Purchaser who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the underwriters) of the issuance by the
Commission or any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time, and to use its best
efforts to promptly obtain the withdrawal of such stop order or other suspension
of effectiveness;
(h) As promptly as practicable after becoming aware of such event,
notify each Purchaser who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the Commission or any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time, and to use its best
efforts to promptly obtain the withdrawal of such stop order or other suspension
of effectiveness (the occurrence of any of the events described in paragraphs
(f) and (g) of this Section 3 is referred to herein as a "Blackout Event");
(i) During the period commencing upon (i) the Purchaser's receipt of
a notification pursuant to Section 3(f) above, or (ii) the entry of a stop order
or other suspension of effectiveness of the Registration Statement described in
Section 2(a) above, and ending at such time as (y) the Company shall have
completed the applicable filings (and if applicable, such filings shall have
been declared effective) and shall have delivered to the Purchaser the documents
required pursuant to Section 3(e) above, or (z), such stop order or other
suspension of the effectiveness of the Registration Statement shall have been
removed, the Company shall be liable to remit the payments required to be paid
pursuant to Section 2(b) above;
(j) If the offering is underwritten, at the request of a Purchaser,
to furnish on the date that Registrable Securities are delivered to the
underwriters for sale pursuant to such registration: (i) an opinion dated such
date of counsel representing the Company for the purposes of such registration,
addressed to the underwriters and to any Purchaser selling Registrable
Securities in connection with such underwriting, stating that such registration
statement has become effective under the Securities Act and that (A) to the best
knowledge of such counsel, no stop order suspending the effectiveness thereof
has been issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Securities Act and (B) the registration
statement, the related prospectus and each amendment or supplement thereof
comply as to form in all material respects with the requirements of the
Securities Act (except that such counsel need not express any opinion as to
financial statements or other financial data contained therein) and (ii) a
letter dated such date from the Company's independent public accountants
addressed to the
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underwriters and to such Purchasers, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five (5) business days prior to the date of such
letter) with respect to such registration as such underwriters may reasonably
request; and
(k) Cooperate with the Purchaser to facilitate the timely
preparation and delivery of certificates for the Registrable Securities to be
offered pursuant to the Registration Statement and to enable such certificates
for the Registrable Securities to be in such denominations or amounts, as the
case may be, as the Purchaser may reasonably request, and registered in such
names as the Purchaser may request; and, within three (3) business days after a
Registration Statement which includes Registrable Securities is ordered
effective by the Commission, the Company shall deliver, and shall cause legal
counsel selected by the Company to deliver, to the transfer agent for the
Registrable Securities (with copies to the Purchaser) an appropriate instruction
and opinion of such counsel.
4. OBLIGATIONS OF THE PURCHASER. In connection with the registration of
the Registrable Securities, the Purchaser shall furnish to the Company such
information regarding itself, the Warrants and Registrable Securities held by
it, and the intended method of disposition of the Warrants and the Registrable
Securities held by it, as shall be reasonably required to effect the
registration of such Warrants and such Registrable Securities, and the Purchaser
shall execute such documents in connection with such registration as the Company
may reasonably request. At least five (5) days prior to the first anticipated
filing date of the Registration Statement, the Company shall notify the
Purchaser of the information the Company included in the Registration Statement.
5. EXPENSES OF REGISTRATION. All expenses, other than underwriting
discounts and commissions and other fees and expenses of investment bankers and
other than brokerage commissions, incurred in connection with registrations,
filings or qualifications pursuant to Section 3, but including, without
limitation, all registration, listing, and qualification fees, printing and
accounting fees, and the fees and disbursements of counsel for the Company.
6. INDEMNIFICATION. In the event any Registrable Securities are included
in a Registration Statement under this Agreement:
(a) The Company will indemnify and hold harmless the Purchaser, each
of its officers, directors and shareholders, and each person, if any, who
controls the Purchaser within the meaning of the Securities Act or the Exchange
Act (each, an
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"Indemnified Person"), against any losses, claims, damages, liabilities or
expenses joint or several) incurred (collectively, "Claims") to which any of
them may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any post-effective amendment thereof or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances in which they were made, 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 Commission) or the
omission to state therein any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, or (iii) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act, any state or foreign securities law or
any rule or regulation under the Securities Act, the Exchange Act or any state
or foreign securities law (the matters in foregoing clauses (i) through (iii)
being, collectively, "Violations"). The Company shall, subject to the provisions
of Section 6(b) below, reimburse the Purchaser, promptly as such expenses are
incurred and are due and payable, for any legal and other costs, expenses and
disbursements in giving testimony or furnishing documents in response to a
subpoena or otherwise, including without limitation, the costs, expenses and
disbursements, as and when incurred, of investigating, preparing or defending
any such action, suit, proceeding or investigation (whether or not in connection
with litigation in which the Purchaser is a party), incurred by it in connection
with the investigation or defense of any such Claim. Notwithstanding anything to
the contrary contained herein, the indemnification agreement contained in this
Section 6(a) shall not (i) apply to any Claim arising out of or based upon a
modification which occurs in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto; (ii) with respect
to any preliminary prospectus, inure to the benefit of any such person from whom
the person asserting any such Claim purchased the Registrable Securities that
are the subject thereof (or to the benefit of any person controlling such
person) if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the final prospectus, as then amended or
supplemented, if such final prospectus was timely made available by the Company
pursuant to Section 3(b) hereof; (iii) be available to the extent that such
Claim is based upon a failure of the Purchaser to deliver or to cause to be
delivered the prospectus made available by the Company, if such prospectus was
timely made available by the Company pursuant to Section 3(b) hereof; or (iv)
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
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and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable Securities
by the Purchaser pursuant to Section 9. Each Purchaser will indemnify the
Company and its officers and directors against any Claims 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 or on behalf of the
Purchaser, expressly for use in connection with the preparation of the
Registration Statement, subject to such limitations and conditions as are
applicable to the Indemnification provided by the Company in this Section 6.
(b) Promptly after receipt by an Indemnified Person under this
Section 6 of notice of the commencement of any action (including any
governmental action), such Indemnified Person 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 that the indemnifying party so desires, jointly with any other
indemnifying party similarly notified, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person, provided, however, that an Indemnified Person shall have the right to
retain its own counsel with the reasonable 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
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person and any other party
represented by such counsel in such proceeding. In such event, the Company shall
pay for only one separate legal counsel for the Purchaser, and such legal
counsel shall be selected by the Purchaser. The failure to deliver written
notice to an indemnifying party within a reasonable time after the commencement
of any such action shall not relieve such indemnifying party of any liability to
the Indemnified Person under this Section 6, except to the extent that the
indemnifying party is materially prejudiced in its ability to 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.
(c) 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 Person of an unconditional and irrevocable release from all
liability in respect of such claim or litigation.
(d) Notwithstanding the foregoing, to the extent that any
provisions relating to indemnification or contribution contained in the
underwriting agreements entered into among the Company, the underwriters and the
Purchaser in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in such underwriting agreements
shall be controlling as to the Registrable
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Securities included in the public offering; provided, however, that if, as a
result of this Section 6(d), the Purchaser, its officers, directors, partners or
any person controlling the Purchaser is or are held liable with respect to any
Claim for which they would be entitled to indemnification hereunder but for this
Section 6(d) in an amount which exceeds the aggregate proceeds received by the
Purchaser from the sale of Registrable Securities included in a registration
pursuant to such underwriting agreement (the "Excess Liability"), the Company
shall reimburse the Purchaser for such Excess Liability.
7. CONTRIBUTION. To the extent any indemnification by an indemnifying
party is prohibited or limited under applicable law, the indemnifying party
agrees to contribute to the amount paid or payable by such indemnified party as
a result of such loss, claim, damage, liability or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and the Indemnified Person on the other hand in connection with the
statements or omissions which resulted in such Claim, as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and the Indemnified Person shall be determined by reference to, among other
things, whether the untrue statement of a material fact or the omission to state
a material fact on which such Claim is based relates to information supplied by
the indemnifying party or by the Indemnified Person, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. Notwithstanding the forgoing, (a) no contribution
shall be made under circumstances where the payor would not have been liable for
indemnification under the fault standards set forth in Section 6, (b) no seller
of Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
such fraudulent misrepresentation and (c) contribution by any seller of
Registrable Securities shall be limited in amount to the net proceeds received
by such seller from the sale of such Registrable Securities. The Company and the
Purchaser agree that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by pro-rata allocation (even if the Purchaser
and any other party were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in this Section.
8. REPORTS UNDER EXCHANGE ACT.
With a view to making available to the Purchaser the benefits of
Rule 144 promulgated under the Securities Act or any other similar rule or
regulation of the Commission that may at any time permit the Purchaser to sell
securities of the Company to the public without registration ("Rule 144"), the
Company agrees to:
(i) make and keep public information available, as those
terms are understood and defined in Rule 144;
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(ii) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act; and
(iii) furnish to the Purchaser so long as the Purchaser owns
Registrable Securities, Debentures or Warrants promptly upon request, (i) a
written statement by the Company that it has complied with the reporting
requirements of the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or periodic 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 Purchaser to sell such securities pursuant to
Rule 144 without registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the Company
register Registrable Securities pursuant to this Agreement shall be
automatically assigned by Purchaser to any transferee of all or any portion of
the principal amount of Debentures or the Warrants, or the underlying Common
Stock held by Purchaser (collectively, the "Securities") if: (a) Purchaser
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; (b) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of the name and address of
such transferee or assignee; (c) at or before the time the Company receives the
written notice contemplated by clause (b) of this sentence, the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
contained herein; and (d) the transfer of the relevant Securities complies with
the restrictions set forth in Section 4 of the Securities Purchase Agreement.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this 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 the Purchaser. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon Purchaser and
the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Warrants or
Registrable Securities whenever such person or entity owns of record such
Warrants or Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more persons or entities with
respect to the same Warrants or Registrable Securities, the Company shall act
upon the basis of the instructions, notice or election received from the
registered owner of such Warrants or Registrable Securities.
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(b) Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be effective upon personal
delivery, via facsimile (upon receipt of confirmation of error-free
transmission) or two business days following deposit of such notice with an
internationally recognized courier service, with postage prepaid and addressed
to each of the other parties thereunto entitled at the following addresses, or
at such other addresses as a party may designate by ten (10) days advance
written notice to each of the other parties hereto.
COMPANY: iBIZ TECHNOLOGY CORP.
1919 West Lone Cactus
Phoenix, Arizona 85027
ATTN: Kenneth Schilling
Tel.: 623-492-9200
Fax: 623-492-9921
WITH COPIES TO:
Gammage & Burnham
2 North Central Avenue
Phoenix, Arizona 85004
ATTN: Steven Boatwright, Esq.
Tel.: 602-256-4439
Fax: 602-256-4475
PURCHASER: Globe United Holdings, Inc.
Akara Building
Wickhams Cay #1
Road Town Tortola
British Virgin Islands
WITH COPIES TO:
Laufer Halberstarn & Karish, P.C.
39 Broadway, 14th Floor
New York, New York 10006
ATTN: Michael J. Halberstam, Esq.
Tel.: (212) 422-8500
Fax: (212) 422-9038
(c) Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof
(d) This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York, except for
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provisions with respect to internal corporate matters of the Company which shall
be governed by the corporate laws of the State of Florida. Each of the parties
consents to the jurisdiction of the federal courts whose districts encompass any
part of the City of New York or the state courts of the State of New York
sitting in the City of New York in connection with any dispute arising under
this Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions. This Agreement may be
signed in one or more counterparts, each of which shall be deemed an original.
The headings of this Agreement are for convenience of reference and shall not
form part of, or affect the interpretation of, this Agreement. If any provision
of this Agreement shall be invalid or unenforceable in any jurisdiction, such
validity or unenforceability shall not affect the validity or enforceability of
the remainder of this Agreement or the validity or enforceability of this
Agreement in any other jurisdiction. Subject to the provisions of Section 10
hereof, this Agreement may be amended only by an instrument in writing signed by
the party to be charged with enforcement. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof.
(e) This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof. This
Agreement supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof.
(f) Subject to the requirements of Section 9 hereof,
this Agreement shall inure for the benefit of and be binding upon the successors
and assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to
the masculine, feminine or neuter, singular or plural, as the context may
require.
(h) The Company acknowledges that any failure by the
Company to perform its obligations under Section 2(a), or any delay in such
performance could result in direct damages to the Purchaser, and the Company
agrees that, in addition to any other liability the Company may have by reason
of any such failure or delay, the Company shall be liable for all direct damages
caused by any such failure or delay. Nothing herein shall limit the Purchaser's
right to pursue any claim seeking such direct damages.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
undersigned.
"COMPANY"
iBIZ TECHNOLOGY CORP.
By:_____________________________________
Name: Kenneth Schilling
Title: President/CEO
IN WITNESS WHEREOF, this Agreement has been duly executed by the
undersigned.
"PURCHASER"
GLOBE UNITED HOLDINGS, INC.
By:_____________________________________
Title: Authorized Person
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