REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is entered into as
of January 5, 2000, by and among DME Interactive Holdings, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇▇ Partners, Inc. (the "▇▇▇▇▇▇▇").
WHEREAS, ▇▇▇▇▇▇▇ has been issued 500,000 shares of the Company's Common
Stock and a warrant to purchase 500,000 shares of common stock as a fee in
connection with the transactions contemplated in Stock Purchase Agreement, dated
January 5, 2000 ("SPA").
WHEREAS, in connection with such transactions, the Company and ▇▇▇▇▇▇▇
desire to enter into certain arrangements with respect to the registration for
public sale under the Securities Act of 1933, as amended (the "Securities Act"),
of the shares of the Company's common stock, par value $.001 per share.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and ▇▇▇▇▇▇▇ hereby
agree as follows:
1. Definitions.
1.1 "Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
1.2 "Company" shall mean DME Interactive Holdings, Inc., a Delaware
corporation.
1.3 "Common Shares" shall mean the shares of common stock, par value
$.001 per share, authorized by the Company's Certificate of Incorporation and
any additional shares of common stock which may be authorized in the future by
the Company, and any stock into which such Common Shares may hereafter be
changed.
1.4 "Public Offering" shall mean any offering of Common Shares to
the public, either on behalf of the Company or any of its security holders,
pursuant to an effective registration statement under the Securities Act.
1.5 "▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇ Partners, Inc.
1.6 "Registrable Securities" shall mean (a) the Common Shares issued
to ▇▇▇▇▇▇▇ in connection with the transactions contemplate by the SPA, (b) the
Common Shares issuable upon the exercise of the Warrant issued to ▇▇▇▇▇▇▇ in
connection with the transactions contemplated by the SPA and (c) any additional
securities issued with respect to the above-described securities upon any stock
split, stock dividend, recapitalization, or similar event. Registrable
Securities shall cease to be Registrable Securities upon the first to occur of :
(i) a registration statement with respect to the sale of such securities shall
have been declared effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, (ii) such
securities shall be eligible to be distributed pursuant to Rule 144 under the
Securities Act in a single three-month period by the holder thereof, (iii) such
securities shall have ceased to be outstanding or (iv) five (5) years after the
date hereof.
1.7 "Registration Expenses" shall mean the expenses described in
Section 5.
1.8 "Securities Act" shall mean the Securities Act of 1933, as
amended.
2. Piggyback Registration.
2.1 Each time the Company shall determine to proceed with the actual
preparation and filing of a registration statement under the Securities Act in
connection with the proposed offer and sale for money of any of its securities
by it or any of its security holders (other than a registration statement on
Form ▇-▇, ▇▇▇▇ ▇-▇ or other limited purpose form and expressly excluding a
post-effective amendment to registration statement), the Company will give
written notice of its determination to all record holders of Registrable
Securities. Upon the written request of a record holder of any Registrable
Securities given within 30 days after the date of any such notice from the
Company, the Company will, except as herein provided, cause all Registrable
Securities the registration of which is requested to be included in such
registration statement, all to the extent requisite to permit the sale or other
disposition by the prospective seller or sellers of the Registrable Securities
to be so registered; provided, however, that nothing herein shall prevent the
Company from, at any time, abandoning or delaying any registration.
2.2 If any registration pursuant to Section 2.1 is underwritten in
whole or in part, the Company may require that the Registrable Securities
included in the registration be included in the underwriting on the same terms
and conditions as the securities otherwise being sold through the underwriters.
If, in the good faith judgment of the managing underwriter of the Public
Offering, the inclusion of all of the Registrable Securities originally covered
by requests for registration would reduce the number of shares to be offered by
the Company or interfere with the successful marketing of the shares offered by
the Company, the number of Registrable Securities to be included in the Public
Offering may be reduced pro rata, among the requesting holders thereof in
proportion to the number of Registrable Securities included in their respective
requests for registration. The Registrable Securities which are thus excluded
from the underwritten Public Offering shall be withheld from the market by the
holders thereof for a period which the managing underwriter reasonably
determines is necessary in order to effect the Public Offering. If the managing
underwriter of an public offering of Common Shares requests that Registrable
Securities be excluded from such offering, the Company shall not be required to
include any Registrable Securities in such registration statement.
3. Registration Procedures. If and whenever the Company is required by
the provisions of Article 2 to include Registrable Securities in a Registration
Statement under the Securities Act, the Company will use its best efforts to
effect the registration and sale of such Registrable Securities in accordance
with the intended methods of disposition specified by the holders participating
therein. Without limiting the foregoing, the Company in each such case will, as
expeditiously as possible:
3.1 use its best efforts to cause such registration statement to
become effective; provided, however, that as far in advance as practical before
filing such registration statement or any amendment thereto, the Company will
furnish counsel for the requesting holders of Registrable Securities with copies
of reasonably complete drafts of all such documents proposed to be filed
(including exhibits), and any such holder shall have the opportunity to object
to any information pertaining solely to such holder that is contained therein
and the Company will make the corrections reasonably requested by such holder
with respect
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to such information prior to filing such registration statement or amendment.
3.2 Prepare and file with the Commission such amendments and
supplements to such registration statement and any prospectus used in connection
therewith as may be necessary to maintain the effectiveness of such registration
statement and to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities included in such registration
statement, in accordance with the intended methods of disposition thereof, until
the earlier of (a) such time as all of the Registrable Securities included in
such registration statement have been disposed of in accordance with the
intended methods of disposition by the holder or holders thereof as set forth in
such registration statement or (b) one hundred eighty (180) days after such
registration statement becomes effective.
3.3 Promptly notify each requesting holder and the underwriter
or underwriters, if any, of:
(a) when such registration statement or any prospectus used in
connection therewith, or any amendment or supplement thereto, has been
filed and, with respect to such registration statement or any
post-effective amendment thereto, when the same has become effective;
(b) any written request by the Commission for amendments or
supplements to such registration statement or prospectus;
(c) any notification received by the Company from the Commission
regarding the Commission's initiation of any proceeding with respect to,
or of the issuance by the Commission of, any stop order suspending the
effectiveness of such registration statement; and
(d) the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale
under the applicable securities or blue sky laws of any jurisdiction.
3.4 Furnish to each holder of Registrable Securities included in
such registration statement such number of conformed copies of such registration
statement and of each amendment and
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supplement thereto, and such number of copies of the prospectus contained in
such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 promulgated
under the Securities Act relating to such seller's Registrable Securities, and
such other documents, as such holder may reasonably request to facilitate the
disposition of its Registrable Securities.
3.5 Use its best efforts to register or qualify all Registrable
Securities included in such registration statement under the securities or "blue
sky" laws of such states as each holder of Registrable Securities shall
reasonably request within twenty (20) days following the original filing of such
registration statement and to keep such registration or qualification in effect
for so long as such registration statement remains in effect, and take any other
action which may be reasonably necessary or advisable to enable such holder to
consummate the disposition in such states of the Registrable Securities owned by
such holder, except that the Company shall not for any such purpose be required
(a) to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this Section 5.5
be obligated to be so qualified, (b) to consent to general service of process in
any such jurisdiction or (c) to subject itself to taxation in any such
jurisdiction by reason of such registration or qualification.
3.6 Use its best efforts to cause all Registrable Securities
included in such registration statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to enable
each holder thereof to consummate the disposition of such Registrable
Securities.
3.7 Notify each holder whose Registrable Securities are included in
such registration statement, at any time 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 any prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and at the request of any such holder promptly prepare and
furnish to such holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be
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necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities, 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, in the light of the circumstances under which
they were made, not misleading.
3.8 Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission.
3.9 Use its best efforts to cause all Registrable Securities
included in such registration statement to be listed, upon official notice of
issuance, on any securities exchange or quotation system on which any of the
securities of the same class as the Registrable Securities are then listed.
3.10 The Company may require each holder whose Registrable
Securities are being registered to, and each such holder, as a condition to
including Registrable Securities in such registration statement, shall, furnish
the Company and the underwriters with such information and affidavits regarding
such holder and the distribution of such Registrable Securities as the Company
and the underwriters may from time to time reasonably request in writing in
connection with such registration statement. At any time during the
effectiveness of any registration statement covering Registrable Securities
offered by a holder, if such holder becomes aware of any change materially
affecting the accuracy of the information contained in such registration
statement or the prospectus (as then amended or supplemented) relating to such
holder, it will immediately notify the Company of such change.
3.11 Upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 3.7, each holder will forthwith
discontinue such holder's disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until such holder
receives the copies of the supplemented or amended prospectus contemplated by
Section 3.7 and, if so directed by the Company, shall deliver to the Company all
copies, other than permanent file copies, then in such holder's possession of
the prospectus relating to such Registrable Securities.
3.12 If requested by the Company or its underwriters, none of the
holders will sell their Registrable Securities for a
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specified period (not to exceed one hundred and eighty (180) days) following the
effective date of a Registration Statement relating to the sale of Securities by
the Company.
4. Expenses. With respect to any registration requested pursuant this
Agreement, the Company shall bear all of the expenses ("Registration Expenses")
incident to the Company's performance of or compliance with its obligations
under this Agreement in connection with such registration including, without
limitation, all registration, filing, securities exchange listing and NASD fees,
all registration, filing, qualification and other fees and expenses or complying
with state securities or "blue sky" laws, all word processing, duplicating and
printing expenses, messenger and delivery expenses, the fees and disbursements
of counsel for the Company and of its independent public accountants, including
the expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, premiums and other costs of any
policies of insurance against liabilities arising out of the Public Offering of
the Registrable Securities being registered obtained by the Company (it being
understood that the Company shall have no obligation to obtain such insurance)
and any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities; but excluding underwriting discounts and commissions and
transfer taxes, if any, in respect of Registrable Securities and any fees and
disbursements of counsel and accountants to the holders of the Registrable
Securities, which discounts, commissions, transfer taxes, fees and disbursements
shall in any registration be payable by the holders of the Registrable
Securities being registered, pro rata in proportion to the number of Registrable
Securities being sold by them.
5. Indemnification.
5.1 The Company will, to the full extent permitted by law, indemnify
and hold harmless each holder of Registrable Securities which are included in a
registration statement pursuant to the provisions of this Agreement, and its
directors, officers and partners and each other person, if any, who controls
such holder within the meaning of the Securities Act, from and against any and
all losses, claims, damages, expenses or liabilities, joint or several
(collectively, "Losses") to which such holder or any such director, officer,
partner or controlling person may become subject under the Securities Act
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or otherwise, insofar as such Losses (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in a
registration statement prepared and filed hereunder, any preliminary, final or
summary prospectus contained therein or any amendment or supplement thereto or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, and the Company will reimburse the holder and each such director,
officer, partner and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
against any such Losses (or action or proceeding in respect thereof); provided,
however, that the Company will not be liable in any such case to the extent that
any such Losses arise out of or are based upon (a) an untrue statement or
alleged untrue statement or omission or alleged omission made in conformity with
written information furnished by such holder specifically for use in the
preparation of the registration statement or (b) such holder's failure to send
or give a copy of the final prospectus to the persons asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
person if such statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such holder or any such director, officer,
partner or controlling person of such holder and shall survive the transfer of
such securities by such holder. The Company shall also indemnify each other
person who participates (including as an underwriter) in the offering or sale of
Registrable Securities, their officers and directors, and partners, and each
other person, if any, who controls any such participating person within the
meaning of the Securities Act to the same extent provided above with respect to
holders of Registrable Securities.
5.2 Each holder of Registrable Securities which are included in a
registration pursuant to the provisions of this Agreement will, to the full
extent permitted by law, indemnify and hold harmless the Company, its officers,
directors and each other person, if any, who controls the Company within the
meaning of the Securities Act from and against any and all
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Losses to which the Company or any such officer, director or controlling person
may become subject under the Securities Act or otherwise, insofar as such Losses
(or actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in a registration statement prepared and filed
hereunder, any preliminary, final or summary prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was so
made in reliance upon and in strict conformity with written information
furnished by such holder specifically for use in the preparation of such
registration statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any such
director, officer or controlling person of the Company. The holder of
Registrable Securities included in a registration statement shall also indemnify
each other person who participates (including as an underwriter) in the offering
or sale of Registrable Securities, their officers and directors, and partners,
and each other person, if any, who controls any such participating person within
the meaning of the Securities Act to the same extent as provided above with
respect to the Company. In no event shall the liability of any holder under this
Section 7.2 exceed the net proceeds received by such holder from the sale of
their Registrable Securities.
5.3 Promptly after receipt by a party indemnified pursuant to the
provisions of Section 5.1 or Section 5.2 of notice of the commencement of any
action involving the subject matter of the foregoing indemnity provisions, such
indemnified party will, if a claim thereof is to be made against the
indemnifying party pursuant to the provisions of Section 5.1 or Section 5.2,
promptly notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve the indemnifying
party from any liability which it may have to any indemnified party except to
the extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against any indemnified party,
the indemnifying party
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shall have the right to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any action include both the indemnified party and the
indemnifying party and the indemnified party reasonably concludes that there is
a conflict of interest that would prevent counsel for the indemnifying party
from also representing the indemnified party, the indemnified party shall have
the right to select separate counsel to participate in the defense of such
action on behalf of the indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party pursuant to the provisions of Section 5.1 or Section 5.2 for any legal or
other expense subsequently incurred by such indemnified party in connection with
the defense thereof unless (a) the indemnified party shall have employed counsel
in accordance with the proviso of the preceding sentence, (b) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after the
notice of the commencement of the action or (c) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party. If the indemnifying party is not entitled to, or elects
not to, assume the defense of a claim, it will not be obligated to pay the fees
and expenses of more than one counsel for the indemnified parties with respect
to such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other
indemnified parties with respect to such claim, in which event the indemnifying
party shall be obligated to pay the fees and expenses of additional counsel or
counsels for the indemnified parties. No indemnifying party shall 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 without the consent of the indemnified party. No indemnifying party
shall be subject to any liability for any settlement made without its consent.
An indemnified party may at any time elect to participate in the defense of any
claim or proceeding at its own expense.
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6. Covenants Relating to Rule 144. If at any time the Company is
required to file reports in compliance with either Section 13 or Section 15(d)
of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") the
Company will use its best efforts to use its best efforts to (a) file reports in
compliance with the Exchange Act and (b) comply with all rules and regulations
of the Commission applicable to the use of Rule 144.
7. Underwritten Offerings. If a distribution of Registrable Securities
pursuant to a registration statement is to be underwritten, the holders whose
Registrable Securities are to be distributed by such underwriters shall be
parties to such underwriting agreement. No requesting holder may participate in
such underwritten offering unless such holder agrees to sell its Registrable
Securities on the basis provided in such underwriting agreement and completes
and executes all questionnaires, powers of attorney, indemnities and other
documents reasonably required under the terms of such underwriting agreement. If
any requesting holder disapproves of the terms of an underwriting, such holder
may elect to withdraw therefrom and from such registration by notice to the
Company and the managing underwriter, and each of the remaining requesting
holders shall be entitled to increase the number of Registrable Securities being
registered to the extent of the Registrable Securities so withdrawn in the
proportion which the number of Registrable Securities being registered by such
remaining requesting holder bears to the total number of Registrable Securities
being registered by all such remaining requesting holders.
8. Amendment. The Company shall not amend this Agreement without the
written consent of the holders of more than 50% of the Registrable Securities.
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9. Termination. This Agreement, and all of the Company's
obligations hereunder (other than its obligations pursuant to Article 7,
which obligations shall survive such termination), shall terminate the date
on which there are no Registrable Securities outstanding or
DME INTERACTIVE HOLDINGS, INC.
By: /s/ Darien Dash
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Name: Darien Dash
Title: President
▇▇▇▇▇▇▇ Partners, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Principal
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