REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement"),
dated as of September ____, 1999, is made by and between
eConnect, a Nevada corporation ("Company"), and the person
named on the signature page hereto ("Subscriber").
Recitals
WHEREAS, upon the terms and subject to the
conditions of the Common Stock Purchase Agreement
("Purchase Agreement"), between the Subscriber and
the Company, and the commitment letter of September
15, 1999 ("Commitment Letter") the Company has agreed
to issue and sell to the Subscriber up to five
million dollars ($5,000,000) of the common stock of
the Company ("Subscribed Shares"), which will be
converted into free trading shares of the common
stock, $0.001 par value ("Common Stock"), of the
Company ("Conversion Shares") upon the terms and
subject to the conditions of such Subscribed Shares;
and
WHEREAS, pursuant to the terms of the Purchase
Agreement the Company will issue on the Effective
Date, as that term is defined below, to the
Subscriber one million (1,000,000) warrants
("Warrants"), exercisable at a strike price equal to
eighty percent (80%) of the closing bid price of the
Common Stock on the Effective Date, as defined in
Section 1 below, and a maximum of five hundred
thousand (500,000) warrants ("Further Warrants") on a
pro rata basis in conjunction with the draw downs, as
set forth in the Purchase Agreement, exercisable at
the closing bid price five (5) day average closing
bid price for the Common Stock for the five trading
days prior to the Effective Date.
WHEREAS, to induce the Subscriber to execute and
deliver the Purchase Agreement, the Company has
agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor
statute (collectively, "Securities Act"), and
applicable state securities laws with respect to the
Conversion Shares;
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 Subscriber hereby agree as follows:
1. Definitions.
(a) As used in this Agreement, the following
terms shall have the following meaning:
(i) "Effective Date" means the date of this
Agreement.
(ii) "Subscriber" means the Subscriber and any
transferee or assignee who agrees to become bound by
the provisions of this Agreement in accordance with
Section 9 hereof.
(iii) "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 "SEC").
(iii) "Registrable Securities" means the
Conversion Shares and Warrants.
(iv) "Registration Statement" means a
registration statement of the Company under the
Securities Act.
(b) As used in this Agreement, the term
Subscriber includes (i) each Subscriber (as defined
above) and (ii) each person who is a permitted
transferee or assignee of the Registrable Securities
pursuant to Section 9 of this Agreement.
(c) Capitalized terms used herein and not
otherwise defined herein shall have the respective
meanings set forth in the Purchase Agreement.
2. Registration.
(a) Mandatory Registration. The Company shall
prepare and file with the SEC, no later than five (5)
days after the Effective Date, a post-effective
amendment to the Registration Statement on Form SB-2
declared effective by the SEC on September 7, 1999
("Registration Statement"), covering a sufficient
number of shares of Common Stock for the Subscribers
to cover the registration of the $5,000,000 of
Subscribed Shares and the conversion of the 1,500,000
Warrants and Further Warrants. The Registration
Statement shall cover a total of 61,000,000 shares of
the Common Stock. Such Registration Statement shall
state that, in accordance with the Securities Act, it
also covers such indeterminate number of additional
shares of Common Stock as may become issuable to
prevent dilution resulting from Stock splits, or
stock dividends. If at any time the number of shares
of Common Stock into which the Subscribed Shares and
Warrants issued in this offering may be converted
exceeds the aggregate number of shares of Common
Stock then registered, the Company shall, within ten
(10) business days after receipt of written notice
from any Subscriber, file with the SEC an additional
Registration Statement on Form SB-2 or any other
applicable registration statement, to register the
shares of Common Stock into which the Subscribed
Shares may be converted that exceed the aggregate
number of shares of Common Stock already registered.
(b) Payment by the Company. If the post-
effective amendment to the Registration Statement
covering the Registrable Securities required to be
filed by the Company pursuant to Section 2(a) hereof
is not declared effective within fifteen (15) days
from the Effective Date, then the Commitment between
the parties, as reflected in letter of understanding
dated September 15, 1999, shall terminate and the
Subscriber shall retain the Warrants and non-
refundable fee as described in the Commitment Letter.
The Company acknowledges that its failure to have the
post-effective amendment to the Registration
Statement declared effective within fifteen (15) days
from the Effective Date shall cause the Subscriber to
suffer damages in an amount that shall be difficult
to ascertain. Accordingly, the parties agree that it
is appropriate to include in this Agreement a
provision for liquidated damages. The parties
acknowledge and agree that the liquidated damages
provision set forth in this section represents the
parties' good faith effort to qualify such damages
and, as such, agree that the form and amount of such
liquidated damages are reasonable and will not
constitute a penalty. The payment of liquidated
damages shall not relieve the Company from its
obligations to register the Common Stock and deliver
the Common Stock pursuant to the terms of this
Agreement, the Purchase Agreement and the Subscribed
Shares.
3. Obligation of the Company. In connection
with the registration of the Registrable Securities,
the Company shall do each of the following:
(a) Prepare promptly, and file with the SEC
within five (5) days of the Effective Date, a post-
effective amendment to the Registration Statement
with respect to not less than the number of
Registrable Securities provided in Section 2(a),
above, and thereafter use its best efforts to cause
each Registration Statement relating to Registrable
Securities to become effective the earlier of (i)
five (5) business days after notice from the
Securities and Exchange Commission that the
Registration Statement may be declared effective, or
(b) fifteen (15) days after the Effective Date, and
keep the Registration Statement effective at all
times until the earliest of (i) the date that is one
year after the completion of the last Closing Date
under the Purchase Agreement, (ii) the date when the
Subscribers may sell all Registrable Securities under
Rule 144 without volume limitations, or (iii) the
date the Subscribers no longer own any of the
Registrable Securities ("Registration Period"), which
Registration Statement (including any amendments or
supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a
material fact or omit to state a material fact
required to be stated therein or necessary to make
the statements therein, in light of the circumstances
in which they were made, not misleading;
(b) Prepare and file with the SEC such
amendments (including post-effective amendments) and
supplements to the Registration Statement and the
prospectus used in connection with the Registration
Statement as may be necessary to keep the
Registration effective 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
Registrable Securities of the Company covered by the
Registration Statement 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;
(c) Furnish to each Subscriber whose
Registrable Securities are included in the
Registration Statement and its legal counsel
identified to the Company, (i) promptly after the
same is prepared and publicly distributed, filed with
the SEC, or received by the Company, one (1) copy of
the Registration Statement, each preliminary
prospectus and prospectus, and each amendment or
supplement thereto, and (ii) such number of copies of
a prospectus, including a preliminary prospectus, and
all amendments and supplements thereto and such other
documents, as such Subscriber may reasonably request
in order to facilitate the disposition of the
Registrable Securities owned by such Subscriber;
(d) Use its 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
Subscribers who hold a majority in interest of the
Registrable Securities being offered reasonably
request and in which significant volumes of shares of
Common Stock are traded, (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 qualification in effect at all
times during the Registration Period, and (iv) take
all other actions reasonably necessary or advisable
to qualify the Registrable Securities for sale in
such jurisdictions: provided, however, that the
Company shall not be required in connection therewith
or as a condition thereto to (A) qualify to do
business in any jurisdiction where it would not
otherwise be required to qualify but for this Section
3(d), (B) subject itself to general taxation in any
such jurisdiction, (C) file a general consent to
service of process in any such jurisdiction, (D)
provide any undertakings that cause more than nominal
expense or burden to the Company or (E) make any
change in its articles of incorporation or by-laws or
any then existing contracts, which in each case the
Board of Directors of the Company determines to be
contrary to the best interests of the Company and its
stockholders;
(e) As promptly as practicable after becoming aware
of such event, notify each Subscriber of the
happening 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 any 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, in light of the circumstances under which
they were made, not misleading ("Registration
Default"), and uses its best efforts promptly to
prepare a supplement or amendment to the Registration
Statement or other appropriate filing with the SEC to
correct such untrue statement or omission, and any
other necessary steps to cure the Registration
Default, and deliver a number of copies of such
supplement or amendment to each Subscriber as such
Subscriber may reasonably request. Failure to cure
the Registration Default within ten (10) business
days shall result in the Company including liquidated
damage penalty of $1,000 per day for so long as more
than 10,000 shares of Common Stock are held by the
Subscriber;
(f) As promptly as practicable after becoming
aware of such event, notify each Subscriber who holds
Registrable Securities being sold (or, in the event
of an underwritten offering, the managing
underwriters) of the issuance by the SEC of any
notice of effectiveness or any stop order or other
suspension of the effectiveness of the Registration
Statement at the earliest possible time;
(g) Use its commercially reasonable efforts, if
eligible, either to (i) cause all the Registrable
Securities covered by the Registration Statement to
be listed on a national securities exchange and on
each additional national securities exchange on which
securities of the same class or series issued by the
Company are then listed, if any, if the listing of
such Registrable Securities is then permitted under
the rules of such exchange, or (ii) secure
designation of all the Registrable Securities covered
by the Registration Statement as a National
Association of Securities Dealers Automated
Quotations System ("NASDAQ") "Small Capitalization"
within the meaning of Rule 11Aa2-1 of the SEC under
the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the quotation of the Registrable
Securities on the NASDAQ Small Cap Market; or if,
despite the Company's commercially reasonable efforts
to satisfy the preceding clause (i) or (ii), the
Company is unsuccessful in doing so, to secure NASD
authorization and quotation for such Registrable
Securities on the over-the-counter bulletin board
and, without limiting the generality of the
foregoing, to arrange for at least two market makers
to register with the National Association of
Securities Dealers, Inc. ("NASD") as such with
respect to such registrable securities;
(h) Provide a transfer agent for the
Registrable Securities not later than the effective
date of the Registration Statement;
(i) Cooperate with the Subscribers who hold
Registrable Securities being offered to facilitate
the timely preparation and delivery of certificates
for the Registrable Securities to be offered pursuant
to the Registration Statement and enable such
certificates for the Registrable Securities to be in
such denominations or amounts as the case may be, as
the Subscribers may reasonably request and
registration in such names as the Subscribers may
request; and, within five (5) business days after a
Registration Statement which includes Registrable
Securities is ordered effective by the SEC, 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 Subscribers whose Registrable Securities are
included in such Registration Statement) an
appropriate instruction and opinion of such counsel,
if so required by the Company's transfer agent; and
(j) Take all other reasonable actions necessary
to expedite and facilitate distribution to the
Subscriber of the Registrable Securities pursuant to
the Registration Statement.
4. Obligations of the Subscribers. In
connection with the registration of the Registrable
Securities, the Subscribers shall have the following
obligations;
(a) It shall be a condition precedent to the
obligations of the Company to complete the
registration pursuant to this Agreement with respect
to the Registrable Securities of a particular
Subscriber that such Subscriber shall timely furnish
to the Company such information regarding itself, the
Registrable Securities held by it, and the intended
method of disposition of the Registrable Securities
held by it, as shall be reasonably required to effect
the registration of such Registrable Securities and
shall timely execute such documents in connection
with such registration as the Company may reasonably
request.
(b) Each Subscriber by such Subscriber's
acceptance of the Registrable Securities agrees to
cooperate with the Company as reasonably requested by
the Company in connection with the preparation and
filing of the Registration Statement hereunder,
unless such Subscriber has notified the Company in
writing of such Subscriber's election to exclude all
of such Subscriber's Registrable Securities from the
Registration Statement; and
(c) Each Subscriber agrees that, upon receipt
of any notice from the Company of the happening of
any event of the kind described in Section 3(e) or
3(f), above, such Subscriber will immediately
discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such
Registrable Securities until such Subscriber's
receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(e) or 3(f) and,
if so directed by the Company, such Subscriber shall
deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in such
Subscriber's possession, of the prospectus covering
such Registrable Securities current at the time of
receipt of such notice.
5. Expenses of Registration. All
reasonable expenses, other than underwriting
discounts and commissions incurred in connection with
registrations, filing or qualifications pursuant to
Section 3, but including, without limitations, all
registration, listing, and qualifications fees,
printers and accounting fees, the fees and
disbursements of counsel for the Company, and review
by Subscribers' counsel, shall be borne by the
Company.
6. Indemnification. After Registrable
Securities are included in a Registration Statement
under this Agreement:
(a) To the extent permitted by law, the Company
will indemnify and hold harmless each Subscriber who
holds such Registrable Securities, the directors, if
any, of such Subscriber, the officers, if any, of
such Subscriber, each person, if any, who controls
any Subscriber within the meaning of the Securities
Act or the Exchange Act (each, an "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 any
of the following statements, omissions or violations
of the Registration Statement or any post-effective
amendment thereof, or any prospectus included
therein: (i) any untrue statement or alleged untrue
statement of a material fact contained in the
Registration Statement or any post-effective
amendment thereof or any prospectus included therein:
(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 to make the statements therein not
misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective
date of such Registration Statement, or contained in
the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary
to make the statements made therein, in light of the
circumstances under which the statements therein were
made, not misleading or (iii) any violation or
alleged violation by the Company of the Securities
Act, the Exchange Act, any state securities law or
any rule or regulation under the Securities Act, the
Exchange Act or any state securities law (the matters
in the foregoing clauses (i) through (iii) being
collectively referred to as "Violations"). The
Company shall reimburse the Subscribers, promptly as
such expenses are incurred and are due and payable,
for any reasonable legal fees or other reasonable
expenses incurred by them in connection with
investigating or defending any such Claim.
Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in
this Section 6(a) shall not (i) apply to 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 any Indemnified Person expressly for use in
connection with the preparation of the Registration
Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available
by the Company pursuant to Section 3(b) hereof; (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 prospectus, as then amended or supplemented,
if such prospectus was timely made available by the
Company pursuant to Section 3(b) hereof; (iii) be
available to the extent such Claim is based on a
failure of the Subscriber to deliver or cause to be
delivered the prospectus made available by the
Company; 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. Each
Subscriber will indemnify the Company, its officers,
directors and agents (including Counsel) 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 such Subscriber, 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 to this Section 6. Such indemnity shall
remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified
Person or Indemnified Party and shall survive the
transfer of the Registrable Securities by the
Subscribers pursuant to Section 9.
(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
the indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually
satisfactory to the indemnifying party and the
Indemnified Person, as the case may be; 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 Subscribers;
such legal counsel shall be selected by the
Subscribers holding a majority in interest of the
Registrable Securities included in the Registration
Statement to which the Claim relates. The failure to
deliver written notice to the indemnifying party
within a reasonable time of the commencement of any
such action shall not relieve such indemnifying party
of any liability to the Indemnified Person under this
Section 6, except to the extent that the indemnifying
party is prejudiced in its ability to defend such
action. The indemnification required by this Section
6 shall be made by periodic payments of the amount
thereof during the course of the investigation or
defense, as such expense, loss, damage or liability
is incurred and is due and payable.
7. Contribution. To the extent any
indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by
law; provided, however, that (a) no contribution
shall be made under circumstances where the maker
would not have been liable for indemnification under
the fault standards set forth in Section 6; (b) no
seller of Registrable Securities guilty or 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 amount of proceeds received by such seller
from the sale of such Registrable Securities.
8. Reports under Exchange Act. With a view
to making available to the Subscribers the benefits
of Rule 144 promulgated under the Securities Act or
any other similar rule or regulation of the SEC that
may at any time permit the Subscribers to sell
securities of the Company to the public without
registration ("Rule 144"), the Company agrees to use
its reasonable best efforts to:
(a) make and keep public information available,
as those terms are understood and defined in Rule
144;
(b) file with the SEC in a timely manner all
reports and other documents required of the Company
under the Exchange Act; and
(c) furnish to each Subscriber so long as such
Subscriber owns Registrable Securities, promptly upon
request, (i) a written statement by the Company that
it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act,
(ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and
documents so filed by the Company and (iii) such
other information as may be reasonably requested to
permit the Subscribers to sell such securities
pursuant to Rule 144 without registration.
9. Interest. Nothing contained herein shall
be deemed to establish or require the payment of
interest to the Subscriber at a rate in excess of the
maximum rate permitted by governing law. In the
event that the rate of interest required to be paid
hereunder exceeds the maximum rate permitted by
governing law, the rate of interest required to be
paid thereunder shall be automatically reduced to the
maximum rate permitted under the governing and any
amounts collected in excess of the permissible amount
shall be deemed a payment of principal. To the
extent that such excess amount exceeds the aggregate
principal amount of the Subscribed Shares, such
excess shall be returned with reasonable promptness
by the Subscriber to the Company.
10. Miscellaneous.
(a) Other Funding. The Company represents
and warrants that the Company is not at present
engaged in discussions, and will not be so engaged,
with any persons, except the Subscribers for the
placement of any equity financing for the Company via
any offerings and the Company will not be permitted
to issue any of its equity securities (or instruments
convertible into or exercisable for equity
securities) in any offerings, except to the Funds
managed my them in a period from the date of this
Agreement until September 15, 2000, or until the
minimum amount of one million dollars ($1,000,000) of
the Common Stock has been issued to the Subscribers,
whichever occurs first.
(b) Registered Owners. A person or entity is deemed
to be a holder of Registrable Securities whenever
such person or entity owns of record such Registrable
Securities. If the Company received conflicting
instructions, notices or elections from two or more
persons or entities with respect to the same
Registrable Securities, the Company shall act upon
the basis of instructions, notice or election
received from the registered owner of such
Registrable Securities.
(c) Rights Cumulative; Waivers. The rights of
each of the parties under this Agreement are
cumulative. The rights of each of the parties
hereunder shall not be capable of being waived or
varied other than by an express waiver or variation
in writing. Any failure to exercise or any delay in
exercising any of such rights shall not operate as a
waiver or variation of that or any other such right.
Any defective or partial exercise of any of such
rights shall not preclude any other or further
exercise of that or any other such right. No act or
course of conduct or negotiation on the part of any
party shall in any way preclude such party from
exercising any such right or constitute a suspension
or any variation of any such right.
(d) Benefit; Successors Bound. This Agreement and
the terms, covenants, conditions, provisions,
obligations, undertakings, rights, and benefits
hereof, shall be binding upon, and shall inure to the
benefit of, the undersigned parties and their heirs,
executors, administrators, representatives,
successors, and permitted assigns.
(e) Entire Agreement. This Agreement contains the
entire agreement between the parties with respect to
the subject matter hereof. There are no promises,
agreements, conditions, undertakings, understandings,
warranties, covenants or representations, oral or
written, express or implied, between them with
respect to this Agreement or the matters described in
this Agreement, except as set forth in this
Agreement. Any such negotiations, promises, or
understandings shall not be used to interpret or
constitute this Agreement.
(f) Assignment. The rights to have the
Company register Registrable Securities pursuant to
this Agreement shall be assigned by the Subscribers
to any transferee, only if: (a) the Subscriber
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 (i) the name and
address of such transferee or assignee and (ii) the
securities with respect to which such registration
rights are being transferred or assigned, (c)
immediately following such transfer or assignment the
further disposition of such securities by the
transferee or assignee is restricted under the
Securities Act and applicable state securities laws,
and (d) at or before the time the Company received
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. In the event of any delay in
filing or effectiveness of the Registration Statement
as a result of such assignment, the Company shall not
be liable for any damages arising from such delay, or
the payments set forth in Section 2(c) hereof.
(g) Amendment. 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 Subscribers
who hold a majority in interest of the Registrable
Securities. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon
each Subscriber and the Company.
(h) Severability. Each part of this Agreement
is intended to be severable. In the event that any
provision of this Agreement is found by any court or
other authority of competent jurisdiction to be
illegal or unenforceable, such provision shall be
severed or modified to the extent necessary to render
it enforceable and as so severed or modified, this
Agreement shall continue in full force and effect.
(i) Notices. Notices required or permitted to
be given hereunder shall be in writing and shall be
deemed to be sufficiently given when personally
delivered (by hand, by courier, by telephone line
facsimile transmission, receipt confirmed, or other
means) or sent by certified mail, return receipt
requested, properly addressed and with proper postage
pre-paid (i) if to the Company, at its executive
office (ii) if to the Subscriber, at the address set
forth under its name in the Purchase Agreement, with
a copy to its designated attorney and (iii) if to any
other Subscriber, at such address as such Subscriber
shall have provided in writing to the Company, or at
such other address as each such party furnishes by
notice given in accordance with this Section 12(b),
and shall be effective, when personally delivered,
upon receipt and, when so sent by certified mail,
four (4) business days after deposit with the United
States Postal Service.
(j) Governing Law. This Agreement shall be governed
by the interpreted in accordance with the laws of the
State of California without reference to its
conflicts of laws rules or principles. Each of the
parties consents to the exclusive jurisdiction of the
federal courts of the State of California 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 coveniens, to the
bringing of any such proceeding in such
jurisdictions.
(k) Consents. The person signing this
Agreement on behalf of Client hereby represents and
warrants that he has the necessary power, consent and
authority to execute and deliver this Agreement on
behalf of Client.
(l) Further Assurances. In addition to the
instruments and documents to be made, executed and
delivered pursuant to this Agreement, the parties
hereto agree to make, execute and deliver or cause to
be made, executed and delivered, to the requesting
party such other instruments and to take such other
actions as the requesting party may reasonably
require to carry out the terms of this Agreement and
the transactions contemplated hereby.
(m) Section Headings. The Section headings in
this Agreement are for reference purposes only and
shall not affect in any way the meaning or
interpretation of this Agreement.
(n) Construction. Unless the context otherwise
requires, when used herein, the singular shall be
deemed to include the plural, the plural shall be
deemed to include each of the singular, and pronouns
of one or no gender shall be deemed to include the
equivalent pronoun of the other or no gender.
(o) Execution in Counterparts. This Agreement may be
executed in two or more counterparts, each of which
shall be deemed an original but all of which shall
constitute one and the same agreement. This
Agreement, once executed by a party, may be delivered
to the other party hereto by telephone line facsimile
transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
A facsimile transmission of this signed Agreement
shall be legal and binding on all parties hereto.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their respective
officers thereunto duly authorized as of the day and
year first above written.
COMPANY:
eConnect
By:_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
SUBSCRIBER:
____________________________________
By:_________________________________
Name:______________________________
Title:_______________________________