Exhibit 10.37
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") (hereinafter referred
to as this "Agreement"), dated as of February 23, 2001, is made by and among RSI
Marketing, L.L.C., a limited liability company duly organized and existing
pursuant to the laws of the state of Nevada ("Investor" or "Buyer") and RSI
Systems, Inc. a corporation duly organized and existing pursuant to the laws of
the state of Minnesota (the "Corporation" or "Seller").
W I T N E S S E T H:
WHEREAS, Corporation and Investor have entered into that certain
Marketing Agreement executed contemporaneously herewith with Investor as Buyer
and the Corporation as Seller; and.
WHEREAS, Corporation and Investor desire to make conditional provisions
for the registration of the securities purchased pursuant to the Marketing
Agreement set forth herein, if the same be necessary;.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and Agreements herein contained, the
parties hereto agree as follows:
SECTION I
DEFINITIONS
1.1 As used in this Agreement, the following capitalized terms shall
have the following meanings:
"EXCHANGE ACT" means the Securities and Exchange Act of 1934,
as amended.
"GAAP" means generally accepted accounting principles, as in
effect from time to time in the United States, consistently applied
"HOLDER" means the Investor, or any assignee of an Investor.
"COMMON SHARES" means the common equity shares of the
Corporation.
"PERSON" means a natural person, partnership, corporation,
business trust, association, joint venture or other entity or a
government or agency or political subdivision thereof.
"PROSPECTUS" means the prospectus included in any Registration
Statement, as supplemented by any and all prospectus supplements and as
amended by any and all post-effective amendments and including all
material incorporated by reference in such prospectus.
"REGISTRATION" means the registration described in Section 2
hereof.
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"REGISTRABLE SECURITIES" means the Common Shares, owned by the
Holder, and any securities issued or issuable with respect to such
Common Shares by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or reorganization.
"REGISTRATION STATEMENT" means the registration statement
which covers Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus included in such registration
statement, amendments (including post-effective amendments) and
supplements to such registration statement, and all exhibits to and all
material incorporated by reference in such registration statement.
"RESTRICTED STOCK" means any shares of Common Stock of the
Corporation issued to Holder for which a Registration Statement has not
become effective.
"SECURITIES ACT" means the Securities Act of 1933, as from
time to time amended.
"SELLING HOLDER" means any holder of Restricted Stock who
exercises any Registration Rights granted hereunder
"SHARE" means the common stock in the Corporation and includes
any options, warrants or other rights to purchase Shares and securities
of any type whatsoever that are, or may become, convertible into Shares
with the number of any Shares which is an option, warrant, right or
convertible security being the number of such Shares which would result
upon the immediate exercise of such option, warrant or right of
conversion of such convertible security, without regard as to when such
option, warrant or right may in fact be exercised or such convertible
security may in fact be converted.
"MARKETING AGREEMENT" means that certain Marketing Agreement
of even date herewith between the Corporation and Investor.
"WARRANT" means any warrant to purchase shares of Common Stock
of the Corporation issued to Holder in accordance with the terms of the
Marketing Agreement.
SECTION II
PIGGYBACK REGISTRATION RIGHTS
2.1 If the Investor exercises any portion of the Warrant, and
thereafter the Corporation proposes to file a registration statement under the
Securities Act with respect to an offering for its own account of any class of
its equity securities (other than a registration statement on Form S-8 (or any
successor form) or any other registration statement relating solely to employee
benefit plans or filed in connection with an exchange offer, a transaction to
which Rule 145 (or any successor provision) under the Securities Act applies or
an offering of securities solely to the Corporation's existing shareholders),
then the Corporation shall in each case give written notice of such proposed
filing to the Holder as soon as practicable (but no later than 20 business days)
before the anticipated filing date, and such notice shall offer each Holder the
opportunity to register such number of shares of Restricted Stock as such Holder
may request. Each Holder desiring to have Restricted Stock included in such
registration statement shall so advise the Corporation in writing within 10
business days after the date on which the Corporation's notice is so given,
setting forth the number of shares of Restricted Stock for which
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registration is requested. If the Corporation's offering is to be an
underwritten offering, the Corporation shall, subject to the further provisions
of this Agreement, use its reasonable best efforts to cause the managing
underwriter or underwriters to permit the Holders of the Restricted Stock
requested to be included in the registration for such offering to include such
Restricted Stock in such offering on the same terms and conditions as any
similar securities of the Corporation included therein. The right of each Holder
to registration pursuant to this Section 4 in connection with an underwritten
offering by the Corporation shall, unless the Corporation otherwise assents, be
conditioned upon such Holder's participation as a seller in such underwritten
offering and its execution of an underwriting agreement with the managing
underwriter or underwriters selected by the Corporation. Notwithstanding the
foregoing, if the managing underwriter or underwriters of such offering deliver
a written opinion to the Corporation that either because of (a) the kind of
securities that the Corporation, the Holders and any other persons or entities
intend to include in such offering or (b) the size of the offering that the
Corporation, the Holders and any other persons or entities intend to make, the
success of the offering would be materially and adversely affected by inclusion
of the Restricted Stock requested to be included, then (i) in the event that the
size of the offering is the basis of such managing underwriter's opinion, the
number of shares of Restricted Stock to be registered and offered for the
accounts of Holders shall be reduced pro rata on the basis of the number of
securities requested by such Holders to be registered and offered to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such managing underwriter or underwriters
(provided that if securities are being registered and offered for the account of
other persons or entities in addition to the Corporation, such reduction shall
not be proportionally greater than any similar reductions imposed on such other
persons or entities) and (ii) in the event that the combination of securities to
be offered is the basis of such managing underwriters opinion, (x) the
Restricted Stock to be included in such registration and offering shall be
reduced as described in clause (i) above or (y) if such actions would, in the
reasonable judgment of the managing underwriter, be insufficient to
substantially eliminate the adverse effect that inclusion of the Restricted
Stock requested to be included would have on such offering, such Restricted
Stock will be excluded entirely from such registration and offering. Any
Restricted Stock excluded from an underwriting shall, if applicable, be
withdrawn from registration and shall not, without the consent of the
Corporation, be transferred in a public distribution prior to the earlier of
ninety (90) days (or such other shorter period of time as the managing
underwriter may require) after the effective date of the registration statement
or ninety (90) days after the date the Holders of such Restricted Stock are
notified of such exclusion.
SECTION III
REGISTRATION PROCEDURES
3.1 Whenever Holders of Restricted Stock have requested pursuant to
Section 2.1 that any Restricted Stock be registered, the Corporation shall,
subject to the provisions of Section 4.3 hereof, use its reasonable best efforts
to effect the registration and the sale or distribution of such Restricted Stock
in accordance with the intended method of disposition thereof as promptly as
practicable, and in connection with any such request, the Corporation shall:
(a) prepare and file with the Securities and Exchange
Commission, a registration statement on any form for which the
Corporation then qualifies and which counsel for the Corporation shall
deem appropriate and which form shall be available for the sale or
distribution of such Restricted Stock in accordance with the intended
method of distribution thereof, and use its reasonable best efforts to
cause such registration
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statement to become effective; provided that, (i) before filing a
registration statement or prospectus or any amendments or supplements
thereto, the Corporation will furnish to one counsel selected by the
Holders of a majority of the shares of Restricted Stock covered by such
registration statement copies of all such documents proposed to be
filed, which documents will be subject to the review and comment of
such counsel and (ii) after the filing of the registration statement,
the Corporation shall promptly notify each Selling Holder of Restricted
Stock of any stop order issued or, to the knowledge of the Corporation,
threatened by the Securities and Exchange Commission and take all
reasonable actions to prevent the entry of such stop order or to remove
it if entered;
(b) prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period of
not less than ninety (90) days or such shorter period as shall
terminate when the distribution of all Restricted Stock covered by such
registration statement shall have terminated (but not before the
expiration of the ninety day (90) period referred to in Section 4(3) of
the Securities Act and Rule 174 thereunder, if applicable) and comply
with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of
disposition by the Selling Holders thereof set forth in such
registration statement;
(c) as soon as reasonably practicable, furnish to each Selling
Holder, prior to filing a registration statement, copies of such
registration statement as proposed to be filed and thereafter furnish
to such Selling Holder such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus
included in such registration Statement (including each preliminary
prospectus) and such other documents as such Selling Holder may
reasonably request in order to facilitate the disposition of the
Restricted Stock owned by such Selling Holder;
(d) use its best efforts to register or qualify such
Restricted Stock under such other securities or blue sky laws of such
jurisdictions within the United States and Canada as any Selling Holder
reasonably (in light of such Selling Holder's intended plan of
distribution) requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Selling Holder
to consummate the disposition in such jurisdictions of the Restricted
Stock owned by such Selling Holder; provided that the Corporation shall
not be required to (i) qualify generally to do business or file a
general consent to service of process in any jurisdiction or (ii) take
any action that would subject itself to taxation in any such
jurisdiction;
(e) promptly notify each Selling Holder of such Restricted
Stock, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the occurrence of any event
known to the Corporation requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the
purchasers or recipients of such Restricted Stock, such prospectus will
not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and promptly make available to each
Selling Holder any such supplement or amendment;
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(f) enter into an underwriting agreement in customary form,
the form and substance of such underwriting agreement being subject to
the reasonable satisfaction of the Corporation and a majority in
interest of the Selling Holders;
(g) make available for inspection by any Selling Holder, any
underwriter participating in any sale or distribution pursuant to such
registration statement and any attorney, accountant or other agent
retained by any such Selling Holder or underwriter (collectively, the
"Inspectors") all financial and other records, pertinent corporate
documents and properties of the Corporation (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Corporation's
officers and employees to supply all information reasonably requested
for such purpose by any such Inspector in connection with such
registration statement; provided that the Corporation shall have no
obligation to permit such access to the Records or its officers or
employees in a manner that would unreasonably disrupt the normal
conduct of its business operations. Each such Selling Holder and
Inspector that actually reviews Records supplied by the Corporation
that include information that the Corporation identifies, in good
faith, as being confidential or proprietary ("Confidential
Information") shall be required at the Corporation's option, prior to
any such review, to execute an agreement with the Corporation providing
that such Inspector shall not publicly disclose any Confidential
Information unless such disclosure is required by applicable law or
legal process and shall not use such information for any purpose other
than the limited purpose contemplated by this subsection (g). Each such
Selling Holder and Inspector shall be required further to agree that it
shall, upon learning that disclosure of Confidential Information is
sought in a court of competent jurisdiction, give notice to the
Corporation and allow the Corporation, at its expense, to undertake
appropriate action to prevent disclosure of the Confidential
Information;
(h) in the event such sale is pursuant to an underwritten
offering, use its reasonable best efforts to obtain a comfort letter or
letters from the Corporation's independent public accountants in
customary form and covering such matters of the type customarily
covered by comfort letters as the managing underwriter reasonably
requests; and
(i) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the Securities and Exchange
Commission and make available to its security holders, as soon as
reasonably practicable, an earnings statement complying with the
provisions of Section 11(a) of the Securities Act (including, at the
option of the Corporation, pursuant to Rule 158 (or any successor
provision) under the Securities Act).
Upon receipt of any notice from the Corporation of the occurrence of any event
of the kind described in subsection (e) hereof, such Selling Holder shall
forthwith discontinue all offerings, sales and other dispositions of Restricted
Stock pursuant to the registration statement covering such Restricted Stock
until such Selling Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by subsection (e) hereof. In the event the Corporation
shall give any such notice, the Corporation shall extend the period during which
such registration statement shall be maintained effective pursuant to this
Agreement (including the period referred to in subsection (b) hereof) by the
number of days during the period from and including the date of the giving of
such notice pursuant to subsection (b) hereof to and including the first date on
which each Selling Holder of Restricted Stock covered by such registration
statement shall have
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received the copies of the supplemented or amended prospectus contemplated by
subsection (e) hereof. Each Selling Holder shall notify the Corporation if any
event relating to such Selling Holder occurs which would require the preparation
of a supplement or amendment to the prospectus so that such prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
SECTION IV
CONDITIONS AND LIMITATIONS.
4.1 The Corporation's obligations under this Section 3 shall be subject
to the Corporation having received the information and documents specified in
Section 5 hereof and each Selling Holder shall have observed or performed its
other covenants contained in Sections 5 and 7 hereof.
4.2 The Corporation's obligation under Section 4 hereof shall be
subject to the limitations and conditions specified in such section, and to the
condition that the Corporation may at any time terminate its proposal to
register equity securities for its own account and discontinue its efforts to
cause a registration statement to become or remain effective as to any and all
shares of Restricted Stock that would otherwise have been eligible for inclusion
in such registration.
SECTION V
CERTAIN COVENANTS OF HOLDERS OF RESTRICTED STOCK
5.1 Notices and requests delivered to the Corporation by Holders for
whom Restricted Stock is to be registered pursuant to this Agreement shall
contain such information regarding the Restricted Stock to be so registered, the
Holder and the intended method of disposition of such Restricted Stock as shall
reasonably be required in connection with the actions contemplated to be taken
pursuant to this Agreement. Any Holder whose Restricted Stock is included in a
registration statement pursuant to this Agreement shall execute all consents,
powers of attorney, registration statements and other documents reasonably
required to be executed by it in order to cause such registration statement to
became effective. Each Selling Holder covenants that, in disposing of such
Holder's shares, such Holder will comply with Rules 10b-2, 10b-5, 10b-6 and
10b-7 (or any successor provisions) under the Exchange Act and all other
requirements of applicable law.
SECTION VI
REGISTRATION EXPENSES
6.1 All Registration Expenses (as defined herein) will be borne by the
Corporation. Underwriting discounts and commissions applicable to the sale of
Restricted Stock shall be borne by the Holder of the Restricted Stock to which
such discount or commission relates, and each Selling Holder shall be
responsible for the fees and expenses of any legal counsel, accountants or other
agents retained by such Selling Holder and all other out-of-pocket expenses
incurred by such Selling Holder in connection with any registration under this
Agreement.
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6.2 As used herein, the term Registration Expenses means all expenses
incident to the Corporation's performance of or compliance with this Agreement
(whether or not the registration in connection with which such expenses are
incurred ultimately becomes effective), including without limitation all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Restricted Stock), rating agency
fees, printing expenses, the fees and expenses incurred in connection with the
listing or admission for quotation of the securities to be registered an any
securities exchange or quotation system and fees and disbursements of counsel
for the Corporation and its independent certified public accountants (including
the expenses of any special audit or comfort letters required by or incident to
such performance), securities act liability insurance (if the Corporation elects
to obtain such insurance), the reasonable fees and expenses of any special
expert retained by the Corporation in connection with such registration and the
fees and expenses of other persons retained by the Corporation.
SECTION VII
INDEMNIFICATION; CONTRIBUTION
7.1 INDEMNIFICATION BY THE CORPORATION. In connection with any offering
of Restricted Stock pursuant to this Agreement, the Corporation shall indemnify
and hold harmless each Selling Holder, its officers, directors and agents and
each person, if any, who controls such Selling Holder within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages, liabilities and expenses
(including reasonable fees and disbursements of counsel) arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus relating to Restricted
Stock or in any amendment or supplement thereto or in any preliminary prospectus
relating to Restricted Stock or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made, except insofar as such losses, claims,
damages, liabilities or expenses arise out of, or are based upon, any such
untrue statement or alleged untrue statement or omission or alleged omission
based upon information furnished in writing to the Corporation by such Selling
Holder or on such Selling Holder's behalf expressly for use therein. In
connection with any underwritten offering of Restricted Stock registered
pursuant to this Agreement, the Corporation shall cause to be included in any
underwriting agreement with the underwriters of such offering provisions
indemnifying and providing for contribution to such underwriters and their
officers and directors and each person who controls such underwriters on
substantially the same basis as the provisions of this Section 7.1 indemnifying
and providing for contribution to the Selling Holders.
7.2 INDEMNIFICATION BY HOLDERS OF RESTRICTED STOCK. In connection with
any offering of Restricted Stock pursuant to this Agreement, each Selling
Holder, severally and not jointly, shall indemnify and hold harmless the
Corporation, its officers, directors and agents and each person, if any, who
controls the Corporation within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and, in accordance with
industry practice, in the case of an offering of Restricted Stock pursuant to
this Agreement, each underwriter of such Restricted Stock if requested by such
underwriter, from and against any and all losses, claims, damages, liabilities
and expenses (including reasonable fees and disbursements of counsel) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
Restricted Stock or in any amendment or supplement thereto or in any preliminary
prospectus relating to Restricted Stock,
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or arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made, provided that (i) such losses, claims, damages, liabilities or
expenses arise out of, or are based upon, any such untrue statement or alleged
untrue statement or omission or alleged omission based upon information
furnished in writing to the Corporation by such Selling Holder or on such
Selling Holder's behalf expressly for use therein and (ii) no Selling Holder
shall be liable for any indemnification under this Section 7.2 in an aggregate
amount which exceeds the total net proceeds received by such Selling Holder from
such offering. In connection with any underwritten offering of Restricted Stock
registered pursuant to this Agreement, each Selling Holder shall cause to be
included in any underwriting agreement with the underwriters of such offering
provisions indemnifying and providing for contribution to such underwriters,
their officers and directors and each person who controls such underwriters on
substantially the same basis as the provisions of this Section 4.6(b)
indemnifying and providing for contribution to the Corporation.
7.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any action or proceeding
(including any governmental investigation) shall be brought or asserted against
any indemnified party hereunder in respect of which indemnity may be sought from
an indemnifying party hereunder, such indemnifying party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such indemnified party, and shall assume the payment of all expenses. Such
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expenses of such indemnified party unless (i) the
indemnifying party has agreed to pay such fees and expenses, (ii) the
indemnifying party shall have failed to assume the defense of such action or
proceeding and employ counsel reasonably satisfactory to such indemnified party,
or (iii) the named parties to any such action or proceeding (including any
impleaded parties) include both such indemnified party and such indemnifying
party, and such indemnified party shall have been advised by counsel that there
may be one or more legal defenses available to such indemnified party which are
different from or additional to those available to the indemnifying party (in
which case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such action or proceeding on behalf of such indemnified party; it being
understood, however, that the indemnifying party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (together with appropriate local
counsel) at any time for such indemnified party, which firm shall be designated
in writing by such indemnified party and reasonably satisfactory to the
indemnifying party). The indemnifying party shall not be liable for any
settlement of any such action or proceeding erected without its written consent,
but if settled with its written consent, or if there is a final judgment for the
plaintiff in any such action or proceeding, the indemnifying party shall
indemnify and hold harmless the indemnified party from and against any loss or
liability (to the extent stated above) by reason of such settlement or judgment.
7.4 CONTRIBUTION. If the indemnification provided for in this Section 4
is unavailable to the Corporation or the Selling Holders in respect of any
losses, claims, damages, liabilities or judgments referred to herein, then each
such indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments in such proportion as
is
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appropriate to reflect the relative fault of each such party in connection with
such statements or omissions or alleged statements or omissions, as well as any
other relevant equitable considerations. The relative fault of each such party
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Corporation and the Selling
Holders agree that it would not be just and equitable if contribution pursuant
to this Section 4(d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding sentences. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or judgments referred to in the immediately preceding sentences shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claims. Notwithstanding the
provisions of this Section 4(d), no Selling Holder shall be required to
contribute an amount in excess of the amount by which the total price at which
the Restricted Stock of such Selling Holder was offered to the public exceeds
the amount of any fee which such Selling Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who is not guilty of such fraudulent misrepresentation.
SECTION VIII
REPRESENTATIONS AND WARRANTIES
The Corporation represents and warrants that:
8.1 EXISTENCE AND RIGHTS. The Corporation is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Minnesota. The Corporation has all requisite corporate power and authority, to
carry on its business and to own and use the properties owned and used by it.
True and correct copies of the Corporation's Articles of Incorporation and
Bylaws, as amended to date, have been delivered to Holder. The Corporation is
qualified to conduct business and is in good standing under the laws of each
jurisdiction wherein the nature of its business or its ownership of property
requires it to be so qualified, except where the failure to be so qualified,
would not individually or in the aggregate, have a material adverse effect on
the assets or business of the Corporation. The Corporation has no Subsidiaries.
8.2 CORPORATE AUTHORIZATION. The Corporation has all necessary power
and authority to enter into this Agreement and has taken all action,
specifically including, without limitation, all corporate action, necessary to
execute, deliver and perform this Agreement. This Agreement has been duly
authorized, executed and delivered by the Corporation and is a legally valid and
binding obligation of the Corporation enforceable against the Corporation in
accordance with its terms.
8.3 NO CONFLICT. The execution, delivery and performance of this
Agreement and of the related documents by the Corporation will not violate any
provision of the Corporation's Articles of Incorporation or the Bylaws; or
violate any law or rule or regulation of any administrative agency or
governmental body; or any order, writ, injunction or decree of any court,
arbiter, administrative agency or governmental authority having jurisdiction
over the
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Corporation; or violate any indenture, mortgage, contract, will, agreement or
other undertaking to which the Corporation is a party or is subject, or result
in the creation or imposition of any lien or encumbrance on any of the
properties of the Corporation under any of the foregoing.
8.4 LITIGATION. There is no litigation, proceeding, dispute, tax audit
or other governmental investigation pending, or to the best of the Corporation's
knowledge, threatened against, or affecting the Corporation's business or its
assets before any court or governmental agency or other body, which would
adversely affect the financial condition of The Corporation, its assets, or the
conduct of the Corporation's business, or which may impede the transaction
contemplated herein. There are no outstanding and unpaid judgments, tax
deficiencies, statements, or notices of assessments or other demands for payment
of taxes served on or filed against the Corporation. The Corporation is not in
default with respect to an order, writ, injunction, decree or demand of any
court or other governmental or regulatory authority.
SECTION IX
MISCELLANEOUS
9.1 NOTICES. Any notice or other communication required or permitted
hereunder shall be deemed given if in writing and delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally or sent by overnight air courier or facsimile
transmission or, if mailed, two days after the date of deposit in the United
States mails, as follows:
IF TO BUYER:
RSI Marketing, L.L.C.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
WITH COPY TO:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇
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Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
IF TO SELLER:
RSI Systems, Inc.
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A.
1100 International Centre
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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Any party may be given notice in accordance with this Section by any other party
at another address or person for receipt of notices, if such party so designates
such other person or address in writing in accordance with this Section 11,
paragraph
9.2 PARTIAL INVALIDITY. Each part of this Agreement is intended to be
separate. If any term, covenant, condition or provision hereof is illegal or
invalid or unenforceable for any reason whatsoever, such illegality, invalidity
or unenforceability shall not affect the legality, validity or enforceability of
the remaining parts of this Agreement and all such remaining parts hereto shall
not be impaired or invalidated in any way, but shall be legal, valid and
enforceable and have full force and effect as if the illegal, invalid,
unenforceable part has not been included.
9.3 LAW GOVERNING AGREEMENT. This Agreement is made and entered into
and is to be at least partially performed in Dallas County, Texas. It shall be
interpreted, construed and enforced and its construction and performance shall
be governed by the laws of the State of Texas applicable to Agreements made and
to be performed entirely within such State without regard to principles of
conflicts of laws, except to the extent that Federal law may apply.
9.4 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and Agreement of the parties hereto, and supersedes any and all
prior understandings or other Agreements, either oral or in writing, if any,
among such parties with respect to the subject matter hereof and contains all of
the covenants and Agreements between the parties with respect thereto. Each
party to this Agreement acknowledges that no representations, inducements, or
Agreements, oral or otherwise, have been made by such party, or anyone acting on
behalf of such party, which are not embodied herein, and no other Agreement,
statement or promise not contained in this Agreement shall be valid or binding.
The parties hereto have had an opportunity to consult with their respective
attorneys concerning the meaning and the import of this Agreement and each has
read this Agreement, as signified by their signatures below, and is executing
the same for the purposes and consideration herein expressed.
9.5 WAIVERS. No delay on the part of any party in exercising any right,
power, or privilege hereunder shall operate as a waiver thereof. Nor shall any
waiver on the part of any party of any such right, power or privilege, nor any
single or partial exercise of any such right, power or privilege, preclude any
further exercise thereof or the exercise of any other such right, power or
privilege. The rights and remedies of any party based upon, arising out of or
otherwise in respect of any inaccuracy in or breach by any other party of any
representation, warranty, covenant or Agreement contained in this Agreement
shall in no way be limited by the fact that the act, omission, occurrence or
other state of facts upon which any claim of any such inaccuracy or breach is
based may also be the subject matter of any other representation, warranty,
covenant or Agreement contained in this Agreement (or in any other Agreement
between the parties) as to which there is no inaccuracy or breach.
9.6 TAX CONSULTATION. Each Party acknowledges that it has had the
opportunity to and has consulted with their own separate independent accounting
and tax advisors in connection with the accounting and tax treatment for the
transactions contemplated hereby and the tax ramifications thereof. Each Party
shall bear all risk in connection with the accounting and tax treatment of the
transactions contemplated by this Agreement and no Party is relying on the other
Party in connection with the same.
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9.7 VARIATIONS IN PRONOUNS. Wherever the context shall so require, all
words herein in the male gender shall be deemed to include the female or neuter
gender and vice versa, all singular words shall include the plural, and all
plural words shall include the singular. All pronouns and any variations thereof
refer to the masculine, feminine or neuter, singular or plural, as the context
may require.
9.8 HEADINGS. The headings used in this Agreement are for
administrative purposes only and do not constitute substantive matter to be
considered in construing the terms and shall not affect the interpretation of
this Agreement. All references herein to Sections, subsections, and clauses,
shall be deemed references to such parts of this Agreement, unless the context
shall otherwise require. A reference to an article or section will mean an
article or section in this Agreement, unless otherwise explicitly set forth. The
titles and headings in this Agreement are for reference purposes only and will
not in any manner limit the construction of this Agreement. For the purposes of
such construction, this Agreement will be considered as a whole. The terms
"including" and "include" as used in this Agreement will be deemed to include
the phrase "without limitation."
9.9 ATTORNEY'S FEES AND COSTS. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs, and necessary
disbursements, but only from the offending party, in addition to any other
relief to which it may be entitled.
9.10 REPRESENTATION BY COUNSEL. Each party acknowledges that it has had
the opportunity to be represented by separate independent counsel in the
negotiation of this Agreement, that any such respective attorneys were of its
own choosing, that each authorized representative has read this Agreement and
that he understands its meaning and legal consequences to each party. Each Party
warrants and represents that he has consulted with his attorney of choice, or
voluntarily chose not to do so, concerning the execution, the meaning and the
import of this Agreement, and has read this Agreement and fully understands the
terms hereof as signified by his signature below, and is executing the same of
his own free will for the purposes and consideration herein expressed. Each
Party warrants and represents that he has had sufficient time to consider
whether to enter into this Agreement and that he is relying solely on his own
judgment and the advice of his own counsel, if any, in deciding to execute this
Agreement. Each Party warrants and represents that he has read this Agreement in
its entirety and has consulted with his attorney, if any concerning the
execution of this Agreement. If any or all Parties have chosen not to seek
counsel, said party or parties hereby acknowledge that he or they refrained from
seeking counsel entirely of his or their own volition and with full knowledge of
the consequences of such a decision.
9.11 PRESUMPTION AGAINST SCRIVENER. Each party waives the presumption
that this Agreement is presumed to be in favor of the party which did not
prepare it, in case of a dispute as to interpretation.
9.12 CAPACITY. Each party represents and warrants that he has the
authority to enter into this Agreement either on his own behalf or in an
official capacity on behalf of a corporate party.
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9.13 FURTHER ASSURANCES. At any time and from time to time after the
date hereof, at the request of any Party, and without further consideration,
every other party will execute and deliver such other and further instruments
and documents, and take such other action as the other Party may reasonably deem
necessary, convenient or desirable in order to more effectively assist any Party
in exercising all rights with respect thereto, and carrying out the business,
duties, and obligations created by this Agreement.
9.14 AMENDMENTS. This Agreement may not be modified, amended,
superceded, cancelled, renewed or extended, except in writing, signed by the
party or parties to be bound thereby or signed by their respective attorneys.
9.15 BINDING EFFECT AND ASSIGNMENT. 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 respective heirs, executors, administrators,
representatives, officers, directors, Corporation, successors, agents, servants,
employees, attorneys, and assigns. This Agreement and any rights hereunder are
freely assignable by Investor to the extent that Investor has assigned or sold
any Warrant or portion thereof. This Agreement shall inure to the benefit of and
bind the Parties hereto and their respective legal representatives, successors,
and permitted assigns.
9.16 COUNTERPARTS. This Agreement may be executed in several
counterparts by one or more of the undersigned and all such counterparts so
executed shall together be deemed and constitute one final Agreement, as if one
document had been signed by all parties hereto; and each such counterpart shall
be deemed an original, binding the parties subscribed hereto and multiple
signature pages affixed to a single copy of this Agreement shall be deemed to be
a fully executed original Agreement. Several counterparts consisting of multiple
copies hereof each signed by less than all parties, but together signed by all
parties shall constitute and be deemed a fully executed original Agreement.
9.17 CORPORATE AUTHORITY. RSIS and RSI Marketing, L.L.C. represent and
warrant to each other that each has previously taken the necessary corporate
action authorizing the execution of this Agreement and the undertakings to e
accomplished hereunder by their officer recited below.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date set opposite their respective signatures below, but effective as provided
herein.
BUYER:
RSI Marketing, L.L.C.
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By: ▇▇▇▇▇▇▇ ▇▇▇▇
Its: Manager
SELLER:
RSI Systems, Inc.
-----------------------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Its: Chairman
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