_________________________________________________________________
_________________________________________________________________
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
LOCKWAVE, INC.,
IMOJO, INC.,
AUDIOMONSTER ONLINE, INC.
AND
▇▇▇▇ INC.
DATED: SEPTEMBER 25, 2000
_________________________________________________________________
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement"), dated
September 25, 2000, is made and entered into by and among
Lockwave, Inc., a Delaware corporation ("Lockwave"), Imojo, Inc.,
a Delaware corporation and the owner of all of the outstanding
capital stock of Lockwave (the "Shareholder"), Audiomonster
Online, Inc., a Nevada corporation ("Audiomonster"), and ▇▇▇▇,
Inc., a Delaware corporation and wholly-owned subsidiary of
Audiomonster ("▇▇▇▇").
BACKGROUND
Whereas, Lockwave=s authorized capital consists of 10,000
shares of common stock, $.01 par value per share, and all of the
issued and outstanding shares of the Common Stock (the AShares@)
are owned by the Shareholder; and
Whereas, ▇▇▇▇▇▇▇▇ is engaged in the business of
incorporating virtual storage and an MP3 player into one
traveling web-based application targeting the MP3 generation (the
"Business"); and
Whereas, the respective Boards of Directors of Lockwave,
Audiomonster and ▇▇▇▇, have approved the merger of ▇▇▇▇ with and
into Lockwave (the "Merger") with ▇▇▇▇▇▇▇▇ being the surviving
corporation, upon the terms and subject to the conditions more
fully set forth herein.
Now, Therefore, and in consideration of the mutual promises
and covenants set forth herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
The Merger and Related Matters
Section 1.1. The Merger. Subject to the terms and
conditions of this Agreement, Articles of ▇▇▇▇▇▇ ▇▇▇▇ executed
and acknowledged shall be filed in the office of the Secretary of
State of the State of Delaware on the Closing Date (as defined in
Article IV) or as soon as practicable thereafter. The Merger
shall become effective upon such filing (the "Effective Time").
At the Effective Time, ▇▇▇▇ shall be merged with and into
Lockwave, and Lockwave shall continue as the surviving
corporation under the laws of the State of Delaware (such
continuing corporation sometimes hereinafter referred to as the
"Surviving Corporation").
Section 1.2. Effect of Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable
provisions of the laws of the State of Delaware. Except as
herein specifically set forth, the identity, existence, purposes,
powers, objects, franchises, privileges, rights and immunities of
Lockwave shall continue unaffected and unimpaired by the Merger
and the corporate franchises, existence and rights of ▇▇▇▇ shall
be merged with and into Lockwave, and Lockwave, as the Surviving
Corporation, shall be fully vested therewith. At the Effective
Time, the separate existence of ▇▇▇▇ shall cease and, in
accordance with the terms of this Agreement, the Surviving
Corporation shall possess all the rights, privileges, immunities
and franchises, of a public, as well as of a private, nature, and
all property, real, personal and mixed, and all debts due on
whatever account, including subscriptions to shares, and all
taxes, including those due and owing and those accrued, and all
other choses in action, and all and every other interest of or
belonging to or due to Lockwave and ▇▇▇▇ shall be taken and
deemed to be transferred to, and vested in, the Surviving
Corporation without further act or deed; and all property, rights
and privileges, powers and franchises and all and every other
interest shall be thereafter effectually the property of the
Surviving Corporation as they were of Lockwave and ▇▇▇▇. Except
as otherwise provided herein, the Surviving Corporation shall
thenceforth be responsible and liable for all the liabilities and
obligations of Lockwave and ▇▇▇▇ and any claim existing, or
action or proceeding pending, by or against Lockwave or ▇▇▇▇ may
be prosecuted as if the Merger had not taken place, or the
Surviving Corporation may be substituted in their place. Neither
the rights of creditors nor any liens upon the property of
Lockwave or ▇▇▇▇ shall be impaired by the Merger, and all debts,
liabilities and duties of Lockwave and ▇▇▇▇ shall attach to the
Surviving Corporation, and may be enforced against the Surviving
Corporation to the same extent as if said debts, liabilities and
duties had been incurred or contracted by such Surviving
Corporation.
Section 1.3. Articles of Incorporation of the Surviving
Corporation. The Articles of Incorporation of Lockwave, as in
effect immediately prior to the Closing, shall be the Articles of
Incorporation of the Surviving Corporation.
Section 1.4. By-Laws of the Surviving Corporation. The By-
Laws of Lockwave, as in effect immediately prior to the Closing,
shall be the By-Laws of the Surviving Corporation until
thereafter amended as provided by law.
Section 1.5. Directors and Officers of the Surviving
Corporation. At the Effective Time, ▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ shall be the directors of the Surviving Corporation,
each of such directors to hold office, subject to the applicable
provisions of the Articles of Incorporation and By-Laws of the
Surviving Corporation, until the next annual shareholders=
meeting of the Surviving Corporation and until their respective
successors shall be duly elected or appointed and qualified. At
the Effective Time, the officers of ▇▇▇▇▇▇▇▇, subject to the
applicable provisions of the Articles of Incorporation and By-
Laws of the Surviving Corporation, shall be as designated by the
Board of Directors of the Surviving Corporation until their
respective successors shall be duly elected or appointed and
qualified.
Section 1.6. Manner of Conversion. As of the Effective
Time:
(a) all of the Shares which are issued and
outstanding immediately prior to the Effective Time, by
virtue of the Merger and without any action on the part of
the holder thereof, automatically shall be deemed to
represent the right to receive the Merger Consideration, as
provided in Section 1.7 hereof;
(b) all Shares which are held by Lockwave as
treasury stock shall be canceled and retired and no consideration
shall be delivered or paid in exchange therefore; and
(c) each share of the capital stock of ▇▇▇▇ shall
be cancelled and in exchange therefore, 1,000 shares of Lockwave,
Inc. shall be issued to Audiomonster.
Section 1.7. Merger Consideration. The consideration
payable by Audiomonster to the Shareholder or its designees in
connection with the Merger shall be (i) Three Million Dollars
($3,000,000) in cash (the ACash Portion@) ($100,000 of which has
been previously paid to the Shareholder) and (ii) an aggregate of
Four Million Five Hundred Thousand (4,500,000) shares of
Audiomonster common stock (the AShare Portion@ and together with
the Cash Portion, the AMerger Consideration@). The Merger
Consideration shall be payable or delivered to the Shareholder or
its designees as follows:
(a) At the Closing, on the Closing Date,
Audiomonster shall pay to the Shareholder or its designees by
wire transfer of immediately available funds, to an account
designated in writing by the Shareholder or its designees, One
Hundred Fifty Thousand Dollars ($150,000). The remainder of the
Cash Portion shall be payable to the Shareholder or its designees
by wire transfer of immediately available funds to an account
designated in writing as follows:
(i) $500,000 on or before November 4, 2000;
(ii) $750,000 on or before December 4, 2000;
(iii)$500,000 on or before January 4, 2001;
(iv) $500,000 on or before February 4, 2001;and
(v) $500,000 on or before March 4, 2001.
Any payment due on a day which is not a day
in which banks are open for business in the United States will be
due on the next business day.
(b) At the Closing, all of the outstanding shares
of the Surviving Corporation (the "Escrowed Shares") shall be
endorsed in blank by Audiomonster and placed in escrow with the
escrow agent ("Escrow Agent") named in the Escrow Agreement
between Audiomonster, ▇▇▇▇ and the Shareholder, substantially in
the form attached hereto as Exhibit A (the "Escrow Agreement").
The Escrowed Shares shall be held by the Escrow Agent pursuant to
the terms of the Escrow Agreement.
(c) No later than (45) days after the delivery to
Audiomonster of any required audited financial statements of
Lockwave, Audiomonster shall file a registration statement on
Form SB-2 (or other applicable form) with the Securities and
Exchange Commission ("SEC") relating to the resale of Two Million
Five Hundred Thousand (2,500,000) shares of the Share Portion.
In the event Audiomonster fails to file the registration required
hereby in accordance with the time frame provided, Audiomonster
shall issue to the Shareholder or its designees One Hundred Sixty
Two Thousand Five Hundred (162,500) shares of common stock of
Audiomonster per month until such time as the registration
statement is filed with the SEC.
ARTICLE II
Representations And Warranties of Lockwave And
The Shareholder
▇▇▇▇▇▇▇▇ and the Shareholder hereby make the following
representations and warranties to ▇▇▇▇ and Audiomonster:
Section 2.1. Organization. Lockwave is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware and is duly authorized to carry on the
business presently conducted by it. All of the issued and
outstanding shares of capital stock of Lockwave are owned by the
Shareholder free and clear of all liens and encumbrances of any
kind. The Shares represent all of the issued and outstanding
shares, of all types or classes, of Lockwave and there are no
outstanding options, warrants, convertible or exchangeable
securities or other rights to purchase shares of capital stock of
Lockwave.
Section 2.2. Pending Claims.
(a) There is no litigation, suit, action, claim,
arbitration, administrative or legal or other proceeding, or
governmental investigation pending or, to Lockwave=s or the
Shareholder=s knowledge threatened, against ▇▇▇▇▇▇▇▇ relating to
the Business and there are no unasserted claims possible of
assertion involving the Business of which Lockwave has notice or
knowledge;
(b) There are no audits by a governmental
authority, claims for unpaid taxes of any kind, or other similar
actions, proceedings or disputes pending or, to Lockwave=s
knowledge, threatened against or affecting the Business;
(c) There are no unpaid judgments of any kind
against Lockwave or the Shareholder relating to the Business; and
(d) Neither Lockwave nor the Shareholder are
charged with or, to either the Company=s or the Shareholder=s
knowledge threatened, with a charge or violation or, to either
Company=s or the Shareholder=s knowledge, is it under
investigation with respect to any alleged violation of any
provision of any federal, state, local or foreign law or
administrative ruling or regulation relating to any aspect of the
Business.
(e) To the best knowledge of Lockwave and the
Shareholder, there are no liabilities or potential liabilities of
Lockwave which in the aggregate exceed Fifty Thousand Dollars
($50,000).
Section 2.3. Title to Assets. Lockwave is the sole and
exclusive owner of, and has good and marketable title to, all of
its assets, rights, properties, claims, contracts and business of
every kind, nature, character and description, tangible and
intangible, personal, real or mixed, wherever located, wherever
located, free and clear of all liens, mortgages, pledges, claims,
encumbrances, security interests, covenants, easements, rights of
way, equities, options, rights of first refusal, assessments,
defects in title, encroachments, charges or any other burden of
restriction of any kind or nature (collectively, "Liens"); and
(b) no other person, firm or corporation has or will have on the
Closing Date any interest whatsoever in any of such assets. The
assets of Lockwave are identified on Schedule 2.3 hereof (the
"Assets").
Section 2.4. No Breach or Violation. The execution,
delivery and performance of this Agreement and any other
agreements contemplated hereby between the parties hereto by
Lockwave and the consummation of the transactions contemplated by
this Agreement or any other agreements contemplated hereby will
not (a) result in or constitute a breach or an event that, with
notice or lapse of time or both, would be a default, breach or
other violation of the articles of incorporation, bylaws of
Lockwave; (b) violate (with or without the giving of notice or
the lapse of time or both), or require any consent, approval,
filing or notice under, any provision of any law, rule or
regulation, court or administrative order, writ, judgment or
decree applicable to Lockwave, the Business or any of the Assets,
and (c) with or without the giving of notice or the lapse of time
or both (i) violate or conflict with, or result in the breach,
suspension or termination of any provision of, or constitute a
default under, or result in the acceleration of the performance
of the obligations of any of Lockwave under, or (ii) result in
the creation of any Liens upon all or any portion of the
properties, assets (including the Assets) or the Business
pursuant to, the articles of incorporation or bylaws of Lockwave,
or any indenture, mortgage, deed of trust, lease, agreement,
contract or instrument to which Lockwave is a party or by which
Lockwave, its Assets or business is bound.
Section 2.5. Corporate Documents. Lockwave has furnished
to Audiomonster for its examination true and correct copies of
the articles of incorporation, bylaws and minute books of
Lockwave.
Section 2.6. Conduct of Business. From the date of this
Agreement until full payment of the Cash Portion, Lockwave shall
operate the Business in the ordinary course and in a commercially
reasonable manner and will make all reasonably necessary efforts
to preserve intact the Business, its relationships with third
parties, all memberships, if any, that it presently holds, the
goodwill it has accrued and the services, to the extent
practicable, of its existing officers, employees, and directors.
Section 1.1.
ARTICLE III
Audiomonster's and ▇▇▇▇'s Representations and Warranties
Audiomonster and ▇▇▇▇ each represent and warrant to Lockwave
and the Shareholder, their respective successors and assigns,
that:
Section 3.1. Organization. Audiomonster is a corporation
duly organized, existing and in good standing under the laws of
the State of Nevada, and is not presently and has not since its
incorporation been the subject of any governmental or quasi-
governmental inquiry or review which would materially adversely
effect its business or operations, nor to the knowledge of
Audiomonster, is any such inquiry or review pending or
threatened. ▇▇▇▇ is a corporation duly organized, existing and
in good standing under the laws of the State of Delaware.
Section 3.2. Authority. Each of Audiomonster and ▇▇▇▇
have taken all necessary corporate action on its part as may be
required under the laws of the jurisdiction of organization and
under its charter documents to authorize the execution, delivery
and carrying out of this Agreement on behalf of Audiomonster and
▇▇▇▇, respectively.
Section 3.3. Authority and Enforceability. Audiomonster
and ▇▇▇▇ each have the full right, power, legal capacity and
authority to enter into and perform their respective obligations
under this Agreement. The execution, delivery and performance by
Audiomonster and ▇▇▇▇ of this Agreement and any other agreements
contemplated hereby and the consummation by them of the
transactions contemplated hereby and thereby have been duly
authorized by Audiomonster as the sole shareholder of ▇▇▇▇ and by
the Board of Directors of Audiomonster. No other corporate or
stockholder action is necessary for the authorization, execution,
delivery and performance by Audiomonster and ▇▇▇▇ of this
Agreement and any other agreements between the parties
contemplated hereby and the consummation by Audiomonster and ▇▇▇▇
of the transactions contemplated hereby or thereby. This
Agreement has been duly executed and delivered by Audiomonster
and ▇▇▇▇ and constitutes a valid and legally binding obligation
of Audiomonster and ▇▇▇▇, enforceable against each of them in
accordance with the terms hereof.
Section 3.4. No Breach or Violation. The execution,
delivery and performance of this Agreement and any other
agreements contemplated hereby between the parties hereto by
Audiomonster and ▇▇▇▇ and the consummation of the transactions
contemplated by this Agreement or any other agreements
contemplated hereby will not (a) result in or constitute a breach
or an event that, with notice or lapse of time or both, would be
a default, breach or other violation of the articles of
incorporation or bylaws of Audiomonster or ▇▇▇▇; (b) violate
(with or without the giving of notice or the lapse of time or
both), or require any consent, approval, filing or notice under,
any provision of any law, rule or regulation, court or
administrative order, writ, judgment or decree applicable to
Audiomonster or ▇▇▇▇; and (c) with or without the giving of
notice or the lapse of time or both violate or conflict with, or
result in the breach, suspension or termination of any provision
of, or constitute a default under, or result in the acceleration
of the performance of any obligations of Audiomonster or ▇▇▇▇.
Section 1.1.
Section 3.5. Capitalization. As of the date hereof, the
authorized capital stock of Audiomonster consists of Fifty
Million (50,000,000) shares of Common Stock, par value $.001 per
share (the "Common Stock"), of which 13,805,000 shares of Common
Stock have been validly issued and outstanding, fully paid and
nonassessable (excluding the Share Portion of the Merger
Consideration). The Company has no obligation (contingent or
other) to purchase, redeem or otherwise acquire any of its equity
securities, or any interest therein or to pay any dividend or to
make any other distribution in respect thereof. Except for this
Agreement, there are no voting trusts or agreements, shareholder
agreements, buy-sell agreements, rights of first refusal,
preemptive rights or proxies relating to any securities of
Audiomonster (whether or not Audiomonster is a party thereto).
All of the outstanding securities of Audiomonster were issued in
compliance with all applicable Federal and state securities laws.
Audiomonster holds no shares of capital stock in its treasury.
Section 3.6. Liabilities. To the best knowledge of
Audiomonster, there are no liabilities or potential liabilities
of Audiomonster that are not included in the financial statements
of Audiomonster dated as of June 30, 2000 which in the aggregate
exceed Fifty Thousand Dollars ($50,000). The parties hereto
acknowledge that there are $1,655,000 in convertible debentures
which are expected, on or immediately after Closing, to be
converted to 1,655,000 shares of common stock of Audiomonster.
The parties acknowledge that these shares of common stock are not
included in Section 3.5 above.
Section 3.7. Each of the documents filed by Audiomonster
with the SEC (including all financial statements included
therein) (the "SEC Filings") at the time of filing thereof
conformed with the requirements of the Securities Act of 1933, as
amended and the Rules and Regulations promulgated thereto, and
none of the SEC Filings at the time of filing thereof contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein and necessary to make
the statements therein in light of the circumstances under which
they were made, not misleading.
ARTICLE IV
The Closing
The closing ("Closing") of the Merger and any other
transactions contemplated by this Agreement shall take place at
the law offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, 600
Old ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 9:00
a.m., on September 25, 2000, or at such other place and time and
on such other date, as the parties may agree upon in writing
("Closing Date").
ARTICLE V
Conditions to ClosinG
The obligations of Lockwave and the Shareholder to engage in
the transactions contemplated by this Agreement are subject to
the fulfillment to the satisfaction of ▇▇▇▇▇▇▇▇ and the
Shareholder, prior to or at the Closing Date, of the following
condition:
(a) Audiomonster shall deliver or cause to be delivered
Three Million Six Hundred Twenty-Five Thousand (3,625,000) shares
of Audiomonster common stock to the Shareholder or its designees.
All such shares shall be subject to Ademand@ registration rights
exercisable by the Shareholder or its designees and their
respective assigns at any time after the Closing Date and
"piggyback" registration rights in accordance with the
registration rights agreement between Audiomonster and the
Shareholder substantially in the form attached hereto as Exhibit
B (the "Registration Rights Agreement").
ARTICLE VI
POST CLOSING COVENANTS OF AUDIOMONSTER
Immediately following the Closing or as soon thereafter as
is reasonably practicable, Audiomonster shall take all steps
necessary to ensure that it Board of Directors is comprised of
▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, each of such directors to hold
office, subject to the applicable provisions of the Articles of
Incorporation and By-Laws of Audiomonster until the next annual
shareholders= meeting of Audiomonster and until their respective
successors shall be duly elected or appointed and qualified.
ARTICLE VII
Obligations of Lockwave and the Shareholder at Closing
At the Closing, Lockwave or the Shareholder (as the case may
be) shall deliver or cause to be delivered to Audiomonster the
following in a form and substance reasonably satisfactory to
Audiomonster:
Section 7.1. Deliveries. Imojo or Lockwave shall execute,
acknowledge, deliver and cause to be executed, acknowledged and
delivered to Audiomonster:
(a) Stock certificates for all of the Shares duly
endorsed for transfer or accompanied by duly executed stock
▇▇▇▇▇▇ executed in blank;
(b) A Certificate of Merger;
(c) The Escrow Agreement; and
(d) The Registration Rights Agreement.
Section 7.2. Corporate Good Standing and Corporate
Resolution. Lockwave shall deliver to Audiomonster a Certificate
of Good Standing from the Secretary of State of Delaware for
▇▇▇▇▇▇▇▇, together with a certified copy of the resolutions of
the Board of Directors of Lockwave and the Shareholder,
authorizing the execution, delivery and consummation of this
Agreement and the execution, delivery and consummation of all
other agreements and documents executed in connection herewith.
Section 1.1.
ARTICLE VIII
Obligations of ▇▇▇▇ and Audiomonster at Closing
At Closing, ▇▇▇▇ or Audiomonster (as the case may be) shall
deliver or cause to be delivered to the Shareholder the following
in a form and substance reasonably satisfactory to the
Shareholder:
Section 8.1. Merger Consideration. Audiomonster shall
deliver to the Shareholder or its designees cash or other
immediately available funds in the aggregate amount of the Cash
Portion specified herein, the Share Portion to be transferred to
the Shareholder or its designees, and shall deliver to the Escrow
Agent the Escrowed Shares as specified herein.
Section 8.2. ▇▇▇▇ and/or Audiomonster shall execute,
acknowledge, deliver and cause to be executed, acknowledged and
delivered to Audiomonster:
(a) A Certificate of Merger;
(b) The Escrow Agreement; and
(c) The Registration Rights Agreement.
Section 8.3. Corporate Good Standing and Certified Board
Resolutions. ▇▇▇▇ and Audiomonster shall deliver to Lockwave a
Certificate of Good Standing from the Secretary of the State of
Delaware for ▇▇▇▇ and Nevada for Audiomonster and a certified
copy of the resolutions of the Boards of Directors of ▇▇▇▇ and
Audiomonster approving this Agreement and consummation of the
transactions contemplated hereby.
ARTICLE IX
Miscellaneous
Section 9.1. Expenses. Each party shall bear its own
expenses in connection with this Agreement and the
transactions contemplated hereby.
Section 9.2. References to Dollar Amounts. All
references in this Agreement to dollar amounts shall be
deemed to mean United States dollars unless specifically
indicated otherwise.
Section 9.3. Headings. The subject headings of the
sections, paragraphs and subparagraphs of this Agreement are
included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its
provisions.
Section 9.4. Entire Agreement, Modification and
Waiver. This Agreement, together with the agreements referenced
herein or contemplated hereby, constitute the entire agreement
between the parties pertaining to its subject matter and
supersede all prior and contemporaneous agreements,
representations and understandings of the parties. No
supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by all the parties. No waiver
of any of the provisions of this Agreement shall be deemed, or
shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No
waiver shall be binding unless executed in writing by the party
making the waiver.
Section 9.5. Counterparts. This Agreement may be
executed simultaneously in one or more counterparts, each of
which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
Section 9.6. Rights of Parties. Nothing in this
Agreement, whether expressed or implied, is intended to confer
any rights or remedies under or by reason of this Agreement on
any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of
any third persons to any party to this Agreement, nor shall any
provision give any third persons any right of subrogation or
action over or against any party to this Agreement.
Section 9.7. Assignment. Neither ▇▇▇▇ nor
Audiomonster shall assign this Agreement to any person other than
an Affiliate or successor without the prior written consent of
Imojo. Subject to the previous sentence, this Agreement shall be
binding on, and shall inure to the benefit of, the parties to it
and their respective heirs, legal representatives, successors and
permitted assigns. The Shareholder shall be free to assign its
right to receive payments under Section 1.7 to any party upon
delivery of written notice thereof to Audiomonster not less than
two (2) days prior to the Closing Date; provided however, that
the Shareholder may not assign any other right, or delegate any
obligation hereunder, without the prior written consent of
Audiomonster. Any assignment or attempted assignment in
violation of the provisions of this Section 9.7 shall be void.
Section 9.8. Remedies. Each party=s obligation under
this Agreement is unique. If any party should default in its
obligations under this Agreement, the parties each acknowledge
that it would be extremely impracticable to measure the resulting
damages; accordingly, the nondefaulting party, in addition to any
other available rights or remedies, may sue in equity for
specific performance, and the parties each expressly waive the
defense that a remedy in damages will be adequate.
Section 9.9. Effect of Certain Actions. No action
taken pursuant to or related to this Agreement, including without
limitation any investigation by or on behalf of any party, shall
be deemed to constitute a waiver by the party taking such action
of compliance with any representation, warranty, condition or
agreement contained herein.
Section 9.10. Notices. All notices, requests and
other communications under this Agreement shall be in writing and
shall be deemed to have been duly given on the date of service if
served personally on the party (including without limitation
service by overnight courier service) to whom notice is to be
given, or on the third day after mailing if mailed to the party
to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, at the address set forth below, or on
the date of service if delivered by facsimile to the facsimile
number set forth below which facsimile is confirmed within three
days by deposit of a copy of such notice in first class mail,
registered or certified, postage prepaid at the address set forth
below. Any party may change its address for purposes of this
paragraph by giving the other parties written notice of the new
address in the manner set forth above.
If to Lockwave ▇▇ ▇▇▇▇ ▇▇▇▇▇
or Unit 5
to Shareholder: Commack, NY 11725
Attn: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to Audiomonster Suite 200
or to ▇▇▇▇: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
Canada V6Z 2P3
With copies to: Audiomonster Online, Inc.
Suite ▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇ ▇▇▇-▇▇▇▇
Section 9.11. Severability. If any provision of this
Agreement shall be declared by any court of competent
jurisdiction to be illegal, void or unenforceable, all other
provisions of this Agreement shall not be affected and shall
remain in full force and effect.
Section 9.12. Definition of Affiliate. As used in
this Agreement the term "Affiliate" as to any person, means any
other person, that, directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common
control with such person.
Section 9.13. Governing Law; Venue. This Agreement
shall be construed in accordance with, and governed by, the laws
of the State of New York as applied to contracts that are
executed and performed entirely in New York. The parties hereby
agree that any action, suit, arbitration or other proceeding
arising out of or related to this Agreement shall be brought,
maintained and conducted only in New York, and each party hereby
irrevocably consents and submits to the personal jurisdiction of
and venue in the United States District Court for the Eastern
District of New York and the New York State Courts in any such
proceeding.
Section 9.14. Legal Fees. In the event any legal
action or proceeding is instituted to enforce or interpret any of
the provisions of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees.
Section 9.15. Schedules and Exhibits. The Schedules
and Exhibits attached to this Agreement are a part hereof as if
fully set forth herein.
Section 9.16. Time of Essence. Time is of the essence
for each and every provision of this Agreement where time is a
factor.
In Witness Whereof, the parties to this Agreement have duly
executed it as of the day and year first set forth above.
Lockwave, Inc.
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, on behalf of
Lockwave, Inc. as CEO of Imojo,
Inc.
Imojo, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, CEO
Audiomonster Online, Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, President
▇▇▇▇ Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, President
EXHIBIT A
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, made and entered into as of this
25th day of September, 2000 (this "Agreement"), by and among
AUDIOMONSTER ONLINE, INC., a Nevada corporation ("Audiomonster"),
LOCKWAVE, INC. ("Lockwave"), ▇▇▇▇ INC., a Delaware corporation
("▇▇▇▇"), IMOJO, INC., a Delaware corporation ("iMojo") and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP (hereinafter referred to
as the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, Audiomonster, ▇▇▇▇, Lockwave and iMojo are all
parties to a certain merger agreement of even date herewith (the
"Merger Agreement"); and
WHEREAS, pursuant to the Merger Agreement, Audiomonster
has agreed to place all of the issued and outstanding shares of
Lockwave common stock in escrow until all amounts due to iMojo
(or its designees) under the Merger Agreement have been paid.
NOW, THEREFORE, in consideration of the premises and
the mutual covenants and agreements herein contained and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Appointment of Escrow Agent. The parties hereby
appoint ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP as Escrow Agent in
accordance with the terms and conditions of this Agreement and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP hereby accepts such
appointment as Escrow Agent.
2. Deposit of Escrow Shares. On the date hereof,
Audiomonster shall deposit all of the issued and outstanding
shares of Lockwave (endorsed in blank or together with stock
power of attorney endorsed in blank) with the Escrow Agent (the
"Escrow Shares").
3. Release or Termination of Escrow. The parties
hereto expressly agree that the escrow created by this Agreement
shall operate and work as follows and the Escrow Agent covenants
and agrees to hold, record, and distribute the Escrow Shares with
the instructions set forth in Paragraph 3(a) or to act in
accordance with the instructions set forth in Paragraph 3(b) as
follows:
(a) At such time as iMojo (or its designees)
shall have received all payments due under the Merger Agreement,
the Escrow Agent shall return the Escrow Shares to Audiomonster.
(b) In the event that Audiomonster shall fail to
make any payment to iMojo for its designees under the Merger
Agreement when due, the Escrow Agent shall release the Escrow
Shares to iMojo within five (5) days of receipt of written notice
from iMojo provided that Audiomonster was provided a copy of such
notice and provided that Audiomonster does not dispute that it
has failed to make any payments.
4. Termination of Escrow. Upon the delivery and
transfer of the Escrow Shares as provided in Paragraph 3(a) or
Paragraph 3(b), this Escrow Agreement shall be terminated;
provided, however, that Sections 5 through 12 hereof shall
survive such expiration and termination.
5. Dispute Among Parties. In the event that a dispute
arises among the parties hereto with respect to the terms of this
Escrow Agreement or any other matter related hereto, and such
dispute between the parties hereto is sufficient, in the sole and
exclusive discretion of the Escrow Agent, to justify its doing
so, the Escrow Agent shall tender into the registry or custody of
any court of competent jurisdiction the Escrow Shares, together
with such legal pleadings as it deems appropriate, and thereupon
shall be discharged from all further duties and liabilities under
this Escrow Agreement or may retain the Escrow Shares until, in
its sole discretion, it believes the parties hereto have resolved
their dispute.
6. Further Assurances. At any time and from time to
time the parties agree to take such actions and to execute and
deliver such documents as may be reasonably necessary to
effectuate the purposes and intent of this Agreement.
7. Reliance by the Escrow Agent on Third Parties. In
performing its obligations hereunder, the Escrow Agent may act in
reliance upon any instrument or signature in good faith believed
by it to be genuine, and the Escrow Agent may assume that any
person purporting to give a notice, request, consent or
instruction or acknowledge receipt in connection with the
provisions hereof has been duly authorized to do so and that the
same is properly made or given. The Escrow Agent may rely upon
any order, judgment, certification, demand or other writing
delivered to it without being required to determine the propriety
or validity thereof or of the service thereof or the jurisdiction
of any court.
8. Escrow Agent Resignation. The Escrow Agent may
resign and thereupon be discharged of its duties as Escrow Agent
hereunder by giving written notice thereof to the parties hereto.
Such resignation shall not take effect until the expiration of 30
calendar days after the giving of such notice or the earlier
receipt by the resigning Escrow Agent of an instrument of
acceptance executed by a successor escrow agent and subscribed
and consented to by each of the parties hereto and the delivery
by the resigning ▇▇▇▇▇▇ Agent to such successor of all Escrow
Shares then held by the resigning Escrow Agent hereunder or if no
successor is appointed, by delivery of such ▇▇▇▇▇▇ Shares to a
court of competent jurisdiction and it shall thereby be
discharged of its duties and responsibilities hereunder, the
parties hereto consenting and submitting to the personal
jurisdiction of said court and agreeing to waive all rights to
contest said jurisdiction in connection with any such action by
the resigning Escrow Agent or any matter arising out of this
Agreement or in connection therewith. In the event that the
Escrow Agent shall resign and be discharged as aforesaid, the
resigning Escrow Agent shall be free to act as counsel to a party
hereto or any of its affiliates or shareholders with respect to
any and all actions and disputes in which such party or any of
its affiliates or shareholders may have an interest adverse to
that of the other parties. The parties hereby acknowledge their
awareness that the Escrow Agent has acted as counsel to Lockwave
and its affiliated persons or entities and hereby waive any
objection to any past or future representation.
9. Escrow Agent's Duties. The Escrow Agent shall have
no duties or obligations hereunder except as expressly set forth
herein, shall be responsible only for the performance of such
duties and obligations, shall not be required to take any action
otherwise than in accordance with the terms hereof and shall not
be in any manner liable or responsible for any loss or damage
arising by reason of any act or omission to act by it hereunder
or in connection with any of the transactions contemplated
hereby, including, but not limited to, any loss that may occur by
reason of forgery, false representations, the exercise of its
discretion in any particular manner or for any other reason,
except for its gross negligence or willful neglect.
10. Liability of Escrow Agent; Legal Process.
(a) The Escrow Agent shall not be bound by any
notice of, or demand with respect to, any waiver, modification,
amendment, termination, cancellation, rescission or supersession
of this Agreement, unless the same shall be in writing and signed
by the parties hereto. In the event of any controversy or
dispute arising hereunder or with respect to the construction
hereof or any action to be taken by the Escrow Agent hereunder,
the Escrow Agent shall not incur any liability for any action or
omission to act by it in good faith. The good faith of the
Escrow Agent shall be conclusively presumed with respect to any
action or omission taken by it in accordance with the advice of
independent counsel selected by such Escrow Agent.
(b) The Escrow Agent may institute or defend any
action or legal process involving any matter referred to herein
which in any manner affects such Escrow Agent or its obligations
or liabilities hereunder, as the case may be, but shall not be
required to institute or defend such action or process unless or
until requested to so do by all of the affected parties hereunder
(other than any party who has instituted such action), and then
only upon receiving full indemnity of an amount and of such
character as the Escrow Agent shall require, against any and all
claims, liabilities, judgments, attorneys' fees and other
expenses of every kind in relation thereto.
11. Indemnification of Escrow Agent. Each of the
parties jointly and severally agree to save harmless, defend and
indemnify the Escrow Agent, acting in its capacity as Escrow
Agent, against any and all losses, liabilities, claims, costs,
damages, judgments, attorneys' fees, expenses, obligations,
taxes, assessments, actions, suits or charges made against the
Escrow Agent which it may incur or sustain in carrying out its
responsibilities hereunder, otherwise than as a result of its
gross negligence or willful neglect.
12. Notices. All notices, demands, requests and
communications required or contemplated hereunder shall be
effective only if given in writing and shall be deemed to have
been given when delivered by personal service or sent by
nationally recognized express delivery service or express mail,
or three days after being deposited in the mail and sent by
registered or certified mail, postage prepaid, addressed, in the
in case of express delivery or mail, as follows:
If to Escrow Agent:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Audiomonster:
Audiomonster Online, Inc.
Suite ▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇ ▇▇▇-▇▇▇▇
If to iMojo:
▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
13. Disclaimer. The Escrow Agent is to be considered
and regarded as a depository only, and shall not be responsible
or liable for the sufficiency or correctness as to form, manner
of execution, validity or enforceability of any instrument
deposited under this Agreement, nor as to the identity,
authority, or rights of any person executing the same; and its
duties hereunder shall be limited to the safekeeping of the
Escrow Shares received by it as Escrow Agent and for the transfer
and delivery of the same in accordance with this Agreement.
14. Miscellaneous.
14.1 No Third-Party Beneficiary. Nothing in this
Agreement expressed or implied is intended or shall be construed
upon or given to any person, other than the parties hereto, any
rights or remedies under or by reason of this Agreement.
14.2 Severability. If any term or provision of this
Agreement or the application thereof to any person or
circumstances shall, to any extent, be invalid or unenforceable,
the remainder of this Agreement or the application of such term
or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected
thereby, and each term and provision of this Agreement shall be
valid and enforceable to the extent permitted by law.
14.3 Successors and Assigns. The provisions hereof
shall inure to the benefit of and be binding upon the parties
hereto and their respective successors, heirs, executors,
administrators, and assigns.
14.4 No Waiver. No course of dealing between any of
the parties hereto and no delay or failure in exercising any
rights hereunder shall operate as a waiver of or otherwise
prejudice any rights of a party hereunder.
14.5 Removal of Escrow Agent. The Escrow Agent may be removed
with the written consent of all parties.
14.6 Lien on Escrowed Shares. The Escrow Agent may not place any
lien or encumbrance on the Escrow Shares except in connection
with non-payment of its fees, if any, in its capacity as Escrow
Agent.
14.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
14.8 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter
hereof and supersedes any prior oral or written Agreement,
representations, promises or course of dealings.
14.9 Amendments and Waivers. Neither this Agreement nor any of
the terms hereof may be terminated, amended or waived orally, but
only by an instrument in writing executed by the parties hereto.
14.10 Headings, etc. The headings of the various
subdivisions of this Agreement are for convenience of reference
only and shall not define nor limit or otherwise affect any of
the terms or provisions hereof. All pronouns shall be deemed to
refer to the masculine, feminine, neuter, singular or plural as
the identity of the person or persons referred to may require.
14.11 Jurisdiction; Service. (a) It is hereby irrevocably agreed
that all actions, suits or proceedings between the parties
hereto arising out of, in connection with or relating to this
Agreement, or the interpretation, performance or breach thereof,
shall be exclusively heard and determined in, and the parties do
hereby irrevocably submit to the exclusive jurisdiction of the
Supreme Court of the State of New York, in the County of Nassau,
or in the United States District Court for the Eastern District
of New York. The parties also agree that a final judgment in any
such action, suit, or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. The parties hereby unconditionally
waive any objection which either of them may now or hereafter
have to the laying of venue of any such action, suit or
proceeding brought in any of the aforesaid courts, and waive any
claim that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum. The
parties hereto further agree that service of process in any such
action, suit or proceeding shall be made in the manner herein
provided for the service of notices, agree to consent to and
accept such service of process, and waive their rights to
statutory service of process.
(b) Notwithstanding clause (a), a party may
institute and prosecute to judgment in any court of competent
jurisdiction, an action, suit or proceeding to enforce any
judgment rendered pursuant to clause (a).
14.12 Counterparts. This Agreement may be executed in
two or more counterparts and by facsimile, each of which shall be
deemed an original, but all of which together shall constitute
one and the same instrument.
Counterpart Signature Page to Escrow Agreement
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed as of the date first set forth above.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇, LLP
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
AUDIOMONSTER ONLINE, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, President
LOCKWAVE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, on behalf of
Lockwave, Inc. as
CEO of Imojo, Inc.
▇▇▇▇, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, President
IMOJO, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CEO
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of September 25, 2000, by and among Audiomonster Online, Inc.,
a Nevada corporation (the "Company"), and iMojo, Inc., a Delaware
corporation ("iMojo").
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
intending to be legally bound hereby agree as follows:
1. Certain Definitions. As used in this Agreement, unless
the context otherwise requires the following terms shall have the
following respective meanings:
"Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering
the Securities Act.
"Common Stock" shall mean the Common Stock, par value
$.001 per share, of the Company.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, or any similar successor Federal statute,
and the rules and regulations of the Commission thereunder, all
as the same shall be in effect from time to time.
"Holder" shall mean, except as specifically provided in
Section 3 hereof, any Investor holding Registrable Stock and any
other Person holding shares of Registrable Stock to whom the
rights under this Agreement have been transferred in accordance
with Section 11.
"Initiating Holders" shall mean Holders who in the
aggregate are Holders of not less than forty percent 40% of the
outstanding Registrable Stock.
The terms "register", "registered" and "registration"
shall refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act and
applicable rules and regulations thereunder, and the declaration
or ordering of the effectiveness of such registration statement.
"Person" shall mean any individual, corporation,
association, partnership, limited liability company, trust or
estate, organization, business, government or agency or political
subdivision thereof or any other entity.
"Registrable Stock" shall mean, except as specifically
provided in Section 3 hereof, shares of Common Stock issued to
iMojo (or its designees) pursuant to a Merger Agreement among
Lockwave, Inc., ▇▇▇▇ Inc., iMojo and the Company dated even date
herewith which have not been previously registered under the
Securities Act.
"Registration Expenses" shall mean the expenses so
described in Section 6.
"Securities Act" shall mean the Securities Act of 1933,
as amended, or any similar successor federal statute, and the
rules and regulations of the Commission thereunder, all as the
same shall be in effect from time to time.
"Selling Expenses" shall mean the expenses so described
in Section 6.
2. Demand Registration. (a) At any time after the
execution of this Agreement, the Initiating Holders may request
in writing that the Company register under the Securities Act all
or any portion of the shares of Registrable Stock held by such
Initiating Holders for sale in the manner specified in such
notice provided that the shares of Registrable Stock for which
such registration has been requested. Notwithstanding anything
to the contrary contained herein, no request may be made under
this Section 2 within sixty (60) days after the effective date of
a registration statement filed by the Company covering a firm
commitment underwritten public offering in which the Holders of
Registrable Stock shall have been entitled to join pursuant to
Sections 3 or 4 and in which there shall have been effectively
registered and sold all shares of Registrable Stock as to which
registration shall have been so requested.
(b) Following receipt of any notice under this Section
2, the Company shall immediately notify all Holders of
Registrable Stock from whom notice has not been received and
shall use its best efforts to register under the Securities Act,
for public sale in accordance with the method of disposition
specified in such notice from requesting Holders, the number of
shares of Registrable Stock specified in such notice (and in all
notices received by the Company from all other Holders within
thirty (30) days after the receipt of such notice given by the
Company to such Holders). Notwithstanding the foregoing, in the
event that the Board of Directors in good faith determines that
it would be detrimental to the Company or its stockholders to
proceed immediately with a public offering, the Company may defer
its obligations under this Section 2 for a period of up to ninety
(90) days from the date of the receipt of the initial request.
(c) The Company shall be obligated to register
Registrable Stock pursuant to this Section 2 on not more than two
occasions only in respect of any one investor; provided, however,
that such obligation shall be deemed satisfied only when a
registration statement covering all shares of Registrable Stock
specified in the notice (which have not subsequently been
withdrawn by the Holders giving such notice) received as
aforesaid for sale in accordance with the method of disposition
specified by the requesting Holders, shall have become effective.
(d) If the method of disposition shall be an
underwritten public offering, the Company may designate the
managing underwriter of such offering, subject to the approval of
the Initiating Holders, such approval not to be unreasonably
withheld.
(e) The Company shall be entitled to include in any
registration statement referred to in this Section 2, for sale in
accordance with the method of disposition specified by the
Initiating Holders, shares of Common Stock to be sold by the
Company for its own account, except as and to the extent that, in
the written opinion (a copy of which shall be delivered to the
Holders) of the managing underwriter (if such method of
disposition shall be an underwritten public offering), such
inclusion would adversely affect the marketing of the Registrable
Stock to be sold, and except that (i) the number of shares of
Registrable Stock to be included in such underwriting shall not
be reduced unless all other securities are first entirely
excluded from the underwriting and (ii) if shares of Common Stock
are to be so included for the account of the Company, then such
registration shall be deemed to be a registration in accordance
with and pursuant to Section 3 and not a registration pursuant to
this Section 2.
(f) The Company will not file with the Commission any
other registration statement with respect to its Common Stock,
whether for its own account or that of other stockholders (other
than with respect to the filing of a Form S-8 to register
securities issuable under the Company's stock option or incentive
plans), from the date of receipt of a notice from requesting
Holders pursuant to this Section 2 until the completion of the
period of distribution of the registration contemplated thereby
but in no event shall such forbearance continue past the date six
months following the effective date of registration made pursuant
to this Section 2.
3. Incidental Registration. If the Company at any time
(other than pursuant to Section 2 or Section 4) proposes to
register any of its securities under the Securities Act, whether
for its own account or for the account of other security holders
or both, it shall each such time give prompt prior written notice
to all Holders of outstanding Registrable Stock of its intention
to do so and of such Holders' rights hereunder. Upon the written
request of any such Holder, received within thirty (30) days
after the mailing of any such notice given by the Company, to
register any of its Registrable Stock (which request shall state
the intended method of disposition thereof), the Company shall
use its best efforts to cause the Registrable Stock as to which
registration shall have been so requested to be included in the
securities to be covered by the registration statement proposed
to be filed by the Company, all to the extent requisite to permit
the sale or other disposition by the Holder (in accordance with
its written request) of such Registrable Stock. In the event
that any registration pursuant to this Section 3 shall be, in
whole or in part, an underwritten public offering of Common
Stock, the number of shares of Registrable Stock to be included
in such an underwriting may be reduced pro rata among the
requesting Holders if and to the extent that the managing
underwriter shall be of the opinion (a written copy of which
shall be delivered to the Holders) that such inclusion would
materially adversely effect the marketing of the securities to be
sold by the Company under such registration statement. The
number of registrations to which Holders may join pursuant to
this Section 3 is unlimited.
4. Registration on Form S-3. (a) The Company shall use
its best efforts to qualify for registration on Form S-3, or any
successor or similar form (including registering its Common Stock
under the Exchange Act following its initial public offering).
At any time after the Company has qualified or is otherwise
eligible for the use of Form S-3, or any successor or similar
form, the Holders of Registrable Stock may, in addition to their
rights under Sections 2 and 3, request the Company to effect
unlimited registrations on Form S-3 with respect to all or any
portion of the shares of Registrable Stock held by such Holders
for sale in the manner specified in such notice. Notwithstanding
anything to the contrary contained herein, no request may be made
under this Section 4 within one hundred twenty (120) days after
the effective date of a registration statement filed by the
Company covering a firm commitment underwritten public offering
in which the Holders of Registrable Stock shall have been
entitled to join pursuant to Section 2 or 3 and in which there
shall have been effectively registered and sold all shares of
Registrable Stock as to which registration shall have been so
requested.
(b) Promptly following receipt of any notice under
this Section 4, the Company shall immediately notify all Holders
of Registrable Stock from whom notice has not been received and
shall use its diligent best efforts promptly to effect the
registration on Form S-3 or any successor or similar form, in
accordance with the method of disposition specified in such
notice from such Holders, with respect to the number of shares of
Registrable Stock specified in such notice (and in all notices
received from other Holders within thirty (30) days after their
receipt of such notice from the Company). If the registration to
be effected pursuant to this Section 4 is to be an underwritten
public offering, the Company may designate the managing
underwriter of such offering, subject to the approval of the
requesting Holders, such approval not be unreasonably withheld.
(c) If in the opinion (a written copy of which shall
be provided to the Holders) of the managing underwriter, market
conditions require a limitation on the number of shares to be
underwritten, and if the total amount of securities that all
Holders request pursuant to this Section 4 to be included in such
offering exceeds the amount of securities that the underwriters
reasonably believe are compatible with the success of the
offering, the Company shall only be required to include in the
offering the amount of securities of such Holders that the
underwriters believe will not jeopardize the success of the
offering, and such amount shall be allocated among such holders
in proportion to the respective number of shares of Registrable
Stock held by each of such holders. All shares of Registrable
Stock that are so excluded from the underwriting shall not be
required to be so registered. The Company shall not file with
the Commission any other registration statement with respect to
its securities, whether for its own account or that of other
stockholders (other than with respect to the filing of a Form S-8
to register securities issuable under the Company's stock option
or incentive plans) from the date of receipt of a notice from
such Holders pursuant to this Section 4 until the completion of
the period of distribution of registration contemplated thereby,
but in no event shall such forbearance continue past the date six
months following the effective date of registration made pursuant
to this Section 4.]
5. Registration Procedures. If and whenever the Company
is required by the provisions of Sections 2, 3 or 4 to effect the
registration of any shares of Registrable Stock under the
Securities Act, the Company shall at its cost and expense, as
expeditiously as possible:
(a) prepare in conformity with the requirements of the
Securities Act and (as promptly thereafter as practicable and in
any event within 120 days after the first request) file with the
Commission a registration statement (which, in the case of an
underwritten public offering pursuant to Section 2, shall be on
Form S-1, SB-2, S-3 (if the Company is eligible) or other form of
general applicability satisfactory to the managing underwriter
and the Holders) with respect to such securities and use its best
efforts to cause such registration statement to become and remain
effective for the period of the distribution contemplated thereby
(determined as hereinafter provided);
(b) prepare in conformity with the requirements of the
Securities Act and file with the 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 the period specified in
paragraph (a) above and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Stock covered by such registration statement in accordance with
the sellers' intended method of disposition set forth in such
registration statement for such period;
(c) furnish to each seller of Registrable Stock and to
each underwriter such number of copies of the registration
statement and of each amendment and supplement thereto (in each
case including exhibits) and the prospectus included therein
(including each preliminary prospectus) and any other prospectus
filed under Rule 424 or Rule 430 under the Securities Act, in
conformity with the requirements of the Securities Act, and such
other documents (in each case including all exhibits) as such
Persons reasonably may request;
(d) use its best efforts to register or qualify the
Registrable Stock covered by such registration statement under
the securities or "blue sky" laws of such jurisdictions as the
sellers of Registrable Stock or, in the case of an underwritten
public offering, the managing underwriter shall reasonably
request and to keep such registrations or qualifications in
effect for so long as such registration statement remains in
effect, and to take such other action as may be reasonably
necessary or advisable to enable such seller to consummate the
disposition in such jurisdiction of the securities owned by such
Seller; provided, however, that the Company shall not for any
such purpose be required to qualify generally to transact
business as a foreign corporation in any jurisdiction where it is
not so qualified or to consent to general service of process in
any such jurisdiction; and provided further however, that if any
such jurisdiction requires that the expenses of qualification be
borne by the selling stockholders, then expenses shall be payable
pro rata as so required, notwithstanding anything to the contrary
herein.
(e) use its best efforts (i) to list all securities
covered by such registration statement on any securities exchange
on which any of such securities is then listed or (ii) in the
event such securities are not so listed to have such Registrable
Stock qualified for inclusion on The Nasdaq National Market, if
such securities are then so qualified or (iii) in the event such
securities are not so listed or qualified, to have such
securities qualified for inclusion on the Nasdaq System;
(f) immediately notify each seller of Registrable
Stock and each underwriter under such registration statement, at
any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the receipt of any stop
order or thereafter of a proceeding for such purpose or of the
happening of any event of which the Company has knowledge as a
result of which the prospectus contained in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and at
the request of any such seller promptly prepare to furnish to
such seller a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such 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 not
misleading in light of the circumstances then existing;
(g) notify the Holders participating in such
registration, promptly after it shall receive notice thereof (i)
of the time when such registration statement has become effective
or a supplement to any prospectus forming a part of such
registration statement has been filed and (ii) of any request by
the Commission for the amending or supplementing of such
prospectus or registration statement;
(h) furnish to each seller of Registrable Stock and
the underwriters, if any, (i) an opinion of counsel representing
the Company for the purposes of such registration, dated the
effective date of such registration, addressed to the
underwriters and to such seller, stating that such registration
statement has become effective under the Securities Act and that
(A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending
or contemplated under the Securities Act, (B) the registration
statement, the related prospectus and each amendment or
supplement thereof comply as to form in all material respects
with the requirements of the Securities Act (except that such
counsel need not express any opinion as to financial statements
or other financial data contained therein) and (C) to such other
effects as reasonably may be requested by counsel for the
underwriters or by such seller or its counsel and (ii) a "comfort
letter" dated the effective date of such registration statement
from the independent public accountants certifying the financial
statements in such registration statement, addressed to the
underwriters and to such seller, stating that they are
independent public accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration
statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act, and
such letter shall additionally cover such other financial matters
(including information as to the period ending no more than five
business days prior to the date of such letter) with respect to
such registration as such underwriters and Sellers reasonably may
request;
(i) make available for inspection by each seller of
Registrable Stock, any underwriter participating in any
distribution pursuant to such registration statement, and any
attorney, accountant or other agent retained by such seller or
underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration
statements;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning
with the first full calendar month after the effective date of
such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act,
and will furnish to each such seller at least two business days
prior to the filing thereof a copy of any amendment or supplement
to such registration statement or prospectus and shall not file
any thereof which do not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations
thereunder; and
(k) provide and cause to be maintained a transfer
agent for all Registrable Stock covered by such registration
statement and a CUSIP number for all such Registrable Stock, in
each case not later than the effective date of such registration
statement.
For purposes of Section 5 and of Section 2(d), the period of
distribution of Registrable Stock in a firm commitment
underwritten public offering shall be deemed to extend until each
underwriter has completed the distribution of all securities
purchased by it, and the period of distribution of Registrable
Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Registrable Stock covered thereby
and one hundred eighty (180) days after the effective date
thereof.
In connection with each registration hereunder, the sellers
of Registrable Stock will furnish to the Company in writing such
information with respect to themselves and the proposed
distribution by them as the Company shall reasonably request in
writing and as shall be reasonably required in order to comply
with Federal and applicable state securities laws (subject to the
proviso in Section 5(d)) in connection with the registration of
Registrable Stock.
In connection with each registration pursuant to Sections 2,
3 or 4 covering an underwritten public offering, the Company and
each seller agree to enter into a written agreement with the
managing underwriter selected in the manner herein provided in
such form and containing such provisions as are customary in the
securities business for such an arrangement between such
underwriter and companies of the Company's size and investment
stature; provided, however, that no such seller of Registrable
Stock shall be required to make any representations or warranties
or agreements other than representations, warranties and
agreements regarding such Holder, such Holder's Registrable Stock
and the intended method of distribution and provided further that
such Holders may require that any or all representations,
warranties, conditions precedent and other agreements by the
Company for the benefit of the underwriter shall also be for the
benefit of such Holders.
6. Expenses. All expenses incurred by the Company in
complying with Sections 2, 3 or 4 including, without limitation,
all registration and filing fees, printing expenses, duplicating,
word processing, messenger and delivery expenses, fees and
disbursements of counsel for the Company and independent public
accountants for the Company, fees and expenses (including counsel
fees) incurred in connection with complying with state securities
or "blue sky" laws, fees of the National Association of
Securities Dealers, Inc., transfer taxes, fees of transfer agents
and registrars, costs of insurance and reasonable fees and
disbursements of one counsel for the sellers of Registrable Stock
for a "due diligence" examination of the Company and a review of
all related documents, but excluding (i) any compensation of
regular employees of the Company which shall be paid in any event
by the Company and (ii) Selling Expenses, are referred to herein
as "Registration Expenses". All underwriting discounts and
selling commissions applicable to the sale of Registrable Stock
are referred to herein as "Selling Expenses".
The Company will pay all Registration Expenses in
connection with all registration statements under Sections 2, 3
or 4. All Selling Expenses in connection with each registration
statement under Sections 2, 3 or 4 shall be borne by the
participating sellers in proportion to the number of shares sold
by each, or by such participating sellers other than the Company
(except to the extent the Company shall be a seller) as they may
agree. Notwithstanding the foregoing, in the event that the
requesting Holders provide notification to the Company of their
intention to withdraw the registration request, such Holders
shall be responsible for all expenses otherwise payable by the
Company pursuant to this Section prior to such withdrawal or, in
lieu of accepting such responsibility, such Holders shall forfeit
their right to require the Company to pay such expenses in
connection with any future requested registration under this
Agreement.
7. Indemnification and Contribution. (a) In the event of
a registration or qualification of any of the Registrable Stock
under the Securities Act pursuant to the provisions of this
Agreement, the Company shall and hereby does indemnify and hold
harmless each seller of such Registrable Stock thereunder, its
legal counsel and accountants and each underwriter of such
Registrable Stock thereunder and each other Person, if any, who
controls such seller or underwriter within the meaning of the
Securities Act and Exchange Act laws, against any losses, claims,
damages or liabilities, joint or several, to which such seller,
legal counsel, accountant, underwriter or controlling Person may
become subject under the Securities Act, the Exchange Act, State
securities laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in any registration statement
under which such Registrable Stock was registered under the
Securities Act and any preliminary prospectus or final prospectus
or summary prospectus or other document contained therein, or any
amendment or supplement thereof, or arise out of or are based
upon 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, or (ii) any violation by the
Company of any federal, State or common law rule or regulation
applicable to the Company in connection with any such
registration or qualification and the Company, and will reimburse
each such seller, each such legal counsel or accountant, each
such underwriter and each such controlling Person for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not
be liable in any such case if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or
alleged omission so made in reliance upon and in conformity with
information furnished by any such seller, any such underwriter or
any such controlling Person in writing duly executed by such
seller or underwriter, as the case may be, specifically stating
that it is for use in such registration statement or prospectus.
(b) In the event of a registration of any of the
Registrable Stock under the Securities Act pursuant to the
provisions of this Agreement, each seller of such Registrable
Stock thereunder, severally and not jointly, will to the extent
permitted by law indemnify and hold harmless the Company, each
Person, if any, who controls the Company within the meaning of
the Securities Act and the Exchange Act, each officer of the
Company who signs the registration statement, each director of
the Company, each underwriter and each Person who controls any
underwriter within the meaning of the Securities Act and the
Exchange Act, against all losses, claims, damages or liabilities,
joint or several, to which the Company or such officer, director,
underwriter or controlling Person may become subject under the
Securities Act, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in the registration statement under
which such Registrable Stock was registered under the Securities
Act pursuant to the provisions of this Agreement, any preliminary
prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based
upon 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, and will reimburse the Company
and each such officer, director, underwriter and controlling
Person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that such
seller will be liable hereunder in any such case if and only to
the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as
such, furnished in writing to the Company duly executed by such
seller stating that it is specifically for use in such
registration statement or prospectus; provided, further, that the
liability of each seller hereunder shall be limited to the
proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price
of the shares sold by such seller under such registration
statement bears to the total public offering price of all
securities sold thereunder, but not in any event to exceed the
net proceeds received by such seller from the sale of Registrable
Stock covered by such registration statement.
(c) Promptly after receipt by an indemnified party
hereunder of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to
notify the indemnifying party shall not relieve it from any
liability which it may have to such indemnified party other than
under this Section 7 and shall only relieve it from any liability
which it may have to such indemnified party under this Section 7
if and to the extent the indemnifying party is actually
prejudiced by such omission. In case any such action shall be
brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with
counsel reasonably satisfactory to such indemnified party, and,
after notice from the indemnifying party to such indemnified
party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such
indemnified party under this Section 7 for any legal expenses
subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of
investigation and of liaison with counsel so selected; provided,
however, that, if the defendants in any such action include both
the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may
be reasonable defenses available to it which are different from
or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed
to conflict with the interests of the indemnifying party, the
indemnified party shall have the right to select a separate
counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as
incurred. No indemnifying party, in defense of any such action,
shall, except with the consent of each indemnified party, consent
to the 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 action.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification
provided for in Section 7 is for any reason held to be
unavailable from the Company to an indemnified party with respect
to any loss, liability claim, damage or expense referred to
therein, then the indemnifying party, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such
loss, liability, claim, damage or expense (including any
investigation, legal and other expense incurred in connection
with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the
indemnified parties, such as Persons who control the Company
within the meaning of the Securities Act or the Exchange Act,
officers of the Company who signed the registration statement and
directors of the Company, who may also be liable for
contribution) in such proportion as is appropriate to reflect
(i) the relative fault of the indemnifying party, on the one
hand, and of the indemnified party, on the other hand, in
connection with the statements or omissions which resulted in
such loss, liability, claim, damage or expense as well as any
other relevant equitable considerations, and (ii) the relative
benefits to such parties. The relative fault of the indemnifying
party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying
party or by the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. For purposes of
this Section 7(d), each Person, if any, who controls, within the
meaning of the Securities Act or the Exchange Act, any
indemnified party shall have the same rights to contribution as
such indemnified party, and each Person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange
Act, each officer of the Company who shall have signed the
registration statement and each director of the Company shall
have the same rights to contribution as the Company. Any party
entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made
against another party or parties under this Section 7(d), notify
such party or parties from whom contribution may be sought, but
the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties
from whom contribution may be sought from any other obligation it
or they may have hereunder or otherwise than under this Section
7(d). The provisions of Section 7 shall survive the termination
of this Agreement and the registration of all Registrable Stock.
8. Changes in Common Stock. (a) If, and as often as,
there is any change in the Common Stock by way of a stock split,
stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by
any other means, appropriate adjustment shall be made in the
provisions hereof so that the rights and privileges granted
hereby shall continue with respect to the Common Stock as so
changed.
(b) The Company will not effect or permit to occur any
combination or subdivision of shares which would materially
adversely affect the ability of Holders of Registrable Stock to
include such Registrable Stock in any registration of its
securities contemplated by this Agreement or the marketability of
such Registrable Stock under any such registration.
9. Rule 144 Reporting. For the purpose of making
available the benefits of certain rules and regulations of the
Commission which may at any time permit the sale of the
Registrable Stock to the public without registration (but in no
way reducing the rights of Holders hereunder relating to effect
any registrations), at all times after 90 days after any
registration statement covering a public offering of securities
of the Company under the Securities Act shall have become
effective, or at all times after the Common Stock of the Company
shall initially be registered pursuant to the requirements of
Section 12 of the Exchange Act, the Company agrees at its cost
and expense to use its best efforts to:
(a) make and keep public information available, as
those terms are understood and defined in Rule 144 under the
Securities Act;
(b) file with the Commission in a timely manner all
reports and other documents required of the Company under the
Securities Act and the Exchange Act;
(c) furnish to each Holder of Registrable Stock,
promptly upon request, a written statement by the Company as to
its compliance with the reporting requirements of such Rule 144
and of the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of the Company, and such
other reports and documents so filed by the Company as such
Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing such Holder to sell any
Registrable Stock without registration; and
(d) furnish to each Holder of Registrable Stock which
is a "qualified institutional buyer" within the meaning of Rule
144A under the Securities Act, promptly upon written request from
such Holder, such information as may be required under Rule 144A
for delivery to any prospective purchaser of any Registrable
Stock in order to permit such Holder to avail itself of the
benefits of the exemptions under the Securities Act afforded by
such Rule.
10. Additional Rights of Holders of Registrable Stock. If
any registration statement of the Company refers to any Holder of
Registrable Stock by name or otherwise as the Holder of any
securities of the Company, then such Holder shall have the right
to require (a) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect
that the holding by such Holder of Registrable Stock does not
necessarily make such Holder a "controlling person" of the
Company within the meaning of the Securities Act and is not to be
construed as a recommendation by such Holder of the investment
quality of the Company's debt or equity securities covered
thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the
Company, or (b) in the event that such reference to such Holder
of Registrable Stock by name or otherwise is not required by the
Securities Act or any rules and regulations promulgated
thereunder, the deletion of the reference to such Holder.
11. Transfer or Assignment of Registration Rights. The
rights to cause the Company to register a Holder's Registrable
Stock granted to each Holder by the Company under Section 2, 3 or
4 may be transferred or assigned by such Holder; provided that
(except in the case of transfers to affiliates) the Company is
given written notice by such ▇▇▇▇▇▇ at the time of or within a
reasonable time after said transfer or assignment, stating the
name and address of said transferee or assignee and identifying
the securities with respect to which such registration rights are
being transferred or assigned, and provided further that the
transferee or assignee of such rights assumes the obligations of
such Holder under this Agreement.
12. Miscellaneous. (a) Except as otherwise provided
herein, all covenants and agreements contained in this Agreement
by or on behalf of any of the parties hereto shall bind and inure
to the benefit of the respective successors and assigns of the
parties hereto.
(b) All notices, requests, consents and other
communications hereunder shall be in writing and shall be mailed
by certified or registered mail, return receipt requested,
postage pre-paid, or by nationally recognized overnight courier
addressed as follows: (i) if to the Company or any other party
hereto, at the address of such party set forth in the Stock
Purchase Agreement; (ii) if to any subsequent Holder of
Registrable Stock, to it at such address as may have been
furnished to the Company in writing by such ▇▇▇▇▇▇; or, in any
case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of a Holder of
Registrable Stock) or to the Holders of Registrable Stock (in the
case of the Company) in accordance with the provisions of this
paragraph.
(c) This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without
giving effect to the conflict of laws principles thereof.
(d) Any dispute arising out of any matter involving
this Agreement shall be submitted to binding and non-appealable
arbitration in accordance with the Commercial Rules of the
American Arbitration currently in effect and as hereinafter
modified. If the parties to the arbitration are unable to agree
on an arbitrator, an arbitrator will be selected pursuant to such
rules. Any such arbitration shall be held in Nassau County,
State of New York. The arbitrator so selected must enforce the
terms of this Agreement and must rule in accordance with New York
law. Judgment upon any award rendered by the arbitrators maybe
entered in any court having jurisdiction. The prevailing party
in any such arbitration will be entitled to an award of its
reasonable attorneys' fees and expenses in connection with such
arbitration and enforcement of any award or relief granted
therein.
(e) No failure to exercise and no delay in
exercising, on the part of the Company or any Holder of
Registrable Stock of any right, power or privilege granted under
this Agreement shall operate as a waiver of such right, power, or
privilege. No single or partial exercise by the Company or any
such Holder of any right, power or privilege granted under this
Agreement shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights
and remedies provided in this Agreement are cumulative and are
not exclusive of any rights or remedies provided by law.
(f) If any provision of this Agreement shall be held
to be illegal, invalid or unenforceable, such illegality,
invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render illegal,
invalid or unenforceable any other provision of this Agreement,
and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
(g) This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and
supersedes all prior agreements relating to the subject matter of
this Agreement. Except as otherwise provided herein, neither
this Agreement nor any provision hereof can be modified, changed,
discharged, waived or terminated except by an instrument in
writing signed by holders of a majority of the outstanding
Registrable Stock.
(h) This Agreement shall be deemed to have been
drafted by both the Company and the Investors and shall not be
construed against either party as the principal draftsperson
hereof.
(i) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument
and it shall not be necessary in making proof of this Agreement
to account for more than one such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this
Registration Rights Agreement to be executed as of the date set
forth above.
AUDIOMONSTER ONLINE, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, President
IMOJO, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CEO