EXECUTION COPY
MCY REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT dated as of October 19, 2000 (this
"Agreement"), by and between ▇▇▇.▇▇▇, Inc., a Delaware corporation (the
"Company") and Applied Digital Solutions, Inc. (the "Stockholder").
This Agreement is being entered into pursuant to a certain MCY
Agreement (the "MCY Agreement") dated as of the date hereof by and between MCY
Music World, Inc. and the Stockholder. Pursuant to Section 2(b) of the Purchase
Agreement, the Stockholder is acquiring [615,976] shares of the Company's common
stock, par value $0.001 per share (the "Common Stock") equal to $1,000,000 (the
"MCY Shares").
The Company and the Stockholder hereby agree as follows:
1. Certain Definitions. As used in this agreement, the following terms
shall have the meanings provided below:
(a) "Commission" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(b) "Demand Notice" means a written request from the Stockholder to
register at least 50% of the Registrable Securities; provided, however, that the
such right to a Demand Notice shall be personal to the Stockholder and may not
be transferred to another party;
(c) "Other Securities" means, at any time, those shares of Common
Stock, and of any other class or series of capital stock of the Company or other
securities of the Company representing the right to acquire Common Stock, that
the Company is required to, or has determined to, register pursuant to a
registration statement filed by the Company with the Commission pursuant to this
or any other agreement.
(d) "Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
(e) "Registrable Securities" means the MCY Shares and any other
securities issuable in replacement thereof by way of a recapitalization,
exchange, merger, consolidation, reorganization or other transaction; provided,
however, that any share shall cease to be a Registrable Security under this
Agreement when (A) a registration statement with respect to such share's public
sale shall have become effective under the Securities Act, (B) it has been
disposed of as permitted by, and in compliance with, Rule 144 (or under any
successor provision to Rule 144) promulgated under the Securities Act, (C) if it
become eligible to be disposed of as permitted by and in compliance with Rule
144 (or under any successor provision to Rule 144), or (D) it shall have ceased
to be outstanding.
(f) "Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the provisions of Sections 2 and 3
including, without limitation, all registration, filing and National Association
of Securities Dealers, Inc. fees, all listing fees, all fees and expenses of
complying with securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities hereunder), all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company and any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities.
(g) "Securities Act" means the Securities Act of 1933, and any
subsequent similar federal statute, and the rules and regulations promulgated
thereunder.
(h) "Stockholder Expense" means any underwriters' fees and underwriting
discounts and commissions in respect of the Registrable Securities being
registered hereunder as well as any fees and expenses of counsel to the
Stockholder of the Registrable Securities hereunder.
2. Demand Registration.
2.1 Rights to Demand Registration. If, at any time after the average
bid and ask price of the Common Stock equals or exceeds $7.50 per share, the
Company receives a Demand Notice from the Stockholder requesting that the
Company effect the registration under the Securities Act of not less than 50% of
the MCY Shares held by the Stockholder. Promptly after receipt of such notice,
the Company will give written notice of such requested registration to all other
holders of Common Stock. The Company will then use its reasonable efforts to
effect the registration under the Securities Act of the MCY Shares which the
Company has been requested to register by ADS, and all shares of Common Stock
which the Company has been requested to register by other holders of Common
Stock by notice delivered to the Company within ten (10) days after the giving
of such notice by the Company.
2.2 Limits on Demand Rights.
(a) The Company shall not be obligated to file and cause to become
effective more than one (1) registration statements pursuant to such Demand
Notice.
(b) Unless the Company shall have delayed the commencement of a
registration statement pursuant to Section 2.2(c) below, the Company may delay
the filing or effectiveness of any registration statement for a period of up to
sixty (60) days after the date of delivery of the Demand Notice pursuant to this
Section 2 if at the time of such request the Company is engaged in an
underwritten public offering of its Common Stock in which the Stockholder may
include the Registrable Securities pursuant to
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Section 3; provided, however, that, in the event the Company exercises its
rights under this Section 2.2(b), the registration shall not be counted as a
demand for registration by any Stockholder for purposes of Section 2.2(a)
hereof; and provided, further that the Company may not exercise its right under
this Section 2.2(b) more than once in any 12-month period.
(c) If, while a registration request is pending pursuant to this
Section 2 or if after the Company has received a Demand Notice, the Company is
advised by legal counsel (i) that the filing of a registration statement would
require the disclosure of a material transaction or other factor that the
Company reasonably determines in good faith could have a material adverse effect
on the Company or (ii) the Company then is unable to comply with Commission
requirements applicable to the requested registration, the Company shall not be
required to effect a registration pursuant to this Section 2 until the earlier
of (A) the date upon which such material information is otherwise disclosed to
the public or ceases to be material or the Company is able to so comply with
applicable Commission requirements, as the case may be, and (B) ninety (90) days
after the Company makes such good faith determination, provided that in the
event the Company exercises its rights under this Section 2.2(c), the
registration shall not be counted as a demand for registration by the
Stockholder for purposes of Section 2.2(a) hereof.
(d) If (i) there is material non-public information regarding the
Company which the Company's Board of Directors (the "Board") reasonably
determines not to be in the Company's best interest to disclose and which the
Company is not otherwise required to disclose, or (ii) there is a significant
business opportunity (including, but not limited to, the acquisition or
disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction) available to
the Company which the Board reasonably determines not to be in the Company's
best interest to disclose and which the Company would be required to disclose
under the requested registration statement, then the Company may postpone or
suspend effectiveness of a registration statement and suspend the sale of
Registrable Securities under a registration statement for a period not to exceed
twenty (20) consecutive days, provided that the Company may not postpone or
suspend its obligation under this Section 2.2(d) for more than forty-five (45)
days in the aggregate during any twelve (12) month period (each, a "Blackout
Period"); provided, however, that no such postponement or suspension shall be
permitted for consecutive twenty (20) day periods, arising out of the same set
of facts, circumstances or transactions.
(e) A requested registration under this Section 2 may be rescinded by
written notice to the Company by the Stockholder. Such rescinded registration
shall not count as a registration statement initiated pursuant to this Section 2
for purposes of Section 2.2 above if such request is rescinded by such
Stockholder not later than five (5) business days prior to the filing of a
registration statement with the Commission.
2.3 Underwriter "Cutbacks" in Demand Registrations. With respect to any
registration pursuant to this Section 2 that is being effected by one or more
underwriters, such underwriters shall be designated by the Company and the
Company may include in such registration any Other Securities; provided,
however, that, anything
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to the contrary in Section 2.1 notwithstanding, if any managing underwriter for
the public offering contemplated by such registration advises the Company in
writing that, in such firm's good faith opinion, the inclusion of all
Registrable Securities and Other Securities proposed to be included in such
registration would adversely affect the offering and sale of all such
securities, then the number of Registrable Securities and Other Securities
proposed to be included in such registration shall be reduced pro rata based
upon the total number of shares of Common Stock owned by each such Person and
its affiliates including the Stockholder (or that each such Person and its
affiliates have the right to acquire) at the time of such registration.
2.4 The Stockholder shall pay 100% of the Stockholder Expenses in
connection with registration and sale of the Registrable Securities requested
pursuant to this Section 2.
3. Piggyback Registration.
3.1 Right to Include Registrable Securities.
(a) Subject to Section 3.1(b), if the Company at any time proposes to
register any of its common stock under the Securities Act for sale to the
public, whether for its own account or for the account of other securities
holders or both (except pursuant to a registration statement on Forms S-4 or S-8
(or any substitute form adopted by the Commission) or any other form that does
not permit the inclusion of shares by its securities holders), it will give
written notice to the Stockholder of its intention to do so and of the
Stockholder's rights ("Piggyback Registration Rights") under this Section 3.
Upon written request of the Stockholder made within ten (10) days after the
receipt of any such notice (which request shall specify the Registrable
Securities intended to be sold or disposed of by such Stockholder), the Company
shall, subject to the provisions hereof, use reasonable efforts to cause all
Registrable Securities that the Stockholder has requested the registration of to
be included in such notification or the registration statement proposed to be
filed by the Company; provided, that nothing contained herein shall require the
Company to take any action which would violate the provisions of any existing
agreements relating to registration rights. The number of the Registrable
Securities to be included in such a registration statement may be reduced (pro
rata among the requesting holders (other than MCY and any other person demanding
registration pursuant to currently existing rights who are entitled to be
protected again any such reduction)) based upon the number of shares so
requested to be registered; provided that, if and to the extent that the
managing underwriter shall be of the good faith opinion that such inclusion
would adversely affect the marketing of the securities to be sold by MCY.
(b) If, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay or suspend the
effectiveness of the registration of such securities, the Company may, at its
election, give written notice of such determination to such Stockholder and upon
giving that notice (i) in the case of a determination not to register, the
Company shall be relieved of its obligation to register any Registrable
Securities in
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connection with such registration (but not from any obligation of the Company to
pay the Registration Expenses (as defined below) in connection therewith),
without prejudice; and (ii) in the case of a determination to delay registering,
the Company shall be permitted to delay registering any Registrable Securities
for the same period as the delay in registering such other securities.
(c) The Company shall pay all Registration Expenses in connection with
registration of Registrable Securities requested pursuant to this Section 3.1.
3.2 Underwriter "Cutbacks" in Piggyback Registrations. Anything in
Section 3.1 to the contrary notwithstanding, with respect to any registration
pursuant to which shares are registered pursuant to this Section 3 that is being
effected by one or more underwriters, such underwriters shall be designated by
the Company and if any managing underwriter for the public offering contemplated
by such registration advises the Company in writing that, in such firm's good
faith opinion, the inclusion of all Registrable Securities and Other Securities
proposed to be included in such registration would adversely affect the offering
and sale of all such securities, then all securities proposed to be sold by the
Company for its own account, if any, shall be included in such registration to
the extent possible and the number of Registrable Securities and Other
Securities proposed to be included in such registration shall be reduced pro
rata based upon the total number of shares of Common Stock owned by each such
Person (other than the Company) and its affiliates (or that each such Person and
its affiliates have the right to acquire) at the time of such registration.
Notwithstanding the foregoing, the Stockholder's Piggyback Registration Right in
such an underwriting shall be subordinated to those of current holders of the
MCY's securities which were granted similar piggyback registration rights prior
to September 29, 2000.
4. Registration Procedures.
(a) In connection with the registration of any Registrable Securities
under the Securities Act as provided in Sections 2 and 3, the Company shall as
expeditiously as possible:
(i) prepare and file with the Commission the requisite
registration statement to effect such registration and thereafter use
its reasonable efforts to cause such registration statement to become
and remain effective (subject to clause (ii) below); provided, however,
that the Company may discontinue any registration of its securities
that are not Registrable Securities at any time prior to the effective
date of the registration statement relating thereto;
(ii) prepare 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 and to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities
covered by such registration statement for such period as shall be
required for the disposition of all of such Registrable Securities;
provided, however, that, the foregoing notwithstanding, the Company
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shall not be required under this item (ii) to maintain the
effectiveness of any such registration statement for longer than 180
days, or such longer period beyond such 180 days (up to an aggregate of
270 days) as may be available without requiring the Company to file any
financial statements as of a later date and for a later period than the
financial statements that may have been required to maintain the
effectiveness of the registration statement for the 180-day period;
(iii) furnish to the Stockholder such number of conformed
copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number
of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and
any other prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, as the Stockholder may reasonably request from time to time;
(iv) use its reasonable efforts (x) to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of
such states of the United States of America where an exemption is not
available and as the Stockholder shall reasonably request, (y) to keep
such registration or qualification in effect for so long as such
registration statement remains in effect, and (z) to take any other
action that may reasonably be necessary or advisable to enable the
Stockholder to consummate the disposition in such jurisdictions of the
securities to be sold by the Stockholder, except that the Company shall
not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would
not, but for the requirements of this paragraph (iv), be obligated to
be so qualified or to consent to general service of process in any such
jurisdiction;
(v) use its reasonable efforts to cause all Registrable
Securities covered by such registration statement to be registered with
or approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the
Company to consummate the disposition of such Registrable Securities in
accordance with their intended method of disposition;
(vi) immediately notify the Stockholder when a prospectus
relating thereto is required to be delivered under the Securities Act,
upon discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, in the light of the
circumstances under which they were made, and at the request of the
Stockholder promptly prepare and furnish to them 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
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a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
under which they were made; and
(vii) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date
not later than the effective date of such registration.
(b) The Company may require the Stockholder to furnish the Company such
information regarding the Stockholder and the distribution of the Stockholder's
Registrable Securities as the Company may from time to time reasonably request
in writing based on its reasonable belief that such information is required to
be disclosed in the Registration Statement pursuant to the Securities Act and
applicable State securities laws.
(c) The Stockholder agrees to furnish to the Company any information
regarding the Stockholder and the distribution of the Stockholder's Registrable
Securities as the Company may from time to time reasonably request in writing in
connection with the preparation and filing of a registration statement pursuant
to the terms of this Agreement.
(d) Upon receipt of any notice from the Company of the happening of an
event of the kind described in item (vi) of this Section 4, the Stockholder
shall forthwith discontinue its disposition of Registrable Securities pursuant
to the registration statement relating to such Registrable Securities until the
Stockholder's receipt of the copies of the supplemented or amended prospectus
contemplated by item (vi) and, if so directed by the Company, the Stockholder
shall deliver to the Company all copies, other than permanent file copies, then
in the Stockholder's possession, of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice.
5. Indemnification.
5.1 Indemnification by the Company. In the event of any registration
statement filed pursuant to Section 2 or Section 3, the Company shall, and
hereby does, indemnify and hold harmless the Stockholder and each of its
directors, officers, partners, agents, attorneys, representatives and affiliates
and each Person who participates as an underwriter in the offering or sale of
such securities and each other Person, if any, who controls the Stockholder or
any such underwriter within the meaning of the Securities Act (each of the
foregoing, a "Stockholder Indemnitee"), insofar as losses, claims, damages, or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such registration
statement, any preliminary prospectus, final prospectus, or summary prospectus
contained therein, or any amendment or supplement thereto, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances in
which they were made not misleading, and the Company
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shall reimburse each Stockholder Indemnitee for any legal or any other fees,
costs and expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, liability, action or proceeding; provided,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or omission made
in reliance upon and in conformity with information furnished to the Company by
or on behalf of a Stockholder or such underwriter, as the case may be, for use
in the preparation thereof; and provided, further, that the Company shall not be
liable to any Stockholder Indemnitee in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of such Person's failure to send or give a copy of the
final prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
final prospectus so long as such final prospectus, and any amendments or
supplements thereto, have been furnished to such underwriter or any Stockholder,
as applicable.
5.2 Indemnification by the Stockholder. If any Registrable Securities
are included in any registration statement, the Stockholder of such Registrable
Securities so registered shall, and hereby does, indemnify and hold harmless (in
the same manner and to the same extent as set forth in Section 5.1 above) the
Company, and each director and officer of the Company, and each other Person, if
any, who controls the Company within the meaning of the Securities Act, with
respect to all losses, claims, damages, expenses or liabilities ("Losses") to
which the Company or such control person becomes subject under the Securities
Act, insofar as such Losses arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or an omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information pertaining to such Stockholder and
furnished to the Company by such Stockholder for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement, provided, however, that no Stockholder
shall have any liability under this Section 5.2 for any amount in excess of the
net proceeds actually received by such Stockholder from the sale of the
Registrable Securities included in such registration statement.
5.3 Notice of Claims, Etc.
(a) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in
Sections 5.1 or 5.2, such indemnified party will, if a claim in respect thereof
is to be made against an indemnifying party, immediately give written notice to
the latter of the commencement of such action; provided, however, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its indemnity obligations,
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except to the extent that the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought against an
indemnified party, unless in the reasonable judgment of counsel for such
indemnified party, a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim (in which case the
indemnified party shall be entitled to retain separate counsel as provided
below), the indemnifying party shall be entitled to participate in and to assume
the defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish and at any time, 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 the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the indemnified party
in connection with the defense thereof other than reasonable costs related to
the indemnified party's cooperation with the indemnifying party provided,
however, that (i) if the indemnifying party fails to assume the defense of such
claim after a reasonable time the indemnified party may retain counsel to defend
such claim and the reasonable fees and expenses of such counsel shall be paid by
the indemnifying party, (ii) the indemnified party may, at its own expense,
retain separate counsel to participate in such defense, (iii) the indemnified
party shall have the right to employ separate counsel at the expense of the
indemnifying party and to control its own defense of such action, claim or
proceeding if, in the reasonable opinion of counsel to such indemnified party, a
material conflict or potential material conflict exists between the indemnified
party and the indemnifying party that would make such separate representation
advisable, except that in no event shall the indemnifying party be required to
pay fees and expenses under this Section 5 for more than one separate firm of
attorneys in any one legal action or group of related legal actions.
(b) No indemnifying party shall be liable for any settlement of any
action or proceeding effected without its written consent, which consent shall
not be unreasonably withheld. No indemnifying party shall, without the consent
of the indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
5.4 Contribution. If indemnification shall for any reason be held by a
court to be unavailable to an indemnified party under Section 5.1 or Section 5.2
in respect of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under Section 5.1 or
Section 5.2, as applicable, the indemnified party and the indemnifying party
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Stockholder on the other
hand that resulted in such loss, claim, damage or liability, or action in
respect thereof, with respect to the statements or omissions that resulted in
such loss, claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations or (ii) if the allocation provided
by item (i) above is not permitted by applicable law, in such proportion as
shall be appropriate to reflect the relative benefits received by the Company on
the one hand and the Stockholder on the other provided, however, that the
Stockholder
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shall have no liability under this Section 5.4 for any amount in excess of the
net proceeds actually received by such Stockholder from the sale of the
Registrable Securities included in such registration statement. No Person guilty
of fraudulent misrepresentation (within the meaning of the Securities Act) shall
be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. In addition, no Person shall be obligated to
contribute hereunder any amounts in payment for any settlement of any action or
claim, effected without such Person's consent, which consent shall not be
unreasonably withheld.
5.5 Rule 144. With a view to making available the benefits of certain
rules and regulations of the Commission that may at any time permit the sale of
the Registrable Securities to the public without registration, at all times from
and after 90 days following the effective date of the first registration of the
Company under the Securities Act of an offering of its securities to the public,
the Company shall:
(a) use its best efforts to facilitate the sale of the Registrable
Securities to the public, without registration under the Securities Act,
pursuant to Rule 144 promulgated under the Securities Act, provided that this
shall not require the Company to file reports under the Securities Act and the
Securities Exchange Act of 1934, or any similar federal statute, and the rules
and regulations of the Commission thereunder ("Exchange Act"), at any time prior
to the Company's being otherwise required to file such reports;
(b) make and keep public information available, as those terms are
understood and defined in Rule 144 promulgated under the Securities Act at all
times after ninety (90) days after the effective date of the first registration
under the Securities Act filed by the Company for an offering of its securities
to the general public;
(c) use its best efforts to then file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(d) deliver to the Stockholder, upon the Stockholder's request, a
written statement as to whether it has complied with the requirements of this
Section 5, a copy of the most recent annual or quarterly report of the Company
filed with the Commission or any stock exchange or self regulatory organization
registered under the Securities Exchange Act of 1934, and such other reports and
documents so filed as a Stockholder may reasonably request to avail itself of
any rule or regulation of the Commission allowing it to sell its Registrable
Securities without registration.
6. Miscellaneous.
(a) Assignment; Pledge. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors (by merger,
consolidation or sale of all or substantially all of the assets of such party)
and permitted assigns. This Agreement may not be assigned, transferred or
pledged by either party, without the prior written consent of the other party
hereto.
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(b) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed in that state, without regard to any of its principles of
conflicts of laws or other laws which would result in the application of the
laws of another jurisdiction. This Agreement shall be construed and interpreted
without regard to any presumption against the party causing this Agreement to be
drafted.
(c) Jurisdiction; Waiver of Jury Trial. EACH OF THE PARTIES HERETO
UNCONDITIONALLY AND IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY AND THE FEDERAL
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK WITH RESPECT TO ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
CONTEST THE VENUE OF SAID COURTS OR DISTRICT OR TO CLAIM THAT SAID COURTS
CONSTITUTE AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO AGREES THAT SERVICE
OF ANY SUMMONS, COMPLAINT, NOTICE OR OTHER PROCESS RELATING TO SUCH SUIT, ACTION
OR OTHER PROCEEDING MAY BE EFFECTED IN THE MANNER PROVIDED IN SECTION 6(i). EACH
OF THE PARTIES HERETO UNCONDITIONALLY AND IRREVOCABLY WAIVES THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(d) Entire Agreement. This Agreement and any exhibits and attachments
hereto, and the other agreements referred to herein, constitute the complete and
exclusive understanding and agreement between the parties with respect to the
subject matter hereof, superseding and replacing any and all prior agreements,
communications, and understandings (both written and oral) regarding such
subject matter all of which are merged herein. There are no representations,
promises or understandings regarding such subject matter, except to the extent
expressly set forth herein.
(e) Remedies Cumulative; Invalidity. All remedies, rights,
undertakings, obligations and agreements contained in this Agreement shall be
cumulative, and none of them shall be in limitation of any other remedy, right,
undertaking, obligation or agreement available to either of the parties hereto.
The invalidity, illegality or unenforceability of any term or provision
contained in this Agreement (as determined by a court of competent jurisdiction)
shall not affect the validity, legality or enforceability of any other term or
provision hereof. It is the intent of the parties that this Agreement be
enforced to the fullest extent permitted by applicable law.
(f) Waiver. No course of dealing or omission or delay of the part of
any party hereto in asserting or exercising any rights hereunder shall
constitute or operation as a waiver of any such right. No waiver of any
provision hereof shall be
11
effective, unless in writing and signed by or on behalf of the party to be
charged therewith. No waiver shall be deemed a continuing waiver or waiver in
respect of any other or subsequent breach or default, unless expressly so stated
in writing.
(g) Amendment. This Agreement may not be modified, amended, altered or
supplemented, except by a written agreement executed by each of the parties
hereto.
(h) Relationship of Parties. Nothing contained herein shall be deemed
to constitute a partnership between, or a joint venture by or employment
relationship between or among the parties hereto. This Agreement is between two
independent contracting parties. Nothing herein is intended nor shall it make
either party a fiduciary of the other party.
(i) Notices. All notices, demands, consents, requests, instructions and
other communications to be given or delivered or permitted under or by reason of
the provisions of this Agreement or in connection with the transactions
contemplated hereby shall be in writing and shall be deemed to be delivered and
received by the intended recipient as follows: (i) if personally delivered, on
the Business Day (as such term is hereinafter defined) of such delivery (as
evidenced by the receipt of the personal delivery service), (ii) if mailed
certified or registered mail return receipt requested, four (4) Business Days
after being mailed, (iii) if delivered by overnight courier (with all charges
having been prepaid), on the Business Day of such delivery (as evidenced by the
receipt of the overnight courier service of recognized standing), or (iv) if
delivered by facsimile transmission, on the Business Day of such delivery if
sent by 6:00 p.m. in the time zone of the recipient, or if sent after that time,
on the next succeeding Business Day (as evidenced by the printed confirmation of
delivery generated by the sending party's telecopier machine). If any notice,
demand, consent, request, instruction or other communication cannot be delivered
because of a changed address of which no notice was given (in accordance with
this Section 6(i)), or the refusal to accept same, the notice, demand, consent,
request, instruction or other communication shall be deemed received on the
second Business Day the notice is sent (as evidenced by a sworn affidavit of the
sender). For the purposes of this Agreement, the term "Business Day" means a day
other than a Saturday, Sunday or day on which banking institutions in the State
of New York are authorized or obligated by law or executive order to close. For
the purposes of this Agreement, if a day referenced herein is not a Business Day
or if a notice is given or delivered on a day which is not a Business Day, such
day shall be deemed to occur or such notice shall be deemed to be given or
delivered on the next Business Day. All such notices, demands, consents,
requests, instructions and other communications will be sent to the following
addresses or facsimile numbers as applicable:
If to MCY:
MCY Music World, Inc.
1133 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
12
Facsimile: 212-944-6943
Attention:President
with copies to:
MCY Music World, Inc.
1133 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 212-944-6943
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel
and to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
The Chrysler Building,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
If to ADS:
Applied Digital Solutions, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 561-366-0002
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 212-692-1900
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
or to such other address as any party may specify by notice given to the other
party in accordance with this Section 6(i).
(j) Counterparts. This Agreement may be executed in counterparts, each
of which, when taken together, shall constitute one and the same instrument.
13
Section headings have been inserted herein for convenience of reference only and
shall not have any impact on the construction or interpretation of this
Agreement.
(k) Publicity. Each of the parties hereto agrees that it will not
disclose, and will not include in any public announcement, the names of the
other party hereto without the consent of such party, which consent will not be
unreasonably withheld or unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such requirement.
(l) Further Assurances. From and after the date of this Agreement, upon
the request of a party hereto, the other party shall executed and deliver such
instrument, documents and other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.
(m) Headings. The section headings in this Agreement are for
convenience only and shall not constitute a part of this Agreement for any other
purpose and shall not be deemed to limit or affect any of the provisions hereof.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, each of MCY and ADS has duly executed this
Agreement as of the day and year first above written.
▇▇▇.▇▇▇, Inc. Applied Digital Solutions, Inc.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and Chief Executive Title: General Counsel
Officer
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