Exhibit 10.16 Standard Rainbow Communicationns, Inc. Client Contract
Exhibit 10.16 Standard Rainbow Communicationns, Inc. Client Contract
RAINBOW COMMUNICATIONS, INC. AGREEMENT
This RAINBOW COMMUNICATIONS, INC. (the "Agreement") is entered into on
this ___ day of_________, 19__, between Rainbow Communications, Inc., a Florida
corporation ("RCI"), and ______________________, a _______________ corporation
("Client").
Whereas, RCI is in the business of planning, developing and
implementing advertising, marketing and promotional campaigns for corporations
and other business entities ("Advertising and Promotional Services");
Whereas, the Client desires to retain RCI to provide the Advertising
and Promotional Services, and RCI desires to provide such Advertising and
Promotional Services to Client, pursuant to the terms, conditions and provisions
contained in this Agreement;
Now, therefore, in consideration of the mutual promises contained
herein and 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. Advertising and Promotional Services. Subject to Client's
compliance with each of the representations, warranties and covenants and
agreements made by Client in this Agreement, RCI agrees to provide to Client the
Advertising and Promotional Services identified on Exhibit A which is attached
hereto and incorporated herein by reference, for the period commencing on the
latter of (the "Effective Date") the date that this Agreement is executed and
delivered by Client or the date that RCI receives payment of its fees as herein
provided and expiring on the 365th day following the effective date of this
Agreement (the "Term").
2. Obligations and Responsibilities of Client. As of the date
hereof and during the Term of this Agreement, Client agrees as follows.
1. Representation and Warranties.
Client represents and warrants to RCI that:
(1) Organization. Client is a corporation duly
organized, validly existing and in good standing under the laws of the State of
its incorporation and it is duly qualified to do business as a foreign
corporation in each jurisdiction in which it owns or leases property or engages
in business.
(2) Formal Action. Client has the corporate
power and authority to execute and deliver this Agreement and to perform each of
its obligations hereunder and this Agreement has been duly approved by Client's
Board of Directors.
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(3) Valid and Binding Agreement. This
Agreement has been duly executed and delivered by Client and is the valid and
binding obligation of Client enforceable against it in accordance with its
terms.
(4) No Violation. The execution, delivery and
performance of this Agreement does not and will not violate any provisions of
the charter or bylaws of Client or any agreement to which Client is a party or
any applicable law or regulation or order or decree of any court, arbitrator or
agency of government and no action of, or filing with, any governmental or
public body or authority is required in connection with the execution, delivery
or performance of this Agreement.
(5) Litigation. No action, suit or proceeding
is pending against or affecting the Client or any of its properties before any
court, arbitrator or governmental body or administrative agency and none of the
persons owning beneficially or of record more than 10% of the outstanding
capital stock of the Client or any of the directors or officers of Client is a
party to any action, suit or proceeding before any federal or state court,
arbitrator or governmental body or administrative agency (other than routine
traffic violations) and no such person has been a party to any such proceedings
for more than the past five years.
(6) Accuracy of Information. The information
furnished by Client to RCI regarding the business,
operations, financial condition, including financial statements, business plans
and biographical information regarding the Client's directors and officers
(collectively referred to as the "Information Package") is complete and accurate
in all material respects and does not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made not misleading.
2. Covenants and Agreements.
Client covenants and agrees to comply with the following
covenants:
(1) Client Certification. Client acknowledges
that it is responsible for the accuracy and completeness of the Information
Package and for all other information furnished to RCI and for the accuracy and
completeness of the contents of all materials prepared by RCI for and on behalf
of Client. The Client hereby designates the individuals listed on Exhibit B
attached hereto and incorporated herein by reference as the duly authorized
representatives of Client for purposes of certifying to RCI the accuracy of all
documents, advertisements or other materials prepared by RCI for and on behalf
of Client. The Client agrees to promptly advise RCI in writing of any condition,
event, circumstance or act that would constitute a material adverse change in
the business, properties, financial condition or business prospects of the
Client or which would make any of the information contained in the Information
Package or in any report, advertorial or other document prepared by RCI for and
on behalf of Client misleading in any material respect.
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Client hereby agrees that RCI and its directors, officers, agents and
employees may rely on the Information Package and on all other information
furnished by Client, and on each and every certification provided by an
authorized representative of Client, until RCI is advised in writing by an
authorized representative of Client that the information previously furnished to
RCI is inaccurate or incomplete in any material respect. Client acknowledges
that RCI shall have no obligation to provide services hereunder until it has
received a written certificate from an authorized representative of Client as
follows: RCI shall prepare proofs and/or tapes of the agreed upon materials and
information, as set for dissemination, for the Client's review and approval and
Client shall sign and return such materials marking all corrections and changes
that the Client believes appropriate. Client acknowledges that RCI will make
oral representations based on the information furnished hereunder and the Client
authorizes such representations.
(2) Books and Records. Client shall maintain
true and complete books, records and accounts in which true and correct entries
shall be made of its transactions in accordance with generally accepted
accounting principles consistently applied ("GAAP").
(3) Financial and Other Information. Client
agrees to furnish to RCI the following information:
(i) Annual Financial Statements. As soon
as practicable, and in any event within 90 days after the close of the Client's
fiscal year, annual financial statements including a balance sheet, an income
statement, a statement of cash flows, and a statement of stockholder's equity,
and all notes thereto prepared in accordance with GAAP and audited by an
independent certified public accountant.
(ii) Quarterly Financial Statements. As
soon as practicable, and in any event within 45 days after the end of each
fiscal quarter, quarterly financial statements, including a balance sheet, a
quarterly and year-to-date income statement, a statement of cash flows, and a
statement of stockholder's equity, prepared by Client in accordance with GAAP
and certified by the chief financial officer of Client as fairly presenting,
subject to normal year-end audit adjustments, the Client's financial position as
of and for the periods indicated.
(4) RCI Reliance on Client's Full Disclosure.
Client will provide, or cause to be provided, to RCI all financial and other
information requested by RCI for the purpose of rendering its services pursuant
to this Agreement. Client recognizes and confirms that RCI will use such
information in performing the services contemplated by this Agreement without
independently verifying such information and that RCI does not assume any
responsibility for the accuracy or completeness of such information. The persons
executing this Agreement on behalf of Client certify that there is no fact known
to them which materially adversely affects or may (so far as the Client's senior
management can no reasonably foresee) materially adversely affect the business,
properties, condition (financial or other) or operations (present or
prospective) of the Client which has not been set forth in written form
delivered by Client to RCI. The persons
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executing this Agreement on behalf of Client agree to keep RCI promptly informed
of any facts hereafter know to Client which materially adversely affects or may
(so far as the Client's senior management can now reasonably foresee) materially
adversely affect the business, properties, condition (financial or other) or
operations (present or prospective) of Client.
(5) Legal Representation. Client acknowledges
and agrees that it has been and will continue to be, represented by legal
counsel experienced in corporate and securities laws and Client acknowledges
that it has been advised as to the obligations imposed on it pursuant to such
laws and understands that it will have the obligation and responsibility to see
that all such laws are complied with at all times during the Term of this
Agreement.
3. Compensation. In consideration of the Advertising and Promotional
Services to be performed by RCI hereunder, Client hereby agrees to compensate
RCI in the manner and in the amount specified in Exhibit C which is attached
hereto and incorporated herein by reference thereto. In addition to the
compensation to be paid to RCI as provided in Exhibit C, Client shall reimburse
RCI promptly after a written request therefor accompanied by appropriate
documentation, for all reasonable out-of-pocket expenses (including reasonable
fees and disbursements of RCI's counsel, if any) incurred in connection with
providing services hereunder or to the extent provided in Exhibit C.
4. Indemnity. Client acknowledges that it is responsible for the
accuracy of the Information Package and all other information provided to RCI
and for the contents of all materials, advertorials and other information
prepared by RCI for an on behalf of Client as provided herein and Client agrees
to indemnify RCI in accordance with the Indemnification Agreement set forth in
Exhibit D, which is attached hereto and incorporated herein by reference.
5. Relationship of the Parties. This Agreement provides for the
providing of marketing, promotional and advertising services by RCI to Client
and the provisions herein for compliance with financial covenants, delivery of
financial statements, and similar provisions are intended solely for the benefit
of RCI to provide it with information on which it may rely in providing services
hereunder and nothing contained in this Agreement shall be construed as
permitting or obligating RCI to act as a financial or business advisor or
consultant to Client, as permitting or obligating RCI to participate in the
management of client's business, as creating or imposing any fiduciary
obligation on the part of RCI with respect to the provisions of services
hereunder and RCI shall have no such duty or obligation to client, as providing
or counseling Client as to the compliance by Client with any federal or state
securities or other laws effecting the services to be provided hereunder, or as
creating any joint venture, agency, or other relationship between the parties
other than as explicitly and specifically stated in this Agreement. The Client
acknowledges that it has had the opportunity to obtain the advice of experienced
counsel of its own choosing in connection with the negotiation and execution of
this Agreement, the provision of services hereunder and with respect to all
matters contained herein, including, without limitation, the provisions of
Section 4 hereof.
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6. Survival of Certain Provisions. The Client's obligations to pay the
fees and expenses of RCI pursuant to Section 3 of this Agreement and to comply
with the indemnification provisions pursuant to Section 4 shall remain operative
and in full force and effect regardless of any termination of this Agreement and
shall be binding upon, and shall inure to the benefit of, RCI and, in the case
of the indemnity agreement, the persons, agents, employees, officers, directors
and controlling persons referred to in the Indemnification Agreement, and their
respective successors and assigns and heirs, and no other person shall acquire
or have any right under or by virtue of this Agreement. All amounts paid or
required to be paid under Sections 3 and 4 of this Agreement shall be fully
earned on the Effective Date of this Agreement notwithstanding prior termination
of this Agreement.
7. Termination. RCI shall have the right in its sole and absolute
discretion to terminate its obligations hereunder and to immediately cease
providing Advertising and Promotional Services pursuant to this Agreement if
RCI, in the exercise of its reasonable judgment, believes that the
representations and warranties made by Client hereunder are inaccurate in any
material respect or if Client breaches any of its covenants and agreements
contained herein or if any federal or state governmental agency or
instrumentality institutes an investigation or suit against Client or pertaining
to the services hereunder.
8. Non-Solicitation Covenant. Client agrees that it will not directly
or indirectly during the term of this Agreement or for three years following the
termination or expiration of this Agreement, either voluntarily or
involuntarily, for any reason whatsoever, recruit or hire or attempt to recruit
or hire any employee of RCI or of any of its affiliates or subsidiaries, or
otherwise induce any such employees to leave the employment of RCI or of any of
its affiliates or subsidiaries or to become an employee of or otherwise be
associated with Client or any affiliate or subsidiary of Client. Client
acknowledges that RCI and its affiliates and subsidiaries have invested a
significant amount of time, energy and expertise in the training of their
employees to be able to provide Advertising and Promotional Services and Client
therefore agrees that this covenant is reasonable and agrees that the breach of
such covenant is very likely to result in irreparable injury to RCI, which is
unlikely to be adequately compensated by damages. Accordingly, in the event of a
breach or threatened breach by Client of this Section 8, RCI shall be entitled
to an injunction restraining Client and any affiliate, subsidiary or director or
officer thereof from recruiting, or hiring or attempting to recruit or hire any
employee of RCI or of any affiliate or subsidiary of Rd. Nothing herein shall be
construed as prohibiting RCI from pursuing any other remedies available to RCI
for such breach or threatened breach, including recovery of damages from Client.
The undertakings herein shall survive the termination or cancellation of the
Agreement for three years.
9. Miscellaneous.
A. Governing Law. This Agreement shall be governed by the laws
of the State of Florida applicable to contracts executed and performed in the
Circuit Court, Orange County, in the State of Florida (without regard to the
principles of conflicts of laws).
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B. Entire Agreement. This Agreement and the Exhibits hereto
embody the entire agreement of the parties with respect to its subject matter.
There are no restrictions, promises, representations, warranties, covenants, or
undertakings other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter.
C. Amendments to be in Writing. This Agreement may be
amended only in a writing signed by all of the parties.
D. No Waivers by Course of Dealing; Limited Effect of Waivers.
No waiver shall be effective against any party unless it is in a writing signed
by that party. No course of dealing and no delay on the part of RCI in
exercising its rights shall operate as a waiver of that right or otherwise
prejudice RCI. RCI's failure to insist upon the strict performance of any
provision of this Agreement, or to exercise any right or remedy available to
RCI, shall not constitute a waiver by RCI of such provision. No specific waiver
by RCI of any specific breach of any provision of this Agreement shall operate
as a general waiver of the provision or of any other breach of the provision.
Client shall have no right to cure any breach except as specifically provided
herein.
E. Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
F. Cumulation of Rights and Remedies. No right or remedy of
RCI under this Agreement is intended to preclude any other right or remedy and
every right and remedy shall coexist with every other right and remedy now or
hereafter existing, whether by contract, at law, or in equity.
G. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties and their successors and assigns.
Client shall not have any right to assign any of its rights or delegate any of
its obligations or responsibilities under this Agreement except as expressly
stated herein.
H. Payment of Fees and Expenses on Enforcing Agreement. In the
event of any dispute between the parties arising out of or related to this
Agreement or the interpretation thereof, at the trial level or appellate level,
the prevailing party shall be entitled to recover from the non-prevailing party
all costs and expenses, including reasonable fees and disbursements of counsel
which may be incurred in connection with such proceeding, without limitation,
including any costs and expenses of experts, witnesses, depositions and other
costs.
I. Notices. Any notice or other communication required
or permitted to be given hereunder shall be in writing, and shall be delivered
to the parties at the addresses set forth below (or to such other addresses
as the parties may specify by due notice to the others). Notices
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or other communications shall be effective when received at the recipient's
location (or when delivered to that location if receipt is refused). Notices or
other communications given by facsimile transmission shall be presumed received
at the time indicated in the recipient's automatic acknowledgment. Notices or
other communications given by Federal Express or other recognized overnight
courier service shall be presumed received on the following business day.
Notices or other communications given by certified mail, return receipt
requested, postage prepaid, shall be presumed received 3 business days after the
date of mailing.
Client:
Attn:
Fax:
with a copy to:
Attn:
Fax:
Company: Rainbow Communications, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
J. Headings. The headings in this Agreement are
intended solely for convenience of reference. They shall be given no effect
in the construction or interpretation of this Agreement.
K. Severability. The invalidity or unenforceability
of any provision of this Agreement shall not impair the validity or
enforceability of any other provision.
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In Witness Whereof, the parties have executed this Agreement as of the
date first above written.
Attest: Client:
By: ___________________________ By: ___________________________
Secretary , President
[Corporate Seal]
Attest: Company: Rainbow Communications, Inc. Group
By: ___________________________ By: ___________________________
Secretary ▇▇▇▇▇ ▇▇▇▇▇, President
[Corporate Seal]
RCI\pub-rel
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EXHIBIT A
Advertising and Promotional Services
The services to be provided are as follows:
A. Growth Industry Report -- A minimum of four-page, two-color
follow-up mail pieces designed for additional informational purposes,
that is mailed to respondents, in addition to those brokers requesting
said information. A total of 10,000 will be printed to satisfy RCI's
responsibility to the Client. Any additional Growth Industry Reports
needed or requested by the Client will be at the Client's expense.
B. The Lead Distribution Program -- RCI will contact retail brokers,
market makers and/or money managers and will arrange a meeting between
representative of the Client and interested retail brokers, market
makers, and money managers, which will include a show and tell from the
top management of the "Client" in disseminating information to these
interested parties. The aforementioned may be accomplished by a Road
Show.
This process will begin immediately upon RCI receiving the payment as
stipulated in Exhibit "C".
C. Other Advertising and Promotional Services.
1. Public relations exposure to newsletter writers,
trade and financial publications. The Client shall be
totally responsible for all travel expenses for the
purpose of due diligence of the Client by financial
newsletter writers and/or brokers. The Client will
have total pre-approval rights on these trips. Road
Show(s) -- Locations to be determined. Client will
cover all expenses of Road Show(s). Client will have
prior approval of those expenses. RCI will be
responsible for RCI's own travel expenses to support
the show
2. Preparation of a Broker Bullet Sheet to be sent to
every broker who indicates an interest in the Client.
3. Lead Tracking Summary maintained for all response
leads generated and provided to the "Client" monthly.
4. Press releases -- Up to four (4) press releases --
the first Press Release shall announce the hiring of
RCI by the "Client"; with three Press Releases
remaining which may be extended at the option of the
"Client", at the Client's expense, at a rate of
$1,000.00 per Press Release. Should the
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Client chose to publish their own Press Release, RCI
shall be mentioned as the Client's Public Relations
firm.
5. RCI will distribute at its cost the due diligence
packages to all inquiring brokers only. The Client
shall supply the necessary materials for this
package, if an Arrow Marketing Contract is not
entered into. In the event an Arrow Marketing
Contract is not entered into, the Client will provide
RCI with 300 packages or in the alternative provide a
master to RCI and RCI will then charge the Client for
the cost of reproduction.
6. RCI targets a minimum of 3% return of qualified
investor leads specifically generated for the Client.
D. Performance By Client.
1. Client is required to do a Standard & Poor's listing at the Client's expense.
2. Client is required to provide RCI with all S& P listings on their attorney's
stationary.
3. Client will provide its shareholder's with audited financials on a yearly
basis and unaudited financials on a quarterly basis.
4. Client agrees to send RCI, DTC sheets on a weekly basis.
5. Client agrees to provide RCI with a complete shareholders list on a
semiannual basis.
6. Client will use its reasonable best efforts to register or qualify any
shares of common stock of Client under the securities or blue sky laws of
such jurisdictions as any broker or market maker may reasonably request and
do any and all other acts and things which may be reasonably necessary or
advisable to enable such broker or market maker to consummate the
disposition in such jurisdictions of shares of common stock of Client,
provided that the Client will not be required to (1) qualify generally to
do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section and (2) subject itself to taxation in any such
jurisdiction or (3) consent to general service of process in any such
jurisdiction.
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The parties hereto by signing this Exhibit in the space provided below
signify their agreement regarding the service to be provided by RCI under the
Agreement.
Client:
By: ____________________
,President
Company: Rainbow Communications, Inc.
By: ___________________
▇▇▇▇▇ ▇▇▇▇▇, President
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EXHIBIT B
Client hereby designates the following person or persons to act on its
behalf for the purposes set forth in Section 2.B.(1) of the Agreement.
------------------------------- -------------------------------
DIRECTOR (PLEASE SIGN) DIRECTOR (PLEASE PRINT)
------------------------------- -------------------------------
PRESIDENT (PLEASE SIGN) PRESIDENT (PLEASE PRINT)
------------------------------- -------------------------------
VICE PRESIDENT (PLEASE SIGN) VICE PRESIDENT (PLEASE PRINT)
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EXHIBIT C
COMPENSATION
1. Client agrees to issue to RCI __________ Dollars ($ _________ in
cash on execution and delivery of the Agreement or, at the option of Client to
issue RCI ______ shares of freely tradable Common Stock in Client (the
"Shares"), which Shares shall be duly and validly issued, fully paid and
nonassessable and shall not be issued in violation of any preemptive right of
any stockholders of client. The Shares shall be issued in compliance with the
exemption from the registration requirements of the Securities Act of 1933 (the
"Act") provided by Section 4(2) of the Act and/or pursuant to Rules 505 or 506
of the General Rules and Regulation under the Securities Act of 1933.
2. If compensation is paid in shares, concurrently with the issuance of
the Shares, Client will execute and deliver the Registration Rights Agreement
attached hereto as Exhibit F under which the Client agrees to register the
Shares for sale in compliance with the Act as therein provided and to comply
with all conditions necessary or required to enable the Shares to be sold
pursuant to Rule 144 of the General Rules and Regulation under the Securities
Act of 1933.
3. Should the Company affect payment of this contract by the tender of
free-trading Client shares belonging to individuals, the Client assures and
guarantees RCI that the Client will not reimburse the individuals for shares
given RCI.
4. The Shares, if any, to be issued to RCI shall be approved for
issuance in accordance with the rules and regulations of any stock exchange on
which the Shares are listed for trading or by the NASDAQ if the shares are
listed for trading thereon and shall be issued in compliance with all
appropriate federal or state governmental rules and regulations.
5. Client acknowledges that the consideration to be paid to RCI shall
be fully earned on the date that RCI commences providing services under the
Agreement regardless of whether the Agreement is terminated as provided in the
Agreement prior to completion of all services.
6. Client agrees to pay or reimburse RCI for all expenses arising out
of or related to the provision of services by RCI under the Agreement to the
extent provided in the Agreement and/or in Exhibit A thereto.
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7. "Options" means the Options issuable, in certain circumstances,
pursuant to the Agreement which are exercisable for Common Stock.
Client shall issue options to RCI as outlines below.
Amount Price Duration
______ shares at $___ One (1) year from the date of this Agreement
______ shares at $___ Two (2) years from the date of this Agreement
______ shares at $___ Three (3) years from the date of this Agreement
______ shares at $___ Four (4) years from the date of this Agreement
______ shares at $___ Five (5) years from the date of this Agreement
The parties hereto by signing this Exhibit in the space provided below
signify their agreement to the compensation provisions contained herein.
Client:
By: ____________________
,President
Company: Rainbow Communications, Inc.
By: ___________________
▇▇▇▇▇ ▇▇▇▇▇, President
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EXHIBIT D
Client acknowledges and agrees that if, in connection with the services
or matters that are the subject of or arise out of such Agreement, RCI becomes
involved (whether or not as a named party) in any action, claim or legal
proceeding (including any governmental inquiry or investigation), Client agrees
to reimburse RCI for its reasonable legal fees, disbursements of counsel and
other expenses (including the cost of investigation and preparation) as they are
incurred by RCI. Client also agrees to indemnify and hold RCI harmless against
any losses, claims, damages or liabilities, joint or several, as incurred, to
which RCI may become subject in connection with the services or matters which
are the subject of or arise out of the Agreement; provided, however, that Client
shall not be liable under the foregoing indemnity in respect of any loss, claim,
damage or liability to the extent that a court having jurisdiction shall have
determined by a final judgment that such loss, claim, damage or liability is a
consequence of intentional fraudulent acts committed by RCI without the
knowledge and/or consent of Client. In the event that the foregoing indemnity is
unavailable by operation of law, then Client shall contribute to amounts paid or
payable by RCI in respect of such losses, claims, damages and liabilities in the
proportion that Client's interest bears to RCI's interest in the matters
contemplated by the Agreement. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, or otherwise,
then Client shall contribute to such amount paid or payable by RCI in such
proportion as is appropriate to reflect not only such relative interests but
also the relative fault of Client on the one hand and RCI on the other hand in
connection with the matters as to which such losses, claims, damages or
liabilities relate and other equitable considerations.
Promptly after RCI' s receipt of notice of the commencement of any
action or of any claim, RCI will, if a claim in respect thereof is to be made
against Client under this Indemnity Agreement, notify Client of the commencement
thereof. In case any such action or claim is brought against RCI, Client will be
entitled to participate therein and, to the extent that Client may wish, to
assume the defense thereof, with counsel satisfactory to RCI. After notice from
Client to RCI of Client's election to so assume the defense thereof, Client will
not be liable to RCI for indemnification as provided in the preceding paragraph
for any legal fees, disbursements of counsel or other expenses subsequently
incurred by RCI in connection with the defense thereof other than reasonable
costs of investigation; provided that RCI shall have the right to employ
separate counsel if, in the reasonable judgment of RCI's counsel, it is
advisable for RCI to be represented by separate counsel or if in the reasonable
judgment of RCI's counsel, Client is not vigorously and actively defending
against any
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such claim or claims, and in either such event the reasonable legal fees and
disbursements of such separate counsel shall be paid by Client.
The foregoing agreements shall apply to any modification of the
Agreement, shall remain in full force and effect following the completion or
termination of RCI's engagement under the Agreement and shall be in addition to
any rights that RCI may have at common law or otherwise. The agreements in this
Indemnification Agreement shall extend to and inure to the benefit of each
person, if any, who may be deemed to control RCI, be controlled by RCI or be
under common control with RCI and to RCI' s, and to each such other person's
respective affiliates, directors, officers, employees and agents. This
Indemnification Agreement shall be binding on any successor of Client.
Client represents that the Indemnification Agreement contained herein
is the legal, valid, binding and enforceable obligation of Client, enforceable
against Client according to its terms.
This Indemnification Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida without regard to principles
of conflicts of law, and the forum for resolution of legal and interpretative
issues shall be the Federal District courts in the State of Florida.
The parties hereto by signing this Exhibit in the space provided below
signify their agreement to the indemnification provisions contained herein.
Client:
By: ____________________
,President
Company: Rainbow Communications, Inc.
By: ___________________
▇▇▇▇▇ ▇▇▇▇▇, President
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EXHIBIT E
ABATEMENT CLAUSE
The parties to this contract understand and agree that Client is under
a federal mandate to become fully reporting and approved for listing by the
Securities and Exchange commission by a time certain or be delisted from the
Electronic Bulletin Board.
The Client and RCI understand and agree that should the Company be
delisted from the Bulletin Board such an event would unduly interfere with RCI's
ability to fulfill its contractual obligations.
WHEREFORE, the Client and RCI hereby agree that should the Client be
delisted from the Electronic Bulletin Board for any reason, RCI's obligations
under this contract shall be abated until such time as the Client is relisted
and resume trading on the Electronic Bulletin Board.
Should the Client fail to gain relisting within one hundred twenty
(120) days of being delisted, RCI may treat that even as a material breach of
this contract. In such event, RCI may declare the contract void through breach
and retain whatever payments have been made as liquidated damages.
Client:
By: ____________________
,President
Company: Rainbow Communications, Inc.
By: ___________________
▇▇▇▇▇ ▇▇▇▇▇, President
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EXHIBIT F
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Registration Agreement") is
made and entered into as of ____, 19___ by and between Rainbow Communications,
Inc., a Florida corporation (RCI), and ________________________, a _________
corporation (the Client).
WHEREAS, RCI concurrently with the execution of this Registration
Agreement is acquiring shares of the Client's common stock, par value $_____ per
share ("Common Stock") and/or options to purchase shares of Common Stock; and
WHEREAS, as a condition to such acquisition, the parties are willing to
enter into the agreements contained herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
Section 1. Definitions
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person.
"Agreement" means the Public Relations and Advertising
Agreement dated as of the date of this Registration Agreement between RCI and
Client.
"Client" is defined in the Preamble to this Registration
Agreement.
"Common Stock" is defined in the Recitals to this Registration
Agreement.
"RCI" is defined in the Preamble to this Registration
Agreement.
"Holder" is defined in Section 2.1 hereof.
"Lock-Up Period" is defined in Section 2.1 hereof.
"Options" mean the Options issuable, in certain circumstances,
pursuant to the Agreement, which are exercisable for Common Stock.
"Other Holders" is defined in Section 4.3 hereof.
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"Permitted Transfer" is defined in Section 2.2 hereof.
"Person" means an individual, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization and government or any
department or agency thereof.
"Piggyback Notice" is defined in Section 4.1 hereof.
"Piggyback Registration" is defined in Section 4.1 hereof.
"Registrable Securities" means (i) the Common Stock issued to
RCI pursuant to the Agreement, (ii) any Common Stock issued to RCI pursuant to
the exercise of Options, and (iii) any securities issued or issuable with
respect to the Common Stock referred to in clauses (i) or (ii) by way of
replacement, share dividend, share split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization.
"Registration Agreement" is defined in the Preamble to this
Registration Agreement.
"Registration Expenses" is defined in Section 6.1 hereof.
"Restricted Securities" is defined in Section 2.1 hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"Transfer" is defined in Section 2.1 hereof.
Section 2. Restrictions on Transfer
2.1 Lock-Up Period. Without the express prior written consent
of the Client, RCI agrees that, except as set forth in Section 2.2 below, it
will not, directly or indirectly, offer, sell, contract to sell or otherwise
dispose of (or announce any offer, sale, contract of sale or other disposition
of) ("Transfer") any Registrable Securities or Options (collectively,
"Restricted Securities") prior to the first anniversary following the date of
this Registration Agreement.
2.2 Permitted Transfers. The restrictions contained in this
Section 2 will not apply with respect to any of the following transactions
(each, a "Permitted Transfer"):
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2.2.1 a natural person may Transfer Restricted
Securities to his or her spouse, siblings, parents or any natural or adopted
children or other descendants or to any personal trust in which such family
members or such transferee retains the entire beneficial interest;
2.2.2 RCI may (A) Transfer Restricted Securities to
one or more other entities that are wholly owned and
controlled, legally and beneficially, by RCI or an Affiliate, or (B) Transfer
Restricted Securities by distributing such Restricted Securities in a
liquidation, winding up or otherwise without consideration to the equity owners
of such corporation, partnership or business entity or to any other corporation,
partnership or business entity that is wholly owned by such equity owners; or
(C) Transfer Restricted Securities to a director, officer or key employee of RCI
or an Affiliate;
2.2.3 a transferee acquiring Restricted
Securities in a Permitted Transfer may Transfer Restricted Securities on his or
her death or mental incapacity to such Person's estate, executor, administrator
or personal representative or to such Person's beneficiaries pursuant to a
devise or bequest or by the laws of descent and distribution; or
2.2.4 RCI or any transferee acquiring
Restricted Securities in a Permitted Transfer may Transfer Restricted Securities
pursuant to an effective Registration Statement as provided herein or pursuant
to an exemption from the registration requirements of the Securities Act.
If any Person Transfers Restricted Securities as described in this Section 2.2,
such Restricted Securities shall remain subject to this Registration Agreement
and, as a condition of the validity of such Transfer, the transferee shall be
required to execute and deliver a counterpart of this Registration Agreement.
Thereafter, such transferee shall be deemed to be a Holder for purposes of this
Registration Agreement.
2.3 Rights of Subsequent Holder. Subject to the foregoing
restrictions, the Client and RCI hereby agree that any subsequent holder of
Registrable Securities shall be entitled to all benefits hereunder as a holder
of such securities.
Section 3. Demands for Registration.
3.1 Demand Period3.1 From the date hereof, until the date
which is four years from the date hereof (the "Demand Period"), subject to the
terms and conditions set forth herein, RCI and the Permitted Transferees will
have in the aggregate three opportunities, in addition to other rights
enumerated in this Registration Agreement, to request registration under the
Securities Act of all or part of its Registrable Securities (a "Demand
Registration"). The Holders of 50% or more of the Registrable Securities shall
have the right to exercise the registration rights under this Section 3.
3.2 Demand Procedure.
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3.2.1 Subject to Sections 3.2.2 and 3.2.4 below,
during the Demand Period any Holder or combination of
Holders (the "Demanding Shareholders") owning 50% or more of the Registrable
Securities may deliver to the Client a written request (a "Demand Registration
Request") that the Client register any or all of such Demanding Shareholders'
Registrable Shares.
3.2.2 Holders, in the aggregate, may only make one
Demand Registration Request in each six-month period
during the Demand Period (the "Interim Demand Periods"). The Client shall only
be required to file one registration statement (as distinguished from
supplements or pre-effective or post-effective amendments thereto) in response
to each Demand Registration Request.
3.2.3 A Demand Registration Request from Demanding
Shareholders shall (i) set forth the number of
Registrable Securities intended to be sold pursuant to the Demand Registration
Request (ii) disclose whether all or any portion of a distribution pursuant to
such registration will be sought by means of an underwriting, and (iii) identify
any managing underwriter or managing underwriters proposed for the underwritten
portion, if any, of such registration.
3.2.4 If during any Interim Demand Period, the
Client receives a Demand Registration Request from Demanding Shareholders for
the registration of Registrable Securities having an aggregate market value of
$100,000 or greater, as determined according to the closing price of the Common
Stock on the NASDAQ National Market, on the Bulletin Board or in the Pink Sheets
on the date of such Demand Registration Request, then the Client shall, subject
to the limitations in Sections 3.2.5 and 3.2.6 hereof, (i) use its reasonable
best efforts to prepare and file within 30 days of receipt of the Demand
registration request with the SEC a registration statement under the Securities
Act with respect to all the Registrable Securities that the Demanding
Shareholders requested to be registered in the Demand Registration Request, (ii)
use its reasonable best efforts to cause such registration statement to become
effective within 75 days of receipt of the Demand Registration Request, and
(iii) if such registration can be accomplished by means of a registration
statement on Form S-3, keep such registration statement effective until such
time as the Demanding Shareholders shall have sold or otherwise disposed of all
of their Registrable Securities included in the registration. If such
registration cannot be accomplished by means of a registration statement on Form
S-3, the Client shall use its reasonable best efforts to keep such registration
statement effective for at least 180 days.
3.2.5 It is anticipated that the registration
contemplated under this Section 3 will be accomplished by
means of the filing of a Form S-3, and that registration on such form will allow
for different means of distribution, including sales by means of an underwriting
as well as sales into the open market. If the Demanding Shareholders desire to
distribute all or part of the Registrable Securities covered by their request by
means of an underwriting, they shall so advise the Client in writing in their
initial Demand R,egistration Request as described in Section 3.2.3 above. A
determination of whether all or part of ~he distribution will be by means of an
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underwriting shall be made by Demanding Shareholders holding a majority of the
Registrable Securities to be included in the registration. If all or part of the
distribution is to be by means of an underwriting, all subsequent decisions
concerning the underwriting which are to be made by the Demanding Shareholders
pursuant to the terms of this Registration Agreement, which shall include the
selection of the underwriter or underwriters to be engaged and the
representative, if any, of the underwriters so engaged, shall be made by the
Demanding Shareholders who hold a majority of the Registrable Securities to be
included in the underwriting, subject to approval by the Board of Directors of
the Client.
3.2.6 Upon the receipt by the Client of a Demand
Registration Request in accordance with Section 3.2.4
hereof, the Client shall, within ten days following receipt of such Demand
Registration Request, give written notice of such request to all Holders. The
Client shall include in such notice information concerning whether all, part or
none of the distribution is expected to be made by means of an underwriting,
and, if more than one means of distribution is contemplated, may require Holders
to notify the Client of the means of distribution of their Registrable
Securities to be included in the registration. If any Holder who is not a
Demanding Shareholder desires to sell any Registrable Securities owned by such
Holder, such Holder may elect to have all or any portion of its Registrable
Securities included in the registration statement by notifying the Client in
writing (a "Supplemental Demand Registration Request") within 20 days of
receiving notice of the Demand Registration Request from the Client. The right
of any Holder to include all or any portion of its Registrable Securities in an
underwriting shall be conditioned upon the Client's having received a timely
written request for such inclusion by way of a Demand Registration Request or
Supplemental Demand Registration Request (which right shall be further
conditioned to the extent provided in this Registration Agreement). All Holders
proposing to distribute their Registrable Securities through an underwriting
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting.
3.2.7 Notwithstanding any other provision of this
Section 3, if an underwriter advises the Client in
writing that marketing factors require a limitation on the number of shares to
be underwritten, then the number of shares of Registrable Securities that may be
included in the underwriting shall be allocated among the Holders in proportion
(as nearly as practicable) to the respective amounts of Registrable Securities
each Holder owns (or in such other proportion as they shall mutually agree).
Registrable Securities excluded or withdrawn from the underwriting in accordance
with this Section 3.2.7 shall be withdrawn from the registration.
3.3 Priority on Request Registration. The Client
will not include in any Demand Registration any
securities which are not Registrable Securities without the prior written
consent of the Holders of a majority of the shares of Registrable Securities
included in such registration. If a Demand Registration is an underwritten
offering and the managing underwriters advise the Client in writing that in
their opinion the number of Registrable Securities and, if permitted hereunder,
other securities requested to be included in such offering exceeds the number of
securities that can be sold in an or4erly manner in such offering within a price
range acceptable to the Holders of a majority of the shares Of Registrable
Securities initially requesting
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Initials
registration, the Client will include in such registration prior to the
inclusion of any securities which are not Registrable Securities the number of
shares of Registrable Securities requested to be included that in the opinion of
such underwriters can be sold in an orderly manner within such acceptable price
range, pro rata among the respective Holders thereof on the basis of the number
of shares of Registrable Securities owned by each such Holder.
Section 4. Piggyback Registrations
4.1 Right to Piggyback. If the Client proposes to undertake an
offering ofshares of Common Stock for its account or for the account of other
stockholders and the registration form to be used for such offering may be used
for the registration of Registrable Securities (a "Piggyback Registration"),
each such time the Client will give prompt written notice to all Holders of
Registrable Securities of its intention to effect such a registration (each, a
"Piggyback Notice") and, subject to Sections 4.3 and 4.4 hereof, the Client will
use its best efforts to cause to be included in such registration all
Registrable Securities with respect to which the Client has received written
requests for inclusion therein within 20 days after the date of sending the
Piggyback Notice.
4.2 Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the Client,
and the managing underwriters advise the Client in writing that in their opinion
the number of securities requested to be included in such registration exceeds
the number that can be sold in an orderly manner within a price range acceptable
to the Client, the Client will include in such registration (a) first, the
securities the Client proposes to sell and (b) second, the Registrable
Securities requested to be included in such registration and any other
securities requested to be included in such registration that are held by
Persons other than the Holders of Registrable Securities pursuant to
registration rights, pro rata among the holders of Registrable Securities and
the holders of such other securities requesting such registration on the basis
of the number of shares of such securities owned by each such holder.
4.3 Priority on Secondary. If a Piggyback Registration is an
underwritten secondary registration on behalf of holders of the Client's
securities other than the Holders of Registrable Securities (the "Other
Holders"), and the managing underwriters advise the Client in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number that can be sold in an orderly manner in such
offering within a price range acceptable to the Other Holders requesting such
registration, the Client will include in such registration (a) first, the
securities requested to be included therein by the Other Holders requesting such
registration and (b) second, the Registrable Securities requested to be included
in such registration hereunder, pro rata among the Holders of Registrable
Securities requesting such registration on the basis of the number of shares of
such securities owned by each such Holder.
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4.4 Selection of Underwriters4. In the case of an underwritten
Piggyback Registration, the Client will have the right to select the investment
banker(s) and manager(s) to administer the offering.
Section 5. Registration Procedures Section. Whenever the Holders of
Registrable Securities have requested that any Registrable Securities be sold
pursuant to this Registration Agreement, the Client will use its reasonable best
efforts to effect the registration and the sale of such Registrable Securities
in accordance with the intended method of disposition thereof, and pursuant
thereto the Client will as expeditiously as possible:
5.1.1 Registration Statement. Prepare and file
with the SEC a registration statement with respect to such Registrable
Securities and use its reasonable best efforts to cause such registration
statement to become effective.
5.1.2 Amendments and Supplements. Promptly
prepare and file with the SEC 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 required
by the intended method of disposition and the terms of this Registration
Agreement and comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement.
5.1.3 Provision of Copies. Promptly furnish to
each seller of Registrable Securities the number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such seller.
5.1.4 Blue Sky Laws. Use its reasonable best
efforts to register or qualify such Registrable Securities under the securities
or blue sky laws of such jurisdictions as any seller reasonably requests and do
any and all other acts and things which may be reasonably necessary or advisable
to enable such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller, provided, that the Client will not
be required to (a) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 5.1.4, (b)
subject itself to taxation in any such jurisdiction or (c) consent to general
service of process in any such jurisdiction.
5.1.5 Anti-fraud Rules. Promptly notify each
seller of such Registrable Securities when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or omits
any material fact necessary to make the statements therein not misleading, and
in such event, at the request of any such seller, the Client will promptly
prepare a supplement or amendment to such prospectus so that, as
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thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading,
provided, that the Client will not take any action which causes the prospectus
included in such registration statement to contain an untrue statement of
material fact or omit any material fact necessary to make the statements therein
not misleading, except as permitted by Section 5.5.
5.1.6 Securities Exchange Listings. Use its
reasonable best efforts to cause all such Registrable
Securities to be listed on each securities exchange on which securities of the
same class issued by the Client are then listed and use its reasonable best
efforts to qualify such Registrable Securities for trading on each system on
which securities of the same class issued by the Client are then qualified.
5.1.7 Underwriting Agreements. Enter into such
customary agreements (including underwriting agreements
in customary form) and take all such other actions as the holders of a majority
of the shares of Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities.
5.1.8 Due Diligence. Make available for
inspection by any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such underwriter, all financial and other records, pertinent corporate
documents and properties of the Client, and cause the Client's officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such underwriter, attorney, accountant or agent in
connection with such registration statement.
5.1.9 Earning Statement. Otherwise use its best
efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as
reasonably practicable, an earning statement covering the period of at least
twelve months beginning with the first day of the Client's first full calendar
quarter after the effective date of the registration statement, which earning
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder.
5.1.10 Deemed Underwriters or Controlling Persons.
Permit any Holder of Registrable Securities which
Holder, in such Holder's reasonable judgment, might be deemed to be an
underwriter or a controlling person of the Client, to participate in the
preparation of such registration or comparable statement and to require the
insertion therein of material in form and substance satisfactory to such Holder
and to the Client and furnished to the Client in writing, which in the
reasonable judgment of such Holder and its counsel should be included.
5.1.11 Management Availability. In connection
with underwritten offerings, make available appropriate management personnel
for participation in the preparation
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and drafting of such registraiton or comparable statement, for due diligence
meetings and for "road show" meetings.
5.1.12 Stop Orders. Promptly notify Holders of
the Registrable Securities of the threat of issuance by
the SEC of any stop order suspending the effectiveness of the registration
statement or the initiation of any proceeding for that purpose, and make every
reasonable effort to prevent the entry of any order suspending the effectiveness
of the registration statement. In the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in such registration
statement for sale in any jurisdiction, the Client will use its reasonable best
efforts promptly to obtain the withdrawal of such order.
5.1.13 Opinions. At each closing of an
underwritten offering, request opinions of counsel to the Client and updates
thereof (which opinions and updates shall be reasonably satisfactory to the
underwriters of the Registrable Securities being sold) addressed to the
underwriters covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such Holders or their counsel.
5.1.14 Comfort Letter. Obtain a cold comfort
letter and related bring down letters from the Client's
independent public accountants addressed to the selling Holders of Registrable
Securities in customary form and covering such matters of the type customarily
covered by cold comfort letters as the Holders of a majority of the Registrable
Securities being sold reasonably request.
5.2 Further Information. The Client may require each Holder of
Registrable Securities to furnish to the Client in writing such information
regarding the proposed distribution by such Holder of such Registrable
Securities as the Client may from time to time reasonably request.
5.3 Notice to Suspend Offers and Sales. Each Investor severally agrees
that, upon receipt of any notice from the Client of the happening of any event
of the kind described in Sections 5.1.5 or 5.1.12 hereof, such Investor will
forthwith discontinue disposition of shares of Common Stock pursuant to a
registration hereunder until receipt of the copies of an appropriate supplement
or amendment to the prospectus under Section 5.1.5 or until the withdrawal of
such order under Section 5.1.12.
5.4 Reference to Holders. If any such registration or comparable
statement refers to any Holder by name or otherwise as the holder of any
securities of the Client and if, in the Holder's reasonable judgment, such
Holder is or might be deemed to be a controlling person of the Client, such
Holder shall have the right to require (a) the insertion therein of language in
form and substance satisfactory to such Holder and the Client and presented to
the Client in writing, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Client's securities covered
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thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Client, or (b) in the event
that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar Federal statute then in force, the deletion of the
reference to such Holder; provided that with respect to this clause (b) such
Holder shall furnish to the Client an opinion of counsel to such effect, which
opinion and counsel shall be reasonably satisfactory to the Client.
5.5 Client's Ability to Postpone. Notwithstanding anything to the
contrary contained herein, the Client shall have the right twice in any twelve
month period to postpone the filing of any registration statement under Sections
3 or 4 hereof or any amendment or supplement thereto for a reasonable period of
time (all such postponements not exceeding 90 days in the aggregate in any
twelve month period) if the Client furnishes the Holders of Registrable
Securities a certificate signed by the Chairman of the Board of Directors or the
President of the Client stating that, in its good faith judgment, the Client's
Board of Directors (or the executive committee thereof) has determined that
effecting the registration at such time would materially and adversely affect a
material financing, acquisition, disposition of assets or stock, merger or other
comparable transaction, or would require the Client to make public disclosure of
information the public disclosure of which would have a material adverse effect
upon the Client.
Section 6. Registration Expenses Section.
6.1 Expenses Borne by Client. Except as specifically otherwise
provided in Section 6.2 hereof, the Client will be responsible for payment of
all expenses incident to any registration hereunder, including, without
limitation, all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger and delivery
expenses, road show expenses, advertising expenses and fees and disbursements of
counsel for the Client and all independent certified public accountants and
other Persons retained by the Client in connection with such registration (all
such expenses borne by the Client being herein called the "Registration
Expenses").
6.2 Expenses Borne by Selling Securityholders. The selling
securityholders will be responsible for payment of their own legal fees (if they
retain legal counsel separate from that of the Client), underwriting fees and
brokerage discounts, commissions and other sales expenses incident to any
registration hereunder, with any such expenses which are common to the selling
securityholders divided among such securityholders (including the Client and
holders of the Client's securities other than Registrable Securities, to the
extent that securities are being registered on behalf of such Persons) pro rata
on the basis of the number of shares being registered on behalf of each such
securityholder, or as such securityholders may otherwise agree.
Section 7. Indemnification Section.
7.1 Indemnification by Client. The Client agrees to indemnify,
to the fullest extent permitted by law, each Holder of Registrable~ Securities
and each Person who controls
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(within the meaning of the Securities Act) such Holder against all losses,
claims, damages, liabilities and expenses in connection with defending against
any such losses, claims, damages and liabilities or in connection with any
investigation or inquiry, in each case caused by or based on any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or arise out of any violation by the Client of any rules or
regulation promulgated under the Securities Act applicable to the Client and
relating to action or inaction required of the Client in connection with such
registration, except insofar as the same are (i) contained in any information
furnished in writing to the Client by such Holder expressly for use therein,
(ii) caused by such Holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto, or (iii)
caused by such Holder's failure to discontinue disposition of shares after
receiving notice from the Client pursuant to Section 5.3 hereof. In connection
with an underwritten offering, the Client will indemnify such underwriters,
their officers and directors and each Person who controls (within the meaning of
the Securities Act) such underwriters at least to the same extent as provided
above with respect to the indemnification of the Holders of Registrable
Securities.
7.2 Indemnification by Holder. In connection with any registration statement in
which a Holder of Registrable Securities is participating, each such Holder will
furnish to the Client in writing such information as the Client reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, will indemnify the Client, its
directors and officers and each Person who controls (within the meaning of the
Securities Act) the Client against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information so furnished in writing by
such Holder expressly for use in connection with such registration; provided
that the obligation to indemnify will be individual to each Holder and will be
limited to the net amount of proceeds received by such Holder from the sale of
Registrable Securities pursuant to such registration statement. In connection
with an underwritten offering, each such Holder will indemnify such
underwriters, their officers and directors and each Person who controls (within
the meaning of the Securities Act) such underwriters at least to the same extent
as provided above with respect to the indemnification of the Client.
7.3 Assumption of Defense by Indemnifying Party. Any Person
entitled to indemnification hereunder will (a) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (b) unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified an indemnifying parties may exist with respect
to such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
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the indemnifying party will not be subject to any liability for any settlement
made by the indenmified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
7.4 Binding Effect. The indemnification provided for under
this Registration Agreement will remain in full force and effect regardless of
any investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party and will survive the
transfer of securities. The Client also agrees to make such provisions, as are
reasonably requested by any indemnified party, for contribution to such party in
the event the Client's indemnification is unavailable for any reason. Each
Holder of Registrable Securities also agrees to make such provisions, as are
reasonably requested by any indemnified party, for contribution to such party in
the event such Holder's indemnification is unavailable for any reason.
Section 8. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
Section 9. Miscellaneous.
9.1 No Inconsistent Agreements. The Client will not hereafter
enter into any agreement with respect to its securities which violates the
rights granted to the Holders of Registrable Securities in this Registration
Agreement.
9.2 Remedies. Any Person having rights under any provision of
this Registration Agreement will be entitled to enforce such rights specifically
to recover damages caused by reason of any breach of any provision of this
Registration Agreement and to exercise all other rights granted by law. The
parties hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Registration Agreement and that
any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Registration Agreement.
9.3 Term. Except for the provisions of Section 7 or as
specifically otherwise provided herein, the provisions of this Registration
Agreement shall apply until such time as all
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Registrable Securities have ceased to be Registrable Securities hereunder but in
no event later than three years from the date of this Registration Agreement.
9.4 Amendments and Waivers. Except as otherwise specifically
provided herein, this Registration Agreement may be amended or waived only upon
the prior written consent of the Client and of the Holders of a majority of the
then outstanding shares of Registrable Securities.
9.5 Successors and Assigns. Subject to Section 2 hereof, all
covenants and agreements in this Registration Agreement by or on behalf of any
of the parties hereto will bind and inure to the benefit of (i) the respective
successors and assigns of the parties hereto whether so expressed or not and
(ii) the persons referred to in clause (iv) of the definition of Registrable
Securities. In addition, whether or not any express assignment has been made but
subject in any case to Section 2 hereof, the provisions of this Registration
Agreement which are for the benefit of RCI or Holders of Registrable Securities
are also for the benefit of, and enforceable by, any subsequent holder of such
securities so long as such securities continue to be restricted securities, as
that term is defined in Securities Act Rule 144.
9.6 Severability. Whenever possible, each provision of this
Registration Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Registration Agreement
is held to be prohibited by or invalid under applicable law, such provision will
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Registration Agreement.
9.7 Counterparts. This Registration Agreement may be executed
simultaneously in multiple counterparts, any one of which need not contain the
signatures of more than one party, but all such counterparts taken together will
constitute one and the same Registration Agreement.
9.8 Descriptive Headings. The descriptive headings of this
Registration Agreement are inserted for convenience only and do not constitute a
part of this Registration Agreement.
9.9 Governing Law. All questions concerning the construction,
validity and interpretation of this Registration Agreement will be governed by
and construed in accordance with the domestic laws of the State of Florida,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Florida or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Florida.
9.10 Entire Agreement. This Registration Agreement is intended
by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto with respect of the subject matter contained
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herein. This Registration Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
9.11 Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Registration
Agreement shall be in writing and shall be deemed to have been given when
delivered personally to the recipient, sent to the recipient by facsimile
transmission, sent to the recipient by reputable express courier service
(charges prepaid) or three business days after being mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications will be sent to each Holder at the
address indicated on the records of the Client and to the Client at the address
set forth in the Agreement or to such other address or to the attention of such
other person as the recipient party has specified by prior written notice to the
sending party.
9.12 Confidentiality. The Client shall hold in strict
confidence and shall not disclose information with respect to sales of Common
Stock by any Holder, including the fact of such sales, the amount of such sales
and the timing of such sales, except as such information shall become public
without violation of this Section 9.12, as may be required by applicable law,
rules or regulations or with the express written consent of such Investor.
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Agreement as of the date first above written.
Client:
By: ____________________
,President
Company: Rainbow Communications, Inc.
By: ___________________
▇▇▇▇▇ ▇▇▇▇▇, President
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