Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of December 29, 2003, by and among GlobalNet Corporation (formerly iDial
Networks, Inc.), a Nevada corporation (the "Company") and The Titan Corporation,
a Delaware Corporation (the "Holder").
WHEREAS, the Company issued and sold to the Holder an Amended and Restated
Convertible Promissory Note dated as of the date hereof (the "Note") that amends
and replaces the Promissory Note dated August 21, 2003 issued by the Company to
the Holder;
WHEREAS, the Note is convertible into fully paid and non-assessable shares
of Common Stock of the Company on the terms set forth in the Note;
WHEREAS, the Company has agreed to grant the Holder the registration rights
described in Section 1 hereof (the "Registration Rights") with respect to the
Registrable Shares (as defined in Section 1 hereof);
WHEREAS, at the Company's request, the Holder and The NIR Group or one of
its affiliates or such other broker selected by the Company and reasonably
acceptable to the Holder (the "Broker") will enter into a brokerage agreement as
soon as practicable after the date hereof (the "Brokerage Agreement") in order
to provide for the orderly sale of the Common Stock issued to the Holder upon
conversion of the Note, all to be set forth in more detail in the Brokerage
Agreement;
Now, Therefore, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Registration Rights.
For purposes of this Agreement, "Registrable Shares" means (i) the shares
of Common Stock issued or issuable to the Holder pursuant to or in connection
with the Note and (ii) any other shares of Common Stock issued as (or issuable
upon the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for,
or in replacement of, all such shares of Common Stock described in the
immediately preceding clause (i); provided, that a Registrable Share ceases to
be a Registrable Share when (A) it has been registered and sold under the
Securities Act of 1933, as amended (the "Securities Act") or (B) it is sold or
transferred in accordance with the requirements of Rule 144 (or similar
provisions then in effect) promulgated by the Securities and Exchange Commission
("SEC") under the Securities Act ("Rule 144").
1.1 Shelf Registration.
(a) Shelf Registration Statement. The Company agrees, as soon as
possible after the date hereof, to file, without any request or any other
action on the part of the Holder, with the
SEC a registration statement for an offering to be made on a continuous
basis pursuant to Rule 415 under the Securities Act (the "Shelf
Registration"), covering all of the Registrable Shares (the "Registration
Statement"; and the related prospectus (including any preliminary
prospectus) is referred to as the "Prospectus"). The Registration Statement
and Prospectus (and any other form or document required to be filed in
connection with the exercise of the Registration Rights) shall be on the
appropriate form, reasonably satisfactory to the Holder and the Broker, and
shall otherwise comply as to form in all material respects with the
requirements of the Securities Act and the rules and regulations
promulgated thereunder, permitting registration of such Registrable Shares
for resale in the manner or manners described in the Brokerage Agreement or
otherwise designated by the Holder. The Company agrees to use its best
efforts to cause the Registration Statement to be declared effective by the
SEC as soon as possible after filing it and will notify the Holder and the
Broker immediately when such Registration Statement has become effective.
The Company agrees to use its best efforts to keep the Registration
Statement effective (including the preparation and filing of any amendments
and supplements necessary for that purpose) during the period from the date
that the Registration Statement is declared effective by the SEC until the
date on which the Holder shall have sold all of the Registrable Shares
(such period, the "Effective Period"). Upon seeking to offer and sell its
Registrable Shares pursuant to the Registration Statement, the Holder
agrees to provide in a timely manner information regarding the proposed
distribution by the Holder of the Registrable Shares and such other
information reasonably requested by the Company in connection with the
preparation of and for the inclusion in the Registration Statement. The
Company agrees to provide to the Holder and the Broker the number of copies
of the final Prospectus and any amendments or supplements thereto as are
reasonably requested by the Holder or the Broker, as the case may be. The
Company shall promptly notify the Holder and the Broker of any threatened
stop order by the SEC or if the Registration Statement ceases to be
effective for any reason at any time during the Effective Period (other
than because of the sale of all of the securities registered thereunder or
as permitted by Section 1.2 hereof), and the Company shall use its best
efforts and take all reasonable actions required to prevent the entry of
such stop order or to obtain the prompt withdrawal of any order suspending
the effectiveness thereof.
(b) Offerings and Sales. At any time and from time to time during the
Effective Period, subject to the restrictions set forth in Sections 1.1(c)
and 1.2 hereof, the Holder may exercise its Registration Rights hereunder
with respect to such Registrable Shares.
(c) Limitations on Registration Rights. If the Holder or the Broker,
on the Holder's behalf, wishes to sell Registrable Shares, the Holder or
the Broker, as the case may be, shall deliver to the designated
representative of the Company a written notice (a "Shelf Resale Notice") of
its present intention to sell, transfer or otherwise dispose of some or all
of the Registrable Shares, and the number of Registrable Shares that it
proposes to sell, transfer or otherwise dispose of. Upon receipt of each
Shelf Resale Notice, the Company shall, as soon as practicable but in no
event more than two business days after receipt of such Shelf Resale
Notice, either (i) provide a Materiality Notice pursuant to Section 1.2 of
this Agreement or (ii) give written notice (a "Company Shelf Response") to
the Holder who gave such Shelf Resale Notice that the prospectus relating
to the Registration Statement is current and that the Registrable Shares
covered by the Shelf Resale Notice may be resold within ten business days
after receipt of such Company Shelf Response. If the Company does not
respond within such two business days, it shall be deemed to have given a
Company Shelf Response. All notices
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pursuant to this Section 1.1(c) shall be provided by facsimile or
electronic mail delivery and confirmed by direct telephonic communication
with the designated representative. If the Holder or the Broker, as the
case may be, receives or is deemed to have received a Company Shelf
Response pursuant to the foregoing, the Holder or the Broker, as the case
may be, shall then have ten business days after receipt of such Company
Shelf Response in which to sell, transfer or otherwise dispose of the
shares subject to the Shelf Resale Notice. In the event that the Holder or
the Broker, as the case may be, receives a Materiality Notice pursuant to
this Section 1.1(c), the rights and obligations of the parties hereto with
respect to such Materiality Notice shall be governed by the provisions of
Section 1.2 of this Agreement.
1.2 Suspension of Offering. The Company may determine at any time that the
offers and sales by the Holder under the Registration Statement or otherwise
during the Effective Period, shall be suspended if (i) a negotiation or
consummation of a transaction by the Company or its subsidiaries is pending or
an event has occurred, which negotiation, consummation or event would, in the
Company's reasonable judgment, based upon the advice of counsel, require
additional disclosure by the Company in the Registration Statement of material
information which the Company has a bona fide business purpose for keeping
confidential, and the nondisclosure of which in the Registration Statement would
reasonably be expected to cause the Registration Statement to fail to comply
with applicable disclosure requirements or obtaining any financial statements
relating to an acquisition or business combination required to be included in
the Registration Statement would be impracticable, or (ii) the offering of such
Registrable Shares would, in the Company's reasonable judgment, based upon the
written advice of its underwriter, adversely affect a pending or proposed
underwritten public offering or Rule 144A offering of the Common Stock or other
securities by the Company. Immediately upon making such a determination, the
Company shall give written notice (which shall include a certificate of the
Chief Executive Officer or President of the Company as to the nature of such
determination) to the Holder (a "Materiality Notice"), upon receipt of which the
Holder agrees, subject to the provisions of this Section 1.2, that it will
immediately discontinue offers and sales of the Registrable Shares under the
Registration Statement or otherwise until (x) in the case of a Materiality
Notice delivered pursuant to clause (i) above, the Holder receives copies of a
supplemented or amended Prospectus that corrects the misstatement(s) or
omission(s) referred to above and receives notice that any post-effective
amendment has become effective or (y) in the case of a Materiality Notice
delivered pursuant to clause (ii) above, the Holder receives a subsequent notice
from the Company that revokes or otherwise withdraws such Materiality Notice;
provided, that the Company may, suspend or withdraw the Registration Statement
and such offers and sales pursuant to clause (i) above, for no more than two (2)
business days after the abandonment or consummation of any of the foregoing
negotiations, transactions or events (or if such negotiations are consummated,
then as soon as practicable to obtain the required financial statements, if any)
or, in any event, for no more than thirty (30) days after delivery of the
Materiality Notice pursuant to clauses (i) or (ii) above, at any one time (and
the Company shall not be entitled to require the Holder to delay or discontinue
offers and sales pursuant to this Section 1.2 for more than two occasions during
any twelve (12) month period and not for more than thirty (30) days at a time);
and provided further, the Company agrees that it may not deliver a Materiality
Notice during the initial 90-day period after the date that the Registration
Statement is declared effective.
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1.3 Expenses. The Company shall pay (a) all expenses incurred by the Holder
in connection with the negotiation and execution of the Note, this Agreement,
the Brokerage Agreement and the other agreements entered into in connection with
the issuance of the Note and the arrangements contemplated hereby and thereby,
including the reasonable fees and expenses of one counsel for the Holder, and
(b) all expenses incident to the performance by the Company of its registration
obligations under this Section 1, regardless of whether a Registration Statement
becomes effective, including, without limitation, (i) all SEC registration and
filing fees and expenses incurred in connection with the preparation, printing
and distribution of the Registration Statement and Prospectus and any other
document or amendment thereto and the mailing and delivery of copies thereof to
the dealers, the Holder or the Broker, (ii) fees and disbursements of the
Company, including, without limitation, fees and disbursements of counsel for
the Company, independent public accountants (including the expenses of any
comfort letters required under this Agreement) and other experts of the Company,
(iii) fees and expenses in connection with the qualification of Registrable
Shares for offering and sale under state securities laws (including fees and
expenses incurred in connection with blue sky qualifications of the Registrable
Shares), (iv) fees and expenses incident to any filing with the National
Association of Securities Dealers, Inc. ("NASD") or securing any required review
by NASD of the terms of the sale of Registrable Shares to be disposed of, (v)
all fees and expenses incurred in connection with the listing of Registrable
Shares on each securities exchange or quotation system on which the Common Stock
is then listed, (vi) reasonable fees and expenses of counsel for the Holder and
(vii) internal expenses of the Company (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties). The Holder shall be responsible for the payment of its
allocated pro rata share of any underwriting discounts and fees, brokerage and
sales commissions, and any transfer taxes relating to the sale or disposition of
the Registrable Shares; provided, that the Company shall not be obligated to
reimburse the Holder for fees and expenses of counsel pursuant to clause (a) and
(b) above in excess of $50,000 (provided that no material unforeseen issues or
conditions arise).
1.4 Registration Procedures.
(a) The Company will, as expeditiously as possible:
(i) use its best efforts to register or qualify the
Registrable Shares by the time the Registration Statement is
declared effective by the SEC under all applicable state
securities or "blue sky" laws of such jurisdictions as the Holder
or managing underwriter shall reasonably request in writing, to
keep each such registration or qualification effective during the
Effective Period, and to do any and all other acts and things
which may be reasonably necessary or advisable to enable the
Holder and the Broker, on its behalf, to consummate the
disposition in each such jurisdiction of the Registrable Shares;
provided, that the Company shall not be required to (x) qualify
generally to do business in any -------- jurisdiction or to
register as a broker or dealer in any jurisdiction where it would
not otherwise be required to qualify but for this Section 1.4,
(y) subject itself to taxation in any such jurisdiction, or (z)
submit to the general service of process in any such
jurisdiction;
(ii) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the Prospectus as
may be (x) necessary to keep the
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Registration Statement effective and to comply with the
provisions of the Securities Act with respect to the disposition
of all Registrable Shares until such time as all Registrable
Shares have been disposed of in accordance with the intended
methods of disposition by the Holder set forth in the
Registration Statement or (y) reasonably requested by the Holder
or the Broker;
(iii) furnish to the Holder and the Broker such number of
conformed copies of the Registration Statement and of each such
amendment and supplement thereto (in each case including all
exhibits), such number of copies of the Prospectus included in
the Registration Statement (including each preliminary
prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in the
Registration Statement or Prospectus, and such other documents as
the Holder or the Broker may reasonably request;
(iv) cause the Registrable Shares to be listed on any
national securities exchange or quotation system, if the listing
of such securities is then permitted under the rules of such
exchange or quotation system;
(v) enter into customary agreements and take such other
actions as are reasonably required in order to expedite or
facilitate the disposition of such Registrable Shares;
(vi) notify the Holder and the Broker in writing promptly
upon (A) the happening of any event as a result of which a
Prospectus included in a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits
to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, and, subject to the provisions of Section
1.2 hereof, at the request of the Holder or the Broker prepare
and furnish to the Holder and the Broker as many copies of a
supplement to or an amendment of such Prospectus as the Holder or
the Broker reasonably requests so that, as thereafter delivered
to the purchasers of such Registrable Shares, such Prospectus
shall not include an untrue statement of a material fact or omit
to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading; (B) the receipt by the Company of any
notification with respect to any comments by the SEC with respect
to such Registration Statement or Prospectus or any amendment or
supplement thereto or any request by the SEC for the amending or
supplementing thereof or for additional information with respect
thereto; (C) the receipt by the Company of any notification with
respect to the issuance by the SEC of any stop order suspending
the effectiveness of such Registration Statement or Prospectus or
any amendment or supplement thereto or the initiation or
threatening of any proceeding for that purpose; and (D) the
receipt by the Company of any notification with respect to the
suspension of the qualification of such Registrable Shares for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purposes;
(vii) the Company will, at least ten (10) days prior to
filing the Registration Statement or Prospectus or any amendment
or supplement thereto, furnish to the Holder and the Broker
copies of such Registration Statement, Prospectus or amendment or
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supplement as proposed to be filed, and thereafter furnish to the
Holder and Broker, such number of copies of such Registration
Statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by
reference therein that are specifically requested to be
provided), the Prospectus included in such Registration Statement
(including each preliminary prospectus) and such other documents
as the Holder or Broker may reasonably request in order to
facilitate the disposition of the Registrable Shares;
(viii) use its best efforts to cause the Registrable Shares
to be registered with or approved by such other governmental
agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the Holder or
the Broker, on its behalf, to consummate the disposition of the
Registrable Shares;
(ix) subject to the execution of customary confidentiality
agreements in form and substance reasonably satisfactory to the
Company, make available upon reasonable notice and during normal
business hours, for inspection by the Holder and the Broker and
any attorney, accountant or other agent retained by the Holder or
Broker (collectively, the "Inspectors"), all pertinent financial
and other records, pertinent corporate documents and properties
of the Company (collectively, the "Records"), as shall be
reasonably necessary to enable them to exercise their due
diligence responsibility, if any, and cause the Company's
officers, directors and employees to supply all information
(together with the Records, the "Information") reasonably
requested by any such Inspector in connection with such
Registration Statement. Any of the Information which the Company
determines in good faith to be confidential, and of which
determination the Inspectors are so notified, shall not be
disclosed by the Inspectors unless (A) the disclosure of such
Information is necessary to avoid or correct a misstatement or
omission in the Registration Statement, (B) the release of such
Information is ordered pursuant to a subpoena or other order from
a court of competent jurisdiction or (C) such Information has
been made generally available to the public; the Holder holding
such Registrable Shares agree that they will, upon learning that
disclosure of such Information is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company,
at the Company's expense, to undertake appropriate action to
prevent disclosure of the Information deemed confidential;
(x) if an underwritten offering or otherwise reasonably
necessary, use its best efforts to obtain from its independent
certified public accountants "cold comfort" letters in customary
form and at customary times and covering matters of the type
customarily covered by cold comfort letters;
(xi) if an underwritten offering or otherwise reasonably
necessary, use its reasonable best efforts to obtain from its
counsel an opinion or opinions in customary form naming the
Holder as additional addressees or parties who may rely thereon;
(xii) provide a transfer agent and registrar (which may be
the same entity and which may be the Company) for such
Registrable Shares;
(xiii) issue to any underwriter to which the Holder holding
such Registrable Shares may sell shares in such offering
certificates evidencing such Registrable Shares;
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(xiv) make available for reasonable inspection by, or give
reasonable access to, the Holder, the Broker and any attorney,
accountant or other agent retained by the Holder or the Broker,
all pertinent financial and other records and pertinent corporate
documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information
reasonably requested by the Holder or the Broker or any other
person in connection with the offering thereunder; and
(xv) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC.
(b) The Company may require the Holder, upon selling Registrable
Shares as to which any registration is being effected, to furnish the
Company with such information in writing regarding the Holder and the
distribution of such securities as required to be included in the
Registration Statement or Prospectus (or preliminary prospectus) included
therein as the Company may from time to time reasonably request. The Holder
may not include any of its Registrable Shares in the Registration Statement
pursuant to this Agreement unless and until the Holder furnishes to the
Company such information in writing. The Holder agrees to furnish promptly
to the Company all information required to be disclosed in order to make
the information previously furnished to the Company by the Holder not
materially misleading.
Section 2. Indemnification.
2.1 Indemnification by the Company. The Company agrees to indemnify and
hold harmless the Holder in any offering or sale of Registrable Shares, each
person (if any) who participates as an underwriter in any offering and sale of
Registrable Shares, and each person, if any, who controls the Holder or such
underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
their respective directors, trustees, officers, partners, agents, employees and
affiliates as follows:
(a) against any and all loss, liability, claim, damage and expense
(including reasonable legal fees and expenses) and action or proceeding
(whether commenced or threatened) whatsoever (collectively, "Losses"), as
incurred, arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus or
Registration Statement (or any amendment or supplement thereto) pursuant to
which the Registrable Shares were registered under the Securities Act,
including all documents incorporated therein by reference, or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any amendment
or supplement thereto), including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(b) against any and all Losses, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue
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statement or omission, or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of the Company (which
consent will not be unreasonably withheld, conditioned or delayed); and
(c) against any and all expense whatsoever, as incurred (including
reasonable fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any Losses or any litigation,
or investigation or proceeding by any governmental agency or body,
commenced or threatened, in each case whether or not a party, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (a) or (b) above; provided, that the
indemnity provided pursuant to this Section 2.1 does not apply to any
indemnified party with respect to any Losses or expenses to the extent
arising out of (i) any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by such indemnified party for use in
the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto), or (ii) such indemnified party's
failure to deliver an amended or supplemental Prospectus if such Losses
would not have arisen had such delivery occurred.
2.2 Indemnification by the Holder. The Holder (and each permitted assignee
of the Holder) agrees, severally and not jointly, to indemnify and hold harmless
the Company, each person (if any) who participates as an underwriter in any
offering and sale of Registrable Shares and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, and their respective directors, trustees, officers,
partners, agents, employees and affiliates, as follows:
(a) against any and all Losses whatsoever, as incurred, arising out of
or based upon any untrue statement or alleged untrue statement of a
material fact and contained in any Prospectus or Registration Statement (or
any amendment or supplement thereto) pursuant to which the Registrable
Shares were registered under the Securities Act, including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of or based upon
any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus, including all documents incorporated therein
by reference, or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(b) against any and all Losses whatsoever, as incurred, to the extent
of the aggregate amount paid in settlement of any litigation, investigation
or proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Holder (which
consent will not be unreasonably withheld);
(c) against any and all expense whatsoever, as incurred (including
reasonable fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any Losses or any litigation,
investigation or proceeding by any governmental agency or body, commenced
or threatened, in each case whether or not a party, or any claim whatsoever
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based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not
paid under subparagraph (a) or (b) above; and
(d) notwithstanding the provisions of subparagraphs (a), (b) and (c)
above, the indemnity provided pursuant to this Section 2.2 shall only apply
with respect to any Losses to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Holder expressly for use in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto). Notwithstanding the provisions of this Section 2.2 or any other
provision of this Agreement, none of the Holder nor any permitted assignee
shall be required to indemnify the Company or any other indemnified party
hereunder with respect to any amount in excess of the total amount of the
net proceeds to the Holder or such permitted assignee, as the case may be,
from sales of the Registrable Shares under the Registration Statement with
respect to such offering.
2.3 Conduct of Indemnification Proceedings. The indemnified party shall
give prompt notice to the indemnifying party of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but
failure to so notify the indemnifying party shall not relieve it from any
liability which it may have under the indemnity agreement provided in Section
2.1 or 2.2 above, unless and to the extent it did not otherwise learn of such
action and the lack of notice by the indemnified party results in the forfeiture
by the indemnifying party of substantial rights and defenses. If the
indemnifying party so elects within a reasonable time after receipt of such
notice, the indemnifying party may assume the defense of such action or
proceeding at such indemnifying party's own expense with counsel chosen by the
indemnifying party and approved by the indemnified party, which approval shall
not be unreasonably withheld; provided, that the indemnifying party will not
settle any such action or proceeding without the written consent of the
indemnified party (which consent will not be unreasonably withheld) unless, as a
condition to such settlement, the indemnifying party secures the unconditional
release of the indemnified party; and provided further that if the indemnified
party reasonably determines that a conflict of interest exists where it is
advisable for the indemnified party to be represented by separate counsel or
that, upon advice of counsel, there may be legal defenses available to it which
are different from or in addition to those available to the indemnifying party,
then the indemnifying party shall not be entitled to assume such defense and the
indemnified party shall be entitled to separate counsel at the indemnifying
party's expense. If the indemnifying party is not entitled to assume the defense
of such action or proceeding as a result of the proviso to the preceding
sentence, the indemnifying party's counsel shall be entitled to conduct the
indemnifying party's defense and counsel for the indemnified party shall be
entitled to conduct the defense of the indemnified party, it being understood
that both such counsel will cooperate with each other to conduct the defense of
such action or proceeding as efficiently as possible. If the indemnifying party
is not so entitled to assume the defense of such action or does not assume such
defense, after having received the notice referred to in the first sentence of
this paragraph, the indemnifying party will pay the reasonable fees and expenses
of counsel for the indemnified party. In such event, however, the indemnifying
party will not be liable for any settlement effected without the written consent
of the indemnifying party (which consent will not be unreasonably withheld).
Except as expressly stated herein, if an indemnifying party is entitled to
assume, and assumes, the defense of such action or proceeding
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in accordance with this paragraph, the indemnifying party shall not be liable
for any fees and expenses of counsel for the indemnified party incurred
thereafter in connection with such action or proceeding.
2.4 Contribution. In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in this Section 2
is unavailable to an indemnified party, the indemnifying party shall contribute
to the aggregate Losses of the nature contemplated by such indemnity agreement
incurred by any indemnified party, (i) in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and the
indemnified parties on the other, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative fault
of but also the relative benefits to the Company on the one hand and the Holder
on the other, in connection with the statements or omissions which resulted in
such Losses, as well as any other relevant equitable considerations. The
relative benefits to the indemnifying party and the indemnified party shall be
determined by reference to, among other things, the total proceeds received by
the indemnifying party and the indemnified party in connection with the offering
to which such Losses relate. The relative fault of the indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, the indemnifying party or
the indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 2.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 2.4, neither the Holder nor any
permitted assignee shall be required to contribute any amount in excess of the
amount of the total net proceeds to the Holder or such permitted assignee, as
the case may be, from sales of the Registrable Shares under the Registration
Statement.
Notwithstanding the foregoing, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 2.4, each person, if
any, who controls an indemnified party within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as such indemnified
party, and each director of the Company, each officer of the Company who signed
a Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Company. The Holder' obligations under this
Section 2.4 are several and not joint and shall, at all times, be subject to the
limitations set forth in Section 2.2(d) hereof.
The indemnity agreements contained in this Section 2 shall be in addition
to any other rights (indemnification, contribution or otherwise) which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of
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any investigation made or omitted by or on behalf of any indemnified party and
shall survive the transfer of any Registrable Shares by the Holder.
Section 3. Rule 144 Compliance.
The Company covenants that it will use its best efforts to timely file the
reports required to be filed by the Company under the Securities Act and the
Securities Exchange Act of 1934, as amended, so as to enable the Holder to sell
Registrable Shares pursuant to Rule 144. In connection with any sale, transfer
or other disposition by the Holder of any Registrable Shares pursuant to Rule
144, the Company shall cooperate with the Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Shares to be
sold and not bearing any Securities Act legend, and enable certificates for such
Registrable Shares to be for such number of shares and registered in such names
as the Holder may reasonably request at least ten (10) business days prior to
any sale of Registrable Shares hereunder.
Section 4. Miscellaneous.
4.1 Integration; Amendment. This Agreement constitutes the entire agreement
among the parties hereto with respect to the matters set forth herein and
supersedes and renders of no force and effect all prior oral or written
agreements, commitments and understandings among the parties with respect to the
matters set forth herein. Except as otherwise expressly provided in this
Agreement, no amendment, modification or discharge of this Agreement shall be
valid or binding unless set forth in writing and duly executed by the Company
and the Holder.
4.2 Waivers. No waiver by a party hereto shall be effective unless made in
a written instrument duly executed by the party against whom such waiver is
sought to be enforced, and only to the extent set forth in such instrument.
Neither the waiver by any of the parties hereto of a breach or a default under
any of the provisions of this Agreement, nor the failure of any of the parties,
on one or more occasions, to enforce any of the provisions of this Agreement or
to exercise any right or privilege hereunder shall thereafter be construed as a
waiver of any subsequent breach or default of a similar nature, or as a waiver
of any such provisions, rights or privileges hereunder.
4.3 Successors and Assigns; Third Party Beneficiaries. The Holder may
assign its rights hereunder to any transferee of Registrable Shares; provided,
however, that such transferee shall, as a condition to the effectiveness of such
assignment, be required to execute a counterpart to this Agreement agreeing to
be treated as the Holder, whereupon such transferee shall have the benefits of
and shall be subject to the restrictions contained in this Agreement as if such
transferee was originally included in the definition of the Holder and had
originally been a party hereto. The Company may not assign any of its rights or
delegate any of its duties under this Agreement without the prior written
consent of the designated representative of the Holder, provided that as a
condition to any merger, reorganization or consolidation of the Company with any
person (as defined in the Securities Act) in which the holders of Common Stock
receive securities of any other person (the "Successor Issuer") the Company
shall assign all of its rights, and delegate all of its obligations under this
Agreement to such Successor Issuer in which event the Successor Issuer will
agree in writing to become the "Company" for all purposes of this Agreement. Any
purported assignment, merger, reorganization or consolidation in violation of
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this Section shall be void. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person other than the Holder (who
shall be third party beneficiaries of this Agreement entitled to the benefit of,
and enforce, its terms) and the Company and their respective successors, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Holder and the Company and their respective successors, and for the benefit of
no other Person. No purchaser of Common Stock from the Holder shall be deemed to
be a successor or assignee by reason merely of such purchase.
4.4 Notices; Designated Representative. Except as otherwise provided in
this Agreement, notices and other communications required by this Agreement
shall be in writing and delivered by hand against receipt or sent by recognized
overnight delivery service or by certified or registered mail, postage prepaid,
with return receipt requested or by confirmed facsimile or confirmed electronic
mail transmission, properly addressed to the addresses of the parties set forth
on the signature pages hereto or to such other address(es) as the respective
parties hereto shall from time to time designate to the other(s) in writing. The
designated representative of the Company shall initially be its Chief Financial
Officer or such other person as the Company shall from time to time designate to
the Holder in writing.
4.5 Specific Performance. The parties hereto acknowledge that the
obligations undertaken by them hereunder are unique and that there would be no
adequate remedy at law if any party fails to perform any of its obligations
hereunder, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled to (i)
compel specific performance of the obligations, covenants and agreements of any
other party under this Agreement in accordance with the terms and conditions of
this Agreement and (ii) obtain preliminary injunctive relief to secure specific
performance and to prevent a breach or contemplated breach of this Agreement in
any court of the United States or any State thereof having jurisdiction.
4.6 No Conflict of Rights. The Company shall not grant any registration
rights which conflict with the Registration Rights.
4.7 Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the Commonwealth of Virginia
(but not including the choice of law rules thereof).
4.8 Headings. Section and subsection headings contained in this Agreement
are inserted for convenience of reference only, shall not be deemed to be a part
of this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
4.9 Pronouns. All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, neuter, singular or plural, as the identity of
the person or entity may require.
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4.10 Execution in Counterparts. To facilitate execution, this Agreement may
be executed in as many counterparts as may be required. It shall not be
necessary that the signature of or on behalf of each party appears on each
counterpart, but it shall be sufficient that the signature of or on behalf of
each party appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of or on behalf of all of the
parties.
4.11 Severability. If fulfillment of any provision of this Agreement, at
the time such fulfillment shall be due, shall transcend the limit of validity
prescribed by law, then the obligation to be fulfilled shall be reduced to the
limit of such validity; and if any clause or provision contained in this
Agreement operates or would operate to invalidate this Agreement, in whole or in
part, then such clause or provision only shall be held ineffective, as though
not herein contained, and the remainder of this Agreement shall remain operative
and in full force and effect.
4.12 Effectiveness of Agreement; Termination. This Agreement shall not
become effective until the Effective Date, at which time this Agreement shall
take full force and effect, and shall terminate on the date that all Registrable
Shares cease to be a Registrable Share, except that the provisions of Section 2
shall survive indefinitely.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed on its behalf as of the date first hereinabove set forth.
GLOBALNET CORPORATION
By: /s/ XXXX X. XXXX
----------------
Name: Xxxx X. Xxxx
Title: CEO
Address for Notices:
GlobalNet Corporation
0000 Xxxxxxxxxx Xxxxx Xxxxx 000
Xxx Xxxxxxxxx, Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
THE TITAN CORPORATION
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President Strategic Transactions
Address for Notices:
The Titan Corporation
0000 Xxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Mr. Xxxxx Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
The Titan Corporation
0000 Xxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Secretary
Phone: (000) 000-0000
Fax: (000) 000-0000
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