REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of June 21,
2005, is made between Ceres Financial Limited (the "Investor"), and Rapidtron,
Inc., a Nevada corporation (the "Company").
WHEREAS, simultaneously with the execution and delivery of this Agreement,
the Investor is purchasing from the Company, pursuant to a Convertible Note and
Warrant Purchase Agreement dated the date hereof (the "Purchase Agreement"), a
Convertible Note and Warrants of the Company. The Convertible Note is
convertible into shares of common stock of the Company ("Common Shares") and
each Warrant is exercisable to purchase one Common Share (terms not defined
herein shall have the meanings ascribed to them in the Purchase Agreement); and
WHEREAS, the Company desires to grant to the Investor the registration
rights set forth herein with respect to the Common Shares acquirable upon
conversion or exercise of the Convertible Note and Warrants purchased pursuant
to the Purchase Agreement (sometimes referred to herein as the "Securities");
NOW, THEREFORE, the parties hereto mutually agree as follows:
Section 1. Registrable Securities. As used herein the term
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"Registrable Security" means the Securities until (i) the Registration Statement
(as defined below) has been declared effective by the Securities and Exchange
Commission ("SEC"), and all Securities have been disposed of pursuant to the
Registration Statement, (ii) all Securities have been sold under circumstances
under which all of the applicable conditions of Rule 144 (or any similar
provision then in force) under the Securities Act ("Rule 144") are met, (iii)
all Securities have been otherwise transferred to holders who may trade such
Securities without restriction under the Securities Act, and the Company has
delivered a new certificate or other evidence of ownership for such Securities
not bearing a restrictive legend or (iv) such time as, in the opinion of counsel
to the Company, all Securities may be sold without any time, volume or manner
limitations pursuant to Rule 144(k) (or any similar provision then in effect)
under the Securities Act. The term "Registrable Securities" means any and/or all
of the securities falling within the foregoing definition of a "Registrable
Security." In the event of any merger, reorganization, consolidation,
recapitalization or other change in corporate structure affecting the Common
Shares, such adjustment shall be deemed to be made in the definition of
"Registrable Security" as is appropriate in order to prevent any dilution or
enlargement of the rights granted pursuant to this Agreement.
Section 2. Restrictions on Transfer. The Investor acknowledges and
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understands that prior to the registration of the Securities as provided herein,
the Securities are "restricted securities" as defined in Rule 144 promulgated
under the Securities Act. The Investor understands that no disposition or
transfer of the Securities may be made by the Investor in the absence of (i) an
opinion of counsel to the Investor, in form and substance reasonably
satisfactory to the Company, that such transfer may be made without registration
under the Securities Act or (ii) such registration.
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With a view to making available to the Investor the benefits of
Rule 144 under the Securities Act or any other similar rule or regulation of the
SEC that may at any time permit the Investor to sell securities of the Company
to the public without registration, the Company agrees to do the following until
two years following the issuance of any Security or until there no longer exists
any Registrable Security:
(a) comply with the provisions of paragraph (c)(1) of Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required to be filed with the SEC pursuant to Section 13 or 15(d)
under the Exchange Act by companies subject to either of such sections,
irrespective of whether the Company is then subject to such reporting
requirements; and
(c) upon request by the transfer agent of the Company (the
"Transfer Agent"), the Company shall provide the Transfer Agent an opinion of
counsel, which opinion shall be reasonably acceptable to the Transfer Agent,
that to the extent true based upon the satisfactory evidence and certifications
provided by the Investor and its broker, the Investor has complied with the
applicable conditions of Rule 000 ( xx any similar provision then in force)
under the Securities Act.
Section 3. Registration Rights With Respect to the Securities.
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(a) Subject to the conditions set forth in Section 16 below,
the Company agrees that it will use its best efforts to prepare and file with
the SEC, within thirty (30) days after receiving written notice from the
Investor, a registration statement (on Form S-1, Form SB-2 or other appropriate
registration statement form) under the Securities Act (the "Registration
Statement"), at the sole expense of the Company except as provided in Section
3(c) hereof), in respect of the Investor, so as to permit a public offering and
resale of the Securities (the number of which shall be calculated based on 120%
of the number acquirable upon exercise or conversion of the Convertible Note and
Warrants assuming full exercise and conversion) under the Securities Act by the
Investor as a selling stockholder and not as an underwriter.
The Company shall provide the Investor with copies of any comment
letters received from the SEC with respect thereto within two (2) trading days
of receipt thereof. The Company shall use its best efforts to cause such
Registration Statement to become effective within five (5) days of SEC clearance
to request acceleration of effectiveness. The number of shares designated in
the Registration Statement to be registered shall include all the Registrable
Securities held by the Investor on the day prior to the filing date of the
Registration Statement, and shall include appropriate language regarding
reliance upon Rule 416 to the extent permitted by the SEC. The Company will
notify the Investor of the effectiveness of the Registration Statement within
three trading days of such event.
(b) Subject to the conditions set forth in Section 16 below,
and further provided that a shelf-registration statement is and continues to be
permitted by law, the Company will maintain the Registration Statement or
post-effective amendment filed under this Section 3 effective under the
Securities Act until the earlier of (i) the date that none of the Securities
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covered by such Registration Statement are or may become issued and outstanding,
(ii) the date that all of the Securities have been sold pursuant to such
Registration Statement, (iii) the date the Investor receives an opinion of
counsel to the Company, which counsel shall be reasonably acceptable to the
Investor, that the Securities may be sold under the provisions of Rule 144
without limitation as to volume, (iv) all Securities have been otherwise
transferred to persons who may trade such shares without restriction under the
Securities Act, and the Company has delivered a new certificate or other
evidence of ownership for such securities not bearing a restrictive legend, (v)
all Securities may be sold without any time, volume or manner limitations
pursuant to Rule 144(k) or any similar provision then in effect under the
Securities Act in the opinion of counsel to the Company, which counsel shall be
reasonably acceptable to the Investor, or (vi) two (2) years from the original
issuance date of the Securities (the "Effectiveness Period"). The Company shall
prepare any supplement and/ or post-effective amendment and the same shall be
reviewed and delivered to and filed with the SEC in the same manner as set forth
in subparagraph 3(a) above.
(c) Subject to the conditions set forth in Section 16 below,
all fees, disbursements and out-of-pocket expenses and costs incurred by the
Company in connection with the preparation and filing of the Registration
Statement under subparagraph 3(a) or the supplement(s) and post-effective
amendment(s) under subparagraph 3(b) and in complying with applicable securities
and Blue Sky laws (including, without limitation, all attorneys' fees of the
Company) shall be borne by the Company. The Investor shall bear the cost of
underwriting and/or brokerage discounts, fees and other costs, if any,
applicable to the Securities being registered and the fees and expenses of its
counsel. The Investor and its counsel shall have a reasonable period, not to
exceed five (5) trading days, to review the proposed Registration Statement or
any amendment thereto, prior to filing with the SEC, and the Company shall
provide the Investor with copies of any comment letters received from the SEC
with respect thereto within two (2) trading days of receipt thereof. Subject to
the conditions set forth in Section 16 below, the Company shall qualify any of
the securities for sale in such states as the Investor reasonably designates and
shall furnish indemnification in the manner provided in Section 6 hereof.
However, the Company shall not be required to qualify in any state which will
require an escrow or other restriction relating to the Company and/or the
sellers, or which will require the Company to qualify to do business in such
state or require the Company to file therein any general consent to service of
process. The Company at its expense will supply the Investor with a copy of the
applicable Registration Statement and the prospectus included therein for use by
the Investor in such quantities as may be reasonably requested by the Investor.
(d) The Company shall not be required by this Section 3 to
include the Investor's Securities in any Registration Statement which is to be
filed if, in the opinion of counsel for both the Investor and the Company (or,
should they not agree, in the opinion of another counsel experienced in
securities law matters acceptable to counsel for the Investor and the Company)
the proposed offering or other transfer as to which such registration is
requested is exempt from applicable federal and state securities laws and would
result in all purchasers or transferees obtaining securities which are not
"restricted securities", as defined in Rule 144 under the Securities Act.
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(e) In the event that the conditions set forth in Section 16
below have continued to be satisfied and the Company fails to keep such
Registration Statement effective as required in Section 3(b) above (each a
"Registration Default") then the Company will pay Investor (pro rated on a daily
basis) in cash or, at the option of the Investor, in Common Shares on the
trading day prior to the date of payment, as liquidated damages for such failure
and not as a penalty two percent (2%) of the aggregate market value of Common
Shares purchased from the Company and held by the Investor for each month
thereafter until such Registration Statement has been filed and declared
effective. Such payment of the liquidated damages shall be made to the Investor
in cash, within five (5) calendar days of demand, provided, however, that the
payment of such liquidated damages shall not relieve the Company from its
obligations to register the Securities pursuant to this Section. Notwithstanding
anything to the contrary contained herein, a failure to maintain the
effectiveness of a filed Registration Statement or the ability of the Investor
to use an otherwise effective Registration Statement to effect resales of
Securities during the period after forty-five (45) days and within one hundred
five (105) days from the end of the Company's fiscal year resulting solely from
the need to update the Company's financial statements contained or incorporated
by reference in such Registration Statement shall not constitute a Registration
Default and shall not trigger the accrual of liquidated damages hereunder.
If the Company does not remit the payment to the Investor as set
forth above, the Company will pay the Investor reasonable costs of collection,
including attorneys' fees, in addition to the liquidated damages. The
registration of the Securities pursuant to this provision shall not affect or
limit the Investor's other rights or remedies as set forth in this Agreement.
(f) No provision contained herein shall preclude the Company
from selling securities pursuant to any Registration Statement in which it is
required to include Securities pursuant to this Section 3.
(g) If at any time or from time to time after the effective
date of any Registration Statement, the Company notifies the Investor in writing
of the existence of a Potential Material Event (as defined in Section 3(h)
below), the Investor shall not offer or sell any Securities or engage in any
other transaction involving or relating to Securities, from the time of the
giving of notice with respect to a Potential Material Event until the Investor
receives written notice from the Company that such Potential Material Event
either has been disclosed to the public or no longer constitutes a Potential
Material Event; provided, however, that the Company may not so suspend the right
to such holders of Securities for more than twenty (20) days in the aggregate
during any twelve month period, during the period the Registration Statement is
required to be in effect, and if such period is exceeded, such event shall be a
Registration Default and subject to liquidated damages as set forth in Section
3(e) hereof. If a Potential Material Event shall occur prior to the date a
Registration Statement is required to be filed, then the Company's obligation to
file such Registration Statement shall be delayed without penalty for not more
than twenty (20) days, and such delay or delays shall not constitute a
Registration Default. Such twenty (20) day period shall not be in addition to
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the twenty (20) day period allowed during the period the Registration Statement
is required to be in effect. The Company must, if lawful, give the Investor
notice in writing at least two (2) trading days prior to the first day of the
blackout period.
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(h) "Potential Material Event" means any of the following: (a)
the possession by the Company of material information not ripe for disclosure in
a registration statement, as determined in good faith by the Chief Executive
Officer or the Board of Directors of the Company that disclosure of such
information in a Registration Statement would be detrimental to the business and
affairs of the Company; or (b) any material engagement or activity by the
Company which would, in the good faith determination of the Chief Executive
Officer or the Board of Directors of the Company, be adversely affected by
disclosure in a registration statement at such time, which determination shall
be accompanied by a good faith determination by the Chief Executive Officer or
the Board of Directors of the Company that the applicable Registration Statement
would be materially misleading absent the inclusion of such information.
Section 4. Cooperation with Company. The Investor will cooperate with
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the Company in all respects in connection with this Agreement, including timely
supplying all information reasonably requested by the Company (which shall
include all information regarding the Investor and proposed manner of sale of
the Registrable Securities required to be disclosed in any Registration
Statement) and executing and returning all documents reasonably requested in
connection with the registration and sale of the Registrable Securities and
entering into and performing its obligations under any underwriting agreement,
if the offering is an underwritten offering, in usual and customary form, with
the managing underwriter or underwriters of such underwritten offering. Nothing
in this Agreement shall obligate the Investor to consent to be named as an
underwriter in any Registration Statement. Subject to the conditions set forth
in Section 16 below, the obligation of the Company to register the Registrable
Securities shall be absolute and unconditional as to those Securities which the
SEC will permit to be registered without naming the Investor as an underwriter.
Any delay or delays caused by the Investor by failure to cooperate as required
hereunder shall not constitute a Registration Default.
Section 5. Registration Procedures. If and whenever the Company
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is required by any of the provisions of this Agreement to effect the
registration of any of the Registrable Securities under the Act, the Company
shall (except as otherwise provided in this Agreement), as expeditiously as
possible, subject to the Investor's assistance and cooperation as reasonably
required with respect to each Registration Statement:
(a) (i) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such Registration Statement
whenever the Investor shall desire to sell or otherwise dispose of the same
(including prospectus supplements with respect to the sales of securities from
time to time in connection with a registration statement pursuant to Rule 415
promulgated under the Act) and (ii) take all lawful action such that each of (A)
the Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
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therein, in light of the circumstances under which they were made, not
misleading and (B) the prospectus forming part of the Registration Statement,
and any amendment or supplement thereto, does not at any time during the
Registration Period include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(b) (i) prior to the filing with the SEC of any Registration
Statement (including any amendments thereto) and the distribution or delivery of
any prospectus (including any supplements thereto), provide draft copies thereof
to the Investor as required by Section 3(c) and reflect in such documents all
such comments as the Investor (and its counsel) reasonably may propose
respecting the Selling Shareholder and Plan of Distribution sections (or
equivalents) and (ii) furnish to the Investor such numbers of copies of a
prospectus including a preliminary prospectus or any amendment or supplement to
any prospectus, as applicable, in conformity with the requirements of the
Securities Act, and such other documents as such Investor may reasonably request
in order to facilitate the public sale or other disposition of the securities
owned by the Investor;
(c) register and qualify the Registrable Securities covered
by the Registration Statement under such other securities or Blue Sky laws of
such jurisdictions as the Investor shall reasonably request (subject to the
limitations set forth in Section 3(d) above), and do any and all other acts and
things which may be necessary or advisable to enable the Investor to consummate
the public sale or other disposition in such jurisdiction of the securities
owned by the Investor;
(d) list such Registrable Securities on the National
Association of Securities Dealers over the counter bulletin board or such other
principal market for the Common Shares (the "Principal Market"), if the listing
of such Registrable Securities is then permitted under the rules of such
Principal Market;
(e) notify the Investor at any time when a prospectus
relating thereto covered by the Registration Statement is required to be
delivered under the Act, of the happening of any event of which it has knowledge
as a result of which the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and the Company shall prepare and file a curative amendment under
Section 5(a) as quickly as commercially possible;
(f) as promptly as practicable after becoming aware of such
event, notify each Investor who holds Registrable Securities being sold (or, in
the event of an underwritten offering, the managing underwriters) of the
issuance by the SEC of any stop order or other suspension of the effectiveness
of the Registration Statement at the earliest possible time and take all lawful
action to effect the withdrawal, rescission or removal of such stop order or
other suspension;
(g) cooperate with the Investor to facilitate the timely
preparation and delivery of certificates for the Registrable Securities to be
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offered pursuant to the Registration Statement and enable such certificates for
the Registrable Securities to be in such denominations or amounts, as the case
may be, as the Investor reasonably may request and registered in such names as
the Investor may request; and, within three (3) trading days after a
Registration Statement which includes Registrable Securities is declared
effective by the SEC, deliver and cause legal counsel selected by the Company to
deliver to the transfer agent for the Registrable Securities (with a copy to the
Investor) an appropriate instruction and, to the extent necessary, an opinion of
such counsel;
(h) take all such other lawful actions reasonably necessary
to expedite and facilitate the disposition by the Investor of its Registrable
Securities in accordance with the intended methods therefor provided in the
prospectus which are customary for issuers to perform under the circumstances;
(i) in the event of an underwritten offering, promptly
include or incorporate in a prospectus supplement or post-effective amendment to
the Registration Statement such information as the managers reasonably agree
should be included therein and to which the Company does not reasonably object
and make all required filings of such prospectus supplement or post-effective
amendment as soon as practicable after it is notified of the matters to be
included or incorporated in such Prospectus supplement or post-effective
amendment; and
(j) maintain a transfer agent and registrar for its Common
Shares.
Section 6. Indemnification.
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(a) To the maximum extent permitted by law, the Company
agrees to indemnify and hold harmless the Investor and each person, if any, who
controls the Investor within the meaning of the Securities Act (each a
"Distributing Investor") against any losses, claims, damages or liabilities,
joint or several (which shall, for all purposes of this Agreement, include, but
not be limited to, all reasonable costs of defense and investigation and all
reasonable attorneys' fees and expenses), to which the Distributing Investor may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement, or any related final prospectus or
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that the Company will not be liable in any such case to the extent, and
only to the extent, that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement, preliminary prospectus,
final prospectus or amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to the Company by the
Distributing Investor, its counsel, affiliates or any underwriter, specifically
for use in the preparation thereof. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) To the maximum extent permitted by law, each Distributing
Investor agrees that it will indemnify and hold harmless the Company, and each
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officer and director of the Company or person, if any, who controls the Company
within the meaning of the Securities Act, against any losses, claims, damages or
liabilities (which shall, for all purposes of this Agreement, include, but not
be limited to, all reasonable costs of defense and investigation and all
reasonable attorneys' fees and expenses) to which the Company or any such
officer, director or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement, or any related final prospectus or amendment or supplement thereto,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in such Registration Statement, final prospectus or amendment or supplement
thereto in reliance upon, and in conformity with, written information furnished
to the Company by such Distributing Investor, its counsel, affiliates or any
underwriter, specifically for use in the preparation thereof. This indemnity
agreement will be in addition to any liability which the Distributing Investor
may otherwise have. Notwithstanding anything to the contrary herein, the
Distributing Investor shall be liable under this Section 6(b) for only that
amount as does not exceed the net proceeds to such Distributing Investor as a
result of the sale of Registrable Securities pursuant to the Registration
Statement.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action against such indemnified
party, such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 6, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve the indemnifying party from any liability
which it may have to any indemnified party except to the extent the failure of
the indemnified party to provide such written notification actually prejudices
the ability of the indemnifying party to defend such action. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, assume the defense thereof,
subject to the provisions herein stated and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section 6 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, unless the indemnifying party shall not
pursue the action to its final conclusion. The indemnified parties as a group
shall have the right to employ one separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall not be at the expense of the indemnifying party if the indemnifying party
has assumed the defense of the action with counsel reasonably satisfactory to
the indemnified party unless (i) the employment of such counsel has been
specifically authorized in writing by the indemnifying party, or (ii) the named
parties to any such action (including any impleaded parties) include both the
indemnified party and the indemnifying party and the indemnified party shall
have been advised by its counsel that there may be one or more legal defenses
available to the indemnifying party different from or in conflict with any legal
defenses which may be available to the indemnified party or any other
indemnified party (in which case the indemnifying party shall not have the right
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to assume the defense of such action on behalf of such indemnified party, it
being understood, however, that the indemnifying party shall, in connection with
any one such action or separate but substantially similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable only for the reasonable fees and expenses of one
separate firm of attorneys for the indemnified party, which firm shall be
designated in writing by the indemnified party). No settlement of any action
against an indemnified party shall be made without the prior written consent of
the indemnified party, which consent shall not be unreasonably withheld so long
as such settlement includes a full release of claims against the indemnified
party.
All fees and expenses of the indemnified party (including reasonable
costs of defense and investigation in a manner not inconsistent with this
Section and all reasonable attorneys' fees and expenses) shall be paid to the
indemnified party, as incurred, within ten (10) trading days of written notice
thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder; provided, that the indemnifying party may require such indemnified
party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such indemnified party is not entitled to
indemnification hereunder).
Section 7. Contribution. In order to provide for just and equitable
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contribution under the Securities Act in any case in which (i) the indemnified
party makes a claim for indemnification pursuant to Section 6 hereof but is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 6 hereof provide
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any indemnified party, then the Company and the
applicable Distributing Investor shall contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (which shall, for
all purposes of this Agreement, include, but not be limited to, all reasonable
costs of defense and investigation and all reasonable attorneys' fees and
expenses), in either such case (after contribution from others) on the basis of
relative fault as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or the applicable Distributing Investor on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Distributing Investor agree that it would not be just and equitable if
contribution pursuant to this Section 7 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 this Section 7. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. 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.
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Notwithstanding any other provision of this Section 7, in no event shall (i) the
Investor be required to undertake liability to any person under this Section 7
for any amounts in excess of the dollar amount of the proceeds received by the
Investor from the sale of the Investor's Registrable Securities (after deducting
any fees, discounts and SECs applicable thereto) pursuant to any Registration
Statement under which such Registrable Securities are registered under the
Securities Act or (ii) shall any underwriter be required to undertake liability
to any person hereunder for any amounts in excess of the aggregate discount, SEC
or other compensation payable to such underwriter with respect to the
Registrable Securities underwritten by it and distributed pursuant to such
Registration Statement.
Section 8. Notices. All notices, demands, requests, consents,
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approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) hand delivered,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by facsimile, addressed as set forth in the
Purchase Agreement or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated in the
Purchase Agreement (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the first business day following
the date of sending by reputable courier service, fully prepaid, addressed to
such address, or (c) upon actual receipt of such mailing, if mailed. Either
party hereto may from time to time change its address or facsimile number for
notices under this Section 8 by giving at least ten (10) days' prior written
notice of such changed address or facsimile number to the other party hereto.
Section 9. Assignment. This Agreement is binding upon and inures to
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the benefit of the parties hereto and their respective heirs, successors and
permitted assigns. The rights granted the Investor under this Agreement may not
be assigned.
Section 10. Additional Covenants of the Company. The Company agrees
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that at such time as it otherwise meets the requirements for the use of
Securities Act Registration Statement on Form S-3 for the purpose of registering
the Registrable Securities, it shall file all reports and information required
to be filed by it with the SEC in a timely manner and take all such other action
so as to maintain such eligibility for the use of such form.
Section 11. Counterparts/Facsimile. This Agreement may be executed
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in two or more counterparts, each of which shall constitute an original, but all
of which, when together shall constitute but one and the same instrument, and
shall become effective when one or more counterparts have been signed by each
party hereto and delivered to the other parties. In lieu of the original, a
facsimile transmission or copy of the original shall be as effective and
enforceable as the original.
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Section 12. Remedies. The remedies provided in this Agreement
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are cumulative and not exclusive of any remedies provided by law. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction.
Section 13. Conflicting Agreements. The Company shall not enter into
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any agreement with respect to its securities that is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement or
otherwise prevents the Company from complying with all of its obligations
hereunder.
Section 14. Headings. The headings in this Agreement are for
--------
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 15. Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of California applicable to
contracts made in California by persons domiciled in California and without
regard to its principles of conflicts of laws.
Section 16. Condition to Company's Obligations. Notwithstanding
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anything to the contrary set forth herein, the Company's obligations contained
in this Agreement are conditioned upon the Investor providing the Company with
information required to complete the Selling Shareholder section of the
Registration Statement.
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date set forth in the first
paragraph.
RAPIDTRON, INC.
By:
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CERES FINANCIAL LIMITED
By:
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