Exhibit 10.3

 

SUBSCRIPTION  AGREEMENT

 

This Subscription Agreement (this “Agreement”) is dated as of September 19,
2018, between One Horizon Group, Inc., a Delaware corporation (the “Company”),
and the person and/or entity identified on the signature page hereto
(“Purchaser”).

 

The Company is offering (the “Offering”) up to Four Million Five Hundred
Thousand (4,500,000) shares of the Company’s common stock, par value $0.0001 per
share (“Common Stock”), for a purchase price of Three Hundred Sixty Thousand
Dollars ($360,000).

 

The Offering will commence September 19, 2018, and terminate on the close of
business on September 21, 2018 (“Initial Offering Period”), which period may be
extended by the Company for up to an additional ten (10) days (this additional
period and the Initial Offering Period shall be referred to as the “Offering
Period”). The Company may hold one or more subsequent closings (“Further
Closings”) until the termination or expiration of the Offering Period until such
time as the Offering is filled. There is no requirement that the entire Offering
be filled for the Company to accept proceeds from the sale of the Common Stock
that is the subject of this Offering and to issue such Common Stock to one or
more Purchasers.

 

Purchaser desires to purchase, and the Company is willing to sell to the
Purchaser, upon the terms and conditions stated in this Agreement, the number of
Shares set forth on the signature page hereof (“Purchased Shares”), for the
purchase price set forth on the signature page hereof (“Purchase Price”).

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and Purchaser agree as
follows:

 

ARTICLE I

PURCHASE AND SALE

 

1.1       Purchase of the Securities. Subject to the terms and conditions of
this Agreement, the Purchaser, intending to be legally bound, hereby irrevocably
subscribes for and agrees to purchase the Purchased Shares, and the Company
agrees to issue the Purchased Shares against its receipt of the Purchase Price.

 

1.2       Deliveries. The Purchaser will deposit the Purchase Price for the
Securities to an account designated by the Company by wire transfer of
immediately available funds. The Company will deliver to the Purchaser the
Securities against the Company’s receipt of the Purchase Price.

 

ARTICLE II 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to Purchaser as follows:

 

2.1        Organization; Good Standing; and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The shares of the Company’s common stock are currently traded
on NASDAQ.

 

2.2        Authorization. The Company possesses the legal right and capacity to
execute, deliver and perform this Agreement. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of the Company’s certificate of incorporation or
bylaws. The Company has taken all action required by law, its certificate of
incorporation, its bylaws, or otherwise to authorize the execution and delivery
of this Agreement and the issuance of the Shares, and the Company has full
power, authority, and legal right and has taken all action required by law, its
certificate of incorporation, bylaws, or otherwise to consummate the
transactions herein contemplated. This Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except to the extent such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, receivership, fraudulent conveyance or
similar laws affecting or relating to the enforcement of creditors’ rights
generally, and by equitable principles (regardless of whether enforcement is
sought in a proceeding in equity or at law).

 

 

 

 

2.3        Issuance of the Shares. The Shares have been duly authorized, and
when issued in accordance with the terms set forth in this Agreement, will be
duly authorized, and duly and validly issued, fully paid and non-assessable,
free and clear of all liens imposed by the Company.

 

2.4        SEC Filings; Financial Statements.

 

(a) There has been available on the SEC EDGAR website, copies of each report,
registration statement and definitive proxy statement filed by Company with the
SEC since at least January 1, 2017 (the “Company SEC Reports”), which are all
the forms, reports and documents filed by Company with the SEC from January 1,
2017 to the date of this Agreement. As of their respective dates, the Company
SEC Reports: (i) were prepared in accordance and complied in all material
respects with the requirements of the Securities Act or the Securities Exchange
Act of 1934 (“Exchange Act”), as the case may be, and the rules and regulations
of the SEC thereunder applicable to such Company SEC Reports; and (ii) did not
at the time they were filed (and if amended or superseded by a filing prior to
the date of this Agreement then on the date of such filing and as so amended or
superseded) contain any untrue statement of a material fact or omit to state a
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.

 

(b)       Each set of financial statements (including, in each case, any related
notes thereto) contained in the Company SEC Reports comply as to form in all
material respects with the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with U.S. Generally Accepted
Accounting Principles (“GAAP”) applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, do not contain footnotes as permitted by Form 10-Q
promulgated under the Exchange Act) and each fairly presents in all material
respects the financial position of Company at the respective dates thereof and
the results of its operations and cash flows for the periods indicated.

 

2.5        Information. The information concerning the Company set forth in this
Agreement and the Company SEC Reports is complete and accurate in all material
respects and does not contain any untrue statements of a material fact or omit
to state a material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents and warrants to the Company as follows:

 

3.1       Incorporation; Authority. Purchaser is either an individual or an
entity duly incorporated or formed, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power and authority
to enter into and to consummate the transactions contemplated by this Agreement
and otherwise to carry out its or his obligations hereunder. The execution and
delivery of this Agreement and performance by Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate, partnership, limited liability company or similar action, as
applicable, on the part of Purchaser. This Agreement, when delivered by
Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of Purchaser, enforceable against it or him in
accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally; (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies; and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

 

 

 

 

3.2        Own Account. Purchaser understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Securities as principal
for its own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities
in violation of the Securities Act or any applicable state securities law.
Purchaser is acquiring the Securities hereunder in the ordinary course of its
business.

 

3.3         Purchaser Status. At the time Purchaser was offered the Shares, it
was, and as of the date hereof it is an “accredited investor” as defined in SEC
Regulation D, Rule 501(a).

 

3.4        Experience of Purchaser. Purchaser, either alone or together with its
or his representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Purchased Shares. Purchaser is able
to bear the economic risk of an investment in the Purchased Shares and, at the
present time, is able to afford a complete loss of such investment.

 

3.5        General Solicitation. Purchaser is not purchasing the Purchased
Shares as a result of any advertisement, article, notice or other communication
regarding the Shares published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

 

3.6       Access to Information. Purchaser acknowledges that it or he has had
the opportunity to review this Agreement (including all exhibits and schedules
thereto) and the SEC Reports and has been afforded (i) the opportunity to ask
such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the Shares
and the merits and risks of investing in the securities of the Company; (ii)
access to information about the Company and its financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company owns or can acquire without unreasonable
effort or expense that is necessary to make an informed investment decision with
respect to the investment. 

 

ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES

 

4.1       Transfer Restrictions.

 

(a)       The Purchased Shares only may be disposed of in compliance with state
and federal securities laws. In connection with any transfer of Securities other
than pursuant to an effective registration statement or Rule 144, to the Company
or to an “affiliate” (as defined in Rule 405 of the Securities Act) of a
Purchaser, the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Purchased Shares under the
Securities Act. As a condition of transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights and
obligations of a Purchaser under this Agreement.

  

(b)       The Purchaser agrees to the imprinting, so long as is required by this
Section 4.1, of a legend on any of the Purchased Shares in the following form:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.”

 

 

 

 

4.2        Use of Proceeds. The Company shall use the net proceeds from the sale
of the Purchased Shares hereunder for working capital purposes.

 

4.3        Registration. The Company hereby agrees to file a registration
statement under the Securities Act for the resale of the Purchased Shares and
any other securities issued upon conversion or exchange or otherwise in respect
thereof, including without limitation pursuant to any stock dividend, stock
split, merger, consolidation or other recapitalization transaction
(collectively, the “Registrable Securities”), in accordance with Appendix A
annexed hereto not more than fifteen (15) days after the date of the First
Closing.

 

4.4         Indemnification.

 

(a)The Company agrees to indemnify and hold harmless Purchaser and each of the
other Indemnified Parties (as hereinafter defined) from and against any and all
losses, claims, damages, obligations, penalties, judgments, awards, liabilities,
costs, expenses and disbursements, and any and all actions, suits, proceedings
and investigations in respect thereof and any and all legal and other costs,
expenses and disbursements in giving testimony or furnishing documents in
response to a subpoena or otherwise (including, without limitation, the costs,
expenses and disbursements, as and when incurred, of investigating, preparing,
pursing or defending any such action, suit, proceeding or investigation (whether
or not in connection with litigation in which any Indemnified Party is a party)
(collectively, “Losses”), directly or indirectly, caused by, relating to, based
upon, arising out of, or in connection with, Purchaser’s purchase of the
Purchased Shares pursuant to the terms of this Agreement, any breach by the
Company of any representation, warranty, covenant or agreement contained in this
Agreement, or the enforcement by Purchaser of its rights under this Agreement,
except to the extent that any such Losses are found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) to have resulted
primarily and directly from the willful misconduct of the Indemnified Party
seeking indemnification hereunder.

 

(b)These indemnification provisions shall extend to the following persons
(collectively, the “Indemnified Parties”): Purchaser, its present and former
affiliated entities, partners, employees, legal counsel, agents, advisors and
controlling persons (within the meaning of the federal securities laws), and the
officers, directors, partners, stockholders, members, managers, employees, legal
counsel, agents, advisors and controlling persons of any of them. These
indemnification provisions shall be in addition to any liability that the
Company may otherwise have to any Indemnified Party.

 

(c)If any action, suit, proceeding or investigation is commenced, as to which an
Indemnified Party proposes to demand indemnification, it shall notify the
Company with reasonable promptness; provided, however, that any failure by an
Indemnified Party to notify the Company shall not relieve the Company from its
obligations hereunder. An Indemnified Party shall have the right to retain
counsel of its own choice to represent it, and the fees, expenses and
disbursements of such counsel shall be borne by the Company. Any such counsel
shall, to the extent consistent with its professional responsibilities,
cooperate with the Company and any counsel designated by them. The Company shall
be liable for any settlement of any claim against any Indemnified Party made
with the written consent of the Company. The Company shall not, without the
prior written consent of Purchaser, settle or compromise any claim, or permit a
default or consent to the entry of any judgment in respect thereof, unless such
settlement, compromise or consent (i) includes, as an unconditional term
thereof, the giving by the claimant to all of the Indemnified Parties of an
unconditional release from all liability in respect of such claim; and (ii) does
not contain any factual or legal admission by or with respect to an Indemnified
Party or an adverse statement with respect to the character, professionalism,
expertise or reputation of any Indemnified Party or any action or inaction of
any Indemnified Party.

 

 

 

 

(d)In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification in such case,
then the Company shall contribute to the Losses to which any Indemnified Party
may be subject: (i) in accordance with the relative benefits received by the
Company and its stockholders, subsidiaries and affiliates, on the one hand, and
the Indemnified Party, on the other hand; and (ii) if (and only if) the
allocation provided in clause (i) of this sentence is not permitted by
applicable law, in such proportion as to reflect not only the relative benefits,
but also the relative fault of the Company, on the one hand, and the Indemnified
Party, on the other hand, in connection with the statements, acts or omissions
that resulted in such Losses as well as any relevant equitable considerations.
No person found liable for a fraudulent misrepresentation shall be entitled to
contribution from any person who is not also found liable for fraudulent
misrepresentation. The relative benefits received (or anticipated to be
received) by the Company and its stockholders, subsidiaries and affiliates shall
be deemed to be equal to the purchase price for the Purchased Shares.

 

(e)The indemnification provisions shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of the Indemnified Parties
and their respective successors, assigns, heirs and personal representatives and
shall remain operative and in full force and effect after the Closing and for
the maximum time period allowable under applicable law.

 

ARTICLE V
MISCELLANEOUS

 

5.1        Waivers. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein or in any other documents. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach. Any party
hereto may, at or before the Closing, waive any conditions to its obligations
that are unfulfilled.

 

5.2        Binding Effect; Benefits. This Agreement shall inure to the benefit
of the parties hereto and shall be binding upon them and their respective their
heirs, executors, administrators, successors, legal representatives and assigns.
Except as otherwise set forth herein, nothing in this Agreement, expressed or
implied, is intended to confer upon any person other than the parties hereto or
their respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.

 

5.3        Assignment; Delegation. No party to this Agreement may assign its
rights or delegate its obligations hereunder without the prior written consent
of all of the other parties. Any assignment or delegation in violation of this
Section 5.3 shall be null and void.

 

5.4        Entire Agreement. This Agreement constitutes the entire agreement and
supersedes all prior agreements, statements, representations or promises, oral
and written, among the parties hereto with respect to the subject matter hereof.
No party hereto shall be bound by or charged with any written or oral arguments,
representations, warranties, statements, promises or understandings not
specifically set forth in this Agreement.

 

5.5         Notices. Any notice, demand or other communication which any party
hereto may be required, or may elect, to give to anyone interested hereunder
shall be sufficiently given if sent prepaid, with a recognized international
courier service.

 

5.6         Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles. If there is any litigation relating to
this Agreement or the transaction contemplated hereby, the parties hereto
irrevocably consent to the jurisdiction of the courts of the State of New York
and of any court located in such State in connection with any action or
proceeding arising out of or relating to this Agreement, any document or
instrument delivered pursuant to, in connection with or simultaneously with this
Agreement, or a breach of this Agreement or any such document or instrument.

 

5.7        Severability. If any term or provision of this Agreement shall to any
extent be finally determined by a court of competent jurisdiction to be invalid
or unenforceable, the remainder of this Agreement shall not be affected thereby,
and each term and provision of the agreement shall be valid and enforced to the
fullest extent permitted by law, provided that as so enforced, each of the
parties receives substantially all of the benefits contemplated hereby.

 

 

 

 

5.8        Counterparts. This Agreement may be executed through the use of
separate signature pages or in any number of counterparts and by e-mail, and
each of such counterparts shall, for all purposes, constitute a single agreement
binding on all parties, notwithstanding that all parties are not signatories to
the same counterpart.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year this subscription has been accepted by the Company as set forth
below.

 

Name of Purchaser: Bespoke Growth Partners, Inc.

 

Signature of Individual or Authorized Signatory:  [img001_v1.jpg]  

  

Email Address of Authorized Signatory: mhp@123bgp.com

 

Address for Notices to Purchaser: 

 

Legal & Compliance, LLC

c/o Bespoke Growth Partners, Inc.

330 Clematis Street, Ste. 217

West Palm Beach, FL 33401

 

Address for Delivery of Securities to Purchaser (if not same as address for
notice):

 

Social Security (Individual) or EIN Number (Entity): 26-4498468

 

Number of Shares Purchased: 4,500,000

 

Purchase Price: $360,000

 

ACCEPTANCE OF SUBSCRIPTION 

        ONE HORIZON GROUP, INC.         By: [img002_v1.jpg]     Martin Ward    
Chief Financial Officer     Duly Authorized

 

Date: September 19, 2018

 

 

 

 

Appendix A

 

REGISTRATION RIGHTS

 

(a)  As used in this Appendix A the following capitalized terms used without
definition shall have the meanings assigned to them below:

 

  1. “Damages” means any loss, damage, or liability (joint or several) to which
a party hereto may become subject under the Securities Act, the Exchange Act, or
other federal or state law, insofar as such loss, damage, or liability (or any
action in respect thereof) arises out of or is based upon: (i) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement of the Company filed pursuant hereto, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto; (ii) an omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading; or (iii) any violation or alleged violation by the
indemnifying party (or any of its agents or affiliates) of the Securities Act,
the Exchange Act, any state securities law, or any rule or regulation
promulgated under the Securities Act, the Exchange Act, or any state securities
law based upon, or arising out of, any of such party’s obligations arising
hereunder.      

  2. “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time-to-time, and the rules and regulations promulgated thereunder.      

  3. “Person” means any individual, corporation, partnership, trust, limited
liability company, association or other entity.      

  4. “Registrable Securities” means the Shares and or other securities issued
upon conversion or exchange or otherwise in respect thereof, including without
limitation pursuant to any stock dividend, stock split, merger, consolidation or
other recapitalization transaction.      

  5. “SEC” means the Securities and Exchange Commission.      

  6. “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities
Act, as in effect from time-to-time.

 

  7. “Securities Act” means the Securities Act of 1933, as amended from
time-to-time, and the rules and regulations promulgated thereunder.      

  8. “Selling Expenses” means all underwriting discounts, selling commissions,
and stock transfer taxes applicable to the sale of Registrable Securities, and
the fees and expenses of counsel to the Buyer.

 

 

 

 

(b) Not later than fifteen (15) days after the date of the First Closing, the
Company will file a registration statement under the Securities Act for the
resale of the Registrable Securities by the Purchaser on Form S-3, or if the
Company does not then qualify to use Form S-3, Form S-1 or such other form as it
is then eligible to use for the resale of the Registrable Securities (the
“Registration Statement”) and shall use its reasonable commercial efforts to
have the Registration Statement declared effective by the SEC and maintain the
effectiveness of the Registration Statement until all of the Registrable
Securities have been sold or are eligible for sale pursuant to Rule 144 without
restriction. The Company shall furnish the Purchaser with a copy of the
prospectus included in the Registration Statement at the time it is declared
effective and any amendments or supplements thereto. The Company shall notify
Purchaser of the happening of any event of which the Company has knowledge as a
result of which the prospectus contained in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and promptly
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of the Registrable Securities, such prospectus shall
not include 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
Company may postpone for up to ninety (90) days the delivery of any such
supplement or amendment if the Company’s Board of Directors determines in good
faith that disclosure of the new information to be contained therein would
reasonably be expected to have a material adverse effect on: (i) any proposal or
plan by the Company or any of its affiliates to engage in any acquisition of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer, reorganization or similar transaction; or (ii) any
pending or threatened litigation to which the Company is, or is threatened to be
made, a party.

 

As a condition to the registration of the Registrable Securities, the Purchaser
shall furnish the Company and its counsel with such information regarding
itself, the Registrable Securities held by it, and the intended method of
disposition of such Registrable Securities as is reasonably required to file the
Registration Statement and cause the timely registration of the Registrable
Securities.

 

The Company shall pay all expenses (other than Selling Expenses), and stock
transfer taxes applicable to the sale of the Registrable Securities, and the
fees and expenses of counsel to the Purchaser) incurred in connection with the
registration of the Registrable Securities, including all registration, filing
and accounting fees, and fees and disbursements of counsel for the Company.

 

(c)(1) To the extent permitted by law, the Company will indemnify and hold
harmless the Purchaser, and the partners, members, officers, directors, and
shareholders of the Purchaser, and each Person, if any, who controls the
Purchaser, against any Damages, and the Company will pay to the Purchaser,
controlling Person, or other aforementioned Person any legal fees and other
expenses reasonably incurred thereby in connection with investigating or
defending any claim or proceeding from which Damages may result, as such
expenses are incurred; provided, however, that such indemnity shall not apply to
amounts paid in settlement of any such claim or proceeding if such settlement is
effected without the consent of the Company, which consent shall not be
unreasonably withheld, nor shall the Company be liable for any Damages to the
extent that they arise out of or are based upon actions or omissions made in
reliance upon and in conformity with written information furnished by or on
behalf of the Purchaser, controlling Person, or other aforementioned Person
expressly for use in connection with such registration.

 

(c)(2) To the extent permitted by law, the Purchaser will indemnify and hold
harmless the Company, and each of its directors, each of its officers who has
signed the Registration Statement, each Person (if any), who controls the
Company within the meaning of the Securities Act, legal counsel for the Company,
against any Damages, in each case only to the extent that such Damages arise out
of or are based upon actions or omissions made in reliance upon and in
conformity with written information furnished by or on behalf of the Purchaser
expressly for use in connection with such registration; and the Purchaser will
pay to the Company and each other aforementioned Person any legal fees and other
expenses reasonably incurred thereby in connection with investigating or
defending any claim or proceeding from which Damages may result, as such
expenses are incurred; provided, however, that such indemnity shall not apply to
amounts paid in settlement of any such claim or proceeding if such settlement is
effected without the consent of the Purchaser, which consent shall not be
unreasonably withheld; and provided further that in no event shall the aggregate
amounts payable by the Purchaser by way of such indemnity exceed the Purchase
Price.

 

 

 

 

(c)(3) Promptly after receipt by an indemnified party of notice of the
commencement of any action (including any governmental action) for which a party
may be entitled to indemnification hereunder, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party, give the
indemnifying party notice of the commencement thereof. The indemnifying party
shall have the right to participate in such action and, to the extent the
indemnifying party so desires, participate jointly with any other indemnifying
party to which notice has been given, and to assume the defense thereof with
counsel reasonably mutually satisfactory to the parties; provided, however, that
an indemnified party (together with all other indemnified parties that may be
represented without conflict by counsel) shall have the right to retain separate
counsel, with the reasonable fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such action. The failure to give notice to the
indemnifying party within a reasonable time of the commencement of any such
action will not relieve such indemnifying party of any liability to the
indemnified party, except to the extent, and only to the extent, that such
failure actually and materially prejudices the indemnifying party’s ability to
defend such action. The failure to give notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnified party
otherwise than as provided herein.

 

(c)(4) To provide for just and equitable contribution to joint liability under
the Securities Act in any case in which either: (i) any party otherwise entitled
to indemnification hereunder makes a claim for indemnification pursuant to this
Appendix A but it 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 this Appendix A provides
for indemnification in such case; or (ii) contribution under the Securities Act
may be required on the part of any party hereto for which indemnification is
provided under this Appendix A, then, and in each such case, such parties will
contribute to the aggregate losses, claims, damages, liabilities, or expenses to
which they may be subject (after contribution from others) in such proportion as
is appropriate to reflect the relative fault of each of the indemnifying party
and the indemnified party in connection with the statements, omissions, or other
actions that resulted in such loss, claim, damage, liability, or expense, as
well as to reflect any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or allegedly untrue
statement of a material fact, or the omission or alleged omission of a material
fact, relates to information supplied by the indemnifying party or by the
indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided, however, that, in any such case, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation; and provided further that in no event shall the
aggregate amounts payable by the Purchaser by way of indemnity or contribution
exceed the Purchase Price.

 

(d) The obligations of the Company and the Purchaser under this Appendix A shall
survive the completion of any offering of the Registrable Securities in a
registration under this Appendix A, and otherwise shall survive the termination
of this Agreement for the maximum time period allowable under applicable law.