Unassociated Document


    REGISTRATION
      RIGHTS AGREEMENT

     

    THIS
      REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
      is
      made and entered into as of May 25, 2006 by and among INNOFONE.COM,
      INCORPORATED, a Nevada corporation (the “Company”),
      and
      the persons and entities who are signatories hereto (the “
      Holders”).

     

    Background

     

    WHEREAS,
      the
      Company and the Holders have entered into, among other documents, that certain
      Letter Agreement, dated May 25, 2006 (the “Letter Agreement”); and

     

    WHEREAS,
      pursuant
      to the Letter Agreement, the Holders were issued warrants to purchase an
      aggregate of 750,000 shares of the Company’s Common Stock (the “Warrant
      Shares”).

     

    The
      parties agree as follows:

     


    1. Certain
      Definitions.
      As used
      herein, the following terms shall have the following respective
      meanings:

    


    "Commission"
      shall
      mean the Securities and Exchange Commission or any other Federal agency at
      the
      time administering the Securities Act.

    


    "Restricted
      Stock" shall
      mean the Warrant Shares, the certificates for which are required to bear the
      legend set forth in Section 2 hereof.

    


    “Registrant”
      shall
      mean the Company or the Public Company Successor, as applicable.

    


    "Securities
      Act" shall
      mean the Securities Act of 1933, as amended, or any similar Federal statute,
      and
      the rules and regulations of the Commission thereunder, all as the same shall
      be
      in effect at the time.

    


    2. Restrictive
      Legend.
      The
      Warrant Shares and each certificate representing such Restricted Stock and,
      except as otherwise provided in Section 3 hereof, each certificate issued upon
      exchange or transfer of any such securities shall be stamped or otherwise
      imprinted with a legend substantially in the following form:

    


    “THE
      SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
      HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
      RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR THE COMPANY RECEIVES
      AN
      OPINION OF COUNSEL FOR THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION
      REQUIREMENTS OF SUCH ACT IS AVAILABLE.”


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    3.
       Notice
      of Proposed Transfer.
      Prior
      to any proposed transfer of any Restricted Stock (other than under the
      circumstances described in Section 4 hereto, the holder thereof shall give
      written notice to the Registrant of its intention to effect such transfer.
      Each
      such notice shall describe the manner of the proposed transfer and, if requested
      by the Registrant, shall be accompanied by an opinion of counsel satisfactory
      to
      the Registrant to the effect that the proposed transfer may be effected without
      registration under the Securities Act, whereupon such holder shall be entitled
      to transfer such securities in accordance with the terms of its notice. All
      Restricted Stock transferred as above provided shall bear the legend set forth
      in Section 2, except that such securities shall not bear such legend if (i)
      such
      transfer is in accordance with the provisions of Rule 144 (or any other rule
      permitting public sale without registration under the Securities Act) or (ii)
      the opinion of counsel referred to above is to the further effect that the
      transferee and any subsequent transferee (other than an affiliate of the
      Registrant) would be entitled to transfer such securities in a public sale
      without registration under the Securities Act.

    


    4. Piggyback
      Registration.
      No
      sooner that six (6) months from the date of the Letter Agreement, if the
      Registrant at any time proposes to register any of its securities under the
      Securities Act for sale to the public, whether for its own account or for the
      account of other security holders or both (other than a registration statement
      on Form-S-4, Form S-8 or other limited purpose form), then in each instance,
      it
      will give written notice to all holders of Restricted Stock of its intention
      so
      to do, provided,
      however, that
      for
      the purposes of this sentence, the Registrant shall treat the holders hereof
      in
      the same manner and in
      pari passu
      with all
      other holders of unregistered capital stock of the Registrant who (i) have
      registration rights with respect to such stock or (ii) presently or at any
      time
      hereafter are officers, directors, or 5% shareholders of the Registrant, or
      any
      affiliate, successor, or assign thereof. Upon the written request of any such
      holders, given within 20 days after the date of any such notice, to register
      any
      of its Restricted Stock (which request shall state the intended method of
      disposition thereof), the Registrant will use its best efforts to cause the
      Restricted Stock as to which registration shall have been so requested to be
      included in the securities to be covered by the registration statement proposed
      to be filed by the Registrant all to the extent requisite to permit the sale
      or
      other disposition by the holders (in accordance with its written request) of
      such Restricted Stock so registered. The Registrant may withdraw any such
      registration statement before it becomes effective or postpone the offering
      of
      securities contemplated by such registration statement without any obligation
      to
      the holders of any Restricted Stock. 

    


    5. Registration
      Procedures.
      If and
      whenever the Registrant is required by the provisions of Section 4 hereof to
      use
      its best efforts to effect the registration of any shares of Restricted Stock
      under the Securities Act, the Registrant will, as expeditiously as
      possible:

    


    (a) prepare
      and file with the Commission a registration statement with respect to such
      securities and use its best efforts to cause such registration statement to
      become and remain effective for the period of the distribution contemplated
      thereby (determined as hereinafter provided),


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    (b) prepare
      and file with the Commission such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as may
      be
      necessary to keep such registration statement effective for the period specified
      in Section 5 (a) above and as to comply with the provisions of the Securities
      Act with respect to the disposition of all Restricted Stock covered by such
      registration statement in accordance with the sellers' intended method of
      disposition set forth in such registration statement for such
      period;

    


    (c) furnish
      to each seller such number of copies of the registration statement and the
      prospectus included therein (including each preliminary prospectus) as such
      persons may reasonably request in order to facilitate the public sale or other
      disposition of the Restricted Stock covered by such registration
      statement;

    


    (d) use
      its
      best efforts to register or qualify the Restricted Stock covered by such
      registration statement under the securities or blue sky laws of such
      jurisdictions as the sellers of Restricted Stock;

    


    (e) immediately
      notify each seller under such registration statement at any time when a
      prospectus relating thereto is required to be delivered under the Securities
      Act, of the happening of any event as a result of which the prospectus contained
      in such registration statement, as then in effect, includes an untrue statement
      of a material fact or omits to state any material fact required to be stated
      therein not misleading in the light of the circumstances then existing;
      and

    


    (f) use
      its
      best efforts to furnish, at the request of any seller, on the date that
      Restricted Stock is delivered for sale pursuant to such registration: (i) an
      opinion dated such date of counsel representing the Registrant for the purposes
      of such registration, and (ii) a letter dated such date from the independent
      public accountants retained by the Registrant.

    


    In
      connection with each registration hereunder, the selling holders of Restricted
      Stock will furnish to the Registrant in writing such information with respect
      to
      themselves and the proposed distribution by them as shall be necessary in order
      to assure compliance with Federal and applicable state securities laws or as
      the
      Registrant may reasonably request.

     

    



    6.
       Expenses.
      All
      expenses incurred by the Registrant in complying with Section 4 hereof,
      including, without limitation, all registration and filing fees, printing
      expenses, fees and disbursements of counsel and independent public accountants
      for the Registrant, fees of the National Association of Securities Dealers,
      Inc., fees of transfer agents and registrars, but excluding any Selling
      Expenses, are herein called "Registration
      Expenses".
      

    


    The
      Registrant will pay all Registration Expenses in connection with each
      registration statement filed pursuant to Section 4 hereof. 


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    7.
       Indemnification.
      In the
      event of a registration of any of the Restricted Stock under the Securities
      Act
      pursuant to Section 4 hereof, the Registrant will indemnify and hold harmless
      each seller of such Restricted Stock thereunder and each underwriter of such
      Restricted Stock thereunder and each other person, if any, who controls such
      seller or underwriter within the meaning of the Securities Act, against any
      and
      all losses, claims, damages, expenses or liabilities, joint or several, to
      which
      such seller or underwriter or controlling person may become subject under the
      Securities Act or otherwise, insofar as such losses, claims, damages or
      liabilities (or actions in respect thereto arise out of or are based upon any
      untrue statement or alleged untrue statement of any material fact contained
      in
      any registration statement under which such Restricted Stock was registered
      under the Securities Act pursuant to Section 4, any preliminary prospectus
      or
      final prospectus contained therein, or any amendment or supplement thereof,
      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, and will reimburse each such seller, each
      such underwriter and each such controlling person for any legal or other
      expenses reasonably incurred by them in connection with investigating or
      defending any such loss, claim, damage, liability, expense or action;
provided,
      however,
      that the
      Registrant will not be liable in any such case if and 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 so made
      in
      conformity with information furnished by such seller, such underwriter or such
      controlling person in writing specifically for use in such registration
      statement or prospectus.

    


    In
      the
      event of a registration of any of the Restricted Stock under the Securities
      Act
      pursuant to Section 4 hereof, each seller of such Restricted Stock thereunder,
      severally and not jointly, will indemnify and hold harmless the Registrant
      and
      each person, if any, who controls the Registrant within the meaning of the
      Securities Act, each officer of the Registrant who signs the registration
      statement, each director of the Registrant, each underwriter and each person
      who
      controls any underwriter within the meaning of the Securities Act, against
      all
      losses, claims, damages, expenses or liabilities, joint or several, to which
      the
      Registrant or such officer or director or underwriter or controlling person
      may
      become subject under the Securities Act or otherwise, insofar as such losses,
      claims, damages, expenses 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 the registration statement under which such
      Restricted Stock was registered under the Securities Act pursuant to Section
      4,
      any preliminary prospectus or final prospectus contained therein, or any
      amendment or supplement thereof, 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, and will
      reimburse the Registrant and each such officer, director, underwriter and
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action, and provided,
      however,
      that
      such seller will be liable hereunder in any such case if 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 reliance upon and in conformity with information pertaining to such
      seller, as such, furnished in writing to the Registrant by such seller
      specifically for use in such registration statement or prospectus; provided,
      further, however,
      that the
      liability of each seller hereunder shall be limited to the proportion of any
      such loss, claim, damage, liability or expense which is equal to the proportion
      that the public offering price of the shares sold by such seller under such
      registration statement bears to the total public offering price of all
      securities sold thereunder, but not to exceed the proceeds received by such
      seller from the sale of Restricted Stock covered by such registration statement.
      


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    Promptly
      after receipt by an indemnified party hereunder of notice of the commencement
      of
      any action, such indemnified party shall, if a claim in respect thereof is
      to be
      made against the indemnifying party hereunder, notify the indemnifying party
      in
      writing thereof, but the omission so to notify the indemnifying party shall
      not
      relieve it from any liability which it may have to any indemnified party under
      this Section 7. In case any such action shall be brought against any indemnified
      party and it shall notify the indemnifying party of the announcement thereof,
      the indemnifying party shall be entitled to participate in and, to the extent
      it
      shall wish, to assume and undertake the defense thereof with counsel reasonably
      satisfactory to such indemnified party, and, after notice from the indemnifying
      party to such indemnified party of its election to assume and undertake the
      defense thereof, the indemnifying party shall not be liable to such indemnified
      party under this Section 7 for any legal expenses subsequently incurred by
      such
      indemnified party in connection with the defense thereof other than reasonable
      costs of investigation and of liaison with counsel so selected; provided,
      however,
      that, if
      the defendants in any such action include both the indemnified party and the
      indemnifying party and the indemnified party shall have reasonably concluded
      that there may be reasonable defenses available to it which are different from
      or additional to those available to the indemnifying party or if the interests
      of the indemnified party reasonably may be deemed to conflict with the interests
      of the indemnifying party, the indemnified party shall have the right to select
      a separate counsel and to assume such legal defenses and otherwise to
      participate in the defense of such action, with the expenses and fees of such
      separate counsel and other expenses related to such participation to be
      reimbursed by the indemnifying party as incurred.

    


    Notwithstanding
      the foregoing, any indemnified party shall have the right to retain its own
      counsel in any such action, but the fees and disbursements of such counsel
      shall
      be at the expense of such indemnified party unless (i) the indemnifying party
      shall have failed to retain counsel for the indemnified person as aforesaid
      or
      (ii) the indemnifying party and such indemnified party shall have mutually
      agreed to the retention of such counsel. It is understood that the indemnifying
      party shall not, in connection with any action or related actions in the same
      jurisdiction, be liable for the fees and disbursements of more than one separate
      firm qualified in such jurisdiction to act as counsel for the indemnified party.
      The indemnifying party shall not be liable for any settlement of any proceeding
      effected without its written consent, but if settled with such consent or if
      there be a final judgment for the plaintiff, the indemnifying party agrees
      to
      indemnify the indemnified party from and against any loss or liability by reason
      of such settlement or judgment. If the indemnification provided for in the
      first
      two paragraphs of this Section 7 is unavailable to or insufficient to hold
      harmless an indemnified party under such paragraphs in respect of any losses,
      claims, damages or liabilities or actions in respect thereof referred to
      therein, then each indemnifying party shall in lieu of indemnifying such
      indemnified party contribute to the amount paid or payable by such indemnified
      party as a result of such losses, claims, damages, liabilities or actions in
      such proportion as appropriate to reflect the relative fault of the Registrant,
      on the one hand, and the sellers of such Restricted Stock, on the other, in
      connection with the statement or omissions which resulted in such losses,
      claims, damages, liabilities or actions, as well as any other relevant equitable
      considerations including the failure to give any notice under the third
      paragraph of this Section 7. 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 Registrant, on the one hand, or by the
      sellers of such Restricted Stock, on the other, and to the parties' relative
      intent, knowledge, access to information and opportunity to correct or prevent
      such statement or omission.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      Registrant and the sellers of Restricted Stock agree that it would not be just
      and equitable if contribution pursuant to this Section 7 were determined by
      pro
      rata
      allocation (even if all of the sellers of Restricted Stock were treated as
      one
      entity for such purpose) or by any other method of allocation which does not
      take account of the equitable considerations referred to in the immediately
      preceding paragraph. The amount paid or payable by an indemnified party as
      a
      result of the losses, claims, damages, liabilities or action in respect thereof,
      referred to in the immediately preceding paragraph shall be deemed to include,
      subject to the limitations set forth above, any legal or other expenses
      reasonably incurred by such indemnified party in connection with investigating
      or defending any such action or claim. Notwithstanding the provisions of this
      and the immediately preceding paragraph, the sellers of such Restricted Stock
      shall not be required to contribute any amount in excess of the amount, if
      any,
      by which the total price at which the Restricted Stock sold by each of them
      was
      offered to the public exceeds the amount of any damages which they would have
      otherwise been required to pay by reason of such untrue or alleged untrue
      statement of omission. 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 is not guilty of such fraudulent
      misrepresentation. The indemnification of underwriters provided for in this
      Section 7 shall be on such other terms and conditions as are at the time
      customary and reasonably required by such underwriters. 

    


    



    8. Rule
      144 Reporting.
      From
      and after the date hereof, the Registrant agrees with the holders of Restricted
      Stock as follows:

    


    (a) The
      Registrant shall make and keep public information available as those terms
      are
      understood and defined in Rule 144 under the Securities Act, at all times from
      and after 90 days following the effective date of the first registration of
      the
      Registrant under the Securities Act of an offering of its common stock to the
      general public.

    


    (b) The
      Registrant shall file with the Commission in a timely manner all reports and
      other documents as the Commission may prescribe under Section 13(a) or 15(d)
      of
      the Securities Exchange Ac of 1934, as amended (the “Exchange
      Act”)
      at any
      time after the Registrant has become subject to such reporting requirements
      of
      the Exchange Act.

    


    (c) The
      Registrant shall furnish to such holder of Restricted Stock forthwith upon
      request (i) a written statement by the Registrant as to its compliance with
      the
      reporting requirements of Rule 144 (at any time from and after 90 days following
      the effective date of the first registration statement of the Registrant for
      an
      offering of its common stock to the general public), and of the Securities
      Act
      and the Exchange Act (at any time after it has become subject to such reporting
      requirements), (ii) a copy of the most recent annual or quarterly report of
      the
      Registrant and (iii) such other reports and documents so filed as a holder
      may
      reasonably request to avail itself of any rule or regulation of the Commission
      allowing a holder of Restricted Stock to sell any such securities without
      registration.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    9. Miscellaneous.

     

    (a)
       The
      rights arising under Section 4 shall terminate on the fifth anniversary of
      this
      Agreement, or if earlier, when (i) the holder of the Restricted Stock is no
      longer an "affiliate" as used in Rule 144 and (ii) the holder of the Restricted
      Stock is permitted to sell all Restricted Stock then held by it pursuant to
      Rule
      144(k).

    


    (b) All
      covenants and agreements contained in this Agreement by or on behalf of any
      of
      the parties hereto shall bind and inure to the benefit of the respective
      successors and assigns of the parties hereto whether so expressed or not.
      Without limiting the generality of the foregoing, the registration rights
      conferred herein on the holders of Restricted Stock shall inure to the benefit
      of any and all subsequent permitted holders from time to time of the Restricted
      Stock for so long as the certificates representing the Restricted Stock shall
      be
      required to bear the legend specified in Section 2 hereof.

    


    (c) All
      notices, requests, consents and other communications hereunder shall be in
      writing and shall be mailed by generally recognized overnight courier, postage
      prepaid, to the holder of the Restricted Stock at its, his, or her address
      set
      forth in the records of the Registrant and to the Registrant at its principal
      place of business or, in any case, at such other address or addresses as shall
      have been furnished in writing to the Registrant (in the case of a holder of
      Restricted Stock) or to the holders of Restricted Stock (in the case of the
      Registrant).

    


    (d) This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York.

     

    (e) EACH
      PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR
      PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
      CONTEMPLATED HEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR
      OF
      THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY
      EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR
      THE
      PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM
      THAT THE SUCH COURTS ARE AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY
      CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
      SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED
      OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 9(C)],
      SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    (f) This
      Agreement constitutes the entire agreement of the parties with respect to the
      subject matter hereof and may not be modified or amended except in
      writing.

    


    (g) This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, but all of which together shall constitute one and the same
      instrument.

    


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      of page left intentionally blank]

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Registration Rights Agreement as of the date
      and year first written above.

     

    INNOFONE.COM,
      INCORPORATED

     

    By:
      /s/
      Alex Lightman

    Alex
      Lightman

    Chief
      Executive Officer

     

    


     

    AJW
      PARTNERS, LLC

    By:
      SMS
      Group, LLC

     

    By:
      /s/
      Corey S. Ribotsky

    Corey
      S.
      Ribotsky

    Manager

     

    


     

    AJW
      OFFSHORE, LTD.

    By:
      First
      Street Manager II, LLC

     

    By:
      /s/
      Corey S. Ribotsky

    Corey
      S.
      Ribotsky

    Manager

     

    


     

    AJW
      QUALIFIED PARTNERS, LLC

    By:
      AJW
      Manager, LLC

     

    By:
      /s/
      Corey S. Ribotsky

    Corey
      S.
      Ribotsky

    Manager

     

    


     

    NEW
      MILLENNIUM CAPITAL PARTNERS II, LLC

    By:
      First
      Street Manager II, LLC

     

    By:
      /s/
      Corey S. Ribotsky

    Corey
      S.
      Ribotsky

    Manager