Document:

ex4-13.htm

    Exhibit
4.13

     

    THE
SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE APPLICABLE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE REQUIREMENTS OF
SUCH ACT AND THE APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER
JURISDICTION.

    

    WARRANT
TO PURCHASE

    800,000
SHARES

    OF
THE COMMON STOCK OF

    TN-K
ENERGY GROUP INC.

     

    
      	
              Warrant
      No.:  2005-9   

            	
              Date
      of Original Issuance: September 9,
2004

            

    

    Date
of Re-Issuance: February 19, 2010

    

    This certifies that TEJAS INCORPORATED
or his, her or its permitted assigns (each individually, a "Holder")
for value received, shall be entitled to purchase from TN-K Energy Group Inc., a
Delaware corporation formerly known as Digital Lifestyles Group, Inc. (the
"Company"),
having its principal place of business at 649 Sparta Highway, Suite 102,
Crossville, TN  38555, a maximum of 800,000 fully paid and
nonassessable shares of the Company's common stock, par value $0.03 per share
("Common
Stock"), for a purchase price equal to $0.475 per share (the "Exercise
Price") at any time, or from time to time, up to and including 5:00 p.m.,
Central Standard time on September 9, 2012 (the "Expiration
Date"), upon (i) the surrender to the Company at its principal place of
business (or at such other location as the Company may advise the Holder in
writing) of this Warrant and a Form of Subscription in substantially the form
attached hereto duly completed and executed and, (ii) if applicable, payment in
cash or by check or other consideration permitted pursuant to Section 1(b) hereof
of the aggregate Exercise Price for the number of shares for which this Warrant
is being exercised, determined in accordance with the provisions hereof. The
Exercise Price and the number of shares of Common Stock purchasable hereunder
are subject to adjustment as provided in Section 3
hereof.

    

    This Warrant is one of a series of
Warrants issued for shares of Common Stock of the Company pursuant to that
certain Securities Purchase Agreement, dated September 9, 2004, by and among the
Company and various purchasers (collectively, the "Warrant
Series").  This Warrant represents the remainder of Warrant No.
2005-8 after a partial exercise of such warrant.

    

    This Warrant is subject to the
following terms and conditions:

    

    1.           Exercise; Issuance of
Certificates; Payment For Shares.

    

    (a)           General. This Warrant
is exercisable at the option of the Holder of record hereof, at any time or from
time to time up to the Expiration Date for all or any part of the shares of
Common Stock (but not for a fraction of a share) which may be purchased
hereunder. The Company agrees that the shares of Common Stock purchased under
this Warrant shall be and are deemed to be issued to the Holder hereof as the
record owner of such shares as of the close of business on the date on which (i)
this Warrant shall have been surrendered, properly endorsed, (ii) the completed,
executed Form of Subscription shall have been surrendered, and (iii) payment
shall have been made to the Company for such shares, in each case, at the
Company's address set forth above (or at such other location as the Company may
advise the Holder in writing). Certificates for the shares of Common Stock so
purchased, together with any other securities or property to which the Holder is
entitled upon such exercise, shall be delivered to the Holder by the Company at
the Company's expense within a reasonable time after the rights represented by
this Warrant have been so exercised, and in any event, within ten (10) days of
such exercise. In case of a purchase of less than all the shares that may be
purchased under this Warrant, the Company shall cancel this Warrant and execute
and deliver a new Warrant or Warrants of like tenor for the balance of the
shares purchasable under the Warrant surrendered upon such purchase, to the
Holder hereof within a reasonable time. Each stock certificate so delivered
shall be in such denominations of Common Stock as may be requested by the Holder
hereof and shall be registered in the name of the Holder.

    

    
      
         

      

      
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    (b)           Net Issue Exercise.
Notwithstanding any provisions herein to the contrary, if the fair market value
of one share of the Company's Common Stock is greater than the Exercise Price
(at the date of calculation as set forth below), in lieu of exercising this
Warrant for cash, the Holder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company together with
the properly endorsed Form of Subscription and notice of such election, in which
event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:

    

    X = Y (A-B)

    A

    

    Where:

    

    X
=           the number of
shares of Common Stock to be issued to the Holder;

    

    
      	
               
      

            	
              Y
      =

            	
              the
      number of shares of Common Stock purchasable under the Warrant or, if only
      a portion of the Warrant is being exercised, the portion of the Warrant
      being canceled (at the date of such
  calculation);

            

    

    

    
      	
               
      

            	
              A
      =

            	
              the
      fair market value of one share of the Company's Common Stock (at the date
      of such calculation); and

            

    

    

    B
=           Exercise
Price (as adjusted to the date of such calculation).

    

    For
purposes of the above calculation, "fair market
value" shall mean with respect to the Common Stock on any date in
question the average of the closing sales prices per share of the Common Stock
for the previous fifteen (15) consecutive trading days (i) on the principal
securities exchange or trading market where the Common Stock is listed or traded
or, if the foregoing does not apply, (ii) in the over-the-counter market on the
electronic bulletin board for the Common Stock or, if, and only if, no trading
price is reported for the Common Stock, then (iii) its fair market value shall
be as determined, in good faith by the board of directors of the
Company.

    

    (c)           Common Stock Legend.
Upon any exercise of the Warrants, certificates representing the shares of
Common Stock shall bear a restrictive legend substantially identical to that set
forth on the face of this Warrant.

    

    2.           Shares To Be Fully Paid;
Reservation of Shares.

    

    The Company covenants and agrees that
all shares of Common Stock that may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be duty authorized, validly
issued, fully paid and nonassessable and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that, during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Common Stock, or other securities and property, when and as required to
provide for the exercise of the rights represented by this Warrant. The Company
will take all such action as may be necessary to assure that such shares of
Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange upon which the Common Stock may be listed; provided, however, that the
Company shall not be required to effect a registration under Federal or State
securities laws with respect to such exercise.

    

    
      
         

      

      
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    3.           Adjustment
of Exercise Price and Number of Shares.

    

    The Exercise Price and the number of
shares (or amount of other securities or property) purchasable upon the exercise
of this Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events described in this Section 3. This
Section shall not require an adjustment to the Exercise Price in connection with
any dividends paid in cash or upon any sale of shares of Common Stock for a per
share price that is less than the Exercise Price.

    

    (a)           Subdivision or Combination
of Stock. If the Company shall effect a stock dividend or stock split or
subdivide its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such stock dividend,
stock split or subdivision shall be proportionately reduced, and conversely, if
the Company shall effect a reverse stock split or combine its outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price in effect
immediately prior to such reverse stock split or combination shall be
proportionately increased. Upon each adjustment of the Exercise Price, the
Holder of this Warrant shall thereafter be entitled to purchase, at the Exercise
Price resulting from such adjustment, the number of shares obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of shares purchasable pursuant hereto immediately prior to such
adjustment, and dividing the product thereof by the Exercise Price resulting
from such adjustment.

    

    (b)           Dividends in Common Stock,
Other Stock, Property, Reclassification. If the holders of Common Stock
(or any shares of stock or other securities at the time receivable upon the
exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,

    

    (i)           Common
Stock or any shares of stock or other securities that are directly or indirectly
convertible into or exchangeable for Common Stock, or any rights or options to
subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution (other than shares of Common Stock issued as a
stock dividend, stock split or subdivision, adjustments in respect of which
shall be covered by the terms of Section 3(a)
above),

    

    (ii)           any
cash paid or payable otherwise than as a cash dividend (other than a liquidation
or dissolution, which shall be covered by the terms of Section 3(d) below),
or

    

    (iii)           additional
shares of Common Stock or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, reorganization, combination of shares or similar corporate
rearrangement (other than shares of Common Stock issued as a stock dividend,
stock split or subdivision, adjustments in respect of which shall be covered by
the terms of Section
3(a) above),

    

    then, and
in each such case, the Holder hereof shall, upon the exercise of this Warrant,
be entitled to receive, in addition to the number of shares of Common Stock
receivable upon such exercise, and without payment of any additional
consideration therefor, the amount of stock and other securities and property
(including cash in the cases referred to in clauses (ii) and (iii) above) which
such Holder would hold on the date of such exercise had such Holder been the
holder of record of such Common Stock as of the date on which holders of Common
Stock received or became entitled to receive such shares or all other additional
stock and other securities and property.

    

    
      
         

      

      
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    (c)           Reorganization,
Reclassification, Consolidation, Merger or Sale. If any reclassification,
recapitalization or reorganization, or consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its assets
or other similar transaction, shall be effected in such a way that holders of
Common Stock shall be entitled to receive, with respect to or in exchange for
their shares of Common Stock, securities or other assets or property (an "Organic
Change") and the Company is the resulting or surviving corporation of
such Organic Change, then, as a condition of such Organic Change, provisions
shall be made by the Company whereby the Holder hereof shall thereafter have the
right to purchase and receive (in lieu of the shares of the Common Stock of the
Company purchasable and receivable upon the exercise of this Warrant immediately
prior to such Organic Change) such shares of stock, securities or other assets
or property as may be issued or payable in connection with such Organic Change
with respect to or in exchange for the number of outstanding shares of such
Common Stock purchasable and receivable upon the exercise of this Warrant
immediately prior to such Organic Change. In the event of any Organic Change,
appropriate provision shall be made by the Company with respect to the rights
and interests of the Holder of this Warrant to the end that the provisions
hereof (including, without limitation, provisions for adjustments of the
Exercise Price and of the number of shares (or amount of stock, other securities
or property) purchasable and receivable upon the exercise of this Warrant) shall
thereafter be applicable, in relation to any shares of stock, securities or
property thereafter deliverable upon the exercise hereof. In the event of any
Organic Change pursuant to which the Company is not the surviving or resulting
corporation, prior to the consummation thereof, the corporation resulting from
such Organic Change or the corporation purchasing such assets shall assume by
written instrument the obligation to deliver to the Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the Holder
may be entitled to purchase; provided, however, this Warrant
may be canceled by the Company as of the effective date of such Organic Change
pursuant to which the Company is not the surviving or resulting corporation by
giving notice to the Holder of the Company’s intent to do so as least ten (1)
business days prior to the effective date of such Organic Change or record date
associated with such Organic Change, whichever is earlier.

    

    (d)           Liquidation or
Dissolution. In the event of a proposed dissolution or liquidation of the
Company, this Warrant will terminate immediately prior to the consummation of
such proposed action, so long as the Company has delivered the notice required
by Section
3(f)(iv) below.

    

    (e)           Certain Events. If
any change in the outstanding Common Stock of the Company or any other event
occurs as to which the other provisions of this Section 3 are not
strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the Holder of the Warrant in accordance with such provisions,
then the Board of Directors of the Company shall make an adjustment in the
number and class of shares or other securities or property available under the
Warrant, the Exercise Price or the application of such provisions, so as to
protect such purchase rights as aforesaid. The adjustment shall be such as will
give the Holder of the Warrant upon exercise for the same aggregate Exercise
Price the total number, class and kind of shares or other securities or property
as the Holder have owned had the Warrant been exercised prior to the event and
had the Holder continued to hold such shares until after the event requiring
adjustment.

    

    (f)           Notices of
Change.

    

    (i)           Immediately
upon any adjustment in the number or class of shares subject to this Warrant and
of the Exercise Price, the Company shall give written notice thereof to the
Holder, setting forth in reasonable detail and certifying the calculation of
such adjustment,

    

    
      
         

      

      
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    (ii)           The
Company shall give written notice to the Holder at least ten (10) business days
prior to the date on which the Company closes its books or takes a record for
determining rights to receive any dividends or distributions,

    

    (iii)           The
Company shall also give written notice to the Holder at least ten (10) business
days prior to the date on which an Organic Change shall take place,
and

    

    (iv)           The
Company shall give written notice to the Holder at least ten (10) business days
prior to the effective date of any proposed liquidation or dissolution of the
Company.

    

    (g)           Calculations. All
calculations under this Section 3 shall be
made to the nearest cent or the nearest 1/100th of a share, as applicable. The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition
of any such shares shall be considered an issue or sale of Common
Stock.

    

    (h)           Adjustments.
Notwithstanding any provision of this Section 3, no
adjustment of the Exercise Price shall be required if such adjustment is less
than $0.01; provided, however, that any adjustments that by reason of this Section 3(h) are not
required to be made shall be carried forward and taken into account for purposes
of any subsequent adjustment.

    

    4.           Registration
Rights.

    

    Shares of Common Stock issued upon
exercise of this Warrant shall be registrable and subject to the terms of that
certain Registration Rights Agreement dated as of date hereof by and among the
Company and various purchasers, by which the Company has agreed to file a
registration statement for the resale of the shares of Common
Stock.

    

    5.           Issue Tax.

    

    The issuance of certificates for shares
of Common Stock upon the exercise of the Warrant shall be made without charge to
the Holder of the Warrant for any issue tax (other than any applicable income
taxes) in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of the Warrant being exercised.

    

    6.           No Voting or Dividend
Rights; Limitation of Liability.

    

    Nothing contained in this Warrant shall
be construed as conferring upon the Holder hereof the right to vote or to
consent or to receive notice as a stockholder of the Company or any other
matters or any rights whatsoever as a stockholder of the Company. No dividends
or interest shall be payable or accrue in respect of this Warrant or the
interest represented hereby or the shares purchasable hereunder until, and only
to the extent that, this Warrant shall have been exercised. No provisions
hereof, in the absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder hereof shall give rise to any liability of such Holder for the Exercise
Price or as a stockholder of the Company, whether such liability is asserted by
the Company or by its creditors.

    

    7.           Transfer; Division and
Combination.

    

    (a)           Transfer Restricted.
This Warrant, and any rights hereunder, may not be assigned or transferred,
except as provided in the legend hereon and in accordance with and subject to
provisions of (i) all applicable state securities laws, and (ii) the Securities
Act, and the rules and regulations promulgated thereunder. Any purported
transfer or assignment made other than in accordance with this Section 7 shall be
null and void and of no force and effect.

    

    
      
         

      

      
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    (b)           Assignment. Any
assignment permitted hereunder shall be made by surrender of this Warrant to the
Company at its principal place of business as set forth above with a Form of
Assignment in substantially the form attached hereto duly completed and executed
and funds sufficient to pay any transfer tax, if any. In such event, the Company
shall, without charge, execute and deliver a new Warrant in the name of the
assignee named in such instrument of assignment in the amount so assigned and
this Warrant shall be promptly canceled; provided, however, that in the
event that Holder hereof shall assign or transfer less than the full amount of
this Warrant, a new Warrant evidencing the remaining portion of this Warrant not
so assigned or transferred shall be issued in the name of the
Holder.

    

    (c)           Division
and Combination. This Warrant may divided or combined with other Warrants upon
presentation and surrender hereof at the principal place of business of the
Company as set forth above, together with a written notice specifying the names
and denominations in which new Warrants are to be issued signed by the Holder.
Subject to compliance with Section 3(a), as to
any transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants of like tenor in exchange
for the Warrant or Warrants to be divided or combined in accordance with such
notice.

    

    (d)           Non-Interference; Par
Value. The Company shall not close its books against the transfer of this
Warrant or any share of Common Stock issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant. The Company shall from time to time take all such action as may be
necessary to ensure that the par value per share of the unissued Common Stock
acquirable upon the exercisable of this Warrant is at all time equal to or less
than the Exercise Price then in effect.

    

    8.           Representations and
Covenants of the Holder.

    

    This Warrant has been entered into by
the Company in reliance upon the following representations and covenants of the
Holder:

    

    (a)           Investment
Purpose.  The Holder is purchasing the Warrant for Holder’s own
account, or for one or more investor accounts for which the Holder is acting as
a fiduciary or agent, in each case for investment, and not with a view to, or
for offer or sale in connection with, any distribution thereof in violation of
the Securities Act and state securities laws.

    

    (b)           Disposition of Holder’s
Rights.  The Holder agrees on its own behalf and on behalf of
any investor account for which such Holder is the Warrant to offering, sell or
otherwise transfer such Warrant prior to the Resale Restriction Termination Date
only (i) to the Company, (ii) pursuant to a registration statement which has
been declared effective under the Securities Act, or (iii) pursuant to any
available exemption from the registration requirements of the Securities Act and
applicable state securities laws.  The foregoing restrictions on
resale will not apply subsequent to the Resale Restriction Termination
Date.  The Holder acknowledges that the Company reserves the right
prior to the offer, sale or other transfer made prior to the Resale Termination
Date pursuant to clause (iii) above to require the delivery of an opinion of
counsel, certifications and/or other information satisfactory to the
Company.

    

    
      
         

      

      
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    9.           Register.

    

    The Company will maintain a register
containing the names and addresses of the registered Holders of the Warrants.
The Holder may change his or its address as shown on the Warrant register at any
time by giving written notice to the Company requesting such
change.

    

    10.           Fractional
Shares.

    

    No fractional shares shall be issued
upon exercise of this Warrant. The Company shall, in lieu of issuing any
fractional share, pay the Holder entitled to such fraction a sum in cash equal
to such fraction multiplied by the then effective Exercise Price.

    

    11.           Miscellaneous.

    

    (a)           Amendments.  Any
term of this Warrant may be amended with the written consent of the Company and
the Holders of Warrants constituting the Warrant Series representing not less
than fifty percent (50%) of the shares of Common Stock issuable upon exercise of
any and all outstanding Warrants constituting the Warrant Series, even without
the consent of the Holder. Any amendment effected in accordance with this Section 11(a) shall
be binding upon each Holder of any of the Warrants constituting the Warrant
Series, each future Holder of all such Warrants, and the Company; provided, however, that no
special consideration or inducement may be given to any such Holder in
connection with such consent that is not given ratably to all such Holders, and
that such amendment must apply to all such Holders equally and ratably in
accordance with the number of shares of Common Stock issuable upon exercise of
their Warrants. The Company shall promptly give notice to all Holders of the
Warrants constituting the Warrant Series of any amendment effected in accordance
with this Section
11(a).

    

    (b)           Notices. Any notice,
request or other document required or permitted to be given or delivered to the
Holder hereof or the Company shall be delivered or shall be sent by certified
mail, postage prepaid, to each such Holder at its address as on the Warrant
Register or to the Company at the address indicated therefor in the first
paragraph of this Warrant or such other address as either may from time to time
provide to the other.

    

    (c)           Binding Effect on
Successors. This Warrant shall be binding upon any corporation succeeding
the Company by merger, consolidation or acquisition of all or substantially all
of the Company's assets. All of the covenants and agreements of the Company
shall inure to the benefit of the permitted successors and assigns of the Holder
hereof.

    

    (d)           Descriptive Headings and
Governing Law. The descriptive headings of the several sections and
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant. This Warrant shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the laws
of the State of Delaware.

    

    (e)           Lost Warrants. The
Company represents and warrants to the Holder hereof that upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company, at its expense, will make and deliver a new
Warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant.

    

    
      
         

      

      
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    IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date of issuance written above.

     

    
      	 	COMPANY:	 
	 	 	 
	 	TN-K ENERGY GROUP
INC.	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/ Ken
      Page	 
	 	 	Ken
      Page, President	 
	 	 	 	 
	 	 	 	 

    

    
 

     

     

    
 

    
      
         

      

      
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    EXHIBIT
A

    

    FORM
OF SUBSCRIPTION

    

    Date: ___________, 20__

    

    TN-K
Energy Group Inc.

    649
Sparta Highway

    Suite
102

    Crossville,
Tennessee  38555

    

    Attn:
Chief Financial Officer

    

    Ladies
and Gentlemen:

    

    
      	
              o

            	
              The
      undersigned hereby elects to exercise the warrant issued to it by TN-K
      Energy Group Inc., formerly known as Digital Lifestyles Group, Inc. (the
      "Company”)
      and dated September 9, 2004 (the "Warrant")
      and to purchase thereunder ________ shares of the Common Stock of the
      Company (the "Shares")
      at a purchase price of $0.475 per Share for an aggregate purchase price of
      ______________Dollars ($_________ ) (the "Exercise
      Price"). Pursuant to the terms of the Warrant, the undersigned has
      delivered the Exercise Price herewith in full in cash or by certified
      check or wire transfer.

            

    

    

    
      	
              o

            	
              The
      undersigned hereby elects to convert ________________percent (___%) of the
      value of the Warrant pursuant to the Net Exercise provisions of Section 1(b) of
      the Warrant.

            

    

    

    In
connection with the exercise of the Warrant to purchase the number of shares
specified above, undersigned makes the following representations and
covenants:

    

    1.           The
undersigned is an "Accredited Investor," as such term is defined in Rule 501(a)
of Regulation D promulgated under the Securities Act of 1933, as amended (the
"Securities
Act").

    

    2.           The
undersigned is purchasing the Shares for the undersigned's own account, or for
one or more investor accounts for which the undersigned is acting as a fiduciary
or agent, in each case for investment, and not with a view to, or for offer or
sale in connection with, any distribution thereof in violation of the Securities
Act.

    

    3.           The
undersigned has had access to such financial and other information concerning
the Company and the Shares that the undersigned has deemed necessary in
connection with a decision to purchase the Shares, including an opportunity to
ask questions of and request information from the Company.

     

     

    
      
        	 	Very truly yours,	 
	 	 	 	 
	 	 	 	 
	 	
                By:
      

              	 	 
	 	Name: 	 	 
	 	Title :	 	 
	 	 	 	 

      

     

    
      
         

      

      
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    EXHIBIT
B

    

    ASSIGNMENT
FORM

    

    (To
assign the foregoing Warrant, execute this form and supply required
information.

    Do not
use this form to exercise the Warrant)

    

    FOR VALUE RECEIVED, hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. 2005-9) with respect to the number of shares of Common Stock
covered thereby set forth below, unto:

    

    Name of
Assignee                                                      Address                                           No.
of Shares

    

    

     

    
      	 	
              By:
      

            	 	 
	 	Name: 	 	 
	 	Title :	 	 
	 	 	 	 

    

    Signature
Guaranteed:

     

    
      	
              By:
      

            	 	 

    

    

    The
signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.

    
 

     

    11Unassociated Document

Exhibit 10.17

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this "Agreement") is made and entered into as of January 27, 2005, by and between Digital Lifestyles Group, Inc., a Delaware corporation (the "Company"), and Alloy Marketing and Promotions, LLC (the "Purchaser").

 

This Agreement is made pursuant to the Agreement, dated as of the date hereof, by and between the Purchaser and the Company (as amended, modified or supplemented from time to time, the "Payment Agreement"), and pursuant to the Note referred to therein.

 

The Company and the Purchaser hereby agree as follows:

 

1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

"Commission" means the Securities and Exchange Commission.

 

"Common Stock" means shares of the Company's common stock, par value $0.03 per share.

 

"Effectiveness Date" means the date that the Registration Statement is declared effective under the Securities Act.

 

"Effectiveness Period" shall have the meaning set forth in Section 2(a).

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and any successor statute.

 

"Filing Date" means the date on which the Company files the initial pre-effective amendment to the Registration Statement including the Note Shares, which may be no earlier than February 10, 2005.

 

"Holder" or "Holders" means the Purchaser or any of its affiliates or transferees to the extent any of them hold Registrable Securities.

 

"Indemnified Party" shall have the meaning set forth in Section 5(c). "Indemnifying Party" shall have the meaning set forth in Section 5(c).

 

"Proceeding" means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

"Prospectus" means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus

  

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supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

 

"Registrable Securities" means the shares of Common Stock issuable (a) upon the conversion of the Note and (b) any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to any securities referenced in (a) above.

 

"Registration Statement" means the Registration Statement on Form S-1 that was filed with the Commission by the Company on January 4, 2005, including the Prospectus therein, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

 

"Requisite Information" has the meaning set forth in Section 2(d) hereof.

 

"Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

"Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

"Rule 424" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

"Securities Act" means the Securities Act of 1933, as amended, and any successor statute.

 

"Trading Market" means any of the NASD OTC Bulletin Board, NASDAQ SmallCap Market, the Nasdaq National Market, the American Stock Exchange or the New York Stock Exchange.

 

"Underwritten Offering" means a registration in which securities of the Company are sold to an underwriter for reoffering to the public.

 

References herein to the term "Holders of a majority in aggregate amount of the then outstanding Registrable Securities" or words to a similar effect shall mean, with respect to any request, notice, demand, objection or other action by the holders of Registrable Securities hereunder or pursuant hereto (each, an "Act"), registered holders of a number of shares of then outstanding Common Stock constituting Registrable Securities and an aggregate amount of the Note convertible into Registrable Securities, such that the sum of such shares of Common Stock and the shares of Common Stock issuable upon conversion of the Note constitute in excess of 50% of the sum of all of the then outstanding shares of Common Stock constituting Registrable

  

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Securities and the number of shares of Common Stock issuable upon conversion of the Note. For purposes of the immediately preceding sentence, any Holder may elect to take any Act with respect to all or any portion of the Registrable Securities held by it and only the portion as to which such Act is taken shall be included in the numerator of the fraction described in the preceding sentence

 

2.  Registration.

 

(a)  On the Filing Date, the Company shall prepare and file with the Commission a pre-effective amendment to the Registration Statement covering the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The Company shall cause the Registration Statement to become effective and remain effective as provided herein. The Company shall use its reasonable commercial efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event no later than February 23, 2005. The Company shall use its reasonable commercial efforts to keep the Registration Statement continuously effective under the Securities Act until the date which is the earlier date of when all Registrable Securities covered by the Registration Statement (i) either have been sold in a manner contemplated by the Registration Statement, (ii) have been sold to the public in compliance with Rule 144, or (iii) may be sold immediately without registration under the Securities Act and without volume restrictions pursuant to Rule 144(k), as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company's transfer agent (each, an "Effectiveness Period") .

 

Thereafter, the Company shall be entitled to withdraw the Registration Statement and, upon such withdrawal, the Holders shall have no further right to offer or sell any of the Registrable Securities pursuant to such Registration Statement (or any Prospectus relating thereto).

 

Notwithstanding anything contained within to the contrary, the Company shall have the right to convert the Registration Statement to a registration statement on Form S-2 or Form S-3 or file a new registration statement on Form S-2 or Form S-3 for an offering to be made on a continuous basis pursuant to Rule 415 covering all the Registrable Securities subject to the Registration Statement and, upon the declaration of effectiveness thereof by the Commission, the Company shall have the right to withdraw the Registration Statement (in which event, such registration statement on Form S-2 or Form S-3 will be deemed to be the Registration Statement for the purposes of this Agreement, including the Company's obligations with respect thereto).

 

(b)  (i) the Effective Date does not occur prior to February 23, 2005; (ii) after the Effective Date, the Registration Statement ceases to be effective (by suspension pursuant to Sections 2(e), 6(c) or otherwise) as to all Regishable Securities to which it is required to relate at any time prior to the expiration of the Effectiveness Period (without being succeeded immediately by an additional Registration Statement filed and declared effective) for a period of time that shall exceed 30 days in the aggregate per year or more than 20 consecutive calendar days (defined as a period of 365 days commencing on the Effective Date); or (iii) the Common Stock is not listed or quoted, or is suspended from trading on any Trading Market for a period of three (3) consecutive Trading Days (provided the Company shall not have been able to

  

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cure such trading suspension within 30 days of the notice thereof or list the Common Stock on another Trading Market); (any such failure or breach being referred to as an "Event," and for purposes of clause (i) the date on which such Event occurs, or for purposes of clause (ii) the date which such 30 day or 20 consecutive day period (as the case may be) is exceeded, or for purposes of clause (iii) the date on which such three (3) Trading Day period is exceeded, being referred to as "Event Date"), then until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as a sole remedy and as liquidated damages and not as a penalty, equal to 1.50% for each thirty (30) day period (prorated for partial periods) on a daily basis of the original principal amount of the Note. While such Event continues, such liquidated damages shall be paid not less often than each thirty (30) days. Any unpaid liquidated damages as of the date when an Event has been cured by the Company shall be paid within three (3) days following the date on which such Event has been cured by the Company.

 

(c)           Within three business days after the Effectiveness Date, the Company shall issue a letter to the transfer agent (and, if required by the transfer agent, a legal opinion) stating that the shares are subject to an effective registration statement and can be reissued free of restrictive legend upon notice of a sale by the Purchaser and confirmation by the Purchaser that it has complied with the prospectus delivery requirements, provided that the Company has not advised the transfer agent orally or in writing that the opinion has been withdrawn. Copies of the letter required by this Section 2(c) shall be delivered to the Purchaser within the time frame set forth above.

 

(d)           The Company may require each Holder of Registrable Securities as to which any registration is being effected to furnish to the Company, within ten calendar days after written request therefor has been made by the Company, such information regarding the distribution of such Holder's Registrable Securities as is required by law to be disclosed in the Registration Statement (the "Requisite Information").

 

(i)     The Company shall file prospectus supplements pursuant to Rule 424 under the Securities Act (or any successor provision thereto) to amend or supplement the applicable Registration Statement to include in the Registration Statement the Requisite Information as to each Holder (and the Registrable Securities held by such Holder) that provides notice to the Company of the Requisite Information. The Company shall file such a prospectus supplement with the Commission no less than once every twenty business days if during such period the Company receives notice from any Holder which includes the Requisite Information with respect to any such Holder. The Company shall provide each Holder a copy of such Prospectus as so amended or supplemented containing the Requisite Information within three business days of filing such Prospectus with the Commission in order to permit such Holder to comply with the prospectus delivery requirements of the Securities Act in a timely manner with respect to any proposed disposition of such Holder's Registrable Securities.

 

(ii)     No Holder shall be entitled to use the Prospectus unless and until such Holder shall have furnished the information required by this Section 2(d) in accordance with the first or second paragraph hereof and such information with respect to such Holder shall have been included in the Prospectus. If any information furnished to the Company by a Holder for inclusion in a Registration Statement or the Prospectus

  

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becomes materially misleading, such Holder agrees (1) to furnish promptly to the Company all information required to be disclosed in such Registration Statement in order to make the information previously furnished to the Company not materially misleading and (ii) to stop selling or offering for sale Registrable Securities pursuant to the Registration Statement until such Holder's receipt of the copies of a supplemented or amended Prospectus correcting such disclosure. The Company shall have no obligation to keep a Prospectus usable with respect to a particular Holder or to give notice that a Prospectus is not usable by such Holder to the extent such Prospectus is not usable by such Holder because current Requisite Information with respect to such Holder is not included therein because such Holder has not provided such information to the Company in accordance with this Section 2(d).

 

(e) Notwithstanding anything in this Section 2 to the contrary, if the Company shall furnish to the Holders a certificate signed by the President or Chief Executive Officer of the Company stating that the Company's Board of Directors has made the good faith determination (i)      that the continued use by the Holders of the Registration Statement for purposes of effecting offers or sales of Registrable Securities pursuant thereto would require, under the Securities Act and the rules and regulations promulgated thereunder, premature disclosure in the Registration Statement (or the Prospectus relating thereto) of material, nonpublic information concerning the Company, its business or prospects or any proposed material transaction involving the Company, (ii) that such premature disclosure would be materially adverse to the Company, its business or prospects or any such proposed material transaction or would not be in the best interests of the Company and (iii) that it is therefore essential to suspend the use by the Holders of the Registration Statement (and the Prospectus relating thereto), then the right of the Holders to use the Registration Statement (and the Prospectus relating thereto) for purposes of effecting offers or sales of Registrable Securities pursuant thereto shall be suspended for a period (the "Suspension Period") not greater than sixty (60) days during any consecutive twelve (12) month period, which shall include no more than thirty (30) consecutive days. During the Suspension Period, the Holders shall not offer or sell any Registrable Securities pursuant to or in reliance upon the Registration Statement (or the Prospectus relating thereto). The Company agrees that, as promptly as possible, but in no event later than three (3) business days, after the consummation, abandonment or public disclosure of the event or transaction that caused the Company to suspend the use of the Registration Statement (and the Prospectus relating thereto) pursuant to this Section 2(e), the Company will lift any suspension, provide the Holders with revised Prospectuses, if required, and will notify the Holders of their ability to effect offers or sales of Registrable Securities pursuant to or in reliance upon the Registration Statement.

 

(f) Notwithstanding anything in this Agreement to the contrary, the Company will have no obligation to register the resale of the Registrable Securities, or take any other action required under this Agreement, unless and until the Company becomes obligated to issue the Note to the Purchaser pursuant to the terms of the Payment Agreement.

  

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3. Registration Procedures. The parties hereto agree that the Registration Statement does not contemplate an Underwritten Offering and the Company shall not be required to cooperate with any Underwritten Offering. If and whenever the Company is required by the provisions hereof to effect the registration of the Registrable Securities under the Securities Act, the Company will, as expeditiously as possible:

 

(a)  prepare and file with the Commission a pre-effective amendment to the Registration Statement with respect to such Registrable Securities, respond as promptly as possible to any comments received from the Commission, and use its reasonable commercial efforts to cause the Registration Statement to become and remain effective for the Effectiveness Period with respect thereto, and promptly provide to the Purchaser copies of all filings and Commission letters of comment relating thereto;

 

(b)  prepare and file with the Commission such amendments and supplements to the Registration Statement and the Prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement and to keep such Registration Statement effective until the expiration of the Effectiveness Period applicable to such Registration Statement;

 

(c)  furnish to the Purchaser such number of copies of the Registration Statement and the Prospectus included therein (including each preliminary Prospectus) as the Purchaser reasonably may request to facilitate the public sale or disposition of the Registrable Securities covered by such Registration Statement;

 

(d)  use its commercially reasonable efforts to register or qualify the Purchaser's Registrable Securities covered by such Registration Statement under the securities or "blue sky" laws of such jurisdictions within the United States as the Purchaser may reasonably request, provided, however, that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction;

 

(e)  list the Registrable Securities with the Trading Market or other securities exchange on which the Common Stock of the Company is then principally listed;

 

(f)  immediately notify the Purchaser at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, 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

 

(g) make available for inspection by the Purchaser and any attorney, accountant or other agent retained by the Purchaser, all publicly available, non-confidential financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors and employees to supply all publicly available, non-confidential information reasonably requested by the attorney, accountant or agent of the Purchaser.

 

  

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4.Registration Expenses. All expenses relating to the Company's compliance with Sections 2 and 3 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or "blue sky" laws, fees of the NASD, transfer taxes, fees of transfer agents and registrars, fees of, and disbursements incurred by, one counsel for the Holders are called "Registration Expenses". All selling commissions applicable to the sale of Registrable Securities, including any fees and disbursements of any special counsel to the Holders beyond those included in Registration Expenses, are called "Selling Expenses." The Company shall only be responsible for Registration Expenses.

 

5. Indemnification.

 

(a)  In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, the Company will indemnify and hold harmless the Purchaser, and its officers, directors and each other person, if any, who controls the Purchaser within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which the Purchaser, or such persons 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 the Registration Statement under which such Registrable Securities were registered under the Securities Act pursuant to this Agreement, 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 Purchaser, and each such person for any reasonable legal or other expenses incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company 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 or on behalf of the Purchaser or any such person in writing specifically for use in any such document; and provided further, however, that the foregoing indemnity shall not inure to the benefit of any Purchaser or any such person if the person asserting a loss, claim, damages or liability (A) purchased a Registrable Security and the Purchaser, or someone acting on the Purchaser's behalf, did not deliver to such person at or prior to the written confirmation of the sale of such Registrable Security a Prospectus (as then amended or supplemented, at the time of such purchase by the person asserting such loss, claim, damages or liability) and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, liability, claim, damage or expense; or (B) received a Prospectus or an amendment or supplement thereto in violation of Section 7(d) of this Agreement if such violation caused such loss, claim, damages or liability.

 

  

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(b)  In the event of a registration of the Registrable Securities under the Securities Act pursuant to this Agreement, each Holder will indemnify and hold harmless the Company, and its officers, directors and each other person, if any, who controls the Company within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such persons may become subject under the Securities Act or the Securities Exchange Act of 1934, each as amended, 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 which was furnished in writing by such Holder to the Company expressly for use in (and such information is contained in) the Registration Statement under which such Registrable Securities were registered under the Securities Act, as amended, pursuant to this Agreement, 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 Company and each such person for any reasonable legal or other expenses incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that the Holder will be liable 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 so made in conformity with information furnished in writing to the Company by or on behalf of the Holder specifically for use in any such document. Notwithstanding the provisions of this paragraph, such Holder shall not be required to indemnify any person or entity in excess of the amount of the aggregate net proceeds received by such Holder in respect of Registrable Securities in connection with any such registration under the Securities Act.

 

(c) Promptly after receipt by a party entitled to claim indemnification hereunder (an "Indemnified Party") of notice of the commencement of any action, such Indemnified Party shall, if a claim for indemnification in respect thereof is to be made against a party hereto obligated to indemnify such Indemnified Party (an "Indemnifying Party"), 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 such Indemnified Party other than under this Section 5(c) and shall only relieve it from any liability which it may have to such Indemnified Party under this Section 5(c) if and to the extent the Indemnifying Party is prejudiced by such omission. In case any such action shall be brought against any Indemnified Party and it shall notify the Indemnifying Party of the commencement 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 so to assume and undertake the defense thereof, the Indemnifying Party shall not be liable to such Indemnified Party under this Section 5(c) for any legal expenses subsequently incurred by such Indemnified Party in connection with the defense thereof; if the Indemnified Party retains its own counsel, then the Indemnified Party shall pay all fees, costs and expenses of such counsel, 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 one separate counsel (which firm should be subject to the approval of the Indemnifying Party, such approval not to be unreasonably withheld) and to assume such legal defenses and

 

  

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otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred; provided, further, that the Company shall not in any event be responsible hereunder for the fees and expenses of more than one firm of separate counsel. The Company shall not be liable for any settlement of any such action or proceeding effected without the Company's prior written consent, which consent shall not be unreasonably withheld or delayed, and the Company agrees to indemnify and hold harmless any Indemnified Party from and against any loss by reason of any settlement of any action effected with the Company's written consent.

 

(d)  In order to provide for just and equitable contribution in the event of joint liability under the Securities Act in any case in which either (i) an Indemnified Party makes a claim for indemnification pursuant to this Section 5 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 Section 5 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of the Indemnified Party in circumstances for which indemnification is provided under this Section 5; then, and in each such case, the Indemnifying Party and the Indemnified Party will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that the Indemnified Party is responsible only for the portion represented by the percentage that the public offering price of its securities offered by the Registration Statement bears to the public offering price of all securities offered by such Registration Statement, provided, however, that, in any such case, (A) the Indemnified Party will not be required to contribute any amount in excess of the public offering price of all such securities offered by it pursuant to such Registration Statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

 

6. Miscellaneous.

 

(a)  Remedies. In the event of a breach by the Company or by a Holder, of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement.

 

(b)  Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement.

 

(c)   Discontinued Disposition. Each Holder agrees by its acquisition of any Registrable Securities that, upon receipt of a notice from the Company of the occurrence of a Discontinuation Event (as defined below) or notice described in Section 3(f), such Holder shall keep the fact of such notice confidential and forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder's receipt of the copies

 

  

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of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph. For purposes of this Section 7(d), a "Discontinuation Event" shall mean (i) when the Commission notifies the Company whether there will be a "review" of the Registration Statement and whenever the Commission comments in writing on the Registration Statement (the Company shall provide true and complete copies thereof and all written responses thereto to each of the Holders); (ii) any request by the Commission or any other Federal or state governmental authority for amendments or supplements to the Registration Statement or Prospectus or far additional information; (iii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and/or (v) the occurrence of any event or passage of time that makes the financial statements included in the Registration Statement ineligible for inclusion therein or any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to the Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any 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.

 

(d)  Piggy-Back Registrations. If at any time during any Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities required to be covered during such Effectiveness Period and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen (15) days after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered, to the extent the Company may do so without violating registration rights of others which exist as of the date of this Agreement, subject to customary underwriter cutbacks applicable to all holders of registration rights (except that no cutback may be required for any holders that have the right to demand or request the inclusion in such registration of shares of Common Stock held by such stockholders) and subject to obtaining any required consent of any selling stockholder(s) to such inclusion under such registration statement.

 

(e)Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or

 

  

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consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of certain Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence.

 

(f) Notices. Any notice or request hereunder may be given to the Company or the Purchaser at the respective addresses set forth below or as may hereafter be specified in a notice designated as a change of address under this Section 7(f). Any notice or request hereunder shall be given by registered or certified mail, return receipt requested, hand delivery, overnight mail or telecopy (confirmed by mail). Notices and requests shall be, in the case of those by hand delivery, deemed to have been given when delivered to any party to whom it is addressed, in the case of those by mail or overnight mail, deemed to have been given three (3) business days after the date when deposited in the mail or with the overnight mail carrier, and, in the case of a telecopy, when confirmed. The address for such notices and communications shall be as follows:

	 	
If to the Company:

 

	
Digital Lifestyles Group, Inc.

1001 S. Capital of Texas Hwy.

Building I, Suite 210 Austin, Texas 78746 

Attention: Chief Financial Officer

Facsimile: (512) 617-8283

 

With a copy to:

 

1001 S. Capital of Texas Hwy.

Building I, Suite 210 Austin, Texas 78746 

Attn: General Counsel 

Facsimile: (512) 617-8283

	 	 	 
	 	 
If to a Purchaser:

	 
To the address set forth under such Purchaser name on the signature pages hereto.

	 	 	 
	 	If to any other Person who is then the registered Holder:	 
To the address of such Holder as it appears in the stock transfer books of the Company

 

or such other address as may be designated in writing hereafter in accordance with this Section 7(f) by such Person.

 

  

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(g)Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless such successor or assignee and Holder provide the Company with written notice at the time of such succession or assignment stating the name of such successor or assignee and identifying the Registrable Securities as to which this Agreement is being assigned; provided, however, that any such assignee or successor shall receive such Registrable Securities subject to all the terms and conditions of this Agreement, including without limitation, Section 5 and shall thereafter be deemed a "Holder" for all purposes under this Agreement. The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Notes and the Securities Purchase Agreement with the prior written consent of the Company, which consent shall not be unreasonably withheld.

 

(h)Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

 

 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law thereof.

 

 Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

 

(k)Severability. 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 reasonable 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. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

(1)  Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

[Balance of page intentionally left blank; signature page follows.]

 

  

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

 

DIGITAL LIFESTYLES GROUP, INC.

 

By: /s/ Kent A. _________

Name: Kent A. _________

Title: CEO

 

 

ALLOY MARKETING AND PROMOTIONS, LLC

 

By: /s/ Matthew C. Diamond

Name: Matthew C. Diamond

Title: CEO

 

Address for Notices: 

54 Canal Street

Boston, MA 02114 

Tel: 617-723-8929 

Fax: (617) 723-2188 

Attn: Gary Colen

 

With a copy to:

 

Alloy, Inc.

151 W. 26th Street, 11th Floor

New York, NY 10001 

Tel: 212-244-4307 

Fax: 212-244-4311 

Attn: General Counsel

 

 

 

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