Document:

Exhibit 4.4

EXHIBIT E

REGISTRATION RIGHTS AGREEMENT

 

 

REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of September
14, 2005, by and among GENUTEC BUSINESS
SOLUTIONS, INC., a Montana corporation (the “Company”), JOHAN HENDRIK SMIT DUYZENTKUNST (“Smit”) and OLAF GEURS (“Geurs” and with Smit,
individually and collectively the “Purchaser”).

 

                WHEREAS,
the Company proposes to issue and sell shares of its common stock, par value
$0.001 per share (the “Common Stock”) pursuant to the terms of an
Amended and Restated Agreement and Plan of Merger of Merger, dated as of
September __, 2005 by and among the Company, Smart Development Acquisition
Corp., Smart Development, LLC and the Purchaser (the “Merger Agreement”).

 

                WHEREAS,
the Company has agreed to provide each Purchaser and subsequent holders of
Registrable Securities (as hereinafter defined) that may be issued, from time
to time, the registration rights with respect to the Registrable Securities, as
set forth in this Agreement.  Capitalized
terms used herein without definition shall have the meanings set forth in the
Merger Agreement.

 

                NOW,
THEREFORE, in consideration of the premises and the covenants and
agreements herein contained, the parties intending to be legally bound, hereby
agree as follows:

 

                1.             Definitions.

 

                Unless otherwise defined herein,
all capitalized terms used in this Agreement shall have the same meaning as is
defined in the Purchase Agreement.  In
addition, the following capitalized terms shall have the following meanings:

 

                “Commission” shall mean
the United States Securities and Exchange Commission.

 

                “Common Stock” means the
common stock, par value $0.001 per share, of the Company.

 

                “Exchange Act” shall mean
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

 

                “Holders” shall mean each
Purchaser, or any one or more of his transferees, who are the record owners of
Registrable Securities.

 

                 “Person” shall mean an individual,
partnership, corporation, limited liability company, business trust, joint
stock company, trust, unincorporated organization, joint venture, a government
authority or other entity of whatever nature.

 

                “Piggyback Registration”
shall have the meaning assigned to such term in Section 3 hereof.

 

                “Prospectus” shall mean
the prospectus included in any Registration Statement, as amended or
supplemented by any prospectus 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 to the Registration Statement
of which such Prospectus is a part thereof, and all material incorporated by
reference in such Prospectus.

 

                “Registrable Securities”
shall mean the Securities, but only so long as they remain Restricted
Securities.

 

                “Registration
Expenses” shall mean all expenses incurred by the Company in complying with
Sections 3and 5 hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel and independent auditors for the Company, reasonable
fees and disbursements of one counsel to the Holders, blue sky fees and
expenses and the expense of any special audits 

 

 

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incident to or required by any such
registration, but excluding all Selling Expenses.

 

                “Registration Statement”
shall mean any registration statement of the Company that covers any of the
Registrable Securities pursuant to the provisions of this Agreement, including
the Prospectus, amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits, and all material
incorporated by reference in such Registration Statement.

 

                “Restricted Securities”
shall mean the Securities unless and until, in the case of any such Securities,
(i) they have been effectively registered under the Securities Act and disposed
of in accordance with the Registration Statement covering them, (ii) they are
distributed to the public pursuant to Rule 144 (or any similar provision then
in force) under the Securities Act, or (iii) they are otherwise freely
transferable without restriction pursuant to Rule 144(k) (or any similar
provision then in force) under the Securities Act, and the holders thereof have
delivered an opinion of their legal counsel to such effect in form and
substance reasonably satisfactory to the Company.

 

                “SEC” shall mean the
United States Securities and Exchange Commission.

 

                “Securities” shall mean
any and all shares of Common Stock received by each Purchaser under the Merger
Agreement, whether constituting Merger Stock or Additional Merger Stock, as
defined therein.

 

                “Securities Act” shall
mean the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

 

                “Selling Expenses” shall
mean all underwriting discounts, selling commissions and stock transfer taxes
applicable to the securities registered by the Holders and any fees of counsel
to any Holder.

 

                2.             Securities Subject to this Agreement.  The Securities entitled to the benefits of
this Agreement are the Registrable Securities.

 

                                                                                                3.             Registration Rights; Lockup
Agreement.

 

                                (a)           Demand Registration.           In the event that the Company shall
not have previously offered to include the Registrable Securities in a
Piggyback Registration, as contemplated by Section 3(b) below, on a date that
shall be not later than six (6) months from consummation of the Company IPO (or
if there shall not be an IPO consummated within such six month period, within six
(6) months from the Company consummating a 1934 Act Registration), the Company
shall, upon the written request of the Purchaser, prepare and file with the SEC
a registration statement on Form SB-2, Form S-1 or other applicable form for
registering securities (provided, that the Company shall use Form S-3 if then
available to it) that shall include therein the Registrable Securities for
resale (the “Demand Registration”). 
The Company shall use its best efforts to cause such Demand Registration
to be declared effective by the SEC and, subject to the terms of this
Agreement, shall undertake to promptly respond to all letters of comment and
other communications from the SEC.

 

(b)           Piggback Registration.        If the Company at any time or from time
to time subsequent to the date of this Agreement proposes to register any
securities under the Securities Act either for its own account or the account
of any selling security holders (other than pursuant to (i) a registration
statement on Forms S-4 or S-8 or any successor or similar forms, or (ii) a
registration on any form that does not permit secondary sales), it will give
written notice (the “Notice”) to each of the Holders of its intention at
least twenty (20) days in advance of the filing of any registration statement
with respect thereto. Upon the written request of any of the Holders given
within fifteen (15) days after receipt of such Notice, the Company, subject to
Section 3(b) below, will use its best efforts to include in such registration,
and in any underwriting involved therein, all the Registrable Securities
included in such request (a “Piggyback Registration”).

 

                                (c)           Underwritten Offerings.

 

                                                (i)            In the case of an underwritten
offering by the Company of securities, each Holder shall, with respect to Securities
that such Holder then desires to sell, enter into an underwriting agreement
with the same underwriters engaged by the Company with respect to securities
being offered by the Company, and 

 

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the
Company shall cause such underwriters to include in any such underwriting all
of the Securities that a Holder then desires to sell; provided, however,
that such underwriting agreement is in substantially the same form as the
underwriting agreement that the Company enters into in connection with the
primary offering it is making. If any Holder disapproves of the terms of any
such underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company and the managing underwriter.  Any Registrable Securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.

 

                                                (ii)           If the Company decides, based on the
advice of the managing underwriter with respect to such underwritten offering,
that the number of Securities to be offered by selling security holders be reduced
because in the judgment of the managing underwriters the offering would be
materially and adversely affected, then the Company will so notify the selling
security holders in writing and such Securities shall be reduced by such amount
as the managing underwriter may determine, which reduced number of Securities
shall be included in the offering selected, first from the Company, second
among any selling security holders other than the Holders, as nearly as
possible pro rata based on the number of Securities such selling security
holders have requested to be included therein, and third, to the extent
available, from the Holders participating in such offering, as nearly as
possible pro rata based on the number of Registrable Securities such Holders
have requested to be included therein. 
Notwithstanding the foregoing, the Registrable Securities to be sold by
the Holders shall not be reduced below ten percent (10%) of the total amount of
securities included in such registration and any reduction of Registrable
Securities to be sold by the Holders shall be as nearly as possible pro rata
based on the number of Registrable Securities such Holders have requested to be
included therein.

 

                                (d)           Lockup Agreement.             Notwithstanding anything to the
contrary, express or implied contained in this Agreement, the Merger Agreement
or any other agreement between the Company and the Purchaser, each Purchaser
and any other Holder hereby agrees that, without the prior written consent of
the Company, such Purchaser or Holder shall not sell, transfer, pledge,
hypothecate, assign or effect a distribution (collectively, “Transfer”)
any of the Registrable Securities for a period of twelve (12) months from the
date of this Agreement, irrespective as to whether or not any of such Registrable
Securities have been previously registered for resale under the Securities Act
(the “Lockup Agreement”). 
Notwithstanding the foregoing, in the event and to the extent that Lee
Danna, the president and CEO of the Company shall be released by the Company
from a similar restriction on Transfer of his Company Common Stock, the Lockup
Agreement of each Purchaser and other Holder shall similarly terminate as to
the same percentage of Company Common Stock.

 

                4.             Cooperation with Company.  The Holders will cooperate with the Company
in all respects in connection with this Agreement, including timely supplying
all information reasonably requested by the Company (which shall include all
information regarding the Holders and proposed manner of sale of the Registrable
Securities required to be disclosed in any Registration Statement) and
executing and returning all documents reasonably requested in connection with
the registration and sale of the Registrable Securities and entering into and
performing their obligations under any underwriting agreement, if the offering
is an underwritten offering, in usual and customary form, with the managing
underwriter or underwriters of such underwritten offering.

 

                5.             Information. 
Upon making a request pursuant to Section 3, the Holder shall specify
the number of shares of Registrable Securities to be registered on its behalf
and the intended method of disposition thereof. 
The Company may require the Holders to furnish in writing to the Company
such information regarding themselves and the distribution of Registrable
Securities as the Company may from time to time reasonably request in writing
in order to comply with the Securities Act. 
The Holders agree to supply the Company as promptly as practicable with
such information and to notify the Company as promptly as practicable of any
inaccuracy or change in information they have previously furnished to the
Company.

 

                6.             Registration Procedures. If and whenever Holders
have requested inclusion in a Company’s Registration hereunder , the Company
will, at its expense, as expeditiously as practicable, but in no event later
than 45 days after receipt of such request for registration :

 

                                (a)           In accordance with the Securities Act
and the rules and regulations of the Commission, use best efforts to prepare
and file with the Commission a Registration Statement in the form of an
appropriate registration statement with respect to the Registrable Securities
to be covered thereby and use its best efforts to cause such Registration
Statement to become and remain continuously effective until the earlier of (i)
the time that

 

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all
of the Registrable Securities covered by such Registration Statement have been
sold in accordance with the intended methods of disposition of the seller or
sellers set forth in such Registration Statement and (ii) two years after such
Registration Statement has been declared effective;

 

                                (b)           Furnish to each Holder participating
in such registration (each of such Holder being referred to herein as a “Participant”
in such registration) one copy of the Registration Statement and Prospectus;

 

                                (c)           Use its best efforts to register or
qualify the Securities covered by such Registration Statement under such state
securities or blue sky laws of such jurisdictions as such Participant may
reasonably request; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to qualify as
a foreign corporation in any jurisdiction in which it is not so qualified or to
subject itself to taxation in connection with any such registration or
qualification of such Securities; and

 

                                (d)           Prepare and promptly file with the
Commission such amendments or supplements to such Registration Statement or
Prospectus as may be necessary to correct any statements or omissions if, at
the time when a Prospectus relating to such Securities is required to be
delivered under the Securities Act, any event has occurred as the result of
which any such Prospectus or any other Prospectus then in effect may include an
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.

 

                7.             Expenses of Registration. All Registration
Expenses incurred in connection with any registration, qualification or
compliance pursuant to this Agreement shall be borne by the Company.  All Selling Expenses relating to Registrable
Securities registered on behalf of the Holders shall be borne by the Holders of
such securities pro  rata on the basis of the number of shares so
registered.

 

                8.             Indemnification and Contribution.

 

                                (a)           Indemnification by the Company.  Whenever, pursuant to this Agreement, a
Registration Statement relating to the Registrable Securities is filed under
the Securities Act, the Company will (except as to matters covered by Section
8(b) hereof) indemnify and hold harmless each Participant in the registration,
each of their officers, directors, partners and employees, and such Participant’s
legal counsel and independent accountant, each underwriter of Registrable
Securities (collectively, the “Participant Indemnitees” and,
individually, a “Participant Indemnitee”), against any losses, claims,
damages or liabilities, including any legal or other expenses reasonably
incurred by a Participant Indemnitee in connection with investigating, settling
or defending against such loss, claim, damage, liability or action, joint or
several, to which such Participant Indemnitees 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
such Registration Statement, or Prospectus contained therein, or any amendment
or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, unless any such statement or
omission is resulting specifically from written information provided and
authorized in writing by the Participant Indemnitee, or a representation, in
writing of a Participant Indemnitee, that in each instance such Participant
Indemnitee has specifically requested be included in such Registration
Statement or Prospectus.

 

                                (b)           Indemnification by Participants.  Each Participant in any registration
undertaken pursuant hereto will, severally and not jointly, indemnify and hold
harmless the Company, each of its directors, each of its officers who has
signed the Registration Statement, each underwriter of Registrable Securities
and each Person, if any, who controls the Company or any such underwriter
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act (collectively, the “Company Indemnitees” and, individually,
a “Company Indemnitee”) and the other Participant Indemnitees (and such
Participants’ officers, directors, partners, and employees, legal counsel and
independent auditors) against all losses, claims, damages or liabilities, to
which any of the Company Indemnitees or the other Participant Indemnitees 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 such Registration Statement, or Prospectus contained therein,
or any amendment or supplement thereto, or arise out of or are based

 

4

 

upon
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, but only if, and to
the extent that, such statement or omission is resulting specifically from
written information provided and authorized in writing by such indemnifying
Participant or a representation in writing of such indemnifying Participant and
will, severally and not jointly, reimburse each Company Indemnitee or other
Participant Indemnitee for all legal or other expenses reasonably incurred by it
in connection with investigating or defending against such loss, claim, damage,
liability or action; provided, however, that the maximum amount
of liability in respect of such indemnification (including, but not limited to,
attorneys’ fees and expenses) shall be limited, in the case of each
indemnifying Participant, to an amount equal to the net proceeds actually
received by such indemnifying Participant from the sale of Registrable
Securities under such Registration Statement.

 

                                (c)           Indemnification Procedures.  Promptly after receipt by a Participant
Indemnitee or a Company Indemnitee (collectively, “Indemnitees” and,
individually, an “Indemnitee”) under Section 8(a) or 8(b) hereof of
notice of the commencement of any action, such Indemnitee will, if a claim in
respect thereof is to be made against the indemnifying party under such clause,
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve the indemnifying
party from any liability that it may have to any Indemnitee.  In case any such action shall be brought
against any Indemnitee, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnitee, and after notice from the
indemnifying party to such Indemnitee of its election to assume the defense
thereof, the indemnifying party shall not be liable to such Indemnitee under
such clause for any legal or other expenses subsequently incurred by such
Indemnitee in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Indemnitee shall have
the right to employ one counsel to represent such Indemnitee if, in the
reasonable judgment of such Indemnitee, it is advisable for such party to be
represented by separate counsel because separate defenses are available or
because a conflict of interest exists between such indemnified and indemnifying
party in respect of such claim, and in that event the fees and expenses of such
separate counsel shall be paid by the indemnifying party.  No indemnifying party in the defense of any
such claim or litigation shall, except with the consent of each Indemnitee,
which consent shall not be unreasonably withheld, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnitee of a release from all liability in respect to such claim or
litigation.  Notwithstanding the
foregoing, if the Company is an Indemnitee, the Company shall designate the one
counsel, and in all other circumstances, the one counsel shall be designated by
a majority in interest based upon the Registrable Securities of the
Indemnitees.

 

                                (d)           Contribution.  If for any reason the foregoing indemnity is
unavailable, or is insufficient (other than by reason of the limitation on
liability set forth in Section 8(b) above) to hold harmless an Indemnitee, then
the indemnifying party shall contribute to the amount paid or payable by the
Indemnitee as a result of such losses, claims, damages, liabilities or expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party on the one hand and the Indemnitee on the
other from the registration or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law or provides a lesser sum to the
Indemnitee than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the Indemnitee on the other but also the
relative fault of the indemnifying party and the Indemnitee as well as any
other relevant equitable considerations. The relative fault of the Indemnitee,
on the one hand, and the indemnifying party, on the other hand, 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 Indemnitee or by
the indemnifying party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
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 was not guilty of such
fraudulent misrepresentation.

 

                                (e)           Survival.  The obligations of the Company and Holders
under this Section 8 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Agreement, and
otherwise.

 

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                9.             Rule 144 Reporting.  With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Restricted Securities to the public without registration, after
such time as a public market exists for the Common Stock, the Company agrees
to:

 

                                (a)           make and keep public information
available, as those terms are understood and defined in Rule 144 promulgated
under the Securities Act; and

 

                                (b)           file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act.

 

                10.           Amendment and Modification.  This Agreement may be amended, modified or
supplemented in any respect only by written agreement by the Company and
Holders representing at least a majority of the issued and outstanding Common
Stock (or Common Stock issued upon conversion thereof), voting together as a
single class; provided that no such amendment shall unfairly
discriminate against a particular Holder relative to the other Holders.  Any action taken by the Holders, as provided
in this Section 10, shall bind all Holders.

 

                11.           Governing Law. 
This Agreement and the rights and obligations of the parties hereunder
shall be governed by, and construed and interpreted in accordance with, the
laws of the State of New York, without giving effect to the conflicts of law
principles thereof.

 

                12.           Invalidity of Provision.  The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or
the validity or enforceability of this Agreement, including that provision, in
any other jurisdiction.

 

                13.           Notices.  All
notices and other communications hereunder shall be in writing and, unless
otherwise provided herein, shall be deemed duly given if delivered personally
or three days after such notice or other communication is mailed by registered
or certified mail (return receipt requested) to the parties at the following
addresses (or at such other address for the party as shall be specified by like
notice):

 

                                (a)           If to the Company:

 

                                                GenuTec
Business Solutions, Inc.

                                                6A
LibertyStreet, Suite 200

                                                Aliso
Viejo, CA 92656

                                                Attention:
Lee Danna, President & Chief Executive Officer

 

                                                with
a copy to (which shall not constitute notice):

 

                                                Gersten
Savage LLP

                                                600
Lexington Avenue, 10th Floor

                                                New
York, NY  10022

                                                Attention:
Stephen A. Weiss, Esq.

 

                                                or
to the Purchaser in writing.

 

                                (b)           If to a Holder, as listed in the
stock record books of the Company or as such Holder shall designate to the
Company in writing,

 

                                                with
a copy to (which shall not constitute notice):

 

                                                Clark
& Trevithick PC

                                                800
Wilshire Boulevard, 12th floor

                                                Los
Angeles, CA 90067

                                                Attention:
Robert Hurm, Esq.

 

 

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                14.           Headings; Execution in Counterparts.  The headings and captions contained herein
are for convenience of reference only and shall not control or affect the
meaning or construction of any provision hereof. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
and all of which together shall constitute one and the same instrument.

 

                15.           Entire Agreement. 
This Agreement, including any exhibits hereto and the documents and
instruments referred to herein and therein, embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.

 

                16.           Attorneys’ Fees. 
If any legal action or any arbitration or other proceeding is brought
for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any of the provisions
of this Agreement, the successful or prevailing party or parties shall be
entitled to recover such reasonable attorneys’ fees and other costs incurred in
that action or proceeding, in addition to any other relief to which it or they
may be entitled, as may be ordered in connection with such proceeding.

 

                17.           Successors and Assigns.  This Agreement shall be binding upon the
parties hereto and their successors and assigns; provided, the Company
is given prior written notice thereof.

 

                18.           “Market Stand-Off” Agreement.  Each Holder agrees to enter into an
agreement, if requested by the Company and an underwriter of Common Stock (or
other securities) of the Company, not to lend, offer, pledge, sell, contract to
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, sell short, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock,
whether in privately negotiated or open market transactions, during the period
of up to one (1) year following the effective date of a registration statement
of the Company filed under the Securities Act.

 

                [Signatures begin on the following page]

 

 

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Counterpart Signature Page of Registration Rights Agreement

 

 

 

IN
WITNESS WHEREOF, this Agreement has been signed by each of the parties hereto
as of the date first above written.

 

	
   

  	
   

  	
  GENUTEC BUSINESS
  SOLUTIONS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Lee Danna

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Lee Danna

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:   President and CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PURCHASER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Johan Hendrik Smit Duyzentkunst

  	
   

  	
   

  
	
   

  	
   

  	
  JOHAN HENDRIK SMIT DUYZENTKUNST

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Olaf Geurs

  	
   

  	
   

  
	
   

  	
   

  	
  OLAF GEURS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  	
   

  
							

 

 

 

 

 

 

 

8Exhibit 4.5

EXECUTION
VERSION

GENUTEC BUSINESS SOLUTIONS, INC.

REGISTRATION RIGHTS AGREEMENT

REGISTRATION
RIGHTS AGREEMENT, dated as of September 16, 2005 (this “Agreement”),
among Technology Investment Capital Corp., a Maryland corporation (together
with its successors and assigns, “TICC”), Seaview Mezzanine Fund LP, a Delaware
limited partnership (together with its successors and assigns, “Seaview”;
TICC and Seaview are hereinafter sometimes referred to collectively as the “Investors”
and each individually as an “Investor”), and GenuTec Business Solutions,
Inc., a Montana corporation (the “Company”).

R E C I T A L S

WHEREAS,
the Investors have agreed, pursuant to the terms of and subject to the
conditions set forth in the Preferred Stock and Warrant Purchase Agreement,
dated as of September 16, 2005, by and among the Company and the Investors (as
from time to time amended, modified or supplemented, the “Stock Purchase
Agreement”), to purchase certain shares of Series A Exchangeable Preferred
Stock, par value $.0001 per share, and certain Warrants (as defined below),
including the Initial Warrants and the Additional Warrants (each as defined in
the Stock Purchase Agreement), to purchase shares of the Class A Voting Common
Stock, par value $.01 per share, of the Company (the “Common Shares”);
and

WHEREAS,
the Company has agreed, as a condition precedent to the Investors’ obligations
under the Stock Purchase Agreement, to grant the Investors certain registration
rights; and

WHEREAS,
the Company and the Investors desire to define the registration rights of the
Investors on the terms and subject to the conditions herein set forth;

NOW,
THEREFORE, in consideration of the foregoing premises and for other good and
valuable consideration, the parties hereby agree as follows:

SECTION 1.                                DEFINITIONS

As
used in this Agreement, the following terms have the respective meanings set
forth below:

Affiliate:  shall mean any Person directly or indirectly
controlling, controlled by or under common control with such Person or entity.

Business
Day: shall mean any day except a Saturday, a Sunday or a legal holiday in
New York City.

Commission:  shall mean the United States Securities and
Exchange Commission or any other federal agency at the time administering the
Securities Act.

Exchange
Act:  shall mean the Securities
Exchange Act of 1934, as amended.

 

 

 

Holder:  shall mean any holder of Registrable
Securities (and for such purposes a holder of Warrants shall be deemed to be a
Holder of the Registrable Securities issuable upon exercise thereof).

Initial
Public Offering:  shall mean
the initial underwritten public offering by the Company of Common Shares for
cash pursuant to an effective registration statement under the Securities Act,
other than a registration relating solely to employee benefit plans or solely
to a transaction described in Rule 145(a) of the Commission.

NASD:  shall mean the National Association of
Securities Dealers, Inc.

NASDAQ:  shall mean The Nasdaq Stock Market, Inc.

Other
Holders:  shall mean Persons other than
the Holders who, by virtue of agreements with the Company or otherwise, are
entitled to include the securities of the Company that they own in a
registration.

Person:  shall mean an individual, partnership,
limited liability company, joint-stock company, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof.

register, registered
and registration:  shall mean a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement.

Registrable
Securities:  shall mean
(A) all Common Shares issuable upon exercise of the Warrants, (B) any
additional Common Shares acquired by either Investor or by any other holder of
Warrants, and (C) any equity securities of the Company issued as a distribution
with respect to, or in exchange for or in replacement of, the Common Shares referred
to in clause (A) or (B).

Registration
Expenses:  shall mean
all expenses incurred by the Company in connection with any registration
effected pursuant to Section 2(a) or (b) hereof, including, without limitation,
all Commission, stock exchange and Nasdaq registration, filing and listing
fees, printing, engraving, duplication, distribution and delivery expenses,
blue sky fees and expenses (including the reasonable fees and disbursements of
underwriters’ counsel in connection with blue sky qualifications and filings),
the fees and disbursements of one firm of counsel for all the selling Holders,
and the fees and disbursements of counsel for the Company, and the fees and
expenses of the Company’s independent public accountants (including, without
limitation, the expense of any special audits or “cold comfort” letters
incident to or required in connection with any such registration), but
excluding Selling Expenses with respect to the Registrable Securities sold
pursuant to such registration;

Security,
Securities:  shall have
the meaning set forth in Section 2(1) of the Securities Act.

Securities
Act:  shall mean the Securities Act
of 1933, as amended.

 

2

 

Selling
Expenses:  shall mean
all underwriting discounts and selling commissions with respect to the sale of
Registrable Securities pursuant to any registration under Section 2(a) or 2(b)
hereof, and all fees and disbursements of counsel for each of the Holders other
than the fees and disbursements of one firm of counsel for all the selling
Holders in connection therewith.

Warrants:  shall mean the warrants issued pursuant to
the Stock Purchase Agreement or the Note Purchase Agreement (as defined in the
Stock Purchase Agreement).

SECTION 2.                                REGISTRATION RIGHTS

(a)           Company Registration.

(i)          Inclusion in Piggyback Registration.  If the Company shall determine to register
under the Securities Act any of its equity securities either for its own
account or for the account of Other Holders (whether pursuant to an Initial
Public Offering or otherwise) and such registration has an anticipated
aggregate public offering price (before any underwriting discounts and
commissions) of not less than $1,000,000, other than a registration relating
solely to employee benefit plans or solely to a transaction described in Rule
145(a) of the Commission, or a registration on any registration form which does
not permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:

(A)          promptly
give to each of the Holders a written notice thereof (which shall include a
list of the jurisdictions in which the Company intends to attempt to qualify
such securities under the applicable blue sky or other state securities laws);
and

(B)           subject
at all times to the provisions of Section 2(a)(ii) below, include in such
registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made by the Holders within fifteen
(15) days after receipt of the written notice from the Company described in
Section 2(a)(i) above.  Such written
request may specify all or a part of the Holders’ respective Registrable
Securities.

(ii)         Underwriting.  If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(a)(i)(A).  In
such event, the right of each of the Holders to registration pursuant to this
Section 2(a) shall be conditioned upon such Holders’ participation in such
underwriting and the inclusion of such Holders’ Registrable Securities in the
underwriting to the extent provided herein. 
The Holders whose securities are to be included in such registration
(other than either Investor, if such Investor elects not to participate in such
underwriting) shall (together with the Company and the Other Holders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters (the “Representative”) selected for
underwriting by the Company.  Notwithstanding
any other provision of this Section 2(a), if the Representative determines that
the successful marketing of securities for the account of the Company, or other
factors, either (A) require a limitation on the

 

2

 

number of securities to be underwritten,
or (B) would require the exclusion from such registration of all securities of
selling stockholders, the number of securities that may be included in the
registration and underwriting by each of the Holders and the Other Holders
shall either be (x) reduced, on a pro rata basis (based on the number of
securities held by such Holder or Other Holder), by such minimum number of
securities as is necessary to comply with such limitation, or (y) excluded
entirely from such registration.  If any
of the Holders or any officer, director or Other Holder disapproves of the
terms of any such underwriting, he may elect to withdraw therefrom by written
notice to the Company and the underwriter. 
Any Registrable Securities or other securities excluded or withdrawn
from such underwriting shall be withdrawn from such registration.

(iii)        Right to Abandon or Delay
Registration.  If, at any time after
giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to each Holder and upon giving that notice
(i) in the case of a determination not to register, the Company shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration without prejudice and (ii) in the case of a determination
to delay registering, the Company shall be permitted to delay registering any
Registrable Securities for the same period as the delay in registering such
other securities.

(b)           Demand Registrations.  The Company intends to use its best efforts
to complete an Initial Public Offering and to qualify for registration on Form
S-3 for secondary sales.  Subject
at all times to the provisions of Section 2(b)(ii) below, the Holders shall
have the right to request two registrations on Form SB-2 or Form S-1, as
applicable, and after the Company has qualified for the use of Form S-3,
the Holders shall have the right to request an unlimited number of
registrations on Form S-3 (which requests shall be in writing and shall
state the number of Registrable Securities to be disposed of and the intended
method of disposition of such securities by such holders), in accordance with
and subject to the following provisions:

(i)          The Company shall not be required to
effect a registration pursuant to this Section 2(b) unless the Holder or
Holders requesting such registration (each, a “Requesting Holder”)
propose to dispose of Registrable Securities having an aggregate price to the
public (before deduction of underwriting discounts and expenses of sale) of
more than $1,000,000.

(ii)         The Company shall not be required to
effect a registration pursuant to this Section 2(b) within 180 days after the
effective date of the registration relating to the Company’s Initial Public
Offering (whether or not securities held by the Requesting Holder were included
for sale or distribution in such registration), or the effective date of the
most recent registration pursuant to this Section 2 in which securities held by
the Requesting Holder could have been included for sale or distribution.

(iii)        The Company shall not be obligated to
effect any registration pursuant to this Section 2(b) in any particular
jurisdiction in which the Company would be required to execute a general
consent to service of process in effecting such registration, qualification or

 

4

 

compliance, unless the Company
is already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations thereunder.

(iv)        The Company shall give written notice to
all Holders of the receipt of a request for registration pursuant to this
Section 2(b) and shall provide a reasonable opportunity for Other Holders to
participate in the registration, subject to the limitations set forth in clause
(v) of this Section 2(b), if applicable, in the case of an underwritten
offering.  Subject to the limitations set
forth in this clause (iv) and elsewhere in this Section 2(b), the Company will
use its best efforts to effect promptly the registration of all Registrable
Securities to the extent requested by the Holder or Holders thereof for
purposes of disposition.

(v)         If Other Holders request such
inclusion, the Requesting Holders shall offer to include the securities of such
Other Holders in the registration and may condition such offer on their
acceptance of the further applicable provisions of this Section 2.  The Requesting Holders whose securities are
to be included in such registration and the Company shall (together with all
Other Holders proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the Representative
of the underwriter or underwriters selected for such underwriting by the
Requesting Holders and reasonably acceptable to the Company.  Notwithstanding any other provision of this
Section 2(b), if the Representative advises the Holders in writing that
marketing factors require a limitation on the number of securities to be
underwritten, the securities of the Company held by Other Holders shall be
excluded from such registration to the extent so required by such
limitation.  If, after the exclusion of
all such securities held by Other Holders, further reductions are still
required, the number of securities included in the registration by each
Requesting Holder shall be reduced on a pro rata basis (based on the number of
securities held by such Requesting Holder), by such minimum aggregate number of
securities as is necessary to comply with such request.  No Registrable Securities or any other
securities excluded from the underwriting by reason of the underwriter’s
marketing limitation shall be included in such registration.  If any Other Holder who has requested
inclusion in such registration as provided above disapproves of the terms of
the underwriting, such Person may elect to withdraw therefrom by written notice
to the Company, the Representative and the Requesting Holders.  The securities so withdrawn shall also be
withdrawn from registration.  If the
Representative has not limited the number of Registrable Securities or other securities
to be underwritten, the Company and officers and directors of the Company may
include its or their securities for its or their own account, in such
registration if the Representative so agrees and if the number of Registrable
Securities and other securities which would otherwise have been included in
such registration and underwriting will not thereby be limited.

(vi)        If, at the time of any request by
Requesting Holders to register Registrable Securities pursuant to this Section
2(b), in the good faith determination of the Company’s Board of Directors, the
Company or its stockholders would be adversely affected by the requested
registration, then the Company may, at its option, direct that such
registration request be delayed for a period not in excess of 90 days from the
date of such request.  The Company’s
right to delay a registration request pursuant to this Section 2(b)(vi) may not
be exercised by the Company more than once in any 12-month period.

 

5

 

(c)           Expenses of Registration.  All
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to this Section 2 shall be borne by the
Company, and all Selling Expenses shall be borne by the Holders of the
securities so registered pro rata on the basis of the number of their
securities so registered.

(d)           Registration Procedures.  In the
case of each registration effected by the Company pursuant to this Section 2,
the Company will keep the Holders, as applicable, advised in writing as to the
initiation of each registration and as to the completion thereof.  At its expense, the Company will:

(i)          use its commercially reasonable
efforts to keep such registration effective for a period of one hundred eighty
(180) days or until the selling Holders,
as applicable, have completed the distribution described in the registration
statement relating thereto, whichever first occurs; provided, however,
that (A) such 180-day period shall be extended for a period of time equal
to the period during which the selling Holders,
as applicable, refrain from selling any securities included in such
registration in accordance with provisions in Section 2(i) hereof; and (B) in
the case of any registration of Registrable Securities on Form S-3 which
are intended to be offered on a continuous or delayed basis, such 180-day
period shall be extended until the earlier of (w) two years after the effective
date of such registration statement or (x) the date on which all such
Registrable Securities are sold, provided that Rule 415, or any successor
rule under the Securities Act, permits an offering on a continuous or delayed
basis, and provided  further that applicable rules under the
Securities Act governing the obligation to file a post-effective
amendment permit, in lieu of filing a post-effective amendment which (y)
includes any prospectus required by Section 10(a) of the Securities Act or (z)
reflects facts or events representing a material or fundamental change in the
information set forth in the registration statement, the incorporation by
reference of information required to be included in (y) and (z) above to be
contained in periodic reports filed pursuant to Section 12 or 15(d) of the
Exchange Act in the registration statement;

(ii)         furnish to each selling Holder such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Holder;

(iii)        use reasonable efforts to register or
qualify such Registrable Securities under such other securities or blue sky
laws of such jurisdictions as any selling Holder
reasonably requests and do any and all other acts and things that may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
Holder (provided that the Company will not be required to (A) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph, (B) subject itself to taxation in any such
jurisdictions, (C) consent to general service of process in each such jurisdiction
or (D) undertake such actions in any jurisdiction other than the states of the
United States of America and the District of Columbia);

 

6

 

(iv)        notify each selling Holder
of such Registrable Securities, 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 included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and, at the request of
any such Holder, the Company will prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to purchasers of such Registrable
Securities, such prospectus will not contain an untrue statement of a material
fact or omit to state any fact necessary to make the statements therein not
misleading;

(v)         use its best efforts to cause all such
Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed and, if not so listed,
to be listed on the NASD automated quotation system and, if listed on the NASD
automated quotation system, use its best efforts to secure designation of all
such Registrable Securities covered by such registration statements as a NASDAQ
“national market system security” within the meaning of Rule 11Aa2-1 of the
Commission or, failing that, to secure NASDAQ authorization for such
Registrable Securities and, without limiting the generality of the foregoing,
to arrange for at least two market makers to register as such with respect to
such Registrable Securities with the NASD;

(vi)        make available for inspection by any selling Holder,
any underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
Holder or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such Holder, underwriter, attorney, accountant or
agent in connection with such registration statement;

(vii)       otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months beginning with the
first day of the Company’s first full calendar quarter after the effective date
of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; and

(viii)      furnish, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are
being sold through underwriters or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (1) an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders participating in such registration, addressed to the underwriters, if
any, and to the Holders participating in such registration and (2) a letter,
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the

 

7

 

Holders participating in such
registration, addressed to the underwriters, if any, and if permitted by
applicable accounting standards, to the Holders participating in such
registration.

(e)           Indemnification.

(i)          The Company will indemnify each of the
Holders, as applicable, each of their respective officers, directors and
partners, and each Person controlling each of the Holders, with respect to each
registration which has been effected pursuant to this Section 2, and each
underwriter, if any, and each Person who controls any underwriter, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Company of the Securities Act or the Exchange Act or any
rule or regulation thereunder applicable to the Company and relating to action
or inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each of the Holders, each of
its officers, directors and partners, and each Person controlling each of the
Holders, each such underwriter and each Person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by the Holders
or underwriter and stated to be specifically for use therein.

(ii)         Each of the Holders will, if
Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers and each underwriter, if any, of
the Company’s securities covered by such a registration statement, each Person
who controls the Company or such underwriter, each Other Holder and each of
their officers, directors, and partners, and each Person controlling such Other
Holder against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document made by such Holder
in writing, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements by such
Holder therein not misleading, and will reimburse the Company and such Other
Holders, directors, officers, partners, Persons, underwriters or control
Persons for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by such Holder and stated to be specifically for use therein; provided,
however, that the obligations of each of the Holders hereunder shall be
limited to an amount equal to the net proceeds to such Holder of securities
sold as contemplated herein, except in the case of actual fraud or willful
misconduct by such Holder.

 

8

 

(iii)        Each party entitled to indemnification
under this Section 2(e) (the “Indemnified Party”) shall give notice to
the party required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom; provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld) and the
Indemnified Party may participate in such defense at such party’s expense
(unless the Indemnified Party shall have reasonably concluded that there may be
a conflict of interest between the Indemnifying Party and the Indemnified Party
in such action, in which case the fees and expenses of counsel shall be at the
expense of the Indemnifying Party), and provided  further that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 2 unless the
Indemnifying Party is materially prejudiced thereby.  No Indemnifying Party, in the defense of any
such claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.  Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.

(iv)        If the indemnification provided for in
this Section 2(e) is held by a court of competent jurisdiction to be
unavailable to an Indemnified Party with respect to any loss, liability, claim,
damage or expense referred to herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the statements or omissions which
resulted in such loss, liability, claim, damage or expense, as well as any
other relevant equitable considerations. 
The relative fault of the Indemnifying Party and of the Indemnified
Party shall be determined by reference to, among other things, whether the
untrue (or alleged untrue) statement of a material fact or the omission (or
alleged omission) to state a material fact relates to information supplied by
the Indemnifying Party or by the Indemnified Party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

(v)         Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten public
offering contemplated by this Agreement are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall be controlling.

(vi)        The foregoing indemnity agreement of the
Company and the Holders is subject to the condition that, insofar as they
relate to any loss, claim, liability or damage made in a preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the
Commission at the time the registration statement in question becomes effective
or the

 

9

 

amended prospectus filed with
the Commission pursuant to Commission Rule 424(b) (the “Final Prospectus”),
such indemnity or contribution agreement shall not inure to the benefit of any
underwriter or Holder if a copy of the Final Prospectus was furnished to the
underwriter and was not furnished to the Person asserting the loss, liability,
claim or damage at or prior to the time such action is required by the
Securities Act.

(f)            Information by the Holders.  Each of
the Holders holding securities included in any registration shall furnish to
the Company such information regarding such Holder and the distribution
proposed by such Holder as the Company may reasonably request in writing and as
shall be reasonably required in connection with any registration, qualification
or compliance referred to in this Section 2.

(g)           Cooperation
by the Holders.

(i)          Each of the Holders holding securities
included in any registration shall cooperate as reasonably requested by the
Company with the Company in connection with the preparation of the registration
statement, and for so long as the Company is obligated to file and keep
effective the registration statement, shall provide to the Company, in writing,
for use in the registration statement, all such information regarding such
Holder and its plan of distribution of the Registrable Securities as may be
reasonably necessary to enable the Company to prepare the registration
statement and prospectus covering the Registrable Securities, to maintain the
currency and effectiveness thereof and otherwise to comply with all applicable
requirements of law in connection therewith.

(ii)         During such time as such Holder may be
engaged in a distribution of the Registrable Securities, such Holder shall
comply with Regulation M promulgated under the Exchange Act and pursuant
thereto it shall, among other things; (x) not engage in any stabilization
activity in connection with the securities of the Company in contravention of
such regulation; (y) distribute the Registrable Securities under the
registration statement solely in the manner described in the registration
statement; (z) cease distribution of such Registrable Securities pursuant to
such registration statement upon receipt of written notice from the Company
that the prospectus covering the Registrable Securities contains any untrue
statement of a material fact or omits a material fact required to be stated
therein or necessary to make the statements therein not misleading.

(h)           Rule 144 Reporting.

With
a view to making available the benefits of certain rules and regulations of the
Commission which may permit the sale of restricted securities to the public
without registration, the Company agrees to:

(i)          use its best efforts to make and keep
public information available as those terms are understood and defined in Rule
144 under the Securities Act (“Rule 144”), at all times from and after
ninety (90) days following the effective date of the first registration under
the Securities Act filed by the Company for an offering of its securities to
the general public;

 

10

 

(ii)         use its best efforts to file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act at any time after it has
become subject to such reporting requirements; and

(iii)        so long as the Holder owns any
Registrable Securities, furnish to the Holder upon request, a written statement
by the Company as to its compliance with the reporting requirements of Rule 144
(at any time from and after ninety (90) days following the effective date of
the first registration statement filed by the Company for an offering of its
securities 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), a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents so filed as the Holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing the Holder
to sell any such securities without registration.

(i)            “Market Stand-off” Agreement.  Each of the Holders agrees, if requested by
the Company and an underwriter of equity securities of the Company, not to sell
or otherwise transfer or dispose of any Registrable Securities held by such
Holder for a period required by the underwriters and designated by the Company,
which period shall begin not more than 30 days prior to the effectiveness of
the registration statement pursuant to which such public offering shall be made
and shall last not more than 180 days after the effective date of such registration
statement in the case of the Company’s initial public offering, or 90 days
after the effective date of such registration statement in the case of any such
other offering.  If requested by the
underwriters, the Holders shall execute a separate agreement to the foregoing
effect.  The Company may impose stop-transfer
instructions with respect to the securities subject to the foregoing
restriction until the end of the applicable period.  The provisions of this Section 2(i) shall be
binding upon any transferee who acquires Registrable Securities.

(j)            Termination of Registration Rights.  (i)  No
Holder shall be entitled to exercise any right provided for in this Section 2
after five (5) years following the consummation of the Initial Public Offering;
and (ii) the registration rights set forth in this Section 2 shall not be
available to any Holder if, in the opinion of counsel to the Company, all of
the Registrable Securities then owned by such Holder (together with any
Affiliate of such Holder with whom such Holder must aggregate its sales under
Rule 144 of the Commission) could be sold in any 90-day period pursuant
to Rule 144 (without giving effect to the provisions of Rule 144(k)).

SECTION 3.                                MISCELLANEOUS

(a)           Directly or Indirectly.  Where
any provision in this Agreement refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.

(b)           Governing
Law; Consent to Jurisdiction.  This Agreement shall be governed by and
construed under the law of the State of New York.  The Company hereby agrees that any suit for
the enforcement of this Agreement may be brought in the Courts of the State of
New York, the courts of the United States for the Southern District of New
York, appellate courts from any thereof and consents to the non-exclusive
jurisdiction of such courts.  The Company
hereby waives any objection that it may now or hereafter have to the venue of
any such suit or any such 

 

11

 

court or that such suit is brought in an
inconvenient court. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in
Section 3(e).  Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

(c)           Participation
in Underwritten Registrations.  No Person may participate in any registration
hereunder which is underwritten unless such Person (i) agrees to sell such
Person’s securities on the basis provided in any underwriting arrangements
approved by the Person or Persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.

(d)           Section Headings.  The
headings of the sections and subsections of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part hereof.

(e)           Notices.  All
notices hereunder shall be in writing and shall be conclusively deemed to have
been received and shall be effective (a) on the day on which delivered if
delivered personally or transmitted by facsimile transmission, (b) one Business
Day after the date on which the same is delivered to a nationally recognized
overnight courier service, (c) three Business Days after being sent by
registered or certified United States mail, return receipt requested, or (d) if
sent by e-mail as provided below, and shall be addressed:

(i)          If to the Company, to:

 

GenuTec Business Solutions, Inc.

6A Liberty Street, Suite 200

Aliso Viejo, CA  92656

Attention:

Facsimile: Lee J. Danna, President

E-mail: ldanna@genutec.com;

 

with a copy to:

 

Gersten Savage, LLP

600 Lexington Avenue

New York, NY  10022

Attention: Stephen A. Weiss

Facsimile: (212) 980-5192

E-mail: sweiss@gskny.com;

 

(ii)         if to TICC, to:

 

12

 

Technology Investment Capital Corp.

8 Sound Shore Drive, Suite 255

Greenwich, CT  06830

Attention:  Saul B. Rosenthal

Facsimile No.: (203)
983-5290;

 

with a copy to:

 

Nixon Peabody LLP

437 Madison Avenue

New York, NY  10022

Attention: Philip A. Haber, Esq.

Facsimile: (866) 855-0026;

(iii)          if to Seaview, to:

Seaview Mezzanine Fund LP

30 Kennedy Plaza, Suite 400

Providence, RI  02903

Attention: David S. Montoya

Facsimile: (401) 421-3533

E-mail: david@seaviewcapital.com

with a copy to:

 

Breslow & Walker, LLP

100 Jericho Quadrangle, Suite 230

Jericho, NY 11753

Attention: Len Breslow, Esq.

Facsimile: (516) 822-6544

E-mail: lbreslow@breslowwalker.com

 

or to such other address or addresses or
telecopy number or numbers as any of such Persons may most recently have
designated in writing to the others by such notice.  Notices and other communications sent to an
e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day.

(f)            Reproduction of Documents.  This
Agreement and all documents relating thereto, including, without limitation,
any consents, waivers and modifications which may hereafter be executed may be
reproduced by the Investors by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and the Investors
may destroy any original document so reproduced.  The parties hereto agree and stipulate that
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative

 

13

 

 

 proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Investors in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

(g)           Successors and Assigns.  This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties.

(h)           Entire Agreement; Amendment and Waiver.  This
Agreement constitutes the entire understanding of the parties hereto and
supersedes all prior and contemporaneous understandings and agreements among
such parties with respect to subject matter hereof.  This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with)
the written consent of the Company and the Holders holding a majority of the
then outstanding Registrable Securities.

(i)            Severability.  In the
event that any part or parts of this Agreement shall be held illegal or
unenforceable by any court or administrative body of competent jurisdiction,
such determination shall not affect the remaining provisions of this Agreement,
which shall remain in full force and effect.

(j)            Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which together shall be considered one and the
same agreement.

(k)           WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF
DUTY AND ALL OTHER CLAIMS.  EACH PARTY
HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

[REMAINDER OF PAGE INTENTIONALLY BLANK.  SIGNATURES FOLLOW.]

 

14

 

IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.

	
   

  	
  GENUTEC
  BUSINESS SOLUTIONS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lee J. Danna

  
	
   

  	
   

  	
  Name:
  Lee J. Danna

  	
   

  	
   

  
	
   

  	
   

  	
  Title:
  President/CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TECHNOLOGY
  INVESTMENT CAPITAL CORP.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Saul B. Rosenthal

  
	
   

  	
   

  	
  Name: Saul
  B. Rosenthal

  	
   

  	
   

  
	
   

  	
   

  	
  Title:   President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SEAVIEW MEZZANINE FUND LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David S. Montoya

  
	
   

  	
   

  	
  Name:
  David S. Montoya

  	
   

  	
   

  
	
   

  	
   

  	
  Title:
  Managing Director

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