COMMON STOCK PURCHASE AGREEMENT
This
Common Stock Purchase Agreement
(this “Agreement”) is
made and entered into as of the 9th
day of
October, 2008 by, between and among America West Resources, Inc., a Nevada
corporation (the “Company”), and each of Denly
ACI Partners, Ltd., a Texas limited partnership (“Denly ACI”) and Xxxxxx X.
xxx
Xxxxxx and Xxxxx X. xxx Xxxxxx, Trustees of The von Waaden 2004 Revocable
Trust
(the “Trustees”) (Denly
ACI and the Trustees are sometimes referred to in this Agreement, collectively,
as the “Investors”).
ARTICLE
I.
RECITALS
1.01 Company. The
Company was initially incorporated on July 13, 1990 and as of the date of
this
Agreement has only one class of its capital stock issued and outstanding,
that
being its $.0001 par value common stock (the “Common Stock”). The
Company is engaged in the coal mining business in Utah.
1.02 Consideration. Each
of the Parties acknowledges that each has given and received good, valuable
and
present consideration to support each of the obligations of the Parties under
this Agreement.
ARTICLE
II.
TRANSACTION
TO BE EFFECTED
PURSUANT TO THIS AGREEMENT
2.01 Issuance
and Sale of Common
Stock for Cash. Subject to the terms and conditions of this
Agreement, at the Closing, the Company shall issue and sell to the Investors,
and the Investors shall purchase from the Company, Ten Million (10,000,000)
shares of Common Stock (the “Investors’ Common Stock”) for
an aggregate purchase price of Two Hundred Thousand Dollars ($200,000) and
being
a price of approximately $.02 per share. The Investors shall purchase
the Investors’ Common Stock from the Company in the following amounts between
them:
Investors
Shares
Price
Denly
ACI
6,666,667
shares
$133,333.34
Trustees
3,333,333
shares
$ 66,666.66
2.02 Determination
of Purchase
Price for the Investors’ Common Stock. The Company and the
Investors acknowledge that the purchase price for the Investors’ Common stock
under this Agreement is fair and reasonable and has been determined by
negotiation, with each of the Parties considering, among other factors, the
following:
(a) the
fact
that the Company’s principal operating subsidiary has been in bankruptcy since
October of 2007; and
(b) the
fact
that the Company has experienced continuing operating losses in 2006, 2007
and
through June 30, 2008; and
(c) the
fact
that the Company has a negative net worth in excess of ($2,500,000);
and
(d) the
fact
that at the end of 2007 a substantial number of unregistered shares of Common
Stock were issued by the Company at a price of $.025 per share; and
(e) the
fact
that the current global credit crisis has made the continued financing of
the
operations of the Company and its Subsidiaries very difficult.
2.03 Registration
Rights
Agreement. When issued, the Investors’ Common Stock shall have
the benefit of that certain Registration Rights Agreement to be executed
by the
Company in the form attached as Exhibit A to this
Agreement (the “Registration
Rights Agreement”).
ARTICLE
III.
CLOSINGS
3.01 Loan
Agreement; Escrow
Agreement. Contemporaneously with the execution of this
Agreement, Investors and the Company have entered into that certain Loan
Agreement (the “Loan
Agreement”) pursuant to which, among other things, Investors have agreed
to loan to the Company up to $2,800,000 subject to certain terms and conditions,
and Investors have delivered $2,250,000 of the loan proceeds to Xxxxx Fargo
Bank, National Association (“Escrow Agent”) in accordance
with that certain Escrow and Control Agreement of even date with this Agreement
(the “Escrow
Agreement”).
3.02 Date
and Place of
Closing. The closing (the “Closing”) hereunder
with
respect to the issuance and sale of the shares of Common Stock and the
consummation of the related transactions contemplated hereby shall, subject
to
the satisfaction or waiver of the applicable conditions set forth in Article
VII, take place at the offices of Graves, Dougherty, Xxxxxx & Xxxxx, P.C.,
000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000 at the same time and
on the
same date (the “Closing
Date”) as the initial disbursement of loan proceeds is made by the Escrow
Agent in accordance with the Loan Agreement and the Escrow
Agreement.
3.03 Deliveries
at
Closing.
(a) At,
or
prior to, the Closing, the Company shall:
(i) deliver
to the Investors a copy certified by the Secretary of State of the State
of
Nevada of the Articles of Incorporation of the Company and all amendments
thereto;
(ii) deliver
to the Investors a Secretary’s Certificate executed by the Secretary of the
Company certifying to the incumbency of the Chief Executive Officer of the
Company, and certifying to and attaching (A) the Bylaws of the Company and
all
amendments thereto, (B) the resolutions of the Board of Directors of the
Company
authorizing and approving the execution, delivery and performance of this
Agreement;
(iii) deliver
to the Investors the opinion of the Company’s counsel, in the form acceptable to
the Investors;
(iv) deliver
to the Investors certificate evidencing the Investors’ Common Stock in customary
form and containing only the restrictive legend described in Section 5.03 below; and
(v) execute
and deliver to the Investors the Registration Rights Agreement.
(b) At
the
Closing, the Investors shall:
(i) deliver
to the Company the purchase price for the Investors’ Common Stock;
and
(ii) execute
and deliver to the Company the Registration Rights Agreement.
ARTICLE
IV.
REPRESENTATIONS
AND
WARRANTIES OF THE COMPANY
4.01 Representations
and
Warranties of the Company. The Company represents and warrants
to the Investors as set forth in this Article IV.
4.02 Organization
and Standing of
the Company; Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of
Nevada and has all requisite corporate power to carry on its business as
now
conducted and as proposed to be conducted, and the Company has the corporate
power to enter into and perform this Agreement and to issue and sell the
Investors’ Common Stock as herein provided. The Company is duly
qualified or licensed as a foreign corporation and in good standing in each
jurisdiction in which the character or location of the property owned, leased
or
operated by it or the nature of the business conducted by it makes such
qualification necessary. The Company is not in default in the
performance, observance or fulfillment of any provisions of its Articles
of
Incorporation or bylaws.
4.03 Capitalization
of the
Company. Immediately prior to execution of this Agreement and
the Closing:
(a) the
authorized capital stock of the Company consists entirely of Two Hundred
Million
(200,000,000) shares of Common Stock, and Two Million Five Hundred Thousand
(2,500,000) shares of $.0001 par value Preferred Stock (“Preferred
Stock”);
(b) One
Hundred Ten Million Five Hundred Forty Nine Thousand One Hundred and Twenty
Nine
(110,549,129) shares of Common Stock are issued and outstanding, no (0) shares
of Preferred Stock are issued or outstanding, and the Company has outstanding
warrants, options and a right pursuant to an employment agreement to
purchase and issue Common Stock in the aggregate amount of Six Million Two
Hundred Thirty Eight Thousand Nine Hundred and Ninety-Nine (6,238,999)
shares;
(c) the
Company has no issued or outstanding capital stock or obligations to issue
capital stock except as set forth in subsection (b) above.
4.04 Duly
Issued. Upon issuance and delivery to each of the Investors of
the Investors’ Common Stock against payment of the purchase price therefore
pursuant to this Agreement and the Escrow Agreement, such shares will be
validly
issued, fully paid and non-assessable shares of Common Stock, and will be
free
and clear of all liens, charges, restrictions, claims and encumbrances imposed
by or through the Company.
4.05 Authorization. The
Company has the requisite corporate power and authority to enter into this
Agreement and each of the Transaction Documents required to be entered into
by
the Company pursuant to the terms and conditions hereof and thereof,
respectively, and to perform its obligations hereunder and
thereunder. This Agreement, the issuance, sale and delivery of the
shares of Investors’ Common Stock have, and each of the Transaction Documents,
when executed and delivered by the Company, will have been duly authorized,
executed and delivered by and on behalf of the Company and will constitute
the
valid and binding agreements of the Company, enforceable in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally.
4.06 SEC
Filings; Financial
Statements. The Company has provided to the Investors copies
of its Form 10K SB/A filed with the Commission on April 29, 2008 for the
period
ended December 31, 2007, the Form 10Q filed with the Commission on August
18,
2008 for the period ended June 30, 2008, and all Form 8-K’s filed with the SEC
since January 1, 2008 (collectively, the “SEC Filings”). The
SEC Filings are accurate and complete in all material respects and contain
all
information required to be set forth in the same. The financials
statements included in the SEC Filings (collectively, the “Financial Statements”) present
fairly, in accordance with GAAP, the financial position and the results of
operation and cash flow of the Company as of the dates and for the periods
indicated therein (with any of such Financial Statements that are unaudited
subject to normal audit adjustments).
4.07 No
Conflict. The execution, delivery and performance of this
Agreement and the other Transaction Documents to which the Company is a party
will not violate the Articles of Incorporation or Bylaws of the Company and
will
not violate any provision of law, or order of any court or governmental agency
affecting the Company in any respect, and will not conflict with, result
in a
breach of the provisions of, constitute a default under any material agreement
binding on the Company, or result in the imposition of any lien, charge,
or
encumbrance upon any assets of the Company that could have a Material Adverse
Effect. No approval or consent from any third party not already
obtained is required in connection with the execution of or performance under
this Agreement or the Transaction Documents.
4.08 No
Material Adverse
Changes. Since June 30, 2008, there have been no Material
Adverse Changes other than as set forth in any of the SEC Filings.
4.09 Governmental
Authorization:
Third Party Consents. No approval, consent, compliance,
exemption, authorization or other action by, or notice to, or filing with,
any
Governmental Authority or any other Person in respect of any Requirement
of Law,
and no lapse of a waiting period under a Requirement of Law, is necessary
or
required in connection with the execution, delivery or performance by the
Company or enforcement against the Company of this Agreement or the Transaction
Documents to which any such Person is a party or the transactions contemplated
thereby.
4.10 Representations
and
Warranties in Other Agreements. The representations and
warranties made by the Company in the other Transaction Documents, and in
any
other certificates delivered pursuant hereto or thereto, are true and correct
in
all material respects (except where any such representation and warranty
is
stated as being true only as of a specific date, in which case such
representation and warranty was true and correct in all material respects
on
such date).
4.11 Disclosure. This
Agreement, The SEC Filings, the Financial Statements and the documents and
certificates furnished to the Investors by the Company on or prior to the
Closing do not contain any untrue statement of a material fact or omit to
state
a material fact necessary in order to make the statements contained herein
or
therein, in the light of the circumstances under which they were made, not
misleading. There is no fact known to the Company which the Company
has not disclosed to the Investors in writing, which has had or would reasonably
be expected to have a Material Adverse Effect.
ARTICLE
V.
REPRESENTATIONS
AND
WARRANTIES OF INVESTORS
5.01 Representations
and
Warranties of the Investors. Each of the Investors severally
(but not jointly) represents and warrants to the Company as set forth in
this
Article V.
5.02 Authorization;
Authority. This Agreement and each of the Transaction
Documents has been duly authorized and executed by such Investor (to the
extent
such Investor is a party to the same) and constitutes a valid agreement binding
upon the Investor, enforceable in accordance with its terms (except to the
extent that such enforceability may be limited by bankruptcy or similar laws
affecting creditors’ rights generally or by general equitable
principles). Such Investor has the full legal right, power and
authority to enter into this Agreement and each of the Transaction Documents
to
which it is a party and to perform such Investor’s obligations hereunder and
thereunder upon the terms and conditions herein and therein set
forth.
5.03 Securities
Not
Registered. Such Investor is acquiring the shares of Common
Stock being purchased by such Investor hereunder for such Investor’s own account
and not with a view to or for sale in connection with the distribution thereof
in violation of applicable securities laws. Such Investor has been
advised that the shares of the Common Stock to be issued and sold hereunder
have
not been registered under the Securities Act, or applicable state securities
laws and that they must be held indefinitely unless the offer and sale thereof
are subsequently registered under the Securities Act or any exemption from
such
registration is available. Such Investor acknowledges and agrees that
the certificates representing the shares of the Investors’ Common Stock will
bear a restrictive legend in substantially the following form:
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“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR SOLD IN THE ABSENCE
OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES
ACT
OF 1933, A “NO ACTION” LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION
WITH RESPECT TO SUCH OFFER FOR SALE OR SALE, COMPLIANCE WITH RULE
144
UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY
TO
THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”
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The
Investor further acknowledges and agrees that the Company may issue appropriate
“stop transfer” instructions to its transfer agent, if any, with respect to such
securities and/or make appropriate notations to such effect in its own transfer
records.
5.04 Investment
Experience,
Etc. The Investor represents that such Investor (i) has
such knowledge and experience in financial and business matters that such
Investor is capable of evaluating the merits and risks of the purchase of
the
Investors’ Common Stock, (ii) has a net worth significantly in excess of the
amount of the purchase price for the Investors’ Common Stock and is able to bear
the economic risk of a complete loss on the purchase of the Investors’ Common
Stock, and (iii) is an “accredited investor” as that term is defined in
Rule 501(a) of Regulation D under the Securities Act.
5.05 Finder’s
Fees. The Investors have not incurred any liability for
commissions or other fees to any finder, broker or agent in connection with
the
transactions contemplated by this Agreement.
ARTICLE
VI.
COVENANTSOF
THE
COMPANY
Subject
to earlier expiration with respect to Section 6.10
as set forth herein, until the date Investors shall own less than ten percent
(10.0%) of the Investors’ Common Stock, the Company and each Subsidiary of the
Company shall:
6.01 Maintenance
of Corporate
Existence, etc. Maintain in full force and effect its
corporate existence, rights and franchises and all licenses and other rights
in
or to use patents, processes, licenses, trademarks, trade names or copyrights
owned or possessed by it of any subsidiary and deemed by the Company to be
necessary to the conduct of their business.
6.02 Prompt
Payment of Taxes,
etc. Promptly pay and discharge, or cause to be paid and
discharge, when due and payable, all lawful taxes, assessments and governmental
charges or levies imposed upon the income, profits, property or business
of the
Company or any subsidiary; provided, however, that any such tax, assessment,
charge or levy need not be paid if the validity thereof shall currently be
contested in good faith by appropriate proceedings and if the Company shall
have
set aside on its books adequate reserves with respect thereto and provided,
further, that the Company will pay all such taxes, assessments, charges or
levies forthwith upon the commencement of proceedings to foreclose any lien
which may have attached as security therefore. The Company will promptly
pay or
cause to be paid when due, or in conformance with customary trade terms or
otherwise in accordance with policies related thereto adopted by the Company’s
Board of Directors, all other indebtedness incident to operations of the
Company.
6.03 Accounts
and
Records. Keep true records and books of account in which full,
true and correct entries will be made of all dealings or transactions in
relation to its business and affairs in accordance with generally accepted
accounting principles applied on a consistent basis.
6.04 Compliance
with Requirements
of Government Authorities. Duly observe and conform to all
valid requirements of governmental authorities relating to the conduct of
their
businesses or to their properties or assets.
6.05 Visits
and
Inspections. Permit representatives of each Investor, from
time to time, as often as may be reasonably requested, but only during normal
business hours and upon reasonable prior notice, to visit and inspect its
properties; inspect, audit and make extracts from its books, records and
files,
including, but not limited to, management letters prepared by independent
accountants; and discuss with its principal officers and its independent
accountants, its business, assets, liabilities, financial condition, results
of
operations and business prospects (and by this provision the Company authorizes
such accountants to discuss the finances and affairs of the
Company).
6.06 Conduct
of
Business. Engage only in business consisting primarily of
business conducted on the Closing Date and other businesses reasonably related
thereto.
6.07 Use
of
Proceeds. Use the proceeds of the sale of the Investors’
Common Stock only for the purposes provided for in the Escrow Agreement
and the
other Transaction Documents.
6.08 Compliance
with
Agreements. Perform and observe all of its material
obligations to the Investors, set forth in this Agreement and the other
Transaction Documents to which it is a party and the Articles of Incorporation,
Bylaws or other organizational and governing documents of the
Company.
6.09 Compliance
with Transaction
Documents. Comply in all material respects with each term,
condition and provision of the Articles of Incorporation, Bylaws and all
other
Transaction Documents to which the Company and any of the Investors is a
party.
6.10 Issuance
of Preferred
Stock. The Company shall not issue any Preferred Stock without
the prior written consent of the holders of a majority of the shares of
Investors’ Common Stock (provided that this Section 6.10 shall expire one (1) year from the date of
this
Agreement).
ARTICLE
VII.
CONDITION
TO INVESTORS’
OBLIGATION TO CLOSE
7.01 Conditions. The
obligation of Investors to close the purchase of the Investors’ Common Stock and
to effect the Closing shall be expressly subject to, and conditioned upon,
satisfaction of the following conditions:
(a) satisfaction
of all conditions for the first disbursement by Escrow Agent under the Escrow
Agreement (including, without limitation, the satisfaction of all conditions
to
such disbursement set forth in that certain Loan Agreement between the Company
and Investors of even date with this Agreement (the “Loan Agreement”);
(b) all
of
the warrants and representations of the Company being true, correct, complete
and accurate; and
(c) full
and
timely performance by the Company of all of its obligations and covenants
under
this Agreement and each of the Transaction Documents.
7.02 Termination. Investors
may terminate this Agreement by written notice to the Company and direct
the
Escrow Agent to return to Investors all of the purchase price for the Investors’
Common Stock previously delivered to Escrow Agent in the event of any one
of the
following:
(a) the
failure of any of the warranties or representations of the Company set forth
in
this Agreement or any of the Transaction Documents to be true, correct, complete
and accurate; or
(b) the
failure of the Company to fully and timely perform any of its obligations
under
this Agreement or any of the other Transaction Documents; or
(c) each
of
the conditions set forth at Section 7.01 above has
not been fully satisfied or waived on or before December 5, 2008.
ARTICLE
VIII.
INDEMNIFICATION
8.01 Indemnification. In
addition to all other sums due hereunder or provided for in this Agreement,
the
Company agrees to indemnify and hold harmless each Investor and their Affiliates
and their officers, directors, agents, employees, subsidiaries, partners
and
controlling Persons (each, an “Indemnified Party”) to the
fullest extent permitted by law, from and against any and all out-of-pocket
losses, claims, damages, expenses (including reasonable fees, disbursements
and
other charges of counsel) or other liabilities (collectively, “Liabilities”) resulting from
or arising out of (a) any breach of any representation or warranty, covenant
or
agreement of the Company in this Agreement or any of the other Transaction
Documents or (b) any investigation or proceeding against the Company or any
Indemnified Party and arising out of or in connection with this Agreement
or any
of the Transaction Documents, whether or not the transactions contemplated
by
this Agreement are consummated, which investigation or proceeding requires
the
participation of, or is commenced or filed against, any Indemnified Party
because of this Agreement, any other Transaction Document or such other
documents and the transactions contemplated hereby or thereby, provided,
that
the Company shall not be liable under this Section 8.01 to an Indemnified Party for any liabilities
resulting primarily from any actions that involved the gross negligence or
willful misconduct of such Indemnified Party; and provided, further, that
if and
to the extent that such indemnification is unenforceable for any reason,
the
Company shall make the maximum contribution to the payment and satisfaction
of
such Liabilities for which it would otherwise be liable hereunder which shall
be
permissible under applicable laws. In connection with the obligation
of the Company to indemnify for Liabilities as set forth above, the Company
further agrees, upon presentation of appropriate invoices containing reasonable
detail, to reimburse each Indemnified Party for all such Liabilities (including
reasonable fees, disbursements and other charges of counsel) as they are
incurred by such Indemnified Party; provided, that if an Indemnified Party
is
reimbursed hereunder for any Liabilities, such reimbursement of Liabilities
shall be refunded to the extent it is finally judicially determined that
the
Liabilities in question resulted primarily from the willful misconduct or
gross
negligence of such Indemnified Party. The obligations of the Company
under this paragraph will survive any transfer of the Investors’ Common
Stock. In the event that the foregoing indemnity is unavailable or
insufficient to hold an Indemnified Party harmless, then the Company will
contribute to amounts paid or payable by such Indemnified Party in respect
of
such Indemnified Party’s Liabilities in such proportions as appropriately
reflect the relative benefits received by and fault of the Company and such
Indemnified Party in connection with the matters as to which such Liabilities
relate and other equitable considerations.
8.02 Notification. Each
Indemnified Party under this Article VIII will, promptly after the receipt
of
notice of the commencement of any action, investigation, claim or other
proceeding against such Indemnified Party in respect of which indemnity may
be
sought from the Company under this Article VIII, notify the Company in writing
of the commencement thereof. The omission of any Indemnified Party so
to notify the Company of any such action shall not relieve the Company from
any
liability which it may have to such Indemnified Party under this Article
VIII
unless, and only to the extent that, such omission results in the Company’s
forfeiture of substantive rights or defenses or the Company is otherwise
irrevocably prejudiced in defending such proceeding. In case any such
action, claim or other proceeding shall be brought against any Indemnified
Party
and it shall notify the Company of the commencement thereof, the Company
shall
be entitled to assume the defense thereof at its own expense, with counsel
satisfactory to the Company; provided, that any Indemnified Party may, at
its
own expense, retain separate counsel to participate in such
defense. Notwithstanding the foregoing, in any action, claim or
proceeding in which both the Company, on the one hand, and an Indemnified
Party,
on the other hand, is, or is reasonably likely to become, a party, such
Indemnified Party shall have the right to employ separate counsel at the
Company’s expense and to control its own defense of such action, claim or
proceeding if, (a) the Company has failed to assume the defense and employ
counsel as provided herein, (b) the Company has agreed in writing to pay
such
fees and expenses of separate counsel or (c) in the reasonable opinion of
counsel to such Indemnified Party, a conflict or likely conflict exists between
the Company, on the one hand, and such Indemnified Party, on the other hand,
that would make such separate representation advisable, provided, however,
that
the Company shall not in any event be required to pay the fees and expenses
of
more than one separate counsel (and if deemed necessary by such separate
counsel, appropriate local counsel who shall report to such separate
counsel). The Company agrees that it will not, without the prior
written consent of an Indemnified Party, settle, compromise or consent to
the
entry of any judgment in any pending or threatened claim, action or proceeding
relating to the matters contemplated hereby (if such Indemnified Party is
a
party thereto or has been actually threatened to be made a party thereto)
unless
such settlement, compromise or consent includes an unconditional release
of such
Indemnified Party from all liability arising or that may arise out of such
claim, action or proceeding. The Company shall not be liable for any
settlement of any claim, action or proceeding effected against an Indemnified
Party without the prior written consent of the Company. The rights
accorded to Indemnified Parties hereunder shall be in addition to any rights
that any Indemnified Party may have at common law, by separate agreement
or
otherwise.
ARTICLE
IX.
MISCELLANEOUS
9.01 Governing
Law. This Agreement shall be governed by and construed in all
respects by the internal laws of the State of Texas (except for the proper
application of the United States federal securities laws), without giving
effect
to any choice of law or conflict of law provision or rule (whether of the
State
of Texas or any other jurisdictions) that would cause the application of
the
laws of any jurisdictions other than the State of Texas.
9.02 Exculpation
Among
Investors. Each Investor acknowledges that it is not relying
upon any other Investor, or any officer, director, employee, member, agent,
partner or affiliate of any such other Investor, in making its investment
or
decision to invest in the Company or in monitoring such investment.
9.03 Notices,
Etc. Unless otherwise specified within a provision of this
Agreement all notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is electronically or
mechanically generated and kept on file by the sending party); (iii) three
Business Days after deposit with the United States Mail when sent by registered
or certified mail; or (iv) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to
the
party to receive the same. The addresses and facsimile numbers for
such communications shall be:
If
to the Company:
Xxx
Xxxxx
Chief
Executive Officer
00
Xxxx
000 Xxxxx, Xxxxx 000
Xxxx
Xxxx
Xxxx, Xxxx 00000
Facsimile: _______________
With
a
copy to:
Xxxxxx
X Xxxxxxxxx
Xxxxxx
& Xxxxxxxxx, PC
0
Xxxxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Facsimile: (000)
000-0000
If
to the Investors:
00000
Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxx,
Xxxxx 00000
Attention: D.
Xxxx xxx
Xxxxxx
Facsimile: (000)
000-0000
With
a copy to:
Xxxxxx
Xxxxxxxx, Esq.
Graves,
Dougherty, Xxxxxx & Xxxxx,
P.C.
000
Xxxxxxxx Xxxxxx, Xxxxx
0000
Xxxxxx,
Xxxxx 00000
Facsimile: (000)
000-0000
9.04 Amendments
and
Waivers.
(a) This
Agreement may be terminated, amended or modified, by a written instrument
executed by (a) the Company, and (b) the Investors.
(b) Any
obligation of the Company under this Agreement may be waived or excused by
the
Investors.
9.05 Gender. Wherever
herein the singular number is used, the same shall include the plural, and
the
masculine gender shall include the feminine and neuter genders, and vice
versa,
as the context may require.
9.06 Certain
Expenses. The Company agrees to pay or reimburse the Investors
and their successors and assigns for: (a) all reasonable out-of-pocket costs
and
expenses (including, without limitation, reasonable attorneys’ fees and
expenses) in connection with (i) the negotiation, preparation, execution
and delivery of this Agreement and the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby and
(ii) any amendment, modification or waiver of any of the terms of this
Agreement or the Transaction Documents; (b) all reasonable costs and expenses
of
the Investors and their successors and assigns (including, without limitation,
reasonable attorney’s fees and expenses) in connection with any default
hereunder and any enforcement proceedings resulting therefrom; and
(c) transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any Governmental Authority in respect of this Agreement
or the
Transaction Documents or any other document referred to herein or therein,
and
will indemnify and save the Investors harmless, without limitation as to
time,
from and against any and all liabilities with respect to all such taxes,
assessments and charges and agrees to pay the Investors such additional amounts
as may be necessary in respect of such taxes, assessments and charges in
order
that the Investors shall incur no greater cost or expenses than the Investors
would have incurred had there been no such taxes, assessment or charges payable
in respect of this Agreement, the Transaction Documents or any other document
referred to herein or therein.
9.07 Section
and Other
Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not in any way affect
the
meaning or interpretation of this Agreement.
9.08 Counterparts. This
Agreement may be executed simultaneously in any number of counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
9.09 Severability. If
any provision of this Agreement is held by final judgment of a court of
competent jurisdiction to be invalid, illegal or unenforceable, such invalid,
illegal or unenforceable provision shall be severed from the remainder of
this
Agreement, and the remainder of this Agreement shall be enforced. In
addition, the invalid, illegal or unenforceable provision shall be deemed
to be
automatically modified, and, as so modified, to be included in this Agreement,
such modification being made to the minimum extent necessary to render the
provision valid, legal and enforceable. Notwithstanding the
foregoing, however, if the severed or modified provision concerns all or
a
portion of the essential consideration to be delivered under this Agreement
by
one party to the other, the remaining provisions of this Agreement shall
also be
modified to the extent necessary to equitably adjust the parties’ respective
rights and obligations hereunder.
9.10 Telecopy
Execution and
Delivery. A facsimile, telecopy or other reproduction of this
Agreement may be executed by one or more parties hereto, and an executed
copy of
this Agreement may be delivered by one or more parties hereto by facsimile
or
similar electronic transmission device pursuant to which the signature of
or on
behalf of such party can be seen, and such execution and delivery shall be
considered valid, binding and effective for all purposes. At the
request of any party hereto, all parties hereto agree to execute an original
of
this Agreement as well as any facsimile, telecopy or other reproduction
hereof.
9.11 Entire
Agreement. This Agreement and the other Transaction Documents
constitute the entire agreement between the parties with respect to the subject
matter hereof and thereof. All proposals, negotiations and
representations (if any) made prior, and with reference to the subject matter
of
this Agreement, are merged herein. This Agreement has been negotiated
by the parties and their respective counsel and will be interpreted fairly
in
accordance with its terms and without any strict construction in favor of
or
against either party. Neither the Company nor the Investors shall be
bound by any oral agreement or representation, irrespective of when
made.
9.12 Survival
of Representations,
Warranties and Covenants. All of the representations and
warranties made herein shall survive the execution and delivery of this
Agreement, any investigation by or on behalf of the Investors, or acceptance
of
the shares of Common Stock and payment therefore and shall survive until
such
time as the shares of Common Stock have been sold or redeemed in full in
cash. All covenants and indemnities made herein shall survive in
perpetuity, unless otherwise provided in this Agreement.
9.13 Remedies
Cumulative. No failure or delay on the part of the Company or
the Investors in exercising any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such
right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein
are cumulative and are not exclusive of any remedies that may be available
to
the Company or the Investors at law, in equity or otherwise.
9.14 Further
Assurances. Each of the parties shall execute such documents
and perform such further acts (including, without limitation, obtaining any
consents, exemptions, authorizations, or other actions by, or giving any
notices
to, or making any filings with, any Governmental Authority or any other Person)
as may be reasonably required or desirable to carry out or to perform the
provisions of this Agreement or any of the Transaction Documents.
9.15 Disputes. The
parties agree that all disputes arising under this Agreement shall be submitted
to a court of competent jurisdiction located in Xxxxxx, Xxxxxx County,
Texas.
9.16 WAIVER
OF JURY
TRIAL. EACH OF THE PARTIES WAIVES ITS RIGHTS TO TRIAL BY JURY
AND AGREES TO SUBMIT ANY LAWSUIT TO TRIAL BEFORE THE COURT AND WITHOUT A
JURY.
ARTICLE
X.
DEFINITIONS
10.01 Definitions. As
used in this Agreement, and unless the context requires a different meaning,
the
following terms have the meanings indicated:
“Affiliate”
means,
with respect
to a Person, (a) any director, executive officer, general partner, managing
member or other manager of such Person, (b) any other Person which directly
or
indirectly through one or more intermediaries, controls, or is controlled
by, or
is under common control with, such Person and (c) if such Person is an
individual, any member of the immediate family (including parents, spouse
and
children) of such individual, any trust whose principal beneficiary is such
individual or one or more members of such individual’s immediate family and any
Person who is controlled by any such member or trust. The term “control” means
(i) the power to vote more than 50% of the securities or other equity interests
of a Person having ordinary voting power (on a fully diluted basis), or (ii)
the
possession, directly or indirectly, of any other power to direct or cause
the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
“Agreement”
means
this Common
Stock Purchase Agreement, as amended, modified or supplemented from time
to
time.
“Articles
of Incorporation”
means the Articles of Incorporation of the Company and as in effect
on the
Closing Date, including, all amendments and restatements of the
same.
“Board
of Directors” shall mean
the group that manages the business and affairs of the Company as described
in
the bylaws of the Company.
“Business
Day” means any day
other than a Saturday, Sunday or other day on which commercial banks in Austin,
Texas are authorized or required by law or executive order to
close.
“Code”
means
the Internal
Revenue Code of 1986, as amended, or any successor
statute thereto.
“Commission”
means
the
Securities and Exchange Commission or any similar agency then having
jurisdiction to enforce the Securities Act.
“Common
Stock” has the meaning
set forth in Section 1.01 of this Agreement.
“Company”
means
America West
Resources, Inc., a Nevada corporation.
“GAAP”
means
generally accepted
United States accounting principles set forth in the opinions and pronouncements
of the Accounting Principles Board of the American Institute of Certified
Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board that are applicable to the circumstances as of the date of
determination.
“Governmental
Authority” means
the government of any nation, state, city, locality or other political
subdivision of any thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
“Material
Adverse Change” means
a material adverse change in the business, assets, operations, condition
(financial or otherwise), results of operations or prospects of the Company
or
any Subsidiary of the Company.
“Material
Adverse Effect” means
a material adverse effect upon the business, assets, operation, condition
(financial or otherwise), results of operations or prospects of the Company
or
any Subsidiary of the Company.
“Person”
means
any individual,
firm, corporation, partnership, trust, limited liability company, incorporated
or unincorporated association, joint venture, joint stock company, Governmental
Authority or other entity of any kind, and shall include any successor (by
merger or otherwise) of such entity.
“Subsidiary”
means,
as to any
Person, (i) any corporation more than fifty percent (50%) of whose stock
of any
class or classes having by the terms thereof ordinary voting power to elect
a
majority of the directors of such corporation (irrespective of whether or
not at
the time stock of any class or classes of such corporation shall have or
might
have voting power by reason of the happening of any contingency) is at the
time
owned such Person and/or one or more Subsidiaries of such Person and (ii)
any
partnership, limited liability company, association, joint venture or other
entity in which such Person and/or one or more Subsidiaries of such Person
has
more than a 50% equity interest at the time.
“Transaction
Documents” means,
collectively, this Agreement, the Registration Rights Agreement, the Escrow
Agreement, the Loan Agreement and all other documents, certificates or
agreements entered into or delivered in connection with any of the
foregoing.
“United
States” and “U.S.” shall mean
the United
States of America.
10.02 Accounting
Terms: Financial
Statements. All accounting terms used herein not expressly
defined in this Agreement shall have the respective meanings given to them
in
accordance with sound accounting practice. The term “sound accounting
practice” shall mean such accounting practice as, in the opinion of the
independent certified public accountants regularly retained by the Company,
conforms at the time to GAAP applied on a consistent basis except for changes
with which such accountants concur.
[remainder
of page intentionally left blank]
IN
WITNESS WHEREOF, the parties have
duly executed this Agreement as of the day and year first above
written.
By:
Name:
Title:
[Counterpart
Signature Pages Follow]
990067v5
COUNTERPART
SIGNATURE
PAGE
DENLY
ACI
PARTNERS, LTD.,
a
Texas
limited partnership
By:
Denly ACI Mgt., LLC, a Texas limited
liability
company, its general partner
By:
Xxxxxx
X. xxx Xxxxxx,
Manager
By:
Xxxxx
X. xxx Xxxxxx,
Manager
990067v5
COUNTERPART
SIGNATURE
PAGE
XXXXXX
X.
XXX XXXXXX, Trustee of
The
von
Waaden 2004 Revocable Trust
XXXXX
X.
XXX XXXXXX, Trustee of
The
von
Waaden 2004 Revocable Trust
990067v5
EXHIBITS
Exhibit
A
Registration Rights Agreement
990067v5
EXHIBIT
A
REGISTRATION
RIGHTS
AGREEMENT
This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated
as
of this ___ day of _______________, 2008 is made by and among America West Resources,
Inc.,
a Nevada corporation, (the “Company”), Denly
ACI Partners, Ltd., a
Texas limited partnership (the “Partnership”), and
Xxxxxx X. xxx Xxxxxx and Xxxxx X. xxx Xxxxxx, Trustees of The von Waaden 2004 Revocable
Trust (the “Trust,”
collectively
with Partnership, “Investors”).
WHEREAS,
the Company and
Investors have entered into a Common Stock Agreement, dated October [__],
2008
(the “Purchase
Agreement”), in which the Investors have agreed to purchase from the
Company an aggregate of 10,000,000 shares of the Company’s common stock (the
“Restricted
Shares”); and
WHEREAS
, among other matters,
the Company has undertaken to register the resale of the Restricted Shares
and
comply with certain other covenants with respect to the Restricted Shares
pursuant to the terms set forth herein.
NOW,
THEREFORE, the Company and the Investors hereby covenant and agree as
follows:
1.
Definitions.
All terms not defined herein shall have the following respective
meanings:
“Common Stock”
shall mean 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 of the SEC thereunder, all as the same shall be in effect at
the
time.
“Holder”
or
“Holders”
shall
mean
any person or persons to whom Restricted Shares were originally issued or
qualifying transferees.
“Restricted
Shares”
shall mean the 10,000,000 shares of the Company’s common stock issued in
connection with the Purchase Agreement.
“Securities
Act” shall
mean the Securities Act of 1933, as amended, and the rules and regulations
of
the SEC thereunder, all as the same shall be in effect at the applicable
time.
“SEC”
shall
mean the
U.S. Securities and Exchange SEC, or any other federal agency at the time
administering the Securities Act.
2.
Registration
Rights.
SECTION
2.1
Registration Rights
Available. The Company agrees to provide Holder with respect to the
Restricted Shares and any other securities issued or issuable at any time
or
from time to time in respect of the Restricted Shares upon a stock split,
stock
dividend, recapitalization or other similar event involving the Company
(collectively, the “Restricted Securities”)
unlimited rights to “piggyback” on any public offering of Company securities
subject to terms of this Agreement (the registration rights hereunder being
“Registration
Right”).
SECTION
2.2
Piggyback
Registration. With respect to Holder’s right to piggyback on a public
offering of the Company securities pursuant to Section 2.1, the
parties agree as follows:
(a)
Pursuant to Section
2.1, the Company will (i) promptly give to Holder written notice of any
registration relating to a public offering of the Company securities; and
(ii)
include in such registration (and related qualification under blue sky laws
or
other compliance), and in the underwriting involved therein, all the Securities
specified in Holders’ written request or requests, mailed in accordance with
Section 4.8
herein within 30 days after the date of such written notice from the
Company.
(b)
The Holders’ right to registration pursuant to Section 2.1 shall
be
conditioned upon Holders’ participation in such offering, and the inclusion of
the Restricted Securities in the underwriting shall be limited to the extent
provided herein. Notwithstanding any other provision of this Agreement, if
the
managing underwriter determines that market factors require a limitation
of the
aggregate number of shares to be underwritten, the managing underwriter may
only
limit the Restricted Securities that may be included in the registration
and
underwriting as follows: the number of Restricted Securities that may be
included in the registration and underwriting by Holders shall be determined
by
multiplying the number of shares of all securities of the Company to be included
in such registration and underwriting, times a fraction, the numerator of
which
is the number of Restricted Securities requested to be included in such
registration and underwriting by Holders, and the denominator of which is
the
total number of securities of the Company to be included in such registration
and underwriting. To facilitate the allocation of shares in accordance with
the
above provisions, the Company may round the number of shares allocable to
any
such person to the nearest 100 shares. If either Holder disapproves
of the terms of any such underwriting, it may elect to withdraw therefrom
by
written notice to the Company and the managing underwriter, delivered not
less
than seven days before the effective date of any registration statement.
Any
Restricted Securities excluded or withdrawn from such underwriting shall
be
withdrawn from such registration, and shall not be transferred in a public
distribution prior to 120 days after the effective date of the registration
statement relating thereto, or such other shorter period of time as the
underwriters may require.
SECTION
2.3
Registration
Procedure. With respect to the Registration Rights, whenever the Company
is required under this Agreement to effect the registration of any Restricted
Securities, the following provisions shall apply:
(a)
Holders shall be obligated to furnish to the Company and the underwriters
(if
any) such information regarding the Restricted Securities and the proposed
manner of distribution of the Restricted Securities as the Company and the
underwriters (if any) may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to
herein
and shall otherwise cooperate with the Company and the underwriters (if any)
in
connection with such registration, qualification or compliance.
(b)
The Company agrees that it will furnish to either Holder such number of
prospectuses, offering circulars or other documents incident to any Registration
Right, qualification or compliance referred to herein as provided or, if
not
otherwise provided, as either Holder from time to time may reasonably
request.
(c)
The Company shall use best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue
Sky
laws of such jurisdictions as shall be reasonably requested by the
Holders.
(d)
In the event of any underwritten public offering, the Company will enter
into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering.
(d)
The Company will notify each Holder of Restricted Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any
event
as a result of which the prospectus included 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 the light of the circumstances then
existing.
(e)
As applicable, the Company will cause all such Restricted Securities registered
pursuant to this Agreement to be listed on a national exchange or trading
system
and on each securities exchange and trading system on which similar securities
issued by the Company are then listed.
(f)
The Company will provide a transfer agent and registrar for all Restricted
Securities registered pursuant hereunder and a CUSIP number for all such
Restricted Securities, in each case not later than the effective date of
such
registration.
(g)
All expenses of any registrations permitted pursuant to this Agreement and
of
all other offerings by the Company (including, but not limited to, the expenses
of any qualifications under the blue-sky or other state securities laws and
compliance with governmental requirements of preparing and filing any
post-effective amendments required for the lawful distribution of the Restricted
Securities to the public in connection with such registration, of supplying
prospectuses, offering circulars or other documents, and Holders’ legal fees
(not to exceed $10,000) will be paid by the Company.
(h)
The Company will promptly make available for inspection by the selling Holders,
any underwriter(s) participating in any disposition pursuant to such
registration statement, and any attorney or accountant or other agent retained
by any such underwriter or selected by the selling Holders, 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 seller, underwriter,
attorney, accountant or agent, in each case, as necessary or advisable to
verify
the accuracy of the information in such registration statement and to conduct
appropriate due diligence in connection therewith.
(i)
The Company will notify each selling Holder, promptly after the Company receives
notice thereof, of the time when such registration statement has been declared
effective or a supplement to any prospectus forming a part of such registration
statement has been filed.
(j)
After any such registration statement hereunder has become effective, the
Company will notify each selling Holder of any request by the SEC that the
Company amend or supplement such registration statement or
prospectus.
(k)
The registration rights of this Agreement, subject to the terms and conditions
hereof, shall be available to any subsequent holder of the Restricted
Securities. Each subsequent holder entitled to registration rights under
this
Agreement shall be bound by the terms and subject to the obligations of this
Agreement as though it were an original signatory hereto.
3. Indemnification
.
SECTION
3.1
Indemnification
by the
Company . In the event of any registration of the Restricted Securities
of the Company under the Securities Act, the Company agrees to indemnity
and
hold harmless Holders and any other person who participates as an underwriter
in
the offering or sale of such securities against any and all claims, demands,
losses, costs, expenses, obligations, liabilities, joint or several, damages,
recoveries and deficiencies, including interest, penalties and attorneys’ fees
(collectively, “Claims”), to which
Holders or underwriter may become subject under the Securities Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based on any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which either Holders’ Restricted Securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or 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, and the Company will reimburse each Holder and each
such
underwriter for any legal or any other expenses reasonably incurred by any
of
them in connection with investigating or defending any such Claim (or action
or
proceeding in respect thereof); provided that the Company shall not be liable
in
any such case to the extent that any such Claim (or action or proceeding
in
respect thereof) or expense arises out of or is based on an untrue statement
or
alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance on and in conformity
with written information furnished to the Company through an instrument duly
executed by either Holder specifically stating that it is for use in the
preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of either Holder or
any
such underwriter and shall survive any transfer of the Restricted Securities
by
each Holder.
SECTION
3.2
Indemnification
by
Holders
. The Company may require, as a condition to including the Restricted Securities
in any registration statement filed pursuant to this Agreement, that the
Company
shall have received an undertaking satisfactory to it from the requesting
Holder(s), to indemnify and hold harmless (in the same manner and to the
same
extent as set forth in Section 3.1)
the Company,
each director of the Company, each officer of the Company and each other
person,
if any, who controls the Company, within the meaning of the Securities Act,
with
respect to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus contained therein,
or any amendment or supplement thereto, if such statement or alleged statement
or omission or alleged omission was made in reliance on and in conformity
with
written information furnished to the Company through an instrument duly executed
by the requesting Holder specifically stating that it is for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or
supplement. Notwithstanding the foregoing, the maximum liability
hereunder that any Holder shall be required to suffer shall be limited to
the
net proceeds to such Holder from the Restricted Securities sold by such Holder
in the offering. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company or any
such
director, officer or controlling person and shall survive any transfer of
the
Securities by each Holder.
SECTION
3.3
Notices of Claims,
etc. Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a Claim referred to in
this
Article 3,
such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under this Article
3,
except to the extent that the indemnifying party is actually prejudiced by
such
failure to give notice. In case any such action is brought against an
indemnifying party, unless in such indemnified party’s reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may
exist
in respect of such Claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, 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
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by
the
latter in connection with the defense thereof other than reasonable costs
of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that 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 of such Claim.
SECTION
3.4
Indemnification
Payments. The indemnification required by this Article
3
shall
be made by periodic payments of the
amount thereof during the course of the investigation or defense, as and
when
bills are received or expense, loss, damage or liability is
incurred.
4.
Additional
Covenants.
SECTION
4.1
Restrictive
Legend. It is understood that the certificates evidencing the
Restricted Shares shall bear the following legend:
|
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR SOLD IN THE ABSENCE
OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES
ACT
OF 1933, A “NO ACTION” LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION
WITH RESPECT TO SUCH OFFER FOR SALE OR SALE, COMPLIANCE WITH RULE
144
UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY
TO
THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”
|
SECTION
4.2
Rule
144. With a view to making available the benefits of certain
rules and regulations of the SEC that may at any time permit the sale of
the
Restricted Securities to the public without registration, the Company agrees
to
use its best lawful efforts to:
(a)
Make and keep adequate current public information available, as those terms
are
understood and defined in Rule 144 under the Securities Act, at all times
during
which the Company is subject to the reporting requirements of the Exchange
Act;
(b)
File with the SEC in a timely manner all reports and other documents required
of
the Company under the Securities Act and the Exchange Act (at all times during
which the Company is subject to such reporting requirements);
(c)
So long as either Holder owns any Restricted Securities, to furnish to such
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 and with regard
to
the Securities Act and the Exchange Act (at all times during which the Company
is subject to such reporting requirements), a copy of the most recent annual
or
quarterly report of the Company, and such other reports and documents of
the
Company and other information in the possession of or reasonably obtainable
by
the Company as either Holder may reasonably request in availing themselves
of
any rule or regulation of the SEC allowing Holder to sell any such securities
without registration; and
(d)
From time to time, upon the request of any Holder, cause counsel for Company
to
issue, at the expense of Company, an opinion to the transfer agent for the
Company’s securities and the broker for Holder confirming that the applicable
Restricted Shares may be sold without registration under the Securities Act
pursuant to Rule 144 thereunder.
Further,
in connection with any sale, transfer or other disposition by any Holder
of any
Restricted Shares pursuant to Rule 144, Company shall cooperate with such
Holder
to facilitate the timely preparation and delivery of certificates representing
the Restricted Shares to be sold and not bearing any legend, and enable
certificates for such Restricted Shares to be for such number of shares as
Seller may reasonably request at least two (2) business days prior to any
sale
of such Restricted Shares.
SECTION
4.3
Limitation on
Subsequent Registration Rights. From and after the date of
this Agreement, the Company will not, without the prior written consent of
the
Holders of a majority of the Restricted Securities, enter into any agreement
with any holder or prospective holder of any securities of the Company that
would (i) allow such holder or prospective holder to demand any registration
of
their securities, or (ii) otherwise grant any registration rights to such
holder
or prospective holder that are more favorable to such holder or prospective
holder than the rights granted to the Holders hereunder, unless such agreement
provides that the registration of the resale of the Restricted Securities
under
the Securities Act will be effected concurrently with such other registration
and that the holders of the Restricted Securities will be subject to pro-rata
reduction along with the other holders if required by the underwriter in
the
event of an underwritten offering.
5.
Miscellaneous
.
SECTION
5.1
Consent to
Amendments. Except as otherwise expressly provided herein, the provisions
of this Agreement may be amended or waived only by the written agreement
of the
Company and the Holders and shall be effective only to the extent specifically
set forth in such writing.
SECTION
5.2
Term of the
Agreement. This Agreement shall terminate with respect to Holder on the
earlier to occur of (i) all of the Restricted Securities having been registered
as provided in Article One, or (ii) three (3) years after the date
hereof.
SECTION
5.3 Successors
and
Assigns. Except as otherwise expressly provided herein, all covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto are transferable and will bind and inure to the benefit of the respective
successors and assigns of the parties hereto, but only if so expressed in
writing.
SECTION
5.4
Severability.
Whenever possible, each provision of this Agreement will be interpreted in
such
a manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable
law,
such provision will be ineffective only to the extent of such prohibition
or
invalidity, without invalidating the remainder of this Agreement.
SECTION
5.5
Delays or
Omissions. No failure to exercise or delay in the exercise of any right,
power or remedy accruing to Holder on any breach or default of the Company
under
this Agreement shall impair any such right, power or remedy nor shall it
be
construed to be a waiver of any such breach or default.
SECTION
5.6
Remedies
Cumulative. All remedies
under this
Agreement, or by law or otherwise afforded to any party hereto shall be
cumulative and not alterative.
SECTION
5.7
Descriptive
Headings. The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement. Unless clearly
denoted otherwise, any reference to Articles or Sections contained herein
shall
be to the Articles or Sections of this Agreement.
SECTION
5.8
Notices. Any
notices required or permitted to be sent hereunder shall be delivered personally
or mailed, certified mail, return receipt requested, to the addresses set
forth
in the Loan Agreement, and shall be deemed to have been received on the day
of
personal delivery or within three business days after deposit in the mail,
postage prepaid.
SECTION
5.9
Governing Law.
The validity, meaning and effect of this Agreement shall be determined in
accordance with the laws of the State of Texas applicable to contracts made
and
to be performed in that state.
SECTION
5.10 Final
Agreement. This Agreement, together with those documents expressly
referred to herein, constitutes the final agreement of the parties concerning
the matters referred to herein, and supersedes all prior agreements and
understandings.
SECTION
5.11 Execution in
Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed
an
original, and such counterparts together shall constitute one
instrument.
[Signature
Page Follows]
A-
990067v5
IN
WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement to be effective as of the day and year first above
written.
By:
Name:
Title:
INVESTORS:
DENLY
ACI
PARTNERS, LTD.,
a
Texas
limited partnership
By:
Denly ACI Mgt., LLC, a Texas limited
liability
company, its general partner
By:
Xxxxxx
X. xxx Xxxxxx,
Manager
By:
Xxxxx
X. xxx Xxxxxx,
Manager
Xxxxxx
X.
xxx Xxxxxx, Trustee of The
von
Waaden 2004 Revocable Trust
Xxxxx
X.
xxx Xxxxxx, Trustee of Xxx
xxx
Xxxxxx 0000 Xxxxxxxxx Xxxxx
X-
000000x0
