REGISTRATION RIGHTS AGREEMENT
Exhibit
10.6
This
Registration Rights Agreement (this “Agreement”) is made and
entered into effective as of __________, 2008 between Crownbutte Wind Power,
Inc. (formerly known
as ProMana Solutions, Inc.), a Nevada corporation (the “Company”), and the persons who
have executed the signature page(s) hereto (each, a “Purchaser” and collectively,
the “Purchasers”).
RECITALS:
WHEREAS,
the Company has entered into an Agreement and Plan of Merger and Reorganization
with Crownbutte Wind Power, Inc., a North Dakota corporation (“Crownbutte”), pursuant to
which a newly organized, wholly-owned subsidiary of the Company has merged with
and into Crownbutte, with Crownbutte remaining as the surviving entity and a
wholly-owned subsidiary of the Company (the “Merger”);
WHEREAS,
simultaneously with the Merger and to provide the capital required by the
Company for working capital and other purposes, the Company has offered in
compliance with Rule 506 of Regulation D and/or Regulation S of the Securities
Act (as defined herein), to investors in a private placement transaction (the
“PPO”), units (“Units”) of its securities,
each Unit consisting of one share of Common Stock (the “Investor Shares”) and a common
stock purchase warrant (the “Investor Warrants”) to
purchase one share of Common Stock;
WHEREAS,
the initial closing of the PPO and the closing of the Merger have taken place on
or prior to the Effective Date (as defined below); and
WHEREAS,
in connection with the Merger and the PPO, the Company agrees to provide certain
registration rights related to the Investor Shares, including “piggyback”
registration rights with respect to the shares of Common Stock issuable upon
exercise of the Investor Warrants, on the terms set forth herein;
NOW,
THEREFORE, in consideration of the mutual promises, representations, warranties,
covenants, and conditions set forth herein, the parties mutually agree as
follows:
1. Certain
Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
“Approved Market”
means the Over-the-Counter Bulletin Board, the Nasdaq Stock Market, the New York
Stock Exchange or the American Stock Exchange.
“Blackout Period”
means, with respect to a registration, a period, in each case commencing on the
day immediately after the Company notifies the Purchasers that they are
required, because of the occurrence of an event of the kind described in Section
4(f) hereof, to suspend offers and sales of Registrable Common Shares during
which the Company, in the good faith judgment of its board of directors,
determines (because of the existence of, or in anticipation of, any acquisition,
financing activity, or other transaction involving the Company, or the
unavailability for reasons beyond the Company’s control of any required
financial statements, disclosure of information which is in its best interest
not to publicly disclose, or any other event or condition of similar
significance to the Company) that the registration and distribution of the
Registrable Common Shares to be covered by such Registration Statement, if any,
would be seriously detrimental to the Company and its stockholders and ending on
the earlier of (1) the date upon which the material non-public information
commencing the Blackout Period is disclosed to the public or ceases to be
material and (2) such time as the Company notifies the selling Holders that
sales pursuant to such Registration Statement or a new or amended Registration
Statement may resume.
“Business Day” means
any day of the year, other than a Saturday, Sunday or any other day on which the
Commission is required or authorized to close.
“Commission” means the
U. S. Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act.
“Common Stock” means
the common stock, par value $0.001 per share, of the Company and any and all
shares of capital stock or other equity securities of: (i) the Company which are
added to or exchanged or substituted for the Common Stock by reason of the
declaration of any stock dividend or stock split, the issuance of any
distribution or the reclassification, readjustment, recapitalization or other
such modification of the capital structure of the Company; and (ii) any other
corporation, now or hereafter organized under the laws of any state or other
governmental authority, with which the Company is merged, which results from any
consolidation or reorganization to which the Company is a party, or to which is
sold all or substantially all of the shares or assets of the Company, if
immediately after such merger, consolidation, reorganization or sale, the
Company or the stockholders of the Company own equity securities having in the
aggregate more than 50% of the total voting power of such other
corporation.
“Effective Date” means
the date of the final closing of the PPO.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder.
“Family Member” means
(a) with respect to any individual, such individual’s spouse, any descendants
(whether natural or adopted), any trust all of the beneficial interests of which
are owned by any of such individuals or by any of such individuals together with
any organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, the estate of any such individual, and any corporation,
association, partnership or limited liability company all of the equity
interests of which are owned by those above described individuals, trusts or
organizations and (b) with respect to any trust, the owners of the beneficial
interests of such trust.
“Holder” means each
Purchaser or any of such Purchaser’s respective successors and Permitted
Assignees who acquire rights in accordance with this Agreement with respect to
any Registrable Securities directly or indirectly from a Purchaser or from any
Permitted Assignee.
“Investor Shares” has
the meaning given it in the recitals of this Agreement.
“Investor Warrants”
has the meaning given it in the recitals of this Agreement.
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“Majority Holders”
means at any time Holders representing a majority of the Registrable Common
Shares.
“Permitted Assignee”
means (a) with respect to a partnership, its partners or former partners in
accordance with their partnership interests, (b) with respect to a corporation,
its stockholders in accordance with their interest in the corporation, (c) with
respect to a limited liability company, its members or former members in
accordance with their interest in the limited liability company, (d) with
respect to an individual party, any Family Member of such party, (e) an entity
that is controlled by, controls, or is under common control with a transferor,
or (f) a party to this Agreement.
“Piggyback Common Share
Registration” means, in any registration of Common Stock as set forth in
Section 3(b)(i), the ability of holders of Registrable Common Shares to include
Registrable Common Shares in such registration.
“Piggyback
Registration” means, in any registration of Common Stock referenced in
Section 3(b), the right of each Holder to include the Registrable Securities of
such Holder in such registration.
“Piggyback Warrant Share
Registration” means, in any registration of Common Stock as set forth in
Section 3(b)(ii), the ability of holders of the Registrable Warrant Shares to
include Registrable Warrant Shares in such registration.
The terms
“register,”
“registered,”
and “registration” refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
“Registrable Common
Shares” means the Investor Shares (and not including the Registrable
Warrant Shares) but excluding (i) any Registrable Common Shares that have been
publicly sold or may be sold immediately without volume or manner of sale
limitations and without registration under the Securities Act either pursuant to
Rule 144 of the Securities Act or otherwise; (ii) any Registrable Common Shares
sold by a person in a transaction pursuant to a registration statement filed
under the Securities Act, or (iii) any Registrable Common Shares that are at the
time subject to an effective registration statement under the Securities
Act.
“Registrable
Securities” means the Registrable Common Shares together with the
Registrable Warrant Shares.
“Registrable Warrant
Shares” means the shares of Common Stock issued or issuable to each
Purchaser upon exercise of the Investor Warrants but excluding (i) any
Registrable Warrant Shares that have been publicly sold or may be sold
immediately without volume or manner of sale limitations and without
registration under the Securities Act either pursuant to Rule 144 of the
Securities Act or otherwise; (ii) any Registrable Warrant Shares sold by a
person in a transaction pursuant to a registration statement filed under the
Securities Act, or (iii) any Registrable Warrant Shares that are at the time
subject to an effective registration statement under the Securities
Act.
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“Registration
Statement” means the registration statement that the Company is required
to file pursuant to this Agreement to register the Registrable Common
Shares.
“Rule 145” means Rule
145 promulgated by the Commission under the Securities Act, as such rule may be
amended or supplemented from time to time, or any similar successor rule that
may be promulgated by the Commission.
“Rule 144” means Rule
144 promulgated by the Commission under the Securities Act, as such rule may be
amended or supplemented from time to time, or any similar successor rule that
may be promulgated by the Commission.
“Rule 415” means Rule
415 promulgated by the Commission under the Securities Act, as such rule may be
amended or supplemented from time to time, or any similar successor rule that
may be promulgated by the Commission.
“Securities Act” means
the Securities Act of 1933, as amended, or any similar federal statute
promulgated in replacement thereof, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time.
“SEC Effective Date”
means the date the Registration Statement is declared effective by the
Commission.
“Trading Day” means
any day on which the national securities exchange, the Nasdaq Stock Market, the
Over-the-Counter Bulletin Board or such other securities market or quotation
system, which at the time constitutes the principal securities market for the
Common Stock, is open for general trading of securities.
2. Term. This
Agreement shall continue in full force and effect for a period of one year from
the Effective Date, unless terminated sooner hereunder.
3. Registration.
(a) Registration on Form
S-1. The Company shall use its commercially reasonable efforts
to file with the Commission a Registration Statement on Form S-1, or other
applicable form, relating to the resale by the Holders of all of the Registrable
Common Shares, and the Company shall use its commercially reasonable efforts to
cause such Registration Statement to be declared effective; provided, that the
Company shall not be obligated to effect any such registration, qualification or
compliance pursuant to this Section, or keep such registration effective
pursuant to the terms hereunder in any particular jurisdiction in which the
Company would be required to qualify to do business as a foreign corporation or
as a dealer in securities under the securities laws of such jurisdiction or to
execute a general consent to service of process in effecting such registration,
qualification or compliance, in each case where it has not already done
so. Nothwitstanding the foregoing, in the event that the Commission
limits the amount of Registrable Common Shares that may be sold, the Company may
scale back from the Registration Statement such number of Registrable Common
Shares on behalf of all of the Purchasers on a pro-rata basis. In
such event, the Company shall give the Purchasers prompt notice of the number of
Registrable Common Shares excluded therein.
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(b) Piggyback
Registration.
(i) Piggyback Common Share
Registration. If the Company shall determine to register for
sale for cash any of its Common Stock, for its own account or for the account of
others (other than the Holders), other than (i) a registration relating solely
to employee benefit plans or securities issued or issuable to employees,
consultants (to the extent the securities owned or to be owned by such
consultants could be registered on Form S-8) or any of their Family Members
(including a registration on Form S-8) or (ii) a registration relating solely to
a Securities Act Rule 145 transaction or a registration on Form S-4 in
connection with a merger, acquisition, divestiture, reorganization or similar
event, the Company shall promptly give to the Holders written notice thereof
(and in no event shall such notice be given less than 20 calendar days prior to
the filing of such registration statement), and shall, subject to Section 3(c),
include as a Piggyback Registration all of the Registrable Common Shares
specified in a written request delivered by the Holder thereof within 10
calendar days after receipt of such written notice from the Company. However,
the Company may, without the consent of the Holders, withdraw such registration
statement prior to its becoming effective if the Company or such other
stockholders have elected to abandon the proposal to register the securities
proposed to be registered thereby.
(ii) Piggyback Warrant Share
Registration. If after the SEC Effective Date, the Company
shall determine to register for sale for cash any of its Common Stock, for its
own account or for the account of others (other than the Holders), other than
(i) a registration relating solely to employee benefit plans or securities
issued or issuable to employees, consultants (to the extent the securities owned
or to be owned by such consultants could be registered on Form S-8) or any of
their Family Members (including a registration on Form S-8) or (ii) a
registration relating solely to a Securities Act Rule 145 transaction or a
registration on Form S-4 in connection with a merger, acquisition, divestiture,
reorganization or similar event, the Company shall promptly give to the Holders
written notice thereof (and in no event shall such notice be given less than 20
calendar days prior to the filing of such registration statement), and shall,
subject to Section 3(c), include as a Piggyback Registration all of the
Registrable Warrant Shares specified in a written request delivered by the
Holder thereof within 10 calendar days after receipt of such written notice from
the Company. However, the Company may, without the consent of the Holders,
withdraw such registration statement prior to its becoming effective if the
Company or such other stockholders have elected to abandon the proposal to
register the securities proposed to be registered thereby.
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(c) Underwriting. If
a Piggyback Registration is for a registered public offering that is to be made
by an underwriting, the Company shall so advise the Holders of the Registrable
Common Shares and the Registrable Warrant Shares eligible for inclusion in such
Registration Statement pursuant to Sections 3(b)(i) and (ii),
respectively. In that event, the right of any Holder to Piggyback
Registration shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Common Shares or
Registrable Warrant Shares in the underwriting to the extent provided herein.
All Holders proposing to sell any of their Registrable Securities through such
underwriting shall (together with the Company and any other stockholders of the
Company selling their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter selected for such
underwriting by the Company or the selling stockholders, as
applicable. Notwithstanding any other provision of this Section, if
the underwriter or the Company determines that marketing factors require a
limitation on the number of shares of Common Stock or the amount of other
securities to be underwritten, the underwriter may exclude some or all
Registrable Securities from such registration and underwriting. The
Company shall so advise all Holders (except those Holders who failed to timely
elect to include their Registrable Securities through such underwriting or have
indicated to the Company their decision not to do so), and indicate to each such
Holder the number of shares of Registrable Securities that may be included in
the registration and underwriting, if any. The number of shares of Registrable
Securities to be included in such registration and underwriting shall be
allocated among such Holders as follows:
(i) If
the Piggyback Registration was initiated by the Company, the number of shares
that may be included in the registration and underwriting shall be allocated
first to the Company and then, subject to obligations and commitments existing
as of the date hereof, to all selling stockholders, including the Holders, who
have requested to sell in the registration on a pro rata basis according to the
number of shares requested to be included therein; and
(ii) If
the Piggyback Registration was initiated by the exercise of demand registration
rights by a stockholder or stockholders of the Company (other than the Holders),
then the number of shares that may be included in the registration and
underwriting shall be allocated first to such selling stockholders who exercised
such demand and then, subject to obligations and commitments existing as of the
date hereof, to all other selling stockholders, including the Holders, who have
requested to sell in the registration on a pro rata basis according to the
number of shares requested to be included therein.
No
Registrable Securities excluded from the underwriting by reason of the
underwriter’s marketing limitation shall be included in such registration. If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw such Holder’s Registrable Securities therefrom by delivering a
written notice to the Company and the underwriter. The Registrable
Securities so withdrawn from such underwriting shall also be withdrawn from such
registration; provided, however, that, if by
the withdrawal of such Registrable Securities, a greater number of Registrable
Securities held by other Holders may be included in such registration (up to the
maximum of any limitation imposed by the underwriters), then the Company shall
offer to all Holders who have included Registrable Securities in the
registration the right to include additional Registrable Securities pursuant to
the terms and limitations set forth herein in the same proportion used above in
determining the underwriter limitation.
(d) Other
Registrations. Before such date that is six months following
the SEC Effective Date, the Company will not, without the prior written consent
of the Majority Holders, file any other registration statement with the
Commission or request the acceleration of any other registration statement filed
with the Commission, and during any time subsequent to the SEC Effective Date
when the Registration Statement for any reason is not available for use by any
Holder for the resale of any Registrable Common Shares, the Company shall not,
without the prior written consent of the Majority Holders, file any other
registration statement or any amendment thereto with the Commission under the
Securities Act or request the acceleration of the effectiveness of any other
registration statement previously filed with the Commission, other than (i) any
registration statement on Form S-8 or Form S-4 and (ii) any registration
statement or amendment which the Company is required to file or as to which the
Company is required to request acceleration pursuant to any obligation in effect
on the date of execution and delivery of this Agreement.
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4. Registration Procedures for
Registrable Common Shares. The Company will keep each Holder
reasonably advised as to the filing and effectiveness of the Registration
Statement. At its expense with respect to the Registration Statement,
the Company will:
(a) prepare
and file with the Commission with respect to the Registrable Common Shares, a
Registration Statement on Form S-1, or any other form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of the Registrable Common Shares in accordance
with the intended methods of distribution thereof, and use its commercially
reasonable efforts to cause such Registration Statement to become effective and
shall remain effective for a period of one year or for such shorter period
ending on the earlier to occur of (i) the sale of all Registrable Common Shares
and (ii) the availability under Rule 144 for the Holder to sell the Registrable
Common Shares (the “Effectiveness
Period”);
(b) if
the Registration Statement is subject to review by the Commission, promptly
respond to all comments and diligently pursue resolution of any comments to the
satisfaction of the Commission;
(c) prepare
and file with the Commission such amendments and supplements to such
Registration Statement as may be necessary to keep such Registration Statement
effective during the Effectiveness Period;
(d) furnish,
without charge, to each Holder of Registrable Common Shares covered by such
Registration Statement (i) a reasonable number of copies of such Registration
Statement (including any exhibits thereto other than exhibits incorporated by
reference), each amendment and supplement thereto as such Holder may reasonably
request, (ii) such number of copies of the prospectus included in such
Registration Statement (including each preliminary prospectus and any other
prospectus filed under Rule 424 of the Securities Act) as such Holders may
reasonably request, in conformity with the requirements of the Securities Act,
and (iii) such other documents as such Holder may require to consummate the
disposition of the Registrable Common Shares owned by such Holder, but only
during the Effectiveness Period;
(e) use
its commercially reasonable efforts to register or qualify such registration
under such other applicable securities laws of such jurisdictions as any Holder
of Registrable Common Shares covered by such Registration Statement reasonably
requests and as may be necessary for the marketability of the Registrable Common
Shares (such request to be made by the time the applicable Registration
Statement is deemed effective by the Commission) and do any and all other acts
and things necessary to enable such Holder to consummate the disposition in such
jurisdictions of the Registrable Common Shares owned by such Holder; provided, that the
Company shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph, (ii) subject itself to taxation in any such jurisdiction, or (iii)
consent to general service of process in any such jurisdiction.
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(f) as
promptly as practicable after becoming aware of such event, notify each Holder
of Registrable Common Shares, the disposition of which requires delivery of a
prospectus relating thereto under the Securities Act, of the happening of any
event, which comes to the Company’s attention, that will after the occurrence of
such event cause the prospectus included in such Registration Statement, if not
amended or supplemented, to contain an untrue statement of a material fact or an
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and the Company shall promptly
thereafter prepare and furnish to such Holder a supplement or amendment to such
prospectus (or prepare and file appropriate reports under the Exchange Act) so
that, as thereafter delivered to the purchasers of such Registrable Common
Shares, such prospectus shall not contain 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 not misleading, unless suspension of the use of such
prospectus otherwise is authorized herein or in the event of a Blackout Period,
in which case no supplement or amendment need be furnished (or Exchange Act
filing made) until the termination of such suspension or Blackout
Period;
(g) comply,
and continue to comply during the Effectiveness Period, in all material respects
with the Securities Act and the Exchange Act and with all applicable rules and
regulations of the Commission with respect to the disposition of all securities
covered by such Registration Statement;
(h) as
promptly as practicable after becoming aware of such event, notify each Holder
of Registrable Common Shares being offered or sold pursuant to the Registration
Statement of the issuance by the Commission of any stop order or other
suspension of effectiveness of the Registration Statement;
(i) use
its commercially reasonable efforts to cause all the Registrable Common Shares
covered by the Registration Statement to be quoted on the OTC Bulletin Board or
such other principal securities market on which securities of the same class or
series issued by the Company are then listed or traded;
(j) provide
a transfer agent and registrar, which may be a single entity, for the shares of
Common Stock at all times;
(k) cooperate
with the Holders of Registrable Common Shares being offered pursuant to the
Registration Statement to issue and deliver, or cause its transfer agent to
issue and deliver, certificates representing Registrable Common Shares to be
offered pursuant to the Registration Statement within a reasonable time after
the delivery of certificates representing the Registrable Common Shares to the
transfer agent or the Company, as applicable, and enable such certificates to be
in such denominations or amounts as the Holders may reasonably request and
registered in such names as the Holders may request;
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(l) during
the Effectiveness Period, refrain from bidding for or purchasing any Common
Stock or any right to purchase Common Stock or attempting to induce any person
to purchase any such security or right if such bid, purchase or attempt would in
any way limit the right of the Holders to sell Registrable Common Shares by
reason of the limitations set forth in Regulation M of the Exchange Act;
and
(m) take
all other reasonable actions necessary to expedite and facilitate the
disposition by the Holders of the Registrable Common Shares pursuant to the
Registration Statement.
5. Suspension of Offers and
Sales. Each Holder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
4(f) hereof or of the commencement of a Blackout Period, such Holder shall
discontinue the disposition of Registrable Common Shares included in the
Registration Statement until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 4(f) hereof or notice
of the end of the Blackout Period, and, if so directed by the Company, such
Holder shall deliver to the Company (at the Company’s expense) all copies
(including, without limitation, any and all drafts), other than permanent file
copies, then in such Holder’s possession, of the prospectus covering such
Registrable Common Shares current at the time of receipt of such
notice.
6. Registration
Expenses. The Company shall pay all expenses in connection
with any registration obligation provided herein, including, without limitation,
all registration, filing, stock exchange fees, printing expenses, all fees and
expenses of complying with applicable securities laws, and the fees and
disbursements of counsel for the Company and of its independent accountants;
provided, that,
in any underwritten registration, each party shall pay for its own underwriting
discounts and commissions and transfer taxes. Except as provided in this Section
and Section 9, the Company shall not be responsible for the expenses of any
attorney or other advisor employed by a Holder.
7. Assignment of
Rights. No Holder may assign its rights under this Agreement
to any party without the prior written consent of the Company; provided, however, that any
Holder may assign its rights under this Agreement without such consent to a
Permitted Assignee as long as (a) such transfer or assignment is effected in
accordance with applicable securities laws; (b) such transferee or assignee
agrees in writing to become subject to the terms of this Agreement; and (c) such
Holder notifies the Company in writing of such transfer or assignment, stating
the name and address of the transferee or assignee and identifying the
Registrable Securities with respect to which such rights are being transferred
or assigned.
8. Information by
Holder. Holders included in any registration shall furnish to
the Company such information as the Company may reasonably request in writing
regarding such Holders and the distribution proposed by such
Holders.
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9. Indemnification.
(a) In
the event of the offer and sale of Registrable Securities under the Securities
Act, the Company shall, and hereby does, indemnify and hold harmless, to the
fullest extent permitted by law, each Holder, its directors, officers, partners,
each other person who participates as an underwriter in the offering or sale of
such securities, and each other person, if any, who controls or is under common
control with such Holder or any such underwriter within the meaning of Section
15 of the Securities Act, against any losses, claims, damages or liabilities,
joint or several, and expenses to which the Holder or any such director,
officer, partner or underwriter or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement of any material fact contained in any registration statement prepared
and filed by the Company under which Registrable 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 to state therein a material fact required to be stated or necessary
to make the statements therein in light of the circumstances in which they were
made not misleading, and the Company shall reimburse the Holder, and each such
director, officer, partner, underwriter and controlling person for any legal or
any other expenses reasonably incurred by them in connection with investigating,
defending or settling any such loss, claim, damage, liability, action or
proceeding; provided, that such
indemnity agreement found in this Section 9(a) shall in no event exceed the net
proceeds from the PPO, as applicable, received by the Company; and provided further,
that the Company shall not be liable in any such case (i) to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement in or omission
from such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company for use in the
preparation thereof or (ii) if the person asserting any such loss, claim,
damage, liability (or action or proceeding in respect thereof) who purchased the
Registrable Securities that are the subject thereof did not receive a copy of an
amended preliminary prospectus or the final prospectus (or the final prospectus
as amended or supplemented) at or prior to the written confirmation of the sale
of such Registrable Securities to such person because of the failure of such
Holder or underwriter to so provide such amended preliminary or final prospectus
and the untrue statement or omission of a material fact made in such preliminary
prospectus was corrected in the amended preliminary or final prospectus (or the
final prospectus as amended or supplemented). Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Holders, or any such director, officer, partner, underwriter or controlling
person and shall survive the transfer of such shares by the Holder.
(b) As
a condition to including Registrable Securities in any registration statement
filed pursuant to this Agreement, each Holder agrees to be bound by the terms of
this Section 9 and to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors and officers, and each other
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director or officer or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) that arises out of or is based upon
an untrue statement in or omission from such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
by the Holder for use in the preparation thereof, and such Holder shall
reimburse the Company, and each such director, officer, and controlling person
for any legal or other expenses reasonably incurred by them in connection with
investigating, defending, or settling any such loss, claim, damage, liability,
action, or proceeding; provided, however, that such
indemnity agreement found in this Section 9(b) shall in no event exceed the net
proceeds received by such Holder as a result of the sale of Registrable
Securities pursuant to such registration statement. 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 the transfer by any Holder of such shares.
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(c) Promptly
after receipt by an indemnified party of notice of the commencement of any
action or proceeding involving a claim referred to in this Section (including
any governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
indemnifying party 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 Section, 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
indemnified party, unless in the reasonable judgment of counsel to such
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist or the indemnified party may have defenses not
available to the indemnifying party in respect of such claim, the indemnifying
party shall be entitled to participate in and to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to
assume 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, unless in such indemnified
party’s reasonable judgment a conflict of interest between such indemnified and
indemnifying parties arises in respect of such claim after the assumption of the
defenses thereof or the indemnifying party fails to defend such claim in a
diligent manner, other than reasonable costs of
investigation. Neither an indemnified nor an indemnifying party shall
be liable for any settlement of any action or proceeding effected without its
consent. No indemnifying party shall, without the consent of the
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 of such claim or litigation. Notwithstanding
anything to the contrary set forth herein, and without limiting any of the
rights set forth above, in any event any party shall have the right to retain,
at its own expense, counsel with respect to the defense of a claim.
(d) If
an indemnifying party does or is not permitted to assume the defense of an
action pursuant to Sections 9(c) or in the case of the expense reimbursement
obligation set forth in Sections 9(a) and (b), the indemnification required by
Sections 9(a) and 9(b) shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills received or
expenses, losses, damages, or liabilities are incurred.
11
(e) If
the indemnification provided for in Section 9(a) or 9(b) 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, the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall (i) contribute to the amount paid or payable by such indemnified party as
a result of such loss, liability, claim, damage or expense as is appropriate to
reflect the proportionate relative fault of the indemnifying party on the one
hand and the indemnified party on the other (determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission relates to information supplied by the indemnifying party or the
indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission), or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, not only the proportionate relative
fault of the indemnifying party and the indemnified party, but also the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other, as well as any other relevant equitable considerations. No
indemnified party guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent
misrepresentation.
10. [INTENTIONALLY
OMITTED]
11. Corporate
Existence. So long as any Holder owns any Registrable
Securities, the Company shall not directly or indirectly consummate an
Organizational Change, unless, prior to the consummation of an Organizational
Change, the Company obtains the written consent of the Majority
Holders. For purposes of this Agreement, “Organizational Change” means
(i) an acquisition by an individual or legal entity or “group” (as described in
Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control
(whether through legal or beneficial ownership of capital stock of the Company,
by contract or otherwise) of in excess of 50% of the voting securities of the
Company, or (ii) the Company merges into or consolidates with any other person,
or any person merges into or consolidates with the Company and, after giving
effect to such transaction, the stockholders of the Company immediately prior to
such transaction own less than 50% of the aggregate voting power of the Company
or the successor entity of such transaction, or (iii) the Company sells or
transfers all or substantially all of its assets to another person and the
stockholders of the Company immediately prior to such transaction own less than
50% of the aggregate voting power of the acquiring entity immediately after the
transaction, or (iv) the execution by the Company of an agreement to which the
Company is a party or by which it is bound, providing for any of the events set
forth in clauses (i) through (iii) above.
12. Independent Nature of Each
Purchaser’s Obligations and Rights. The obligations of each
Purchaser under this Agreement are several and not joint with the obligations of
any other Purchaser, and each Purchaser shall not be responsible in any way for
the performance of the obligations of any other Purchaser under this Agreement.
Nothing contained herein and no action taken by any Purchaser pursuant hereto,
shall be deemed to constitute such Purchasers as a partnership, an association,
a joint venture, or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement. Each Purchaser
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.
12
13. Miscellaneous.
(a) Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
United States of America and the State of New York, both substantive and
remedial, without regard to New York conflicts of law principles. Any judicial
proceeding brought against either of the parties to this Agreement or any
dispute arising out of this Agreement or any matter related hereto shall be
brought in the courts of the State of New York, New York County, or in the
United States District Court for the Southern District of New York and, by its
execution and delivery of this Agreement, each party to this Agreement accepts
the jurisdiction of such courts. The foregoing consent to jurisdiction shall not
be deemed to confer rights on any person other than the parties to this
Agreement.
(b) Remedies. In
the event of a breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, shall be entitled to
specific performance of its rights under this Agreement. The Company
and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall not assert
or shall waive the defense that a remedy at law would be adequate.
(c) Successors and
Assigns. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
Permitted Assignees, executors and administrators of the parties
hereto.
(d) No Inconsistent
Agreements. The Company has not entered, as of the date
hereof, and shall not enter, on or after the date of this Agreement, into any
agreement with respect to its securities that would have the effect of impairing
the rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof.
(e) Entire
Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.
(f) Notices, etc. All
notices or other communications which are required or permitted under this
Agreement shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, by electronic
mail, or by courier or overnight carrier, to the persons at the addresses set
forth below (or at such other address as may be provided hereunder), and shall
be deemed to have been delivered as of the date so delivered:
13
If to the
Company to:
000 Xxxxx
Xxxxxx Xxxxxxxxx
Xxxxxx,
XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
with copy to:
Gottbetter
& Partners, LLP
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
XX 00000
Attention: Xxxx
X. Xxxxxxxxxx, Esq.
Facsimile: (000)
000-0000
If to the
Purchasers:
To each
Purchaser at the address set forth on the signature page hereto;
or at
such other address as any party shall have furnished to the other parties in
writing.
(g) Delays or
Omissions. No delay or omission to exercise any right, power
or remedy accruing to any Holder, upon any breach or default of the Company
under this Agreement, shall impair any such right, power or remedy of such
Holder nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of any similar breach or default thereunder
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
Holder of any breach or default under this Agreement, or any waiver on the part
of any Holder of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, or by law or otherwise
afforded to any holder, shall be cumulative and not alternative.
(h) Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
enforceable against the parties actually executing such counterparts, and all of
which together shall constitute one instrument. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.
(i) Severability. In the
case any provision of this Agreement shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
14
(j) Amendments. The
provisions of this Agreement may be amended at any time and from time to time,
and particular provisions of this Agreement may be waived, with and only with an
agreement or consent in writing signed by the Company and the Majority Holders.
The Purchasers acknowledge that by the operation of this Section, the Majority
Holders may have the right and power to diminish or eliminate all rights of the
Purchasers under this Agreement.
[SIGNATURE
PAGES FOLLOW]
15
This
Registration Rights Agreement is hereby executed as of the date first above
written.
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COMPANY:
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By:
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Name:
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Xxxxxxx
H, Simons
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Title:
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Chief
Executive Officer
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[SIGNATURE
PAGE OF PURCHASER FOLLOWS]
16
This
Registration Rights Agreement is hereby executed as of the date first above
written.
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PURCHASER
(Individual)
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(Print
Name)
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PURCHASER
(Entity)
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By:
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(Print
Name)
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(Print
Title)
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Address
for notices:
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City
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State
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Zip
Code
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17
Annex
A
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of Registrable Securities of Crownbutte Wind Power,
Inc., a Nevada corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities
and Exchange Commission a registration statement (the “Registration
Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended, of the Registrable Securities, in accordance
with the terms of the Registration Rights Agreement (the “Registration Rights
Agreement”) to which this document is annexed. A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below. All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.
Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly,
holders and beneficial owners of Registrable Securities are advised to consult
their own securities law counsel regarding the consequences of being named or
not being named as a selling securityholder in the Registration Statement and
the related prospectus.
NOTICE
The
undersigned beneficial owner (the “Selling
Securityholder”) of Registrable Securities hereby elects to include the
Registrable Securities owned by it in the Registration Statement.
The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
QUESTIONNAIRE
1. Name:
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(a)
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Full
Legal Name of Selling
Securityholder
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(b)
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Full
Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities are
held:
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(c)
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Full
Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose
of the securities covered by the
questionnaire):
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2. Address
for Notices to Selling Securityholder:
| ____________________________________________________________________________________________________________ |
| ____________________________________________________________________________________________________________ |
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Telephone: ______________________________________ Fax: _________________________________________________________
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Email: ________________________________________________________________________________________________
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Contact Person:
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3. Broker-Dealer
Status:
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(a)
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Are
you a broker-dealer?
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Yes ¨ No ¨
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(b)
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If
“yes” to Section 3(a), did you receive your Registrable Securities as
compensation for investment banking services to the
Company?
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Yes ¨ No ¨
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Note:
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If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
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(c)
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Are
you an affiliate of a
broker-dealer?
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Yes ¨ No ¨
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(d)
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If
you are an affiliate of a broker-dealer, do you certify that you bought
the Registrable Securities in the ordinary course of business, and at the
time of the purchase of the Registrable Securities to be resold, you had
no agreements or understandings, directly or indirectly, with any person
to distribute the Registrable
Securities?
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Yes ¨ No ¨
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Note:
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If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
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2
4. Beneficial
Ownership of Securities of the Company Owned by the Selling
Securityholder:
Except
as set forth below in this Item 4, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the securities
issuable pursuant to the PPO.
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(a)
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Type
and Amount of other securities (other than the Registrable Securities)
beneficially owned by the Selling
Securityholder:
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5. Relationships
with the Company:
Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.
State any
exceptions here:
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The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at any time while the Registration Statement remains effective.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 5 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto. The undersigned understands that
such information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.
3
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Selling Securityholder Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent.
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Dated:_____________________________
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Beneficial Owner:____________________________
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By:
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Name:
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Title:
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PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:
Gottbetter
& Partners, LLP
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
XX 00000
Attention: Xxxxxx
X. XxXxxxxx
Facsimile: (000)
000-0000
4
