EXHIBIT 99.2
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of October 27,
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2004 by and between DONOBI, INC., a Nevada corporation, with its principal
office located at 0000 Xxxxx Xxx XX, Xxxxxxxxx, XX 00000 (the "Company"), and
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CORNELL CAPITAL PARTNERS, LP, a Delaware limited partnership (the "Investor").
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WHEREAS:
A. In connection with the Standby Equity Distribution Agreement by and between
the parties hereto of even date herewith (the "Standby Equity Distribution
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Agreement"), the Company has agreed, upon the terms and subject to
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the conditions of the Standby Equity Distribution Agreement, to issue and
sell to the Investor that number of shares of the Company's common stock,
par value $0.001 per share (the "Common Stock"), which can be purchased
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pursuant to the terms of the Standby Equity Distribution Agreement for an
aggregate purchase price of up to Five Million U.S. Dollars ($5,000,000).
Capitalized terms not defined herein shall have the meaning ascribed to
them in the Standby Equity Distribution Agreement.
B. To induce the Investor to execute and deliver the Standby Equity
Distribution Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute
(collectively, the "1933 Act"), and applicable state securities laws.
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor
hereby agree as follows:
1. DEFINITIONS.
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As used in this Agreement, the following terms shall have the following
meanings:
a. "Person" means a corporation, a limited liability company, an
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association, a partnership, an organization, a business, an
individual, a governmental or political subdivision thereof or a
governmental agency.
b. "Register," "registered," and "registration" refer to a registration
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effected by preparing and filing one or more Registration Statements
(as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 under the 1933 Act or any successor rule providing for
offering securities on a continuous or delayed basis ("Rule 415"), and
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the declaration or ordering of effectiveness of such Registration
Statement(s) by the United States Securities and Exchange Commission
(the "SEC").
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c. "Registrable Securities" means the Investor's Shares, as defined in
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the Standby Equity Distribution Agreement and shares of Common Stock
issuable to Investors pursuant to the Standby Equity Distribution
Agreement.
d. "Registration Statement" means a registration statement under the 1933
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Act which covers the Registrable Securities.
2. REGISTRATION.
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a. Mandatory Registration. The Company shall prepare and file with the
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SEC a Registration Statement on Form X-0, XX-0 or on such other form
as is available. The Company shall cause such Registration Statement
to be declared effective by the SEC prior to the first sale to the
Investor of the Company's Common Stock pursuant to the Standby Equity
Distribution Agreement.
b. Sufficient Number of Shares Registered. In the event the number of
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shares available under a Registration Statement filed pursuant to
Section 2(a) is insufficient to cover all of the Registrable
Securities which the Investor has purchased pursuant to the Standby
Equity Distribution Agreement, the Company shall amend the
Registration Statement, or file a new Registration Statement (on the
short form available therefore, if applicable), or both, so as to
cover all of such Registrable Securities which the Investor has
purchased pursuant to the Standby Equity Distribution Agreement as
soon as practicable, but in any event not later than fifteen (15) days
after the necessity therefore arises. The Company shall use it best
efforts to cause such amendment and/or new Registration Statement to
become effective as soon as practicable following the filing thereof.
For purposes of the foregoing provision, the number of shares
available under a Registration Statement shall be deemed "insufficient
to cover all of the Registrable Securities" if at any time the number
of Registrable Securities issuable on an Advance Notice Date is
greater than the number of shares available for resale under such
Registration Statement.
3. RELATED OBLIGATIONS.
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a. The Company shall keep the Registration Statement effective pursuant
to Rule 415 at all times until the date on which the Investor shall
have sold all the Registrable Securities covered by such Registration
Statement (the "Registration Period"), which Registration Statement
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(including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
b. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to
Rule 424 promulgated under the 1933 Act, as may be necessary to keep
such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the
provisions of the 1933 Act with respect to the disposition of all
Registrable Securities of the Company covered by such Registration
Statement until such time as all of such Registrable Securities shall
have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such
Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this
Agreement (including pursuant to this Section 3(b)) by reason of the
Company's filing a report on Form 10-KSB, Form 10-QSB or Form 8-K or
any analogous report under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the Company shall have incorporated such
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report by reference into the Registration Statement, if applicable, or
shall file such amendments or supplements with the SEC on the same day
on which the 1934 Act report is filed which created the requirement
for the Company to amend or supplement the Registration Statement.
c. The Company shall furnish to the Investor without charge, (i) at least
one copy of such Registration Statement as declared effective by the
SEC and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, all
exhibits and each preliminary prospectus, (ii) ten (10) copies of the
final prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as
such Investor may reasonably request) and (iii) such other documents
as such Investor may reasonably request from time to time in order to
facilitate the disposition of the Registrable Securities owned by such
Investor.
d. The Company shall use its best efforts to (i) register and qualify the
Registrable Securities covered by a Registration Statement under such
other securities or "blue sky" laws of such jurisdictions in the
United States as the Investor reasonably requests, (ii) prepare and
file in those jurisdictions, such amendments (including post-effective
amendments) and supplements to such registrations and qualifications
as may be necessary to maintain the effectiveness thereof during the
Registration Period, (iii) take such other actions as may be necessary
to maintain such registrations and qualifications in effect at all
times during the Registration Period, and (iv) take all other actions
reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions; provided, however, that the
Company shall not be required in connection therewith or as a
condition thereto to (w) make any change to its certificate of
incorporation or by-laws, (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but
for this Section 3(d), (y) subject itself to general taxation in any
such jurisdiction, or (z) file a general consent to service of process
in any such jurisdiction. The Company shall promptly notify the
Investor of the receipt by the Company of any notification with
respect to the suspension of the registration or qualification of any
of the Registrable Securities for sale under the securities or "blue
sky" laws of any jurisdiction in the United States or its receipt of
actual notice of the initiation or threat of any proceeding for such
purpose.
e. As promptly as practicable after becoming aware of such event or
development, the Company shall notify the Investor in writing of the
happening of any event as a result of which the prospectus included in
a Registration Statement, as then in effect, includes an untrue
statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare a supplement or
amendment to such Registration Statement to correct such untrue
statement or omission, and deliver ten (10) copies of such supplement
or amendment to each Investor. The Company shall also promptly notify
the Investor in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to
the Investor by facsimile on the same day of such effectiveness), (ii)
of any request by the SEC for amendments or supplements to a
Registration Statement or related prospectus or related information,
and (iii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be
appropriate.
f. The Company shall use its best efforts to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration
Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction within the United
States of America and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest
possible moment and to notify the Investor of the issuance of such
order and the resolution thereof or its receipt of actual notice of
the initiation or threat of any proceeding for such purpose.
g. At the reasonable request of the Investor, the Company shall furnish
to the Investor, on the date of the effectiveness of the Registration
Statement and thereafter from time to time on such dates as the
Investor may reasonably request (i) a letter, dated such date, from
the Company's independent certified public accountants in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, and
(ii) an opinion, dated as of such date, of counsel representing the
Company for purposes of such Registration Statement, in form, scope
and substance as is customarily given in an underwritten public
offering, addressed to the Investor.
h. The Company shall make available for inspection by (i) the Investor
and (ii) one firm of accountants or other agents retained by the
Investor (collectively, the "Inspectors") all pertinent financial and
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other records, and pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably deemed
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necessary by each Inspector, and cause the Company's officers,
directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each Inspector shall
agree, and the Investor hereby agrees, to hold in strict confidence
and shall not make any disclosure (except to an Investor) or use of
any Record or other information which the Company determines in good
faith to be confidential, and of which determination the Inspectors
are so notified, unless (a) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the 1933 Act,
(b) the release of such Records is ordered pursuant to a final,
non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has
been made generally available to the public other than by disclosure
in violation of this or any other agreement of which the Inspector and
the Investor has knowledge. The Investor agrees that it shall, upon
learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means,
give prompt notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, the Records deemed confidential.
i. The Company shall hold in confidence and not make any disclosure of
information concerning the Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or
state securities laws, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is
ordered pursuant to a subpoena or other final, non-appealable order
from a court or governmental body of competent jurisdiction, or (iv)
such information has been made generally available to the public other
than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that
disclosure of such information concerning the Investor is sought in or
by a court or governmental body of competent jurisdiction or through
other means, give prompt written notice to the Investor and allow the
Investor, at the Investor's expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, such
information.
j. The Company shall use its best efforts either to cause all the
Registrable Securities covered by a Registration Statement (i) to be
listed on each securities exchange on which securities of the same
class or series issued by the Company are then listed, if any, if the
listing of such Registrable Securities is then permitted under the
rules of such exchange or to secure the inclusion for quotation on the
National Association of Securities Dealers, Inc. OTC Bulletin Board
for such Registrable Securities. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this
Section 3(j).
k. The Company shall cooperate with the Investor to the extent
applicable, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or
amounts, as the case may be, as the Investor may reasonably request
and registered in such names as the Investor may request.
l. The Company shall use its best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to consummate the disposition of such
Registrable Securities.
m. The Company shall make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the close
of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the 0000 Xxx) covering
a twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the effective date of the
Registration Statement.
n. The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any
registration hereunder.
o. Within two (2) business days after a Registration Statement which
covers Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company
to deliver, to the transfer agent for such Registrable Securities
(with copies to the Investor) confirmation that such Registration
Statement has been declared effective by the SEC in the form attached
hereto as Exhibit A.
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p. The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of Registrable
Securities pursuant to a Registration Statement.
4. OBLIGATIONS OF THE INVESTOR.
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The Investor agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e), the Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until the Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e) or receipt of
notice that no supplement or amendment is required. Notwithstanding anything to
the contrary, the Company shall cause its transfer agent to deliver unlegended
certificates for shares of Common Stock to a transferee of the Investor in
accordance with the terms of the Standby Equity Distribution Agreement in
connection with any sale of Registrable Securities with respect to which the
Investor has entered into a contract for sale prior to the Investor's receipt of
a notice from the Company of the happening of any event of the kind described in
Section 3(f) or the first sentence of 3(e) and for which the Investor has not
yet settled.
5. EXPENSES OF REGISTRATION.
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All expenses incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers, legal and accounting
fees shall be paid by the Company.
6. INDEMNIFICATION.
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With respect to Registrable Securities which are included in a Registration
Statement under this Agreement:
a. To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend the Investor, the directors,
officers, partners, employees, agents, representatives of, and each
Person, if any, who controls the Investor within the meaning of the
1933 Act or the 1934 Act (each, an "Indemnified Person"), against any
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losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable attorneys' fees, amounts paid in settlement
or expenses, joint or several (collectively, "Claims") incurred in
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investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing
by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened,
whether or not an indemnified party is or may be a party thereto
("Indemnified Damages"), to which any of them
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may become subject insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or
are based upon: (i) any untrue statement or alleged untrue statement
of a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other "blue sky"
laws of any jurisdiction in which Registrable Securities are offered
("Blue Sky Filing"), or the omission or alleged omission to state a
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material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) any untrue statement or
alleged untrue statement of a material fact contained in any final
prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission
or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under
which the statements therein were made, not misleading; or (iii) any
violation or alleged violation by the Company of the 1933 Act, the
1934 Act, any other law, including, without limitation, any state
securities law, or any rule or regulation there under relating to the
offer or sale of the Registrable Securities pursuant to a Registration
Statement (the matters in the foregoing clauses (i) through (iii)
being, collectively, "Violations"). The Company shall reimburse the
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Investor and each such controlling person promptly as such expenses
are incurred and are due and payable, for any legal fees or
disbursements or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (x) shall
not apply to a Claim by an Indemnified Person arising out of or based
upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified
Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement
thereto; (y) shall not be available to the extent such Claim is based
on a failure of the Investor to deliver or to cause to be delivered
the prospectus made available by the Company, if such prospectus was
timely made available by the Company pursuant to Section 3(e); and (z)
shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person.
b. In connection with a Registration Statement, the Investor agrees to
indemnify, hold harmless and defend, to the same extent and in the
same manner as is set forth in Section 6(a), the Company, each of its
directors, each of its officers who signs the Registration Statement
and each Person, if any, who controls the Company within the meaning
of the 1933 Act or the 1934 Act (each an "Indemnified Party"), against
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any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as
such Claim or Indemnified Damages arise out of or is based upon any
Violation, in each case to the extent, and only to the extent, that
such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by the Investor expressly for use
in connection with such Registration Statement; and, subject to
Section 6(d), the Investor will reimburse any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) and the agreement with
respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Investor, which consent shall
not be unreasonably withheld; provided, further, however, that the
Investor shall be liable under this Section 6(b) for only that amount
of a Claim or Indemnified Damages as does not exceed the net proceeds
to the Investor 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 such Indemnified Party. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in
this Section 6(b) with respect to any prospectus shall not inure to
the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the prospectus was corrected
and such new prospectus was delivered to the Investor prior to the
Investor's use of the prospectus to which the Claim relates.
c. Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party
under this Section 6, deliver to the indemnifying party a written
notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly
noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have
the right to retain its own counsel with the fees and expenses of not
more than one counsel for such Indemnified Person or Indemnified Party
to be paid by the indemnifying party, if, in the reasonable opinion of
counsel retained by the indemnifying party, the representation by such
counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified
Party and any other party represented by such counsel in such
proceeding. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying
party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person
which relates to such action or claim. The indemnifying party shall
keep the Indemnified Party or Indemnified Person fully apprised at all
times as to the status of the defense or any settlement negotiations
with respect thereto. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its
prior written consent, provided, however, that the indemnifying party
shall not unreasonably withhold, delay or condition its consent. No
indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any
judgment or enter into any settlement or other compromise which does
not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party or Indemnified Person
of a release from all liability in respect to such claim or
litigation. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third
parties, firms or corporations relating to the matter for which
indemnification has been made. The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action.
d. The indemnification required by this Section 6 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
Indemnified Damages are incurred.
e. The indemnity agreements contained herein shall be in addition to (i)
any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii)
any liabilities the indemnifying party may be subject to pursuant to
the law.
7. CONTRIBUTION.
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To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that: (i) no seller
of Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any seller of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.
8. REPORTS UNDER THE 1934 ACT.
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With a view to making available to the Investor the benefits of Rule 144
promulgated under the 1933 Act or any similar rule or regulation of the SEC that
may at any time permit the Investors to sell securities of the Company to the
public without registration ("Rule 144") the Company agrees to:
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a. make and keep public information available, as those terms are
understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other documents
required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements (it being understood
that nothing herein shall limit the Company's obligations under
Section 6.3 of the Standby Equity Distribution Agreement) and the
filing of such reports and other documents is required for the
applicable provisions of Rule 144; and
c. furnish to the Investor so long as the Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule
144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as
may be reasonably requested to permit the Investor to sell such
securities pursuant to Rule 144 without registration.
9. AMENDMENT OF REGISTRATION RIGHTS.
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Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only by a written agreement between the Company and the
Investor. Any amendment or waiver effected in accordance with this Section 9
shall be binding upon the Investor and the Company. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of
any provision of any of this Agreement unless the same consideration also is
offered to all of the parties to this Agreement.
10. MISCELLANEOUS.
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a. A Person is deemed to be a holder of Registrable Securities whenever
such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices
or elections from two or more Persons with respect to the same
Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of
such Registrable Securities.
b. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or
(iii) 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, to: Donobi, Inc.
0000 Xxxxx Xxx XX
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, III
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx - Xxxxx 0000
Xxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxxxxxxx & Xxxxxxxx LLP
If to the Investor(s), to: Cornell Capital Partners, LP
000 Xxxxxx Xxxxxx -Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Portfolio Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a Copy to: Xxxxx Xxxxxxxx, Esq.
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change its address by providing written notice to the
other parties hereto at least five days prior to the effectiveness of
such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile
machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by a
courier or overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.
c. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.
d. The corporate laws of the State of Nevada shall govern all issues
concerning the relative rights of the Company and the Investor. All
other questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal
laws of the State of New Jersey, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of
New Jersey or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of New Jersey.
Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the Superior Courts of the State of New Jersey,
sitting in Xxxxxx County, New Jersey and the Federal District Court
for the District of New Jersey sitting in Newark, New Jersey, for the
adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of
such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address for such notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of
the remainder of this Agreement in that jurisdiction or the validity
or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
e. This Agreement, the Standby Equity Distribution Agreement, the Escrow
Agreement, and the Placement Agent Agreement constitute the entire
agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and
therein. This Agreement, the Standby Equity Distribution Agreement,
the Escrow Agreement, and the Placement Agent Agreement supersede all
prior agreements and understandings among the parties hereto with
respect to the subject matter hereof and thereof.
f. This Agreement shall inure to the benefit of and be binding upon the
permitted successors and assigns of each of the parties hereto.
g. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in identical counterparts, each of
which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission
of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
i. Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the
other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
j. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
k. This Agreement is intended for the benefit of the parties hereto and
their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other
Person.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY:
DONOBI, INC.
By: /s/ Xxxxxxx Xxxxxx, III
--------------------------
Name: Xxxxxxx Xxxxxx, III
Title: Chief Executive Officer
INVESTOR:
CORNELL CAPITAL PARTNERS, LP
BY: YORKVILLE ADVISORS, LLC
ITS: GENERAL PARTNER
By: /s/ Xxxx X. Xxxxxx
---------------------
Name: Xxxx X. Xxxxxx
Title: Portfolio Manager
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
Florida Atlantic Stock Transfer, Inc.
0000 Xxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxx
Re: DONOBI, INC.
-------------
Ladies and Gentlemen:
We are counsel to Donobi, Inc., a Nevada corporation (the "Company"), and
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have represented the Company in connection with that certain Standby Equity
Distribution Agreement (the "Standby Equity Distribution Agreement") entered
--------------------------------------
into by and between the Company and Cornell Capital Partners, LP (the
"Investor") pursuant to which the Company issued to the Investor shares of its
Common Stock, par value $0.001 per share (the "Common Stock"). Pursuant to the
------------
Standby Equity Distribution Agreement, the Company also has entered into a
Registration Rights Agreement with the Investor (the "Registration Rights
-------------------
Agreement") pursuant to which the Company agreed, among other things, to
---------
register the Registrable Securities (as defined in the Registration Rights
Agreement) under the Securities Act of 1933, as amended (the "1933 Act"). In
--------
connection with the Company's obligations under the Registration Rights
Agreement, on _________________, the Company filed a Registration Statement on
Form ________ (File No. 333-_____________) (the "Registration Statement") with
----------------------
the Securities and Exchange Commission (the "SEC") relating to the Registrable
---
Securities which names the Investor as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
By:
cc: CORNELL CAPITAL PARTNERS, LP
