REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
dated as of January 15, 2010, is made by and between EGPI Firecreek, Inc., a
Nevada corporation located at 0000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx
00000 (the “Company”),
and St. Xxxxxx Investments, LLC, an Illinois limited liability company located
at 000 Xxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 (the “Investor”).
A. Upon
the terms and subject to the conditions of that certain Note Purchase Agreement
dated as of the date hereof between the Investor and the Company (the “Purchase
Agreement”), the Company has agreed to issue and sell to the Investor a
Convertible Promissory Note in the face amount of $86,000 (the “Note”).
B. The
Note is convertible into shares (the “Conversion
Shares”) of Common Stock, $0.001 par value per share (“Common
Stock”), upon the terms and subject to the conditions contained in the
Note.
C. In
order to induce the Investor to execute and deliver the Purchase 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 “Securities
Act”), with respect to the Registrable Securities (as defined
below).
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.
As used in this Agreement, the following terms shall have the following
meanings:
“Closing
Date” means the date of the closing of the transactions contemplated by
the Purchase Agreement.
“Effective
Date” means the date the SEC declares a Registration Statement covering
Registrable Securities and otherwise meeting the conditions contemplated hereby
to be effective.
“Increased
Conversion Shares” means the good faith estimate of number of shares
which the Company anticipates will be issuable to the Holder as a result of an
adjustment to the Conversion Price.
“Investor”
means the Investor and any permitted transferee or assignee who agrees to become
bound by the provisions of this Agreement in accordance with Section 10 hereof
and who holds the Note or Registrable Securities.
“Other Issuable
Shares” means the good faith estimate of the Company of the number of
Increased Conversion Shares, as the case may be, which the Company anticipates,
as of the date of the filing of the Registration Statement and any amendment
thereto, will be issuable to the Holder pursuant to the provisions of the
Transaction Agreements.
“Permitted
Suspension Period” means not more than two (2) periods during any
consecutive 12-month period during which the Holder’s right to sell Registrable
Securities under the Registration Statement is suspended, provided, however,
that each of such periods shall neither (i) be for more than twenty (20) days
nor (ii) begin less than ten (10) trading days after the last day of the
preceding suspension period (whether or not such last day was during or after a
Permitted Suspension Period).
“Potential
Material Event” means any of the following: (i) the possession by the
Company of material information not ripe for disclosure in a registration
statement, which shall be evidenced by determinations in good faith by the Board
of Directors of the Company that disclosure of such information in the
registration statement would be detrimental to the business and affairs of the
Company; or (ii) any material engagement or activity by the Company which would,
in the good faith determination of the Board of Directors of the Company, be
adversely affected by disclosure in a registration statement at such time, which
determination shall be accompanied by a good faith determination by the Board of
Directors of the Company that the registration statement would be materially
misleading absent the inclusion of such information.
“Register,”
“Registered,”
and “Registration”
refer to a registration effected by preparing and filing a Registration
Statement or Statements in compliance with the Securities Act and pursuant to
Rule 415 under the Securities Act or any successor rule providing for offering
securities on a continuous basis (“Rule
415”), and the declaration or ordering of effectiveness of such
Registration Statement by the SEC.
“Registrable
Securities” means, collectively, the Conversion Shares and the Other
Issuable Shares.
“Registration
Statement” means a registration statement of the Company under the
Securities Act covering Registrable Securities on Form S-3, if the Company is
then eligible to file using such form, and if not eligible, on Form S-1 or other
appropriate form.
“Required Filing
Date” means (i) with respect to the initial Registration Statement, the
date as soon as practicable after the Closing Date but no later than two weeks
after the Closing Date, and (ii) with respect to a Registration Statement filed
with respect to an Increased Registered Shares Date, the Increased Shares
Required Filing Date (as those terms are defined below).
“Restricted Sale
Date” means the first date, other than a date during a Permitted
Suspension Period (as defined below), on which the Investor is restricted from
making sales of Registrable Securities covered by any previously effective
Registration Statement.
2. Registration.
(a) Mandatory
Registration.
(i) The
Company shall prepare and file with the SEC, as soon as practicable after the
Closing Date but no later than fourteen (14) days thereafter, a Registration
Statement registering for resale by the Investor a sufficient number of shares
of Common Stock for the Investor to sell the Registrable
Securities. Notwithstanding the requirement to register all
Registrable Securities, the Company’s obligation to register the Registrable
Securities shall initially be satisfied by the registration of the Initial
Number of Shares to Be Registered (as defined below). The “Initial Number of
Shares to Be Registered” is a number of shares of Common Stock which is
at least equal to the sum of (v) 2,000,000 shares of Common Stock for issuance
upon conversion of the Note, and (w) the number of Other Issuable Shares as of
the date of the filing of the Registration Statement or any amendment thereto
(provided, however, that for purposes of this provision, the number of Other
Issuable Shares shall not be greater than the number of such shares which the
SEC permits to be included in the Registration Statement). Unless
otherwise specifically agreed to in writing in advance by the Holder, the
Registration Statement (W) shall include only the Registrable Securities, and
(X) shall also state that, in accordance with Rule 416 and 457 under the
Securities Act, it also covers such indeterminate number of additional shares of
Common Stock as may become issuable upon conversion of the Note or issuances of
Other Issuable Securities covered by such Registration Statement to prevent
dilution resulting from stock splits, stock dividends or similar
transactions.
(ii) The
Company will use its best efforts to cause such Registration Statement to be
declared effective on a date (the “Required
Effective Date”) which is no later than the earlier of (Y) five (5) days
after oral or written notice by the SEC that it may be declared effective, or
(Z) ninety (90) days from the date of this Agreement.
(b) Trigger
Events.
(i) If
the Registration Statement covering the Registrable Securities is not filed as
contemplated by this Agreement with the SEC by the Required Filing Date, a
Trigger Event (as defined in the Note) shall be deemed to have occurred under
the Note and, in addition to the Trigger Effects (as defined in the Note) and
any other remedies available (and not as liquidated damages), a penalty equal to
$100 per day shall be added to the principal balance of the Note for so long as
the Registration Statement remains unfiled.
(ii) If
the Registration Statement covering the Registrable Securities is not effective
by the relevant Required Effective Date or if there is a Restricted Sale Date, a
Trigger Event shall be deemed to have occurred under the Note and, in addition
to the Trigger Effects (as defined in the Note) and any other remedies available
(and not as liquidated damages), a penalty equal to $100 per day shall be added
to the principal balance of the Note for so long as the Registration Statement
remains not yet effective.
3. Obligations of the
Company. In connection with the registration of the
Registrable Securities, the Company shall do each of the following:
(a) Prepare
promptly, and file with the SEC by the Required Filing Date a Registration
Statement with respect to not less than the number of Registrable Securities
provided in Section 2(a) above, and thereafter use its reasonable best efforts
to cause such Registration Statement relating to Registrable Securities to
become effective by the Required Effective Date and keep the Registration
Statement effective at all times during the period (the “Registration
Period”) continuing until the earlier of (i) the date when the Investor
may sell all Registrable Securities under Rule 144 without volume or other
restrictions or limits or (ii) the date the Investor no longer owns any of the
Registrable Securities, which Registration Statement (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) Prepare
and file with the SEC such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to keep the Registration
Statement effective at all times during the Registration Period, and, during the
Registration Period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company covered
by the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the Registration
Statement;
(c) Permit
a single firm of counsel designated by the Investor (which, until further
notice, shall be deemed to be Xxxxxxx Xxxxxxx Xxxxxxx & Deere, P.C.,
Attn: Xxxxxxxx X. Xxxxxx, which firm has requested to receive such
notification, “Investor’s
Counsel”) to review the Registration Statement and all amendments and
supplements thereto within a reasonable period of time (but not less than three
(3) trading days) prior to their filing with the SEC, and not file any document
in a form to which such counsel reasonably objects;
(d) Notify
the Investor and the Investor’s Counsel immediately (and, in the case of clause
(i)(A) below, not less than three (3) trading days prior to such filing) and (if
requested by any such person) confirm such notice in writing no later than one
(1) trading day following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to the Registration Statement is proposed
to be filed; (B) whenever the SEC notifies the Company whether there will be a
“review” of such Registration Statement; (C) whenever the Company receives (or a
representative of the Company receives on its behalf) any oral or written
comments from the SEC in respect of a Registration Statement (copies or, in the
case of oral comments, summaries of such comments shall be promptly furnished by
the Company to the Investors); and (D) with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC or any other Federal or state governmental
authority for amendments or supplements to the Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the SEC of
any stop order suspending the effectiveness of the Registration Statement
covering any or all of the Registrable Securities or the initiation of any
proceedings for that purpose; (iv) if at any time any of the representations or
warranties of the Company contained in any agreement (including any underwriting
agreement) contemplated hereby ceases to be true and correct in all material
respects; (v) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose; and (vi) of the occurrence of
any event that to the best knowledge of the Company makes any statement made in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. In addition, the Company shall communicate with
the Investor’s Counsel with regard to its proposed written responses to the
comments contemplated in clause (C) of this Section 3(d), so that, to the extent
practicable, the Investors shall have the opportunity to comment
thereon;
(e) Furnish
to the Investor and to Investor’s Counsel (i) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company, one (1) copy of the Registration Statement, each preliminary prospectus
and prospectus, and each amendment or supplement thereto, and (ii) such number
of copies of a prospectus, and all amendments and supplements thereto and such
other documents, as the Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by the
Investor;
(f)
As promptly as practicable after becoming aware thereof,
notify the Investor of the happening of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and deliver a number of copies
of such supplement or amendment to the Investor as the Investor may reasonably
request;
(g) As
promptly as practicable after becoming aware thereof, notify the Investor of the
issuance by the SEC of a Notice of Effectiveness or any notice of effectiveness
or any stop order or other suspension of the effectiveness of the Registration
Statement at the earliest possible time;
(h) Comply
with Regulation FD or any similar rule or regulation regarding the dissemination
of information regarding the Company, and in furtherance of the foregoing, and
not in limitation thereof, not disclose to the Investor any non-public material
information regarding the Company;
(i) Notwithstanding
the foregoing, if at any time or from time to time after the date of
effectiveness of the Registration Statement, the Company notifies the Investor
in writing that the effectiveness of the Registration Statement is suspended for
any reason, whether due to a Potential Material Event or otherwise, the Investor
shall not offer or sell any Registrable Securities, or engage in any other
transaction involving or relating to the Registrable Securities, from the time
of the giving of such notice until the Investor receives written notice from the
Company that such the effectiveness of the Registration Statement has been
restored, whether because the Potential Material Event has been disclosed to the
public or it no longer constitutes a Potential Material Event or otherwise;
provided, however, that the
Company may not so suspend the right to such holders of Registrable Securities
during the periods the Registration Statement is required to be in effect other
than during a Permitted Suspension Period (and the applicable provisions of
Section 2(b) shall apply with respect to any such suspension other than during a
Permitted Suspension Period);
(j)
Use its reasonable efforts to secure and maintain the designation of all
the Registrable Securities covered by the Registration Statement on the
Principal Trading Market and the quotation of the Registrable Securities on the
Principal Trading Market;
(k) Provide
a transfer agent (“Transfer
Agent”) and registrar, which may be a single entity, for the Registrable
Securities not later than the initial Effective Date;
(l) Cooperate
with the Investor to facilitate the timely preparation and delivery of
certificates for the Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts as the case may be, as the
Investor may reasonably request, and, within five (5) trading days after a
Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the Transfer Agent for the Registrable
Securities (with copies to the Investor) an appropriate instruction and opinion
of such counsel, which shall include, without limitation, directions to the
Transfer Agent to issue certificates of Registrable Securities (including
certificates for Registrable Securities to be issued after the Effective Date
and replacement certificates for Registrable Securities previously issued)
without legends or other restrictions, subject to compliance with applicable law
and other rules and regulations, including, without limitation, prospectus
delivery requirements;
(m) Take
all other reasonable administrative steps and actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement; provided, however, that the foregoing does not
require that the Company take any steps whatsoever regarding the identification
or selection of a broker to sell the Registrable Securities, the identification
of buyers of the Registrable Securities, or the negotiation of the
sale terms of the Registrable Securities; and
(n)
Not file any other registration statement (other than the
Registration Statement and amendments thereto) during the period commencing on
the Closing Date and ending on the Effective Date.
4. Obligations of the
Investor. In connection with the registration of the
Registrable Securities, the Investor shall have the following
obligations:
(a) The
Investor, by its acceptance of the Registrable Securities, agrees to cooperate
with the Company as reasonably requested by the Company in connection with the
preparation and filing of the Registration Statement hereunder, unless the
Investor has notified the Company in writing of the Investor’s election to
exclude all of its Registrable Securities from the Registration Statement;
and
(b) 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), (g) or (i) above,
the Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until the Investor’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(f), (g) or (i), and, if so directed by the
Company, the Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in the Investor’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such
notice.
5. Expenses of
Registration. All reasonable expenses (other than
underwriting discounts and commissions of the Investor) incurred in connection
with registrations, filings or qualifications pursuant to Section 3, but
including, without limitation, all registration, listing, and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company shall be borne by the Company. In addition, a fee for a
single counsel for the Investor equal to $2,000.00 for the review of each
Registration Statement shall be borne by the Company.
6. Indemnification. In
the event any Registrable Securities are included in a Registration Statement
under this Agreement:
(a) To
the extent permitted by law, the Company will indemnify and hold harmless the
Investor, the directors, if any, of the Investor, and the officers, if any, of
the Investor (each, an “Indemnified
Party”), against any losses, claims, damages, liabilities or expenses
(joint or several) incurred (collectively, “Claims”)
to which any of them may become subject under the Securities Act, Securities
Exchange Act of 1934, as amended (the “Exchange
Act”), or otherwise, insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations in the
Registration Statement, or any post-effective amendment thereof, or any
prospectus included therein: (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
post-effective amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in the 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 Securities Act,
the Exchange Act, any state securities law or any rule or regulation under the
Securities Act, the Exchange Act or any state securities law (the matters in the
foregoing clauses (i) through (iii) being, collectively referred to as “Violations”). Subject
to clause (b) of this Section 6, the Company shall reimburse the Investor,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by it 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) shall not (I) apply to any Claim 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 or on behalf of such Indemnified Party
expressly for use in connection with the preparation of the Registration
Statement, any such amendment thereof or supplement thereto or
prospectus, if such prospectus (or supplement or amendment thereto) was timely
made available by the Company pursuant to Section 3(b) hereof; (II)
be available to the extent such Claim is based on a failure of the Investor to
deliver or cause to be delivered the prospectus made available by the Company or
the amendment or supplement thereto made available by the Company; (III) be
available to the extent such Claim is based on the delivery of a prospectus by
the Investor after receiving notice from the Company under Section 3(f), (g) or
(i) hereof (other than a notice regarding the effectiveness of the Registration
Statement or any amendment or supplement thereto), or (IV) 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
or delayed. The Investor will indemnify the Company and its officers,
directors and agents (each, an “Indemnified
Party”) against any claims 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 or on behalf of the Investor, expressly for use in connection
with the preparation of the Registration Statement or the amendment or
supplement thereto, subject to such limitations and conditions as are applicable
to the indemnification provided by the Company pursuant to this Section 6. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Party and shall survive the transfer of
the Registrable Securities by the Investor pursuant to Section
10.
(b) Promptly
after receipt by an Indemnified Party under this Section 6 of notice of the
commencement of any action (including any governmental action), such 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 satisfactory to the indemnifying
party (provided such counsel shall not have a conflict of interest with the
Indemnified Party and provided that all defenses available to the Indemnified
Party can be maintained without prejudicing the rights of the indemnifying
party). In case any such action is brought against any Indemnified
Party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party similarly notified,
assume the defense thereof, subject to the provisions herein stated and after
notice from the indemnifying party to such Indemnified Party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
Indemnified Party under this Section 6 for any legal or other reasonable
out-of-pocket expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action to its
final conclusion. The Indemnified Party shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof, but the fees and reasonable out-of-pocket expenses of such counsel
shall not be at the expense of the indemnifying party if the indemnifying party
has assumed the defense of the action with counsel as provided
above. 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 Party under
this Section 6, except to the extent that the indemnifying party is prejudiced
in its ability to defend such action. 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 such expense, loss, damage or
liability is incurred and is due and payable; provided, however, that the
Investor shall not obligated to make any indemnification payment to the Company
under this Section 6 unless and until there has been a final adjudication of
liability on the part of the Investor.
7. Contribution. 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 (a) no
contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section
6; (b) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any seller of Registrable Securities who
was not guilty of such fraudulent misrepresentation; and (c) except where the
seller has committed fraud (other than a fraud by reason of the information
included or omitted from the Registration Statement as to which the Company has
not given notice as contemplated under Section 3 hereof) or intentional
misconduct, 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 Securities Act and
Exchange Act. With a view to making available to Investor the
benefits of Rule 144 promulgated under the Securities Act or any other similar
rule or regulation of the SEC that may at any time permit Investor to sell
securities of the Company to the public without Registration (“Rule
144”), the Company agrees to:
(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 Securities Act and the Exchange Act; 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 Securities Act and the Exchange Act,
(ii) if not available on the SEC’s XXXXX system, 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; and
(d) at
the request of the Investor, give its Transfer Agent instructions (supported by
an opinion of Company counsel, if required or requested by the Transfer Agent)
to the effect that, upon the Transfer Agent’s receipt from the Investor
of:
(i) a
certificate (a “Rule 144
Certificate”) certifying (A) that the Investor’s holding period (as
determined in accordance with the provisions of Rule 144) for the shares of
Registrable Securities which the Investor proposes to sell (the “Securities Being
Sold”) is not less than six months and (B) as to such other matters as
may be appropriate in accordance with Rule 144 under the Securities Act,
and
(ii) an
opinion of counsel acceptable to the Company (for which purposes it is agreed
that the Investor’s Counsel shall be deemed acceptable) that, based on the Rule
144 Certificate, Securities Being Sold may be sold pursuant to the provisions of
Rule 144, even in the absence of an effective Registration
Statement,
the
Transfer Agent is to effect the transfer of the Securities Being Sold and issue
to the buyer(s) or transferee(s) thereof one or more stock certificates
representing the transferred Securities Being Sold without any restrictive
legend and without recording any restrictions on the transferability of such
shares on the Transfer Agent’s books and records (except to the
extent any such legend or restriction results from facts other than the identity
of the Investor, as the seller or transferor thereof, or the status, including
any relevant legends or restrictions, of the shares of the Securities Being Sold
while held by the Investor). If the Transfer Agent reasonably requires any
additional documentation at the time of the transfer, the Company shall deliver
or cause to be delivered all such reasonable additional documentation as may be
necessary to effectuate the issuance of an unlegended certificate.
9. Piggyback Registrations. The
Company shall notify the Investor in writing at least 15 business days prior to the filing
of any Registration Statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
Registration Statements relating to secondary offerings of securities of the
Company) and will afford the Investor an opportunity to include in such
Registration Statement all or part of the Registrable Securities it holds. If
the Investor desires to include in any such Registration Statement all or any
part of the Registrable Securities held by it, the Investor shall, within 15
business days after the above-described notice from the Company, so notify the
Company in writing. Such notice shall state the intended method of disposition
of the Registrable Securities by the Investor. In the event the Investor desires
to include less than all of its Registrable Securities in any Registration
Statement it shall continue to have the right to include any Registrable
Securities in any subsequent Registration Statement or Registration Statements
as may be filed by the Company with respect to offerings of its securities, all
upon the terms and conditions set forth herein.
10. Assignment of the Registration
Rights. The rights to have the Company register Registrable
Securities pursuant to this Agreement shall be automatically assigned by the
Investor to any transferee of the Registrable Securities (or all or any portion
of any unconverted Purchased Shares) only if the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, (b) the securities with respect
to which such registration rights are being transferred or assigned, and (c)
written evidence of the transferee’s assumption of the Investor’s obligations
under this Agreement.
11. Amendment of Registration
Rights. Any provision 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 with the written consent of the
Company and the Investor. Any amendment or waiver effected in
accordance with this Section 11 shall be binding upon the Investor and the
Company.
12. Miscellaneous.
(a) A
person or entity is deemed to be a holder of Registrable Securities whenever
such person or entity owns of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two or
more persons or entities 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) Notices
required or permitted to be given hereunder shall be given in the manner
contemplated by the Purchase Agreement, if to the Company or to the Investor, to
their respective address contemplated by the Purchase Agreement, or at such
other address as each such party furnishes by notice given in accordance with
this Section 12(b).
(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)
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Illinois for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the
exclusive jurisdiction of the federal courts whose districts encompass any part
of the County of Xxxx or the state courts of the State of Illinois sitting in
the County of Xxxx in connection with any dispute arising under this Agreement
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non coveniens, to the
bringing of any such proceeding in such jurisdictions.
(e) The
Company and the Investor hereby waive a trial by jury in any action, proceeding
or counterclaim brought by either of the parties hereto against the other in
respect of any matter arising out of or in connection with this Agreement or any
of the other Transaction Agreements.
(f) If
any one or more of the provisions contained herein, or the application thereof
in any circumstance, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions hereof shall not be in
any way impaired, unless the provisions held invalid, illegal or unenforceable
shall substantially impair the benefits of the remaining provisions
hereof.
(g) Subject
to the requirements of Section 10 hereof, this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto.
(h) All
pronouns and any variations thereof refer to the masculine, feminine or neuter,
singular or plural, as the context may require.
(i) The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning thereof.
(j) This
Agreement may be executed in one or more 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 telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this
Agreement.
(k) The
Company acknowledges that any failure by the Company to perform its obligations
under Section 3(a) hereof, or any delay in such performance could result in loss
to the Investor, and the Company agrees that, in addition to any other liability
the Company may have by reason of such failure or delay, the Company shall be
liable for all direct damages caused by any such failure or delay, unless the
same is the result of force majeure. Neither party shall be liable
for consequential damages.
(l) This
Agreement (including to the extent relevant the provisions of other Transaction
Agreements) constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein.
[Remainder
of page intentionally left blank]
IN WITNESS WHEREOF, the
parties have caused this Agreement to be duly executed by their respective
officers thereunto duly authorized as of the day and year first above
written.
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COMPANY:
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a
Nevada corporation
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By:
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 |
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Name: Xxxxxx
X Xxxxxxxxx
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Title: CEO
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INVESTOR:
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ST. XXXXXX INVESTMENTS,
LLC,
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an
Illinois limited liability company
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By:
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Xxxx
X. Xxxx,
Manager
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