EXHIBIT 10.27
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
December 13, 2004 by and between DCI USA, INC., a Delaware
corporation (the "Company"), and CORNELL CAPITAL PARTNERS, LP, a
Delaware limited partnership (the "Investor").
WHEREAS:
A. In connection with the Standby Equity Distribution
Agreement by and between the parties hereto of even date herewith
(the "Standby Equity Distribution Agreement"), the Company has
agreed, upon the terms and subject to 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 pursuant to the terms of the Standby Equity
Distribution Agreement for an aggregate purchase price of up to
Five Million 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.
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:
a. "Person" means a corporation, a limited liability
company, an 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 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 the declaration or ordering of
effectiveness of such Registration Statement(s) by the United
States Securities and Exchange Commission (the "SEC").
c. "Registrable Securities" means the shares of
Common Stock issuable to Investor pursuant to the Standby Equity
Distribution Agreement, including, without limitation, the
Investor's Shares (as defined in Section 12.4 of the Standby
Equity Distribution Agreement).
d. "Registration Statement" means a registration
statement under the 1933 Act which covers the Registrable
Securities.
2. REGISTRATION.
a. Mandatory Registration. The Company shall prepare
and file with the 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 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.
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 (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 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 other records, and pertinent corporate
documents and properties of the Company (collectively, the
"Records"), as shall be reasonably deemed 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
(ii) 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.
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.
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.
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.
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,
attorneys, 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 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 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 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 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 each Indemnified Person 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
solely as it relates to such Indemnified person if 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. Notwithstanding anything to the contrary
herein or in any other agreement entered into between the Company
and the Investor, the Company acknowledges and agrees that it is
solely responsible and shall indemnify each Indemnified Person
for the contents of any registration statement, prospectus or
other filing made with the SEC or otherwise used in the offering
of the Company's securities (except as such disclosure relates
solely to the Investor and then only to the extent that such
disclosure conforms with information furnished in writing by the
Investor to the Company), even if the Investor or its agents as
an accommodation to the Company participate or assist in the
preparation of such registration statement, prospectus or other
SEC filing. The Company shall retain its own legal counsel to
review, edit, confirm and do all things such counsel deems
necessary or desirable to such registration statement, prospectus
or other SEC filing to ensure that it does not contain an untrue
statement or alleged untrue statement of material fact or omit or
alleged to omit a material fact necessary to make the statements
made therein, in light of the circumstances under which the
statements were made, not misleading. 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 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 solely relates to the Investor and 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.
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.
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:
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.
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.
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, DCI USA, Inc.
to:
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxx Xxxxx & Associates
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Investor, Cornell Capital Partners, LP
to:
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxx Xxxxxx
Portfolio Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Cornell Capital Partners, LP
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
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 New Jersey
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
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:
DCI USA, INC.
By: /s/ Xxxxx Xxxxxxxxxx
Name: Xxxxx Xxxxxxxxxx
Title: Chairman
INVESTOR:
CORNELL CAPITAL PARTNERS, LP
By: Yorkville Advisors, LLC
Its: General Partner
By: Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Portfolio Manager
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
INSERT
Attention:
Re: DCI USA, INC.
Ladies and Gentlemen:
We are counsel to DCI USA, Inc., a Delaware corporation (the
"Company"), and 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.
___ -_____________) (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
