INVESTOR REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.6
THIS
REGISTRATION RIGHTS
AGREEMENT (this “Agreement”),
dated as
of December 31, 2007, by and among C-XXXX INTERNATIONAL, INC.,
a
South Carolina corporation, with its principal office located at 0000 X. Xxx
Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000 (the “Company”), and the
undersigned investors (each, an “Investor” and
collectively, the “Investors”).
WHEREAS:
A.
In connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the “Securities
Purchase
Agreement”), the Company has agreed, upon the terms and subject to the
conditions of the Securities Purchase Agreement, to issue and sell to the
Investors secured convertible debentures (the “Convertible
Debentures”) which shall be convertible into that number of shares of the
Company’s common stock, par value US$.0001 per share (the “Common Stock”),
pursuant to the terms of the Securities Purchase Agreement for an
aggregate purchase price of up to Three Million Five Hundred Thousand U.S.
Dollars ($3,500,000). Capitalized terms not defined herein shall
have the meaning ascribed to them in the Securities Purchase
Agreement.
B.
To induce the Investors to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations there
under, 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 Investors 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 SEC (the “SEC”).
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(c)
“Registrable
Securities” means the shares of Common Stock issuable to Investors upon
conversion of the Convertible Debentures pursuant to the Securities Purchase
Agreement dated the date hereof.
(d)
“Registration
Statement” means a registration statement under the 1933 Act which covers
the Registrable Securities.
2.
REGISTRATION.
(a)
Subject to the terms and conditions of this Agreement, the Company shall prepare
and file, no later than thirty (30) days from the date hereof (the “Scheduled Filing
Deadline”), with the SEC a registration statement on Form S-1 or SB-2
(or, if the Company is then eligible, on Form S-3) under the 1933 Act (the
“Initial Registration
Statement”) for the registration for the resale by all Investors who
purchased Convertible Debentures pursuant to the Securities Purchase Agreement
shares of Common Stock representing at least five (5) times the number of shares
which are anticipated to be issued upon conversion of the Convertible Debentures
issued pursuant to the Securities Purchase Agreement and the Investor’s
Shares. The Company shall cause the Registration Statement to remain
effective until all of the Registrable Securities have been
sold. Prior to the filing of the Registration Statement with the SEC,
the Company shall furnish a copy of the Initial Registration Statement to the
Investors and Xxxxx X. Xxxxxxx XX, P.A. for their review and
comment. The Investors and Xxxxx X. Xxxxxxx XX, P.A. shall furnish
comments on the Initial Registration Statement to the Company by the later
of:
(a) seventy-two (72) hours of the receipt thereof from the Company and (b)
the
close of the third business day following receipt thereof from the
Company.
(b)
Effectiveness of
the
Initial Registration Statement. The Company shall use its best
its best efforts (i) to have the Initial Registration Statement declared
effective by the SEC no later than ninety (90) days after the date hereof (the
“Scheduled Effective
Deadline”) and (ii) to insure that the Initial Registration Statement and
any subsequent Registration Statement remains in effect until all of the
Registrable Securities have been sold, subject to the terms and conditions
of
this Agreement. It shall be an event of default hereunder if the
Initial Registration Statement is not declared effective by the SEC within
ninety (90) days after filing thereof.
(c)
Failure to File
or
Obtain Effectiveness of the Registration Statement. In the
event the Registration Statement is not filed by the Scheduled Filing Deadline
or is not declared effective by the SEC on or before the Scheduled Effective
Date, or if after the Registration Statement has been declared effective by
the
SEC, sales cannot be made pursuant to the Registration Statement (whether
because of a failure to keep the Registration Statement effective, failure
to
disclose such information as is necessary for sales to be made pursuant to
the
Registration Statement, failure to register sufficient shares of Common Stock
or
otherwise then as partial relief for the damages to any holder of Registrable
Securities by reason of any such delay in or reduction of its ability to sell
the underlying shares of Common Stock (which remedy shall not be exclusive
of
any other remedies at law or in equity), the Company will pay as liquidated
damages (the “Liquidated Damages”)
to the holder, at the holder’s option, either a cash amount or shares of the
Company’s Common Stock within three (3) business days, after demand therefore,
equal to two percent (2%) of the liquidated value of the Convertible Debentures
outstanding as Liquidated Damages for each thirty (30) day period after the
Scheduled Filing Deadline or the Scheduled Effective Date as the case may be
provided that in no event will liquidated damages exceed fifteen percent
(15%).
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(d)
Liquidated
Damages. The Company and the Investor hereto acknowledge and
agree that the sums payable under subsection 2(c) above shall constitute
liquidated damages and not penalties and are in addition to all other rights
of
the Investor, including the right to call a default. The parties
further acknowledge that (i) the amount of loss or damages likely to be incurred
is incapable or is difficult to precisely estimate, (ii) the amounts specified
in such subsections bear a reasonable relationship to, and are not plainly
or
grossly disproportionate to, the probable loss likely to be incurred in
connection with any failure by the Company to obtain or maintain the
effectiveness of a Registration Statement, (iii) one of the reasons for the
Company and the Investor reaching an agreement as to such amounts was the
uncertainty and cost of litigation regarding the question of actual damages,
and
(iv) the Company and the Investor are sophisticated business parties and have
been represented by sophisticated and able legal counsel and negotiated this
Agreement at arm’s length.
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 incorporate 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 each Investor whose Registrable Securities are
included in any Registration Statement, without charge, (i) at least one (1)
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 in writing) and (iii)
such other documents as such Investor may reasonably request in writing from
time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.
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(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 any
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 each Investor who
holds Registrable Securities 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 each 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 each 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
each
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 each Investor who holds Registrable
Securities being sold 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.
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(g)
At the reasonable written request of any Investor, the Company shall furnish
to
such Investor, on the date of the effectiveness of the Registration Statement
and thereafter from time to time on such dates as an 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
Investors.
(h)
Upon written request, the Company shall make available for inspection by (i)
any
Investor and (ii) one (1) firm of accountants or other agents retained by
the Investors (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 in writing; provided, however, that each Inspector shall
agree, and each Investor hereby agrees, to hold in strict confidence and shall
not make any disclosure (except to an Investor) or use 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. Each 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 an 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 an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
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(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) 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 Investors who hold Registrable Securities
being offered and, 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 Investors may reasonably request in writing and
registered in such names as the Investors 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 (12) 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 declared 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 Investors
whose Registrable Securities are included in such Registration Statement)
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 the lawful disposition by the Investors of Registrable Securities
pursuant to a Registration Statement.
(q)
The Company shall use a law firm recommended by the Investors for the
preparation of the Registration Statement.
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4.
OBLIGATIONS OF
THE
INVESTORS.
Each
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), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such 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 an
Investor in accordance with the terms of the Securities Purchase Agreement
in
connection with any sale of Registrable Securities with respect to which an
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 each Investor, the directors, officers,
partners, employees, agents, representatives of, and each Person, if any, who
controls any 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 the Investors 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(c); 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 and shall survive the transfer
of
the Registrable Securities by the Investors pursuant to Section 9
hereof.
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(b)
In connection with a Registration Statement, each Investor agrees to severally
and not jointly 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, employees, representatives, or agents 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 occurs in reliance
upon
and in conformity with written information furnished to the Company by such
Investor expressly for use in connection with such Registration Statement;
and,
subject to Section 6(d), such 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 such
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
such 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 and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9. 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 each Investor prior to such Investor’s use of the prospectus to which the
Claim relates.
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(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 (1) 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.
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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 Investors 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 4(c) of the Securities Purchase
Agreement) and the filing of such reports and other documents as are required
by
the applicable provisions of Rule 144; and
(c)
furnish to each Investor so long as such Investor owns Registrable Securities,
promptly upon written 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 Investors
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 with the written consent of the Company and Investors
who
then hold at least two-thirds (2/3) of the Registrable
Securities. Any amendment or waiver effected in accordance with this
Section 9 shall be binding upon each Investor and the
Company. No such amendment shall be effective to the extent that it
applies to fewer than all of the holders of the Registrable
Securities. 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
EXHIBIT
10.6 - continued
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 (2) 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 (1) 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:
|
C-Xxxx
International, Inc..
|
|
0000
X. Xxx Xxxxx, Xxxxx 000
|
|
|
Xxxxxxx,
XX 00000
|
|
|
Attn:
Xx. Xxxxxxx Xxxxx, CEO
|
|
|
Telephone:
(000) 000-0000
|
|
|
Facsimile:
(000) 000-0000
|
|
|
With
a copy to:
|
The
X’Xxxx Law Firm, P.C.
|
|
00000
X. Xxxx Xxxx., Xxxxx 000-X
|
|
|
Xxxxxxxx
Xxxxx, XX 00000
|
|
|
Attention: Xxxxxxx
X. X’Xxxx, Esq.
|
|
|
Telephone:
(000) 000-0000
|
|
|
Facsimile:
(000) 000-0000
|
|
If
to an
Investor, to its address and facsimile number on the Schedule of Investors
attached hereto, with copies to such Investor’s representatives as set forth on
the Schedule of Investors or to such other address and/or facsimile number
and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five (5) 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.
11
EXHIBIT
10.6 - continued
(d)
The laws of the State of Florida shall govern all issues concerning the relative
rights of the Company and the Investors as its stockholders. All other questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of Florida without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of Florida or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Florida
Each
party hereby irrevocably submits to the non-exclusive jurisdiction of the State
Courts of the State of Florida sitting in Broward County, Florida and federal
courts for the Southern District of Florida 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 Irrevocable Transfer Agent Instructions, the Securities
Purchase Agreement and related documents including the Convertible Debenture
and
the Escrow Agreement dated the date hereof by and among the Company, the
Investors set forth on the Schedule of Investors attached hereto, and Xxxxx
X.
Xxxxxxx XX, P.A. (the “Escrow Agreement”)
and the Security Agreement dated the date hereof (the “Security 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 Irrevocable Transfer Agent
Instructions, the Securities Purchase Agreement and related documents including
the Convertible Debenture, the Escrow Agreement and the Security 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.
12
EXHIBIT
10.6 - continued
(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.
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.
(j)
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]
13
EXHIBIT
10.6 - continued
IN
WITNESS WHEREOF, the
parties have caused this Investor Registration Rights Agreement to be duly
executed as of day and year first above written.
|
COMPANY:
|
|
|
C-XXXX
INTERNATIONAL, INC.
|
|
|
By:
/s/ Xxxxxxx X. Xxxxx, Xx.
|
|
|
Name:
Xxxxxxx X. Xxxxx, Xx.
|
|
|
Title:
Chief Executive Officer
|
|
|
BUYER:
|
|
|
TRAFALGAR
CAPITAL SPECIALIZED
|
|
|
INVESTMENT
FUND, LUXEMBOURG
|
|
|
By:
Trafalgar Capital Sarl
|
|
|
Its:
General Partner
|
|
|
By:
/s/ Xxxxxx Xxxxx
|
|
|
Name: Xxxxxx
Xxxxx
|
|
|
Title: Chairman
of the Board
|
14
EXHIBIT
10.6 - continued
SCHEDULE
I
SCHEDULE
OF
INVESTORS
|
Name
|
Signature
|
Address/Facsimile
Number
of Buyer
|
|
|
0-00
Xxx Xxxxxxx Xxxxx
|
|||
|
Trafalgar
Capital Specialized
|
By:
Trafalgar Capital Sarl
|
BP
3023
|
|
|
Investment
Fund,
|
Its:
General Partner
|
X-0000
Xxxxxxxxxx
|
|
|
Xxxxxxxxxx
|
Facsimile:
|
||
|
011-44-207-405-0161
|
|||
|
By: /s/
Xxxxxx Xxxxx
|
and
|
||
|
Name: Xxxxxx
Xxxxx
|
001-786-323-1651
|
||
|
Its:
Chairman of the Board
|
|||
15
EXHIBIT
10.6 - continued
EXHIBIT
A
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION
STATEMENT
Attention:
|
|
Re:
|
C-XXXX
INTERNATIONAL, INC.
|
Ladies
and Gentlemen:
We
are
counsel to C-Xxxx International, Inc., a South Carolina corporation (the “Company”), and have
represented the Company in connection with that certain Securities Purchase
Agreement (the “Securities Purchase
Agreement”) entered into by and among the Company and the investors named
therein (collectively, the “Investors”) pursuant
to which the Company issued to the Investors shares of its Common Stock, par
value US$.0001 per share (the “Common
Stock”). Pursuant to the Purchase Agreement, the Company also
has entered into a Registration Rights Agreement with the Investors (the “Investor 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 SEC (the “SEC”)
relating to the
Registrable Securities which names each of the Investors as a selling
stockholder there under.
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,
[INSERT
NAME OF COMPANY COUNSEL]
By:
cc:
[LIST
NAMES OF INVESTORS]
A-1
