REGISTRATION RIGHTS AGREEMENT
Exhibit
10.58
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of
October _2_, 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 debentures (the “Debentures”), pursuant to the terms of
the Securities Purchase Agreement providing that the Investor may purchase
Debentures having up to an aggregate purchase price of up to One Million
One
Hundred Thousand U.S. Dollars ($1,100,000). 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
Commission (the “SEC”).
(c) “Registrable
Securities” means the shares of Common Stock issuable to Investors upon
conversion of the Convertible Debentures pursuant to the Securities Purchase
Agreement and the shares of Common Stock issuable to the Investors upon exercise
of the Warrant issued pursuant to the Securities Purchase
Agreement. As to any particular Registrable Securities, such
securities will cease to be Registrable Securities when (a) they have been
effectively registered under the 1933 Act and disposed of in accordance with
the
Registration Statement covering them, (b) they are or may be freely traded
without restriction and without registration pursuant to Rule 144(k)
promulgated under the Securities Act, as such Rule may be amended from time
to
time, or (c) they have been otherwise transferred and new certificates for
them
not bearing a restrictive legend have been issued by the Company and the
Company
shall not have “stop transfer” instructions against them.
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(d) “Registration
Statement” means a registration statement under the 1933 Act which covers
the Registrable Securities.
2. REGISTRATION.
(a) Right
to Piggyback. Whenever the Company proposes to register any of its
securities under the Securities Act of 1933, as amended (the “Securities
Act”) and the registration form to be used may be used for the
registration of Registrable Securities (a “Piggyback
Registration”), the Company will give prompt written notice to the
Investors of its intention to effect such a registration (such notice to
be
given a minimum of thirty (30) days prior to filing of the registration form)
and will include in such registration form all Registrable Securities unless
the
Company has received written requests for exclusion therein of a portion
or all
of the Registrable Securities prior to filing thereof by the
Company. The Investors and Xxxxx X. Xxxxxxx XX, P.A. shall
furnish comments on the such 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) Priority
on Primary Registrations. If a Piggyback Registration is an underwritten
primary registration on behalf of the Company, and the managing underwriters
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which can
be
sold in such offering without adversely affecting the marketability of the
offering, the Company will include in such registration (i) first, the
Registrable Securities requested to be included in such registration, and
(ii)
second, the securities that the Company proposes to sell, and (iii) third,
such
other securities of the Company possessing registration rights.
(c) Priority
on Secondary Registrations. If a Piggyback Registration is an underwritten
secondary registration solely on behalf of holders of the Company’s securities,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering without adversely
affecting the marketability of the offering, the Company will include in
such
registration (i) first, the Registrable Securities requested to be included
in
such registration, (ii) second, the securities requested to be included therein
by the holders requesting such registration, and (ii) third, such other
securities of the Company with registration rights permitted to be included
in
such registration.
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(d) General
Priority Rule. Notwithstanding anything contained in this Agreement to the
contrary, in no event shall any Registrable Securities be excluded from such
offering unless all other stockholders’ securities have first been
excluded.
(e) Other
Registrations. If the Company has previously filed a registration statement
with respect to Registrable Securities pursuant to this Section, and if such
previous registration has not been withdrawn or abandoned, the Company will
not
file or cause to be effected any other registration of any of its equity
securities or securities convertible or exchangeable into or exercisable
for its
equity securities under the Securities Act (except on Form S-4 or Form S-8
or
any successor form), whether on its own behalf or at the request of any holder
or holders of such securities, until a period of at least six (6) months
has
elapsed from the effective date of such previous registration.
(f) Limitations
on Subsequent Registration Rights. From
and
after the date of this Agreement, the Company shall not, without the prior
written consent of the Investor, enter into any agreement with any holder
or
prospective holder of any securities of the Company which would allow such
holder or prospective holder (a) to include such securities in any
registration unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only
to
the extent that the inclusion of such securities will not reduce the amount
of
the Registrable Securities of the Investor that are included or (b) to
demand registration of any securities held by such holder or prospective
holder.
(g) Sufficient
Number of Shares Registered. In the event the number of shares available
under a Registration Statement filed pursuant to this Section 2 is insufficient
to cover all of the Registrable Securities, 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 as soon as practicable, but in any event not later
than
forty-five (45) 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 the delivery of a Conversion Notice (as defined in the Convertible
Debentures) or an Exercise Notice (as defined in the Warrants) is greater
than
the number of shares available for resale under such Registration
Statement.
(h) Alternative
to Registration. At Investor’s option, the Company shall take all
necessary steps to ensure that the shares underlying the Warrants are issued
pursuant to Rule 504 of Regulation D of the 1933 Act.
3. RELATED
OBLIGATIONS.
(a) The
Company shall keep any such filed Registration Statement effective until
all of
the Registrable Securities are eligible for resale by the Investors pursuant
to
Rule 144(k) of the Securities Act. Any such 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.
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(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.
(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.
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(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.
(g) [reserved]
(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.
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(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.
(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(i).
(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 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. The certificates representing the Registrable Securities
will bear a restrictive legend.
(l) 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.
(m) 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.
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(n) 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.
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 Section 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 Section 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 this Agreement, 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); (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; and (aa) shall not apply to the extent that any such
loss, claim, damage or liability (or action in respect thereof) arises out
of or
is based upon an untrue statement or alleged untrue statement or omission
or
alleged omission in such Registration Statement or Prospectus, which untrue
statement or alleged untrue statement or omission or alleged omission is
completely corrected in an amendment or supplement to the Registration Statement
or Prospectus and Investor thereafter fails to deliver or cause to be delivered
such Registration Statement or Prospectus as so amended or supplemented prior
to
or concurrently with the Registrable Securities, or the written confirmation
of
the sale of the Registrable Securities, as the case may be, to the person
asserting such loss, claim, damage or liability (or action in respect thereof)
or expense after the Company has furnished Investor with the same. 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.
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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.
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(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 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.
10
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. 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.
11
(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
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.
12
(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]
13
IN
WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above
written.
|
COMPANY:
|
|
|
CMARK
INTERNATIONAL, INC.
|
|
|
By: /s/
Xxxxxxx X. Xxxxx, Xx.
|
|
|
Name:
Xxxxxxx X. Xxxxx,
Xx.
|
|
|
Title:
President
|
|
|
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
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
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$__________ 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
