INVESTOR REGISTRATION RIGHTS AGREEMENT
Exhibit
10.11
THIS
INVESTOR REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated
as of June 29, 2007, by and among BUCKEYE VENTURES, INC., a
Michigan corporation, with its principal office located at 0000 Xxxxxx Xxxxxx,
Xxxxx 0, Xxx Xxxxx, 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$.001 per share (the “Common Stock”), pursuant to the terms of the
Securities Purchase Agreement for an aggregate purchase price of up to Five
Million U.S. Dollars ($5,000,000). Capitalized terms not defined herein shall
have the meaning ascribed to them in the 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 thereunder, or any
similar successor statute (collectively, the “1933 Act”), and applicable
state securities laws.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the 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”).
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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 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 registration pursuant to Rule 144
promulgated under the Securities Act, as such Rule may be amended from time
to
time, or (c) they have been otherwise lawfully and properly 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.
(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 use its
best
efforts to prepare and file with the SEC, no later than forty-five (45) days
from the First Closing Date (as such term is defined in the Securities Purchase
Agreement, the “ScheduledFiling Deadline”), a Registration
Statement on Form S-1 or SB-2 (or, if the Company is then eligible, on Form
S-3)
(the “Initial Registration Statement”) for the registration for the
resale by all Investors who purchased Convertible Debentures pursuant to
the
Securities Purchase Agreement 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
(subject to Rule 415 restrictions). 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 second business day following receipt thereof from the
Company.
(b) Effectiveness
of the Initial Registration Statement. The Company shall use its best
efforts to (i) to have the Initial Registration Statement declared effective
by
the SEC no later than one hundred five (105) days after the First Closing
Date
(the “Scheduled EffectiveDeadline”) 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, or cease
to be
outstanding, or the date on which all Registrable Securities may be sold
in any
ninety (90) day period under Rule 144 as determined by counsel to the Company
pursuant to a written opinion letter to such effect delivered to the Investors
and based on such representations as may be reasonably requested, whichever
is
earlier (the “Registration Period”). It shall be an event of default
hereunder if the Initial Registration Statement is not declared effective
by the
SEC by the Scheduled Effective Deadline unless the SEC does not declare the
Initial Registration. Statement effective solely due to objections based
upon
either: (a) Rule 415 or (b) the Investor.
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(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 (subject to
the
caveat in the final sentence of 2(b) above), 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 by the Company 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 then outstanding as Liquidated Damages for
each
thirty (30) day period (or any part thereof) after the Scheduled Filing Deadline
or the Scheduled Effective Date as the case may be.
(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 subsection 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.
(e) 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.
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3. RELATED
OBLIGATIONS.
(a) [Reserved]
(b) The
Company shall use its best efforts to prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with such
Registration Statement (which prospectus is to be filed pursuant to Rule
424
promulgated under the 0000 Xxx) 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 or as otherwise provided in this Agreement. 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) 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) one copy 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,
taking into account the Company’s good faith assessment of any adverse
consequences to the Company and its stockholders of the premature disclosure
of
such event, 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) 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.
(h) 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
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(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(h).
(i) 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.
(j) 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.
(k) 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.
(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 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.
(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. 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
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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.
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 Sections 2 and 3, including, without limitation, all registration,
listing and qualifications fees, printers, legal and accounting fees shall
be
paid by the Company. In no event shall the Company be responsible for any
broker
or similar commissions or, except to the extent provided for in the Transaction
Documents, any legal fees or other costs of the Investors.
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
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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 thereunder 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): (w) 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, the prospectus or form of prospectus, or in any amendment or
supplement thereto, or any such amendment thereof or supplement thereto;
(x)
shall not be available to the extent such Claim is based on a failure of
the
Investor to timely 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); (y) shall not be available to the extent
the
claim arises from or is based upon the willful misfeasance of the Indemnified
Person; and (z) shall not apply to amounts paid in settlement of any Claim
if
such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall remain
in
full force and effect regardless of any investigation made by or on behalf
of
the Indemnified Person.
(b)
In
connection with a Registration Statement, 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, the prospectus or form of
prospectus, or in any amendment or supplement thereto; 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
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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.
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.
(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 writt en 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 writt en 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 reasonable 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 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:
|
|
0000
Xxxxxx Xxxxxx, Xxxxx 0
|
|
Xxx
Xxxxx, XX 00000
|
|
Attention:
Xxxxx Xxxxxxxxx
|
|
Telephone:
(000) 000-0000
|
|
Facsimile:
(000) 000-0000
|
|
With
a copy to:
|
Xxxx
X. Xxxxxx, Esq.
|
Xxxxx
& Berne LLP
|
|
0000
Xxxx Xxxxxx Xx., Xxx. 0000
|
|
Xxxxxxxxx,
Xxxx 00000-0000
|
|
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
11
notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii)
or
(iii) above, respectively.
(c) Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate
as a
waiver thereof.
(d) The
laws
of the State of Michigan 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 “EscrowAgreement”) 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.
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:
|
|||
|
By:
|
||
Name: | |||
Title: | |||
BUYER: | |||
TRAFALGAR CAPITAL SPECIALIZED INVESTMENT FUND, LUXEMBOURG | |||
By: Trafalgar Capital Sarl | |||
Its: General Partner | |||
By: | |||
Name: Xxxxxx Xxxxx | |||
Title: Chairman of the Board |
13
SCHEDULE
I
SCHEDULE
OF INVESTORS
Name
|
Signature
|
Address/Facsimile
Number
of Buyer
|
|
Trafalgar
Capital Specialized
|
By:
|
Trafalgar
Capital Sarl
|
0-00
Xxx Xxxxxxx Xxxxx
XX
0000
|
Investment
Fund,
|
Its:
|
General
Partner
|
X-0000
Xxxxxxxxxx
|
Xxxxxxxxxx
|
Facsimile:
|
||
011-44-207-405-0161
|
|||
By:
|
and
|
||
Name:
|
Xxxxxx
Xxxxx
|
001-786-323-1651
|
|
Its:
|
Chairman
of the Board
|
14
EXHIBIT
A
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
Attention:
Re:
BUCKEYE VENTURES, INC. (the
“Company”)
Ladies
and Gentlemen:
Pursuant
to certain Securities Purchase Agreement (the
“Securities Purchase Agreement”)
entered into by and among the Company and the investors named therein
(collectively, the “Investors”), 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 our legal counsel by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at
[ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF
EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a
member of the SEC’s staff, that any stop order suspending its effectiveness has
been issued or that any proceedings for that purpose are pending before,
or
threatened by, the SEC and the Registrable Securities are available for resale
under the 1933 Act pursuant to the Registration Statement.
Very
truly yours,
By:
cc:
[LIST NAMES OF INVESTORS]
15