REGISTRATION RIGHTS AGREEMENT
Exhibit
10.2
THIS
REGISTRATION RIGHTS AGREEMENT,
dated as
of__________, 2007 (this “Agreement”), is made by and between ODYNE
CORPORATION,
a
Delaware corporation, with headquarters located at 00 Xxxxx Xxxxx, Xxxxx X,
Xxxxxxxxx, Xxx Xxxx 00000 (the “Company”), and each entity or individual listed
on the signature page hereto (each, an “Investor”).
W
I T N E S S E T H:
WHEREAS,
upon
the terms and subject to the conditions of the Subscription Agreement, dated
as
of the date of acceptance as set forth on the Subscription Agreement, between
the Investor and the Company (the “Subscription Agreement”) capitalized terms
not otherwise defined herein shall have the meanings ascribed to them in the
Subscription Agreement), the Company has agreed to issue and sell to the
Investor a Unit consisting of a Debenture and a Warrant; and
WHEREAS,
the
Debenture is convertible into shares of Common Stock (the “Conversion Shares”);
which term, for purposes of this Agreement, shall include shares of Common
Stock
of the Company issuable in lieu of accrued interest through the Maturity Date
of
the Debenture, as that term is defined in and as contemplated by the Debenture)
upon the terms and subject to the conditions contained in the Debenture; and
WHEREAS,
the
Company has agreed to issue the Warrant to the Investor in connection with
the
issuance of the Debenture, and the Warrant may be exercised for the purchase
of
shares of Common Stock (the “Warrant Shares”) upon the terms and conditions of
the Warrant; and
WHEREAS,
to
induce the Investor to execute and deliver Subscription Agreement, the Company
has agreed to provide certain registration rights under the Securities Act
of
1933, as amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the “Securities Act”), with respect to the
Registrable Securities (as defined below);
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the Investor hereby agree as
follows:
1. Definitions. As
used
in this Agreement, the following terms shall have the following
meanings:
(a) “Closing
Date” means the date of the final closing of the purchase and sale of the
Debentures and Warrants.
(b) “Effective
Date” means the date the SEC declares a Registration Statement covering
Registrable Securities and otherwise meeting the conditions contemplated hereby
to be effective.
(c) “Principal
Trading Market” shall mean The National Association of Securities Dealers Inc.’s
Over-The-Counter Bulletin Board, the Pink Sheets, or a national securities
exchange or national quotation system.
(d) “Register,”
“Registered,” and “Registration” refer to a registration effected by preparing
and filing a Registration Statement or Statements in compliance with the
Securities Act and
pursuant
to Rule 415 under the Securities Act or any successor rule providing for
offering securities on a continuous basis (“Rule 415”), and the declaration or
ordering of effectiveness of such Registration Statement by the United States
Securities and Exchange Commission (the “SEC”).
(e) “Registrable
Securities” means the Conversion Shares and the Warrant Shares, provided that
all such shares shall cease to be Registrable Securities at such time as they
have been soled under a Registration Statement or pursuant to Rule 144 under
the
Securities Act or otherwise or at such time as they are eligible to be sold
pursuant to Rule 144 (without volume limitations)..
(f) “Registration
Statement” means a registration statement of the Company under the Securities
Act covering Registrable Securities on Form SB-2, if the Company is then
eligible to file using such form, and if not eligible, on such other appropriate
form.
2. Registration.
(a) Mandatory
Registration.
The
Company shall prepare and file with the SEC, as soon as possible after the
Closing Date but no later than sixty (60) days after the Closing Date (the
“Required Filing Date”), a Registration Statement registering for resale by the
Investor a number of shares of Common Stock for the Investors to sell the
Registrable Securities, but in no event less than the number of shares equal
to
the number of shares into which the Debentures and all interest thereon through
the Maturity Date would be convertible at the time of filing of such
Registration Statement and (y) the number of Warrant Shares which would be
issuable on exercise of the Warrant at its initial exercise price. The
Registration Statement shall also cover the shares of Common Stock issuable
upon
exercise of the Warrants being issued to Matrix USA, LLC. The Registration
Statement shall state that, in accordance with Rule 416 and 457 under the
Securities Act, it also covers such indeterminate number of additional shares
of
Common Stock as may become issuable upon conversion of the Debentures and the
exercise of the Warrants to prevent dilution resulting from stock splits or
stock dividends. The Company will use its reasonable best efforts to cause
such
Registration Statement to be declared effective. In the event that the
Registration Statement is is not effective (the “Required Effective Date”) upon
the earlier of (Y) five (5) days after oral or written notice by the SEC that
it
may be declared effective or (Z) one hundred eighty (180) days after the Closing
Date (unless such failure to become effective is a result of the actions of
the
Investor), the Company will be deemed to be in breach of this Agreement.
(b) Payments
by the Company.
(i) If
the
Registration Statement covering the Registrable Securities is not filed in
proper form with the SEC by the Required Filing Date, the Company will make
payment to the Investor in such amounts and at such times as shall be determined
pursuant to this Section 2(b).
(ii) If
the
Registration Statement covering the Registrable Securities is not effective
by
the relevant Required Effective Date or if the Investor is restricted from
making sales of Registrable Securities covered by a previously effective
Registration Statement at any time by virtue of a suspension or stop order
with
respect to such Registration Statement (the date such restriction commences,
a
“Restricted Sale Date”), then the Company will make payments to the Investor in
such amounts and at such times as shall be determined pursuant to this Section
2(b); notwithstanding the following, the Company may suspend the Investor from
making sales of Registrable Securities for up to three such suspension periods
during any consecutive 12 month period, each of which suspension period shall
not either (i) be for more than twenty (20) business days or (ii) begin less
than ten (10) business days after the last day of the preceding
suspension.
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(iii) The
amount (the “Periodic Amount”) to be paid by the Company to the Investor shall
be determined as of each Computation Date (as defined below) and such Periodic
Amount shall be equal to 2% of the principal amount of Debenture outstanding
for
the period from the date following each of the relevant Required Filing Date
or
the Required Effective Date, as the case may be, to the first relevant
Computation Date, and thereafter to each subsequent Computation Date (prorated
on a daily basis if such period is less than thirty (30) days); provided,
however,
that
such Periodic Amounts shall cease after six (6) months from the initial
Computation Date. The parties acknowledge that the failure to comply on a timely
basis with the provisions related to both the Required Filing Date and the
Required Effective Date would result in a payment of four (4%) percent of the
then outstanding principal amount of the Debenture.
(iv) Each
Periodic Amount will be payable by the Company, and at the option of the
Company, in cash or freely tradable shares of Common Stock (1) on the day after
the Required Filing Date or the Required Effective Date, as the case may be,
and
(2) each thirtieth day thereafter.
(v) The
parties acknowledge that the damages which may be incurred by the Investor
if
the Registration Statement is not filed by the Required Filing Date or the
Registration Statement has not been declared effective by a Required Effective
Date, including if the right to sell Registrable Securities under a previously
effective Registration Statement is suspended or the shares of the Company’s
stock are not listed on the Principal Trading Market, may be difficult to
ascertain. The parties agree that the Periodic Amounts represent a reasonable
estimate on the part of the parties, as of the date of this Agreement, of the
amount of such damages.
(vi) Notwithstanding
the foregoing, the amounts payable by the Company pursuant to this provision
shall not be payable to the extent any delay in the effectiveness of the
Registration Statement or such Registration Statement is suspended or subject
to
a stop order occurs because of an act of, or a failure to act or to act timely
by the Investor or its counsel.
(vii) “Computation
Date” means (A) the date which is the earlier of (1) thirty (30) days after the
Required Filing Date or Required Effective Date, as the case may be, or (2)
the
date after the Required Filing Date on which the Registration Statement is
filed
(with respect to payments due as contemplated by Section 2(b)(i) hereof) or
the
date after the Required Effective Date on which the Registration Statement
is
declared effective (with respect to payments due as contemplated by Section
2(b)(ii) hereof), as the case may be, and (B) each date which is the earlier
of
(1) thirty (30) days after the previous Computation Date or (2) the date after
the previous Computation Date on which the Registration Statement is filed
(with
respect to payments due as contemplated by Section 2(b)(i) hereof) or is
declared effective (with respect to payments due as contemplated by Section
2(b)(ii) hereof), as the case may be.
(viii) Notwithstanding
anything to the contrary contained in this Agreement,
if the staff of the SEC (the “Staff”) or the SEC seeks to characterize any
offering pursuant to a Registration Statement filed pursuant to this Agreement
as constituting a primary offering of securities by or on behalf of the
Company,
or in any other manner, such that the Staff or the SEC does not permit
such
Registration Statement to become effective and used for resales in a continuous
at the market offering pursuant to Rule 415 under the Securities Act by
the
Investors (or as otherwise may be acceptable to each Investor) without
being
named therein as “underwriters” (a “Resale Registration Statement”), then the
Company shall have the right to reduce the number of Registrable Securities
to
be included in such Registration Statement by all Investors, to the extent
that
the Staff or the SEC shall permit such Registration Statement to become
effective as a Resale Registration Statement. In making such reduction,
the
Company shall reduce the number of Registrable Securities to be included
by
all
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Investors
on a pro rata basis (based upon the number of Registrable Securities otherwise
required to be included for each Investor), unless the inclusion of Registrable
Securities by a particular Investor or a particular type of Investors is the
cause of the refusal by the Staff or the SEC to allow such Registration to
become effective as a Resale Registration Statement, in which event the
Registrable Securities held by such Investor or type of Investors shall be
the
only Registrable Securities subject to reduction (and if by a set of Investors
on a pro rata basis with respect to such Investors or on such other basis as
would result in the exclusion of the least number of shares by all such
Investors). In addition, if the Staff or the SEC requires any Investor seeking
to sell Registrable Securities under a Registration Statement filed pursuant
to
this Agreement to be identified as an “underwriter” in order to permit such
Registration Statement to become effective, and such Investor does not consent
to being so named as an underwriter in such Registration Statement, then, in
each such case, the Company shall be entitled to reduce the total number of
Registrable Securities to be registered on behalf of such Investor, until such
time as the Staff or the SEC does not require such identification.
(ix) If
any
reduction in the number of Registrable Securities included in a Registration
Statement is made pursuant to paragraph (i) above, then no Investor shall have
any claim against the Company as a result of such reduction or any Event or
other delay or breach of this Agreement attributable primarily to the refusal
of
the Staff or the SEC to permit the Registration Statement to become effective
as
a Resale Registration Statement, nor shall any such reduction entitle any
Investor to require the Company to pay any partial damages pursuant to Section
2(b) hereof. In the event of any reduction in Registrable Securities pursuant
to
this paragraph, an affected Investor shall have the right, upon delivery of
a
written request to the Company signed by the Investor, to require the Company
to
file a registration statement within 90 days after its receipt of such request
(subject to any restrictions imposed by Rule 415 or required by the Staff or
the
SEC) for resale by such Investor in a manner reasonably acceptable to such
Investor, and the Company shall following such request use its commercially
reasonable efforts to cause such registration statement to be declared and
kept
effective in the same manner as otherwise contemplated in this Agreement for
registration statements hereunder, in each case until such time as: (i) all
Registrable Securities held by such Investor have been registered pursuant
to an
effective Registration Statement in a manner reasonably acceptable to such
Investor, (ii) such Investor’s Registrable Securities may be resold by such
Investor without restriction (including volume limitations) pursuant to
Rule 144(k) of the Securities Act, or (iii) the Investor agrees to be named
as an underwriter in any such Registration Statement as to all Registrable
Securities held by such Investor and which have not theretofore been included
in
a Registration Statement under this Agreement (it being understood that the
special demand right under this sentence may be exercised by a Investor multiple
times and with respect to limited amounts of Registrable Securities in order
to
permit the resale thereof by such Investor as contemplated above).
3. Obligations
of the Company.
In
connection with the registration of the Registrable Securities, the Company
shall do each of the following:
(a) Prepare
promptly, and file with the SEC by the Required Filing Date a Registration
Statement with respect to not less than the number of Registrable Securities
provided in Section 2(a) above, and thereafter use its reasonable best efforts
to cause such Registration Statement relating to Registrable Securities to
become effective by the Required Effective Date and keep the Registration
Statement effective at all times during the period (the “Registration Period”)
continuing until the earlier of (i) the date when the Investors may sell all
Registrable Securities under Rule 144 without volume or other restrictions
or
limits or (ii) the date the Investors no longer own any of the Registrable
Securities, which Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a
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material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not
misleading;
(b) Prepare
and file with the SEC such amendments (including post-effective amendments)
and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to keep the Registration
Statement effective at all times during the Registration Period, and, during
the
Registration Period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company covered
by the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the Registration
Statement;
(c) Permit
a
single firm of counsel designated by the Investor to review the Registration
Statement and all amendments and supplements thereto a reasonable period of
time
(but not less than three (3) business days) prior to their filing with the
SEC,
and not file any document in a form to which such counsel reasonably objects,
at
Investor’s expense.
(d) Notify
the Investor and the Investor’s counsel (initially Xxxxxx X. Xxxxxxxx, Esq., x/x
XxXxxxxxxx & Xxxxx, XXX, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 10016) and any
managing underwriters immediately (and, in the case of (i)(A) below, not less
than three (3) business days prior to such filing) and (if requested by any
such
person) confirm such notice in writing no later than one (1) business day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed;
(B) whenever the SEC notifies the Company whether there will be a “review” of
such Registration Statement; (C) whenever the Company receives (or a
representative of the Company receives on its behalf) any oral or written
comments from the SEC in respect of a Registration Statement (copies or, in
the
case of oral comments, summaries of such comments shall be promptly furnished
by
the Company to the Investors); and (D) with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC or any other Federal or state governmental
authority for amendments or supplements to the Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the SEC
of
any stop order suspending the effectiveness of the Registration Statement
covering any or all of the Registrable Securities or the initiation of any
proceedings for that purpose; (iv) if at any time any of the representations
or
warranties of the Company contained in any agreement (including any underwriting
agreement) contemplated hereby ceases to be true and correct in all material
respects; (v) of the receipt by the Company of any notification with respect
to
the suspension of the qualification or exemption from qualification of any
of
the Registrable Securities for sale in any jurisdiction, or the initiation
or
threatening of any proceeding for such purpose; and (vi) of the occurrence
of
any event that to the best knowledge of the Company makes any statement made
in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material
fact
or omit to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading. In addition, the Company shall furnish the Investor’s
Counsel with copies of all intended written responses to the comments
contemplated in clause (C) of this Section 3(d) not later than one (1) business
day in advance of the filing of such responses with the SEC so that the
Investors shall have the opportunity to comment thereon, if relevant to the
Investors;
(e) Furnish
the Investor and to Investor’s Counsel (i) promptly after the same is prepared
and publicly distributed, filed with the SEC, or received by the Company, one
(1) copy of the
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Registration
Statement, each preliminary prospectus and prospectus, and each amendment or
supplement thereto, and (ii) such number of copies of a prospectus, and all
amendments and supplements thereto and such other documents, as such Investor
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor;
(f) As
promptly as practicable after becoming aware thereof, notify each Investor
of
the happening of any event of which the Company has knowledge, as a result
of
which the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
use its best efforts promptly to prepare a supplement or amendment to the
Registration Statement or other appropriate filing with the SEC to correct
such
untrue statement or omission, and deliver a number of copies of such supplement
or amendment to the Investor as the Investor may reasonably
request;
(g) As
promptly as practicable after becoming aware thereof, notify the Investor who
holds the Registrable Securities being sold (or, in the event of an underwritten
offering, the managing underwriters) of the issuance by the SEC of a Notice
of
Effectiveness or any notice of effectiveness or any stop order or other
suspension of the effectiveness of the Registration Statement at the earliest
possible time;
(h) Use
its
reasonable efforts to secure and maintain the designation of all the Registrable
Securities covered by the Registration Statement on the Principal Trading Market
within the meaning of Rule 11Aa2-1 of the SEC under the Securities Exchange
Act
of 1934, as amended (the “Exchange Act”), and the quotation of the Registrable
Securities on the Principal Trading Market.
(i) Cooperate
with the Investor to facilitate the timely preparation and delivery
of certificates for the Registrable Securities to be offered pursuant to
the
Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts as the case may be, as
the
Investor may reasonably request, and, within five (5) business days after
a
Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal
counsel
selected by the Company to deliver, to the transfer agent for the Registrable
Securities (with a copy to Xxxxxx X. Xxxxxxxx, Esq.) an appropriate instruction
and opinion of such counsel;
(j) For
a
period of 75 days from the Effective Date, not file a Registration Statement
covering any additional shares of Common Stock (excluding on Form
S-8);
(k) Take
all
other reasonable actions necessary to expedite and facilitate disposition by
the
Investor of the Registrable Securities pursuant to the Registration
Statement.
4. Obligations
of the Investor.
In
connection with the registration of the Registrable Securities, the Investors
shall have the following obligations:
(a) The
Investor, by the Investor’s acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of the Registration Statement hereunder, unless
the Investor has notified the Company in writing of the Investor’s election to
exclude all of the Investor’s Registrable Securities from the Registration
Statement; and
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(b) The
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(f) or 3(g), above,
the
Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until the Investor’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(f) or 3(g) and, if so directed by the
Company, the Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in the Investor’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such
notice.
5. Expenses
of Registration.
(a) All
expenses (other than (i) underwriting discounts and commissions of the Investor
and (ii) expenses of the Investor’s counsel incurred in connection with
registrations, filings or qualifications pursuant to Section 3), but including,
without limitation, all registration, listing, and qualifications fees, printers
and accounting fees, the fees and disbursements of counsel for the Company
shall
be borne by the Company.
(b) The
Company has not, as of the date hereof, nor shall the Company on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Investor in this Agreement
or the Subscription Agreement, except as disclosed therein.
6. Indemnification.
After
Registrable Securities are included in a Registration
Statement under this Agreement:
(a) To
the
extent permitted by law, the Company will indemnify and hold harmless, the
Investor, the directors, if any, of such Investor, the officers, if any, of
such
Investor (each, an “Indemnified Party”), against any losses, claims, damages,
liabilities or expenses (joint or several) incurred (collectively, “Claims”) to
which any of them may become subject under the Securities Act, the Exchange
Act
or otherwise, insofar as such Claims (or actions or proceedings, whether
commenced in respect thereof) arise out of or are based upon: (i) any untrue
statement or untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereof or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or untrue statement of a material fact contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in the light of the circumstances under which the statements therein
were made, not misleading or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or
any
rule or regulation under the Securities Act, the Exchange Act or any state
securities law (the matters in the foregoing clauses (i) through (iii) being
collectively referred to as “Violations”). The Company shall reimburse the
Investor for any reasonable legal fees 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) shall not (i) apply to any Claims
arising out of or based upon a Violation which occurs in reliance upon and
in
conformity with information furnished in writing to the Company by or on behalf
of any Indemnified Party expressly for use in connection with the preparation
of
the Registration Statement or any such amendment thereof or supplement thereto;
(ii) be available to the extent such Claim is based on a failure of the Investor
to deliver or cause to be delivered the prospectus made available by the
Company; or (iii) apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent
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shall
not
be unreasonably withheld. The Investor will indemnify the Company, its officers,
directors and agents (including legal counsel) (each an “Indemnified Party”)
against any claims arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company, by or on behalf of such Investor, expressly for use in connection
with
the preparation of the Registration Statement, subject to such limitations
and
conditions set forth in this Section 6. The Investor shall reimburse the Company
for any reasonable legal fees or other reasonable expenses incurred by it in
connection with investigating or defending any such Claim. Such indemnity shall
remain in full force and effect regardless of any investigation made by or
on
behalf of the Indemnified Party, and shall survive the offering and transfer
of
the Registrable Securities by the Investor.
(b) Promptly
after receipt by an Indemnified Party under this Section 6 of notice of the
commencement of any action (including any governmental action), such Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party
a
written notice of the commencement thereof and the indemnifying party shall
have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Party, as the case may be; provided,
however,
that an
Indemnified Party shall have the right to retain its own counsel with the
reasonable fees and expenses 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 Party and the indemnifying
party would be inappropriate due to actual or potential differing interests
between such Indemnified Party and any other party represented by such counsel
in such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall
not
relieve such indemnifying party of any liability to the Indemnified Party under
this Section 6, except to the extent that the indemnifying party is prejudiced
in its ability to defend such action. The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense as such expense, loss, damage or
liability is incurred and is due and payable.
7. Contribution.
To the
extent any indemnification by an indemnifying party is prohibited or limited
by
law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided,
however,
that
(a) no contribution shall be made under circumstances where the maker would
not
have been liable for indemnification under the fault standards set forth in
Section 6; (b) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any seller of Registrable Securities
who
was not guilty of such fraudulent misrepresentation; and (c) except where the
seller has committed fraud (other than a fraud by reason of the information
included or omitted from the Registration Statement as to which the Company
has
not given notice as contemplated under Section 3 hereof) or intentional
misconduct, contribution by any seller of Registrable Securities shall be
limited in amount to the net amount of proceeds received by such seller from
the
sale of such Registrable Securities.
8. Reports
under
Securities Act and Exchange Act.
With a
view to making available to Investor the benefits of Rule 144 promulgated under
the Securities Act or any other similar rule or regulation of the SEC that
may
at any time permit Investor to sell securities of the Company to the public
without Registration (“Rule 144”), the Company agrees to:
(a) make
and
keep public information available, as those terms are understood and defined
in
Rule 144;
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(b) file
with
the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act;
(c) furnish
to the Investor so long as the Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company that it has complied with
the reporting requirements of Rule 144, the Securities Act and the Exchange
Act
, a copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company and (iii) such other
information as may be reasonably requested to permit the Investor to sell such
securities pursuant to Rule 144 without Registration.
9. Assignment
of the Registration Rights.
The
rights to have the Company register Registrable Securities pursuant to this
Agreement shall be automatically assigned by the Investors to any transferee
of
the Registrable Securities (or all or any portion of any unconverted Debentures)
only if the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee and (b) the securities with respect to which such
registration rights are being transferred or assigned.
10. Amendment
of Registration Rights.
Any
provision of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively
or
prospectively), only with the written consent of the Company and the Investor.
Any amendment or waiver affected in accordance with this Section 10 shall be
binding upon the Investor and the Company.
11. Miscellaneous.
(a) A
person
or entity is deemed to be an Investor of Registrable Securities whenever such
person or entity owns of record such Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two or more persons
or entities with respect to the same Registrable Securities, the Company shall
act upon the basis of instructions, notice or election received from the
registered owner of such Registrable Securities.
(b) Notices
required or permitted to be given hereunder shall be given in the manner
contemplated by the Subscription Agreement, (i) if to the Company or to the
Investor, to their respective address and the address of their counsel as
contemplated by the Subscription Agreement, and (ii) if to any other Investor,
at such address as such Investor shall have provided in writing to the Company,
or at such other address as each such party furnishes by notice given in
accordance with this Section 11(b).
(c) Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as
a
waiver thereof.
(d) This
Agreement shall be governed by and interpreted in accordance with the laws
of
the State of New York for contracts to be wholly performed in such state and
without giving effect to the principles thereof regarding the conflict of laws.
Each of the parties consents to the jurisdiction of the federal courts in the
City of New York, New York or the state courts of the State of New York sitting
in the City of New York, New York County, New York in connection with any
dispute arising under this Agreement and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on
forum non coveniens,
to the
bringing of any such proceeding in such jurisdictions. To the extent determined
by such court, the Company shall reimburse the Investor for any reasonable
legal
fees and disbursements incurred by the Investor in enforcement of or protection
of any of its rights under this Agreement
-9-
(e) 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 or the validity or
enforceability of this Agreement in any other jurisdiction.
(f) Subject
to the requirements of Section 9 of this Agreement, this Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of
the
parties hereto.
(g) All
pronouns and any variations thereof refer to the masculine, feminine or neuter,
singular or plural, as the context may require.
(h) The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning thereof.
(i) This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which shall constitute one and the same agreement.
This Agreement, once executed by a party, may be delivered to the other party
hereto by telephone line facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
(j) This
Agreement constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof. There are no restrictions, promises, warranties
or
undertakings, other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the parties hereto
with
respect to the subject matter hereof. This Agreement may be amended only by
an
instrument in writing signed by the party to be charged with enforcement
thereof.
(k) The
Company acknowledges that any failure by the Company to perform
its obligations under Section 3(a) hereof, or any delay in such performance
could result in loss to the Investors, and the Company agrees that, in
addition
to any other liability the Company may have by reason of such failure or
delay,
the Company shall be liable for all direct damages caused by any such failure
or
delay, unless the same is the result of force majeure. Neither party shall
be
liable for consequential damages.
-10-
IN
WITNESS WHEREOF,
the
parties have caused this Agreement to be duly executed as of the day and year
first above written.
COMPANY:
ODYNE
CORPORATION
By:
___________________________
Title:
__________________________
INVESTOR:
By:
____________________________
Name:
__________________________
Title:
___________________________
-11-
