SECURITIES EXCHANGE AGREEMENT
Exhibit
2.1
THIS
SECURITIES EXCHANGE AGREEMENT (this “Agreement”) is
made and entered into as of this 1st day of November, 2007, by and among
Landbank Group, Inc., a Delaware corporation (the
“Company”), located at 0000 Xxxxxxxxxxx Xxx., Xxx
Xxxx, XX 00000-0000, Landbank Acquisition LLC, a California limited liability
company (the “Investor”), located at 0000 Xxxxxxxxxxx
Xxx., Xxx Xxxx, XX 00000-0000, and Family Products LLC, a California limited
liability company, located at 0000 Xxxxxxxxxxx Xxx., Xxx Xxxx, XX 00000-0000
(“FPLLC”) (for purposes of providing indemnification
pursuant to Section 8 and the acknowledgement of Section 9.13
only). Each of the Company and Investor are referred to individually
herein as a “Party,” and collectively, as the
“Parties.”
RECITALS:
A. Landbank
LLC, a wholly-owned subsidiary of the Company (the
“LLC”), has previously issued those certain Promissory
Notes in the aggregate principal amount of $3,032,657.47 (the
“Initial Notes”), which were assigned to Investor as
holder thereof on September 20, 2007.
B. The
LLC
desires to transfer to the Company, and the Company desires to assume and
acquire, $500,000.00 of debt under the Initial Notes (the “Assigned
Debt”), leaving the remaining principal and interest due and owing
to Investor pursuant to the remaining Initial Notes (such remaining promissory
notes shall be referred to herein as the “Remaining
Notes,” and the transfer by LLC hereunder shall be referred to as
the “Note Transfer”).
C. The
Investor desires to obtain from the Company, and the Company desires to deliver
to the Investor, shares of Common Stock of the Company, par value $0.0001 per
share (the “Common Stock”), and 100% of the membership
interests (the “Interests”) of the LLC (the
“Share and Interest Transfer”).
D. The
Company desires to obtain from Investor, and Investor desires to deliver to
the
Company, the obligation to defend, indemnify and hold harmless the Company
and
its designees from any and all claims arising from or as a result of the
business operations or assets of the LLC (the
“Indemnification,” and together with the Note Transfer
and Share and Interest Transfer, the
“Transactions”).
E. The
Company has obtained a fairness opinion from Gemini Valuation Services, LLC
stating that the Transactions contemplated by this Agreement are fair to the
Company and its stockholders from a financial point of view (the
“Fairness Opinion”).
F. The
Parties desire to set forth in this Agreement the terms and conditions
applicable to the Transactions.
AGREEMENT:
NOW,
THEREFORE, in consideration of the premises and the mutual promises herein
made,
and in consideration of the representations, warranties, and covenants contained
herein, the Parties agree as follows:
1. Issuance
and Delivery of Common Stock; Transfer of Interests.
1.1 The
Company has authorized and hereby
agrees to (i) issue and deliver to Investor, and Investor agrees to acquire
from
the Company, 79,311,256 shares of Common Stock; and (ii) transfer to Investor,
and Investor agrees to acquire from Company, 100% of the
Interests. The shares of Common Stock to be issued pursuant to the
terms hereof are referred to as the
“Shares”. The Shares, together with the
shares of Common Stock owned by Investor prior to Closing, shall represent
95%
of the Fully Diluted Capital Stock immediately following the
Closing. For purposes of this Agreement, “Fully Diluted
Capital Stock” shall mean the Company’s issued and outstanding
shares of Common Stock, assuming the conversion or exercise of all outstanding
securities convertible into or exercisable for shares of Common
Stock.
1.2 Closing
and Delivery.
1.2.1 Closing. The
issuance of the Shares and the transfer of the Interests shall occur as soon
as
reasonably practicable following the satisfaction or waiver of all conditions
to
closing described in Section 5 below. The closing of such
respective issuance and transfer is referred to herein as the
“Closing,” and the date of the Closing is referred to
herein as the “Closing Date.” The Closing
shall be held at the offices of the Company first set forth above.
1.2.2 Deliveries
by Investor. At the Closing, the Investor shall (a) surrender to
the Company the Initial Notes so that such notes can be cancelled and reissued
by the Company to represent the Assigned Debt and the Remaining Notes; and
(b)
deliver an executed signature page to the Registration Rights Agreement between
the Company and Investor in the form attached hereto as Exhibit A (the
“Registration Rights Agreement”).
1.2.3 Deliveries
by Company. At the Closing, the Company shall (a) deliver to the
Investor an assignment and assumption of Assigned Debt (the
“Assignment”) executed by the LLC (as assignor) and
Company (as assignee), and/or a replacement note to represent and evidence
the
Assigned Debt to document the Note Transfer, (b) deliver to the Investor a
certificate evidencing the Shares acquired at the Closing, (c) deliver an
executed signature page to the Registration Rights Agreement, and (d) deliver
to
the Investor a certificate evidencing the Interests transferred at the Closing
or otherwise deliver an assignment of interests in a form reasonably acceptable
to Investor in order to adequately document the transfer of the Interests to
the
Investor.
1.3 Assumption
of Liabilities. Subject to the provisions of this Agreement, the
Investor agrees that upon transfer of the Interests on the Closing Date, it
shall assume, pay, satisfy, discharge, perform and fulfill, to the extent not
paid, satisfied, performed, discharged or fulfilled by the Company on or before
the Closing Date or the LLC following the Closing Date, all of the Liabilities
of the Company and/or the LLC arising out of, or relating to, periods, events,
or occurrences happening prior to the Closing (the “Assumed
Liabilities”) other than the Assigned
Debt. “Liabilities” shall mean any direct
or indirect liability, indebtedness, obligation, commitment, expense, claim,
deficiency, deferred income, guaranty, or endorsement of or by any person or
entity of any type, whether accrued, absolute, contingent, matured, unmatured
or
otherwise.
2. Representations
and Warranties of the Company. The Company hereby represents and
warrants to the Investor that:
2.1 Status. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business as now conducted and as proposed to
be
conducted. The LLC is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of California
and has all requisite limited liability company power and authority to carry
on
its business as now conducted and as proposed to be conducted. The Interests
constitute all of the issued and outstanding membership interests and economic
interests in the LLC.
2.2 Power. The
Company has all requisite power and authority to accept, execute and deliver
this Agreement, to issue the Shares, to transfer the Interests, to except,
execute and deliver the Assignment, and to carry out the provisions of this
Agreement.
2.3 Approvals. All
action on the part of the Company, its Board of Directors and stockholders
necessary for the authorization, execution and delivery of this Agreement,
the
performance of all obligations of the Company hereunder, the authorization,
issuance, sale and delivery of the Shares hereunder, the transfer and delivery
of the Interests, and the authorization, execution and deliver of the Note
Transfer have been taken (other than approval by the Company’s stockholders,
which is a condition to Closing), and this Agreement, the Registration Rights
Agreement and the Remaining Notes constitute valid and legally binding
obligations of the Company, enforceable in accordance with its terms, except
(i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
and
other laws of general application affecting enforcement of creditors’ rights
generally, and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
2.4 Exemption
from Registration; Valid Issuances. Subject to the accuracy of
each of the Investor’s representations in Section 3, the issuance of the
Shares and the transfer of the Interests and delivery of the Replacement Note
will not require registration under the Securities Act of 1933, as amended
(the
“Securities Act”) or any applicable state securities
law. The Shares, when issued and delivered in accordance with the
terms of this Agreement, shall be duly and validly issued, fully-paid and
non-assessable shares of Common Stock, free of all liens, claims, encumbrances,
preemptive rights, rights of first refusal and restrictions on transfer, except
as imposed by applicable securities laws or this Agreement. The
Interests shall be free of all liens, claims, encumbrances, preemptive rights,
rights of first refusal and restrictions on transfer, except as imposed by
applicable securities laws or this Agreement.
2.5 Business
of LLC. All of the properties, rights, interests and other
tangible and intangible assets necessary to enable the Investor to conduct
the
business of the Company in the manner in which such business is currently being
conducted, and has been conducted prior to the Closing, are owned by and in
the
name of the LLC; provided, however, that the Company shall retain $5,000.00
in
its bank account following the Closing.
3. Representations
and Warranties of the Investor. The Investor hereby represents
and warrants to the Company that:
3.1 Status. The
Investor is duly organized, validly existing and in good standing under the
laws
of the state of California, and has the power to own and operate its properties,
to carry on its business as now conducted and to enter into and to perform
its
obligations under this Agreement.
3.2 Power
and Authority. The Investor has the full legal right, power and
authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement and the
performance by the Investor of its obligations hereunder are within the powers
of the Investor and have been duly authorized by all necessary action properly
taken and the Investor has received all necessary governmental approvals, if
any, that are required. The person executing this Agreement is duly
authorized to act on behalf of the Investor.
3.3 Validity
and Binding Effect. This Agreement constitutes the valid and
legally binding obligation of the Investor, enforceable in accordance with
its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors’ rights generally, and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
3.4 Investment. The
Investor has been advised that the Shares will not be registered under the
Securities Act nor qualified under any state securities law, on the ground
that
no distribution or public offering of the Shares is to be effected, and that
in
this connection the Company is relying in part on the representations of the
Investor set forth in this Section 3. The Investor represents
that:
3.4.1 Investment
Intent. The Investor is acquiring the Shares solely for its own
account, for investment purposes only, and with no present intention of
distributing, selling or otherwise disposing of the Shares.
3.4.2 Economic
Risk. The Investor is able to bear the economic risk of an
investment in the Shares acquired by it or to be acquired by it pursuant to
this
Agreement and can afford to sustain a total loss on such
investment.
3.4.3 Sophistication. The
Investor (i) has a preexisting business relationship with the Company or its
officers and/or directors, and (ii) is an experienced and sophisticated
investor, is able to fend for itself in the transactions contemplated by this
Agreement, and has such knowledge and experience in financial and business
matters that it is capable of evaluating the risks and merits of acquiring
the
Shares. The Investor has had, during the course of this transaction and prior
to
its purchase of the Shares the opportunity to ask questions of, and receive
answers from, the Company and its management concerning the Company and the
terms and conditions of this Agreement. The Investor hereby
acknowledges that it has received all such information as it considers necessary
for evaluating the risks and merits of acquiring the Shares and for verifying
the accuracy of any information furnished to it or to which he had
access.
3.4.4 Accredited
Investor. The Investor is an “accredited investor” for purposes
of Regulation D promulgated by the Securities and Exchange Commission (the
“Commission”) under the Securities Act.
3.5 Transfer
Restrictions. The Investor understands the restrictions on resale
and transfer of the Shares imposed upon the Investor pursuant to Section
4 of this Agreement, and will abide by such resale and transfer
restrictions.
3.6 Legend. The
Investor understands that a legend in substantially the following form will
be
placed on the certificates representing the Shares (if any):
|
“THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE
SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD
OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION
OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED.”
|
4. Restrictions
on Transfer.
4.1 Securities
Law Compliance. The Investor hereby agrees that none of the
Shares shall be sold, transferred, assigned, pledged, hypothecated or otherwise
disposed of unless and until one of the following events shall have
occurred:
4.1.1 Such
securities are disposed of pursuant to and in conformity with an effective
registration statement filed with the Commission pursuant to the Securities
Act
or pursuant to Rule 144 of the Commission thereunder; or
4.1.2 The
Company shall have received a written opinion of counsel reasonably acceptable
to the Company (which may be counsel for the Company) to the effect that the
proposed transfer is exempt from the registration and prospectus delivery
requirements of the Securities Act.
As
a
further condition to any such disposition and to the Company’s obligation to
register any such disposition, so long as the legend set forth above will appear
on the stock certificate resulting from such transfer, the Company may require,
as a condition to such transfer, that the contemplated transferee furnish the
Company with an investment letter in form and substance reasonably satisfactory
to the Company and its counsel.
4.2 Registration
Rights. The Investor shall receive certain registration rights in
connection with the issuance of the Shares in accordance with the terms and
conditions of the Registration Rights Agreement.
5. Conditions
to Closing.
5.1 Conditions
to the Obligations of Investor. The obligations of the Investor
to acquire the Shares and Interests pursuant to the terms of this Agreement
at
the Closing and the other obligations of the Investor under this Agreement
are
subject to the satisfaction as of the Closing of the following conditions,
any
of which may be waived in writing in whole or in part by the
Investor:
5.1.1 Representations
and Warranties. The representations and warranties of the Company
shall be true and correct in all material respects (except for representations
and warranties that contain qualifications as to materiality, which shall be
true and correct in all respects) at and as of the date when made and as of
the
Closing Date as though made at that time, and the Investor shall have received
a
certificate attesting thereto from the Company signed by a duly authorized
officer of the Company.
5.1.2 Board
Approval. The Company shall have delivered to the Investor a
resolution of a majority of the Board of Directors of the Company, including
a
majority of members of the Board of Directors of the Company who do not have
an
interest in the transactions contemplated by this Agreement, approving the
transactions contemplated by this Agreement.
5.1.3 Stockholder
Approval. This Agreement and the Transactions shall have been
duly and validly approved by the requisite vote or consent of Company’s
stockholders.
5.1.4 Amendment
to Certificate of Incorporation. The Company shall have amended
its certificate of incorporation to (i) change its name from “Landbank Group,
Inc.” to another name reasonably acceptable to Investor, which name shall not
include the word “Landbank” or any variation thereof, and (ii) increase the
number of shares of authorized common stock from 100,000,000 to
2,000,000,000.
5.1.5 Deliveries
of the Company. At the Closing, the Company shall have delivered
or caused to be delivered to Investor those deliveries required to be delivered
at Closing pursuant to Section 1.2.3 along with a certificate executed by the
President of the Company, dated the Closing Date, certifying (1) the resolutions
of Company’s Board of Directors and stockholders approving and authorizing the
execution, delivery and performance of the Agreement and the other transaction
documents to which the Company is a party, (2) the certificate of incorporation
of the Corporation, as amended hereunder, and (3) the satisfaction of the
closing conditions contained in this Section 5.1.
5.1.6 Expenses. At
or prior to the Closing, the LLC shall have paid all expenses, fees and other
amounts incurred by the Company or the LLC with respect to this Agreement and
the Transactions contemplated herein. Additionally, the LLC shall
transferred cash to the Company’s bank account such that its balance is at least
$5,000.00.
5.1.7 No
Material Adverse Change. No material adverse change shall have
occurred to, and no event or circumstance shall have occurred that could
reasonably be expected to cause a material adverse change to, the LLC’s
financial condition or businesses since the date of the Agreement.
5.2 Conditions
to the Obligations of the Company. The obligations of the Company
to issue the Shares and transfer the Interests pursuant to the terms of this
Agreement at the Closing and the other obligations of the Company under this
Agreement are subject to the satisfaction as of the Closing of the following
conditions, any of which may be waived in writing in whole or in part by the
Company:
5.2.1 Representations
and Warranties. The representations and warranties of the
Investor shall be true and correct in all material respects (except for
representations and warranties that contain qualifications as to materiality,
which shall be true and correct in all respects) at and as of the date when
made
and as of the Closing Date as though made at that time, and the Company shall
have received a certificate attesting thereto from the Investor signed by a
duly
authorized officer of the Investor.
5.2.2 Stockholder
Approval. This Agreement and the Transactions shall have been
duly and validly approved by the requisite vote or consent of Company’s
stockholders.
5.2.3 Deliveries
of the Investor. At the Closing, the Investor shall have
delivered or caused to be delivered to Investor those deliveries required to
be
delivered at Closing pursuant to Section 1.2.2 along with a certificate executed
by a Manager of the Investor, dated the Closing Date, certifying the
satisfaction of the closing conditions contained in this Section
5.2.
6. Additional
Agreements.
6.1 Stockholder
Approval.
6.1.1 As
soon
as practicable after the date of this Agreement, and in no event later than
fifteen (15) business days after the date hereof, the Company shall prepare
and
cause to be filed with the Commission a proxy statement pursuant to Rule 14a-3
promulgated under Section 14A of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) (together with any amendments or
supplements thereto, the "Proxy Statement") in
connection with the approval and adoption of this Agreement and the
Transactions. The Proxy Statement shall include a statement that
Company's Board of Directors has approved this Agreement, determined that this
Agreement and the Transactions are in the best interests of Company's
stockholders and recommends that Company's stockholders vote in favor thereof,
and Company shall use its commercially reasonable efforts to solicit such votes
from its stockholders. The Proxy Statement shall comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations promulgated thereunder. Company shall immediately advise
Investor if the Proxy Statement, including any amendments or supplements
thereto, at the time filed with the Commission, as of the date of mailing to
the
stockholders of Company or at any other time, contains any untrue statement
of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statement therein, in light of the
circumstances under which they are made, not misleading. Company
shall respond promptly to any comments of the Commission or its staff with
respect thereto and use its best efforts to have the Proxy Statement cleared
by
the Commission as soon as practicable after its filing. Company shall also
promptly furnish to Investor copies of any correspondence received from the
Commission, and shall permit representatives of the Investor to attend any
telephone calls with the Commission that discuss comments made by its staff.
As
soon as practicable after clearance by the Commission of the Proxy Statement,
Company shall mail the Proxy Statement to its stockholders. In addition, Company
shall take all action necessary in accordance with applicable Laws and its
charter to duly call, give notice of, convene and hold a meeting of its
stockholders as soon as practicable solely to consider and approve this
Agreement and the Transactions.
6.1.2 In
the
event that prior to the Company’s filing of the Proxy Statement, Company
receives authorization by written consent from that number of holders of its
capital stock necessary to approve this Agreement and the Transactions, then
notwithstanding the provisions of this Section 6.1 to the contrary, as soon
as
practicable after the date of this Agreement, and in no event later than fifteen
(15) business days after the date hereof, Company shall prepare and cause to
be
filed with the Commission an information statement pursuant to Rule 14(c)
promulgated under Section 14A of the Exchange Act (together with any amendments
or supplements thereto, the "Information Statement")
in connection with the approval and adoption of this Agreement and the
Transactions, and shall take all other actions necessary and consistent with
the
provisions of this Section 6.1, with respect to the Information
Statement.
6.1.3 As
promptly as practicable, Company shall properly prepare and file any other
filings required under the Securities Act, the Exchange Act or any other Laws
(including, without limitation, state securities and "blue sky" laws) relating
to the Transactions contemplated by this Agreement (collectively,
"Other Filings").
6.1.4 Company
shall provide copies of drafts of the Proxy Statement or the Information
Statement, as the case may be, to Company at least two (2) business days prior
to the date of filing of such document with the Commission (including with
respect to each amendment or supplement thereto) so as to allow Investor to
review and comment on such documents. Such review shall not be deemed a review
by Investor as to whether the Company has properly complied with Commission
rules or regulations. Prior to the filing of the Proxy Statement or the
Information Statement, as the case may be, with the Commission, the Company
shall consider in good faith any comments made by, or changes requested by,
Investor.
6.2 The
Company shall take such actions, do such things, execute and deliver such other
documents, instruments or agreements, and make such filings as may be necessary
or desirable in order to obtain the approval of the Company’s stockholders as
described herein.
7. Termination.
7.1 Termination
Events. This Agreement may be terminated at any time prior to the
Closing by mutual written consent of the Company and the Investor.
7.2 Effect
of Termination. Upon termination of this Agreement as provided in
Section 7.1, this Agreement shall forthwith become void and there shall
be no liability or obligation on the part of any party hereto or their
respective, subsidiaries, stockholders, directors, officers,
employees, agents or other representatives.
8. Indemnification.
8.1 Each
of
Investor and FPLLC (the “Indemnifying Parties”) shall
defend, hold harmless and indemnify each of the Company Indemnitees from and
against, and shall compensate and reimburse each of the Company Indemnitees
for,
any Damages that are directly or indirectly suffered or incurred by any of
the
Company Indemnitees or to which any of the Company Indemnitees may otherwise
become subject at any time (regardless of whether or not such Damages relate
to
any third party claim) and that arise directly or indirectly from or as a direct
or indirect result of, or are directly or indirectly connected with (i) the
operation of the business or assets of the LLC prior to or following the
Closing, but not including any Damages arising from the Assigned Debt which
shall remain an obligation of the Company following the Closing, (ii) any breach
of any representation or warranty or covenant made by the Investor in this
Agreement and (iii) the Assumed Liabilities excluding the Assigned
Debt. “Company Indemnitees” shall
mean (a) the Company; (b) the Company’s officers,
directors, stockholders, and other current and future affiliates; and (c) the
respective successors and assigns of the persons and entities referred to in
clauses “(a)” and “(b)” above. “Damages”
shall include any direct damage, injury, liability,
claim, demand, settlement,
judgment, award, fine, penalty, tax, fee (including any reasonable legal fee,
expert fee, accounting fee or advisory fee), charge, cost (including any cost
of
investigation) or expense of any nature; but shall specifically exclude any
special, incidental, consequential, lost profits, indirect, punitive, or
exemplary damages.
8.2 If
any
Damages or alleged Damages shall be brought against any Company Indemnitee
in
respect of which such Company Indemnitee may be indemnified under this Section
8
by Indemnifying Parties, such Company Indemnitee shall promptly notify
the Indemnifying Parties in writing. The Indemnifying Parties at
their option may assume the defense of any action in respect of which it has
acknowledged its obligation to indemnify such Company Indemnitee under this
Section 8. If any Indemnifying Party assumes the defense of any
action, such Company Indemnitee shall not be liable for any settlement thereof
without its consent (but such consent will not be unreasonably
withheld). If any Indemnifying Party assumes the defense of any such
action, such Company Indemnitee shall have the right to employ separate counsel
in such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be paid by such Company Indemnitee unless there
exists a conflict between the positions of the Indemnifying Party and of such
Company Indemnitee in conducting the defense of such action or that there may
be
legal defenses available to such Company Indemnitee different from or in
addition to those which counsel to the Indemnifying Party would be able to
raise, in which event the reasonable fees and expenses of such counsel shall
be
paid by the Indemnifying Party.
8.3 Contribution. If
the indemnification from the Indemnifying Parties provided for in this Section
8
is unavailable to a Company Indemnitee hereunder in respect of any Damages
referred to therein, then the Indemnifying Parties, in lieu of indemnifying
such
Company Indemnitee, shall contribute to the amount paid or payable by such
Indemnifying Parties as a result of such Damages in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Parties and
Company Indemnitees in connection with the actions which resulted in such
Damages, as well as any other relevant equitable considerations. The
relative fault of such Indemnifying Parties and Company Indemnitees shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact, has been
made by, or relates to information supplied by, such Indemnifying Party or
Company Indemnitee, and the parties intent, knowledge, access to information
and
opportunity to correct or prevent such action. The amount paid or
payable by a party as a result of the Damages shall be deemed to include any
reasonable legal or other fees or expenses reasonably incurred by such party
in
connection with any investigation or proceeding. No Company Indemnitee guilty
of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
9. Miscellaneous.
9.1 Notices. Any
and all notices, elections or demands permitted or required to be made under
this Agreement shall be in writing, signed by the party giving such notice,
election or demand and shall be delivered personally, telecopied, or sent by
certified mail or overnight via nationally recognized courier service (such
as
Federal Express), to the other party at the address set forth in the
introductory paragraph to this Agreement or at such other address as may be
supplied in writing and of which receipt has been acknowledged in
writing. The date of personal delivery or telecopy or two (2)
business days after the date of mailing (or the next business day after delivery
to such courier service), as the case may be, shall be the date of such notice,
election or demand.
9.2 Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.
9.3 Submission
to Jurisdiction; Venue. The Parties hereto expressly acknowledge
and agree that the exclusive forum for the resolution of disputes hereunder
shall be the courts located in Los Angeles, California, and waive any objection
thereto on the basis of personal jurisdiction or venue.
9.4 Further
Assurances. Whether or not specifically required under the terms
of this Agreement, each party hereto shall execute and deliver such documents
and take such further actions as shall be necessary in order for such party
to
perform all of his or its obligations specified herein or reasonably implied
from the terms hereof.
9.5 Amendment. This
Agreement may not be amended or any provision hereof waived in whole or in
part,
except by a written amendment signed by the Company and the
Investor.
9.6 Successors
and Assigns. Whenever in this Agreement one of the parties hereto
is named or referred to, the heirs, legal representatives, successors,
successors-in-title and assigns of such parties shall be included, and all
covenants and agreements contained in this Agreement by or on behalf of the
Company or by or on behalf of an Investor shall bind and inure to the benefit
of
their respective heirs, legal representatives, successors-in-title and assigns,
whether so expressed or not.
9.7 Assignability. Neither
this Agreement nor any right, remedy, obligation or liability arising hereunder
or by reason hereof shall be assignable by either the Company or the Investor,
without the prior written consent of each other party.
9.8 Entire
Agreement. This Agreement constitutes the entire agreement and
understanding of the parties in respect of its subject matters and supersedes
all prior understandings, agreements, or representations by or between the
parties, written or oral, to the extent they relate in any way to the subject
matter hereof.
9.9 Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed as original but all of which together shall constitute one and the same
instrument.
9.10
Severability. The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
9.11
Article
and Section Headings, Defined Terms. Numbered and titled article
and section headings and defined terms are for convenience only and shall not
be
construed as amplifying or limiting any of the provisions of this
Agreement.
9.12
Expenses.
Each party shall bear its own costs and expenses incurred in connection with
the
preparation, execution and performance of this Agreement and the transactions
contemplated hereunder including all fees and expenses of agents,
representatives, financial advisors, legal counsel and accountants.
9.13
Independent
Counsel; Interpretation. THE INVESTOR AND FPLLC HEREBY
EXPRESSLY REPRESENT, ACKNOWLEDGE AND CONFIRM THAT THEY UNDERSTAND THAT XXXXXX
XXXXXXXX & MARKILES, LLP HAS REPRESENTED THE COMPANY ONLY IN THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THAT THEY HAVE BEEN ADVISED
TO
SEEK AND OBTAIN LEGAL ADVICE FROM INDEPENDENT COUNSEL REPRESENTING THEIR
INTERESTS WITH RESPECT TO THIS AGREEMENT, THAT THEY HAVE HAD THE FULL RIGHT
AND
OPPORTUNITY TO CONSULT WITH SUCH COUNSEL, THAT THEY HAVE AVAILED THEMSELVES
OF
THIS RIGHT AND OPPORTUNITY, THAT THEY HAVE CAREFULLY READ AND FULLY UNDERSTANDS
THIS AGREEMENT IN ITS ENTIRETY, THAT THEY ARE FULLY AWARE OF THE CONTENTS HEREOF
AND THE MEANING, INTENT AND LEGAL EFFECT OF THIS AGREEMENT, AND THAT THEY HAVE
EXECUTED THIS AGREEMENT FREE FROM COERCION, DURESS OR UNDUE
INFLUENCE. SPECIFICALLY, BY SIGNING THIS AGREEMENT, INVESTOR AND
FPLCC UNDERSTAND, AND HEREBY ACKNOWLEDGE AND CONFIRM, THAT THEY MAY BE GIVING
UP
SIGNIFICANT LEGAL RIGHTS. SHOULD ANY PROVISION OF THIS AGREEMENT
REQUIRE JUDICIAL INTERPRETATION, IT IS AGREED THAT A COURT INTERPRETING OR
CONSTRUING THE SAME SHALL NOT APPLY A PRESUMPTION THAT THE TERMS HEREOF SHALL
BE
MORE STRICTLY CONSTRUED AGAINST ANY PARTY BY REASON OF THE RULE OF CONSTRUCTION
THAT A DOCUMENT IS TO BE CONSTRUED MORE STRICTLY AGAINST THE PARTY WHO ITSELF
OR
THROUGH ITS AGENT PREPARED THE SAME, IT BEING AGREED THAT ALL PARTIES HERETO
HAVE PARTICIPATED IN THE PREPARATION OF THIS AGREEMENT.
IN
WITNESS WHEREOF, this Agreement has been executed by the parties with the intent
that it be effective as of the date first above written.
LANDBANK
GROUP, INC.
a
Delaware corporation
By: /s/
Xxxx Xxxxxxxxxxxx
Name:
Xxxx Xxxxxxxxxxxx
Its:
Interim
President
LANDBANK
ACQUISITION, LLC
a
California limited liability company
By: /s/
Xxxxxxx Xxxxxxx
Name:
Xxxxxxx
Xxxxxxx
Its:
Member
FAMILY
PRODUCTS LLC
a
California limited liability company
By: /s/
Xxxxxxx Xxxxxxx
Name:
Xxxxxxx
Xxxxxxx
Its: Member
EXHIBIT
A
TO
REGISTRATION
RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered
into as of the 1st day of November, 2007, by and among Landbank Group, Inc.,
a
Delaware corporation (the “Company”), and Landbank
Acquisition LLC, a California limited liability company (the
“Stockholder”).
WITNESSETH:
WHEREAS,
the Company and Stockholder are parties to that certain Securities Exchange
Agreement, dated November 1, 2007 (the “Securities Exchange
Agreement”) pursuant to which the Stockholder is to be issued
79,311,256 shares of common stock of the Company (the “Common
Stock”);
WHEREAS,
it is a condition of the Securities Exchange Agreement that the Stockholder
and
Company enter into a Registration Rights Agreement in the form
hereof.
NOW
THEREFORE, in
consideration of the premises and the mutual promises herein made, and for
other
good and valuable consideration, the receipt and sufficiency of which hereby
are
acknowledged, the parties agree as follows:
1. Registration
Rights
Effective
as of the Closing of the Securities Exchange Agreement (the
“Effective Date”), the Company hereby grants to the
Stockholder the following registration rights.
A. Definitions.
As used in this Section 1, the following terms shall have the
following respective meanings:
Business
Day: Any day other than a day on which banks are authorized
or required to be closed in the State of New York.
Exchange
Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Person: Any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or other agency or
political subdivision thereof.
Prospectus: The
prospectus included in any Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement,
and all other amendments and supplements to the prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such prospectus.
Registrable
Securities: Each issued and outstanding share of Common
Stock held as of the Effective Date by the Stockholder and identified on
Exhibit A hereto until such time as such shares (a) have been sold
pursuant to, or are subject to, an effective registration statement under the
Act, (b) have been sold pursuant to Rule 144, or (b) may be sold without any
time, volume or manner limitations pursuant to section (k) of Rule
144.
Registration
Statement: Any registration statement of the Company that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statements, including post effective amendments, all exhibits,
and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
Rule
144: Rule 144 promulgated by the Commission pursuant to the Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same effect as such
Rule.
SEC: The
United States Securities and Exchange Commission.
Trading
Day: A day on whichever (a) the national securities
exchange, (b) the NASDAQ Stock Market, or (c) such other securities market,
in
any such case which at the time constitutes the principal securities market
for
the Common Stock, is open for general trading of securities.
B. Demand
Registration Right. If the Company
receives at any time after the date that is six (6) months from the Effective
Date, a written request (a “Demand Request”) from the
Stockholder that the Company register any such Registrable Securities, then
the
Company shall agree to take all actions as are necessary to keep any
Registration Statement filed pursuant to this Section 1.B. effective until
the
date on which all Registrable Securities thereunder may be sold without any
restriction, under Rule 144 during any 90-day period in accordance with all
rules and regulations regarding sales of securities pursuant to Rule
144.
The
Company shall file, no later than forty-five (45) days following receipt of
a
Demand Request (the “Demand Filing Date”), a Registration
Statement (the “Demand Registration Statement”) covering such
Registrable Securities which the Company has been so requested to register
by
the Stockholder, providing for the registration under the Securities Act of
such
Registrable Securities to the extent necessary to permit the disposition of
such
Registrable Securities in accordance with the intended method of distribution
specified in such Demand Request, and use its commercially reasonable efforts
to
have such Demand Registration Statement declared effective by the SEC within
one
hundred fifty (150) days after the Demand Filing Date. If a registration
pursuant to this Section 1.B. involves an underwritten public offering, the
Stockholder registration may elect, in writing prior to the effective date
of
the Registration Statement filed in connection with such registration, not
to
register such securities in connection with such registration.
The
Company may delay making a filing of a Demand Registration Statement in
connection with a Demand Request or taking action in connection therewith by
not
more than ninety (90) days if the Company provides a written certificate signed
by the Chief Executive Officer and Chief Financial Officer of the Company to
the
Stockholders, prior to the time it would otherwise have been required to file
such Demand Registration Statement or take such action pursuant to this
Section 1.B., stating that the Board has determined in good faith that
the filing of such Demand Registration Statement would be seriously detrimental
to the Company or would otherwise materially adversely affect a financing,
acquisition, disposition, merger or other material transaction (collectively,
a
“Valid Business Reason”) and that it is therefore essential to
defer the filing of the Demand Registration Statement; provided, however, that
such right to delay a Demand Request shall be exercised by the Company not
more
than once in any twelve (12)-month period and the Company shall only have the
right to delay a Demand Request so long as such Valid Business Reason exists,
and during such time, the Company may not file a registration statement for
securities to be issued and sold for its own account or for that of anyone
other
than the Stockholders.
The
Company shall only be obligated to effect one (1) Demand Request pursuant to
this Section 1.B.
The
Stockholder shall have the right to cancel a proposed registration of
Registrable Securities pursuant to this Section 1.B when the request for
cancellation is based upon material adverse information relating to the Company
that is different from the information known to the Stockholder at the time
of
the Demand Request. Such cancellation of a registration shall be made
in writing and shall not be counted as a Demand Request.
C. Piggyback
Registration. If the Company proposes
to register any of its securities under the Securities Act for sale to the
public for its own account or for the account of other security stockholders
(except with respect to the Initial Registration Statement, or registration
statements on Forms S-4 or S-8 or another form not available for registering
the
Registrable Securities for sale to the public), each such time it will give
written notice thereof to Stockholder of its intention so to do (such notice
to
be given at least fifteen (15) days prior to the filing
thereof). Upon the written request of the Stockholder (which request
shall specify the number of Registrable Securities intended to be disposed
of by
the Stockholder and the intended method of disposition thereof), received by
the
Company within ten (10) days after giving of any such notice by the Company,
to
register any of the Stockholder’s Registrable Securities, the Company will use
its commercially reasonable efforts to cause the Registrable Securities as
to
which registration shall have been so requested to be included in the securities
to be covered by the Registration Statement proposed to be filed by the Company,
all to the extent requisite to permit the sale or other disposition by the
Stockholder (in accordance with its written request) of such Registrable
Securities so registered (“Piggyback Registration Rights”);
provided, that if, at any time after giving written notice
of its
intention to register any securities pursuant to this Section 1.C and
prior to the effective date of the Registration Statement filed in connection
with such registration, the Company shall determine for any reason not to
register such securities, the Company shall give written notice to the
Stockholder and, thereupon, shall be relieved of its obligation to register
any
Registrable Securities in connection with such registration. If a
registration pursuant to this Section 1.C. involves an underwritten public
offering, the Stockholder may elect, in writing prior to the effective date
of
the registration statement filed in connection with such registration, not
to
register such securities in connection with such registration. The foregoing
provisions notwithstanding, the Company may withdraw any registration statement
referred to in this Section 1.C. without thereby incurring any liability
to the Stockholder.
D. Underwriting. If
a Registration Statement is for a registered public offering involving an
underwriting, the Company shall so advise the Stockholder in writing or as
a
part of the written notice given pursuant to Section 1.B or 1.C,
as applicable. In such event the right of the Stockholder to
registration pursuant to Section 1.B and/or 1.C shall be
conditioned upon the Stockholder’s participation in such underwriting and the
inclusion of the Stockholder’s Registrable Securities in the underwriting to the
extent provided herein. The Stockholder, if proposing to distribute
their securities through such underwriting, shall (together with the Company
and
any other stockholders of the Company distributing their securities through
such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company or
selling stockholders, as applicable. Notwithstanding any other
provision of this Section 1, if the underwriter or the Company determines
that marketing factors require a limitation of the number of shares to be
underwritten, the underwriter may exclude some or all Registrable Securities
from such registration and underwriting. The Company shall so advise
the Stockholder, and the number of shares of Registrable Securities that may
be
included in the registration and underwriting, if any, shall be allocated to
the
Stockholder as follows:
(i) In
the
event of a registration that is initiated by the exercise of demand registration
rights by the Stockholder, then the number of shares that may be included in
the
registration and underwriting shall be allocated first to the
Stockholder;
(ii) In
the
event of a registration that is initiated by the Company, the number of shares
that may be included in the registration and underwriting shall be allocated
first to the Company and then, subject to obligations and commitments existing
as of the date hereof, to all selling stockholders, including the Stockholder,
who have requested to sell in the registration on a pro rata basis according
to
the number of shares requested to be included; and
(iii) In
the
event of a registration that is initiated by the exercise of demand registration
rights by a stockholder or stockholders of the Company (other than the
Stockholder), then the number of shares that may be included in the registration
and underwriting shall be allocated first to such selling stockholders who
exercised such demand and then, subject to obligations and commitments existing
as of the date hereof, to all other selling stockholders, including the
Stockholder, who have requested to sell in the registration, on a pro rata
basis
according to the number of shares requested to be included.
No
Registrable Securities excluded from the underwriting by reason of the
underwriter’s marketing limitation shall be included in such
registration. If the Stockholder disapproves of the terms of any such
underwriting, the Stockholder may elect to withdraw therefrom by written notice
to the Company and the underwriter. The Registrable Securities and/or
other securities so withdrawn from such underwriting shall also be withdrawn
from such registration.
E. Registration
Procedures. In connection with the
registration obligations of the Company pursuant to the terms and conditions
of
this Agreement, the Company shall:
(i) Prepare
and file with the SEC such amendments and supplements to all Registration
Statements and each related Prospectus as may be necessary to comply with the
provisions of the Act with respect to the disposition of securities covered
by
such Registration Statements;
(ii) Respond
as promptly as reasonably practicable to any comments received from the SEC
with
respect to a Registration Statement or any amendment thereto.
(iii) Notify
the Stockholder as promptly as reasonably practicable and confirm such notice
in
writing no later than one trading day following the day (A) when a Prospectus
or
any Prospectus supplement or post-effective amendment to a Registration
Statement is proposed to be filed and (B) with respect to a Registration
Statement or any post-effective amendment, when the same has become effective;
(iv) Furnish
such number of Prospectuses and other documents incident thereto, including
supplements and amendments, as the Stockholder may reasonably request;
(v) Furnish
to the Stockholder, upon request, a copy of all documents filed with and all
correspondence from or to the SEC in connection with any such registration
statement other than non-substantive cover letters and the like;
(vi) Use
its
reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a registration
statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment; and
(vii) Use
its
reasonable best efforts to comply with all applicable rules and regulations
of
the SEC.
Notwithstanding
the foregoing, if at any time or from time to time after the date hereof, the
Company notifies the Stockholder whose shares are registered on a Registration
Statement (a “Selling Stockholder”) in writing of the
existence of an event or circumstance that is not disclosed in such Registration
Statement and that may have a material effect on the Company or its business
(a
“Potential Material Event”), the Selling Stockholder
shall not offer or sell any Registrable Securities, or engage in any other
transaction involving or relating to the Registrable Securities, from the time
of the giving of notice with respect to a Potential Material Event until the
Company notifies the Selling Stockholder that such Potential Material Event
either has been added to the Registration Statement by amendment or supplement
or no longer constitutes a Potential Material Event; provided, that the
Company may not so suspend the right of the Selling Stockholder for more than
One-Hundred Twenty (120) days during any twelve (12) month period.
F. Registration
Expenses.
(i) All
expenses incident to the Company’s performance of, or compliance with, the
provisions hereof, including without limitation, all Commission and securities
exchange or NASD registration and filing fees, fees and expenses of compliance
with securities or “blue sky” laws (including fees and disbursements of counsel
in connection with “blue sky” qualifications of the Registrable Securities),
printing expenses, messenger and delivery expenses, internal expenses
(including, without limitation, all salaries and expenses of the Company’s
officers and employees performing legal or accounting duties), fees and expenses
incurred in connection with the listing of the securities to be registered,
if
any, on each securities exchange on which similar securities issued by the
Company are then listed, fees and disbursements of counsel for the Company
and
its independent certified public accountants (including the expense of any
special audit or “cold comfort” letters required by, or incident to, such
performance), Securities Act liability insurance (if the Company elects to
obtain such insurance), reasonable fees and expenses of any special experts
retained by the Company in connection with such registration, fees and expenses
of other Persons retained by the Company in connection with each registration
hereunder (but not including the fees and expense of legal counsel retained
by
the Stockholder, or any underwriting fees, discounts or commissions attributable
to the sale of Registrable Securities) are herein called “Registration
Expenses.”
(ii) The
Company will pay all Registration Expenses in connection with each Registration
Statement filed pursuant to Section 1 except as otherwise set forth
therein. Other than as specifically provided for in Section
1.A hereof, all expenses to be borne by the Stockholder in connection with
any Registration Statement filed pursuant to Section 1 (including,
without limitation, all underwriting fees, discounts or commissions attributable
to such sale of Registrable Securities) shall be borne by the participating
Stockholder.
G. Indemnification;
Contribution.
(i) Indemnification
by the Company. The Company agrees to indemnify and hold
harmless, to the full extent permitted by law, the Stockholder, its officers,
directors and each Person who controls the Stockholder (within the meaning
of
the Securities Act), and any agent or investment adviser thereof, against all
losses, claims, damages, liabilities and expenses (including reasonable
attorneys’ fees and costs of investigation) arising out of or based upon any
untrue or alleged untrue statement of material fact contained in any
Registration Statement, any amendment or supplement thereto, any Prospectus
or
preliminary Prospectus or any omission or alleged omission to state therein
a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same arise out of or are based
upon any such untrue statement or omission based upon information with respect
to the Stockholder furnished in writing to the Company by or on behalf of the
Stockholder expressly for use therein; provided that, in the event that
the Prospectus shall have been amended or supplemented and copies thereof as
so
amended or supplemented, shall have been furnished to the Stockholder prior
to
the confirmation of any sales of Registrable Securities, such indemnity with
respect to the Prospectus shall not inure to the benefit of the Stockholder
if
the Person asserting such loss, claim, damage or liability and who purchased
the
Registrable Securities from the Stockholder did not, at or prior to the
confirmation of the sale of the Registrable Securities to such Person, receive
a
copy of the Prospectus as so amended or supplemented and the untrue statement
or
omission of a material fact contained in the Prospectus was corrected in the
Prospectus as so amended or supplemented.
(ii) Indemnification
by Stockholder of Registrable Securities. In connection with any
Registration Statement in which the Stockholder is participating, the
Stockholder will furnish to the Company in writing such information with respect
to the name and address of the Stockholder and such other information as may
be
reasonably required for use in connection with any such Registration Statement
or Prospectus and agrees to indemnity, to the full extent permitted by law,
the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue statement of a material
fact
in the Registration Statement or Prospectus or any amendment thereof or
supplement thereto or necessary to make the statements therein not misleading,
to the extent, but only to the extent, that such untrue or alleged untrue
statement relates to any information with respect to the Stockholder so
furnished in writing by the Stockholder specifically for inclusion in any
Prospectus or Registration Statement; provided, however, that the
Stockholder shall not be liable in any such case to the extent that prior to
the
filing of any such Registration Statement or Prospectus or amendment thereof
or
supplement thereto, the Stockholder has furnished in writing to the Company
information expressly for use in such Registration Statement or Prospectus
or
any amendment thereof or supplement thereto which corrected or made not
misleading information previously furnished to the Company. In no
event shall the liability of the Selling Stockholder hereunder be greater in
amount than the dollar amount of the net proceeds received by the Selling
Stockholder upon the sale of the Registrable Securities, sold under such
Registration Statement or Prospectus as contemplated herein, giving rise to
such
indemnification obligation.
(iii) Conduct
of Indemnification Proceedings. Any Person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such Person of any written notice of
the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which such Person will claim indemnification or contribution
pursuant to the provisions hereof and, unless in the judgment of counsel of
such
indemnified party a conflict of interest may exist between such indemnified
party and the indemnifying party with respect to such claim, permit the
indemnifying party to assume the defense of such claim. Whether or
not such defense is assumed by the indemnifying party, the indemnifying party
will not be subject to any liability for any settlement made without its consent
(but such consent will not be unreasonably withheld). No indemnifying
party will consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant
or
plaintiff to such indemnified party of a release from all liability in respect
of such claim or litigation. If the indemnifying party is not
entitled to, or elects not to, assume the defense of a claim, it will not be
obligated to pay the fees and expenses of more than one counsel (plus such
local
counsel, if any, as may be reasonably required in other jurisdictions) with
respect to such claim, unless in the judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other
of
such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels. For the purposes of this Section
5(c), the term “conflict of interest” shall mean that there are one or more
legal defenses available to the indemnified party that are different from or
additional to those available to the indemnifying party or such other
indemnified parties, as applicable, which different or additional defenses
make
joint representation inappropriate.
(iv) Contribution. If
the indemnification from the indemnifying party provided for in this Section
1.G
is unavailable to an indemnified party hereunder in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion
as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified parties, and the parties
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 1.G(iii),
any
reasonable legal or other fees or expenses reasonably incurred by such party
in
connection with any investigation or proceeding. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(v) If
indemnification is available under this Section 1.G, the indemnifying parties
shall indemnity each indemnified party to the full extent provided in Sections
5(a) and (b) without regard to the relative fault of said indemnifying party
or
indemnified party or any other equitable consideration provided for in this
Section 1.G.
H. Limitation
to Registration
Requirement. Notwithstanding anything
else herein to the contrary, the Company shall not be obligated to effect any
registration of the Registrable Securities or take any other action (i) in
any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service
in
such jurisdiction and except as may be required by the Securities Exchange
Act,
or (ii) during any period in which the Company suspends the rights of a
subscriber after giving the Subscriber written notification of a Material
Event.
I. Transfer
of Rights. The rights to cause the
Company to register Registrable Securities granted pursuant to the provisions
hereof may be transferred or assigned by the Stockholder to a transferee or
assignee; provided; however, that the transferee or assignee of such
rights assumes the obligations of such transferor or assignor, as the case
may
be, hereunder.
J. Information
by Stockholder. The Stockholder or holders of
Registrable Securities included in any Registration Statement shall furnish
to
the Company such information regarding the Stockholder and the distribution
of
securities by the Stockholder as the Company may request in
writing.
K. Compliance. The
Stockholder covenants and agrees that the Stockholder will comply with the
prospectus delivery requirements of the Act as applicable to the Stockholder
in
connection with sales of Registrable Securities pursuant to the Registration
Statements required hereunder.
2. Amendment. Except
as otherwise provided herein, the provisions hereof may not be amended, modified
or supplemented, and waivers or consents to departures from the provisions
hereof may not be given unless the Company has obtained the written consent
of
the Stockholder.
3. Successors
and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
4. Governing
Law. This Agreement shall be governed
by and construed under the laws of the State of California, irrespective of
its
choice of law principles.
5. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
6. Titles
and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7. Notices.
Unless otherwise provided, any notice required or permitted under this Agreement
shall be given in writing and shall be deemed effectively given upon personal
delivery to the party to be notified or, if sent by telex, telecopier or e-mail
transmission, upon receipt of the correct answer back, or upon deposit with
the
United States Post Office, by registered or certified mail, or upon deposit
with
an overnight air courier, in each case postage prepaid and addressed to the
party to be notified at the address indicated for such party in the records
of
the Company, or at such other address as such party may designate by ten (10)
days’ advance written notice to the other parties.
8. Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
9. Entire
Agreement. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof
and
supersedes all prior agreements, term sheets, letters, discussions and
understandings of the parties in connection therewith.
10. Further
Assurances. Each party to this Agreement shall
execute all instruments and documents and take all actions as may be reasonably
required to effectuate this Agreement, whether before, concurrently with or
after the consummation of the transactions contemplated hereby.
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first above written.
LANDBANK
GROUP, INC.
a
Delaware corporation
By: /s/
Xxxx Xxxxxxxxxxxx
Name:
Xxxx Xxxxxxxxxxxx
Its: Interim
President
LANDBANK
ACQUISITION, LLC,
a
California limited liability company
By:
Name:
Its:
EXHIBIT
A
SHARES
79,311,256
shares of Common Stock issued to Landbank Acquisition LLC on ________ __,
2007.
