REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”) is made and entered into
as of September 16, 2014, by and among MediJane Holdings Inc., a Nevada corporation (the
“Company”), and the persons and entities listed on Exhibit A hereto (each, a “Purchaser” and,
collectively, the “Purchasers”).
WHEREAS, upon the terms and subject to the conditions of the Securities
Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), the Company has
agreed to issue and sell shares of its Common Stock and Warrants to purchase shares of its
Common Stock to the Purchasers; and
WHEREAS, to induce the Purchasers to execute and deliver the Purchase
Agreement and to purchase the Shares and the Warrants, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as amended, with respect to the
Shares, the Warrants and the Warrant Shares (each as respectively defined in the Purchase
Agreement).
NOW, THEREFORE, in consideration of the representations, warranties and
agreements contained herein and other good and valuable consideration, the receipt and legal
adequacy of which are hereby acknowledged by the parties, the Company and the Purchasers
hereby agree as follows:
1.
Definitions.
Capitalized terms used but not otherwise defined herein shall have the meanings
given such terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:
“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly controls or is controlled by or under common control with such Person. For the
purposes of this definition, “control,” when used with respect to any Person, means the
possession, direct or indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms “affiliated,” “controlling” and “controlled” have meanings correlative to
the foregoing.
“Blackout Period” shall have the meaning set forth in Section 3(m).
“Board” shall have the meaning set forth in Section 3(m).
“Business Day” means any day except Saturday, Sunday and any day which is a
legal holiday or a day on which banking institutions in the State of Texas generally are
authorized or required by law or other government actions to close.
“Commission” means the Securities and Exchange Commission.
“Common Shares” shall have the meaning set forth in the definition of
“Registrable Securities.”
“Common Stock” means the Company’s Common Stock, $0.001 par value.
“Effectiveness Date” means with respect to the Registration Statement the earlier
of (i) the 90th day following the Closing Date, before which the Company will use its
commercially reasonable best efforts to cause the Registration Statement to become effective,
and (ii) the date which is within five (5) Business Days after the date on which the Commission
informs the Company in writing (a) that the Commission will not review the Registration
Statement, or (b) that the Company may request the acceleration of the effectiveness of the
Registration Statement.
“Effectiveness Period” shall have the meaning set forth in Section 2.
“Event” shall have the meaning set forth in Section 8(d).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Holder” means, collectively, each holder from time to time of Registrable
Securities including, without limitation, each Purchaser and its assignees. To the extent this
Agreement refers to an election, consent, waiver, request or approval of or by the Holder, such
reference shall mean an election, consent, waiver, request or approval by the holders of a
majority in interest of the then-outstanding Registrable Securities (on an as exercised basis).
“Indemnified Party” shall have the meaning set forth in Section 6(c).
“Indemnifying Party” shall have the meaning set forth in Section 6(c).
“Liquidated Damages” shall have the meaning set forth in Section 8(d).
“Losses” shall have the meaning set forth in Section 6(a).
“OTC” shall mean the OTC Markets Group.
“Person” means an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or political subdivision thereof) or other entity of any kind.
“Proceeding” means an action, claim, suit, investigation or proceeding (including,
without limitation, an investigation or partial proceeding, such as a deposition), whether
commenced or threatened.
“Prospectus” means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any 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
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covered by the Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference in
such Prospectus.
“Registrable Securities” means (i) the shares of Common Stock issued or issuable
pursuant to the Purchase Agreement, and upon any stock split, stock dividend, recapitalization or
similar event with respect to such shares of Common Stock and any other securities issued in
exchange of or replacement of such shares of Common Stock (collectively, the “Common
Shares”); until in the case of any of the Common Shares (a) a Registration Statement covering
such Common Share has been declared effective by the Commission and continues to be
effective during the Effectiveness Period, or (b) such Common Share is sold in compliance with
Rule 144, after which time such Common Share shall not be a Registrable Security; (ii) the
Warrants issued or issuable pursuant to the Purchase Agreement until in the case of any of the
Warrants (a) a Registration Statement covering such Warrant has been declared effective by the
Commission and continues to be effective during the Effectiveness Period, (b) such Warrant is
sold in compliance with Rule 144, after which time such Warrant shall not be a Registrable
Security, or (c) such Warrant is fully exercised for shares of Common Stock, after which time
such Warrant shall not be a Registrable Security; and (iii) the shares of Common Stock issued
and issuable pursuant to the exercise of the Warrants, and upon any stock split, stock dividend,
recapitalization or similar event with respect to such shares of Common Stock and any other
securities issued in exchange of or replacement of such shares of Common Stock (collectively,
the “Warrant Shares”); until in the case of any of the Warrant Shares (a) a Registration Statement
covering such Warrant Share has been declared effective by the Commission and continues to be
effective during the Effectiveness Period, or (b) such Warrant Share is sold in compliance with
Rule 144, after which time such Warrant Share shall not be a Registrable Security.
“Registration Statement” means the registration statement, including the
Prospectus, amendments and supplements to such registration statement or Prospectus, including
pre- and post-effective amendments, all exhibits thereto, and all material incorporated by
reference in such registration statement, for the Shares, the Warrants and the Warrant Shares
required to be filed by the Company with the Commission pursuant to this Agreement.
“Required Filing Date” means the 45th day immediately following the Closing
Date.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such Rule.
“Rule 158” means Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such Rule.
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such Rule.
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“Securities Act” means the Securities Act of 1933, as amended.
“Special Counsel” means an attorney selected by and acting as special counsel to
Holder.
“Warrant Shares” shall have the meaning set forth in the definition of
“Registrable Securities.”
2.
Registration. On or prior to the Required Filing Date, the Company shall prepare
and file with the Commission a Registration Statement covering the resale of the Registrable
Securities for an offering to be made on a continuous basis pursuant to Rule 415. The
Registration Statement shall be on Form S-1 and shall contain (except if otherwise directed by
the Purchasers) the “Plan of Distribution” attached hereto as Exhibit B. The Company shall (i)
not permit any securities other than the Registrable Securities to be included in the Registration
Statement, (ii) use its commercially reasonable best efforts to cause the Registration Statement to
be declared effective under the Securities Act (including filing with the Commission a request
for acceleration of effectiveness within five (5) Business Days of the date that the Company is
notified (orally or in writing, whichever is earlier) by the Commission that the Registration
Statement will not be “reviewed,” or not be subject to further review) as soon as possible after
the filing thereof, but in any event prior to the Effectiveness Date, and (iii) keep such
Registration Statement continuously effective under the Securities Act for a period of two years
from the Effectiveness Date (the “Effectiveness Period”).
3.
Registration Procedures; Company’s Obligations.
In connection with the registration of the Registrable Securities, the Company
shall:
(a)
Prepare and file with the Commission on or prior to the Required Filing
Date, a Registration Statement on Form S-1 in accordance with the method or methods of
distribution thereof as specified by the Holder (except if otherwise directed by the Holder), and
use its commercially reasonable best efforts to cause the Registration Statement to become
effective and remain effective as provided herein; provided, however, that not less than three (3)
Business Days prior to the filing of the Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would be incorporated therein
by reference), the Company shall (i) furnish to the Holder and any Special Counsel, copies of all
such documents proposed to be filed, which documents (other than those incorporated by
reference) will be subject to the timely review of and comment by such Special Counsel, and (ii)
at the request of the Holder cause its officers and directors, counsel and independent certified
public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of
such Special Counsel, to conduct a reasonable investigation within the meaning of the Securities
Act. The Company shall not file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holder or any Special Counsel shall reasonably
object in writing within three (3) Business Days of their receipt thereof.
(b)
(i) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement as may be necessary to keep the
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Registration Statement continuously effective as to the applicable Registrable Securities for the
Effectiveness Period in order to register for resale under the Securities Act all of the Registrable
Securities; (ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424 (or
any similar provisions then in force) promulgated under the Securities Act; (iii) respond
promptly to any comments received from the Commission with respect to the Registration
Statement or any amendment thereto and promptly provide the Holder true and complete copies
of all correspondence from and to the Commission relating to the Registration Statement; and
(iv) comply in all material respects with the provisions of the Securities Act and the Exchange
Act with respect to the disposition of all Registrable Securities covered by the Registration
Statement during the applicable period in accordance with the intended methods of disposition
by the Holder set forth in the Registration Statement as so amended or in such Prospectus as so
supplemented.
(c)
Notify the Holder of Registrable Securities to be sold and any Special
Counsel promptly (and, in the case of (i)(A) below, not less than three (3) Business Days prior to
such filing and, in the case of (i)(C) below, no later than the first Business Day following the
date on which the Registration Statement becomes effective) and (if requested by any such
Person) confirm such notice in writing no later than three (3) Business Days 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) when the Commission notifies the Company
whether there will be a “review” of such Registration Statement and whenever the Commission
comments in writing on such Registration Statement, and (C) with respect to the Registration
Statement or any post-effective amendment, when the same has become effective; (ii) of any
request by the Commission 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 Commission 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) 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 (v) of the occurrence of any event that 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 the light of the circumstances under which they were made, not
misleading.
The Company shall promptly furnish to the Special Counsel, without charge, (i)
any correspondence from the Commission or the Commission’s staff to the Company or its
representatives relating to any Registration Statement, and (ii) promptly after the same is
prepared and filed with the Commission, a copy of any written response to the correspondence
received from the Commission.
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(d)
Use its commercially reasonable best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of, (i) any order suspending the effectiveness of the Registration
Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of
the Registrable Securities for sale in any U.S. jurisdiction, at the earliest practicable moment.
(e)
If requested by the Holder, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment to the Registration Statement such information as the
Company reasonably agrees should be included therein, and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
(f)
Furnish to the Holder and any Special Counsel, without charge, at least
one conformed copy of each Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be incorporated
therein by reference, and all exhibits to the extent requested by such Person (including those
previously furnished or incorporated by reference) promptly after the filing of such documents
with the Commission.
(g)
Promptly deliver to the Holder and any Special Counsel, without charge,
as many copies of the Registration Statement, Prospectus or Prospectuses (including each form
of prospectus) and each amendment or supplement thereto as such Persons may reasonably
request; and the Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by the selling Holder in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or supplement thereto.
(h)
Prior to any public offering of Registrable Securities, use its commercially
reasonable best efforts to register or qualify or cooperate with the selling Holder and any Special
Counsel in connection with the registration or qualification (or exemption from such registration
or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as the Holder reasonably requests in writing,
to keep each such registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Registrable Securities covered by a Registration
Statement; provided, however, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any action that would
subject it to general service of process in any such jurisdiction where it is not then so subject or
subject the Company to any tax in any such jurisdiction where it is not then so subject.
(i)
Cooperate with the Holder to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold pursuant to a Registration Statement
and to enable such Registrable Securities to be in such denominations and registered in such
names as the Holder may request at least two (2) Business Days prior to any sale of Registrable
Securities.
(j)
Upon the occurrence of any event contemplated by Section 3(c)(v),
promptly prepare a supplement or amendment, including a post-effective amendment, to the
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Registration Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any other required document so that,
as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an
untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading.
(k)
Use its commercially reasonable best efforts to cause all Registrable
Securities relating to such Registration Statement to be quoted by OTC and any other securities
exchange, quotation system, market or over-the-counter bulletin board, if any, on which the same
securities issued by the Company are then listed as and when required pursuant to the Purchase
Agreement.
(l)
Comply in all material respects with all applicable rules and regulations of
the Commission and make generally available to its security holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 not later than forty-
five (45) days after the end of any twelve (12) month period (or ninety (90) days after the end of
any twelve (12) month period if such period is a fiscal year) commencing on the first day of the
first fiscal quarter of the Company after the effective date of the Registration Statement, which
statement shall conform to the requirements of Rule 158.
(m)
If (i) there is material non-public information regarding the Company
which the Company’s Board of Directors (the “Board”) reasonably determines not to be in the
Company’s best interest to disclose and which the Company is not otherwise required to
disclose, or (ii) there is a significant business opportunity (including, but not limited to, the
acquisition or disposition of assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or other similar transaction) available to the Company which the
Board reasonably determines not to be in the Company’s best interest to disclose and which the
Company would be required to disclose under the Registration Statement, then the Company
may suspend effectiveness of a Registration Statement and suspend the sale of Registrable
Securities under a Registration Statement one (1) time every three (3) months or three (3) times
in any twelve month period, provided that the Company may not suspend its obligation for more
than thirty (30) days in the aggregate in any twelve month period if suspension is for any of the
reasons listed above or sixty (60) days in the aggregate in any twelve month period for any other
reason (each, a “Blackout Period”); provided, however, that no such suspension shall be
permitted for more than twenty (20) consecutive days, arising out of the same set of facts,
circumstances or transactions.
(n)
Within two (2) Business Days after the Registration Statement which
includes the Registrable Securities is ordered effective by the Commission, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such
Registrable Securities (with copies to the Holder whose Registrable Securities are included in
such Registration Statement) confirmation that the Registration Statement has been declared
effective by the Commission in the form attached hereto as Exhibit C.
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4.
Registration Procedures; Holder’s Obligations
In connection with the registration of the Registrable Securities, the Holder shall:
(a)
If the Registration Statement refers to the Holder by name or otherwise as
the holder of any securities of the Company, have the right to require (if such reference to the
Holder by name or otherwise is not required by the Securities Act or any similar federal statute
then in force) the deletion of the reference to the Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such reference ceases to be
required.
(b)
(i) not sell any Registrable Securities under the Registration Statement
until it has received copies of the Prospectus as then amended or supplemented as contemplated
in Section 3(g) and notice from the Company that such Registration Statement and any post-
effective amendments thereto have become effective as contemplated by Section 3(c), (ii)
comply with the prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration Statement, and (iii)
furnish to the Company information regarding such Holder and the distribution of such
Registrable Securities as is required by law to be disclosed in the Registration Statement, and the
Company may exclude from such registration the Registrable Securities of the Holder if it fails
to furnish such information within a reasonable time prior to the filing of each Registration
Statement, supplemented Prospectus and/or amended Registration Statement.
(c)
upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(m), forthwith discontinue
disposition of such Registrable Securities under the Registration Statement until the Holder’s
receipt of the copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies of any additional
or supplemental filings that are incorporated or deemed to be incorporated by reference in such
Prospectus or Registration Statement.
5.
Registration Expenses
All reasonable fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not the
Registration Statement is filed or becomes effective and whether or not any Registrable
Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in
the foregoing sentence shall include, without limitation, the following: (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect to filings required to
be made with OTC and each securities exchange or other market on which Registrable Securities
are required hereunder to be listed, (B) with respect to filings required to be made with the
Commission, and (C) in compliance with state securities or Blue Sky laws); (ii) printing
expenses (including, without limitation, expenses of printing certificates for Registrable
Securities and of printing prospectuses if the printing of prospectuses is requested by the holders
of a majority of the Registrable Securities included in the Registration Statement); (iii)
messenger, telephone and delivery expenses; (iv) fees and disbursements of counsel for the
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Company; and (v) fees and expenses of all other Persons retained by the Company in connection
with the consummation of the transactions contemplated by this Agreement, including, without
limitation, the Company’s independent public accountants (including the expenses of any
comfort letters or costs associated with the delivery by independent public accountants of a
comfort letter or comfort letters). In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of any annual audit,
and the fees and expenses incurred in connection with the listing of the Registrable Securities on
any securities exchange as required hereunder. The Company shall not be responsible for the
payment of any commissions or other expenses incurred by the Holder in connection with their
sales of Registrable Securities or for the fees of any Special Counsel.
6.
Indemnification
(a)
Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Purchaser, its permitted
assignees, officers, directors, managers, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to perform under a
margin call of Common Stock), investment advisors and employees, each Person who controls
any such Purchaser or permitted assignee (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors, managers, agents and employees
of each such controlling Person, and the respective successors, assigns, estate and personal
representatives of each of the foregoing, to the fullest extent permitted by applicable law, from
and against any and all claims, losses, damages, liabilities, penalties, judgments, costs (including,
without limitation, costs of investigation) and expenses (including, without limitation, reasonable
attorneys’ fees and expenses) (collectively, “Losses”), as incurred, arising out of or relating to
any untrue or alleged untrue statement of a material fact contained in the Registration Statement,
any Prospectus, as supplemented or amended, if applicable, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto,
in the light of the circumstances under which they were made) not misleading, except (i) to the
extent, but only to the extent, that such untrue statements or omissions are based solely upon
information regarding the Holder furnished in writing to the Company by the Holder expressly
for use therein, which information was reviewed and expressly approved by the Holder or
Special Counsel expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto, or (ii) as a result of the failure of the
Holder to deliver a Prospectus, as amended or supplemented, to a purchaser in connection with
an offer or sale. The Company shall notify the Holder promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the transactions
contemplated by this Agreement. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of an Indemnified Party (as defined in Section 6(c)
hereof) and shall survive the transfer of the Registrable Securities by the Holder.
(b)
Indemnification by Purchaser. Each Purchaser and its permitted assignees
shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning of Section
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15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents
or employees of such controlling Persons, and the respective successors, assigns, estate and
personal representatives of each of the foregoing, to the fullest extent permitted by applicable
law, from and against any and all Losses, as incurred, arising out of or relating to any untrue or
alleged untrue statement of a material fact contained in the Registration Statement, any
Prospectus, as supplemented or amended, if applicable, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto,
in the light of the circumstances under which they were made) not misleading, to the extent, but
only to the extent, that (i) such untrue statement or omission is contained in or omitted from any
information so furnished in writing by the Holder or the Special Counsel to the Company
specifically for inclusion in the Registration Statement or such Prospectus, and (ii) such
information was reasonably relied upon by the Company for use in the Registration Statement,
such Prospectus or such form of prospectus or, to the extent that such information relates to the
Holder or the Holder’s proposed method of distribution of Registrable Securities, was reviewed
and expressly approved in writing by the Holder expressly for use in the Registration Statement,
such Prospectus or such form of Prospectus Supplement. Notwithstanding anything to the
contrary contained herein, the Holder shall be liable under this Section 6(b) for only that amount
as does not exceed the net proceeds to the Holder as a result of the sale of Registrable Securities
pursuant to such Registration Statement.
(c)
Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity pursuant to Section 6(a) or 6(b)
hereunder (an “Indemnified Party”), such Indemnified Party promptly shall notify the Person
from whom indemnity is sought (the “Indemnifying Party) in writing, and the Indemnifying
Party shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified Party to give such
notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined by a court of
competent jurisdiction (which determination is not subject to appeal or further review) that such
failure shall have materially and adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party
has agreed in writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (iii) the named parties to any
such Proceeding (including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying
Party in writing that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense thereof and such
counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be
liable for any settlement of any such Proceeding effected without its written consent, which
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consent shall not be unreasonably withheld, conditioned or delayed. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, which consent shall not
unreasonably be withheld, conditioned or delayed, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes
an unconditional release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.
All reasonable fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or preparing to defend
such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten (10) Business Days of written notice thereof to the Indemnifying
Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled
to indemnification hereunder; provided, that the Indemnifying Party may require such
Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally
judicially determined that such Indemnified Party is not entitled to indemnification hereunder or
pursuant to applicable law).
(d)
Contribution. If a claim for indemnification under Section 6(a) or 6(b) is
unavailable to an Indemnified Party because of a failure or refusal of a governmental authority to
enforce such indemnification in accordance with its terms (by reason of public policy or
otherwise), then each 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, in
such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party 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 or omission or alleged omission of a material fact, has been taken or made by, or
relates to information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission. The amount paid or payable by a party as a result of any
Losses shall be deemed to include, subject to the limitations set forth in Section 6(c), any
reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection
with any Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for under Section 6(a) or 6(b) was available to such
party in accordance with its terms. Notwithstanding anything to the contrary contained herein,
the Holder shall be liable or required to contribute under this Section 6(d) for only that amount as
does not exceed the net proceeds to the Holder as a result of the sale of Registrable Securities
pursuant to the Registration Statement.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred to in the
immediately preceding paragraph. 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.
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The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.
7.
Rule 144.
As long as the Holder owns Registrable Securities, the Company covenants to
timely file (or obtain extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or
15(d) of the Exchange Act and to promptly furnish the Holder with true and complete copies of
all such filings. As long as the Holder owns Registrable Securities, if the Company is not
required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare
and furnish to the Holder and make publicly available in accordance with Rule 144(c)
promulgated under the Securities Act annual and quarterly financial statements, together with a
discussion and analysis of such financial statements in form and substance substantially similar
to those that would otherwise be required to be included in reports required by Section 13(a) or
15(d) of the Exchange Act, as well as any other information required thereby, in the time period
that such filings would have been required to have been made under the Exchange Act. The
Company further covenants that it will take such further action as the Holder may reasonably
request, all to the extent required from time to time to enable the Holder to sell Warrants,
Common Shares and Warrant Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the Securities Act,
including providing any legal opinions of counsel to the Company referred to in the Purchase
Agreement. Upon the request of any Holder, the Company shall deliver to such Holder a written
certification of a duly authorized officer as to whether it has complied with such requirements.
8.
Miscellaneous.
(a)
Remedies. The remedies provided in this Agreement and the Purchase
Agreement are cumulative and not exclusive of any remedies provided by law. In the event of a
breach by the Company or by the Holder of any of their obligations under this Agreement, the
Holder or the Company, as the case may be, in addition to being entitled to exercise all rights
granted by law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and the Holder agree that
monetary damages would not provide adequate compensation for any losses incurred by reason
of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the
event of any action for specific performance in respect of such breach, it shall waive the defense
that a remedy at law would be adequate.
(b)
No Inconsistent Agreements. Neither the Company nor any of its
Affiliates has as of the date hereof entered into, nor shall the Company or any of its Affiliates, 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 Holder in this Agreement or otherwise conflicts with
the provisions hereof. Without limiting the generality of the foregoing, without the written
consent of the Holder, the Company shall not grant to any Person the right to request the
Company to register any securities of the Company under the Securities Act if the rights so
granted are inconsistent with the rights granted to the Holder set forth herein, or otherwise
prevent the Company with complying with all of its obligations hereunder.
-12-
(c)
No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holder in such capacity pursuant hereto) may include securities
of the Company in the Registration Statement.
(d)
Failure to File Registration Statement and Other Events. The Company
and the Holder agree that the Holder will suffer damages if the Registration Statement is not filed
on or prior to the Required Filing Date or is not declared effective by the Commission on or prior
to the Effectiveness Date and maintained in the manner contemplated herein during the
Effectiveness Period or if certain other events occur. The Company and the Holder further agree
that it would not be feasible to ascertain the extent of such damages with precision. Accordingly,
if (i) the Registration Statement is not filed on or prior to the Required Filing Date, or is not
declared effective by the Commission on or prior to the Effectiveness Date, or (ii) the Company
fails to file with the Commission a request for acceleration within five (5) Business Days of the
date that the Company is notified (orally or in writing, whichever is earlier) by the Commission
that a Registration Statement will not be “reviewed,” or not subject to further review, or (iii) the
Registration Statement is filed with and declared effective by the Commission but thereafter
ceases to be effective or available as to all Registrable Securities at any time during the
Effectiveness Period, without being succeeded within a reasonable period by a subsequent
Registration Statement filed with and declared effective by the Commission, or (iv) the Company
suspends the use of the Prospectus forming a part of such Registration Statement for more than
thirty (30) days in any period of 365 consecutive days if the Company suspends in reliance on its
ability to do so due to the existence of a development that, in the good faith discretion of the
Board, makes it appropriate to so suspend or which renders the Company unable to comply with
the Commission requirements, or the Company suspends the use of the Prospectus forming a part
of such Registration Statement for more than sixty (60) days in any period of 365 consecutive
days for any other reason, or (v) during the Effectiveness Period, trading in the Warrants or
Common Stock shall be suspended for any reason for more than three (3) Business Days in the
aggregate, or (vi) the Company breaches in a material respect any covenant or other material
term or condition in the Transaction Documents (other than a representation or warranty
contained therein) or any other agreement, document, certificate or other instrument delivered in
connection with the transactions contemplated hereby and thereby, and such breach continues for
a period of thirty (30) days after written notice thereof to the Company, or (vii) the Company has
breached Section 3(n) of this Agreement (any such failure or breach being referred to as an
“Event”), the Company shall pay as liquidated damages for such failure or breach and not as a
penalty (the “Liquidated Damages”) to the Holder an amount equal to three percent (3%) of the
purchase price of the Common Stock paid by the Holder pursuant to the Purchase Agreement for
the first thirty (30) day period, and two percent (2%) of such purchase price for each subsequent
thirty (30) day period, pro-rated for any period less than thirty (30) days, following the Event
until the applicable Event has been cured. Payments to be made pursuant to this Section 8(d)
shall be due and payable immediately upon demand in cash. The parties agree that the Liquidated
Damages represent a reasonable estimate on the part of the parties, as of the date of this
Agreement, of the amount of damages that may be incurred by the Holder if the Registration
Statement is not filed on or prior to the Required Filing Date or has not been declared effective
by the Commission on or prior to the Effectiveness Date and maintained in the manner
contemplated herein during the Effectiveness Period or if any other Event as described herein has
occurred.
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(e)
Consent to Jurisdiction. The Company and each Purchaser (i) hereby
irrevocably submit to the jurisdiction of the United States District Court for the Northern District
of Texas and the courts of the State of Texas located in Dallas County for the purposes of any
suit, action or proceeding arising out of or relating to this Agreement or the Purchase Agreement,
and (ii) hereby waive, and agree not to assert in any such suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding
is brought in an inconvenient forum or that the venue of the suit, action or proceeding is
improper. The Company and each Purchaser consent to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in effect for notices to
it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing in this Section 8(e) shall affect or limit any right to serve
process in any other manner permitted by law.
(f)
Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the same shall be in
writing and signed by the Company and the Purchasers.
(g)
Notices. Any notices required or permitted to be given under this
Agreement (and, unless otherwise expressly provided therein, under any document delivered
pursuant to this Agreement) shall be given in writing and shall be deemed received (i) when
personally delivered to the relevant party at such party’s address as set forth below, (ii) if sent by
mail (which must be certified or registered mail, postage prepaid), when received or rejected by
the relevant party at such party’s address indicated below, or (iii) if sent by email transmission,
when confirmation of delivery is received by the sending party.
(i)
if to the Company:
0000 Xxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Chief Operating Officer
Email: xxxxxxx.xxxxx@xxxx.xxx
with a copy to:
X.X. Xxxxxx & Associates
Attorneys At Law
0000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Email: xxxxxx00@xxxxx.xxx
-14-
(ii)
if to any Purchaser:
At the address of such Purchaser set forth on Exhibit A to this
Agreement.
or to such other address or addresses or facsimile number or numbers as any such party may
most recently have designated in writing to the other parties hereto by such notice.
(h)
Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns and shall inure to the
benefit of the Holder and its successors and assigns. The Company may not assign this
Agreement or any of its respective rights or obligations hereunder without the prior written
consent of the Purchasers. Each Purchaser may assign its rights hereunder in the manner and to
the Persons as permitted under the Purchase Agreement.
(i)
Assignment of Registration Rights. The rights of the Holder hereunder,
including the right to have the Company register for resale Registrable Securities in accordance
with the terms of this Agreement, shall be assignable by each Holder to any transferee of the
Holder of all or a portion of the shares of Registrable Securities if: (i) the Holder agrees in
writing with the transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment; (ii) 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; (iii) following such transfer or
assignment the further disposition of such securities by the transferee or assignees is restricted
under the Securities Act and applicable state securities laws; (iv) at or before the time the
Company receives the written notice contemplated by clause (ii) of this Section, the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions of this
Agreement; and (v) such transfer shall have been made in accordance with the applicable
requirements of the Purchase Agreement and shall be for no less than 10% of the Registrable
Securities. In addition, the Holder shall have the right to assign its rights hereunder to any other
Person with the prior written consent of the Company, which consent shall not be unreasonably
withheld, conditioned or delayed. The rights to assignment shall apply to the Holder (and to
subsequent) successors and assigns. In the event of an assignment pursuant to this Section 8(i),
the Purchaser shall pay all incremental costs and expenses incurred by the Company in
connection with filing a Registration Statement (or an amendment to the Registration Statement)
to register the shares of Registrable Securities assigned to any assignee or transferee of the
Purchaser.
(j)
Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original, and all of which
taken together shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with the same force
and effect as if such facsimile signature were the original thereof.
-15-
(k)
Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to principles of conflicts of law
thereof. This Agreement shall not be interpreted or construed with any presumption against the
party causing this Agreement to be drafted.
(l)
Cumulative Remedies. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
(m)
Termination. This Agreement shall terminate on the date on which all
remaining Registrable Securities may be sold without restriction pursuant to Rule 144 of the
Securities Act.
(n)
Severability. If any term, provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable in any respect, the remainder of
the terms, provisions, covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.
(o)
Headings. The headings herein are for convenience only, do not constitute
a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
[Remainder of page intentionally left blank. Signature pages to follow.]
-16-
![[registrationrightsagreeme002.gif]](https://www.sec.gov/Archives/edgar/data/1493212/000101489714000409/registrationrightsagreeme002.gif)
PURCHASERS:
YP HOLDINGS, LLC
By:
Xxxxxxx X. Xxxxxxxxx, Manager
EXHIBIT A
PURCHASERS
YP Holdings, LLC
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx
Email: xxxxxxxxxx@xxxxx.xxx
With a copy to:
Block & Garden, LLP
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Garden, Esq.
Email: xxxxxx@xxxxxx.xxx
A-1
EXHIBIT B
PLAN OF DISTRIBUTION
We are registering the shares of common stock and the warrants on behalf of the selling
stockholders. The common stock and the warrants may be sold in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing
market prices, at varying prices determined at the time of sale, or at negotiated prices. These
sales may be effected at various times in one or more of the following transactions, or in other
kinds of transactions:
transactions on the OTC Markets Group or on any national securities exchange or U.S.
inter-dealer system of a registered national securities association on which the common
stock and the warrants may be listed or quoted at the time of sale;
in the over-the-counter market;
in private transactions and transactions otherwise than on these exchanges or systems or
in the over-the-counter market;
in connection with short sales of the shares;
by pledge to secure or in payment of debt and other obligations;
through the writing of options, whether the options are listed on an options exchange or
otherwise;
in connection with the writing of non-traded and exchange-traded call options, in hedge
transactions and in settlement of other transactions in standardized or over-the-counter
options; or
through a combination of any of the above transactions.
The selling stockholders and their successors, including their transferees, pledgees or
donees or their successors, may sell the common stock and the warrants directly to purchasers or
through underwriters, broker-dealers or agents, who may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders or the purchasers. These
discounts, concessions or commissions as to any particular underwriter, broker-dealer or agent
may be in excess of those customary in the types of transactions involved.
In addition, any securities covered by this prospectus which qualify for sale pursuant to
Rule 144 of the Securities Act may be sold under Rule 144 rather than pursuant to this
prospectus.
The selling stockholders may from time to time pledge or grant a security interest in
some or all of the shares of common stock and warrants owned by them and, if they default in
the performance of their secured obligations, the pledgees or secured parties may offer and sell
B-1
the shares of common stock from time to time under this prospectus after we have filed an
amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the
Securities Act amending the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer the shares of common stock and warrants in
other circumstances, in which case the transferees, pledgees or other successors in interest will
be the selling beneficial owners for purposes of this prospectus and may sell the shares of
common stock and warrants from time to time under this prospectus after we have filed an
amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the
Securities Act amending the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus.
The selling stockholders and any broker-dealers or agents that are involved in selling the
shares of common stock and warrants may be deemed to be “underwriters” within the meaning
of the Securities Act in connection with such sales. In such event, any commissions received by
such broker-dealers or agents and any profit on the resale of the shares of common stock or
warrants purchased by them may be deemed to be underwriting commissions or discounts under
the Securities Act.
We entered into a registration rights agreement for the benefit of the selling stockholders
to register the common stock and the warrants under applicable federal and state securities laws.
The registration rights agreement provides for cross-indemnification of the selling stockholders
and us and our respective directors, officers and controlling persons against specific liabilities in
connection with the offer and sale of the common stock and the warrants, including liabilities
under the Securities Act. We will pay substantially all of the expenses incurred by the selling
stockholders incident to the registration of the common stock and the warrants.
The selling stockholders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding the sale of
their shares of common stock or warrants, nor is there an underwriter or coordinating broker
acting in connection with a proposed sale of shares of common stock or warrants by any selling
stockholder. If we are notified by any selling stockholder that any material arrangement has
been entered into with a broker-dealer for the sale of shares of common stock or warrants, if
required, we will file a supplement to this prospectus. If the selling stockholders use this
prospectus for any sale of the shares of common stock or warrants, they will be subject to the
prospectus delivery requirements of the Securities Act.
The anti-manipulation rules of Regulation M under the Securities Exchange Act may
apply to sales of our common stock and activities of the selling stockholders.
B-2
EXHIBIT C
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[Name and address of Transfer Agent]
_________________
_________________
_________________
Attn: ____________
Re:
Ladies and Gentlemen:
We are counsel to MediJane Holdings Inc., a Nevada corporation (the “Company”), and
have represented the Company in connection with that certain Securities Purchase Agreement (the
“Purchase Agreement”), dated as of September [●], 2014, by and among the Company and the
purchasers (the “Purchasers” and the “Holders”) named therein pursuant to which the Company
issued to the Purchasers shares (the “Shares”) of its Common Stock, $0.001 par value. Pursuant to
the Purchase Agreement, the Company has also entered into a Registration Rights Agreement with
the Purchasers (the “Registration Rights Agreement”), dated as of September [●], 2014, pursuant
to which the Company agreed, among other things, to register the Registrable Securities (as defined
in the Registration Rights Agreement), including the Shares, under the Securities Act of 1933, as
amended (the “1933 Act”). In connection with the Company’s obligations under the Registration
Rights Agreement, on [●], 2014, the Company filed a Registration Statement on Form S-3 (File No.
[●]) (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”)
relating to the resale of the Registrable Securities which names the Holders as selling stockholders
thereunder.
In connection with the foregoing, we advise you that a member of the SEC’s staff has
advised us by telephone that the SEC has entered an order declaring the Registration Statement
effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF
EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a member of the SEC’s
staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and, accordingly, the Registrable Securities
are available for resale under the 1933 Act in the manner specified in, and pursuant to the terms of,
the Registration Statement.
Very truly yours,
By:
cc:
[PURCHASERS]
C-1
