REGISTRATION RIGHTS AGREEMENT
Registration
Rights Agreement (the “Agreement”), dated as of June 11, 2008, by
and between Buyer Group International, Inc., a corporation organized under the
laws of State of Nevada, with its principal executive office at 000 Xxxxxxxxx
Xxx, XxXxxxxx, XX 00000
(the “Company”), and Dutchess Private Equities Fund,
Ltd., a Cayman Islands exempted company, with its principal office at 00
Xxxxxxxxxxxx Xxxxxx, Xxxxx 0, Xxxxxx, XX 00000 (the “Holder”).
Whereas, in
connection with the Investment Agreement by and between the Company and the
Investor of this date (the “Investment Agreement”),
the Company has agreed to issue and sell to the Investor an indeterminate
number of shares of the Company’s
Common Stock, $.001 par value per share (the “Common Stock”), to be
purchased pursuant to the terms and subject to the conditions set forth in the
Investment Agreement; and
Whereas, to
induce the Investor to execute and deliver the Investment Agreement, the Company
has agreed to provide certain registration rights under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the “1933 Act”), and
applicable state securities laws, with respect to the shares of Common Stock
issuable pursuant to the Investment Agreement.
Now
therefore, in consideration of the foregoing promises and the mutual covenants
contained hereinafter and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor
hereby agree as follows:
Section 1. DEFINITIONS.
As used
in this Agreement, the following terms shall have the following meanings: “Execution Date” means the date of this Agreement
set forth above.
“Investor” means Dutchess Private Equities
Fund, Ltd., a Cayman Islands exempted company.
“Person” means a
corporation, a limited liability company, an association, a partnership, an
organization, a business, an individual, a governmental or political subdivision
thereof or a governmental agency.
“Potential Material Event”
means any of the following: (i) the
possession by the Company of material information not ripe for disclosure in the
Registration Statement, which shall be evidenced by determinations in good faith
by the Board of Directors of the Company that disclosure of such information in
the Registration Statement would be detrimental to the business and affairs of
the Company, or (ii) any
material engagement or activity by the Company which would, in the good faith
determination of the Board of Directors of the Company, be adversely affected by
disclosure in the Registration Statement at such time, which determination shall
be accompanied by a good faith determination by the Board of Directors of the
Company that the Registration Statement would be materially misleading absent
the inclusion of such information.
“Principal Market”
shall mean The American Stock Exchange, National Association of
Securities Dealer’s, Inc.,
Over-the-Counter electronic bulletin board, the Nasdaq National Market or The
Nasdaq SmallCap Market whichever is the principal market on which the Common
Stock of the Company is listed.
“Register,” “Registered,” and
“Registration” refer
to the Registration effected by preparing and filing one (1) or more
Registration Statements in compliance with the 1933 Act and pursuant to Rule 415
under the 1933 Act or any successor rule providing for offering securities on a
continuous basis (“Rule
415”), and the declaration or ordering of effectiveness of such Registration
Statement(s) by the United States Securities and Exchange Commission (the
“SEC”).
BUYER
GROUP INTL, INC.EQUITY LINE.REGISTRATION RIGHTS.JUNE.2008
1
“Registrable Securities”
means (i) the
shares of Common Stock issued or issuable pursuant to the Investment Agreement,
and (ii) any shares of
capital stock issued or issuable with respect to such shares of Common Stock, if
any, as a result of any stock split, stock dividend, recapitalization, exchange
or similar event or otherwise, which have not been (x) included in the
Registration Statement that has been declared effective by the SEC, or (y) sold under circumstances
meeting all of the applicable conditions of Rule 144 (or any similar provision
then in force) under the 1933 Act.
“Registration Statement”
means the registration statement of the Company filed under the 1933 Act
covering the Registrable Securities.
All
capitalized terms used in this Agreement and not otherwise defined herein shall
have the same meaning ascribed to them as in the Investment
Agreement.
Section
2. REGISTRATION.
(a) The
Company shall, within fifteen (15) days of the date of this Agreement, file with
the SEC the Registration Statement or Registration Statements (as is necessary)
on Form SB-2 (or, if such form is unavailable for such a registration, on such
other form as is available for such registration), covering the resale of all of
the Registrable Securities, which Registration Statement(s) shall state that, in
accordance with Rule 416 promulgated under the 1933 Act, such Registration
Statement also covers such indeterminate number of additional shares of Common
Stock as may become issuable upon stock splits, stock dividends or similar
transactions. The Company shall initially register for resale 5,000,000 shares
of Common Stock which would be issuable on the date preceding the filing of the
Registration Statement based on the closing bid price of the Company’s Common Stock on such date
and the amount reasonably calculated that represents Common Stock issuable to
other parties as set forth in the Investment Agreement except to the extent that
the SEC requires the share amount to be reduced as a condition of
effectiveness.
(b) The
Company shall use all commercially reasonable efforts to have the Registration
Statement(s) declared effective by the SEC within ninety (90) calendar days
after the Execution Date.
(c) The Company agrees not to
include any other securities in the Registration Statement covering the
Registrable Securities without Investor’s prior written consent which
Investor may withhold in its sole discretion. Furthermore, the Company agrees
that it will not file any other Registration Statement for other securities,
until thirty calendar days after the Registration Statement for the Registrable
Securities is declared effective by the SEC.
Section
3. RELATED
OBLIGATIONS.
At such
time as the Company is obligated to prepare and file the Registration Statement
with the SEC pursuant to Section 2(a), the Company will effect the registration
of the Registrable Securities in accordance with the intended method of
disposition thereof and, with respect thereto, the Company shall have the
following obligations:
(a) The Company shall use all
commercially reasonable efforts to cause such Registration Statement relating to
the Registrable Securities to become effective within ninety (90) days after the
Execution Date and shall keep such Registration Statement effective until the
earlier to occur of the date on which (A) the Investor shall have
sold all the Registrable Securities; or (B) the Investor has no right
to acquire any additional shares of Common Stock under the Investment Agreement
(the “Registration Period”). The
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading. The Company shall use all commercially
reasonable efforts to respond to all SEC comments within seven (7) business days
from receipt of such comments by the Company. The Company shall use all
commercially reasonable efforts to cause the Registration Statement relating to
the Registrable Securities to become effective no later than five
(5)
BUYER
GROUP INTL, INC.EQUITY LINE.REGISTRATION RIGHTS.JUNE.2008
2
business
days after notice from the SEC that the Registration Statement may be declared
effective. The Investor agrees to provide all information which it is required
by law to provide to the Company, including the intended method of disposition
of the Registrable Securities, and the Company’s obligations set forth
above shall be conditioned on the receipt of such information.
(b) The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep such Registration Statement effective during the Registration
Period, and, during such period, comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities of the Company covered
by such Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended methods
of disposition by the Investor thereof as set forth in such Registration
Statement. In the event the number of shares of Common Stock covered by the
Registration Statement filed pursuant to this Agreement is at any time
insufficient to cover all of the Registrable Securities, the Company shall amend
such Registration Statement, or file a new Registration Statement (on the short
form available therefor, if applicable), or both, so as to cover all of the
Registrable Securities, in each case, as soon as practicable, but in any event
within thirty (30) calendar days after the necessity therefor arises (based on
the then Purchase Price of the Common Stock and other relevant factors on which
the Company reasonably elects to rely), assuming the Company has sufficient
authorized shares at that time, and if it does not, within thirty (30) calendar
days after such shares are authorized. The Company shall use commercially
reasonable efforts to cause such amendment and/or new Registration Statement to
become effective as soon as practicable following the filing
thereof.
(c) The
Company shall make available to the Investor whose Registrable Securities are
included in any Registration Statement and its legal counsel without charge
(i) promptly after the
same is prepared and filed with the SEC at least one (1) copy of such
Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits, the prospectus included in such Registration Statement (including
each preliminary prospectus) and, with regards to such Registration
Statement(s), any correspondence by or on behalf of the Company to the SEC or
the staff of the SEC and any correspondence from the SEC or the staff of the SEC
to the Company or its representatives; (ii) upon the effectiveness of
any Registration Statement, the Company shall make available copies of the
prospectus, via XXXXX, included in such Registration Statement and all
amendments and supplements thereto; and (iii) such other documents,
including copies of any preliminary or final prospectus, as the Investor may
reasonably request from time to time in order to facilitate the disposition of
the Registrable Securities.
(d) The
Company shall use commercially reasonable efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statement under such other
securities or “blue sky” laws of such states in the
United States as the Investor reasonably requests; (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period; (iii) take such other actions
as may be necessary to maintain such registrations and qualifications in effect
at all times during the Registration Period, and (iv) take all other actions
reasonably necessary or advisable to qualify the Registrable Securities for sale
in such jurisdictions; provided,
however,
that the Company shall not be required in connection therewith or as a
condition thereto to (x)
qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(d), or (y) subject itself to general
taxation in any such jurisdiction. The Company shall promptly notify the
Investor who holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or qualification
of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or
threatening of any proceeding for such purpose.
BUYER
GROUP INTL, INC.EQUITY LINE.REGISTRATION RIGHTS.JUNE.2008
3
(e) As
promptly as practicable after becoming aware of such event, the Company shall
notify Investor in writing of the happening of any event as a result of which
the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (“Registration Default”)
and use all diligent efforts to promptly prepare a supplement or
amendment to such Registration Statement and take any other necessary steps to
cure the Registration Default (which, if such Registration Statement is on Form
S-3, may consist of a document to be filed by the Company with the SEC pursuant
to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act (as defined below) and to
be incorporated by reference in the prospectus) to correct such untrue statement
or omission, and make available copies of such supplement or amendment to the
Investor. The Company shall also promptly notify the Investor (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when the
Registration Statement or any post-effective amendment has become effective (the
Company will prepare notification of such effectiveness which shall be delivered
to the Investor on the same day of such effectiveness and by overnight mail),
additionally, the Company will promptly provide to the Investor, a copy of the
effectiveness order prepared by the SEC once it is received by the Company;
(ii) of any request by
the SEC for amendments or supplements to the Registration Statement or related
prospectus or related information, (iii) of the Company’s reasonable determination that
a post-effective amendment to the Registration Statement would be appropriate,
(iv) in the event the
Registration Statement is no longer effective, or (v) if the Registration
Statement is stale as a result of the Company’s failure to timely file its
financials or otherwise. The Company acknowledges that its failure to cure the
Registration Default within ten (10) business days will cause the Investor to
suffer damages in an amount that will be difficult to ascertain. Accordingly,
the parties agree that it is appropriate to include a provision for liquidated
damages. The parties acknowledge and agree that the liquidated damages provision
set forth in this section represents the parties’ good faith effort to
quantify such damages and, as such, agree that the form and amount of such
liquidated damages are reasonable and will not constitute a penalty. It is the
intention of the parties that interest payable under any of the terms of this
Agreement shall not exceed the maximum amount permitted under any applicable
law. If a law, which applies to this Agreement, which sets the maximum interest
amount, is finally interpreted so that the interest in connection with this
Agreement exceeds the permitted limits, then: (1) any such interest shall be
reduced by the amount necessary to reduce the interest to the permitted limit;
and (2) any sums already
collected (if any) from the Company which exceed the permitted limits will be
refunded to the Company. The Investor may choose to make this refund by reducing
the amount that the Company owes under this Agreement or by making a direct
payment to the Company. If a refund reduces the amount that the Company owes the
Investor, the reduction will be treated as a partial payment.
(f) The
Company shall use all commercially reasonable efforts to prevent the issuance of
any stop order or other suspension of effectiveness of the Registration
Statement, or the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the earliest
possible moment and to notify the Investor holding Registrable Securities being
sold of the issuance of such order and the resolution thereof or its receipt of
actual notice of the initiation or threat of any proceeding concerning the
effectiveness of the registration statement.
(g) The
Company shall permit the Investor and one (1) legal counsel, designated by the
Investor, to review and comment upon the Registration Statement and all
amendments and supplements thereto at least one (1) calendar day prior to their
filing with the SEC. However, any postponement of a filing of a Registration
Statement or any postponement of a request for acceleration or any postponement
of the effective date or effectiveness of a Registration Statement by written
request of the Investor (collectively, the "Investor's Delay") shall not act to
trigger any penalty of any kind, or any cash amount due or any in- kind amount
due the Investor from the Company under any and all agreements of any nature or
kind between the Company and the Investor. The event(s) of an Investor's Delay
shall act to suspend all obligations of any kind or nature of the Company under
any and all agreements of any nature or kind between the Company and the
Investor.
(h) At the request of the
Investor, the Company's counsel shall furnish to the Investor an opinion letter
confirming the effectiveness of the registration statement. Such opinion letter
shall be issued as of the date of the effectiveness of the registration
statement and be in a form suitable to the Investor.
BUYER
GROUP INTL, INC.EQUITY LINE.REGISTRATION RIGHTS.JUNE.2008
4
(i) The
Company shall hold in confidence and not make any disclosure of information
concerning the Investor unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii)
the release of such information is ordered pursuant to a subpoena or
other final, non-appealable order from a court or governmental body of competent
jurisdiction, or (iv)
such information has been made generally available to the public other
than by disclosure in violation of this Agreement or any other agreement. The
Company agrees that it shall, upon learning that disclosure of such information
concerning the Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to the
Investor and allow the Investor, at the Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
covering such information.
(j) The
Company shall use all commercially reasonable efforts to maintain designation
and quotation of all the Registrable Securities covered by any Registration
Statement on the Principal Market. If, despite the Company’s commercially
reasonable efforts, the Company is unsuccessful in satisfying the preceding
sentence, it shall use commercially reasonable efforts to cause all the
Registrable Securities covered by any Registration Statement to be listed on
each other national securities exchange and automated quotation system, if any,
on which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities is then permitted
under the rules of such exchange or system. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this Section
3(j).
(k) The
Company shall cooperate with the Investor to facilitate the prompt preparation
and delivery of certificates representing the Registrable Securities to be
offered pursuant to the Registration Statement and enable such certificates to
be in such denominations or amounts, as the case may be, as the Investor may
reasonably request (and after any sales of such Registrable Securities by the
Investor, such certificates not bearing any restrictive legend).
(l) The
Company shall provide a transfer agent for all the Registrable Securities not
later than the effective date of the first Registration Statement filed pursuant
hereto.
(m) If
requested by the Investor, the Company shall (i) as soon as reasonably
practical incorporate in a prospectus supplement or post-effective amendment
such information as the Investor reasonably determines should be included
therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the offering of the
Registrable Securities to be sold in such offering; (ii) make all required filings
of such prospectus supplement or post- effective amendment as soon as reasonably
possible after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment; and (iii) supplement or make
amendments to any Registration Statement if reasonably requested by the
Investor.
(n) The
Company shall use all commercially reasonable efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to facilitate the disposition of such Registrable
Securities.
(o) The
Company shall otherwise use all commercially reasonable efforts to comply with
all applicable rules and regulations of the SEC in connection with any
registration hereunder.
(p) Within
one (1) business day after the Registration Statement which includes Registrable
Securities is declared effective by the SEC, the Company shall deliver to the
transfer agent for such Registrable Securities, with copies to the Investor,
confirmation that such Registration Statement has been declared effective by the
SEC.
(q) The Company shall take all
other reasonable actions necessary to expedite and facilitate disposition by the
Investor of Registrable Securities pursuant to the Registration
Statement.
BUYER
GROUP INTL, INC.EQUITY LINE.REGISTRATION RIGHTS.JUNE.2008
5
Section
4. OBLIGATIONS OF THE
INVESTOR.
(a) At least
five (5) calendar days prior to the first anticipated filing date of the
Registration Statement the Company shall notify the Investor in writing of the
information the Company requires from the Investor for the Registration
Statement. It shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the
Registrable Securities and the Investor agrees to furnish to the Company that
information regarding itself, the Registrable Securities and the intended method
of disposition of the Registrable Securities as shall reasonably be required to
effect the registration of such Registrable Securities and the Investor shall
execute such documents in connection with such registration as the Company may
reasonably request. The Investor covenants and agrees that, in connection with
any sale of Registrable Securities by it pursuant to the Registration Statement,
it shall comply with the “Plan of Distribution” section of the then current
prospectus relating to such Registration Statement.
(b) The
Investor, by its acceptance of the Registrable Securities, agrees to cooperate
with the Company as reasonably requested by the Company in connection with the
preparation and filing of any Registration Statement hereunder, unless the
Investor has notified the Company in writing of an election to exclude all of
the Investor’s Registrable Securities from such Registration
Statement.
(c) The Investor agrees that,
upon receipt of written notice from the Company of the happening of any event of
the kind described in Section 3(f) or the first sentence of 3(e), the Investor
will immediately discontinue disposition of Registrable Securities pursuant to
any Registration Statement(s) covering such Registrable Securities until the
Investor’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(f) or the first sentence of 3(e).
Section
5. EXPENSES OF
REGISTRATION.
All
expenses, other than underwriting discounts and commissions and other than as
set forth in the Investment Agreement, incurred in connection with registrations
including comments, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printing and accounting fees, and fees and disbursements of counsel for
the Company or for the Investor shall be paid by the Company.
Section
6. INDEMNIFICATION.
In the
event any Registrable Securities are included in the Registration Statement
under this Agreement:
(a) To the fullest extent
permitted by law, the Company, under this Agreement, will, and hereby does,
indemnify, hold harmless and defend the Investor who holds Registrable
Securities, the directors, officers, partners, employees, counsel, agents,
representatives of, and each Person, if any, who controls, any Investor within
the meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended
(the “1934 Act”)
(each, an “Indemnified Person”),
against any losses, claims, damages, liabilities, judgments, fines,
penalties, charges, costs, attorneys’ fees, amounts paid in settlement or
expenses, joint or several (collectively, “Claims”), incurred
in investigating, preparing or defending any action, claim, suit, inquiry,
proceeding, investigation or appeal taken from the foregoing by or before any
court or governmental, administrative or other regulatory agency, body or the
SEC, whether pending or threatened, whether or not an indemnified party is or
may be a party thereto (“Indemnified Damages”),
to which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in the Registration Statement or any
post-effective amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other “blue sky” laws of
any jurisdiction in which the Investor has requested in writing that the Company
register or qualify the Shares (“Blue Sky Filing”),
or the omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which the
BUYER
GROUP INTL, INC.EQUITY LINE.REGISTRATION RIGHTS.JUNE.2008
6
statements
therein were made, not misleading, (ii) any untrue statement or
alleged untrue statement of a material fact contained in the final prospectus
(as amended or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged omission to state
therein any material fact necessary to make the statements made therein, in
light of the circumstances under which the statements therein were made, not
misleading, or (iii) any
violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any
other law, including, without limitation, any state securities law, or any rule
or regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to the Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, “Violations”).
Subject to the restrictions set forth in Section 6(c) the Company shall
reimburse the Investor and each such controlling person, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim
arising out of or based upon a Violation which is due to the inclusion in the
Registration Statement of the information furnished to the Company by any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto;
(ii) shall not be
available to the extent such Claim is based on (a) a failure of the Investor
to deliver or to cause to be delivered the prospectus made available by the
Company or (b) the
Indemnified Person’s use
of an incorrect prospectus despite being promptly advised in advance by the
Company in writing not to use such incorrect prospectus; (iii) any claims based on the
manner of sale of the Registrable Securities by the Investor or of the
Investor’s failure to
register as a dealer under applicable securities laws; (iv) any omission of the
Investor to notify the Company of any material fact that should be stated in the
Registration Statement or prospectus relating to the Investor or the manner of
sale; and (v) any
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the resale of the Registrable Securities by the Investor
pursuant to the Registration Statement.
(b) In
connection with any Registration Statement in which Investor is participating,
the Investor agrees to severally and jointly indemnify, hold harmless and
defend, to the same extent and in the same manner as is set forth in Section
6(a), the Company, each of its directors, each of its officers who signs the
Registration Statement, each Person, if any, who controls the Company within the
meaning of the 1933 Act or the 1934 Act and the Company’s agents (collectively and
together with an Indemnified Person, an “Indemnified
Party”), against any Claim or Indemnified Damages to which any of them
may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as
such Claim or Indemnified Damages arise out of or are based upon any Violation,
in each case to the extent, and only to the extent, that such Violation is due
to the inclusion in the Registration Statement of the written information
furnished to the Company by the Investor expressly for use in connection with
such Registration Statement; and, subject to Section 6(c), the Investor will
reimburse any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Investor, which consent shall not be
unreasonably withheld; provided, further, however, that the Investor shall only
be liable under this Section 6(b) for that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to such Investor as a result of the
sale of Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the resale of
the Registrable Securities by the Investor pursuant to the Registration
Statement. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with respect to any
preliminary prospectus shall not inure to the benefit of any Indemnified Party
if the untrue statement or omission of material fact contained in the
preliminary prospectus were corrected on a timely basis in the prospectus, as
then amended or supplemented. This indemnification provision shall apply
separately to each Investor and liability hereunder shall not be joint and
several.
BUYER
GROUP INTL, INC.EQUITY LINE.REGISTRATION RIGHTS.JUNE.2008
7
(c) Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6
of notice of
the commencement of any action or proceeding (including any governmental action
or proceeding) involving a Claim, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any indemnifying
party under this Section 6, deliver to the indemnifying party a written notice
of the commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the Indemnified
Person or Indemnified Party, the representation by counsel of the Indemnified
Person or Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential differing interests between such Indemnified Person
or Indemnified Party and any other party represented by such counsel in such
proceeding. The indemnifying party shall pay for only one (1) separate legal
counsel for the Indemnified Persons or the Indemnified Parties, as applicable,
and such counsel shall be selected by the Investor, if the Investor is entitled
to indemnification hereunder, or the Company, if the Company is entitled to
indemnification hereunder, as applicable. The Indemnified Party or Indemnified
Person shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Indemnified Party or Indemnified Person which relates to such action or
Claim. The indemnifying party shall keep the Indemnified Party or Indemnified
Person fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding affected without
its written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the consent of the Indemnified Party or Indemnified Person,
consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the Indemnified Party or Indemnified Person with respect to all third
parties, firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such
action.
(d) The indemnity agreements
contained herein shall be in addition to (i) any cause of action or
similar right of the Indemnified Party or Indemnified Person against the
indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.
Section
7. CONTRIBUTION.
To the
extent any indemnification by an indemnifying party is prohibited or limited by
law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however,
that: (i) no
contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section
6; (ii) no seller of
Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any seller of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (iii)
contribution by any seller of Registrable Securities shall be limited in
amount to the net amount of proceeds received by such seller from the sale of
such Registrable Securities.
Section
8.REPORTS UNDER THE
1934 ACT.
With a
view to making available to the Investor the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that may
at any time permit the Investor to sell securities of the Company to the public
without registration (“Rule
144”), provided that the Investor holds any Registrable Securities are
eligible for resale under Rule 144 (k), the Company agrees to:
BUYER
GROUP INTL, INC.EQUITY LINE.REGISTRATION RIGHTS.JUNE.2008
8
(a) make and
keep public information available, as those terms are understood and defined in
Rule 144;
(b) file with
the SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains
subject to such requirements (it being understood that nothing herein shall
limit the Company’s
obligations under Section 5(c) of the Investment Agreement) and the filing of
such reports and other documents is required for the applicable provisions of
Rule 144; and
(c) furnish to the Investor,
promptly upon request, (i)
a written statement by the Company that it has complied with the
reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Investor to sell such securities
pursuant to Rule 144 without registration.
Section
9. NO ASSIGNMENT OF
REGISTRATION RIGHTS.
The
rights and obligations under this Agreement shall not be
assignable.
Section
10. AMENDMENT OF
REGISTRATION RIGHTS.
The
provisions of this Agreement may be amended only with the written consent of the
Company and Investor.
Section
11. MISCELLANEOUS.
(a) Any notices or other
communications required or permitted to be given under the terms of this
Agreement that must be in writing will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii)
upon receipt, when sent by facsimile (provided a confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii)
one (1) day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:
If to the
Company:
000
Xxxxxxxxx Xxx
XxXxxxxx,
XX 00000
Telephone:
(000)000-0000 Facsimile:
If to the
Investor:
Dutchess
Private Equities Fund, Ltd.
00
Xxxxxxxxxxxx Xxx, Xxxxx 0 Xxxxxx, XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Each
party shall provide five (5) business days prior notice to the other party of
any change in address, phone number or facsimile number.
BUYER
GROUP INTL, INC.EQUITY LINE.REGISTRATION RIGHTS.JUNE.2008
9
(b) Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.
(c) This
Agreement and the Transaction Documents constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein.
(d) This
Agreement and the Transaction Documents supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.
(e) The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. Whenever required by the context
of this Agreement, the singular shall include the plural and masculine shall
include the feminine. This Agreement shall not be construed as if it had been
prepared by one of the parties, but rather as if all the parties had prepared
the same.
(f) This
Agreement may be executed in two or more identical counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same
agreement. This Agreement, once executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.
(g) Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
(h) In case any provision of
this Agreement is held by a court of competent jurisdiction to be excessive in
scope or otherwise invalid or unenforceable, such provision shall be adjusted
rather than voided, if possible, so that it is enforceable to the maximum extent
possible, and the validity and enforceability of the remaining provisions of
this Agreement will not in any way be affected or impaired thereby.
Section
12. DISPUTES SUBJECT
TO ARBITRATION GOVERNED BY MASSACHUSETTS LAW
All
disputes arising under this agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts, without regard to
principles of conflict of laws. The parties to this agreement will submit all
disputes arising under this agreement to arbitration in Boston, Massachusetts
before a single arbitrator of the American Arbitration Association (“AAA”). The
arbitrator shall be selected by application of the rules of the AAA, or by
mutual agreement of the parties, except that such arbitrator shall be an
attorney admitted to practice law in the Commonwealth of Massachusetts. No party
to this agreement will challenge the jurisdiction or venue provisions as
provided in this section. Nothing contained herein shall prevent the party from
obtaining an injunction.
BUYER
GROUP INTL, INC.EQUITY LINE.REGISTRATION RIGHTS.JUNE.2008
10
SIGNATURE
PAGE OF REGISTRATION RIGHTS AGREEMENT
Your
signature on this Signature Page evidences your agreement to be bound by the
terms and conditions of the Investment Agreement and the Registration Rights
Agreement as of the date first written above.
The
undersigned signatory hereby certifies that he has read and understands the
Registration Rights Agreement, and the representations made by the undersigned
in this Registration Rights Agreement are true and accurate, and agrees to be
bound by its terms.
DUTCHESS PRIVATE EQUITIES
FUND, LTD.,
By:
Xxxxxxx
X. Xxxxxxxx, Director
By: /s/ Xxxxx
Xxxxxx
Xxxxx
Xxxxxx, President
BUYER
GROUP INTL, INC.EQUITY LINE.REGISTRATION RIGHTS.JUNE.2008
11
