REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.1
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into as of March 31, 2008, by and among TRUE
NORTH ENERGY CORPORATION,
a
Nevada corporation (the “Company”),
and
VALENS U.S. SPV I, LLC and VALENS OFFSHORE SPV II, CORP. (collectively, the
“Purchasers”).
This
Agreement is made pursuant to that certain letter agreement dated March 27,
2008, by and among the Purchasers, ICF Energy Corporation, a Texas corporation
(“ICF”)
and
the Company (as amended, modified or supplemented from time to time, the
“Letter
Agreement”),
.
The
Company and the Purchasers hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
purchase agreement shall have the meanings given such terms in the purchase
agreement. As used in this agreement, the following terms shall have the
following meanings:
“Commission”
means
the Securities and Exchange Commission.
“Common
Stock”
means
shares of the Company’s common stock, par value $0.0001 per share.
“Closing
Shares” means
the
shares of Common Stock issued to the Purchasers pursuant to the Letter
Agreement.
“Demand
Notice”
has the
meaning set forth in Section 2(a).
“Demand
Registration”
has the
meaning set forth in Section 2(a).
“Effectiveness
Date”
means a
date no later than thirty (30) days following the Filing Date in the event
the
Commission determines not to review the Registration Statement or ninety (90)
days following the Filing Date if the Commission determines to review the
Registration Statement. The Effectiveness date shall be extended to one hundred
twenty (120) days following the Filing Date if the Commission issues more than
two comment letters on the Registration Statement.
“Effectiveness
Period”
has the
meaning set forth in Section 2(a).
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and any successor
statute.
“Event”
has the
meaning set forth in Section 2(b).
“Event
Date”
has the
meaning set forth in Section 2(b).
“Filing
Date”
means
thirty (30) days following the date of a Demand Notice.
“Holder”
or
“Holders”
means
the Purchasers or any of their respective affiliates or transferees to the
extent any of them hold Registrable Securities, other than those purchasing
Registrable Securities in a market transaction.
“Indemnified
Party”
has the
meaning set forth in Section 5(c).
“Indemnifying
Party”
has the
meaning set forth in Section 5(c).
“Note
Amount”
means
$425,000.00.
“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 a 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 covered by such Registration Statement,
and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
“Purchase
Agreement”
means
the Securities Purchase Agreement dated September 17, 2007 by and between the
Company, the Purchasers and ICF.
“Registrable
Securities”
means
the Closing Shares.
“Registration
Statement”
means
each registration statement required to be filed hereunder, including the
Prospectus therein, amendments and supplements to such registration statement
or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
“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
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.
“Securities
Act”
means
the Securities Act of 1933, as amended, and any successor statute.
“Trading
Market”
means
any of the NASDAQ Over The Counter Bulletin Board, NASDAQ Capital Market, the
NASDAQ Global Markets System, the American Stock Exchange or the New York Stock
Exchange
2
2. Registration.
(a) In
the
event the Purchasers determine that they are unable to sell all of the
Registrable Securities, for any reason, pursuant to an exemption from
registration provided by Rule 144, then the holders of a majority-in-interest
of
the Registrable Securities held by the Purchasers may, at any time after sixty
(60) days following the date of this Agreement, make a written demand for
registration under the Securities Act of all or part of their Registrable
Securities (a “Demand
Notice”).
Upon
receipt of a Demand Notice, the Company shall, on or prior to the Filing Date,
prepare and file with the Commission a Registration Statement covering the
Registrable Securities for a selling stockholder resale offering to be made
on a
continuous basis pursuant to Rule 415 (a “Demand
Registration.).
Each
Registration Statement shall be on Form S-3 (except if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3, in
which
case such registration shall be on another appropriate form in accordance
herewith). The Company shall cause each Registration Statement to become
effective and remain effective as provided herein. The Company shall use its
best efforts to cause each Registration Statement to be declared effective
under
the Securities Act as promptly as possible after the filing thereof, but in
any
event no later than the Effectiveness Date. The Company shall use its best
efforts to keep each Registration Statement continuously effective under the
Securities Act until the date which is the earlier date of when (i) all
Registrable Securities covered by such Registration Statement have been sold
or
(ii) all Registrable Securities covered by such Registration Statement may
be
sold immediately without registration under the Securities Act and without
volume restrictions pursuant to Rule 144(b), as determined by the counsel to
the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company’s transfer agent and the affected Holders (each, an
“Effectiveness
Period”).
(b) If:
(i)
the Registration Statement is not filed on or prior to the Filing Date; (ii)
the
Registration Statement is not declared effective by the Commission by the
Effectiveness Date; (iii) after the Registration Statement is filed with and
declared effective by the Commission, the Registration Statement ceases to
be
effective (by suspension or otherwise) as to all Registrable Securities to
which
it is required to relate at any time prior to the expiration of the
Effectiveness Period (without being succeeded immediately by an additional
registration statement filed and declared effective) for a period of time which
shall exceed thirty (30) days in the aggregate per year or more than twenty
(20)
consecutive calendar days (defined as a period of 365 days commencing on the
date the Registration Statement is declared effective); or (iv) the Common
Stock
is not listed or quoted, or is suspended from trading on any Trading Market
for
a period of three (3) consecutive Trading Days (provided the Company shall
not
have been able to cure such trading suspension within thirty (30) days of the
notice thereof or list the Common Stock on another Trading Market); (any such
failure or breach being referred to as an “Event,”
and
for purposes of clause (i) or (ii) the date on which such Event occurs, or
for
purposes of clause (iii) the date which such thirty (30) day or twenty (20)
consecutive day period (as the case may be) is exceeded, or for purposes of
clause (iv) the date on which such three (3) Trading Day period is exceeded,
being referred to as “Event
Date”),
then
until the applicable Event is cured, the Company shall pay to each Holder an
amount in cash, as liquidated damages and not as a penalty, equal to one percent
(1.0%) for each thirty (30) day period (prorated for partial periods) on a
daily
basis of the Note Amount; provided that, the maximum aggregate amount of
liquidated damages that may be charged to the Company pursuant to this Section
2(b) shall not exceed ten percent (10%) of the Note Amount. While such Event
continues, such liquidated damages shall be paid not less often than each thirty
(30) days. Any unpaid liquidated damages as of the date when an Event has been
cured by the Company shall be paid within three (3) days following the date
on
which such Event has been cured by the Company. Notwithstanding the foregoing,
(A) if the Commission does not declare the Registration Statement effective
on
or before the Effectiveness Date, or (B) if the Commission allows the
Registration Statement to be declared effective at any time before or after
the
Effectiveness Date, subject to the withdrawal of certain Registrable Securities
from the Registration Statement, and the reason for (A) or (B) is the
Commission’s determination that (x) the offering of any of the Registrable
Securities constitutes a primary offering of securities by the Company, (y)
Rule
415 may not be relied upon for the registration of the resale of any or all
of
the Registrable Securities, and/or (z) a Holder of any Registrable Securities
must be named as an underwriter, the Holders understand and agree that in the
case of (B) the Company may reduce, on a pro rata basis, the total number of
Registrable Securities to be registered on behalf of each such Holder, and,
in
the case of (A) or (B), the overall limit of liquidated damages that a Holder
shall be entitled to with respect to the Registrable Securities not registered
for the reason set forth in (A), or so reduced on a pro rata basis as set forth
in (B) shall be one percent (1%) for each thirty (30) day period (pro rated
for
partial periods) on a daily basis of the Note Amount; provided that, the maximum
aggregate amount of liquidated damages that may be charged to the Company
pursuant to this Section 2(b) shall not exceed ten percent (10%) of the Note
Amount. Notwithstanding the foregoing, in the event that securities other than
the Registrable Securities are being included in any Registration Statement
(whether because they were listed on Schedule 7(b) or they are being permitted
to be included by the Purchaser), the number of Registrable Securities included
in the Registration Statement may be reduced only (i) if the Commission
specifically indicates that a portion of the Registrable Securities being
registered must be removed from the Registration Statement in order for the
Commission to declare the Registration Statement effective, or (ii) (a) if
all
other securities included in such Registration Statement have been removed
from
such Registration Statement, and (b) to the extent necessary for the Commission
to declare the registration Statement effective.
3
(c)
Within
three (3) business days of the Effectiveness Date, the Company shall cause
its
counsel to issue a blanket opinion in the form attached hereto as Exhibit A,
to
the transfer agent stating that the shares are subject to an effective
registration statement and can be reissued free of restrictive legend upon
notice of a sale by the Purchaser and confirmation by the Purchaser that it
has
complied with the prospectus delivery requirements, provided that the Company
has not advised the transfer agent orally or in writing that the opinion has
been withdrawn. Copies of the blanket opinion required by this Section 2(c)
shall be delivered to the Purchaser within the time frame set forth
above.
(d)
The
Company shall not be obligated to effect more than an aggregate of two (2)
Demand Registrations under this Section 2 in respect of Registrable
Securities.
3.
Registration
Procedures.
If and
whenever the Company is required by the provisions hereof to effect a Demand
Registration, the Company will, as expeditiously as possible:
4
(a) prepare
and file with the Commission a Registration Statement with respect to such
Registrable Securities, respond as promptly as possible to any comments received
from the Commission, and use its best efforts to cause such Registration
Statement to become and remain effective for the Effectiveness Period with
respect thereto, and promptly provide to the Purchaser copies of all filings
and
Commission letters of comment relating thereto;
(b) prepare
and file with the Commission such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may
be
necessary to comply with the provisions of the Securities Act with respect
to
the disposition of all Registrable Securities covered by such Registration
Statement and to keep such Registration Statement effective until the expiration
of the Effectiveness Period applicable to such Registration
Statement;
(c) furnish
to the Purchaser such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus) as the
Purchaser reasonably may request to facilitate the public sale or disposition
of
the Registrable Securities covered by such Registration Statement;
(d) use
its
best efforts to register or qualify the Purchaser’s Registrable Securities
covered by such Registration Statement under the securities or “blue sky” laws
of such jurisdictions within the United States as the Purchaser may reasonably
request, provided, however, that the Company shall not for any such purpose
be
required to qualify generally to transact business as a foreign corporation
in
any jurisdiction where it is not so qualified or to consent to general service
of process in any such jurisdiction;
(e) list
the
Registrable Securities covered by such Registration Statement with any
securities exchange on which the Common Stock of the Company is then
listed;
(f) immediately
notify the Purchaser at any time when a Prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event of
which
the Company has knowledge as a result of which the Prospectus contained in
such
Registration Statement, as then in effect, includes an untrue statement of
a
material fact or omits to state a material fact required to be stated therein
or
necessary to make the statements therein not misleading in light of the
circumstances then existing; and
(g) make
available for inspection by the Purchaser and any attorney, accountant or other
agent retained by the Purchaser, all publicly available, non-confidential
financial and other records, pertinent corporate documents and properties of
the
Company, and cause the Company’s officers, directors and employees to supply all
publicly available, non-confidential information reasonably requested by the
attorney, accountant or agent of the Purchaser.
4. Registration
Expenses.
All
expenses relating to the Company’s compliance with Sections 2 and 3 hereof,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and independent public accountants
for the Company, fees and expenses (including reasonable counsel fees) incurred
in connection with complying with state securities or “blue sky” laws, fees of
the NASD, transfer taxes, fees of transfer agents and registrars and fees of,
and disbursements incurred by, one counsel for the Holders, are called
“Registration Expenses”. All selling commissions applicable to the sale of
Registrable Securities, including any fees and disbursements of any special
counsel to the Holders beyond those included in Registration Expenses, are
called “Selling Expenses.” The Company shall only be responsible for all
Registration Expenses.
5
5. Indemnification.
(a) In
the
event of a registration of any Registrable Securities under the Securities
Act
pursuant to this Agreement, the Company will indemnify and hold harmless each
Holder, and its officers, directors and each other person, if any, who controls
such Holder within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such Holder, or
such
persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement under which such
Registrable Securities were registered under the Securities Act pursuant to
this
Agreement, any preliminary Prospectus or final Prospectus contained therein,
or
any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and
will reimburse such Holder, and each such person for any reasonable legal or
other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided,
however,
that
the Company will not be liable in any such case if and to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made
in
conformity with information furnished by or on behalf of the Purchaser or any
such person in writing specifically for use in any such document.
(b) In
the
event of a registration of the Registrable Securities under the Securities
Act
pursuant to this Agreement, the Purchaser will indemnify and hold harmless
the
Company, and its officers, directors and each other person, if any, who controls
the Company within the meaning of the Securities Act, against all losses,
claims, damages or liabilities, joint or several, to which the Company or such
persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact which was furnished in writing by the Purchaser to the
Company expressly for use in (and such information is contained in) the
Registration Statement under which such Registrable Securities were registered
under the Securities Act pursuant to this Agreement, any preliminary Prospectus
or final Prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the
statements therein not misleading, and will reimburse the Company and each
such
person for any reasonable legal or other expenses incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action, provided,
however,
that
the Purchaser will be liable in any such case if and only to the extent that
any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made
in
conformity with information furnished in writing to the Company by or on behalf
of the Purchaser specifically for use in any such document. Notwithstanding
the
provisions of this paragraph, the Purchaser shall not be required to indemnify
any person or entity in excess of the amount of the aggregate net proceeds
received by the Purchaser in respect of Registrable Securities in connection
with any such registration under the Securities Act.
6
(c) Promptly
after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified
Party”)
of
notice of the commencement of any action, such Indemnified Party shall, if
a
claim for indemnification in respect thereof is to be made against a party
hereto obligated to indemnify such Indemnified Party (an “Indemnifying
Party”),
notify the Indemnifying Party in writing thereof, but the omission so to notify
the Indemnifying Party shall not relieve it from any liability which it may
have
to such Indemnified Party other than under this Section 5(c) and shall only
relieve it from any liability which it may have to such Indemnified Party under
this Section 5(c) if and to the extent the Indemnifying Party is prejudiced
by
such omission. In case any such action shall be brought against any Indemnified
Party and it shall notify the Indemnifying Party of the commencement thereof,
the Indemnifying Party shall be entitled to participate in and, to the extent
it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such Indemnified Party, and, after notice from the Indemnifying
Party to such Indemnified Party of its election so to assume and undertake
the
defense thereof, the Indemnifying Party shall not be liable to such Indemnified
Party under this Section 5(c) for any legal expenses subsequently incurred
by
such Indemnified Party in connection with the defense thereof; if the
Indemnified Party retains its own counsel, then the Indemnified Party shall
pay
all fees, costs and expenses of such counsel, provided,
however,
that,
if the defendants in any such action include both the Indemnified Party and
the
Indemnifying Party and the Indemnified Party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the Indemnifying Party or if the interests
of the Indemnified Party reasonably may be deemed to conflict with the interests
of the Indemnifying Party, the Indemnified Party shall have the right to select
one separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the reasonable expenses and
fees
of such separate counsel and other expenses related to such participation to
be
reimbursed by the Indemnifying Party as incurred.
(d) In
order
to provide for just and equitable contribution in the event of joint liability
under the Securities Act in any case in which either (i) the Purchaser, or
any
officer, director or controlling person of the Purchaser, makes a claim for
indemnification pursuant to this Section 5 but it is judicially determined
(by
the entry of a final judgment or decree by a court of competent jurisdiction
and
the expiration of time to appeal or the denial of the last right of appeal)
that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of the
Purchaser or such officer, director or controlling person of the Purchaser
in
circumstances for which indemnification is provided under this Section 5; then,
and in each such case, the Company and the Purchaser will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from other) in such proportion so that the Purchaser is
responsible only for the portion represented by the percentage that the public
offering price of its securities offered by the Registration Statement bears
to
the public offering price of all securities offered by such Registration
Statement, provided,
however,
that,
in any such case, (A) the Purchaser will not be required to contribute any
amount in excess of the public offering price of all such securities offered
by
it pursuant to such Registration Statement; and (B) no person or entity guilty
of fraudulent misrepresentation (within the meaning of Section 10(f) of the
Act)
will be entitled to contribution from any person or entity who was not guilty
of
such fraudulent misrepresentation.
7
6. Representations
and Warranties.
(a) The
Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act and, except with respect to certain matters which the Company has disclosed
to the Purchaser on Schedule
4.21
to the
Purchase Agreement, the Company has timely filed all proxy statements, reports,
schedules, forms, statements and other documents required to be filed by it
under the Exchange Act. The Company has filed (i) its Annual Report on Form
10-K[SB] for its fiscal year most recently ended and (ii) its Quarterly Report
on Form 10-Q[SB] for the fiscal quarters most recently ended (collectively,
the
“SEC Reports”). Each SEC Report was, at the time of its filing, in substantial
compliance with the requirements of its respective form and none of the SEC
Reports, nor the financial statements (and the notes thereto) included in the
SEC Reports, as of their respective filing dates, contained any untrue statement
of a material fact or omitted 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. The financial
statements of the Company included in the SEC Reports comply as to form in
all
material respects with applicable accounting requirements and the published
rules and regulations of the Commission or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles (“GAAP”)
applied on a consistent basis during the periods involved (except (i) as may
be
otherwise indicated in such financial statements or the notes thereto or (ii)
in
the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed) and fairly present in all material respects
the
financial condition, the results of operations and the cash flows of the Company
and its subsidiaries, on a consolidated basis, as of, and for, the periods
presented in each such SEC Report.
(b) The
Common Stock is listed or quoted, as applicable, for trading on the NASDAQ
Over
The Counter Bulletin Board and satisfies all requirements for the continuation
of such listing or quotation, as applicable, and the Company shall do all things
necessary for the continuation of such listing or quotation, as applicable.
The
Company has not received any notice that its Common Stock will be delisted
from
or no longer be quoted on, as applicable, the NASDAQ Over The Counter Bulletin
Board (except for prior notices which have been fully remedied) or that the
Common Stock does not meet all requirements for the continuation of such listing
or quotation, as applicable.
(c) Neither
the Company, nor any of its affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security
or
solicited any offers to buy any security under circumstances that would cause
the offering of the Closing Shares pursuant to the Letter Agreement to be
integrated with prior offerings by the Company for purposes of the Securities
Act which would prevent the Company from selling the Common Stock pursuant
to
Rule 506 under the Securities Act, or any applicable exchange-related
stockholder approval provisions, nor will the Company or any of its affiliates
or subsidiaries take any action or steps that would cause the offering of the
Common Stock to be integrated with other offerings (other than such concurrent
offering to the Purchaser).
8
(d) The
Closing Shares are restricted securities under the Securities Act as of the
date
of this Agreement. The Company will not issue any stop transfer order or other
order impeding the sale and delivery of any of the Registrable Securities at
such time as such Registrable Securities are registered for public sale or
an
exemption from registration is available, except as required by federal or
state
securities laws.
(e) Except
for agreements made in the ordinary course of business, there is no agreement
that has not been filed with the Commission as an exhibit to a registration
statement or to a form required to be filed by the Company under the Exchange
Act, the breach of which could reasonably be expected to have a material and
adverse effect on the Company and its subsidiaries, or would prohibit or
otherwise interfere with the ability of the Company to enter into and perform
any of its obligations under this Agreement in any material
respect.
(f) The
Company shall provide written notice to each Holder of (i) the occurrence of
each Discontinuation Event (as defined below) and (ii) the declaration of
effectiveness by the Commission of each Registration Statement required to
be
filed hereunder, in each case within one (1) business day of the date of each
such occurrence and/or declaration.
7. Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by a Holder, of any of their respective
obligations under this Agreement, each 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.
(b) No
Piggyback on Registrations.
Except
as and to the extent set forth on Schedule 7(b) hereto, neither the Company
nor
any of its security holders (other than the Holders in such capacity pursuant
hereto) may include securities of the Company in any Registration Statement
other than the Registrable Securities, and the Company shall not after the
date
hereof enter into any agreement providing any such right for inclusion of shares
in the Registration Statement to any of its security holders. Except as and
to
the extent specified in Schedule
7(b)
hereto,
the Company has not previously entered into any agreement granting any
registration rights with respect to any of its securities to any person or
entity other than the Purchasers that have not been fully
satisfied.
(c) Compliance.
Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to any Registration Statement.
(d) Discontinued
Disposition.
Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of a Discontinuation
Event (as defined below), such Holder will forthwith discontinue disposition
of
such Registrable Securities under the applicable Registration Statement until
such Holder’s receipt of the copies of the supplemented Prospectus and/or
amended Registration Statement or until it is advised in writing (the
“Advice”)
by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, until it 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. The Company may provide appropriate stop
orders to enforce the provisions of this paragraph. For purposes of this
Agreement, a “Discontinuation
Event”
shall
mean (i) 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 (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the
Holders); (ii) any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by
the
Commission of any stop order suspending the effectiveness of such Registration
Statement covering any or all of the Registrable Securities or the initiation
of
any Proceedings for that purpose; (iv) 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/or (v) the occurrence of any event or passage of time that makes
the financial statements included in such Registration Statement ineligible
for
inclusion therein or any statement made in such 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
such
Registration Statement, Prospectus or other documents so that, in the case
of
such Registration Statement or Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
9
(e) Piggy-Back
Registrations.
If at
any time during any Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities required to be covered
during such Effectiveness Period and the Company shall determine to prepare
and
file with the Commission a registration statement relating to an offering for
its own account or the account of others under the Securities Act of any of
its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated
under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or
other employee benefit plans, then the Company shall send to each Holder written
notice of such determination and, if within fifteen (15) days after receipt
of
such notice, any such Holder shall so request in writing, the Company shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered, to the extent the Company
may
do so without violating registration rights of others which exist as of the
date
of this Agreement, subject to customary underwriter cutbacks applicable to
all
holders of registration rights and subject to obtaining any required consent
of
any selling stockholder(s) to such inclusion under such registration
statement.
(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 Holders of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to
the
rights of certain Holders and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of at least a majority of the
Registrable Securities to which such waiver or consent relates; provided,
however,
that
the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding
sentence.
10
(g) Notices.
Any
notice or request hereunder may be given to the Company or the Purchaser at
the
respective addresses set forth below or as may hereafter be specified in a
notice designated as a change of address under this Section 7(g). Any notice
or
request hereunder shall be given by registered or certified mail, return receipt
requested, hand delivery, overnight mail, Federal Express or other national
overnight next day carrier (collectively, “Courier”)
or
telecopy (confirmed by mail). Notices and requests shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any party
to
whom it is addressed, in the case of those by mail or overnight mail, deemed
to
have been given three (3) business days after the date when deposited in the
mail or with the overnight mail carrier, in the case of a Courier, the next
business day following timely delivery of the package with the Courier, and,
in
the case of a telecopy, when confirmed. The address for such notices and
communications shall be as follows:
|
If
to the Company:
|
True
North Energy Corporation
0000
Xxxxxxxx Xxxxxx Xxxxx
Xxxxx
000
Xxx
Xxxxxxxxx, XX 00000
Attention: Chief
Executive Officer
Facsimile:
(000) 000-0000
|
|
|
with
a copy to:
|
Xxxxxx
Xxxxx XxXxxxxx Xxxxxxxxx &
Xxxxx,
LLP
0000
Xxxx Xxxx Xxxxx
Xxxxx
0000
Xxxxxxx,
Xxxxx 00000
Attention:
X. Xxxxxx Yeates
Facsimile:
(000) 000-0000
|
|
|
If
to Purchaser:
|
To
the address set forth under such Purchaser name on the signature
pages
hereto.
|
|
|
If
to any other Person who is then the registered
Holder:
|
To
the address of such Holder as it appears in the stock transfer books
of
the Company
|
or
such
other address as may be designated in writing hereafter in accordance with
this
Section 7(g) by such Person.
(h) Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties and shall inure to the benefit of
each
Holder. The Company may not assign its rights or obligations hereunder without
the prior written consent of each Holder. Each Holder may assign its respective
rights hereunder in the manner and to the persons and entities as permitted
under the Purchase Agreement.
11
(i) Execution
and 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.
(j) Governing
Law, Jurisdiction and Waiver of Jury Trial.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH
STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The Company hereby
consents and agrees that the state or federal courts located in the County
of
New York, State of New York shall have exclusion jurisdiction to hear and
determine any Proceeding between the Company, on the one hand, and the
Purchaser, on the other hand, pertaining to this Agreement or to any matter
arising out of or related to this Agreement; provided,
that
the Purchaser and the Company acknowledge that any appeals from those courts
may
have to be heard by a court located outside of the County of New York, State
of
New York, and further provided,
that
nothing in this Agreement shall be deemed or operate to preclude the Purchaser
from bringing a Proceeding in any other jurisdiction to collect the obligations,
to realize on the Collateral or any other security for the obligations, or
to
enforce a judgment or other court order in favor of the Purchaser. The Company
expressly submits and consents in advance to such jurisdiction in any Proceeding
commenced in any such court, and the Company hereby waives any objection which
it may have based upon lack of personal jurisdiction, improper venue or
forum
non conveniens.
The
Company hereby waives personal service of the summons, complaint and other
process issued in any such Proceeding and agrees that service of such summons,
complaint and other process may be made by registered or certified mail
addressed to the Company at the address set forth in Section 7(g) and that
service so made shall be deemed completed upon the earlier of the Company’s
actual receipt thereof or three (3) days after deposit in the U.S. mails, proper
postage prepaid. The parties hereto desire that their disputes be resolved
by a
judge applying such applicable laws. Therefore, to achieve the best combination
of the benefits of the judicial system and of arbitration, the parties hereto
waive all rights to trial by jury in any Proceeding brought to resolve any
dispute, whether arising in contract, tort, or otherwise between the Purchaser
and/or the Company arising out of, connected with, related or incidental to
the
relationship established between them in connection with this Agreement. If
either party hereto shall commence a Proceeding to enforce any provisions of
this Agreement, the Purchase Agreement or any other Related Agreement, then
the
prevailing party in such Proceeding shall be reimbursed by the other party
for
its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.
(k) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
12
(l) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable, 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.
(m) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
[Balance
of page intentionally left blank; signature page follows]
13
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
|
TRUE
NORTH ENERGY CORPORATION
|
||
|
By:
|
/s/
Xxxx X. Folnovic
|
|
|
Name:
Xxxx X. Folnovic
|
||
|
Title:
President and Chief Executive Officer
|
||
|
VALENS
U.S. SPV I, LLC
|
||
|
By:
|
Valens
Capital Management, LLC, as
investment
manager
|
|
|
By:
|
/s/
Xxxxxxx Xxxxx
|
|
|
Name:
Xxxxxxx Xxxxx
|
||
|
Title:
Authorized Signatory
|
||
|
Address
for Notices:
|
||
|
c/o
Valens Capital Management, LLC
|
||
|
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
|
||
|
Xxx
Xxxx, XX 00000
|
||
|
Attention:
Portfolio Services
|
||
|
Facsimile:
(000) 000-0000
|
||
|
VALENS
OFFSHORE SPV II, CORP.
|
||
|
By:
|
Valens
Capital Management, LLC, as
investment
manager
|
|
|
By:
|
/s/
Xxxxxxx Xxxxx
|
|
|
Name:
Xxxxxxx Xxxxx
|
||
|
Title:
Authorized Signatory
|
||
|
Address
for Notices:
|
||
|
c/o
Valens Capital Management, LLC
|
||
|
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
|
||
|
Xxx
Xxxx, XX 00000
|
||
|
Attention:
Portfolio Services
|
||
|
Facsimile:
(000) 000-0000
|
||
SIGNATURE
PAGE TO
TRUE
NORTH REGISTRATION
RIGHTS
AGREEMENT
EXHIBIT
A
____________,
200___
Empire
Stock Transfer Inc.
0000
Xx.
Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
|
Re:
|
True
North Energy Corporation
Registration
Statement on Form [S-3]
|
Ladies
and Gentlemen:
As
counsel to True North Energy Corporation, a Nevada corporation (the
“Company”),
we
have been requested to render our opinion to you in connection with the resale
by the individuals or entitles listed on Schedule
A
attached
hereto (the “Selling
Stockholders”),
of an
aggregate of __________ shares (the “Shares”)
of the
Company’s Common Stock.
A
Registration Statement on Form [S-3]
under
the Securities Act of 1933, as amended (the “Act”),
with
respect to the resale of the Shares was declared effective by the Securities
and
Exchange Commission on [date].
Enclosed is the Prospectus dated [date].
We
understand that the Shares are to be offered and sold in the manner described
in
the Prospectus.
Based
upon the foregoing, upon request by the Selling Stockholders at any time while
the registration statement remains effective, it is our opinion that the Shares
have been registered for resale under the Act and new certificates evidencing
the Shares upon their transfer or re-registration by the Selling Stockholders
may be issued without restrictive legend. We will advise you if the registration
statement is not available or effective at any point in the future.
Very
truly yours,
[Company
counsel]
Schedule
A to Exhibit A
|
Selling
Stockholder
|
R/N/O
|
Shares
Being
Offered
|
||
SCHEDULE
7(b)
1.
Pursuant to that certain promissory note of the Company in the principal amount
of $125,000 made payable to Uphill Limited Liability Company, Xxxxxx X. Xxxxxxx,
Trustee (“Uphill”)
dated
August 20, 2007, Uphill received 50,000 shares of the Company’s restricted
Common Stock with respect to which Uphill has piggyback registration
rights.
2.
Pursuant to that certain promissory note of the Company in the principal amount
of $125,000 made payable to X. Xxxxxxx, Inc. (“Xxxxxxx”)
dated
August 20, 2007, Xxxxxxx received 50,000 shares of the Company’s restricted
Common Stock with respect to which Xxxxxxx has piggyback registration
rights.
3.
If the
Powder River Consummation takes place, the Sellers in that transaction will
have
piggyback registration rights with respect to the shares of Common Stock issued
to them in that transaction.
4.
Prime
Natural Resources, Inc. will be granted piggyback registration rights with
respect to the shares of the Company’s Common Stock issued to it in connection
with the purchase of assets pursuant to the Purchase and Sale Agreement by
and
between Prime Natural Resources, Inc. and ICF.
5.
Following closing of the transactions contemplated by the Purchase Agreement,
Energy Capital Solutions, L.P. (“ECS”) will be granted a warrant for the
purchase of 300,000 shares of the common stock of TNEC. ECS will have piggyback
registration rights in regard to the shares of common stock purchased upon
exercise of the warrant.
6.
The
ECS Agreement described on Schedule 4.6, Item 3 of the Disclosure Schedules
to
the Purchase Agreement, provides for issuance of warrants of common stock of
TNEC to ECS upon the successful completion of a Private Placement (as defined
therein). Such warrants will contain provisions which will require, under
certain circumstances, TNEC to grant registration rights in the event a public
offering of TNEC’s common stock is filed with the SEC, subject to customary
restrictions and conditions.
7.
Pursuant to that Consulting Agreement between Prime Natural Resources, Inc.
("Prime") and the Company, dated as of December 21, 2007, Prime has received,
and will receive, an issuance of $45,000 in common stock of the Company for
each
calendar year quarterly period (i.e., the three months ending December 31,
2007,
March 31, 2008 and June 30, 2008). Prime has "piggyback" rights pursuant to
which Prime may request that the Company include the stock on any registration
statement filed with the Securities and Exchange Commission to register other
common stock of the Company (other than a registration on Form S-4 or S-8,
or
any successor or other forms promulgated for similar purposes).
