EXHIBIT 10.12
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into
as of the 30th day of March, 2005 by and between (i) Bluegate Corporation, a
Nevada corporation (the "Company"), and (ii) CCII Joint Venture No. 1
("Stockholder").
RECITALS:
WHEREAS, Stockholder may acquire certain shares of the Company's Common
Stock (the "Common Stock") pursuant to the conversion or exercise of derivative
securities, particularly a convertible debenture and a warrant to purchase
Common Stock (for purposes hereof, all shares of the Company's Common Stock that
Stockholder may now or hereafter own, and all shares of the Company's Common
Stock underlying any derivative securities that Stockholder may now or hereafter
own, are collectively referred to hereinafter as the "Registrable Shares"); and
WHEREAS, the Company agreed to grant certain registration rights to
Stockholder with respect to the Registrable Shares in connection with their
acquisition by Stockholder;
AGREEMENTS:
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged by each of
the Company and Stockholder, each of the Company and Stockholder hereby agrees
as follows:
(a) If at any time after the date hereof the Company proposes to
register any Common Stock under the Securities Act of 1933, as amended (the
"Act"), for sale to the public for cash (and not for issuance pursuant to an
employee benefit plan or in connection with an acquisition of another company or
business or in connection with any other registration that does not allow the
registration of secondary sales), the Company shall give written notice to
Stockholder of its intention so to do at least 20 days prior to filing the
related registration statement (the "Registration Statement"). Upon the written
request of Stockholder, given within 10 days after receipt of any such notice,
to register any Registrable Shares, the Company shall use its best efforts to
cause all Registrable Shares, as to which registration shall have been so
requested, to be included in the securities to be covered by the Registration
Statement, all to the extent requisite to permit the sale or other disposition
by Stockholder of the Registrable Shares requested to be so registered;
provided, however, that:
(i) If, at any time after giving such written notice of its
intention to register any securities and prior to the effective date
of the Registration Statement, the Company shall determine for any
reason not to register such securities, the Company may, at its
election, give written notice of such determination to Stockholder,
and thereupon the Company shall be relieved of its obligation to
register any Registrable Shares in connection with such registration;
(ii) If such registration involves an underwritten offering,
Stockholder must
sell its Registrable Shares to the underwriters selected by the
Company on the same terms and conditions as apply to the Company
(except as otherwise agreed to by the Company in writing); and
(iii) The Company shall be obligated to keep the Registration
Statement effective only for nine months after its initial effective
date.
The number of Registrable Shares to be included in an underwritten offering may
be reduced, pro rata among all the Company's stockholders selling shares in the
offering, in a ratio equal to the respective amounts of shares proposed to be
sold by such stockholders, if and to the extent that the managing underwriter
shall advise Stockholder and the Company by letter of its belief that the number
of securities requested to be registered exceeds the number that can be sold in
(or during the term of) such offering without adversely affecting the marketing
of the securities to be sold by the Company.
(b) In connection with the registration provided for hereunder,
Stockholder shall use reasonable efforts to cooperate with the Company and shall
furnish to the Company in writing such information with respect to it and its
proposed distribution as shall be reasonably necessary in order to assure
compliance with federal and applicable state securities laws.
(c) The Company shall pay all expenses incurred by the Company in
complying with its registration obligations pursuant to this Agreement,
including, without limitation, all registration, qualification, and filing fees,
blue sky fees and expenses, printing expenses, fees and disbursements of counsel
and independent public accountants for the Company, all expenses of the
underwriter customarily paid by issuers or sellers of securities (including fees
of the National Association of Securities Dealers, Inc.), transfer taxes, escrow
fees, fees of transfer agents and registrars, and costs of insurance.
Stockholder shall pay all underwriting discounts and selling commissions
applicable to the sale of the Registrable Shares being registered.
(d) (i) The Company shall protect, indemnify and hold Stockholder,
and its officers, directors, stockholders, attorneys, accountants, employees,
affiliates, successors and assigns, harmless from any and all demands, claims,
actions, causes of actions, lawsuits, proceedings, investigations, judgments,
losses, damages, injuries, liabilities, obligations, expenses and costs
(including costs of litigation and attorneys' fees), arising out of or based
upon (aa) any untrue statement or alleged untrue statement of any material fact
contained in or incorporated by reference into the Registration Statement, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, (bb) 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, or (cc) any material violation by the Company of any
rule or regulation promulgated under Act applicable to the Company and relating
to action or inaction by the Company in connection with any such registration;
provided, however, that the Company shall not be liable in the case of (aa) and
(bb) above if and to the extent that the event otherwise giving rise to
indemnification arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in conformity with
information furnished by a person otherwise entitled to indemnification in
writing specifically for use in the Registration Statement or
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prospectus or information contained in a writing that has been expressly
approved or deemed approved by a person otherwise entitled to indemnification.
(ii) Stockholder shall protect, indemnify and hold the Company and
its officers, directors, stockholders, attorneys, accountants, employees,
affiliates, successors and assigns, harmless from any and all demands, claims,
actions, causes of actions, lawsuits, proceedings, investigations, judgments,
losses, damages, injuries, liabilities, obligations, expenses and costs
(including costs of litigation and attorneys' fees), arising out of or based
upon (aa) any untrue statement or alleged untrue statement of any material fact
contained in or incorporated by reference into the Registration Statement, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, (bb) 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, or (cc) any material violation by Stockholder of any
rule or regulation promulgated under the Act applicable to Stockholder and
relating to action or inaction by Stockholder in connection with any such
registration; provided, however, that Stockholder shall be liable in the case of
(aa) and (bb) above only if and to the extent that the event giving rise to
indemnification arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in conformity with
information furnished by Stockholder in writing specifically for use in the
Registration Statement or prospectus or information contained in a writing that
has been expressly approved or deemed approved by Stockholder.
(iii) Promptly after receipt by an indemnified party under this
Section (d) of notice of the threat or commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party hereunder, notify each such indemnifying party in writing
thereof, but the omission so to notify an indemnifying party shall not relieve
it from any liability which it may have to any indemnified party to the extent
that the indemnifying party is not prejudice as a result thereof. In case any
such action shall be brought against any indemnified party and it shall notify
an 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 reasonably 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 (d) for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so elected; provided,
however, that, if the defendants in any such action include both an indemnified
party and an indemnifying party and the related 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 believed to conflict
with the interests of the indemnifying party, the indemnified party shall have
the right to select separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred. No indemnifying party
shall be subject to any liability for any settlement made without consent which
shall not be unreasonably withheld. No indemnifying party shall consent to the
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the
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giving by the claimant or plaintiff to such indemnified party of a release from
all liability with respect to such claim or litigation.
(e) Any notice or request herein required or permitted to be given to
any party hereunder shall be given in writing and shall be personally delivered
or sent to such party by prepaid mail at the address set forth below the
signature of such party hereto or at such other address as such party may
designate by written communication to the other party to this Agreement. Each
notice given in accordance with this paragraph shall be deemed to have been
given, if personally delivered, on the date personally delivered, or, if mailed,
on the third day following the day on which it is deposited in the United States
mail, certified or registered mail, return receipt requested, with postage
prepaid. This Agreement embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersede all
prior agreements and understandings, whether written or oral, relating to the
subject matter hereof. This Agreement may not be amended, supplemented, waived,
or terminated except by written instrument executed by the Company and
Stockholder. No waiver of any provision of this Agreement shall constitute a
waiver of any other provision of this Agreement, nor shall such waiver
constitute a waiver of any subsequent breach of such provision. This Agreement
shall be binding upon and shall inure to the benefit of each party hereto and
his or its respective successors, heirs, assigns, and legal representatives.
Stockholder may assign to a transferee or assignee the rights granted to
Stockholder under this Agreement in connection with any transfer or assignment
of Registrable Shares by the Stockholder or its assignees. The obligations
imposed on the Company by this Agreement shall be binding upon any corporation
into which the Company is merged or to whom substantially all of the Company's
assets are sold, and the Company may not merge or sell its assets in this regard
without previously having the surviving corporation or purchaser (as the case
may be) agree to assume the Company's obligations hereunder.
IN WITNESS WHEREOF, the undersigned have set their hands hereunto as of the
first date written above.
"COMPANY" "STOCKHOLDER"
BLUEGATE CORPORATION CCII JOINT VENTURE NO. 1
By: /s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxx Xxxxx
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Xxxxxxx Xxxxxxxxx, Xxxx Xxxxx
Chief Executive Officer
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Address: 000 X. Xxxx Xxx Xxxx., Address:
Suite 630 -----------------------------
Xxxxxxx, Xxxxx 00000
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