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EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of the __ day of March, 2001, by and among eResource Capital
Group, Inc., a Delaware corporation ("ERCG") and certain stockholders of LST,
Inc., a Delaware corporation d/b/a LifeStyle Technologies ("LST") listed on
Schedule 1 hereto (each such person a "SELLER" and, collectively, the
"SELLERS").
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, and intending to be legally bound, the parties hereto hereby
agree as follows:
1. RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; REGISTRATION RIGHTS
1.1 CERTAIN DEFINITIONS.
(a) "Holder" shall mean any Seller who holds Registrable
Securities and any holder of Registrable Securities to whom the rights conferred
by this Agreement have been transferred in compliance with Section 1.2 hereof.
(b) "Other Stockholders" shall mean persons who, by
virtue of agreements with eRCG other than this Agreement, whether eRCG executed
such agreements prior to the date hereof or subsequent to such date, are
entitled to include their securities in certain registrations hereunder.
(c) "Registrable Securities" shall mean shares of eRCG's
common stock, par value $.04 per share ("ERCG COMMON STOCK") issued to the
Sellers pursuant to those certain Stock Purchase Agreements that each Seller
entered into with eRCG of even date herewith (collectively, the "PURCHASE
AGREEMENTS"); provided that a Registrable Security ceases to be a Registrable
Security when (i) it is registered under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), (ii) it is sold or transferred in accordance with the
requirements of Rule 144 (or similar provisions then in effect), (iii) it is
eligible to be sold or transferred under Rule 144 without holding period or
volume limitations, or (iv) it is sold in a private transaction in which the
transferor's rights under this Agreement are not assigned.
(d) The terms "register," "registered" and "registration"
shall refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and applicable rules and
regulations thereunder and the declaration or ordering of the effectiveness of
such registration statement.
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(e) "Registration Expenses" shall mean all reasonable
expenses incurred in effecting any registration pursuant to this Agreement,
including, without limitation, all federal and state registration,
qualification, and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for eRCG, blue sky fees and expenses, and expenses of
any regular or special audits incident to or required by any such registration,
but shall not include (i) Selling Expenses, (ii) the compensation of regular
employees of eRCG, which shall be paid in any event by eRCG, (iii) disbursements
of counsel for any Holder, (iv) blue sky fees and expenses incurred in
connection with the registration or qualification of any Registrable Securities
in any state, province or other jurisdiction in a registration pursuant to
Section 1.3 hereof only to the extent that eRCG shall otherwise be making no
offers or sales in such state, province or other jurisdiction in connection with
such registration and (v) any expenses of a registration for which the request
has been withdrawn by the Holder(s) unless the withdrawal is based upon material
adverse information concerning eRCG of which the Holder(s) were not aware at the
time of the request.
(f) "Restricted Securities" shall mean any Registrable
Securities required to bear the legend set forth in Section 1.2(c) hereof.
(g) "Rule 144" shall mean Rule 144 as promulgated by the
SEC under the Securities Act, as such Rule may be amended from time to time, or
any similar successor rule that may be promulgated by the SEC.
(h) "SEC" shall mean the Securities and Exchange
Commission.
(i) "Selling Expenses" shall mean all underwriting
discounts, selling commissions, brokers' fees and stock transfer taxes
applicable to the sale of Registrable Securities.
1.2 RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees not to make any disposition of all
or any portion of the Registrable Securities unless and until (i) there is then
in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such
registration statement, or (ii) (A) such Holder shall have notified eRCG in
writing of the proposed disposition and shall have furnished eRCG with a
detailed statement of the circumstances surrounding the proposed disposition and
the proposed transferee agrees in writing to be subject to all restrictions set
forth in this Agreement and (B) if reasonably requested by eRCG, such Holder
shall have furnished eRCG with an opinion of counsel, reasonably satisfactory to
eRCG, that such disposition will not require registration of such shares under
the Securities Act.
(b) Notwithstanding the provisions of subparagraphs (i)
and (ii) of paragraph (a) above, no such registration statement or opinion of
counsel shall be necessary for a transfer by a Holder which is (A) a partnership
to its partners in accordance with their partnership interests, (B) a limited
liability company to its members in accordance with their member interests, or
(C) to the Holder's family member or a trust for the benefit of an individual
Holder
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or one or more of its family members; provided the transferee will be subject to
the terms of this Section 1.2 to the same extent as if it were an original
Holder hereunder.
(c) Each certificate representing Registrable Securities
shall (unless otherwise permitted by the provisions of this Agreement) be
stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state securities
laws):
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
SUCH ACT OR UNLESS eRCG HAS RECEIVED AN OPINION OF COUNSEL OR OTHER
EVIDENCE, SATISFACTORY TO eRCG AND ITS COUNSEL, THAT SUCH REGISTRATION
IS NOT REQUIRED.
(d) eRCG shall be obligated to promptly reissue
unlegended certificates at the request of any Holder thereof if the Holder shall
have obtained an opinion of counsel (which counsel may be counsel to eRCG)
reasonably acceptable to eRCG to the effect that the securities proposed to be
disposed of may lawfully be so disposed of in compliance with the Securities Act
without registration, qualification or legend.
(e) Any legend endorsed on an instrument pursuant to
applicable state securities laws and the stop-transfer instructions with respect
to such securities shall be removed upon receipt by eRCG of an order of the
appropriate blue sky authority authorizing such removal or if the Holder shall
request such removal and shall have obtained and delivered to eRCG an opinion of
counsel reasonably acceptable to eRCG to the effect that such legend and/or
stop-transfer instructions are no longer required pursuant to applicable state
securities laws.
1.3 ERCG REGISTRATION.
(a) Registration Statement. eRCG hereby agrees that
within one-hundred and eighty days (180) from the closing of the transactions
contemplated in the Purchase Agreements, it shall cause to be filed with the SEC
a registration statement on Form S-3 (except if eRCG 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) and prior to such filing eRCG
will:
(i) promptly give to each Holder written notice
thereof, which notice briefly describes the Holders' rights under this Section
1.3 (including notice deadlines); and
(ii) use its commercially reasonable efforts to
include in such registration (and any related filing or qualification under
applicable blue sky laws; provided, however, eRCG shall not be obligated to
effect any registration statement in any jurisdiction in which it would be
required to qualify to do business or execute a general consent to service of
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process), except as set forth in Section 1.3(b) below, and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made by any Holder and received by eRCG within ten (10) days after
the written notice from eRCG described in clause (i) above is mailed or
delivered by eRCG, provided that such Holders shall have requested for inclusion
in such registration at least twenty-five percent (25%) of the aggregate number
of the Registrable Securities which have been issued to the Holders prior to the
date of such written request. Such written request may specify all or a part of
a Holder's Registrable Securities.
(b) Underwriting. If the registration of which eRCG gives
notice is for a registered public offering involving an underwriting, eRCG shall
so advise the Holders as a part of the written notice given pursuant to Section
1.3(a)(i). In such event, the right of any Holder to registration pursuant to
this Section 1.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with eRCG and the
other holders of securities of eRCG with registration rights to participate
therein distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by eRCG.
Notwithstanding any other provision of this Section 1.3, if
the representative of the underwriters advises eRCG in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
representative may (subject to the limitations set forth below) exclude all
Registrable Securities from, or limit the number of Registrable Securities to be
included in, the registration and underwriting. eRCG shall so advise all Holders
of securities requesting registration, and the number of shares of securities
that are entitled to be included in the registration and underwriting shall be
allocated first to eRCG for securities being sold for its own account and
thereafter the Registrable Securities so included will be apportioned pro rata
among the selling Holders according to the total number of Registrable
Securities entitled to be included therein (without regard to the number of
Registrable Securities actually requested to be included therein) owned by each
selling Holder or in such other proportions as shall mutually be agreed to by
such selling Holders. For purposes of the preceding sentence, for any selling
Holder which is Holder of Registrable Securities and which is a partnership or
corporation, the partners, retired partners and shareholders of such Holder, or
the estates and family members of such partners and retired partners and any
trusts for the benefit of any of the foregoing persons shall be deemed to be a
single "selling Holder" and any pro rata reduction with respect to such "selling
Holder" shall be based upon the aggregate amount of share carrying registration
rights owned by all entities and individuals included in such "selling Holder,"
as defined in this sentence. If any person does not agree to the terms of any
such underwriting, it shall be excluded therefrom by written notice from eRCG or
the underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(c) Rights of Other Stockholders. Each Holder
acknowledges that eRCG has granted or may grant similar or superior registration
rights to Other Stockholders and eRCG may or may not file with the SEC one or
more registration statements covering the resale of securities of eRCG held by
such Other Stockholders (including registration statements filed in
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connection with private placements commenced by eRCG prior to the date hereof)
and eRCG may, but is not obligated to, offer to include in such registration
statement the Registrable Securities held by the Holders, provided that eRCG
does offer to include the Registrable Securities of the Holders in a
registration statement filed with the SEC within the one hundred and eighty day
(180) period discussed in Section 1.3(a) above.
1.4 EXPENSES OF REGISTRATION. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
Section 1.3 hereof shall be borne by eRCG. All Selling Expenses relating to
securities so registered shall be borne by the Holders of such securities pro
rata on the basis of the number of shares of securities so registered on their
behalf.
1.5 REGISTRATION PROCEDURES. In the case of each registration
affected by eRCG pursuant to Section 1.3 hereof, eRCG will keep each Holder
advised in writing as to the initiation of each registration. At its expense,
eRCG will use its commercially reasonable efforts to:
(a) prepare and file with the SEC such amendments and
supplements to the registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(b) furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as a Holder from time to time may reasonably request;
(c) notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included 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 or incomplete in the light of the
circumstances then existing, and, at the request of any Holder, prepare and
furnish to such Holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or incomplete in the light of the circumstances then
existing; provided, however, eRCG shall not be obligated to prepare and furnish
any such prospectus supplements or amendments relating to any material nonpublic
information at any such time as the Board of Directors of eRCG has determined
that, for good business reasons, the disclosure of such material nonpublic
information at that time is contrary to the best interests of eRCG in the
circumstances and is not otherwise required under applicable law (including
applicable securities laws); and provided, further, such obligation shall
continue until the earlier of (i) the sale of all Registrable Securities
registered pursuant to the registration statement of which the prospectus forms
a part or (ii) withdrawal of such registration statement.
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(d) cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange and/or included in
any national quotation system on which similar securities issued by eRCG are
then listed or included;
(e) provide a transfer agent and registrar for all
Registrable Securities registered pursuant to such registration statement and a
CUSIP number for all such Registrable Securities, in each case not later than
the effective date of such registration; and
(f) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering a period of at least twelve (12) months, but not more than
eighteen (18) months, beginning with the first month after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act.
1.6 INDEMNIFICATION.
(a) eRCG will indemnify each Holder and its officers,
directors, partners, legal counsel, accountants and each person controlling such
Holder within the meaning of Section 15 of the Securities Act, with respect to
which registration, qualification, or compliance has been effected pursuant to
this Article 1, and each underwriter, if any, and each person who controls
within the meaning of Section 15 of the Securities Act any underwriter, against
all expenses, claims, losses, damages, and liabilities (or actions, proceedings,
or settlements in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular, or other document (including any related
registration statement) incident to any such registration, qualification, or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any material violation by eRCG of the Securities Act
or any rule or regulation thereunder applicable to eRCG or relating to action or
inaction required of eRCG in connection with any such registration,
qualification, or compliance, and will reimburse each such Holder and its
officers, directors, partners, legal counsel, accountants and each person
controlling such Holder, each such underwriter, and each person who controls any
such underwriter, for legal and other expenses reasonably incurred in connection
with investigating and defending or settling any such claim, loss, damage,
liability, or action; provided that eRCG will not be liable in any such case to
the extent that any such claim, loss, damage, liability, or expense arises out
of or is based on any untrue statement or omission based upon written
information furnished to eRCG by such Holder (or its officers, directors,
partners, legal counsel, accountants or a person controlling such Holder) or
underwriter for use therein. It is agreed that the indemnity agreement contained
in this Section 1.6(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the prior written consent of eRCG (which consent shall not be unreasonably
withheld). The indemnity agreement contained in this paragraph shall not apply
to the extent that any loss, claim, damage, liability or action results from the
fact that a current copy of the registration statement or prospectus was not
sent or given to a proposed transferee asserting any such expenses, loss, claim,
damage or liability at or prior to the written
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confirmation of the Registrable Securities if it is determined that eRCG
provided such registration statement or prospectus to such selling Holder in a
timely manner prior to such sale and it was the responsibility of the selling
Holder under the Securities Act to provide the proposed transferee with a
current copy of the registration statement or prospectus and such registration
statement or prospectus would have cured the defect giving rise to such expense,
loss, claim, damage or liability.
(b) Each Holder will, if Registrable Securities held by
it are included in the securities as to which such registration, qualification,
or compliance is being effected, indemnify eRCG, each of its directors,
officers, partners, legal counsel, accountants and each underwriter, if any, of
eRCG's securities covered by such a registration statement, each person who
controls eRCG or such underwriter within the meaning of Section 15 of the
Securities Act, each other such Holder and Other Stockholder, and each of their
officers, directors, and partners, and each person controlling such Holder or
Other Stockholder, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular, or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
eRCG and such Holders, Other Stockholders, directors, officers, partners, legal
counsel, and accountants, persons, underwriters, or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability, or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to eRCG by such Holder for use
therein; provided, however, (i) that the obligations of such Holder hereunder
shall not apply to amounts paid in settlement of any such claims, losses,
damages, or liabilities (or actions in respect thereof) if such settlement is
effected without the consent of such Holder (which consent shall not be
unreasonably withheld).
(c) Each party entitled to indemnification under this
Section 1.6 (the "INDEMNIFIED PARTY") shall give notice to the party required to
provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of such
claim or any litigation resulting therefrom, provided that one (1) counsel for
the Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Section
1.6, to the extent such failure is not prejudicial. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff of a release to such Indemnified Party from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably
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request in writing and as shall be reasonably required in connection with
defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section
1.6 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the conduct, statements or omissions that resulted in such
loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in the underwriting
agreement entered into by the Indemnifying Party and the Indemnified Party in
connection with the underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control.
1.7 INFORMATION BY HOLDER. Each Holder of Registrable Securities
shall furnish to eRCG such information regarding such Holder and the
distribution proposed by such Holder as eRCG may reasonably request in writing
and the furnishing of such information shall be a condition precedent to the
obligations of eRCG to take action in connection with any registration,
qualification, or compliance referred to in this Section 1. eRCG shall have no
obligation with respect to a registration pursuant to Section 1, if, as a result
of the preceding sentence, the number of shares of Registrable Securities to be
included in the registration does not equal or exceed the percent of Registrable
Securities required to trigger eRCG's obligation to initiate registration
pursuant to Section 1.3(a)(ii) hereof.
1.8 RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the SEC that may permit the sale of
the Restricted Securities to the public without registration, eRCG agrees to use
its commercially reasonable efforts to:
(a) make and keep adequate public information regarding
eRCG available as those terms are understood and defined in Rule 144 after the
effective date of a registration statement;
(b) file with the SEC in a timely manner all material
reports and other documents required of eRCG under the Securities Act; and
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(c) so long as a Holder owns any Restricted Securities,
furnish to the Holder forthwith upon written request a written statement by eRCG
as to its compliance with the reporting requirements of Rule 144 (at any time
after ninety (90) days after the effective date of a registration statement
filed by eRCG) and of the Securities Act, a copy of the most recent annual or
quarterly report of eRCG, and such other reports and documents so filed as a
Holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing a Holder to sell any such securities without registration.
1.9 DELAY OF REGISTRATION; CERTAIN NOTICES.
(a) Delay of Registration. No Holder shall have any right
to take any action to restrain, enjoin or otherwise delay any registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of any provision of this Agreement.
(b) Notice to Discontinue. Each Holder agrees by
acquisition of such securities that, upon receipt of any notice from eRCG of any
event of the kind described in Section 1.5(c), the Holder will discontinue
disposition of Registrable Securities until the Holder receives copies of the
supplemented or amended prospectus contemplated by Section 1.5(c). In addition,
if eRCG requests, the Holder will deliver to eRCG all copies of the prospectus
covering the Registrable Securities current at the time of receipt of such
notice.
(c) Notice by Holders. Whenever the Holders have
requested that any Registrable Securities be registered pursuant to this
Agreement, those Holders shall notify eRCG, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event, which as to any Holder is (i) to its respective
knowledge, (ii) solely within its respective knowledge and (iii) solely as to
matters concerning that Holder, as a result of which the prospectus included in
the registration statement, then in effect, contains an untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein, in light of the circumstances then existing, not misleading.
1.10 "MARKET STAND-OFF" AGREEMENT.
(a) Each Holder hereby agrees that, during the period of
duration (up to, but not exceeding, one hundred eighty (180) days) specified by
eRCG and an underwriter of eRCG Common Stock or other securities of eRCG,
following the effective date of a registration statement of eRCG filed under the
Securities Act, it shall not, to the extent requested by eRCG and such
underwriter, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any securities of eRCG held by it at any time during such period except
eRCG Common Stock included in such registration.
(b) To enforce the foregoing covenant, eRCG may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder until the end of such period, and each Holder agrees that, if so
requested, such Holder will execute an agreement in
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the form provided by the underwriter containing terms which are essentially
consistent with the provisions of this Section 1.10.
1.11 TERMINATION OF REGISTRATION RIGHTS. The registration rights
granted under this Section 1 shall terminate and be of no further force and
effect if all Registrable Securities held by and issuable to such Holder (and
its affiliates, partners, former partners, members and former members) may be
sold under Rule 144 during any ninety (90) day period.
2. REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF ERCG. eRCG represents and
warrants to the Sellers as follows:
(a) The execution, delivery and performance of this
Agreement by eRCG have been duly authorized by all requisite corporate action
and will not violate any provision of law, any order of any court or other
agency of government, the Articles of Incorporation or Bylaws of eRCG, or any
provision of any material indenture, agreement or other instrument to which it
or any of its properties or assets is bound, or conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any such material indenture, agreement or other instrument, or result in
the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of eRCG, except as would not
reasonably be expected to result in a material adverse effect on eRCG.
(b) This Agreement has been duly executed and delivered
by eRCG and constitutes the legal, valid and binding obligation of eRCG,
enforceable against eRCG in accordance with its terms, subject to applicable
bankruptcy, insolvency and other similar laws affecting the enforceability of
creditors' rights generally, general equitable principles, the discretion of
courts in granting equitable remedies and public policy considerations.
2.2 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each Seller
(severally and not jointly) represents and warrants to eRCG as follows:
(a) The execution, delivery and performance of this
Agreement by such Seller has been duly authorized by all requisite corporate
action (if applicable) and will not violate any provision of law, any order of
any court or any agency or government, the Articles of Incorporation or Bylaws
of Seller (if applicable), or any provision of any material indenture or
agreement or other instrument to which it or any of its respective properties or
assets is bound, or conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such material indenture,
agreement or other instrument, or result in the creation or imposition of any
lien, charge, or encumbrance of any nature whatsoever upon any of the properties
or assets of the Seller except as would not reasonably be expected to result in
a material adverse effect on such Seller.
(b) This Agreement has been duly executed and delivered
by such Seller and constitutes the legal, valid and binding obligation of such
Seller, enforceable against such Seller in accordance with its terms, subject to
applicable bankruptcy, insolvency and other similar
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laws affecting the enforceability of creditors' rights generally, general
equitable principles, the discretion of courts in granting equitable remedies
and public policy considerations.
3. MISCELLANEOUS
3.1 INFORMATION CONFIDENTIAL. Each Holder acknowledges that the
information received by it pursuant hereto may be confidential and for its use
only, and it will not use such confidential information in violation of the
Securities Act or reproduce, disclose or disseminate such information to any
other person (other than its employees or agents having a need to know the
contents of such information, and its attorneys, each of which are informed of
the confidential nature of such information), except in connection with the
exercise of rights under this Agreement, unless eRCG has made such information
available to the public generally or such Holder is required to disclose such
information by a governmental body and gives prior notice to eRCG.
3.2 BINDING EFFECT. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
3.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the
full and entire understanding and agreement between the parties with regard to
the subject hereof. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated, except by a written instrument signed by eRCG
and the Holders of at least fifty-one percent (51%) of the Registrable
Securities and any such amendment, waiver, discharge or termination shall be
binding on all the Holders, but in no event shall the obligation of any Holder
hereunder be materially increased, except upon the written consent of such
Holder.
3.4 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by United States
first-class mail, postage prepaid, delivered personally by hand, confirmed
facsimile transmission or nationally recognized overnight courier addressed (a)
if to a Holder, as indicated in the stock records of eRCG or at such other
address as such Holder shall have furnished to eRCG by like notice, or (b) if to
eRCG, at 0000 Xxxxxxxxx Xxxx, XX, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Attention:
Xxxxxxx X. Xxxxxxx or at such other address as eRCG shall have furnished to each
Holder by like notice with a copy to Xxxxxx & Xxxxxx LLP, 2700 International
Tower, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, Attn: Xxxxxx X. Xxxxxx,
Esq. All such notices and other written communications shall be effective on the
date of mailing or delivery.
3.5 DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to eRCG or to any Holder under this Agreement
shall impair any such right, power or remedy nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
therefore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character of any breach or default under this Agreement or any
waiver of any provisions or conditions of this Agreement must be made in writing
and shall be effective only to the extent
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specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise, shall be cumulative and not alternative.
3.6 RIGHTS; SEVERABILITY. Unless otherwise expressly provided
herein, a Holder's rights hereunder are several rights, not rights jointly held
with any of the other Holders. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
3.7 TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
3.8 GOVERNING LAW; JURISDICTION. This Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the State
of Delaware without reference to Delaware's choice of law rules and each of the
parties hereto hereby consents to personal jurisdiction in any federal or state
court in the State of North Carolina.
3.9 COUNTERPARTS. This Agreement may be executed and delivered
(including by facsimile transmission) in any number of counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement or have caused this Agreement to be duly executed on its behalf by an
officer or representative thereto duly authorized, all as of the date first
above written.
ERESOURCE CAPITAL GROUP, INC.
By:
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Its:
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SELLER
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Signature
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Printed Name
[SIGNATURES OF ADDITIONAL SELLERS ON FOLLOWING PAGES]
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