EXHIBIT 10.12
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (the "Agreement"), dated as of September
20, 2004, by and between Energas Resources, Inc., a corporation organized
under the laws of State of Delaware, with its principal executive office at
Energas Resources, Inc., 000 Xxxxxxxxx 00xx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx,
00000, (the "Company"), and Dutchess Private Equities Fund, II, L.P., a
Delaware limited partnership with its principal office at 000 Xxxxxx Xxxxxx,
Xxxxxx, XX 00000 (the "Holder").
Whereas, in connection with the Investment Agreement by and between the
Company and the Investor of even date herewith (the "Investment Agreement"),
the Company has agreed to issue and sell to the Investor an indeterminate
number of shares of the Company's Common Stock, $0.001 par value per share
(the "Common Stock"), to be purchased pursuant to the terms and subject to
the conditions set forth in the Investment Agreement; and
Whereas, to induce the Investor to execute and deliver the Investment
Agreement, the Company has agreed to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"),
and applicable state securities laws, with respect to the shares of Common
Stock issuable pursuant to the Investment Agreement.
Now therefore, in consideration of the foregoing premises and the
mutual covenants contained hereinafter and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and the Investor hereby agree as follows:
Section 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
"Execution Date" means the date first written above.
"Investor" means Dutchess Private Equities Fund, L.P., a Delaware
limited partnership.
"Person" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.
"Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for disclosure in
a Registration Statement, which shall be evidenced by determinations in good
faith by the Board of Directors of the Company that disclosure of such
information in the Registration Statement would be detrimental to the
business and affairs of the Company, or (ii) any material engagement or
activity by the Company which would, in the good faith determination of the
Board of Directors of the Company, be adversely affected by disclosure in a
Registration Statement at such time, which determination shall be accompanied
by a good faith determination by the Board of Directors of the Company that
the Registration Statement would be materially misleading absent the
inclusion of such information.
"Principal Market" shall mean The American Stock Exchange, National
Association of Securities Dealer's, Inc. Over-the-Counter electronic bulletin
board, the Nasdaq National Market or The Nasdaq SmallCap Market whichever is
the principal market on which the Common Stock is listed.
"Register," "Registered," and "Registration" refer to a registration
effected by preparing and filing one or more Registration Statements in
compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or
any successor rule providing for offering securities on a continuous basis
("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement(s) by the United States Securities and Exchange
Commission (the "SEC").
"Registrable Securities" means (i) the shares of Common Stock issued or
issuable pursuant to the Investment Agreement, and (ii) any shares of capital
stock issued or issuable with respect to such shares of Common Stock, if any,
as a result of any stock split, stock dividend, recapitalization, exchange or
similar event or otherwise, which have not been (x) included in a
Registration Statement that has been declared effective by the SEC or (y)
sold under circumstances meeting all of the applicable conditions of Rule 144
(or any similar provision then in force) under the 1933 Act.
"Registration Statement" means a registration statement of the Company
filed under the 1933 Act covering the Registrable Securities.
All capitalized terms used in this Agreement and not otherwise defined
herein shall have the same meaning ascribed to them as in the Investment
Agreement.
Section 2. REGISTRATION.
(a) On or before the execution of this Agreement, the Company shall
have provided a draft of the Registration Statement covering the Registrable
Securities to the Investor. The Company shall, as soon as practicable, but
not later than fifteen calendar days following the Execution of this
agreement, file with the SEC a Registration Statement or Registration
Statements (as is necessary) on Form SB-2 (or, if such form is unavailable
for such a registration, on such other form as is available for such a
registration), covering the resale of all of the Registrable Securities,
which Registration Statement(s) shall state that, in accordance with Rule 416
promulgated under the 1933 Act, such Registration Statement also covers such
indeterminate number of additional shares of Common Stock as may become
issuable upon stock splits, stock dividends or similar transactions. The
Company shall initially register for resale 10,000,000 shares of Common Stock
which would be issuable on the date preceding the filing of the Registration
Statement based on the closing bid price of the Company's Common Stock on
such date and the amount reasonably calculated that represents Common Stock
issuable to other parties as set forth in the Investment Agreement except to
the extent that the SEC requires the share amount to be reduced as a
condition of effectiveness.
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(b) The Company shall use commercially reasonable efforts to have the
Registration Statement(s) declared effective by the SEC within 90 calendar
days after the Execution Date.
(c) The Company agrees not to include any other securities in the
Registration Statement covering the Registrable Securities without Investor's
prior written consent which Investor may withhold in its sole discretion.
Furthermore, the Company agrees that it will not file any other Registration
Statement for other securities, until thirty calendar days after the
Registration Statement for the Registrable Securities is declared effective
by the SEC.
Section 3. RELATED OBLIGATIONS.
At such time as the Company is obligated to prepare and file a
Registration Statement with the SEC pursuant to Section 2(a), the Company
will effect the registration of the Registrable Securities in accordance with
the intended method of disposition thereof and, with respect thereto, the
Company shall have the following obligations:
(a) The Company shall use commercially reasonable efforts to cause
such Registration Statement relating to the Registrable Securities to become
effective within 90 days after the Execution Date and shall keep such
Registration Statement effective until the earlier to occur of (i) the date
as of which the Investor may sell all of the Registrable Securities without
restriction pursuant to Rule 144(k) promulgated under the 1933 Act (or
successor thereto); or (ii) the date on which (A) the Investor shall have
sold all the Registrable Securities; and (B) the Investor has no right to
acquire any additional shares of Common Stock under the Investment Agreement
(the "Registration Period"). The Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made,
not misleading. The Company shall use its best efforts to respond to all SEC
comments within seven business days from receipt of such comments by the
Company. The Company shall use its best efforts to cause the Registration
Statement relating to the Registrable Securities to become effective no later
than three business days after notice from the SEC that the Registration
Statement may be declared effective. The Investor agrees to provide all
information which it is required by law to provide to the Company, including
the intended method of disposition of the Registrable Securities, and the
Company's obligations set forth above shall be conditioned on the receipt of
such information.
(b) The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the 1933 Act, as may be necessary to keep such Registration Statement
effective during the Registration Period, and, during such period, comply
with the provisions of the 1933 Act with respect to the disposition of all
Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been
disposed of in accordance with the intended methods of disposition by the
Investor thereof as set forth in such Registration Statement. In the event
the number of shares of Common Stock covered by a Registration Statement
filed pursuant to this Agreement is at any time insufficient to cover all of
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the Registrable Securities, the Company shall amend such Registration
Statement, or file a new Registration Statement (on the short form available
therefor, if applicable), or both, so as to cover all of the Registrable
Securities, in each case, as soon as practicable, but in any event within 30
calendar days after the necessity therefor arises (based on the then Purchase
Price of the Common Stock and other relevant factors on which the Company
reasonably elects to rely), assuming the Company has sufficient authorized
shares at that time, and if it does not, within 30 calendar days after such
shares are authorized. The Company shall use commercially reasonable efforts
to cause such amendment and/or new Registration Statement to become effective
as soon as practicable following the filing thereof.
(c) The Company shall make available to the Investor whose Registrable
Securities are included in any Registration Statement and its legal counsel
without charge (i) promptly after the same is prepared and filed with the SEC
at least one copy of such Registration Statement and any amendment(s)
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits, the prospectus included
in such Registration Statement (including each preliminary prospectus) and,
with regards to such Registration Statement(s), any correspondence by or on
behalf of the Company to the SEC or the staff of the SEC and any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives; (ii) upon the effectiveness of any Registration Statement,
the Company shall make available copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto; and (iii)
such other documents, including copies of any preliminary or final
prospectus, as the Investor may reasonably request from time to time in order
to facilitate the disposition of the Registrable Securities.
(d) The Company shall use commercially reasonable efforts to (i)
register and qualify the Registrable Securities covered by a Registration
Statement under such other securities or "blue sky" laws of such states in
the United States as any Investor reasonably requests; (ii) prepare and file
in those jurisdictions, such amendments (including post-effective amendments)
and supplements to such registrations and qualifications as may be necessary
to maintain the effectiveness thereof during the Registration Period; (iii)
take such other actions as may be necessary to maintain such registrations
and qualifications in effect at all times during the Registration Period, and
(iv) take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however,
that the Company shall not be required in connection therewith or as a
condition thereto to (x) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(d), or (y)
subject itself to general taxation in any such jurisdiction. The Company
shall promptly notify each Investor who holds Registrable Securities of the
receipt by the Company of any notification with respect to the suspension of
the registration or qualification of any of the Registrable Securities for
sale under the securities or "blue sky" laws of any jurisdiction in the
United States or its receipt of actual notice of the initiation or
threatening of any proceeding for such purpose.
(e) As promptly as practicable after becoming aware of such event, the
Company shall notify each Investor in writing of the happening of any event
as a result of which the prospectus included in a Registration Statement, as
then in effect, includes an untrue statement of a material fact or omission
to state a material fact required to be stated therein or necessary to make
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the statements therein, in light of the circumstances under which they were
made, not misleading ("Registration Default") and use all diligent efforts to
promptly prepare a supplement or amendment to such Registration Statement and
take any other necessary steps to cure the Registration Default, (which, if
such Registration Statement is on Form S-3, may consist of a document to be
filed by the Company with the SEC pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act (as defined below) and to be incorporated by reference
in the prospectus) to correct such untrue statement or omission, and make
available copies of such supplement or amendment to each Investor. The
Company shall also promptly notify each Investor (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(the Company will prepare notification of such effectiveness which shall be
delivered to the Investor on the same day of such effectiveness and by
overnight mail), additionally, the Company will promptly provide to the
Investor a copy of the effectiveness order prepared by the SEC once it is
received by the Company; (ii) of any request by the SEC for amendments or
supplements to a Registration Statement or related prospectus or related
information, (iii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate,
(iv) in the event the Registration Statement is no longer effective, or (v)
if Registration Statement is stale as a result of the Company's failure to
timely file its financials or otherwise. The Company acknowledges that its
failure to cure the Registration Default within ten business days will cause
the Investor to suffer damages in an amount that will be difficult to
ascertain. Accordingly, the parties agree that it is appropriate to include
a provision for liquidated damages. The parties acknowledge and agree that
the liquidated damages provision set forth in this section represents the
parties' good faith effort to quantify such damages and, as such, agree that
the form and amount of such liquidated damages are reasonable and will not
constitute a penalty. It is the intention of the parties that interest
payable under any of the terms of this Agreement shall not exceed the maximum
amount permitted under any applicable law. If a law, which applies to this
Agreement which sets the maximum interest amount, is finally interpreted so
that the interest in connection with this Agreement exceeds the permitted
limits, then: (1) any such interest shall be reduced by the amount necessary
to reduce the interest to the permitted limit; and (2) any sums already
collected (if any) from the Company which exceed the permitted limits will be
refunded to the Company. The Investor may choose to make this refund by
reducing the amount that the Company owes under this Agreement or by making a
direct payment to the Company. If a refund reduces the amount that the
Company owes the Investor, the reduction will be treated as a partial
payment. In case any provision of this Agreement is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if
possible, so that it is enforceable to the maximum extent possible, and the
validity and enforceability of the remaining provisions of this Agreement
will not in any way be affected or impaired thereby.
(f) The Company shall use commercially reasonable efforts to prevent
the issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension
at the earliest possible moment and to notify the Investor who holds
Registrable Securities being sold of the issuance of such order and the
resolution thereof or its receipt of actual notice of the initiation or
threat of any proceeding for such purpose.
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(g) The Company shall permit the Investor and one legal counsel,
designated by the Investor, to review and comment upon a Registration
Statement and all amendments and supplements thereto at least seven business
days prior to their filing with the SEC, and not file any document in a form
to which such counsel reasonably objects. The Company may request to shorten
the Investor's review period and the Investor will, if possible, attempt to
comply with the accelerated review period. The Company shall not submit to
the SEC a request for acceleration of the effectiveness of a Registration
Statement or file with the SEC a Registration Statement or any amendment or
supplement thereto without the prior approval of such counsel, which approval
shall not be unreasonably withheld.
(h) At the request of the Investor, the Company shall cause to be
furnished to such Investor, on the date of the effectiveness of a
Registration Statement, a legal opinion, in form and substance reasonably
acceptable to Investor's counsel, dated as of such date, of counsel
representing the Company for purposes of such Registration Statement.
(i) The Company shall make available for inspection by (i) the
Investor and (ii) one legal counsel and one firm of accountants or other
agents retained by the Investor (collectively, the "Inspectors"), all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the "Records"), as shall be
reasonably deemed necessary by each Inspector, and cause the Company's
officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, that each Inspector
shall hold in strict confidence and shall not make any disclosure (except to
a Investor) or use of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (b) the release of
such Records is ordered pursuant to a final, non-appealable subpoena or order
from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement of which
the Inspector has knowledge. Each Investor agrees that it shall, upon
learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential.
(j) The Company shall hold in confidence and not make any disclosure
of information concerning a Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to
avoid or correct a misstatement or omission in any Registration Statement,
(iii) the release of such information is ordered pursuant to a subpoena or
other final, non-appealable order from a court or governmental body of
competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this
Agreement or any other agreement. The Company agrees that it shall, upon
learning that disclosure of such information concerning a Investor is sought
in or by a court or governmental body of competent jurisdiction or through
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other means, give prompt written notice to such Investor and allow such
Investor, at the Investor's expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, such information.
(k) The Company shall use commercially reasonable efforts to maintain
designation and quotation of all the Registrable Securities covered by any
Registration Statement on the Principal Market. If, despite the Company's
best efforts, the Company is unsuccessful in satisfying the preceding
sentence, it shall use commercially reasonable efforts to cause all the
Registrable Securities covered by any Registration Statement to be listed on
each other national securities exchange and automated quotation system, if
any, on which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable Securities is
then permitted under the rules of such exchange or system. The Company shall
pay all fees and expenses in connection with satisfying its obligation under
this Section 3(k).
(l) The Company shall cooperate with the Investor to facilitate the
prompt preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities to be offered pursuant to a
Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the Investor may reasonably
request.
(m) The Company shall provide a transfer agent for all the Registrable
Securities not later than the effective date of the first Registration
Statement filed pursuant hereto.
(n) If requested by the Investor, the Company shall (i) as soon as
reasonably practical incorporate in a prospectus supplement or post-effective
amendment such information as such Investor reasonably determine should be
included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
offering of the Registrable Securities to be sold in such offering; (ii) make
all required filings of such prospectus supplement or post-effective
amendment as soon as reasonably possible after being notified of the matters
to be incorporated in such prospectus supplement or post-effective amendment;
and (iii) supplement or make amendments to any Registration Statement if
reasonably requested by such Investor.
(o) The Company shall use commercially reasonable efforts to cause the
Registrable Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to consummate the disposition of such
Registrable Securities.
(p) The Company shall otherwise use commercially reasonable efforts to
comply with all applicable rules and regulations of the SEC in connection
with any registration hereunder.
(q) Within one business day after the Registration Statement which
includes Registrable Securities is declared effective by the SEC, the Company
shall deliver to the transfer agent for such Registrable Securities, with
copies to the Investor, confirmation that such Registration Statement has
been declared effective by the SEC.
(r) reserved
(s) The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of Registrable Securities
pursuant to a Registration Statement.
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Section 4. RESERVED
Section 5. EXPENSES OF REGISTRATION.
All expenses, other than underwriting discounts and commissions and
other than as set forth in the Investment Agreement, incurred in connection
with registrations including comments, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration, listing
and qualifications fees, printing and accounting fees, and fees and
disbursements of counsel for the Company shall be paid by the Company.
Section 6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
(a) To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Investor who holds such
Registrable Securities, the directors, officers, partners, employees,
counsel, agents, representatives of, and each Person, if any, who controls,
any Investor within the meaning of the 1933 Act or the Securities Exchange
Act of 1934, as amended (the "1934 Act") (each, an "Indemnified Person"),
against any losses, claims, damages, liabilities, judgments, fines,
penalties, charges, costs, attorneys' fees, amounts paid in settlement or
expenses, joint or several (collectively, "Claims"), incurred in
investigating, preparing or defending any action, claim, suit, inquiry,
proceeding, investigation or appeal taken from the foregoing by or before any
court or governmental, administrative or other regulatory agency, body or the
SEC, whether pending or threatened, whether or not an indemnified party is or
may be a party thereto ("Indemnified Damages"), to which any of them may
become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any
filing made in connection with the qualification of the offering under the
securities or other "blue sky" laws of any jurisdiction in which the Investor
has requested in writing that the Company register or qualify the Shares
("Blue Sky Filing"), or the omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which the statements therein
were made, not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state therein
any material fact necessary to make the statements made therein, in light of
the circumstances under which the statements therein were made, not
misleading, or (iii) any violation or alleged violation by the Company of the
1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the
offer or sale of the Registrable Securities pursuant to a Registration
Statement (the matters in the foregoing clauses (i) through (iii) being,
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collectively, "Violations"). Subject to the restrictions set forth in
Section 6(c) the Company shall reimburse the Investor and each such
controlling person, promptly as such expenses are incurred and are due and
payable, for any reasonable legal fees or other reasonable expenses incurred
by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall not apply
to a Claim arising out of or based upon a Violation which is due to the
inclusion in the Registration Statement of the information furnished to the
Company by any Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto; (ii) shall not be available to the extent such Claim is
based on (a) a failure of the Investor to deliver or to cause to be delivered
the prospectus made available by the Company or (b) the Indemnified Person's
use of an incorrect prospectus despite being promptly advised in advance by
the Company in writing not to use such incorrect prospectus; (iii) any
claims based on the manner of sale of the Registrable Securities by the
Investor or of the Investor's failure to register as a dealer under
applicable securities laws; (iv) any omission of the Investor to notify the
Company of any material fact that should be stated in the Registration
Statement or prospectus relating to the Investor or the manner of sale; and
(v) any amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which consent
shall not be unreasonably withheld. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the resale of the Registrable
Securities by the Investor pursuant to the Registration Statement.
(b) In connection with any Registration Statement in which a Investor
is participating, each such Investor agrees to severally and jointly
indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors,
each of its officers who signs the Registration Statement, each Person, if
any, who controls the Company within the meaning of the 1933 Act or the 1934
Act and the Company's agents (collectively and together with an Indemnified
Person, an "Indemnified Party"), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent,
that such Violation is due to the inclusion in the Registration Statement of
the written information furnished to the Company by such Investor expressly
for use in connection with such Registration Statement; and, subject to
Section 6(c), such Investor will reimburse any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnity agreement contained in this
Section 6(b) and the agreement with respect to contribution contained in
Section 7 shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such Investor,
which consent shall not be unreasonably withheld; provided, further, however,
that the Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified Damages as does not exceed the net proceeds
to such Investor as a result of the sale of Registrable Securities pursuant
to such Registration Statement. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the resale of the Registrable Securities
by the Investor pursuant to the Registration Statement. Notwithstanding
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anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any preliminary prospectus
shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the preliminary
prospectus were corrected on a timely basis in the prospectus, as then
amended or supplemented. This indemnification provision shall apply
separately to each Investor and liability hereunder shall not be joint and
several.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a
Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this
Section 6, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party
and the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that an Indemnified Person or Indemnified Party shall have
the right to retain its own counsel with the fees and expenses to be paid by
the indemnifying party, if, in the reasonable opinion of counsel retained by
the Indemnified Person or Indemnified Party, the representation by counsel of
the Indemnified Person or Indemnified Party and the indemnifying party would
be inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by
such counsel in such proceeding. The indemnifying party shall pay for only
one separate legal counsel for the Indemnified Persons or the Indemnified
Parties, as applicable, and such counsel shall be selected by the Investor,
if the Investor are entitled to indemnification hereunder, or the Company, if
the Company is entitled to indemnification hereunder, as applicable. The
Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or Claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified
Party or Indemnified Person which relates to such action or Claim. The
indemnifying party shall keep the Indemnified Party or Indemnified Person
fully appraised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the consent of the Indemnified Party or Indemnified Person,
consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party or Indemnified Person
of a release from all liability in respect to such Claim. Following
indemnification as provided for hereunder, the indemnifying party shall be
surrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter
for which indemnification has been made. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party under this Section 6, except
to the extent that the indemnifying party is prejudiced in its ability to
defend such action.
(d) The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or
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Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
Section 7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise
be liable under Section 6 to the fullest extent permitted by law; provided,
however, that: (i) no contribution shall be made under circumstances where
the maker would not have been liable for indemnification under the fault
standards set forth in Section 6; (ii) no seller of Registrable Securities
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the 0000 Xxx) shall be entitled to contribution from any seller of
Registrable Securities who was not guilty of fraudulent misrepresentation;
and (iii) contribution by any seller of Registrable Securities shall be
limited in amount to the net amount of proceeds received by such seller from
the sale of such Registrable Securities.
Section 8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investor the benefits of Rule
144 promulgated under the 1933 Act or any other similar rule or regulation of
the SEC that may at any time permit the Investor to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees
to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long
as the Company remains subject to such requirements (it being understood that
nothing herein shall limit the Company's obligations under Section 5(c) of
the Investment Agreement) and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and
(c) furnish to the Investor, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting requirements
of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Investor to sell such securities pursuant
to Rule 144 without registration.
Section 9. NO ASSIGNMENT OF REGISTRATION RIGHTS.
The rights under this Agreement shall not be assignable.
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Section 10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended only with the written
consent of the Company and Investor. No such amendment shall be effective to
the extent that it applies to less than all of the Investor of the
Registrable Securities.
Section 11. MISCELLANEOUS.
(a) Any notices or other communications required or permitted to be
given under the terms of this Agreement that must be in writing will be
deemed to have been delivered (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided a confirmation of
transmission is mechanically or electronically generated and kept on file by
the sending party); or (iii) one day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Energas Resources, Inc.
000 Xxxxxxxxx 00xx Xxxxxx
0xx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Investor:
Dutchess Private Equities Fund, LP
000 Xxxxxx Xx, Xxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Each party shall provide five business days prior notice to the other
party of any change in address, phone number or facsimile number.
(b) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(c) The laws of the Commonwealth of Massachusetts shall govern all
issues arising from or related to this Agreement without regard to the
principles of conflict of laws. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of
12
Boston, County of Suffolk, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
(d) This Agreement and the Transaction Documents constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein.
(e) This Agreement and the Transaction Documents supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
(f) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof. Whenever
required by the context of this Agreement, the singular shall include the
plural and masculine shall include the feminine. This Agreement shall not be
construed as if it had been prepared by one of the parties, but rather as if
all the parties had prepared the same.
(g) This Agreement may be executed in two or more identical
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same agreement. This Agreement, once executed
by a party, may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party
so delivering this Agreement.
(h) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the
other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
* * *
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SIGNATURE PAGE OF REGISTRATION RIGHTS AGREEMENT
Agreed as of the date first written above.
DUTCHESS PRIVATE EQUITIES FUND, L.P.,
BY ITS GENERAL PARTNER,
DUTCHESS CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxx, Managing Member
ENERGAS RESOURCES, INC.
By: /s/ Xxxxxx Xxxx
---------------------------
Xxxxxx Xxxx, President
