EXHIBIT 99.5
MINIMUM BORROWING NOTE REGISTRATION RIGHTS AGREEMENT
This Minimum Borrowing Note Registration Rights Agreement (this
"Agreement") is made and entered into as of October 31, 2005, by and between RG
America, Inc., a Nevada corporation (the "Company"), and Laurus Master Fund,
Ltd. (the "Purchaser").
This Agreement is made pursuant to the Security Agreement, dated as
of the date hereof, by and among the Purchaser, the Company and various
subsidiaries of the Company (as amended, modified or supplemented from time to
time, the "Security Agreement"), and pursuant to the Notes and the Warrants
referred to therein.
The Company and the Purchaser hereby agree as follows:
62. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Security Agreement shall have the meanings given such
terms in the Security Agreement. As used in this Agreement, the following terms
shall have the following meanings:
"Blackout Period" means, with respect to a registration, a period,
in each case commencing on the day immediately after the Holders have received
written notice from the Company notifying the Holders that the Holders are
required to suspend offers and sales of Registrable Securities pursuant to
Section 7 hereof due to the fact that (1) (a) there is material non-public
information regarding the Company which the Company's Board of Directors (the
"Board"), after advice of legal counsel, reasonably determines not to be in the
Company's best interest to disclose and which the Company is not otherwise
required to then disclose or (b) there is a significant business opportunity
(including, but not limited to, the acquisition or disposition of assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer or other similar transaction available to the Company which the Board
reasonably determines would be seriously detrimental to the Company and its
stockholders to then disclose, and which the Company would be required to
disclose in a Registration Statement; provided that such period shall end on the
earlier to occur of (i) the date upon which the circumstance that give rise to
the commencement of the period would no longer cause the registration and
distribution of the Registrable Securities to be seriously detrimental to the
Company and its stockholders and (ii) such time as the Company (A) notifies the
Holders that the Company will no longer delay such filing of the registration
statement, (B) recommences steps to make such registration statement effective
or (c) allows sales pursuant to such registration statement to resume; provided
further in no event shall the aggregate Blackout Periods in any rolling 12-month
period exceed 45 days in the aggregate for such 12-month period.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means shares of the Company's common stock, par value
$0.001 per share.
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"Effectiveness Date" means, (i) with respect to the Registration
Statement required to be filed in connection with the Minimum Borrowing Note
issued on the initial funding date under the Security Agreement and the Warrants
issued on such initial funding date, a date no later than (x) ninety (90) days
following such initial funding date or (y) in the event that the Registration
Statement is subject to a full review by the SEC, then 130 days following such
initial funding date and (ii) with respect to each additional Registration
Statement required to be filed hereunder, a date no later than thirty (30) days
following the applicable Filing Date.
"Effectiveness Period" has the meaning set forth in Section 2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor statute.
"Filing Date" means, with respect to (1) the Registration Statement
which is required to be filed in connection with the shares of Common Stock
issuable upon conversion of the Minimum Borrowing Note made on the initial
funding date, the date which is thirty (30) days after the date hereof, (2) the
Registration Statement required to be filed in connection with the shares of
Common Stock issuable to the Holder upon exercise of a Warrant, the date which
is thirty (30) days after the issuance of such Warrant, and (3) the Registration
Statement required to be filed in connection with the shares of Common Stock
issuable to the Holder as a result of adjustments to the Fixed Conversion Price
or the Exercise Price, as the case may be, made pursuant to Section 2.5 of the
Revolving Note, Section 3.5 of the Minimum Borrowing Note, Section 4 of the
Warrant or otherwise, thirty (30) days after the occurrence of such event or the
date of the adjustment of the Fixed Conversion Price or Exercise Price, as the
case may be.
"Holder" or "Holders" means the Purchaser or any of its affiliates
or transferees to the extent any of them hold Registrable Securities, other then
those purchasing Registrable Securities in a market transaction.
"Indemnified Party" has the meaning set forth in Section 5(c).
"Indemnifying Party" has the meaning set forth in Section 5(c).
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
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"Registrable Securities" means the shares of Common Stock issued
upon the conversion of the Minimum Borrowing Note and issuable upon exercise of
the Warrants.
"Registration Statement" means each registration statement required
to be filed hereunder, including the Prospectus therein, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended, and
any successor statute.
"Security Agreement" has the meaning given to such term in the
Preamble hereto.
"Trading Market" means any of the NASD Over The Counter Bulletin
Board, NASDAQ SmallCap Market, the NASDAQ National Market, the American Stock
Exchange or the New York Stock Exchange
"Warrants" means the Common Stock purchase warrants issued in
connection with the Security Agreement, whether on the date thereof or
thereafter.
63. Registration.
63.1 On or prior to each Filing Date, the Company shall prepare and
file with the Commission a Registration Statement covering the Registrable
Securities for a selling stockholder resale offering to be made on a continuous
basis pursuant to Rule 415. Each Registration Statement shall be on Form S-3
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith). The Company shall cause each
Registration Statement to be declared effective by the Commission and remain
effective as provided herein. The Company shall use its reasonable commercial
efforts to cause each Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof, but in any
event no later than the Effectiveness Date. The Company shall use its reasonable
commercial efforts to keep each Registration Statement continuously effective
under the Securities Act until the date which is the earlier date of when (i)
all Registrable Securities covered by such Registration Statement have been sold
or (ii) all Registrable Securities covered by such Registration Statement may be
sold immediately without registration under the Securities Act and without
volume restrictions pursuant to Rule 144(k), as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company's transfer agent and the affected Holders (each, an
"Effectiveness Period").
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If: (i) any Registration Statement is not filed on or prior to the
applicable Filing Date for such Registration Statement; (ii) a Registration
Statement filed hereunder is not declared effective by the Commission by the
applicable Effectiveness Date; (iii) after a Registration Statement is filed
with and declared effective by the Commission, a Discontinuation Event (as
hereafter defined) shall occur and be continuing, or such Registration Statement
ceases to be effective (by suspension or otherwise) as to all Registrable
Securities to which it is required to relate at any time prior to the expiration
of the Effectiveness Period applicable to such Registration Statement (without
being succeeded immediately by an additional Registration Statement filed and
declared effective), for a period of time which shall exceed 30 days in the
aggregate per year or more than 20 consecutive calendar days (defined as a
period of 365 days commencing on the date such Registration Statement is
declared effective); (iv) after a Registration Statement is filed with and
declared effective by the Commission, a Blackout Period shall occur and be
continuing for a period of time which shall exceed 45 days in the aggregate, in
each case for all such Blackout Periods during any rolling 12-month period or
(v) the Common Stock is not listed or quoted, or is suspended from trading on
any Trading Market for a period of three (3) consecutive Trading Days (provided
the Company shall not have been able to cure such trading suspension within 30
days of the notice thereof or list the Common Stock on another Trading Market);
(any such failure or breach as described in clauses (i) through (v) above being
referred to as an "Event," and for purposes of clause (i) or (ii) the date on
which such Event occurs, or for purposes of clause (iii) the date which such 30
day or 20 consecutive day period (as the case may be) is exceeded, or for
purposes of clause (iv) above, the date which such 45 day period is exceeded, or
for purposes of clause (v) the date on which such three (3) Trading Day period
is exceeded, being referred to as "Event Date"), then as partial relief for the
damages to the Purchaser by reason of the occurrence of any such Event (which
remedy shall not be exclusive of any other remedies available at law or in
equity), the Company shall pay to the Purchaser for each day that an Event has
occurred and is continuing, an amount in cash as liquidated damages and not as a
penalty, equal to one-thirtieth (1/30th) of the product of: (A) the original
principal amount of each Minimum Borrowing Note outstanding at such time
multiplied by (B) 0.02. In the event the Company fails to make any payments
pursuant to this Section 2(b) in a timely manner, such payments shall bear
interest at the rate of 1.5% per month (prorated for partial months) until paid
in full.
63.2 Within three business days of the Effectiveness Date, the
Company shall cause its counsel to issue a blanket opinion in the form attached
hereto as Exhibit A, to the transfer agent stating that the shares are subject
to an effective registration statement and can be reissued free of restrictive
legend upon notice of a sale by the Purchaser and confirmation by the Purchaser
that it has complied with the prospectus delivery requirements, provided that
the Company has not advised the transfer agent orally or in writing that the
opinion has been withdrawn. Copies of the blanket opinion required by this
Section 2(c) shall be delivered to the Purchaser within the time frame set forth
above.
64. Registration Procedures. If and whenever the Company is required by
the provisions hereof to effect the registration of any Registrable Securities
under the Securities Act, the Company will, as expeditiously as possible:
64.1 prepare and file with the Commission a Registration Statement
with respect to such Registrable Securities, respond as promptly as possible to
any comments received from the Commission, and use its commercially reasonable
efforts to cause such Registration Statement to be declared effective by the
Commission and remain effective for the Effectiveness Period with respect
thereto, and promptly provide to the Purchaser copies of all filings and
Commission letters of comment relating thereto;
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64.2 prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by
such Registration Statement and to keep such Registration Statement effective
until the expiration of the Effectiveness Period applicable to such Registration
Statement;
64.3 furnish to the Purchaser such number of copies of the
Registration Statement and the Prospectus included therein (including each
preliminary Prospectus) as the Purchaser reasonably may request to facilitate
the public sale or disposition of the Registrable Securities covered by such
Registration Statement;
64.4 use its commercially reasonable efforts to register or qualify
the Purchaser's Registrable Securities covered by such Registration Statement
under the securities or "blue sky" laws of such jurisdictions within the United
States as the Purchaser may reasonably request, provided, however, that the
Company shall not for any such purpose be required to qualify generally to
transact business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such
jurisdiction;
64.5 list the Registrable Securities covered by such Registration
Statement with any securities exchange on which the Common Stock of the Company
is then listed;
64.6 immediately notify the Purchaser at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the Prospectus contained in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing; and
64.7 make available for inspection by the Purchaser and any
attorney, accountant or other agent retained by the Purchaser, all publicly
available, non-confidential financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all publicly available, non-confidential
information reasonably requested by the attorney, accountant or agent of the
Purchaser.
64.8 The Purchaser represents and warrants that it is an "accredited
investor", as defined under Rule 501(a) of Regulation D of the Securities Act.
65. Registration Expenses. All expenses relating to the Company's
compliance with Sections 2 and 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders are called "Registration Expenses". All selling
commissions applicable to the sale of Registrable Securities, including any fees
and disbursements of any special counsel to the Holders beyond those included in
Registration Expenses, are called "Selling Expenses." The Company shall only be
responsible for all Registration Expenses.
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66. Indemnification.
66.1 In the event of a registration of any Registrable Securities
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless each Holder, and its officers, directors and each other
person, if any, who controls such Holder within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which such Holder, or such persons may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Securities were registered under the
Securities Act pursuant to this Agreement, any preliminary Prospectus or final
Prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse such Holder, and each such person for
any reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by or on
behalf of the Purchaser or any such person in writing specifically for use in
any such document.
66.2 In the event of a registration of the Registrable Securities
under the Securities Act pursuant to this Agreement, the Purchaser will
indemnify and hold harmless the Company, and its officers, directors and each
other person, if any, who controls the Company within the meaning of the
Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Company or such persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact which was
furnished in writing by the Purchaser to the Company expressly for use in (and
such information is contained in) the Registration Statement under which such
Registrable Securities were registered under the Securities Act pursuant to this
Agreement, any preliminary Prospectus or final Prospectus contained therein, or
any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company and each such person for any reasonable legal or
other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action, provided, however, that the
Purchaser will be liable in any such case if and only to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished in writing to the Company by or on behalf
of the Purchaser specifically for use in any such document. Notwithstanding the
provisions of this paragraph, the Purchaser shall not be required to indemnify
any person or entity in excess of the amount of the aggregate net proceeds
received by the Purchaser in respect of Registrable Securities in connection
with any such registration under the Securities Act.
66.3 Promptly after receipt by a party entitled to claim
indemnification hereunder (an "Indemnified Party") of notice of the commencement
of any action, such Indemnified Party shall, if a claim for indemnification in
respect thereof is to be made against a party hereto obligated to indemnify such
Indemnified Party (an "Indemnifying Party"), notify the Indemnifying Party in
writing thereof, but the omission so to notify the Indemnifying Party shall not
relieve it from any liability which it may have to such Indemnified Party other
than under this Section 5(c) and shall only relieve it from any liability which
it may have to such Indemnified Party under this Section 5(c) if and to the
extent the Indemnifying Party is prejudiced by such omission. In case any such
action shall be brought against any Indemnified Party and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such Indemnified
Party, and, after notice from the Indemnifying Party to such Indemnified Party
of its election so to assume and undertake the defense thereof, the Indemnifying
Party shall not be liable to such Indemnified Party under this Section 5(c) for
any legal expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof; if the Indemnified Party retains its own counsel, then
the Indemnified Party shall pay all fees, costs and expenses of such counsel,
provided, however, that, if the defendants in any such action include both the
Indemnified Party and the Indemnifying Party and the Indemnified Party shall
have reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the Indemnifying
Party or if the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, the Indemnified Party
shall have the right to select one separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other expenses related
to such participation to be reimbursed by the Indemnifying Party as incurred.
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66.4 In order to provide for just and equitable contribution in the
event of joint liability under the Securities Act in any case in which either
(i) the Purchaser, or any officer, director or controlling person of the
Purchaser, makes a claim for indemnification pursuant to this Section 5 but it
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 5 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required on
the part of the Purchaser or such officer, director or controlling person of the
Purchaser in circumstances for which indemnification is provided under this
Section 5; then, and in each such case, the Company and the Purchaser will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion so that the
Purchaser is responsible only for the portion represented by the percentage that
the public offering price of its securities offered by the Registration
Statement bears to the public offering price of all securities offered by such
Registration Statement, provided, however, that, in any such case, (A) the
Purchaser will not be required to contribute any amount in excess of the public
offering price of all such securities offered by it pursuant to such
Registration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
67. Representations and Warranties.
67.1 The Common Stock is registered pursuant to Section 12(b) or
12(g) of the Exchange Act and, except with respect to certain matters which the
Company has disclosed to the Purchaser on Schedule 12(u) to the Security
Agreement, the Company has timely filed all proxy statements, reports,
schedules, forms, statements and other documents required to be filed by it
under the Exchange Act. The Company has filed (i) its Annual Report on Form 10-K
for the fiscal year ended December 31, 2004 and (ii) its Quarterly Report on
Form 10-Q for the fiscal quarters ended March 31, 2005 and June 30, 2005
(collectively, the "SEC Reports"). Each SEC Report was, at the time of its
filing, in substantial compliance with the requirements of its respective form
and none of the SEC Reports, nor the financial statements (and the notes
thereto) included in the SEC Reports, as of their respective filing dates,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed) and fairly present in all material respects the financial
condition, the results of operations and the cash flows of the Company and its
subsidiaries, on a consolidated basis, as of, and for, the periods presented in
each such SEC Report.
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67.2 The Common Stock is quoted for trading on the NASDAQ Over The
Counter Bulletin Board and satisfies all requirements for the continuation of
such quotation, and the Company shall do all things necessary for the
continuation of such quotation. The Company has not received any notice that its
Common Stock will no longer be quoted on the NASDAQ Over The Counter Bulletin
Board (except for prior notices which have been fully remedied) or that the
Common Stock does not meet all requirements for the continuation of such listing
67.3 Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf, has directly or indirectly made any offers or
sales of any security or solicited any offers to buy any security under
circumstances that would cause the offering of the Securities pursuant to the
Security Agreement to be integrated with prior offerings by the Company for
purposes of the Securities Act which would prevent the Company from selling the
Common Stock pursuant to Rule 506 under the Securities Act, or any applicable
exchange-related stockholder approval provisions, nor will the Company or any of
its affiliates or subsidiaries take any action or steps that would cause the
offering of the Common Stock to be integrated with other offerings (other than
such concurrent offering to the Purchaser).
67.4 The Warrants, the Notes and the shares of Common Stock which
the Purchaser may acquire pursuant to the Warrants and the Notes are all
restricted securities under the Securities Act as of the date of this Agreement.
The Company will not issue any stop transfer order or other order impeding the
sale and delivery of any of the Registrable Securities at such time as such
Registrable Securities are registered for public sale or an exemption from
registration is available, except as required by federal or state securities
laws.
67.5 The Company understands the nature of the Registrable
Securities issuable upon the conversion of each Note and the exercise of each
Warrant and recognizes that the issuance of such Registrable Securities may have
a potential dilutive effect. The Company specifically acknowledges that its
obligation to issue the Registrable Securities is binding upon the Company and
enforceable regardless of the dilution such issuance may have on the ownership
interests of other shareholders of the Company.
67.6 Except for agreements made in the ordinary course of business,
there is no agreement that has not been filed with the Commission as an exhibit
to a registration statement or to a form required to be filed by the Company on
Form 8-K under the Exchange Act, the breach of which could reasonably be
expected to have a material and adverse effect on the Company and its
subsidiaries, or would prohibit or otherwise interfere with the ability of the
Company to enter into and perform any of its obligations under this Agreement in
any material respect.
67.7 The Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock for the full conversion of each Note
and exercise of the Warrants.
68. Miscellaneous.
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68.1 Remedies. In the event of a breach by the Company or by a
Holder, of any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise
all rights granted by law and under this Agreement, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement.
68.2 No Piggyback on Registrations. Except as and to the extent set
forth on Schedule 7(b) hereto, neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Company in any Registration Statement other than the
Registrable Securities, and the Company shall not after the date hereof enter
into any agreement providing any such right for inclusion of shares in the
Registration Statement to any of its security holders. Except as and to the
extent specified in Schedule 7(b) hereto, the Company has not previously entered
into any agreement granting any registration rights with respect to any of its
securities to any Person that have not been fully satisfied.
68.3 Compliance. Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
any Registration Statement.
68.4 Discontinued Disposition. Each Holder agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the Company
of the occurrence of a Discontinuation Event (as defined below), such Holder
will forthwith discontinue disposition of such Registrable Securities under the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph. For purposes of this Agreement, a "Discontinuation Event" shall mean
(i) when the Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders); (ii) any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to such Registration Statement or Prospectus or
for additional information; (iii) the issuance by the Commission of any stop
order suspending the effectiveness of such Registration Statement covering any
or all of the Registrable Securities or the initiation of any Proceedings for
that purpose; (iv) the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and/or (v) the occurrence of any
event or passage of time that makes the financial statements included in such
Registration Statement ineligible for inclusion therein or any statement made in
such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
68.5 Piggy-Back Registrations. If at any time during any
Effectiveness Period there is not an effective Registration Statement covering
all of the Registrable Securities required to be covered during such
Effectiveness Period and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen (15) days after receipt of such notice, any
such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered, to the extent the Company may do so without
violating registration rights of others which exist as of the date of this
Agreement, subject to customary underwriter cutbacks applicable to all holders
of registration rights and subject to obtaining any required consent of any
selling stockholder(s) to such inclusion under such registration statement.
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68.6 Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of the then outstanding Registrable Securities. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of certain Holders
and that does not directly or indirectly affect the rights of other Holders may
be given by Holders of at least a majority of the Registrable Securities to
which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.
68.7 Notices. Any notice or request hereunder may be given to the
Company or the Purchaser at the respective addresses set forth below or as may
hereafter be specified in a notice designated as a change of address under this
Section 7(g). Any notice or request hereunder shall be given by registered or
certified mail, return receipt requested, hand delivery, overnight mail, Federal
Express or other national overnight next day carrier (collectively, "Courier")
or telecopy (confirmed by mail). Notices and requests shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any party to
whom it is addressed, in the case of those by mail or overnight mail, deemed to
have been given three (3) business days after the date when deposited in the
mail or with the overnight mail carrier, in the case of a Courier, the next
business day following timely delivery of the package with the Courier, and, in
the case of a telecopy, when confirmed. The address for such notices and
communications shall be as follows:
If to the Company: RG America, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy(which shall not constitute notice) to:
58
Xxxxxx & Xxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000 XXX
Attention: I. Xxxxx Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 214-939-5849
If to a Purchaser: To the address set forth under such Purchaser name on the
signature pages hereto.
If to any other Person who is
then the registered Holder: To the address of such Holder as it appears in the
stock transfer books of the Company
or such other address as may be designated in writing hereafter in accordance
with this Section 7(g) by such Person.
68.8 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Each Holder may assign their respective rights hereunder in the
manner and to the Persons as permitted under the Notes and the Security
Agreement.
68.9 Execution and Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and, all of which taken together shall constitute one and the same
agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
68.10 Governing Law, Jurisdiction and Waiver of Jury Trial. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The Company hereby
consents and agrees that the state or federal courts located in the County of
New York, State of New York shall have exclusion jurisdiction to hear and
determine any Proceeding between the Company, on the one hand, and the
Purchaser, on the other hand, pertaining to this Agreement or to any matter
arising out of or related to this Agreement; provided, that the Purchaser and
the Company acknowledge that any appeals from those courts may have to be heard
by a court located outside of the County of New York, State of New York, and
further provided, that nothing in this Agreement shall be deemed or operate to
preclude the Purchaser from bringing a Proceeding in any other jurisdiction to
collect the obligations, to realize on the Collateral or any other security for
the obligations, or to enforce a judgment or other court order in favor of the
Purchaser. The Company expressly submits and consents in advance to such
jurisdiction in any Proceeding commenced in any such court, and the Company
hereby waives any objection which it may have based upon lack of personal
jurisdiction, improper venue or forum non conveniens. The Company hereby waives
personal service of the summons, complaint and other process issued in any such
Proceeding and agrees that service of such summons, complaint and other process
may be made by registered or certified mail addressed to the Company at the
address set forth in Section 7(g) and that service so made shall be deemed
completed upon the earlier of the Company's actual receipt thereof or three (3)
days after deposit in the U.S. mails, proper postage prepaid. The parties hereto
desire that their disputes be resolved by a judge applying such applicable laws.
Therefore, to achieve the best combination of the benefits of the judicial
system and of arbitration, the parties hereto waive all rights to trial by jury
in any Proceeding brought to resolve any dispute, whether arising in contract,
tort, or otherwise between the Purchaser and/or the Company arising out of,
connected with, related or incidental to the relationship established between
then in connection with this Agreement. If either party hereto shall commence a
Proceeding to enforce any provisions of this Agreement, the Security Agreement
or any other Ancillary Agreement, then the prevailing party in such Proceeding
shall be reimbursed by the other party for its reasonable attorneys' fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.
59
68.11 Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
68.12 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
68.13 Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
[Balance of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Minimum Borrowing Note
Registration Rights Agreement as of the date first written above.
RG AMERICA, INC.
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
LAURUS MASTER FUND, LTD.
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
Address for Notices:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Grin
Facsimile: 000-000-0000
61
EXHIBIT A
____________, 200___
[Continental Stock Transfer
& Trust Company
Two Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx]
Re: RG America, Inc. Registration Statement on Form [SB-2]
Ladies and Gentlemen:
As counsel to RG America, Inc., a Nevada corporation (the "Company"), we
have been requested to render our opinion to you in connection with the resale
by the individuals or entitles listed on Schedule A attached hereto (the
"Selling Stockholders"), of an aggregate of __________ shares (the "Shares") of
the Company's Common Stock.
A Registration Statement on Form [SB-2] under the Securities Act of 1933,
as amended (the "Act"), with respect to the resale of the Shares was declared
effective by the Securities and Exchange Commission on [date]. Enclosed is the
Prospectus dated [date]. We understand that the Shares are to be offered and
sold in the manner described in the Prospectus.
Based upon the foregoing, upon request by the Selling Stockholders at any
time while the registration statement remains effective, it is our opinion that
the Shares have been registered for resale under the Act and new certificates
evidencing the Shares upon their transfer or re-registration by the Selling
Stockholders may be issued without restrictive legend. We will advise you if the
registration statement is not available or effective at any point in the future.
Very truly yours,
[Company counsel]
Schedule A to Exhibit A
Shares
Selling Stockholder R/N/O Being Offered
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SCHEDULE 7(b)
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