EXHIBIT 10.5
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of September 26,
2005, by and among AccuPoll Holding Corp., a Nevada corporation (the "Company"),
Palisades Capital, Ltd., Xxxxxxxxxx Investments, Ltd. and Hyde Investments, Ltd.
("Lenders").
WHEREAS, Lenders are, or will be, the holders of certain shares of the
Company's common stock, $.001 par value per share (the "Common Stock") which
shall be issued to such Lenders pursuant to that certain Conversion and
Settlement Agreement with Mutual Releases dated as of the date hereof between
the parties (the "Settlement Agreement"), and
WHEREAS, the Settlement Agreement provides that the Company and the
Lenders enter into this Registration Rights Agreement.
NOW, THEREFORE, in order to implement the foregoing and in consideration
of the mutual representations, warranties, covenants and agreements contained
herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. Capitalized terms used herein but not otherwise defined
shall have the meanings given to such terms in the Settlement Agreement.
"Agreement" shall have the meaning set forth in the preambles.
"Common Stock" shall have the meaning set forth in the preambles.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder as the same may be amended
from time to time.
"Holder" shall mean any Person owning or having the right to acquire
Registrable Securities or any assignee thereof.
"Person" shall mean an individual, general partnership, corporation,
limited partnership, limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature.
"Registrable Securities" shall mean 25,000,000 of the shares of Common
Stock issued or issuable pursuant to the Settlement Agreement, whether held by
any Stockholder or any Affiliate thereof or any successor thereto or assignee
thereof (and any shares of capital stock received as a dividend or distribution
with respect to, or in exchange for, or in replacement of such shares) which
shares cannot be sold by the Holder thereof within a ninety (90) day period,
without volume limitations, under SEC Rule 144k (or any successor thereto).
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder as the same may be amended from
time to time.
"Stockholders" shall mean Palisades Capital, Ltd., Xxxxxxxxxx Investments,
Ltd. and Hyde Investments, Ltd., or their assigns or any transferees of the
Common Stock.
ARTICLE II
REGISTRATION RIGHTS
2.1 Required Registration. The Company will file a registration statement
with the SEC for the resale of the Registrable Securities held by the
Stockholders or their assigns or transferees, within sixty calendar days after
the effectiveness of the current registration statement filed with the SEC, or
within sixty days following the abandonment or termination of such registration
statement, or within 180 days following the date hereof, whichever date is
earliest. The Company will use its best efforts to keep such registration
statement effective until the earlier of (a) the Registrable Securities may be
sold by the holders thereof pursuant to Rule 144K promulgated pursuant to the
Securities Act; or (b) the Holders of Registrable Securities covered by such
registration statement have completed the distribution described in the
registration statement.
2.2 Incidental Registration. Other than the current registration statement
currently on file and most recently amended on April 5,2005, if at any time
after the date hereof, the Company proposes to register any shares of its Common
Stock under the Securities Act (except for registrations of Common Stock in
connection with (i) any employee stock option plan or employee benefit or
dividend reinvestment plan on a Form S-8 or any successor form or (ii) a merger
or exchange on a Form S-4 or any successor form), whether for sale for its own
account or the account of any other, it will each such time as soon as
practicable but in no event less than thirty (30) days prior to filing give
written notice of its intention to do so to the Stockholders. If the
Stockholders then are the holders of any Registrable Securities (i.e. shares of
Common Stock that are not already registered on an effective and current
registration statement or that are saleable under Rule 144(k)), then upon the
written request (which request shall specify the total number of Registrable
Securities intended to be disposed of by the Stockholders) of the Stockholders
made within twenty (20) days after the receipt of any such notice, the Company
will use its best efforts to effect the registration under the Securities Act of
all Registrable Securities held by the Stockholders which the Company has been
so requested to register for sale in the manner initially proposed by the
Company (an "Incidental Registration"). If the Company thereafter determines in
its sole discretion not to register or to delay registration of the Common
Stock, the Company may, at its election, give written notice of such
determination to the Stockholders and (i) in the case of a determination not to
register, shall be relieved of the obligation to register any Registrable
Securities in connection with such registration and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities for the same period as the delay in registration of such
other securities. The Company will use its best efforts to keep such
registration statement effective until the earlier of (a) the Registrable
Securities may be sold by the holders thereof pursuant to Rule 144K promulgated
pursuant to the Securities Act; or (b) the Holders of Registrable Securities
covered by such registration statement have completed the distribution described
in the registration statement.
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2.3 Registration Procedures. In connection with the Company's obligations
pursuant to this Article II, the Company will use its best efforts to effect
such registration in accordance herewith and the Company will promptly:
(a) prepare and file with the SEC the requisite registration
statement to effect such registration and use its best efforts to cause such
registration to become effective;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective in accordance
with this Article II, and to comply with the provisions of the Securities Act
with respect to the disposition of Registrable Securities covered by such
registration statement during the applicable period in accordance with the
intended methods of disposition set forth in such registration statement,
prospectus or amendment or supplement thereto;
(c) furnish to the Stockholders and the managing underwriter, if
any, at least one executed original of the registration statement and such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, as may reasonably be
requested by the Stockholders;
(d) use its best efforts (i) to register or qualify, to the extent
necessary, the Registrable Securities covered by such registration statement
under the securities or "blue sky" laws of such jurisdictions where an exemption
is not then available as the Stockholders shall reasonably request, (ii) to keep
such registration or qualification in effect for so long as such registration
statement remains in effect and (iii) to take any other action which may be
reasonably necessary or advisable to enable the Stockholders to consummate the
disposition in such jurisdictions of such Registrable Securities, provided that
the Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or take any action which would
subject it to general service of process in any such jurisdiction;
(e) notify the Stockholders and the managing underwriter, if any,
promptly, and confirm such advice in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and, with
respect to a registration statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the SEC or any state
securities commission for amendments or supplements to a registration statement
or related prospectus or for additional information, (iii) of the issuance by
the SEC of any stop order suspending the effectiveness of a registration
statement or the initiation of any proceedings for that purpose, (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the registered securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event or information becoming known which could require the
making of any changes in a registration statement or related prospectus so that
such documents 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 not misleading and (vi) of the Company's reasonable
determination that a post-effective amendment to a registration statement would
be appropriate;
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(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a registration statement, or the lifting
of any suspension of the registration or qualification of any of the registered
securities for sale in any jurisdiction, at the earliest possible moment;
(g) upon the occurrence of any event contemplated by clause (e)(ii)
to (vi) above, prepare a supplement or post-effective amendment to the
applicable registration statement or related prospectus or any document filed
therewith or incorporated therein by reference or file any other required
document as soon as practicable, but in any event within thirty (30) days of the
occurrence of such event, so that, as thereafter delivered to the purchasers of
the securities being sold thereunder, such prospectus will not contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading;
(h) otherwise use its best efforts to comply as soon as practicable
with all applicable rules and regulations of the SEC and each state securities
commission in connection with a registration pursuant hereto;
(i) cooperate with the Stockholders and the managing underwriters,
if any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold; and enable such Registrable
Securities to be in such denominations and registered in such names as the
Stockholders or the managing underwriters, if any, may request at least two
business days prior to any sale of Registrable Securities to the underwriters;
(j) use its best 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 or desirable
to enable the Stockholders or the underwriters, if any, to consummate the
disposition of such Registrable Securities;
(k) cause all Registrable Securities covered by the registration
statement to be listed on each securities exchange, if any, or NASDAQ, on which
securities of such class, series and form issued by the Company, if any, are
then listed or traded;
(1) cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc. (the "NASD") and in the
performance of any due diligence investigation by any underwriter (including any
qualified independent underwriter that is required to be retained in accordance
with the rules and regulations of the NASD); and
(m) enter into and perform customary agreements (including an
underwriting agreement with respect to an underwritten offering in customary
form with the managing underwriter, if any) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of the
Registrable Securities.
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2.4 Expenses. The Company will pay all expenses incurred in connection
with each Registration of Registrable Securities, including, without limitation,
any and all filing fees payable to the SEC, fees with respect to filings
required to be made with stock exchanges, NASDAQ and the NASD, fees and expenses
of compliance with state securities or blue sky laws, printing expenses, fees
and disbursements of counsel and accountants of the Company (including costs
associated with comfort letters), and fees and expenses of other Persons
retained by the Company, and the actual reasonable legal fees and expenses of
one counsel for the Stockholders in connection with each Demand and Incidental
Registration of Registrable Securities, but excluding underwriting discounts and
commissions relating to the distribution of the Registrable Securities, included
in such registration statement).
ARTICLE III
MISCELLANEOUS
3.1 Binding Effect. The provisions of this Agreement shall be binding upon
and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives and successors.
3.2 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by either party hereto of any
of the provisions hereof shall be effective unless set forth in a writing
executed by the party so waiving. No waiver of any provision or breach of this
Agreement shall be a waiver of any other provision or breach of this Agreement
or any subsequent breach. No course of dealing or delay or failure to exercise
any right hereunder on the part of any party thereto shall operate as a waiver
of such right or otherwise prejudice the rights, powers or remedies of such
party.
3.3 Notices. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be sent in accordance
with the Notice provisions of the Settlement Agreement.
3.4 Governing Law. This Agreement shall be governed by and construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of California without regard to choice of law principles hereof..
Any dispute arising under or related to this Agreement shall be resolved in
Santa Monica, California, as set forth in the Settlement Agreement.
3.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument
3.6 Invalidity. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
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
commercially reasonable efforts to find and employ, or to cause a court 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 portion thereof that may be hereafter declared
invalid, illegal, or unenforceable.
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3.7 Cumulative Remedies. All rights and remedies of the party hereto are
cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
3.8 Entire Agreement. This Agreement and the Settlement Agreement and the
other documents delivered pursuant hereto or contemplated hereby constitute the
full and entire understanding and agreement of the parties with regard to the
subjects hereof and thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
AccuPoll Holding Corp.;
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx, CEO and President
Palisades Capital, LLC Xxxxxxxxxx Investments, Ltd.
By: /s/ Xxxx Xxxxxxxx By: /s/ X. Xxxxx
-------------------------------- ---------------------------
Name: Xxxx Xxxxxxxx Name: X. Xxxxx
Title: President Title: Director
Hyde Investments, Ltd.
By: /s/ X. Xxxxx
--------------------------------
Name: X. Xxxxx
Title: Director
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