REGISTRATION RIGHTS AGREEMENT
Exhibit
10.5
REGISTRATION
RIGHTS
AGREEMENT (this “Agreement”), dated as of July
[__], 2007, by and among Global Realty Development Corp., a Delaware corporation
(the “Company”), and the persons listed on Schedule
A annexed hereto.
Preliminary
Statement
Pursuant
to the terms and
conditions of the Note and Warrant Purchase Agreement (the “Purchase
Agreement”), the Company is offering on a “best efforts” no minimum
basis, a financing (the “Offering”) of up to a maximum of
$6,000,000 of Offering Units (each an “Offering
Unit”). Each Offering Unit consists of $1.00 principal
amount of 12% Senior Promissory Notes (the “Notes”) and
Warrants to purchase three (3) shares of Common Stock (the “Initial
Warrants”). In addition to theses Initial Warrants, each Offering Unit
includes an additional warrant (the “Additional Warrant”) to
purchase one (1) shares of Common Stock for each Offering Unit. The Additional
Warrants are identical in all terms to the Initial Warrants (together, the
“Warrants”), except that (i) the Additional Warrants are
escrowed with an escrow agent which shall be Xxxxxxxxxx & Xxxxx LLP (the
“Escrow Agent”) pursuant to an escrow agreement between the
Escrow Agent, Company and Holders (the “Escrow Agreement”) and (ii) will be
distributed to the undersigned only upon an Event of Default (as defined in
Section 6 of the Note , or a Registration Failure under this
Agreement. This Offering is being made only to a Person who qualifies
as an “accredited investor” as such term is defined in Rule 501 of Regulation D
under the Securities Act of 1933, as amended (the “Securities
Act”). Capitalized terms used herein and not otherwise defined shall
have the respective meanings set forth in the Purchase Agreement, the Notes,
and
the Warrant, each entered into or issued in connection with this Registration
Rights Agreement (“Registration Agreement”).
NOW,
THEREFORE, in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the persons listed on Schedule A
annexed hereto hereby agree as follows:
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1.
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DEFINITIONS.
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As
used in this Agreement, the
following terms shall have the following meanings:
a. “Holder”
(collectively “Holders”) means the persons listed on Schedule A annexed
hereto, and any transferee or assignee to whom they assign rights under this
Agreement and who agrees to become bound by the provisions of this Agreement
in
accordance with Section 9.
b. “Person”
means any individual, corporation, trust, association, company, partnership,
joint venture, limited liability company, joint stock company, Governmental
Authority or other entity.
c. “Register,”
“registered,” and “registration”
refer to a registration
effected by preparing and filing one or more
Registration Statements (as defined below) in compliance with and pursuant
to
Rule 415 under the Securities 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”).
d. “Registrable
Securities” means the shares of Common Stock of the Company
underlying the Warrants (“Warrant Shares”) and the shares of Common Stock
underlying the Warrants issued to Xxxxxxx Capital and/or its designees and
assignees, up to the maximum permitted for registration under Rule 415
(approximately 9,000,000 Warrant Shares in the aggregate).
e. “Registration
Statement” means a registration statement or registration
statements of the Company filed under the Securities Act on Form S-3 or SB-2
if
available or Form S-1 (or any other appropriate form prescribed by the SEC)
for
the resale of the Registrable Securities.
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2.
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REGISTRATION.
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a. Registration. Subject
to the terms contained herein, the Company hereby agrees to file with the SEC
a
shelf registration statement on Form S-3 or another suitable and appropriate
form permitted by the SEC covering the resale of the Registrable Securities
(the
“Registration Statement”) within 120 calendar days after the
final Closing Date (the “Filing Date”), and use its best efforts to cause
the Registration Statement to be declared effective within 90 calendar days
after the Filing Date, or within 120 calendar days after the Filing Date in
the
event the Registration Statement is reviewed by the SEC (the “Effectiveness
Date”). The Company will use its best efforts to keep the
Registration Statement continuously effective until the earlier of (i) the
date
as of which the Holders may sell all of the Registrable Securities covered
by
such Registration Statement without restriction pursuant to Rule 144(k)
promulgated under the Securities Act (or successor thereto), (ii) Expiration
Date for the Warrants and/or (iii) the date on which the Holders shall have
sold
all the Registrable Securities covered by such Registration
Statement (the “Registration
Period”).
b. Piggy-Back
Registrations. If at any time prior to the earlier of
the expiration of two-years from the completion of the Offering, or the
availability for sale of the Warrant Shares without volume limitation pursuant
to Rule 144(k) (as such Rule may be amended), the Company proposes to file
with
the SEC a Registration Statement relating to an offering for its own account
or
the account of others under the Securities Act of any of its securities (other
than a Registration Statement on Form S-4 or Form S-8 (or their equivalents
at
such time) relating to 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) the Company shall
promptly send to each Holder written notice of the Company’s intention to file a
Registration Statement and of such Holder’s rights under this Section 2(b) and,
if within five (5) Business Days after receipt of such notice, such Holder
shall
so request in writing, the Company shall include in such Registration Statement
all or any part of the Registrable Securities such Holder requests to be
registered, subject to the priorities set forth in this Section 2(b)
below. No right to registration of Registrable Securities under this
Section 2(b) shall be construed to limit any registration required under Section
2(b). The obligations of the Company under this Section 2(b) may be
waived by Holders holding a majority of the Registrable
Securities. If an offering in connection with which a Holder is
entitled to registration under this Section 2(b) is an underwritten offering,
then each Holder whose Registrable Securities are included in such Registration
Statement shall, unless otherwise agreed to by the Company, offer and sell
such
Registrable Securities in an underwritten offering using the same underwriter
or
underwriters and, subject to the provisions of this Agreement, on the same
terms
and conditions as other shares of Common Stock included in such underwritten
offering. If a registration pursuant to this Section 2(b) is to be an
underwritten public offering and the managing underwriter(s) advise the Company
in writing that, in their reasonable good faith opinion, marketing or other
factors dictate that a limitation on the number of shares of Common Stock which
may be included in the Registration Statement is necessary to facilitate and
not
adversely affect the proposed offering, then the Company shall include in such
registration: (1) first, all securities the Company proposes to sell for its
own
account, (2) second, up to the full number of securities proposed to be
registered for the account of the holders of securities entitled to inclusion
of
their securities in the Registration Statement by reason of demand registration
rights, and (3) third, the securities requested to be registered by the Holders
and other holders of securities entitled to participate in the registration,
as
of the date hereof, drawn from them pro rata based on the number each has
requested to be included in such registration.
c. Allocation
of Registrable Securities. The initial number of
Registrable Securities included in any Registration Statement and each increase
in the number of Registrable Securities included therein shall be allocated
pro
rata among the Holders based on the number of Registrable Securities held by
each Holder at the time the Registration Statement covering such initial number
of Registrable Securities or increase thereof is declared effective by the
SEC. In the event that a Holder sells or otherwise transfers any of
such Holder’s Registrable Securities, each transferee shall be allocated a pro
rata portion of the then remaining number of Registrable Securities included
in
such Registration Statement for such transferor. Any shares of Common
Stock included in a Registration Statement and which remain allocated to any
Person which ceases to hold any Registrable Securities shall be allocated to
the
remaining Holders, pro rata based on the number of Registrable Securities then
held by such Holders.
d. Registration
Postponement. Notwithstanding the foregoing, the Company shall have
the right to postpone the Registration Statement if (i) so required under the
terms of another financing for not less than five millions dollars ($5 million)
and such financing is completed within 90 calendar days of final Closing or
(ii)
agreed to by the Company and Holders.
e. Compensation
for Registration Failure. If (i) the Company does
not have a Registration Statement covering the resale of the Registrable
Securities with an Effective Date prior to the one year anniversary of the
date
herein (“Registration Failure”) and (ii) the Securities and
Exchange Commission has not enacted revisions to Rule 144 that would shorten
the
required holding period and therefore permit, on the one year anniversary of
the
date herein, the unrestricted sale of the Common Stock issuable upon exercise
of
the Warrants, then the Escrow Agent (as defined in the 12% Senior Promissory
Note) shall issue the Additional Warrants to the Holders on the one year
anniversary herein pursuant to the formula set forth below:
X=Y[A-B]/A]
X=Number
of Additional Warrant to be issued to Holder under this section
Y=
Total
Additional Warrants possibly issuable to Holder
A=Number
of Initial Warrants issued to the Holder
B=Shares
of Common Stock of the Company underlying the Initial Warrants that can be
sold
pursuant to Rule 144 on the one year anniversary of the purchase of the Offering
Units by such Holder
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3.
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RELATED
OBLIGATIONS.
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The
Company will use its best efforts to effect the registration of the Registrable
Securities contemplated by Section 2 in accordance with the intended method
of
disposition thereof and, pursuant thereto, the Company shall have the following
obligations:
a. The
Company shall prepare and file with the SEC a Registration Statement with
respect to the Registrable Securities (on or prior to the Filing Date) for
the
registration of Registrable Securities pursuant to Section 2 and use its best
efforts to cause such Registration Statement relating to the Registrable
Securities to become effective as soon as possible after such
filing. The Company shall keep the Registration Statement required to
be filed hereunder effective pursuant to Rule 415 at all times during the
Registration Period, which 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 term “best
efforts” shall mean, among other things, that the Company shall submit to the
SEC, within ten (10) Business Days after the Company learns that no review
of a
particular Registration Statement will be made by the staff of the SEC or that
the staff has no further comments on the Registration Statement, as the case
may
be, a request for acceleration of effectiveness of such Registration Statement
to a time and date not later than 48 hours after the submission of such
request.
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 Securities Act, as
may
be necessary to keep such Registration Statement effective at all times during
the Registration Period, and, during such period, comply with the provisions
of
the Securities 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 seller or sellers thereof as set forth
in
such Registration Statement. In the case of amendments and
supplements to a Registration Statement that are required to be filed pursuant
to this Agreement (including pursuant to this Section 3(b)) by reason of the
Company filing a report on Form 10-KSB, Form 10-QSB or Form 8-K or any analogous
report under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), the Company shall file such amendments
or supplements with the SEC on the same day or as soon as practicably thereafter
on which the Exchange Act report is filed that created the requirement for
the
Company to amend or supplement the Registration Statement.
c. The
Company shall furnish to each Holder whose Registrable Securities are included
in any Registration Statement, without charge, upon the effectiveness of any
Registration Statement, one (1) copy of the prospectus included in such
Registration Statement and all amendments and supplements thereto as such Holder
may reasonably request and such other documents, including copies of any
preliminary or final prospectus, as such Holder may reasonably request from
time
to time in order to facilitate the disposition of the Registrable Securities
owned by such Holder.
d. The
Company shall use 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 jurisdictions in the United States as any Holder
reasonably requests, unless the Holder maintains a securities brokerage account
in New York State through which the Registerable Securities may be sold, (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), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify each Holder 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 Holder 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 omits 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, and
promptly prepare a supplement or amendment to such Registration Statement to
correct such untrue statement or omission, and deliver one (1) copy of such
supplement or amendment to each Holder (or such other number of copies as such
Holder may reasonably request). The Company shall also promptly
notify each Holder in writing (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 (notification of such
effectiveness shall be delivered to each Holder by facsimile within five (5)
Business Days on the same day of such effectiveness or by overnight mail),
(ii)
of any request by the SEC for amendments or supplements to a Registration
Statement or related prospectus or related information, and (iii) of the
Company’s reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
f. The
Company shall use its best 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 each Holder 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.
g. The
Company shall hold in confidence and not make any disclosure of information
concerning an Holder 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 an Holder is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt written notice to such Holder and allow such Holder, at the Holder’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
h. The
Company shall use its best efforts to (i) cause all the Registrable Securities
covered by a Registration Statement to be listed on each securities exchange
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. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this Section
3(h).
i. The
Company shall provide to the transfer agent and registrar for its Common Stock
(the “Transfer Agent”) all such Registrable Securities not
later than the Effective Date of such Registration Statement.
j. The
Company shall 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 to
consummate the disposition of such Registrable Securities.
k. The
Company shall otherwise use its best efforts to comply with all applicable
rules
and regulations of the SEC in connection with any registration
hereunder.
l. Within
three (3) Business Days after a Registration Statement that covers applicable
Registrable Securities is ordered effective by the SEC, the Company shall
deliver to the Transfer Agent for such Registrable Securities (with copies
to
the Holders whose Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has been declared
effective by the SEC.
m. The
Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by the Holders of Registrable Securities pursuant to
a
Registration Statement.
n. Notwithstanding
anything to the contrary in Section 3(e), at any time after the Registration
Statement has been declared effective, the Company may delay the disclosure
of
material, non-public information concerning the Company the disclosure of which
at the time is not, in the good faith opinion of the Board of Directors of
the
Company and its counsel, in the best interest of the Company and, in the opinion
of counsel to the Company, otherwise required (a
“Grace Period”);
provided, that the Company shall promptly (i) notify the Holders in writing
of
the existence of material, non-public information giving rise to a Grace Period
and the date on which the Grace Period will begin, and (ii) notify the Holders
in writing of the date on which the Grace Period ends. For purposes
of determining the length of a Grace Period above, the Grace Period shall begin
on and include the date the Holders receive the notice referred to in clause
(i)
above and shall end on and include the date the Holders receive the notice
referred to in clause (ii) above (the “Allowable Grace
Period”). Upon expiration of the Allowable Grace Period, the
Company shall again be bound by the first sentence of Section 3(e) with respect
to the information giving rise thereto.
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4.
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OBLIGATIONS
OF
THE HOLDERS.
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a. At
least five (5) Business Days prior to the first anticipated filing date of
a
Registration Statement, the Company shall notify each Holder in writing of
the
information the Company requires from each such Holder if such Holder elects
to
have any of such Holder’s Registrable Securities included in such Registration
Statement. It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Holder that such Holder shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request.
b. Each
Holder by such Holder’s acceptance of the Registrable Securities agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless
such Holder has notified the Company in writing of such Holder’s election to
exclude all of such Holder’s Registrable Securities from such Registration
Statement.
c. Each
Holder agrees that, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 3(e) or the first sentence of
Section 3(f), such Holder will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e) or the first
sentence of Section 3(f).
d. Each
Holder agrees not to take any action to cause such Holder to become a registered
broker-dealer, as defined under the Exchange Act.
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5.
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EXPENSES
OF
REGISTRATION.
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All
reasonable expenses, other than
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, and fees and disbursements of counsel for
the Company, shall be paid by the Company.
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6.
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INDEMNIFICATION.
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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 Holder who holds such Registrable
Securities, the directors, officers, partners, and each Person, if any, who
controls, any Holder within the meaning of the Securities Act or the Exchange
Act, and any underwriter (as defined in the Securities Act) for the Holders,
and
the directors and officers of, and each Person, if any, who controls, any such
underwriter within the meaning of the Securities Act or the Exchange 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 or 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 Registrable Securities are offered
(“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 not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used
prior to the effective date of such Registration Statement, or 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, (iii) any violation or alleged violation by the Company
of
the Securities Act, the Exchange 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 or (iv) any material violation of this Agreement (the
matters in the foregoing clauses (i) through (iv) being, collectively,
“Violations”). The Company shall reimburse
the Holders and each such underwriter or controlling person, promptly as such
expenses are incurred and are due and payable, for any 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 by an Indemnified Person arising out of or based
upon a Violation that occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Indemnified Person or underwriter
for such Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company pursuant
to
Section 3(c); (ii) with respect to any preliminary prospectus, shall not inure
to the benefit of any such person from whom the person asserting any such Claim
purchased the Registrable Securities that are the subject thereof (or to the
benefit of any person controlling such person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
in the prospectus, as then amended or supplemented, if such prospectus was
timely made available by the Company pursuant to Section 3(c), and the
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a violation and such Indemnified
Person, notwithstanding such advice, used it; (iii) shall not be available
to
the extent such Claim is based on a failure of the Holder to deliver or to
cause
to be delivered the prospectus made available by the Company, if such prospectus
was timely made available by the Company pursuant to Section 3(c); and (iv)
shall not apply to 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 transfer of the Registrable Securities
by the Holders pursuant to Section 9.
b. In
connection with any Registration Statement in which a Holder is participating,
each such Holder agrees to severally and not 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 and officers, each Person, if any,
who
controls the Company within the meaning of the Securities Act or the Exchange
Act (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 Securities Act,
the
Exchange 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 occurs in reliance upon and in conformity with
written information furnished to the Company by such Holder expressly for use
in
connection with such Registration Statement; and, subject to Section 6(d),
such
Holder 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 Holder, which consent shall not be unreasonably
withheld; provided, further, however, that the Holder 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 Holder 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 transfer of the
Registrable Securities by the Holders pursuant to Section
9. Notwithstanding 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 was corrected on a timely basis in the prospectus and
such prospectus was provided to Holders as required, as then amended or
supplemented.
c. The
Company shall be entitled to receive indemnities from underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in any distribution, to the same extent as provided above, with
respect to information such persons so furnished in writing expressly for
inclusion in the Registration Statement.
d. 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, 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 indemnifying party, the representation by such 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 Company shall pay reasonable fees for
only one separate legal counsel for the Holders, and such legal counsel shall
be
selected by the Holders holding a majority of the issued or issuable Registrable
Securities included in the Registration Statement to which the Claim
relates. 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 that relates to such action or claim. The
indemnifying party shall keep the Indemnified Party or Indemnified Person fully
apprised 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 that 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
or
litigation. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated 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.
e. The
indemnification required by this Section 6 shall be made by periodic payments
of
the amount thereof during the course of the investigation or defense, as and
when bills are received or Indemnified Damages are incurred.
f. The
indemnity agreements contained herein shall be in addition to (i) any cause
of
action or similar right of the Indemnified Party or Indemnified Person against
the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.
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7.
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CONTRIBUTION.
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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 seller of Registrable Securities
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of
the Securities Act) shall be entitled to contribution from any seller of
Registrable Securities who was not guilty of fraudulent misrepresentation;
and
(ii) 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.
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8.
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REPORTS
UNDER THE
EXCHANGE ACT.
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With
a view to making available to the
Holders the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time permit the
Holders to sell securities of the Company to the public without registration
(“Rule 144”) during the Registration Period, 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 Securities Act and the Exchange Act so long as the Company
remains subject to such requirements and the filing of such reports and other
documents as required for the applicable provisions of Rule 144;
and
c. furnish
to each Holder so long as such Holder owns Registrable Securities, promptly
upon
request, (i) a written statement by the Company that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange 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 Holders to sell such
securities pursuant to Rule 144 without registration.
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9.
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ASSIGNMENT
OF
REGISTRATION RIGHTS.
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The
rights under this Agreement shall
be automatically assignable by the Holders to any transferee of all or any
portion of Registrable Securities if: (i) the Holder agrees in writing with
the
transferee or assignee to assign such rights, and a copy of such agreement
is
furnished to the Company within a reasonable time after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee
or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer
or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act and applicable state securities
laws; (iv) at or before the time the Company receives the written notice
contemplated by clause (ii) of this sentence the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained
herein; and (v) such transfer shall have been made in accordance with the
applicable requirements of the Note Purchase Agreement and/or
Warrant.
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10.
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AMENDMENT
OF
REGISTRATION RIGHTS.
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Provisions
of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the Company and Holders who then hold or have the right
to
acquire sixty-six and two-thirds (66%) of the Registrable
Securities. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Holder and the Company. No such
amendment shall be effective to the extent that it applies to less than all
of
the holders of the Registrable Securities. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification
of
any provision of any of this Agreement unless the same consideration also is
offered to all of the parties to this Agreement.
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11.
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MISCELLANEOUS.
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a. A
Person is deemed to be a holder of Registrable Securities whenever such Person
owns or is deemed to own of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two
or
more Persons with respect to the same Registrable Securities, the Company shall
act upon the basis of instructions, notice or election received from the
registered owner of such Registrable Securities.
b. Any
notices, consents, waivers or other communications required or permitted to
be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one (1) Business 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: | Global
Realty Development Corp.
Attn:
Xxxxxx X. Xxxx, Chief Executive Officer
00000
Xxxxx Xxx Xxxxxxxxx Xxxxx 000
Xxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone:
(000) 000-0000
Fax: (000)
000-0000
|
|
| With a copy to: | Xxxxxxxxxx
& Xxxxx LLP
Attention:
Addison X. Xxxxx, Esq.
00000
Xxxxxxxx Xxxx., Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000)
000-0000
Fax: (000)
000-0000
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If
to a
Holder, to his or its address and facsimile number on Schedule A hereto, or
to
such other address and/or facsimile number and/or to the attention of such
other
person as the recipient party has specified by written notice given to each
other party five (5) Business Days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically generated
by the sender’s facsimile machine containing the time, date, recipient facsimile
number and an image of such transmission or (C) provided by a courier or
overnight courier service shall be rebuttable evidence of personal service,
transmission by facsimile or overnight or courier delivery in accordance with
clause (A), (B) or (C) above, respectively.
c. Except
as otherwise provided in this Agreement, the 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.
d. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of
Florida, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of Florida or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of
Florida. Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the U.S. District Court, Central District of Florida or the
State courts of the State of Florida 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. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT
OR
ANY TRANSACTION CONTEMPLATED HEREBY.
e. This
Agreement constitutes the entire agreement among the parties hereto with respect
to the registration rights. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
and
therein. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.
f. Subject
to the requirements of Section 9, this Agreement shall inure to the benefit
of
and be binding upon the heirs, legal representatives, permitted successors
and
assigns of each of the parties hereto.
g. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
h. This
Agreement may be executed in 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.
i. 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.
j. All
consents and other determinations to be made by the Holders pursuant to this
Agreement shall be made, unless otherwise specified in this Agreement, by
Holders holding a majority of the Registrable Securities.
k. The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent and no rules of strict construction
will
be applied against any party.
l. This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF,
the parties have caused this Registration Rights Agreement to be duly executed
as of day and year first above written.
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COMPANY:
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GLOBAL REALTY DEVELOPMENT CORP. |
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a
Delaware Corporation
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| By: Xxxxxx X. Xxxx | |
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Its: Chief
Executive Officer
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| HOLDERS: |
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By:
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Its:
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By:
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Its:
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| By: | |
| Its: | |
| By: | |
| Its: | |
| By: | |
| Its: | |
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| By: | |
| Its: | |
| By: | |
| Its: | |
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By:
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| Its: |
Schedule
A
|
Name
and Address
|
Number
of Warrant Shares
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Letterhead
of
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
[Name
of Holder]
[Address
of Holder]
Attn:______________
______________,
2007
Ladies
and Gentlemen:
Please
be advised that on __________,
2007 we filed a Registration Statement on
Form [___] (File No. 333-__________________) (the
“Registration Statement”) with the Securities and Exchange
Commission (the “SEC”) for the resale of shares of our Common
Stock (the “Shares”) by the selling stockholders named therein
in accordance with the Registration Rights Agreement dated as of July
[ ], 2007.
In
connection with the foregoing, we
advise you that a member of the SEC’s staff has advised us by telephone that the
SEC has entered an order declaring the Registration Statement effective under
the Securities Act of 1933, as amended (the “Act”) at
[ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF
EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a
member of the SEC’s staff, that any stop order suspending its effectiveness has
been issued or that any proceedings for that purpose are pending before, or
threatened by, the SEC and the Shares are available for resale under the Act
pursuant to the Registration Statement.
|
Very
truly yours,
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|||
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By:
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/s/ | |
|
Name:
|
Xxxxxx
X. Xxxx
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||
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Its:
|
Chief
Executive Officer
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