REGISTRATION RIGHTS AGREEMENT
Exhibit
10.13
REGISTRATION
RIGHTS AGREEMENT
(this
“Agreement”),
dated
as of February 14, 2008, by and between Sonterra Resources, Inc. (f/k/a River
Capital Group, Inc.), a Delaware corporation, with headquarters currently
located
at Xxxxx
000, 0 Xxxx Xxxxxx, Xxxxxxxx Xxxxxxx XX00, and to be located after the Exchange
Closing Date at 000 Xxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxx
00000, Texas (the “Company”),
and
The Longview Fund, L.P., a California limited partnership (“Buyer”).
WHEREAS:
A. In
connection with the Securities Exchange and Additional Note Purchase Agreement,
by and between the parties hereto and dated as of August 3, 2007 (as amended
by
the February 2008 Amendment Agreement, dated February 14, 2008 by and between
the parties hereto, and as may be further amended, modified, restated or
supplemented and in effect from time to time, the “Securities
Exchange Agreement”),
the
Company has agreed, upon the terms and subject to the conditions of the
Securities Exchange Agreement, to issue at the Exchange Closing (as defined
in
the Securities Exchange Agreement) to the Buyer (i) senior secured notes of
the
Company, (ii) shares (the “New
Common Shares”)
of the
Company’s common stock, $0.001 par value (the “Common
Stock”),
and
(iii) a warrant to purchase shares of Common Stock (such warrant, together
with
any warrant issued in exchange or substitution therefor or replacement thereof,
and as the same may be amended, restated or modified and in effect from time
to
time, the “Warrant”;
and
the shares of Common Stock issuable upon exercise of the Warrant being referred
to herein as the “Warrant
Shares”);
B. Pursuant
to the Securities Exchange Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively,
the
“1933
Act”),
and
applicable state securities laws.
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 Buyer hereby agree as follows:
1. DEFINITIONS.
As
used
in this Agreement, the following terms shall have the following
meanings:
a. “1934
Act”
means,
collectively, the Securities Exchange Act of 1934, as amended, and the rules
and
regulations thereunder, or any similar successor statute.
b. "Business
Day" means
any
day other than Saturday, Sunday or any other day on which commercial banks
in
the City of New York are authorized or required by law to remain closed.
c. “Demand
Registration Filing Deadline”
means
the date that is thirty (30) days after delivery to the Company of a Demand
Registration Request; provided, however, that in the case of a Demand
Registration for an offering pursuant to Rule 415, the “Demand Registration
Filing Deadline” shall mean the later of such date and the earliest date that
the Company is permitted to file the Registration Statement by the
SEC.
d. "Effectiveness
Deadline"
means
the Initial Effectiveness Deadline, an Additional Warrant Share Registration
Effectiveness Deadline or a Demand Registration Effectiveness Deadline, as
applicable.
e. “Filing
Deadline”
means
the Initial Filing Deadline, an Additional Warrant Share Registration Filing
Deadline or a Demand Registration Filing Deadline, as applicable.
f. "Initial
Effectiveness Date" means
the
date the Initial Registration Statement is declared effective by the SEC.
g. “Initial
Effectiveness Deadline”
means
the later of (i) the date that is 120 days after the Exchange Closing Date
and
(ii) the Initial Filing Date.
h. "Initial
Filing Date"
means
the date on which the Initial Registration Statement is filed with the
SEC.
i. "Initial
Filing Deadline"
means
the date (such date, the “Target
Date”)
that
is thirty (30) days after the Exchange Closing Date; provided, however that,
if
on the Exchange Closing Date the Warrant Registrable Securities are not then
eligible for sale on a delayed or continuous basis by the Investors pursuant
to
Rule 415, the Initial filing Deadline shall be the later of (i) the Target
Date
and (ii) the earlier of (A) the date that is the tenth (10th)
Business Day following the date on which the Investors shall have delivered
to
the Company the information required by Item 508 of Regulation S-K under the
Securities Act with respect to a plan of distribution for the Warrant
Registrable Shares other than in accordance with Rule 415 and (B) the first
date
on which the Warrant Registrable Securities are eligible for sale on a delayed
or continuous basis by the Investors pursuant to Rule 415.
j. "Initial
Registration Statement" means
a
registration statement or registration statements of the Company filed under
the
1933 Act pursuant to Section 2(a) hereof covering the Warrant Registrable
Securities.
k. “Investor”
means
the Buyer, any transferee or assignee thereof to whom the Buyer assigns its
rights under this Agreement and who agrees to become bound by the provisions
of
this Agreement in accordance with Section
11
and any
transferee or assignee thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the provisions
of
this Agreement in accordance with Section
11.
l. "Permitted
Registration Amount"
means
the lesser of (i) the number of Registrable Securities requested to be included
in a Registration Statement for a Demand Registration or a Piggyback
Registration, as applicable and (ii) the maximum number of Registrable
Securities the Company is permitted to include in such Registration Statement
by
the SEC.
2
m. "Person"
means an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
n. “Person”
means
an individual, a limited liability company, a partnership, a joint venture,
a
corporation, a trust, an unincorporated organization and a governmental or
any
department or agency thereof, or any other legal entity.
o. "Register,"
"registered,"
and
"registration"
refer to
a registration effected by preparing and filing one or more Registration
Statements in compliance with the 1933 Act and the declaration or ordering
of
effectiveness of such Registration Statement(s) by the SEC.
p. "Registrable
Securities" means
(i)
the New Common Shares, (ii) the Warrant Shares issued or issuable upon exercise
of the Warrant, (iii) any other shares of Common Stock held by Buyer on the
date
of this Agreement, or issuable upon exercise, exchange or conversion of any
other securities held by Buyer on the date of this Agreement, (such shares,
the
“Other
Common Shares”),
and
(iv) any shares of capital stock of the Company issued or issuable with respect
to the Warrant, the New Common Shares, the Warrant Shares or the Other Common
Shares as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise provided, however, that any such
Registrable Securities shall cease to be Registrable Securities when (A) a
Registration Statement with respect to the sale of such securities becomes
effective under the 1933 Act and such securities are disposed of in accordance
with such Registration Statement, (B) such securities are sold in accordance
with Rule 144 (as defined in Section 10) or (c) such securities become
transferable without any restrictions in accordance with Rule 144(k) (or any
successor provision).
q. "Registration
Statement"
means a
registration statement or registration statements of the Company filed under
the
1933 Act covering Registrable Securities.
r. "Rule
415"
means
Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis.
s. “Trading
Day”
means
any day on which the Common Stock is traded on the Principal Market; provided
that “Trading Day” shall not include any day on which the Common Stock is
scheduled to trade, or actually trades, on the Principal Market for less than
4.5 hours.
t. “Warrant
Registrable Securities”
means
(i) the Warrant Shares issued or issuable upon exercise of the Warrant and
(ii)
any shares of capital stock issued or issuable with respect to the Warrant
or
the Warrant Shares as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise; provided, however,
that any such Warrant Registrable Securities shall cease to be Warrant
Registrable Securities when (A) a Registration Statement with respect to the
sale of such securities becomes effective under the 1933 Act and such securities
are disposed of in accordance with such Registration Statement, (B) such
securities are sold in accordance with Rule 144, or (C) such securities become
transferable without any restrictions in accordance with Rule 144(k) (or any
successor provision).
3
u. “Principal
Market”
means,
with respect to the Common Stock, the OTC Bulletin Board; provided
however,
that,
if after the date of this Agreement the Common Stock is listed on a national
securities exchange, “Principal Market” shall mean such national securities
exchange; and, with respect to any other security, “Principal Market” means the
principal securities exchange or trading market for such security.
v. “Weighted
Average Price”
means,
for any security as of any date, the dollar volume-weighted average price for
such security on its Principal Market during the period beginning at 9:30 a.m.
New York City time (or such other time as its Principal Market publicly
announces is the official open of trading) and ending at 4:00 p.m. New York
City
time (or such other time as its Principal Market publicly announces is the
official close of trading) as reported by Bloomberg Financial Markets (or any
successor thereto) (“Bloomberg”)
through its “Volume at Price” functions, or if the foregoing does not apply, the
dollar volume-weighted average price of such security in the over-the-counter
market on the electronic bulletin board for such security during the period
beginning at 9:30 a.m. New York City time (or such other time as such
over-the-counter market publicly announces is the official open of trading),
and
ending at 4:00 p.m. New York City time (or such other time as such
over-the-counter market publicly announces is the official close of trading)
as
reported by Bloomberg, or, if no dollar volume-weighted average price is
reported for such security by Bloomberg for such hours, the average of the
highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in the “pink sheets” by the National
Quotation Bureau, Inc. If the Weighted Average Price cannot be calculated for
such security on such date on any of the foregoing bases, the Weighted Average
Price of such security on such date shall be the fair market value as mutually
determined by the Company and the applicable Investor. If the Company and the
applicable Investor are unable to agree upon the fair market value of the Common
Stock, then such dispute shall be resolved by the Chicago office of an
investment banking firm mutually agreeable to the applicable Investor and the
Company. All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during
any
period during which the Weighted Average Price is being determined.
Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Exchange Agreement.
2. INITIAL
MANDATORY REGISTRATION.
a. Initial
Mandatory Registration.
The
Company shall prepare, and, as soon as practicable but in no event later than
the Initial Filing Deadline, file with the SEC a Registration Statement on
Form
S-3 (subject to Section
2(c)),
covering the resale of all of the Warrant Registrable Securities. The Initial
Registration Statement prepared pursuant hereto shall register for resale at
least that number of Warrant Registrable Securities equal to 100% of the number
of Warrant Shares issued or issuable upon exercise of the Warrant as of the
second Trading Day immediately preceding the date the Initial Registration
Statement is initially filed with the SEC. The Company shall use its reasonable
best efforts
to have the Initial Registration Statement declared effective by the SEC as
soon
as practicable, but in no event later than the Initial Effectiveness Deadline.
4
b. Allocation
of Registrable Securities.
The
initial number of Warrant Registrable Securities included in the Initial
Registration Statement (or any other Registration Statement filed pursuant
to
this Section
2)
and
each increase in the number of Warrant Registrable Securities included therein
shall be allocated pro rata among the Investors based on the number of such
Warrant Registrable Securities held by each Investor at the time such
Registration Statement or increase thereof is declared effective by the SEC.
In
the event that an Investor sells or otherwise transfers any of such Investor’s
Warrant Registrable Securities, each transferee shall be allocated a pro rata
portion of the then remaining number of Warrant Registrable Securities included
in such Registration Statement for such transferor. Any shares of Common Stock
included in the Initial Registration Statement (or any other Registration
Statement filed pursuant to this Section
2)
and
which remain allocated to any Person which ceases to hold any Warrant
Registrable Securities covered by such Registration Statement shall be allocated
to the remaining Investors, pro rata based on the number of Warrant Registrable
Securities then held by such Investors which are covered by such Registration
Statement. For purposes hereof, the number of Warrant Registrable Securities
held by an Investor includes all Warrant Registrable Securities issuable upon
the exercise of Warrants held by such Investor, without regard to any
limitations on exercise of the Warrant. In no event shall the Company include
any securities other than Registrable Securities in any Registration Statement
filed pursuant to this Section
2.
c. Ineligibility
for Form S-3.
In the
event that Form S-3 is not available for the registration of the resale of
the
Warrant Registrable Securities hereunder, the Company shall (i) register the
Warrant Registrable Securities on Form S-1, Form SB-2 or another appropriate
form reasonably acceptable to the holders of two-thirds of the Warrant
Registrable Securities, and (ii) undertake to register the Warrant Registrable
Securities on Form S-3 (by post-effective amendment to the existing Registration
Statement or otherwise) as soon as such form is available, provided that the
Company shall maintain the effectiveness of the Registration Statement then
in
effect until such time as a Registration Statement on Form S-3 covering the
Warrant Registrable Securities has been declared effective by the
SEC.
d. Sufficient
Number of Shares Registered.
In the
event the number of shares available under the Initial Registration Statement
filed pursuant to Section 2(a) (or any Registration Statement previously filed
pursuant to this Section 2(d)) is insufficient to cover all of the Warrant
Registrable Securities required to be covered by the Initial Registration
Statement (or Registration Statement previously filed pursuant this Section
2(d)) or an Investor’s allocated portion of such Warrant Registrable Securities
pursuant to Section 2(b), the Company shall, as soon as practicable, but in
any
event not later than fifteen (15) days after the necessity therefor arises
(an
“Additional
Warrant Share Registration Filing Deadline”),
amend
the Initial Registration Statement, or file a new Registration Statement (on
the
short form available therefor, if applicable), or both, so as to register for
resale at least that number of Warrant Registrable Securities equal to 100%
of
the number of Warrant Shares issued or issuable upon exercise of the Warrant
as
of the Trading Day immediately preceding the date of the filing of such
amendment or new Registration Statement with the SEC. The Company shall use
its
reasonable best efforts
to cause such amendment and/or new Registration Statement to become effective
as
soon as practicable following the filing thereof, but in any event not later
than seventy-five (75) days following the filing thereof (an “Additional
Warrant Share Registration Effectiveness Deadline”).
For
purposes of the foregoing provision, the number of shares available under the
Initial Registration Statement (or any Registration Statement previously filed
pursuant to this Section 2(d)) shall be deemed “insufficient to cover all of the
Warrant Registrable Securities” if, as of any date of determination, the number
of Warrant Registrable Securities equal to the number of Warrant Shares issued
or issuable as of such time upon exercise of the Warrant is greater than the
number of Warrant Registrable Securities available for resale under such
Registration Statement.
5
e. Effect
of Failure to File and Obtain and Maintain Effectiveness of Mandatory
Registration Statement.
If (A)
a Registration Statement covering Registrable Securities and required to be
filed by the Company pursuant to Section
2(a)
or
Section 2(d)
is not
(I) filed with the SEC on or before the applicable Filing Deadline or
(II) declared effective by the SEC on or before the applicable
Effectiveness Deadline, or (B) on any day after Registration Statement has
been
declared effective by the SEC sales of all the Registrable Securities required
to be included on such Registration Statement cannot be made (other than during
an Allowable Grace Period (as defined in Section
5(t))
pursuant to such Registration Statement (including because of a failure to
keep
the such Registration Statement effective, to disclose such information as
is
necessary for sales to be made pursuant to such Registration Statement or to
register sufficient shares of Common Stock, as determined in accordance with
Section
2(e),
or
because a post-effective amendment to such Registration Statement has been
filed
but not been declared effective), then, as partial relief for the damages to
any
holder of Warrants by reason of any such delay in or reduction of its ability
to
sell the underlying shares of Common Stock (which remedy shall not be exclusive
of any other remedies available at law or in equity), the Company shall pay
to
such holder an amount in cash equal to the product of (X) the total Aggregate
Exercise Price (as defined in the Warrant) of the Warrant held by such holder,
multiplied by (Y) the sum of (I) 0.02, if such Registration Statement is not
filed by the applicable Filing Deadline, plus (II) 0.02, if such Registration
Statement is not declared effective by the applicable Effectiveness Deadline,
plus (III) the product of (I) 0.000667 multiplied by (II) the sum (without
duplication) of (1) the number of days after the applicable Filing Deadline
that
such Registration Statement is not filed with the SEC, plus (2) the number
of
days after the applicable Effectiveness Deadline that such Registration
Statement is not declared effective by the SEC, plus (3) the number of days
after such Registration Statement has been declared effective by the SEC that
such Registration Statement is not available (other than during an Allowable
Grace Period) for the sale of at least all the Warrant Registrable Securities
required to be included on such Warrant Registration Statement pursuant to
this
Section
2.
The
payments to which a holder shall be entitled pursuant to this Section
2(e)
are
referred to herein as “Warrant
Share Registration Delay Payments.”
Warrant Registration Delay Payments shall be paid on the earlier of (I) the
last
day of the calendar month during which such Warrant Registration Delay Payments
are incurred and (II) the third Business Day after the event or failure giving
rise to the Registration Delay Payments is cured. In the event the Company
fails
to make Warrant Share Registration Delay Payments in a timely manner, such
Warrant Registration Delay Payments shall bear interest, in each case until
paid
in full, at a rate equal to the lesser of (A) 2.0% per month (equivalent to
a
per annum rate of 24.0%), prorated for partial months, and (B) the highest
lawful interest rate.
6
3. DEMAND
REGISTRATION.
a. Long-Form
Registrations.
Subject
to the terms of this Agreement, any Investors holding at least two-thirds (2/3)
of the then-outstanding Registrable Securities may at any time following the
Exchange Closing Date request (any such request, a “Long-Form
Demand Registration Request”)
registration of all or part of their Registrable Securities on Form S-1, Form
SB-2 or any similar long-form registration. Within five (5) days after receipt
of any request pursuant to this Section
3(a),
the
Company will give written notice of such request to all other Investors holding
Registrable Securities. The Company shall prepare, and, as soon as practicable
but in no event later than the Demand Registration Filing Deadline, file with
the SEC a Registration Statement, and the Company shall include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion within twenty (20) days after delivery
of the Company’s notice; provided, however, that if at the time of issuance of
such Long-Form Demand Registration Request, the Registrable Securities are
eligible to be sold on a delayed or continuous basis pursuant to Rule 415 and
the Demand Registration is for an offering pursuant to Rule 415, the Company
shall not be required to include in such Demand Registration Statement a number
of Registrable Securities in excess of the Permitted Registration Amount. All
registrations requested pursuant to this Section
3(a)
are
referred to herein as “Long-Form
Demand Registrations.”
The
Company is obligated to effect no more than three (3) Long-Form Demand
Registrations in any 12-month period.
b. Short-Form
Registrations.
In
addition to the Long-Form Registrations provided pursuant to Section
3(a),
at any
time following the Exchange Closing Date that the Company is eligible to use
a
Form S-3 (or any similar short-form registration) for resale of Common Stock
by
selling security holders, Investors holding at least two-thirds (2/3) of the
then-outstanding Registrable Securities may request (any such request, or any
Long-Form Demand Registration Request, a “Demand
Registration Request”) registrations
of all or part of their Registrable Securities on Form S-3 or any similar
short-form registration (“Short-Form
Demand Registrations”
and,
together with the Long-Form Demand Registrations, “Demand
Registrations”).
Within five (5) Business Days after receipt of any request pursuant to this
Section
3(b),
the
Company will give written notice of such request to all other Investors holding
Registrable Securities. The Company shall prepare, and, as soon as practicable
but in no event later than the Demand Registration Filing Deadline, file with
the SEC a Registration Statement, and the Company shall include in such
Registration Statement all Registrable Securities with respect to which the
Company has received written requests for inclusion within twenty (20) days
after delivery of the Company’s notice; provided, however, that if the Demand
Registration is for an offering pursuant to Rule 415, the Company shall not
be
required to include in such Demand Registration Statement a number of
Registrable Securities in excess of the Permitted Registration Amount. Demand
Registrations will be Short-Form Registrations whenever the Company is permitted
to use Form S-3 or any applicable short form therefor. If a Short-Form
Registration is to be an underwritten public offering, and if the underwriters
for marketing or other reasons request the inclusion in the Registration
Statement of information which is not required under the 1933 Act to be included
in a Registration Statement on the applicable form for the Short-Form
Registration, the Company will provide such information as may be reasonably
requested for inclusion by the underwriters in the Short-Form Registration.
The
Company is not obligated to effect more than three (3) Short-Form Demand
Registrations in any 12-month period.
7
c. Filing
Deadlines and Effectiveness Dates.
The
Company shall use its reasonable best efforts
to have any Registration Statement filed pursuant to this Section 3 declared
effective by the SEC as soon as practicable, but in no event later than the
date
which is seventy-five (75) days after the date such Registration Statement
is
initially filed with the SEC (the “Demand
Registration Effectiveness Deadline”).
d. Allocation
and Priority of Registrable Securities in a Demand Registration.
i. The
Company will not include in any Demand Registration any securities which are
not
Registrable Securities without the prior written consent of the Investors
holding securities representing at least two-thirds (2/3) of the Registrable
Securities to be included in such Demand Registration. If a Demand Registration
is for an offering pursuant to Rule 415 and the number of Registrable Securities
required by the Investors to be included therein exceeds the Permitted
Registration Amount, the initial number of Registrable Securities included
in
any Registration Statement in respect of such Demand Registration and each
increase in the number of Registrable Securities included therein shall be
allocated pro rata among the Investors holding Registrable Securities on the
basis of the number of Registrable Securities owned by such Investors, with
further successive pro rata allocations among the Investors if any such Investor
has requested the registration of less than all of the Registrable Securities
such Investor is entitled to register. In the event that an Investor sells
or
otherwise transfers any of such Investor’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 Demand Registration
Statement and which remain allocated to any Person which ceases to hold any
Registrable Securities covered by such Demand Registration Statement shall
be
allocated to the remaining Investors, pro rata based on the number of
Registrable Securities then held by such Investors which are covered by such
Registration Statement. For purposes hereof, the number of Registrable
Securities held by an Investor includes all shares of Common Stock issuable
upon
exercise of Warrants (and upon conversion, exercise or exchange of other
securities held by Buyer on the date of this Agreement) held by such Investor,
with further successive pro rata allocations among the Investors if any such
Investor has requested the registration of less than all of the Registrable
Securities such Investor is entitled to register.
ii. If
a
Demand Registration is an underwritten public offering and the managing
underwriters advise the Company in writing that in their opinion the inclusion
of the number of Registrable Securities and other securities requested to be
included creates a substantial risk that the price per share of Common Stock
will be reduced, the Company will include in such registration, prior to the
inclusion of any securities which are not Registrable Securities, the number
of
Registrable Securities requested to be included which in the opinion of such
underwriters can be sold without creating such a risk, pro rata among the
respective Investors holding Registrable Securities on the basis of the number
of Registrable Securities owned by such Investors, with further successive
pro
rata allocations among the Investors if any such Investor has requested the
registration of less than all such Registrable Securities such Investor is
entitled to register.
8
e. Selection
of Underwriters.
The
Investors holding at least two-thirds (2/3) of the Registrable Securities
included in any Demand Registration shall have the right to elect that the
Demand Registration shall be underwritten and, if so elected, to select the
investment bank(s) and manager(s) to administer the offering, subject to the
Company’s approval, which shall not be unreasonably withheld, conditioned or
delayed.
f. Effect
of Failure to File and Obtain and Maintain Effectiveness of a Demand
Registration Statement.
If (i)
a Registration Statement covering Registrable Securities and required to be
filed by the Company pursuant to Section
3(a)
or
Section
3(b)
of this
Agreement is not (A) filed with the SEC on or before the applicable Filing
Deadline or (B) declared effective by the SEC on or before the applicable
Effectiveness Deadline, or (ii) on any day after any such Registration Statement
has been declared effective by the SEC sales of all the Registrable Securities
required to be included on such Registration Statement cannot be made (other
than during an Allowable Grace Period (as defined in Section
5(t))
pursuant to such Registration Statement (including because of a failure to
keep
such Registration Statement effective, to disclose such information as is
necessary for sales to be made pursuant to such Registration Statement or to
register sufficient shares of Common Stock, as determined in accordance with
this Section
3,
or
because a post-effective amendment to such Registration Statement has been
filed
but not been declared effective), then, as partial relief for the damages to
any
holder of Registrable Securities by reason of any such delay in or reduction
of
its ability to sell the underlying shares of Common Stock (which remedy shall
not be exclusive of any other remedies available at law or in equity), the
Company shall pay to such holder an amount in cash equal to the product of
(i)
the sum of (A) the total Aggregate Exercise Price (as defined in the Warrant)
of
the Warrant held by such holder, plus (B) the product of (I) the total number
of
New Common Shares and Other Common Shares held by such holder, multiplied by
(II) the arithmetic average of the Weighted Average Price of the Common Stock
on
each of the five (5) consecutive Trading Days immediately preceding the Exchange
Closing Date (subject to appropriate adjustment for any stock dividend, stock
split, stock combination or other similar transaction occurring during such
period) multiplied by (ii) the sum of (a) 0.02, if such Registration Statement
is not filed by the applicable Filing Deadline, plus (b) 0.02, if such
Registration Statement is not declared effective by the applicable Effectiveness
Deadline, plus (c) the product of (X) 0.000000 multiplied by (Y) the sum
(without duplication) of (1) the number of days after the applicable Filing
Deadline that such Registration Statement is not filed with the SEC, plus (2)
the number of days after the applicable Effectiveness Deadline that such
Registration Statement is not declared effective by the SEC, plus (3) the number
of days after such Registration Statement has been declared effective by the
SEC
that such Registration Statement is not available (other than during an
Allowable Grace Period) for the sale of at least all the Registrable Securities
required to be included on such Registration Statement pursuant to this
Section
3.
The
payments to which a holder shall be entitled pursuant to this Section
3(f)
are
referred to herein as “Demand
Registration Delay Payments.”
Demand
Registration Delay Payments shall be paid on the earlier of (I) the last day
of
the calendar month during which such Demand Registration Delay Payments are
incurred and (II) the third Business Day after the event or failure giving
rise
to the Demand Registration Delay Payments is cured. In the event the Company
fails to make Demand Registration Delay Payments in a timely manner, such Demand
Registration Delay Payments, shall bear interest, in each case until paid in
full, at a rate equal to the lesser of (A) 2.0% per month (equivalent to a
per
annum rate of 24.0%), prorated for partial months, and (B) the highest lawful
interest rate.
9
4. PIGGYBACK
REGISTRATIONS.
a. Right
to Piggyback.
Whenever the Company proposes to register any of its securities under the 1933
Act (other than pursuant to Section
2 or 3
of the
Agreement) in connection with a public offering of such securities for cash
(other than a registration relating solely to the sale of securities to
participants in a stock incentive plan of the Company, in their capacity as
such) and the registration form to be used may be used for the registration
of
Registrable Securities (a “Piggyback
Registration”),
the
Company will give prompt written notice (and in any event within five (5)
Business Days after its receipt of notice of any exercise of demand registration
rights other than under this Agreement), which notice shall describe the
offering contemplated thereby, to all Investors of its intention to effect
such
a registration and will include in such registration all Registrable Securities
held by any Investors (in accordance with the priorities set forth in
Sections
4(b)
and
4(c)
below)
with respect to which the Company has received written requests for inclusion
within twenty (20) days after the delivery of the Company’s notice; provided,
however, that if the Piggyback Registration is for an offering pursuant to
Rule
415, the Company shall not be required to include in such Demand Registration
Statement a number of Registrable Securities in excess of the Permitted
Registration Amount.
b. Allocation
and Priority of Registrable Security in a Piggyback Registration.
i. If
the
Registrable Securities are then eligible for sale on a delayed or continuous
basis pursuant to Rule 415 and a Piggyback Registration is for an offering
pursuant to Rule 415 and the number of Registrable Securities required by the
Investors to be included therein exceeds the Permitted Registration Amount,
the
initial number of Registrable Securities included in any Registration Statement
in respect of such Piggyback Registration and each increase in the number of
Registrable Securities included therein shall be allocated pro rata among the
Investors holding Registrable Securities on the basis of the number of
Registrable Securities owned by such Investors, with further successive pro
rata
allocations among the Investors if any such Investor has requested the
registration of less than all of the Registrable Securities such Investor is
entitled to register. In the event that an Investor sells or otherwise transfers
any of such Investor’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 Piggyback Registration Statement and which
remain allocated to any Person which ceases to hold any Registrable Securities
covered by such Piggyback Registration Statement shall be allocated to the
remaining Investors, pro rata based on the number of Registrable Securities
then
held by such Investors which are covered by such Registration Statement. For
purposes hereof, the number of Registrable Securities held by an Investor
includes all shares of Common Stock issuable upon exercise of the Warrant (and
upon conversion, exercise or exchange of other securities) held by such
Investor.
ii. If
a
Piggyback Registration is an underwritten primary registration on behalf of
the
Company and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in the
registration creates a substantial risk that the price per share of Common
Stock
in the offering will be reduced, the Company will include in such registration
first,
the
securities that the Company proposes to sell, second,
the
Registrable Securities requested to be included in such registration, pro rata
among the Investor on the basis of the number of shares of Registrable
Securities owned by the Investors, with further successive pro rata allocations
among the Investors if any such Investor has requested the registration of
less
than all of the Registrable Securities such Investor is entitled to register,
and third,
any
other securities requested to be included in such registration.
10
iii. Priority
on Secondary Registrations.
If a
Piggyback Registration is an underwritten secondary registration on behalf
of
holders of the Company’s securities and the managing underwriters advise the
Company in writing that in their opinion the number of securities requested
to
be included in the registration creates a substantial risk that the price per
share of Common Stock in the offering will be reduced, the Company will include
in such registration first,
the
securities requested to be included therein by the holders requesting such
registration and the Registrable Securities requested to be included in such
registration, pro rata among the holders of such securities on the basis of
the
number of shares of Common Stock or Registrable Securities owned by such
holders, with further successive pro rata allocations among such holders if
any
such holder has requested the registration of less than all of the Registrable
Securities such holder is entitled to register, and second,
other
securities requested to be included in such registration.
c. Selection
of Underwriters.
In
connection with any Piggyback Registration, (i) Investors holding at least
two-thirds (2/3) of the Registrable Securities requested to be registered shall
have the right to elect that such registration be underwritten and to select
the
managing underwriters (subject to the approval of the Company, which shall
not
be unreasonably withheld, conditioned or delayed) to administer any offering
of
the Company’s securities covered by Section
5(b)(iii),
and
(ii) the Company shall have the right to select the managing underwriters
(subject to the approval of Investors holding securities representing at least
two-thirds (2/3) of the Registrable Securities requested to be registered,
which
shall not be unreasonably withheld, conditioned or delayed) to administer any
offering of the Company’s securities covered by Section
5(b)(ii).
5. RELATED
OBLIGATIONS.
Whenever
the Company is obligated to file a Registration Statement with the SEC pursuant
to Section
2
or
Section
3,
the
holders of Registrable Securities have requested that any Registrable Securities
be registered pursuant to this Agreement, or the Company is otherwise obligated
to file a Registration Statement pursuant to this Agreement, the Company shall
use its reasonable best efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof and,
pursuant thereto, the Company shall have the following obligations:
a. The
Company shall promptly prepare and file with the SEC a Registration Statement
with respect to the applicable Registrable Securities (but in no event later
than the Applicable Filing Deadline) and use its reasonable best efforts to
cause such Registration Statement relating to the Registrable Securities to
become effective as soon as practicable after such filing (but in no event
later
than the applicable Effectiveness Deadline). No later than the first Business
Day after such Registration Statement becomes effective, the Company shall
file
with the SEC the final prospectus included therein pursuant to Rule 424 (or
successor thereto) promulgated under the 1933 Act. The Company shall keep each
Registration Statement effective pursuant to Rule 415 at all times until the
earlier of (i) the date as of which the Investors may sell all of the
Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or successor thereto) promulgated under
the
1933 Act or (ii) the date on which the Investors shall have sold all the
Registrable Securities covered by such Registration Statement to Persons that
are not Investors (the “Registration
Period”).
Such
Registration Statement (including any amendments or supplements thereto and
any
prospectuses (preliminary, final, summary or free writing) contained therein
or
related thereto 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 “reasonable best efforts” shall mean, among other
things, that the Company shall submit to the SEC, within two (2) 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 of the SEC 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.
11
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
supplements shall be filed pursuant to Rule 424 (or successor thereto)
promulgated under the 0000 Xxx) 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 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of any amendment or supplement to a Registration
Statement or prospectus that is required to be filed pursuant to this Agreement
(including pursuant to this Section 5(b)) by reason of the Company filing a
report under the 1934 Act, the Company shall have incorporated such report
by
reference into such Registration Statement, if applicable and permitted by
law,
or shall file such amendments or supplements with the SEC on the same day.
The
Company shall use its reasonable best efforts to cause any post-effective
amendment to a Registration Statement to become effective as soon as practicable
after such filing. No later than the first Business Day after a post-effective
amendment to a Registration Statement becomes effective, the Company shall
file
with the SEC the final prospectus included therein pursuant to Rule 424 (or
successor thereto) promulgated under the 1933 Act.
c. The
Investors holding securities representing at least two-thirds, (2/3) of the
Registrable Securities to be included in any Registration Statement shall have
the right to select one legal counsel to review such Registration Statements
(“Legal Counsel”), which shall be Xxxxxx Xxxxxx Xxxxxxxx LLP or such other
counsel as thereafter designated by the holders of at least two-thirds (2/3)
of
the Registrable Securities to be included in such Registration Statement. The
Company shall reasonably cooperate with Legal Counsel in performing the
Company’s obligations under this Agreement. Without limiting the foregoing, the
Company shall (A) permit Legal Counsel to review and comment upon (i) the
Initial Registration Statement or Registration Statement with respect to a
Long
Form Registration, at least five (5) Business Days prior to its filing with
the
SEC, (ii) any Registration Statement with respect of a Short-Form Registration,
at least three (3) Business Days prior to its filing with the SEC, and (iii)
all
other Registration Statements and all amendments and supplements to all
Registration Statements, within a reasonable number of days prior to their
filing with the SEC, and (B) not file any document, registration statement,
amendment or supplement described in the foregoing clause (A) in a form to
which
Legal Counsel reasonably objects. The Company shall not submit a request for
acceleration of the effectiveness of a Registration Statement or any amendment
or supplement thereto without providing prior notice thereof to Legal Counsel
and each Investor. The Company shall furnish to Legal Counsel, without charge,
(i) promptly after the same is prepared and filed with the SEC, one copy of
any
Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits and (ii) upon the effectiveness of any Registration Statement,
one
copy of the prospectus included in such Registration Statement and all
amendments and supplements thereto. The Company shall reasonably cooperate
with
Legal Counsel in performing the Company’s obligations pursuant to this
Section
5.
12
d. The
Company shall furnish to each Investor whose Registrable Securities are included
in any Registration Statement, without charge, (i) promptly after the same
is
prepared and filed with the SEC, at least one copy of such Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference that have not been
filed via XXXXX, all exhibits and each preliminary prospectus, (ii) upon the
effectiveness of any Registration Statement, at least one copy of the prospectus
included in such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Investor may reasonably request)
and (iii) such other documents, including copies of any prospectus (preliminary,
final, summary or free writing), as such Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.
e. The
Company shall use its reasonable best efforts to (i) register and qualify,
unless an exemption from registration and qualification applies, the resale
by
the Investors of the Registrable Securities covered by a Registration Statement
under the securities or “blue sky” laws of all the states of the United States
and any other jurisdiction reasonably requested by any Investor, (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
5(e)
or (y)
subject itself to general taxation in any such jurisdiction. The Company shall
promptly notify Legal Counsel and each Investor who holds Registrable Securities
of the receipt by the Company of any notification with respect to the suspension
of the registration or qualification of any of the Registrable Securities for
sale under the securities or “blue sky” laws of any jurisdiction or its receipt
of actual notice of the initiation or threatening of any proceeding for such
purpose.
13
f. The
Company shall notify Legal Counsel and each Investor in writing of the happening
of any event, as promptly as practicable after becoming aware of such event,
as
a result of which any prospectus included in, or relating to, a Registration
Statement, as then in effect, includes an untrue statement of a material fact
or
omission to state a material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare and file with the SEC
a
supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver at least one copy of such supplement or
amendment to Legal Counsel and each Investor. The Company shall also promptly
notify Legal Counsel and each Investor 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 Legal Counsel and
each
Investor by facsimile on the same day of such effectiveness and 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.
g. The
Company shall use its reasonable 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 Legal Counsel and each Investor who holds Registrable
Securities being sold of the issuance of such order and the resolution thereof
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.
h. At
the
reasonable request (in the context of the securities laws) of any Investor,
or
in the case of an underwritten offering upon the request of any underwriter,
the
Company shall furnish to such Investor or underwriter, as the case may be,
on
the date of the effectiveness of the Registration Statement and thereafter
from
time to time on such dates as such Investor or underwriter may reasonably
request (i) a “comfort letter,” dated such date, from the Company’s independent
registered certified public accountants in form and substance as is customarily
given by registered independent registered certified public accountants to
underwriters in an underwritten public offering, addressed to the Investors
and
any underwriters (or if such accountants are prohibited by generally accepted
auditing standards from issuing such a “comfort letter” to an Investor, the
Company shall furnish to such Investor an “agreed upon procedures” letter
covering the same matters to the greatest extent possible, and otherwise in
customary form and substance), and (ii) an opinion, dated as of such date,
of
counsel representing the Company for purposes of such Registration Statement,
in
form, scope and substance as is customarily given to underwriters in an
underwritten public offering, addressed to such Investor or underwriter, as
the
case may be.
i. At
the
reasonable request (in the context of the securities laws) of any Investor
or,
in the case of an underwritten offering, upon the request of any underwriter,
the Company shall make available for inspection during regular business hours
by
(i) any Investor, (ii) Legal Counsel and (iii) one firm of accountants or
other agents retained by the Investors (collectively, the “Inspectors”),
and
in the case of an underwritten offering by any underwriter all pertinent
financial and other records, and pertinent corporate documents and properties
of
the Company (collectively, the “Records”),
as
shall be reasonably deemed necessary by such Inspector or underwriter, as the
case may be, and cause the Company’s officers, directors and employees to supply
all information that any Inspector or underwriter may reasonably request;
provided,
however,
that
each Inspector shall agree to hold in strict confidence and shall not make
any
disclosure (except to an Investor or underwriter) or use of any Record or other
information that the Company determines in good faith to be confidential, and
of
which determination the Inspectors are so notified, unless (a) the disclosure
of
such Records is necessary to avoid or correct a misstatement or omission in
any
Registration Statement or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a subpoena or other order from
a
court or government body of competent jurisdiction, or (c) the information
in
such Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement of which the Inspector
has knowledge. Each Investor agrees that it shall, upon learning that disclosure
of such Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and
allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein (or any other confidentiality agreement between
the
Company and any Investor) shall be deemed to limit the Investor’s ability to
sell Registrable Securities in a manner that is otherwise consistent with
applicable laws and regulations, provided that such Investor receiving
information pursuant to this Section
5(i)
complies
with its confidentiality obligations pursuant to this Section
5(i).
14
j. The
Company shall hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to
the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure
of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
k. The
Company shall use its reasonable best efforts to (i) cause all the Registrable
Securities covered by a Registration Statement to be listed on each securities
exchange or trading market on which securities of the same class or series
issued by the Company are listed, and (ii) without limiting the generality
of the foregoing, arrange for at least three market makers to register with
the
National Association of Securities Dealers, Inc. (the “NASD”)
as
such with respect to such Registrable Securities. The Company shall pay all
fees
and expenses in connection with satisfying its obligation under this
Section
5(k).
l. The
Company shall cooperate with the Investors who hold Registrable Securities
being
offered and the underwriters, if any, and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities to be offered pursuant to a
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the Investors may reasonably request and
registered in such names as the Investors may request.
15
m. The
Company shall provide a transfer agent and registrar of all such Registrable
Securities not later than the effective date of the applicable Registration
Statement.
n. If
requested by an Investor, the Company shall (i) as soon as practicable
incorporate in a prospectus supplement or post-effective amendment such
information as such Investor requests to be included therein relating to the
sale and distribution of Registrable Securities, including information with
respect to such Investor, the number of Registrable Securities being offered
or
sold, the purchase price being paid therefor and any other terms of the offering
of the Registrable Securities to be sold in such offering; (ii) as soon as
practicable make all required filings of such prospectus supplement or
post-effective amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment; and (iii) as soon
as
practicable, supplement or make amendments to any Registration Statement if
reasonably requested by an Investor.
o. The
Company shall use its reasonable 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 in the
United States as may be necessary to consummate the disposition of such
Registrable Securities.
p. The
Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions
of
Rule 158 under the 0000 Xxx) covering a 12-month period beginning not later
than
the first day of the Company’s fiscal quarter next following the effective date
of a Registration Statement.
q. The
Company shall otherwise use its reasonable best efforts
to comply with all applicable rules and regulations of the SEC in connection
with any registration hereunder.
r. Within
one (1) Business Day after a Registration Statement that covers applicable
Registrable Securities is ordered effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by
the
SEC in substantially the form attached hereto as Exhibit
A,
provided that if the Company changes its transfer agent, it shall immediately
deliver any previously delivered notices under this Section 5(r) and any
subsequent notices to such new transfer agent.
s. To
the
extent not made by the underwriters in the case of an underwritten offering,
the
Company shall make such filings with the NASD, pursuant to NASD Rule 2710 or
otherwise (including providing all required information and paying required
fees
thereto), as and when requested by any Investor, or in the case of an
underwritten offering, by any underwriter, and make all other filings and take
all other actions reasonably necessary to expedite and facilitate the
disposition by the Investors of Registrable Securities pursuant to a
Registration Statement, including promptly responding to any comments received
from the NASD.
16
t. Notwithstanding
anything to the contrary in Section 5(f), at any time after the applicable
Registration Statement has been declared effective by the SEC, 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 not, in the opinion of counsel to the Company, otherwise required
(a
“Grace
Period”);
provided,
that
the Company shall promptly (i) notify the Investors in writing of the
existence of material non-public information giving rise to a Grace Period
(provided that in each notice the Company shall not disclose the content of
such
material non-public information to the Investors) and the date on which the
Grace Period will begin, and (ii) notify the Investors in writing of the date
on
which the Grace Period ends; and, provided further, that (A) no Grace Period
shall exceed fifteen (15) consecutive days, (B) during any 365 day period such
Grace Periods shall not exceed an aggregate of thirty (30) days and (C) the
first day of any Grace Period must be at least ten (10) Trading Days after
the
last day of any prior Grace Period (a Grace Period that satisfies all of the
requirements of this Section 5(t) being referred to as an “Allowable
Grace Period”).
For
purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the Investors receive the notice referred
to
in clause (i) and shall end on and include the later of the date the Investors
receive the notice referred to in clause (ii) and the date referred to in such
notice. The provisions of Section 5(g) hereof shall not be applicable
during the period of any Allowable Grace Period. Upon expiration of the Grace
Period, the Company shall again be bound by the provisions of the first sentence
of Section 5(f) with respect to the information giving rise thereto unless
such
material non-public information is no longer applicable.
u. The
Company shall not register any of its securities for sale for its own account
(other than for issuance to employees, directors and consultants, of the Company
under an employee benefit plan or for issuance in a business combination
transaction), except pursuant to a firm commitment underwritten offering. Except
pursuant to this Agreement, the Company shall not file any Registration
Statement (other than on Form S-8) with the SEC prior to the date that the
Initial Registration Statement is declared effective by the SEC.
v. The
Company shall enter into such customary agreements (including, in the case
of
underwritten offering, an underwriting agreement) and take such other actions
as
the any of the Investors or underwriters, if any, may reasonably request in
order to expedite and facilitate the disposition of the Registrable Securities
and any other securities covered by a Registration Statement.
6. OBLIGATIONS
OF THE INVESTORS.
a. At
least
seven (7) Business Days prior to the first anticipated filing date of a
Registration Statement and at lease five (5) Business Days prior to the filing
of any amendment or supplement Registration Statement, the Company shall notify
each Investor in writing of the information, if any, the Company requires from
each such Investor if such Investor elects to have any of such Investor’s
Registrable Securities included in such Registration Statement or, with respect
to an amendment or a supplement, if such Investor’s Registrable Securities are
included in such Registration Statement (each an “Information
Request”).
Provided that the Company shall have complied with its obligations set forth
in
the preceding sentence, 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 Investor that such Investor shall
furnish to the Company, in response to an Information Request, 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.
17
b. Each
Investor agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
Statement in which any Registrable Securities held by such Investors are being
included.
c. Each
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section
5(g)
or the
first sentence of Section
5(f)
or
written notice from the Company of an Allowable Grace Period, such Investor
will
promptly discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering such Registrable Securities until such
Investor’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section
5(g)
or the
first sentence of Section
5(f)
or
receipt of notice that no supplement or amendment is required or that the
Allowable Grace Period has ended. Notwithstanding anything to the contrary,
the
Company shall cause its transfer agent to deliver unlegended shares of Common
Stock to a transferee of an Investor in accordance with the terms of the
Securities Exchange Agreement in connection with any sale of Registrable
Securities with respect to which an Investor provides reasonable evidence that
such Investor has entered into a contract for sale prior to the Investor’s
receipt of a notice from the Company of the happening of any event of the kind
described in Section
5(g)
or the
first sentence of Section
5(f)
and for
which the Investor has not yet settled.
7. EXPENSES
OF REGISTRATION.
All
reasonable expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to
Sections
2, 3, 4 and
5,
including 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. The Company shall also reimburse the Investors for the
reasonable fees and disbursements of Legal Counsel in connection with
registration, filing or qualification pursuant to Sections
2, 3, 4 and
5,
of this
Agreement.
18
8. INDEMNIFICATION.
In
the
event any Registrable Securities are included in a Registration Statement under
this Agreement:
a. To
the
fullest extent permitted by law, the Company will, and hereby does, indemnify,
hold harmless and defend each Investor and any underwriter, and the directors,
officers, partners, members, managers, employees, agents, representatives of,
and each Person, if any, who controls any Investor or underwriter within the
meaning of the 1933 Act or the 1934 Act (each, an “Indemnified
Person”),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable 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
authority, or body (including the SEC or any state securities commission,
authority or self-regulatory organization, in the United States or anywhere
else
in the world), 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, final, summary or free writing 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 1933 Act, the
1934 Act, any other law, including 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 by the Company (the matters in the foregoing clauses (i)
through (iv) being, collectively, “Violations”).
Subject to Section
8(c),
the
Company shall reimburse the Indemnified Persons, 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
8(a):
(i)
shall not apply to a Claim by an Indemnified Person arising out of or based
upon
a Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Indemnified Person 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 (or amendment or supplement thereto) was timely filed with
the
SEC and furnished by the Company to such Investor pursuant to Section
5(d),
and
(ii) 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, conditioned or delayed. 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 Investors pursuant to Section 11.
19
b. In
connection with any Registration Statement in which an Investor is
participating, each such Investor 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
8(a),
the
Company, each of its directors, each of its officers who signs the Registration
Statement, and each Person, if any, who controls the Company within the meaning
of the 1933 Act or the 1934 Act (each an “Indemnified
Party”),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim
or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by
such
Investor expressly for use in connection with such Registration Statement;
and,
subject to Section
8(c),
such
Investor will reimburse any legal or other expenses reasonably incurred by
an
Indemnified Party in connection with investigating or defending any such Claim;
provided,
however,
that
the indemnity agreement contained in this Section
8(b)
and the
agreement with respect to contribution contained in Section
9
shall
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Investor, which consent
shall
not be unreasonably withheld, conditioned or delayed; provided,
further,
however,
that
the aggregate liability of the Investor in connection with any Violation shall
not exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to the Registration Statement giving rise to
such Claim. 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 any transfer of the Registrable Securities by an Investor pursuant
to
Section
11.
c. Promptly
after receipt by an Indemnified Person or Indemnified Party under this
Section
8 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
8,
deliver
to the indemnifying party a written notice of the commencement thereof, and
the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person
or
the Indemnified Party, as the case may be. In any such proceeding, any
Indemnified Person or Indemnified Party may retain its own counsel, but, except
as provided in the following sentence, the fees and expenses of that counsel
will be at the expense of that Indemnified Person or Indemnified Party, as
the
case may be, unless (i) the indemnifying party and the Indemnified Person or
Indemnified Party, as applicable, shall have mutually agreed to the retention
of
that counsel, (ii) the indemnifying party does not assume the defense of such
proceeding in a timely manner or (iii) in the reasonable opinion of counsel
retained by the Indemnified Person or Indemnified Party, the representation
by
such counsel for 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 up to one separate legal counsel (plus local counsel) for
the Investors, and such legal counsel shall be selected by the Investors holding
at least two-thirds (2/3) in interest of the Registrable Securities included
in
the Registration Statement to which the Claim relates. 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 prior written consent,
provided,
however,
that
the indemnifying party shall not unreasonably withhold, delay or condition
its
consent. No indemnifying party shall, without the prior written consent of
the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise with respect to any pending or
threatened action or claim in respect of which indemnification or contribution
may be or has been sought hereunder (whether or not the Indemnified Party or
Indemnified Person is an actual or potential party to such action or claim)
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim or litigation, and such
settlement shall not include any admission as to fault on the part of the
Indemnified Party. 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
8,
except
to the extent that the indemnifying party is prejudiced in its ability to defend
such action.
20
d. The
indemnification required by this Section
8
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.
e. 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.
9. CONTRIBUTION.
To
the
extent any indemnification by an indemnifying party is prohibited or limited
by
law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 8 to the
fullest extent permitted by law; provided,
however,
that:
(i) no Person involved in the sale of Registrable Securities who is guilty
of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
0000 Xxx) in connection with such sale, shall be entitled to contribution from
any Person involved in such sale of Registrable Securities who was not guilty
of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited to an amount equal to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant
to
the Registration Statement giving rise to such action or claim for
indemnification less the amount of any damages that such seller has otherwise
been required to pay in connection with such sale.
10. REPORTS
UNDER THE 1934 ACT.
With
a
view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that
may
at any time permit the Investors to sell securities of the Company to the public
without registration (“Rule
144”),
the
Company agrees to:
a. make
and
keep public information available, as those terms are understood and defined
in
Rule 144;
21
b. file
with
the SEC in a timely manner all reports and other documents required of the
Company under the 1934 Act so long as the Company remains subject to such
requirements (it being understood that nothing herein shall limit the Company’s
obligations under Section 4(c) of the Securities Exchange Agreement) and the
filing of such reports and other documents is required for the applicable
provisions of Rule 144; and
c. furnish
to each Investor so long as such Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company that it has complied with
the reporting requirements of Rule 144 and the 1934 Act, (ii) a copy of the
most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company (or information regarding the locations
thereof on the SEC’s XXXXX filing system), and (iii) such other information as
may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
11. ASSIGNMENT
OF REGISTRATION RIGHTS.
The
rights under this Agreement shall be automatically assignable by the Investors
to any transferee or assignee of all or any portion of Registrable Securities
if: (i) the Investor 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 transfer or 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 1933 Act or 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 Securities
Exchange Agreement.
12. AMENDMENT
OF REGISTRATION RIGHTS.
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 Investors
who
then hold at least two-thirds (2/3) of the Registrable Securities. Any amendment
or waiver effected in accordance with this Section 10 shall be binding upon
each Investor 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.
13. MISCELLANEOUS.
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.
22
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:
000
Xxxx
Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, Xxxxx 00000
Facsimile:
000-000-0000
Attention:
Xxxxxxx X. Xxxxxxx
With
a
copy to:
Xxxxxxxx
& Xxxxxx
000
Xxxx
Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Facsimile:
000-000-0000
Attention:
Xxxxxx Xxxxxx, Esq.
If
to
Buyer:
The
Longview Fund, L.P.
c/o
Viking Asset Management, LLC
000
Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Facsimile:
000-000-0000
Attention:
Xxxxxxx Xxxxxxx
With
a
copy to:
c/o
Viking Asset Management, LLC
00
Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx,
Xxxxxxxxxxx 00000
Attention:
Xxxxxx X. Xxxxxxxx
Facsimile:
000-000-0000
And
with
a copy to:
Xxxxxx
Xxxxxx Rosenman LLP
000
X.
Xxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000-0000
Attention:
Xxxx X. Xxxx, Esq.
Facsimile:
000-000-0000
23
If
to
Legal Counsel, to Xxxxxx Xxxxxx Xxxxxxxx LLP as set forth above.
Or,
in
the case of a Buyer or other party named above, 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 at least five
(5) days prior to the effectiveness of such change.
If
to an
Investor (other than the Buyer), to such Investor at the address and/or
facsimile number reflected in the records or the Company.
Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated
by
the sender’s facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided
by a
courier or overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile or deposit with a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively. Notwithstanding the foregoing, the Company or its counsel may
transmit versions of any Registration Statement (or any amendments or
supplements thereto) to Legal Counsel in satisfaction of its obligations under
Section
5(c)
to
permit Legal Counsel to review such Registration Statement prior to filing
(and
solely for such purpose) by email to xxxx.xxxx@xxxxxxxxx.xxx (or such other
e-mail address as has been provided for such purpose by Legal Counsel) and
provided that delivery and receipt of such transmission shall be confirmed
by
electronic, telephonic or other means.
c. 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 New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting the City of New York, borough of Manhattan,
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 by
registered or certified mail, return receipt requested, or by deposit with
a
nationally recognized overnight delivery service, 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.
24
e. This
Agreement and the other Transaction Documents constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement and the other
Transaction Documents supersede 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 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 and any amendments hereto may be executed and delivered in one or
more
counterparts, and by the different parties hereto in separate counterparts,
each
of which when executed shall be deemed to be an original, but all of which
taken
together shall constitute one and the same agreement, and shall become effective
when counterparts have been signed by each party hereto and delivered to the
other parties hereto, it being understood that all parties need not sign the
same counterpart. In the event that any signature to this Agreement or any
amendment hereto is delivered by facsimile transmission or by e-mail delivery
of
a “.pdf” format data file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof. No party hereto shall raise the use
of
a facsimile machine or e-mail delivery of a “.pdf” format data file to deliver a
signature to this Agreement or any amendment hereto or the fact that such
signature was transmitted or communicated through the use of a facsimile machine
or e-mail delivery of a “.pdf” format data file as a defense to the formation or
enforceability of a contract and each party hereto forever waives any such
defense.
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 Investors pursuant to this
Agreement shall be made, unless otherwise specified in this Agreement, by
Investors holding at least two-thirds (2/3) of the Registrable Securities,
determined as if the Warrant (any other securities exercisable or exchangeable
for, or convertible into Registrable Securities) then outstanding have been
converted into or exercised or exchanged for Registrable Securities, without
regard to any limitations on the exercise of the Warrants (or any such other
securities). Any consent or other determination approved by Investors as
provided in the immediately preceding sentence shall be binding on all
Investors.
25
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. Each
Buyer and each holder of the Securities shall have all rights and remedies
set
forth in the Transaction Documents and all rights and remedies that such Buyers
and holders have been granted at any time under any other agreement or contract
and all of the rights that such Buyers and holders have under any law. Any
Person having any rights under any provision of this Agreement shall be entitled
to enforce such rights specifically (without posting a bond or other security
or
proving actual damages), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law
or
in equity.
m. This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns and, to the extent provided in Sections 8(a)
and 8(b) hereof, each Investor, any underwriter, and the directors, officers,
partners, members, managers, employees, agents, representatives of, and each
Person, if any, who controls any Investor or underwriter within the meaning
of
the 1933 Act or the 1934 Act and each of the Company’s directors, each of the
Company’s officers who signs the Registration Statement, and each Person, if
any, who controls the Company within the meaning of the 1933 Act or the 1934
Act, and is not for the benefit of, nor may any provision hereof be enforced
by,
any other Person.
n. The
Company shall not grant any Person any registration rights with respect to
shares of Common Stock or any other securities of the Company other than
registration rights that will not adversely affect the rights of the Investors
hereunder (including by limiting in any way the number of Registrable Securities
that could be included in any Registration Statement pursuant to Rule 415)
and
shall not otherwise enter into any agreement that is inconsistent with the
rights granted to the Investors hereunder.
o. The
obligations of each Investor hereunder are several and not joint with the
obligations of any other Investor, and no provision of this Agreement is
intended to confer any obligations on any Investor vis-à-vis any other Investor.
Nothing contained herein, and no action taken by any Investor pursuant hereto,
shall be deemed to constitute the Investors as a partnership, an association,
a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated herein.
p. Unless
the context otherwise requires, (a) all references to Sections, Schedules or
Exhibits are to Sections, Schedules or Exhibits contained in or attached to
this
Agreement, (b) words in the singular or plural include the singular and plural
and pronouns stated in either the masculine, the feminine or neuter gender
shall
include the masculine, feminine and neuter and (c) the use of the word
“including” in this Agreement shall be by way of example rather than
limitation.
*
* * * * *
26
IN
WITNESS WHEREOF,
the
parties have caused this Registration Rights Agreement to be duly executed
as of
day and year first above written.
| COMPANY: | BUYER: | ||
|
(f/k/a
River Capital Group, Inc.)
|
THE LONGVIEW FUND, L.P. | ||
|
By:
Viking Asset Management, LLC
|
|||
|
Its:
Investment Adviser
|
|||
| By: /s/ Xxxxxx Xxxxxx | By: /s/ S. Xxxxxxx Xxxxxxx | ||
|
Name: Xxxxxx Xxxxxx |
Name: S. Xxxxxxx Xxxxxxx |
||
| Title: Chief Executive Officer | Title: Chief Financial Officer |
[Signature
Page to Registration Rights Agreement]
27
EXHIBIT
A
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
[TRANSFER
AGENT]
Attn:
Ladies
and Gentlemen:
We
are
counsel to Sonterra Resources, Inc., a Delaware corporation (the “Company”),
and
have represented the Company in connection with that certain Securities Exchange
Agreement (the “Purchase
Agreement”)
entered into by and among the Company and the buyers named therein
(collectively, the “Holders”)
pursuant to which the Company issued to the Holders shares of Common Stock
of
the Company (the “Common
Stock”)
and
warrants (the “Warrants”)
to
purchase shares of Common Stock. Pursuant to the Purchase Agreement, the Company
also has entered into a Registration Rights Agreement with the Holders (the
“Registration
Rights Agreement”),
pursuant to which the Company agreed, among other things, to register the
Registrable Securities (as defined in the Registration Rights Agreement),
including the shares of Common Stock issuable upon exercise of the Warrants,
under the Securities Act of 1933, as amended (the “1933
Act”).
In
connection with the Company’s obligations under the Registration Rights
Agreement, on ____________ ___, 200_, the Company filed a Registration Statement
on Form [S-__]
(File
No. 333-_____________) (the “Registration
Statement”)
with
the Securities and Exchange Commission (the “SEC”)
relating to the Registrable Securities, which names each of the Holders as
a
selling stockholder thereunder.
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 1933 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 Registrable Securities are available for resale under the 1933 Act pursuant
to the Registration Statement.
| Very truly yours, | ||
| [ISSUER’S COUNSEL] | ||
| |
|
|
| By: | ||
|
cc: [LIST NAMES OF HOLDERS] |
||
28
