Execution Copy
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated effective February
22, 2005, by and among ACTIVECORE TECHNOLOGIES, INC., a Nevada corporation, with
its principal office located at 000 Xxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx, Xxxxxx X0X 0X0 (the "Company"), and Xxxxxx Xxxxxxx and Xxxxxx
Xxxxxx-Xxxxx (each, an "Investor" and collectively, the "Investors").
WHEREAS:
A. In connection with the Share Purchase Agreement by and among the parties
hereto of even date herewith (the "Share Purchase Agreement"), the Company has
agreed, upon the terms and subject to the conditions of the Share Purchase
Agreement, to issue to the Investors eight million nine hundred and twenty one
thousand and thirty one (8,921,031) shares of Common Stock of the Company, par
value $0.001 per share (the "Common Stock"), pursuant to the terms of the Share
Purchase Agreement for an aggregate purchase price of up to Two Million, Four
Hundred Thousand Dollars ($2,400,000). Capitalized terms not defined herein
shall have the meaning ascribed to them in the Share Purchase Agreement.
B. To induce the Investors to execute and deliver the Share Purchase 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 the Investors
hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Investor" means an Investor and any transferee or assignee thereof
to whom an Investor assigns its rights under this Agreement and who
agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof.
(b) "Person" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an
individual, a governmental or political subdivision thereof or a
governmental agency.
(c) "Register", "Registered," and "Registration" refer to a registration
effected by preparing and filing one or more Registration Statements
(as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 under the 1933 Act or any successor rule providing for
offering securities on a continuous or delayed basis ("Rule 415"),
and the declaration or ordering of effectiveness of such
Registration Statement(s) by the United States Securities and
Exchange Commission (the "SEC").
(d) "Registrable Securities" means the shares of Common Stock issuable
to Investors pursuant to the Share Purchase Agreement.
(e) "Registration Statement" means a registration statement under the
1933 Act which covers the Registrable Securities.
2. REGISTRATION.
(a) Filing of Registration Statement. Subject to the terms and
conditions of this Agreement, the Company shall prepare and file, no
later than ninety (90) days from the date of the closing of the
transactions contemplated by the Share Purchase Agreement (the
"Scheduled Filing Deadline"), with the SEC a registration statement
on Form S-1 or SB-2 (or, if the Company is then eligible, on Form
S-3) under the 1933 Act (the "Initial Registration Statement") for
the registration for the resale of the Registrable Securities by all
Investors. The Registration Statement required hereunder shall
contain (except if otherwise directed by the Investors) the "Plan of
Distribution" attached hereto as Annex A. The Company shall cause
the Registration Statement to remain effective until all of the
Registrable Securities have been sold. Prior to the filing of the
Registration Statement with the SEC, the Company shall furnish a
copy of the Initial Registration Statement to the Investors and
Xxxxxx Xxxxxx LLP for their review and comment. The Investors and
Xxxxxx Xxxxxx LLP shall furnish comments on the Initial Registration
Statement to the Company within seventy-two (72) hours of the
receipt thereof from the Company.
(b) Effectiveness of the Initial Registration Statement. The Company
shall use its best efforts (i) to have the Initial Registration
Statement declared effective by the SEC no later than one hundred
and twenty (120) days date of the closing of the transactions
contemplated by the Share Purchase Agreement (the "Scheduled
Effective Deadline") and (ii) to insure that the Initial
Registration Statement and any subsequent Registration Statement
remains in effect until all of the Registrable Securities have been
sold, subject to the terms and conditions of this Agreement.
(c) Failure to File or Obtain Effectiveness of the Registration
Statement. In the event the Registration Statement is not filed by
the Scheduled Filing Deadline or is not declared effective by the
SEC on or before the Scheduled Effective Deadline, or if after the
Registration Statement has been declared effective by the SEC, sales
cannot be made pursuant to the Registration Statement (whether
because of a failure to keep the Registration Statement effective,
failure to disclose such information as is necessary for sales to be
made pursuant to the Registration Statement, failure to register
sufficient shares of Common Stock or otherwise), 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 at law or in equity), the Company
will pay as liquidated damages (the "Liquidated Damages") to the
holder a cash amount within three (3) business days, after demand
therefore, equal to two percent (2%) of the liquidated value of the
Registrable Securities outstanding, based on the purchase price paid
for such securities pursuant to the Share Purchase Agreement, as
Liquidated Damages for each thirty (30) day period after the
Scheduled Filing Deadline or the Scheduled Effective Deadline as the
case may be.
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(d) Liquidated Damages. The Company and the Investors hereto acknowledge
and agree that the sums payable under subsection 2(c) above shall
constitute liquidated damages and not penalties. The parties further
acknowledge that (i) the amount of loss or damages likely to be
incurred is incapable or is difficult to precisely estimate, (ii)
the amounts specified in such subsections bear a reasonable
relationship to, and are not plainly or grossly disproportionate to
the probable loss likely to be incurred in connection with any
failure by the Company to obtain or maintain the effectiveness of a
Registration Statement, (iii) one of the reasons for the Company and
the Investors reaching an agreement as to such amounts was the
uncertainty and cost of litigation regarding the question of actual
damages, and (iv) the Company and the Investors are sophisticated
business parties and have been represented by sophisticated and able
legal counsel and negotiated this Agreement at arm's length.
3. RELATED OBLIGATIONS.
(a) The Company shall keep the Registration Statement effective pursuant
to Rule 415 at all times until the date on which the Investors shall
have sold all the Registrable Securities covered by such
Registration Statement (the "Registration Period"), which
Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading.
(b) The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with
such Registration Statement, which prospectus is to be filed
pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep such Registration Statement effective 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 amendments
and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section
3(b)) by reason of the Company's filing a report on Form 10-KSB,
Form 10-QSB or Form 8-K or any analogous report under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), the Company shall
incorporate such report by reference into the Registration
Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act
report is filed which created the requirement for the Company to
amend or supplement the Registration Statement.
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(c) The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without
charge, (i) at least one (1) copy of such Registration Statement as
declared effective by the SEC and any amendment(s) thereto,
including financial statements and schedules, all documents
incorporated therein by reference, all exhibits and preliminary
prospectus and (ii) such other documents as such Investors may
reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities owned by such Investor.
(d) The Company shall use its best efforts to (i) register and qualify
the Registrable Securities covered by a Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in
the United States as any Investor reasonably requests, (ii) prepare
and file in those jurisdictions, such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness
thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration
Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (w)
make any change to its certificate of incorporation or by-laws, (x)
qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (y)
subject itself to general taxation in any such jurisdiction, or (z)
file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify each Investor who
holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under
the securities or "blue sky" laws of any jurisdiction in the United
States or its receipt of actual notice of the initiation or threat
of any proceeding for such purpose.
(e) As promptly as practicable after becoming aware of such event or
development, the Company shall notify each Investor in writing of
the happening of any event as a result of which the prospectus
included in a Registration Statement, as then in effect, includes an
untrue statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make 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 a supplement or amendment to such Registration Statement to
correct such untrue statement or omission, and deliver ten (10)
copies of such supplement or amendment to each Investor. The Company
shall also promptly notify 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 each Investor by facsimile on
the same day of such effectiveness), (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.
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(f) The Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of
any of the Registrable Securities for sale in any jurisdiction
within the United States of America or in the Province of Ontario
and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible
moment and to notify each 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.
(g) The Company shall make available for inspection by (i) any Investor
and (ii) one (1) firm of accountants or other agents retained by the
Investors (collectively, the "Inspectors") all pertinent financial
and other records, and pertinent corporate documents and properties
of the Company (collectively, the "Records"), as shall be reasonably
deemed necessary by each Inspector, and cause the Company's
officers, directors and employees to supply all information which
any Inspector may reasonably request; provided, however, that each
Inspector shall agree, and each Investor hereby agrees, to hold in
strict confidence and shall not make any disclosure (except to an
Investor) or use any Record or other information which the Company
determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the
disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is
otherwise required under the 1933 Act, (b) the release of such
Records is ordered pursuant to a final, non-appealable subpoena or
order from a court or government body of competent jurisdiction, or
(c) the information in such Records has been made generally
available to the public other than by disclosure in violation of
this or any other agreement of which the Inspector and the Investor
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.
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(h) 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.
(i) The Company shall use its best efforts either to cause all the
Registrable Securities covered by a Registration Statement (i) to be
listed on each securities exchange on which securities of the same
class or series issued by the Company are then listed, if any, if
the listing of such Registrable Securities is then permitted under
the rules of such exchange or (ii) the inclusion for quotation on
the National Association of Securities Dealers, Inc. OTC Bulletin
Board for such Registrable Securities. The Company shall pay all
fees and expenses in connection with satisfying its obligation under
this Section 3(i).
(j) The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable, to
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.
(k) The Company shall use its best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to consummate the disposition of
such Registrable Securities.
(l) 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 twelve (12) month period beginning not later than the
first day of the Company's fiscal quarter next following the
effective date of the Registration Statement.
(m) The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any
registration hereunder.
(n) Within two (2) business days after a Registration Statement which
covers Registrable Securities is declared 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 the
form attached hereto as Exhibit A.
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(o) The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investors of Registrable
Securities pursuant to a Registration Statement.
(p) In the event that the Company issues securities to the Investors
pursuant to the Share Increase Mechanism of the Share Purchase
Agreement that are not covered by an effective Registration
Statement and the Company determines to prepare and file with the
Commission a registration statement relating to an offering for its
own account or the account of others under the 1933 Act of any of
its equity securities, other than on Form S-4 or Form S-8 (each as
promulgated under the 0000 Xxx) or their then equivalents relating
to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable
in connection with the stock option or other employee benefit plans,
then the Company shall send to each Investor a written notice of
such determination and, if within fifteen days after the date of
such notice, any such Investor shall so request in writing, the
Company shall include in such registration statement all or any part
of such securities issued pursuant to the Share Increase Mechanism
such Investor requests to be registered, subject to customary
underwriter cutbacks applicable to all holders of registration
rights
4. OBLIGATIONS OF THE INVESTORS. Each Investor agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 3(f) or the first sentence of 3(e), such Investor will immediately
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
3(e) or receipt of notice that no supplement or amendment is required.
Notwithstanding anything to the contrary, the Company shall cause its transfer
agent to deliver unlegended certificates for shares of Common Stock to a
transferee of an Investor in connection with any sale of Registrable Securities
with respect to which an 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 3(f) or the first sentence of 3(e) and
for which the Investor has not yet settled.
5. EXPENSES OF REGISTRATION. All expenses incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers, legal and accounting fees shall be paid by the Company.
6. INDEMNIFICATION. With respect to Registrable Securities which are included in
a Registration Statement under this Agreement:
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(a) To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend each Investor, the
directors, officers, partners, employees, agents, representatives
of, and each Person, if any, who controls any Investor 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,
body or the SEC, whether pending or threatened, whether or not an
indemnified party is or may be a party thereto ("Indemnified
Damages"), to which any of them may become subject insofar as such
Claims (or actions or proceedings, whether commenced or threatened,
in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in
any filing made in connection with the qualification of the offering
under the securities or other "blue sky" laws of any jurisdiction in
which Registrable Securities are offered ("Blue Sky Filing"), or the
omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; (ii) any untrue statement or alleged untrue statement of
a material fact contained in any final prospectus (as amended or
supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the
statements therein were made, not misleading; or (iii) any violation
or alleged violation by the Company of the 1933 Act, the 1934 Act,
any other law, including, without limitation, any state securities
law, or any rule or regulation there under relating to the offer or
sale of the Registrable Securities pursuant to a Registration
Statement (the matters in the foregoing clauses (i) through (iii)
being, collectively, "Violations"). The Company shall reimburse the
Investors and each such controlling person promptly as such expenses
are incurred and are due and payable, for any legal fees or
disbursements or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (x) 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 expressly for use in connection with the
preparation of the Registration Statement or any such amendment
thereof or supplement thereto; (y) shall not be available to the
extent such Claim is based on a failure of the Investor to deliver
or to cause to be delivered the prospectus made available by the
Company, if such prospectus was timely made available by the Company
pursuant to Section 3(c); and (z) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9 hereof.
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(b) In connection with a Registration Statement, each 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
6(a), the Company, each of its directors, each of its officers,
employees, representatives, or agents 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 is 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 6(d), such
Investor will reimburse any legal or other expenses reasonably
incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to
contribution contained in Section 7 shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without
the prior written consent of such Investor, which consent shall not
be unreasonably withheld; provided, further, however, that the
Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified Damages as does not exceed the net
proceeds to such Investor as a result of the sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and
shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained
in this Section 6(b) with respect to any prospectus shall not inure
to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the prospectus was corrected
and such new prospectus was delivered to each Investor prior to such
Investor's use of the prospectus to which the Claim relates.
(c) Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding)
involving a Claim, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to
the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified
Party, as the case may be; provided, however, that an Indemnified
Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one (1) counsel
for such Indemnified Person or Indemnified Party to be paid by the
indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such
counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified
Party and any other party represented by such counsel in such
proceeding. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or claim. The
indemnifying party shall keep the Indemnified Party or Indemnified
Person fully 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 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. Following
indemnification as provided for hereunder, the indemnifying party
shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or
corporations relating to the matter for which indemnification has
been made. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to
the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in
its ability to defend such action.
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(d) The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or
Indemnified Damages are incurred.
(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.
7. CONTRIBUTION. To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities.
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8. 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 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;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the 1933 Act and the 1934 Act so long
as the Company remains subject to such requirements and the filing
of such reports and other documents as are required by 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, the 1933 Act and the 1934 Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Investors to sell such
securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS. The rights under this Agreement shall be
automatically assignable by the Investors to any transferee 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 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; and (iii) 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.
10. 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
fewer 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.
11
11. 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 (2) or more Persons with respect to
the same Registrable Securities, the Company shall act upon the
basis of instructions, notice or election received from the
registered owner of such Registrable Securities.
(b) Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or
(iii) one (1) business day after deposit with a nationally
recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
If to the Company, to:
ActiveCore Technologies Inc.
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX X0X 0X0
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to an Investor, to its address and facsimile number on the
Schedule of Investors attached hereto, with copies to such
Investor's representatives as set forth on the Schedule of Investors
or to such other address and/or facsimile number and/or to the
attention of such other person as the recipient party has specified
by written notice given to each other party five (5) days prior to
the effectiveness of such change. Written confirmation of receipt
(A) given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically 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
receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.
(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.
12
(d) The laws of the State of Nevada shall govern all issues concerning
the relative rights of the Company and the Investors as its
stockholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be
governed by the internal laws of the State of Nevada, without giving
effect to any choice of law or conflict of law provision or rule
(whether of the State of Nevada or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other
than the State of Nevada. Each party hereby irrevocably submits to
the non-exclusive jurisdiction of the Superior Courts of the State
of Nevada, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or
that the venue of such suit, action or proceeding is improper. Each
party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address
for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this
Agreement in that jurisdiction or the validity or enforceability of
any provision of this Agreement in any other jurisdiction. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES
NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY.
(e) This Agreement by and among the Company and the Investors set forth
on the Schedule of Investors attached hereto constitutes 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 supersedes all prior
agreements and understandings among the parties hereto with respect
to the subject matter hereof and thereof.
(f) 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 may be executed in identical counterparts, each of
which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a
party, may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of
the party so delivering this Agreement.
13
(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. 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.
(j) This Agreement is intended for the benefit of the parties hereto and
their respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced by, any
other Person.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
14
IN WITNESS WHEREOF, the parties have caused this Investor Registration Rights
Agreement to be duly executed as of day and year first above written.
ACTIVECORE TECHNOLOGIES, INC.
By: /s/ [Xxxxx Xxxxxxxx]
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Executive Officer
By: /s/ [Xxxxxx Xxxxxxx]
--------------------------------------------
Name: Xxxxxx Xxxxxxx
By: /s/ [Xxxxxx Xxxxxx-Xxxxx]
--------------------------------------------
Name: Xxxxxx Xxxxxx-Xxxxx
15
SCHEDULE OF INVESTORS
Xxxxxx Xxxxxxx
00 Xxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx XXXXXX
X0X 0X0
-and-
Xxxxxx Xxxxxx-Xxxxx
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx XXXXXX
X0X 0X0
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
Re: ACTIVECORE TECHNOLOGIES INC.
Ladies and Gentlemen:
We are counsel to ActiveCore Technologies Inc., a Nevada corporation (the
"Company"), which has entered into that certain Share Purchase Agreement (the
"Purchaser Agreement") by and among the Company and the investors named therein
(collectively, the "Investors") pursuant to which the Company issued to the
Investors shares of its Common Stock, par value $0.001 per share (the "Common
Stock"). Pursuant to the Purchase Agreement, the Company also has entered into a
Registration Rights Agreement with the Investors (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) under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with the Company's obligations under the Registration Rights
Agreement, on ________________, the Company filed a Registration Statement on
Form ________ (File No. 333-_____________) (the "Registration Statement") with
the Securities and Exchange SEC (the "SEC") relating to the Registrable
Securities which names each of the Investors 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 INVESTORS]
ANNEX A
PLAN OF DISTRIBUTION
The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o settlement of short sales;
o broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The Selling Stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock from time to time under
this prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act of 1933 amending the list of
Selling Stockholders to include the pledgee, transferee or other successors in
interest as Selling Stockholders under this prospectus.
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The Selling Stockholders have
informed the Company that it does not have any agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock.
The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
