EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT, DATED AS OF JUNE 27, 2006,
BY AND BETWEEN TOWER TECH HOLDINGS, INC. AND
DUTCHESS PRIVATE EQUITIES FUND, L.P.
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (the "AGREEMENT"), dated as of June 27,
2006, by and between Tower Tech Holdings, Inc., a corporation organized under
the laws of State of Nevada, with its principal executive office at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇., ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "COMPANY"), and Dutchess Private Equities
Fund, L.P., a Delaware limited partnership with its principal office at ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "HOLDER").
WHEREAs, in connection with the Investment Agreement by and between the
Company and the Investor of this date (the "INVESTMENT AGREEMENT"), the Company
has agreed to issue and sell to the Investor an indeterminate number of shares
of the Company's Common Stock, $.001par value per share (the "COMMON STOCK"), to
be purchased pursuant to the terms and subject to the conditions set forth in
the Investment Agreement; and
WHEREAS, to induce the Investor to execute and deliver the Investment
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, with respect to the shares of Common Stock
issuable pursuant to the Investment Agreement.
NOW THEREFORE, IN CONSIDERATION OF THE FOREGOING PROMISES AND THE
MUTUAL COVENANTS CONTAINED HEREINAFTER AND OTHER GOOD AND VALUABLE
CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE
COMPANY AND THE INVESTOR HEREBY AGREE AS FOLLOWS:
SECTION 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
"EXECUTION DATE" means the date of this Agreement set forth above.
"INVESTOR" means Dutchess Private Equities Fund, L.P., a Delaware
limited partnership.
"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.
"POTENTIAL MATERIAL EVENT" means any of the following: (I) the
possession by the Company of material information not ripe for disclosure in the
Registration Statement, which shall be evidenced by determinations in good faith
by the Board of Directors of the Company that disclosure of such information in
the Registration Statement would be detrimental to the business and affairs of
the Company, or (II) any material engagement or activity by the Company which
would, in the good faith determination of the Board of Directors of the Company,
be adversely affected by disclosure in the Registration Statement at such time,
which determination shall be accompanied by a good faith determination by the
Board of Directors of the Company that the Registration Statement would be
materially misleading absent the inclusion of such information.
"PRINCIPAL MARKET" shall mean The American Stock Exchange, National
Association of Securities Dealer's, Inc., Over-the-Counter electronic bulletin
board, the Nasdaq National Market or The Nasdaq SmallCap Market whichever is the
principal market on which the Common Stock of the Company is listed.
"REGISTER," "REGISTERED," and "REGISTRATION" refer to the Registration
effected by preparing and filing one (1) or more Registration Statements 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 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").
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"REGISTRABLE SECURITIES" means (I) the shares of Common Stock issued or
issuable pursuant to the Investment Agreement, and (II) any shares of capital
stock issued or issuable with respect to such shares of Common Stock, if any, as
a result of any stock split, stock dividend, recapitalization, exchange or
similar event or otherwise, which have not been (X) included in the Registration
Statement that has been declared effective by the SEC, or (Y) sold under
circumstances meeting all of the applicable conditions of Rule 144 (or any
similar provision then in force) under the 1933 Act.
"REGISTRATION STATEMENT" means the registration statement of the
Company filed under the 1933 Act covering the Registrable Securities.
All capitalized terms used in this Agreement and not otherwise defined
herein shall have the same meaning ascribed to them as in the Investment
Agreement.
SECTION 2. REGISTRATION.
(A) The Company shall, within Thirty (30) days of the date of this
Agreement, file with the SEC the Registration Statement or Registration
Statements (as is necessary) on Form SB-2 (or, if such form is unavailable for
such a registration, on such other form as is available for such registration),
covering the resale of all of the Registrable Securities, which Registration
Statement(s) shall state that, in accordance with Rule 416 promulgated under the
1933 Act, such Registration Statement also covers such indeterminate number of
additional shares of Common Stock as may become issuable upon stock splits,
stock dividends or similar transactions. The Company shall initially register
for resale 5,000,000 shares of Common Stock which would be issuable on the date
preceding the filing of the Registration Statement based on the closing bid
price of the Company's Common Stock on such date and the amount reasonably
calculated that represents Common Stock issuable to other parties as set forth
in the Investment Agreement except to the extent that the SEC requires the share
amount to be reduced as a condition of effectiveness.
(B) The Company shall use all commercially reasonable efforts to have
the Registration Statement(s) declared effective by the SEC within one hundred
and twenty (120) calendar days after the filing of the registration statement. .
(C) The Company may include in the Registration Statement covering the
Registrable Securities up to 3,000,000 shares of common stock to be registered
for resale. Furthermore, the Company agrees that it will not file any other
Registration Statement for other securities, until thirty calendar days after
the Registration Statement for the Registrable Securities is declared effective
by the SEC.
SECTION 3. RELATED OBLIGATIONS.
At such time as the Company is obligated to prepare and file the
Registration Statement with the SEC pursuant to Section 2(a), the Company will
effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof and, with respect thereto, the Company
shall have the following obligations:
(A) The Company shall use all commercially reasonable efforts to cause
such Registration Statement relating to the Registrable Securities to become
effective within one hundred and twenty(120) after the filing of the
registration statement days after the Execution Date and shall keep such
Registration Statement effective until the earlier to occur of the date on which
(A) the Investor shall have sold all the Registrable Securities; or (B) the
Investor has no right to acquire any additional shares of Common Stock under the
Investment Agreement (the "REGISTRATION PERIOD"). The 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
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misleading. The Company shall use all commercially reasonable efforts to respond
to all SEC comments within seven (7) business days from receipt of such comments
by the Company. The Company shall use all commercially reasonable efforts to
cause the Registration Statement relating to the Registrable Securities to
become effective no later than five (5) business days after notice from the SEC
that the Registration Statement may be declared effective. The Investor agrees
to provide all information which it is required by law to provide to the
Company, including the intended method of disposition of the Registrable
Securities, and the Company's obligations set forth above shall be conditioned
on the receipt of such information.
(B) The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the 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 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 Investor
thereof as set forth in such Registration Statement. In the event the number of
shares of Common Stock covered by the Registration Statement filed pursuant to
this Agreement is at any time insufficient to cover all of the Registrable
Securities, the Company shall amend such Registration Statement, or file a new
Registration Statement (on the short form available therefor, if applicable), or
both, so as to cover all of the Registrable Securities, in each case, as soon as
practicable, but in any event within thirty (30) calendar days after the
necessity therefor arises (based on the then Purchase Price of the Common Stock
and other relevant factors on which the Company reasonably elects to rely),
assuming the Company has sufficient authorized shares at that time, and if it
does not, within thirty (30) calendar days after such shares are authorized. The
Company shall use commercially reasonable efforts to cause such amendment and/or
new Registration Statement to become effective as soon as practicable following
the filing thereof.
(C) The Company shall make available to the Investor whose Registrable
Securities are included in any Registration Statement and its legal counsel
without charge (I) promptly after the same is prepared and filed with the SEC at
least one (1) copy of such Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein
by reference and all exhibits, the prospectus included in such Registration
Statement (including each preliminary prospectus) and, with regards to such
Registration Statement(s), any correspondence by or on behalf of the Company to
the SEC or the staff of the SEC and any correspondence from the SEC or the staff
of the SEC to the Company or its representatives; (II) upon the effectiveness of
any Registration Statement, the Company shall make available copies of the
prospectus, via ▇▇▇▇▇, included in such Registration Statement and all
amendments and supplements thereto; and (III) such other documents, including
copies of any preliminary or final prospectus, as the Investor may reasonably
request from time to time in order to facilitate the disposition of the
Registrable Securities.
(D) The Company shall use commercially reasonable efforts to (I)
register and qualify the Registrable Securities covered by the Registration
Statement under such other securities or "blue sky" laws of such states in the
United States as the 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 (X) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), or (Y) subject
itself to general taxation in any such jurisdiction. The Company shall promptly
notify the 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 threatening of any proceeding for
such purpose.
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(E) As promptly as practicable after becoming aware of such event, the
Company shall notify Investor in writing of the happening of any event as a
result of which the prospectus included in the 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 ("REGISTRATION DEFAULT") and use all diligent efforts to promptly
prepare a supplement or amendment to such Registration Statement and take any
other necessary steps to cure the Registration Default (which, if such
Registration Statement is on Form S-3, may consist of a document to be filed by
the Company with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the
1934 Act (as defined below) and to be incorporated by reference in the
prospectus) to correct such untrue statement or omission, and make available
copies of such supplement or amendment to the Investor. The Company shall also
promptly notify the Investor (I) when a prospectus or any prospectus supplement
or post-effective amendment has been filed, and when the Registration Statement
or any post-effective amendment has become effective (the Company will prepare
notification of such effectiveness which shall be delivered to the Investor on
the same day of such effectiveness and by overnight mail), additionally, the
Company will promptly provide to the Investor, a copy of the effectiveness order
prepared by the SEC once it is received by the Company; (II) of any request by
the SEC for amendments or supplements to the Registration Statement or related
prospectus or related information, (III) of the Company's reasonable
determination that a post-effective amendment to the Registration Statement
would be appropriate, (IV) in the event the Registration Statement is no longer
effective, or (V) if the Registration Statement is stale as a result of the
Company's failure to timely file its financials or otherwise. The Company
acknowledges that its failure to cure the Registration Default within ten (10)
business days will cause the Investor to suffer damages in an amount that will
be difficult to ascertain. Accordingly, the parties agree that it is appropriate
to include a provision for liquidated damages. The parties acknowledge and agree
that the liquidated damages provision set forth in this section represents the
parties' good faith effort to quantify such damages and, as such, agree that the
form and amount of such liquidated damages are reasonable and will not
constitute a penalty. It is the intention of the parties that interest payable
under any of the terms of this Agreement shall not exceed the maximum amount
permitted under any applicable law. If a law, which applies to this Agreement,
which sets the maximum interest amount, is finally interpreted so that the
interest in connection with this Agreement exceeds the permitted limits, then:
(1) any such interest shall be reduced by the amount necessary to reduce the
interest to the permitted limit; and (2) any sums already collected (if any)
from the Company which exceed the permitted limits will be refunded to the
Company. The Investor may choose to make this refund by reducing the amount that
the Company owes under this Agreement or by making a direct payment to the
Company. If a refund reduces the amount that the Company owes the Investor, the
reduction will be treated as a partial payment.
(F) The Company shall use all commercially reasonable efforts to
prevent the issuance of any stop order or other suspension of effectiveness of
the 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 the Investor holding 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
concerning the effectiveness of the registration statement.
(G) The Company shall permit the Investor and one (1) legal counsel,
designated by the Investor, to review and comment upon the Registration
Statement and all amendments and supplements thereto at least one (1) calendar
day prior to their filing with the SEC.
However, any postponement of a filing of a Registration Statement or
any postponement of a request for acceleration or any postponement of the
effective date or effectiveness of a Registration Statement by written request
of the Investor (collectively, the "Investor's Delay") shall not act to trigger
any penalty of any kind, or any cash amount due or any in-kind amount due the
Investor from the Company under any and all agreements of any nature or kind
between the Company and the Investor. The event(s) of an Investor's Delay shall
act to suspend all obligations of any kind or nature of the Company under any
and all agreements of any nature or kind between the Company and the Investor.
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(H) At the request of the Investor, the Company's counsel shall furnish
to the Investor an opinion letter confirming the effectiveness of the
registration statement. Such opinion letter shall be issued as of the date of
the effectiveness of the registration statement and be in form suitable to the
Investor.
(I) The Company shall hold in confidence and not make any disclosure of
information concerning the Investor 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 the Investor is sought
in or by a court or governmental body of competent jurisdiction or through other
means, give prompt written notice to the Investor and allow the Investor, at the
Investor's expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order covering such information.
(J) The Company shall use all commercially reasonable efforts to
maintain designation and quotation of all the Registrable Securities covered by
any Registration Statement on the Principal Market. If, despite the Company's
commercially reasonable efforts, the Company is unsuccessful in satisfying the
preceding sentence, it shall use commercially reasonable efforts to cause all
the Registrable Securities covered by any Registration Statement to be listed on
each other national securities exchange and automated quotation system, if any,
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 system. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this Section 3(j).
(K) The Company shall cooperate with the Investor to facilitate the
prompt preparation and delivery of certificates representing the Registrable
Securities to be offered pursuant to the Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
Investor may reasonably request (and after any sales of such Registrable
Securities by the Investor, such certificates not bearing any restrictive
legend).
(L) The Company shall provide a transfer agent for all the Registrable
Securities not later than the effective date of the first Registration Statement
filed pursuant hereto.
(M) If requested by the Investor, the Company shall (I) as soon as
reasonably practical incorporate in a prospectus supplement or post-effective
amendment such information as the Investor reasonably determines should be
included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
offering of the Registrable Securities to be sold in such offering; (II) make
all required filings of such prospectus supplement or post-effective amendment
as soon as reasonably possible after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(III) supplement or make amendments to any Registration Statement if reasonably
requested by the Investor.
(N) The Company shall use all commercially reasonable 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 facilitate the disposition of such
Registrable Securities.
(O) The Company shall otherwise use all commercially reasonable efforts
to comply with all applicable rules and regulations of the SEC in connection
with any registration hereunder.
(P) Within one (1) business day after the Registration Statement which
includes Registrable Securities is declared effective by the SEC, the Company
shall deliver to the transfer agent for such Registrable Securities, with copies
to the Investor, confirmation that such Registration Statement has been declared
effective by the SEC.
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(Q) The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of Registrable Securities
pursuant to the Registration Statement.
SECTION 4. OBLIGATIONS OF THE INVESTOR.
(A) At least five (5) calendar days prior to the first anticipated
filing date of the Registration Statement the Company shall notify the Investor
in writing of the information the Company requires from the Investor for the
Registration Statement. It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities and the Investor agrees to furnish to the Company
that information regarding itself, the Registrable Securities and the intended
method of disposition of the Registrable Securities as shall reasonably be
required to effect the registration of such Registrable Securities and the
Investor shall execute such documents in connection with such registration as
the Company may reasonably request. The Investor covenants and agrees that, in
connection with any sale of Registrable Securities by it pursuant to the
Registration Statement, it shall comply with the "Plan of Distribution" section
of the then current prospectus relating to such Registration Statement.
(B) The Investor, by its acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of any Registration Statement
hereunder, unless the Investor has notified the Company in writing of an
election to exclude all of the Investor's Registrable Securities from such
Registration Statement.
(C) The Investor agrees that, upon receipt of written 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), the Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration Statement(s)
covering such Registrable Securities until the Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(f) or the
first sentence of 3(e). If so directed by the Company, such Investor shall
deliver to the Company (at the expense of the Company) or destroy (and deliver
to the Company a certificate of destruction) all copies in such Investor's
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.
SECTION 5. EXPENSES OF REGISTRATION.
All expenses, other than underwriting discounts and commissions and
other than as set forth in the Investment Agreement, incurred in connection with
registrations including comments, filings or qualifications pursuant to Sections
2 and 3, including, without limitation, all registration, listing and
qualifications fees, printing and accounting fees, and fees and disbursements of
counsel for the Company or for the Investor shall be paid by the Company.
SECTION 6. INDEMNIFICATION.
In the event any Registrable Securities are included in the
Registration Statement under this Agreement:
(A) To the fullest extent permitted by law, the Company, under this
Agreement, will, and hereby does, indemnify, hold harmless and defend the
Investor who holds Registrable Securities, the directors, officers, partners,
employees, counsel, agents, representatives of, and each Person, if any, who
controls, any Investor within the meaning of the 1933 Act or the Securities
Exchange Act of 1934, as amended (the "1934 ACT") (each, an "INDEMNIFIED
PERSON"), against any losses, claims, damages, liabilities, judgments, fines,
penalties, charges, costs, attorneys' fees, amounts paid in settlement or
expenses, joint or several (collectively, "CLAIMS"), incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency, body or the SEC,
whether pending or threatened, whether or
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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 the 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 the Investor has requested in writing that the Company register or qualify
the Shares ("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, in light of the circumstances under which the statements therein were
made, not misleading, (II) any untrue statement or alleged untrue statement of a
material fact contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, 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 thereunder relating to the offer or sale of the Registrable
Securities pursuant to the Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, "VIOLATIONS"). Subject to the
restrictions set forth in Section 6(c) the Company shall reimburse the Investor
and each such controlling person, promptly as such expenses are incurred and are
due and payable, for any reasonable legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (I) shall not apply to a Claim arising
out of or based upon a Violation which is due to the inclusion in the
Registration Statement of the information furnished to the Company by any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto; (II)
shall not be available to the extent such Claim is based on (A) a failure of the
Investor to deliver or to cause to be delivered the prospectus made available by
the Company or (B) the Indemnified Person's use of an incorrect prospectus
despite being promptly advised in advance by the Company in writing not to use
such incorrect prospectus; (III) any claims based on the manner of sale of the
Registrable Securities by the Investor or of the Investor's failure to register
as a dealer under applicable securities laws; (IV) any omission of the Investor
to notify the Company of any material fact that should be stated in the
Registration Statement or prospectus relating to the Investor or the manner of
sale; and (V) any 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 resale of the Registrable Securities by the
Investor pursuant to the Registration Statement.
(B) In connection with any Registration Statement in which Investor is
participating, the Investor agrees to severally and 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 who
signs the Registration Statement, each Person, if any, who controls the Company
within the meaning of the 1933 Act or the 1934 Act and the Company's agents
(collectively and together with an Indemnified Person, an "INDEMNIFIED PARTY"),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 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 is due to the
inclusion in the Registration Statement of the written information furnished to
the Company by the Investor expressly for use in connection with such
Registration Statement; and, subject to Section 6(c), the 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 the Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall only be liable
under this Section 6(b) for 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 resale of the
Registrable Securities by the Investor pursuant to the
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Registration Statement. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus were corrected on a timely basis in the
prospectus, as then amended or supplemented. This indemnification provision
shall apply separately to each Investor and liability hereunder shall not be
joint and several.
(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 to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the Indemnified Person or
Indemnified Party, the representation by 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 indemnifying party shall pay for only one (1) separate legal
counsel for the Indemnified Persons or the Indemnified Parties, as applicable,
and such counsel shall be selected by the Investor, if the Investor are entitled
to indemnification hereunder, or the Company, if the Company is entitled to
indemnification hereunder, as applicable. 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 written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the consent of the Indemnified Party or Indemnified Person,
consent to entry of any judgment or enter into any settlement or other
compromise 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. 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.
(D) 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.
SECTION 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 contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6; (II) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of fraudulent
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misrepresentation; and (III) 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.
SECTION 8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investor 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 Investor to sell securities of the
Company to the public without registration ("RULE 144"), provided that the
Investor holds any Registrable Securities are eligible for resale under Rule 144
(k), 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 (it being understood that
nothing herein shall limit the Company's obligations under Section 5(c) of the
Investment Agreement) and the filing of such reports and other documents is
required for the applicable provisions of Rule 144; and
(C) furnish to the Investor, 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 Investor to sell such securities pursuant to Rule 144 without
registration.
SECTION 9. NO ASSIGNMENT OF REGISTRATION RIGHTS.
The rights and obligations under this Agreement shall not be
assignable.
SECTION 10. AMENDMENT OF REGISTRATION RIGHTS.
The provisions of this Agreement may be amended only with the written
consent of the Company and Investor.
SECTION 11. MISCELLANEOUS.
(A) Any notices or other communications required or permitted to be
given under the terms of this Agreement that must be in writing will be deemed
to have been delivered (I) upon receipt, when delivered personally; (II) upon
receipt, when sent by facsimile (provided a confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (III) one (1) 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:
Tower Tech Holdings, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Investor:
Dutchess Private Equities Fund, LP
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Each party shall provide five (5) business days prior notice to the
other party of any change in address, phone number or facsimile number.
(B) 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.
(C) This Agreement and the 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.
(D) This Agreement and the Transaction Documents supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
(E) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof. Whenever
required by the context of this Agreement, the singular shall include the plural
and masculine shall include the feminine. This Agreement shall not be construed
as if it had been prepared by one of the parties, but rather as if all the
parties had prepared the same.
(F) This Agreement may be executed in two or more 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.
(G) 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.
(H) In case any provision of this Agreement is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Agreement will not in any way
be affected or impaired thereby.
SECTION 12. DISPUTES SUBJECT TO ARBITRATION GOVERNED BY MASSACHUSETTS LAW
All disputes arising under this agreement shall be governed by and
interpreted in accordance with the laws of the Commonwealth of Massachusetts,
without regard to principles of conflict of laws. The parties to this agreement
will submit all disputes arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
("AAA"). The arbitrator shall be selected by application of the rules of the
AAA, or by mutual agreement of the parties, except that such arbitrator shall be
an attorney admitted to practice law in the Commonwealth of Massachusetts. No
party to this agreement will challenge the jurisdiction or venue provisions as
provided in this section. Nothing contained herein shall prevent the party from
obtaining an injunction.
*.*.*
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SIGNATURE PAGE OF REGISTRATION RIGHTS AGREEMENT
Your signature on this Signature Page evidences your agreement to be bound by
the terms and conditions of the Investment Agreement and the Registration Rights
Agreement as of the date first written above.
The undersigned signatory hereby certifies that he has read and understands the
Registration Rights Agreement, and the representations made by the undersigned
in this Registration Rights Agreement are true and accurate, and agrees to be
bound by its terms.
DUTCHESS PRIVATE EQUITIES FUND, L.P.,
BY ITS GENERAL PARTNER,
DUTCHESS CAPITAL MANAGEMENT, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Managing Member
TOWER TECH HOLDINGS, INC.
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇▇▇▇▇, President
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