EXHIBIT 10.10
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of February 1, 2001, by and between Clements Golden Phoenix Enterprises,
Inc., a Florida corporation (the "Company"), and Capital Consultants, Inc. (the
"Purchaser").
Preliminary Statements
In connection with the consummation of the transactions contemplated by
that certain Common Stock Purchase Agreement (the "Purchase Agreement") of even
date herewith by and between the Company and the Purchaser, the Company has
agreed, upon the terms and subject to the conditions of the Common Stock
Purchase Agreement, to issue and sell to the Purchaser 200,000 shares ( the
"Shares") of the Company's Common Stock (the "Common Stock").
The Shares are collectively referred to as the "Securities."
To induce the Purchaser to execute and deliver the Purchase Agreement,
the Company has agreed, pursuant to the terms and conditions of this Agreement,
to provide certain registration rights with respect to the Common Shares.
Agreement
In consideration of the foregoing, the mutual covenants and conditions
set forth in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to become legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
respective meanings:
"Agreement" shall mean this Registration Rights Agreement, made and
entered into as of February 1, 2001, by and between the Company and the
Purchaser.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Shares" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.
"Purchase Agreement" shall have the meaning ascribed to such term in
the Preliminary Statements to this Agreement.
"Company" shall mean Clements Golden Phoenix Enterprises, Inc., a
Florida corporation, of which Clements Citrus Sales of Florida, Inc., a Florida
corporation is a wholly owned subsidiary.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as in effect from time to time.
"Holder" or "Holders" shall mean (a) the Purchaser, to the extent that
the Purchaser holds Registrable Securities, and (b) any Person holding
Registrable Securities as a transferee of the Purchaser (directly or indirectly,
including subsequent transfers).
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint- stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Purchase Agreement" shall mean, that certain Common Stock Purchase
Agreement, dated as of February 1, 2001, by and between the Company and the
Purchaser.
"Purchaser" shall mean Capital Consultants, Inc., a Kentucky corporation
The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing with the Commission one or more
registration statements covering Registrable Securities in compliance with the
Securities Act that is declared or ordered effective by the Commission.
"Registrable Securities" shall mean the Common Shares, the Converted
Common Shares and any shares of capital stock issued or issuable with respect to
the Securities as a result of any stock split, stock dividend, recapitalization,
exchange or similar event; provided, however, that such securities shall cease
to be Registrable Securities when (a) a registration statement with respect to
such securities shall have been declared effective under the Securities Act and
such securities shall have been disposed of pursuant to the registration
statement, (b) such securities are distributed to the public pursuant to Rule
144(k) (or any successor provisions) promulgated under the Securities Act or (c)
such securities shall have ceased to be outstanding.
"Registration Expenses" shall mean all expenses incurred in order to
comply with Article II hereof, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Company, reasonable fees and disbursements of one (1) counsel for the Holders,
blue sky fees and expenses, and the expense of any special audits incident to or
required by any such registration, but excluding the compensation of regular
employees of the Company (which shall be paid in any event by the Company) and
excluding Selling Expenses.
"Restricted Securities" shall mean Registrable Securities that are
"restricted securities" as defined in Rule 144 under the Securities Act.
"Securities" shall have the meaning ascribed to such term in the
Preliminary Statements to this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all as in effect from time to time.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions incurred in connection with the sale of securities pursuant to a
registration effected hereunder.
Capitalized terms used in this Agreement and not otherwise defined
herein shall have the respective meanings ascribed to such terms in the Purchase
Agreements.
ARTICLE II
REGISTRATION RIGHTS
Section 2.1 Registration Under the Securities Act of 1933, as amended.
The Shares have not been registered under the Act. Unless and until
registered under the Act, all certificates evidencing the shares shall bear the
following legend:
These securities have not been registered under the Securities Act of
1933, as amended (the "Act") or applicable state law and may not be
sold, transferred or otherwise disposed of unless registered under the
Act and any applicable state act or unless the Company is satisfied
that these securities may be transferred without registration under the
Act.
The Shares shall be Rule 144 restricted shares (the "Restricted
Securities"). After issuance of the Shares, Company agrees to use its best
efforts to assist Purchaser in registering the Shares under the Act subject to
the rules, regulations, and other provisions of said Act and subject to the
terms and conditions contained herein.
Piggyback Registration.
(a) At any time that the Company proposes to file a
Company registration statement on Form S-1 under the Act (the "Registrations
Statement"), the Company shall cause to be included in such registration
statement any securities issued or subject to issuance in this transaction;
provided, however, that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
Company Registration Statement filed in connection with such registration, the
Company shall determine for any reason not to register or to delay registration
of Purchaser's Restricted Securities, the Company may, at its election, give
written notice of such determination to holder and, thereupon:
(i) in the ease of a determination not to
register, shall be relieved of its obligation to register Purchaser's Restricted
Securities in connection with such registration (but not from its obligation to
pay the registration expenses in connection therewith), and
(ii) in the case of a delay in registering,
shall be permitted to delay registering Purchaser's Restricted Securities for
the same period as the delay in registering such other
securities.
(b) The Company's obligation to include Restricted
Securities in a Company's Registration Statement shall be subject to the
following limitations:
(i) The Company may elect, at its sole
option and for any reason, not to register Purchaser's Restricted Shares,
provided however, that this right is limited to one (1) time and relative to one
(1) particular Company Registration Statement.
(ii) The Company shall not be obligated to
include any Restricted Securities in a registration statement filed on any other
form than Form S-1.
(iii) If a Company Registration Statement
involves an underwritten offering and the managing underwriter advises the
Company in writing that in its opinion, the number of securities requested to be
included in such Company Registration Statement exceeds the number which can be
sold in such offering without adversely affecting the offering, the Company
shall include in such Company Registration Statement the number of such
securities which the Company is so advised can be sold in such offering without
adversely affecting the offering, determined as follows:
(A) first, the securities proposed
by the Company to be sold for it own account, and
(B) second, any Restricted Securities
requested to be included in such registration and any other securities of the
Company in accordance with the priorities, if and then existing among the
holders of such securities pro rata among the holders thereof requesting such
registration on the basis of the number of shares of such securities requested
to be included by such holders.
(iv) The Company shall not be obligated to
include Restricted Securities in more than one (1) Company Registration
Statement.
(c) To the extent Purchaser's Restricted Securities
are intended to be included in a Company Registration Statement, Purchaser may
include any of its Restricted Securities in such Company Registration Statement
pursuant to this Agreement only if Purchaser furnishes to the Company in
writing, within ten (10) business days after receipt of a written request
therefore, such information specified in Item 507 of Regulation S-K under the
Act or such other information as the Company may reasonably request for use in
connection with the Company Registration Statement or Prospectus or preliminary
Prospectus included therein and in any application to the NASD. Purchaser as to
which the Company Registration Statement is being effected agrees to furnish
promptly to the Company all information required to be disclosed in order to
make all information previously furnished to the Company by Purchaser not
materially misleading.
Section 2.2 Expenses of Registration. All Registration
Expenses incurred in connection with any registration, qualification or
compliance pursuant to Section 2.1 shall be borne
by the Company; and all Selling Expenses in connection with such registration,
qualification or compliance shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered.
Section 2.3 Registration Procedures. In the case of each
registration, qualification or compliance effected by the Company pursuant to
this Article II, the Company will keep each Holder advised in writing as to the
initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense, the Company will:
(a) prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement;
(b) furnish to the Holders such numbers of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirement of the Securities Act, and such other documents as they may
reasonably request (including a conformed copy of the registration statement
filed with the Commission and any amendments thereto and an original executed
underwriting agreement entered into in connection with such registration) in
order to facilitate the disposition of Registrable Securities owned by them;
(c) use reasonable efforts to register and qualify
the securities covered by such registration statement under such other
securities or blue sky laws of one (1) jurisdiction (in addition to those
jurisdictions in which the Company has otherwise agreed to so register and
qualify such securities) as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions;
(d) in the event of any underwritten public offering
enter into and perform its obligations under an underwriting agreement with the
managing underwriter(s) of such offering; each holder participating in such
underwriting shall also enter into and perform its obligations under such
underwriting agreement;
(e) notify each holder of Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing; and
(f) furnish, at the request of any holder requesting
registration of Registrable Securities pursuant to this Article II, on the date
that such Registrable Securities are delivered to the underwriters for sale in
connection with registration pursuant to this Article II, if such securities are
being sold through underwriters, or on the date that the registration statement
with respect to such securities becomes effective, if such securities are not
being sold through
underwriters, (i) a copy of any opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, addressed to the
underwriters of the Company, and (ii) a copy of any letter, dated such date,
from the independent accountants of the Company, addressed to the underwriters
of the Company.
Each Holder of Registrable Securities agrees that upon receipt of any notice
from the Company of the happening of any event of the kind described in clause
(f) of this Section 2.3, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Holder's receipt of the copies of a
supplemented or amended prospectus and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense), all copies, other
than permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Securities that was in effect prior to such amendment
or supplement. In the event the Company shall give any such notice, the period
set forth in clause (a) of this Section 2.3 shall be extended by the number of
days during the period from and including the date of the giving of such notice
pursuant to clause (e) of this Section 2.3 to and including the date when each
seller of Registrable Securities covered by such registration statement shall
have received the copies of a supplemented or amended prospectus.
Section 2.4 Indemnification.
(a) The Company will indemnify each Holder, each
Holder's officers, directors and partners, and each Person controlling such
Holder (collectively, "Holder's Parties"), participating in any registration,
qualification, or compliance effected pursuant to this Article II with respect
to Registrable Securities held by such Holder and each underwriter, if any, and
each Person who controls any underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, to which they
may become subject under the Securities Act, the Exchange Act or other federal
or state law, arising out of or based on (i) any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other similar document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (ii) any violation by the Company of
any federal, state or common law rule or regulation applicable to the Company in
connection with any such registration, qualification or compliance, and will
reimburse each such Holder's Parties each such underwriter, and each Person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, as incurred, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission, made in reliance on and in conformity with written information
furnished to the Company by such Holder's Parties or underwriter or Person
controlling such underwriter specifically for use in the preparation thereof.
(b) Each Holder will, if Registrable Securities held
by such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, severally and not jointly,
indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company securities covered by such a registration
statement, and each Person who controls the Company or such underwriter within
the meaning of the Securities Act, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on (i) any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other similar
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such directors, officers, Persons,
underwriters or control Persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, as incurred, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with the written information furnished to the Company by such Holder
specifically for use in the preparation thereof, or (ii) any violation by any
such Holder of any federal, state or common law rule or regulation applicable to
such Holder in connection with the distribution of securities pursuant to a
registration statement, and will reimburse the Company, such Holders, such
directors, officers, Persons, underwriters or control Persons for any legal any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability, or action, as incurred; provided,
however, that the obligations of each such Holder hereunder shall be limited to
an amount equal to the aggregate proceeds received by such Holder in such
offering.
(c) Each party entitled to indemnification under this
Section 2.4 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has received written notice of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld). The Indemnified Party may participate in such defense
at such party's expense; provided, however, that the Indemnifying Party shall
bear the expense of such defense of one counsel representing the Indemnified
Party if representation of both parties by the same counsel would be
inappropriate due to actual or potential conflicts of interest. The failure of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2.4, except to the
extent such failure to give notice shall materially and adversely prejudice the
Indemnifying Party in the defense of any such claim or any such litigation. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation.
(d)(i) If the indemnification provided for in this
Section 2.4 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or expense
referred to herein, then the Indemnifying Party hereunder shall contribute to
the amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage or expense, in such proportion as is appropriate to
reflect the relative fault
of the Indemnifying Party on the one hand and the Indemnified Party on the other
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relevant intent,
knowledge, access to information and opportunities to correct or prevent such
statement or omission.
(ii) The parties agree that it would not be just and
equitable if contribution pursuant to this Section 2.4 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to above. The amount paid or payable by
an Indemnified Party as a result of the claims, losses, damages and liabilities
referred to above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
(iii) No Holder that is a seller of Registrable Stock
covered by such registration statement or Person controlling such seller other
than the Company shall be obligated to make contribution hereunder that in the
aggregate exceeds the total public offering price of the Registrable Stock sold
by such Holder, less the aggregate amount of any damages that such Holder and
its controlling Persons have otherwise been required to pay pursuant to this
Section 2.4. The obligations of such Holders to contribute are several in
proportion to their respective ownership of the securities covered by such
registration statement and not joint.
(iv) The indemnity and contribution provided herein
shall be in addition to, and not in lieu of, any other liability that one party
may have to another.
Section 2.5 Information by Holder. Each Holder of
Registrable Securities included in any registration shall furnish to the Company
such information regarding such Holder and the distribution proposed by such
Holder as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Article II.
Section 2.6 Rule 144 Reporting. With a view to making
available the benefits of certain rules and regulations of the Commission that
may at any time permit the sale of the Restricted Securities to the public
without registration, the Company agrees to:
(a) use its best efforts to facilitate the sale of
the Restricted Securities to the public without registration under the
Securities Act, pursuant to Rule 144 under the Securities Act;
(b) make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities Act, at
all times after the effective date of the first registration statement filed by
the Company for an offering of its securities to the general
public;
(c) file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements); and
(d) so long as a Holder owns any Restricted Securities
to furnish to the Holder forthwith upon request a written statement by the
Company as to its compliance with the public information requirements of said
Rule 144, and the reporting requirements of the Securities Act and the Exchange
Act, a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents so filed by the Company as a Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing a Holder to sell any such securities without registration.
Section 2.7 Transfer of Registration Rights. The rights
granted under this Article II may not be assigned or otherwise conveyed by any
Holder of Registrable Securities to any transferee.
Section 2.8 Restrictions on Market Manipulation. In the
event any shares of Common Stock are offered or sold by any Holder in a
registration, each such Holder will:
(a) advise the Company in writing of any offer, sale or other
disposition by it of any Common Stock in any manner other than as set
forth in the registration statement or any prospectus included therein
on or for the 30-day period prior to the filing of such registration
statement until the distribution under the registration statement has
been completed;
(b) not effect any stabilization activity in connection with the
Company's Common Stock;
(c) not bid or purchase, for any account in which it has a
beneficial interest, any Common Stock except as may be permitted
pursuant to Rule 10b-6 under the Exchange Act (if applicable);
(d) not until it has sold all of such shares of Common Stock,
attempt to induce any Person to purchase any Common Stock except as
may be permitted pursuant to Rule 10b-6; and
(e) not until it has sold all such shares of Common Stock, pay
any compensation for soliciting another to purchase any securities of
the Company, except as may be permitted pursuant to Rule 10b-6.
ARTICLE III
MISCELLANEOUS
Section 3.1 Governing Law; Jurisdiction and Venue. This Agreement
shall be governed by and interpreted in accordance with the laws of the State of
Florida. The parties agree that the courts of Palm Beach County, Florida, shall
have exclusive jurisdiction and venue for the adjudication of any civil action
between them arising out of relating to this Agreement, and hereby irrevocably
consent to such jurisdiction and venue.
Section 3.2 Successors and Assignees. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assignees, heirs, executors and administrators (as the
case may be) of the parties hereto.
Section 3.3 Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof.
Section 3.4 Notices, etc. All notices and other communications
required or permitted hereunder shall be in writing and shall be effective four
days after mailed by first-class mail, postage prepaid, or otherwise delivered
by hand or by messenger, addressed (a) if to the Purchaser, at Capital
Consultants, Inc., 1050 Chinoe Road, Suite 304, Lexington, KY 40502, Attention:
Frank D. Dickey, Jr.; (b) if to any other Holder of Registrable Securities, at
such address as such Holder shall have furnished the Company in writing, or,
until any such Holder so furnishes an address to the Company, then to and at the
address of the last Holder of such Registrable Securities who has so furnished
an address to the Company; or (c) if to the Company, at 3135 S.W. Mapp Road,
P.O. Box 268, Palm City, FL 34991, Attention: Joseph R. Rizzuti, Chairman &
Chief Operating Officer.
Section 3.5 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any Holder of any Registrable Securities,
upon any breach or default of the Company under this Agreement, shall impair any
such right, power or remedy of such Holder nor shall it be construed to be a
waiver of any such breach or default or an acquiescence therein or of or in any
similar breach or default thereunder occurring nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any Holder of any breach or default under
this Agreement or any waiver on the part of any Holder of any provisions or
conditions of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any Holder shall be cumulative
and not alternative.
Section 3.6 Counterparts. This Agreement may be executed in any number
of counterparts, each of which may be executed by less than all of the parties
hereto, each of which shall be enforceable against the parties actually
executing such counterparts and all of which together shall constitute one
instrument.
Section 3.7 Severability. In the event any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 3.8 Amendments. The provisions of this Agreement may be
amended at any time and from time to time, and particular provisions of this
Agreement may be waived, with and only with, an agreement or consent in writing
signed by the Company and by the Holders of a majority of the Registrable
Securities voting as a single class.
The parties have executed this Registration Rights Agreement as of the date
first written above.
CLEMENTS GOLDEN PHOENIX ENTERPRISES, INC.
/s/ Joseph R. Rizzuti
-------------------------------------
Name: Joseph R. Rizzuti
Title: Chairman & Chief Operating Officer
CAPITAL CONSULTANTS, INC.
/s/ Frank G. Dickey Jr.
-------------------------------------
Name: Frank G. Dickey Jr.
Title: President