Common use of Mandatory Registration Statement Clause in Contracts

Mandatory Registration Statement. (a) As promptly as possible after the Closing Date, and in any event prior to the date that is sixty (60) days following the Closing Date (the “MANDATORY FILING DATE”), the Company shall prepare and file with the SEC a Registration Statement on Form S-1, Form SB-2 or, if eligible, on Form S-3 for the purpose of registering under the Securities Act all of the Registrable Shares for resale by, and for the account of, each Investor as an initial selling stockholder thereunder (the “MANDATORY REGISTRATION STATEMENT”), which the Investors acknowledge may also register 3,381,538 shares of Common Stock issuable upon conversion of the outstanding shares of Series A Convertible Preferred Stock previously issued by the Company’s subsidiary, Particle Drilling Technologies, Inc., a Delaware corporation. The Mandatory Registration Statement shall permit the Investors to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, any or all of the Registrable Shares. The Company agrees to use its commercially reasonable efforts to cause the Mandatory Registration Statement to be declared effective as soon as possible but in no event later than the date that is one hundred eighty (180) days following the Closing Date (the “MANDATORY EFFECTIVE DATE”) (including filing with the SEC, within three (3) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the SEC that the Mandatory Registration Statement will not be “reviewed” or will not be subject to further review, a request for acceleration of effectiveness in accordance with Rule 461 promulgated under the Securities Act (an “ACCELERATION REQUEST”), which request shall request an effective date that is within three (3) Business Days of the date of such request); provided that the Company agrees to use its commercially reasonable efforts to cause the Mandatory Registration Statement to be declared effective no later than the date that is seventy five (75) days after the Closing Date in the event the Mandatory Registration Statement will not be “reviewed”. The Company shall notify each Investor in writing promptly (and in any event within one (1) Business Day) after the Company’s submission of an Acceleration Request to the SEC. The Company shall be required to keep the Mandatory Registration Statement continuously effective (including through the filing of any required post-effective amendments) until the earliest to occur of (i) the date after which all of the Registrable Shares registered thereunder shall have been sold, (ii) the second (2nd) anniversary of the effective date of the Mandatory Registration Statement and (iii) the date on which the Investor may sell all Registrable Shares then held by the Investor without restriction under Rule 144(k) of the Securities Act; provided, that in any case such date shall be extended by the amount of time of any Suspension Period (as defined below) (the “EFFECTIVENESS PERIOD”). Thereafter, the Company shall be entitled to withdraw the Mandatory Registration Statement and, upon such withdrawal, the Investors shall have no further right to offer or sell any of the Registrable Shares pursuant to the Mandatory Registration Statement (or any prospectus relating thereto). (b) Notwithstanding anything in this Section 2 to the contrary, if the Company shall furnish to the Investors a certificate signed by the President or Chief Executive Officer of the Company stating that the Board has made the good faith determination upon the advice of counsel (i) that the continued use by the Investors of a Registration Statement for purposes of effecting offers or sales of Registrable Shares pursuant thereto would require, under the Securities Act and the rules and regulations promulgated thereunder, premature disclosure in a Registration Statement (or the Prospectus relating thereto) of material, nonpublic information concerning the Company, its business or prospects or any proposed material transaction involving the Company, (ii) that such premature disclosure would be materially adverse to the Company, its business or prospects or any such proposed material transaction and (iii) that it is therefore necessary to suspend the use by the Investors of, or the filing of, a Registration Statement (and the Prospectus relating thereto), then the right of the Investors to use a Registration Statement (and the Prospectus relating thereto) for purposes of effecting offers or sales of Registrable Shares pursuant thereto or the filing of any Registration Statement shall be suspended for a period (the “SUSPENSION PERIOD”) not greater than forty-five (45) consecutive Business Days and not more than ninety (90) Business Days during any consecutive twelve (12) month period. During the Suspension Period, the Investors shall not offer or sell any Registrable Shares pursuant to or in reliance upon a Registration Statement (or the Prospectus relating thereto). The Company agrees that, as promptly as possible, but in no event later than one (1) Business Day, after the consummation, abandonment or public disclosure of the event or transaction that caused the Company to suspend the use of or delay the filing of a Registration Statement (and the Prospectus relating thereto) pursuant to this Section 2(b), the Company will as promptly as possible lift any suspension, provide the Investors with revised Prospectuses, if required, and will notify the Investors of their ability to effect offers or sales of Registrable Shares pursuant to or in reliance upon the Registration Statement. (c) It shall be a condition precedent to the obligations of the Company to register Registrable Shares for the account of an Investor pursuant to this Section 2, Section 2A or Section 3 that such Investor furnish to the Company such information regarding itself, the Registrable Shares held by it, and the method of disposition of such securities as shall be reasonably required to effect the registration of such Investor’s Registrable Shares. (d) Notwithstanding anything in this Agreement to the contrary, the Investors’ sole remedy at law (but without limiting the availability of equitable remedies) for the failure of the Company to file the Mandatory Registration Statement as promptly as possible after the date hereof, and in any event on or prior to the Mandatory Filing Date, or for the failure of the Company to make effective the Mandatory Registration Statement on or prior to the Mandatory Effective Date, shall be the vesting of the Warrants as provided for therein.

Mandatory Registration Statement. (a) As promptly as possible after the Closing Date, and in any event prior to the date that is sixty earlier of (601) days the 10th calendar day following the Closing Date date the Company files its Annual Report on Form 10-K for the fiscal year ended September 30, 2006 and (2) January 15, 2007 (the “MANDATORY FILING DATEMandatory Filing Date”), the Company shall prepare and file with the SEC a Registration Statement on Form S-1, Form SB-2 S-1 or, if eligible, on Form S-3 for the purpose of registering under the Securities Act all of the Registrable Shares for resale by, and for the account of, each Investor as an initial selling stockholder thereunder (the “MANDATORY REGISTRATION STATEMENTMandatory Registration Statement”), which the Investors acknowledge may also register 3,381,538 shares of Common Stock issuable upon conversion of the outstanding shares of Series A Convertible Preferred Stock previously issued by the Company’s subsidiary, Particle Drilling Technologies, Inc., a Delaware corporation. The Mandatory Registration Statement shall permit the Investors to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, any or all of the Registrable Shares. The Company agrees to use its commercially reasonable efforts to cause the Mandatory Registration Statement to be declared effective as soon as possible but in no event later than the date that is one hundred eighty (180) 60 calendar days following the Closing Date filing date of the Mandatory Registration Statement (or 90 calendar days following the filing date in the event the staff of the SEC decides to “review” the Mandatory Registration Statement) (the “MANDATORY EFFECTIVE DATEMandatory Effective Date”) (including filing with the SEC, within three five (35) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the SEC that the Mandatory Registration Statement will not be “reviewed” or will not be subject to further review, a request for acceleration of effectiveness in accordance with Rule 461 promulgated under the Securities Act (an “ACCELERATION REQUESTAcceleration Request”), which request shall request an effective date that is within three (3) Business Days of the date of such request); provided that the Company agrees to use its commercially reasonable efforts to cause the Mandatory Registration Statement to be declared effective no later than the date that is seventy five (75) days after the Closing Date in the event the Mandatory Registration Statement will not be “reviewed”. The Company shall notify each Investor in writing promptly (and in any event within one (1) Business Day) after the Company’s submission of an Acceleration Request to the SEC. The Company shall be required to keep the Mandatory Registration Statement continuously effective (including through the filing of any required post-effective amendments) until the earliest to occur of (i) the date after which all of the Registrable Shares registered thereunder shall have been sold, sold and (ii) the second (2nd) anniversary of the effective date of the Mandatory Registration Statement and (iii) the date on which the Investor may sell all Registrable Shares then held by the Investor without restriction under Rule 144(k) of the Securities ActStatement; provided, that in any case such date shall be extended by the amount of time of any Suspension Period (as defined below) (the “EFFECTIVENESS PERIODEffectiveness Period”). Notwithstanding the foregoing, in no event shall the Company be required to keep the Mandatory Registration Statement effective after the date on which the Investor may sell all Registrable Shares then held by the Investor without restriction under Rule 144(k) of the Securities Act. Thereafter, the Company shall be entitled to withdraw the Mandatory Registration Statement and, upon such withdrawal, the Investors shall have no further right to offer or sell any of the Registrable Shares pursuant to the Mandatory Registration Statement (or any prospectus relating thereto). (b) Notwithstanding anything in this Section 2 to the contrary, if the Company shall furnish to the Investors a certificate signed by the President or Chief Executive Officer of the Company stating that the Board has made the good faith determination upon the advice of counsel (i) that the continued use by the Investors of a Registration Statement for purposes of effecting offers or sales of Registrable Shares pursuant thereto would require, under the Securities Act and the rules and regulations promulgated thereunder, premature disclosure in a Registration Statement (or the Prospectus relating thereto) of material, nonpublic information concerning the Company, its business or prospects or any proposed material transaction involving the Company, (ii) that such premature disclosure would be materially adverse to the Company, its business or prospects or any such proposed material transaction and (iii) that it is therefore necessary to suspend the use by the Investors of, or the filing of, a Registration Statement (and the Prospectus relating thereto), then the right of the Investors to use a Registration Statement (and the Prospectus relating thereto) for purposes of effecting offers or sales of Registrable Shares pursuant thereto or the filing of any Registration Statement shall be suspended for a period (the “SUSPENSION PERIODSuspension Period”) not greater than forty-five (45) consecutive Business Days and not more than ninety (90) Business Days during any consecutive twelve (12) month period. During the Suspension Period, the Investors shall not offer or sell any Registrable Shares pursuant to or in reliance upon a Registration Statement (or the Prospectus relating thereto). The Company agrees that, as promptly as possible, but in no event later than one (1) Business Day, after the consummation, abandonment or public disclosure of the event or transaction that caused the Company to suspend the use of or delay the filing of a Registration Statement (and the Prospectus relating thereto) pursuant to this Section 2(b), the Company will as promptly as possible lift any suspension, provide the Investors with revised Prospectuses, if required, and will notify the Investors of their ability to effect offers or sales of Registrable Shares pursuant to or in reliance upon the Registration Statement. (c) It shall be a condition precedent to the obligations of the Company to register the Registrable Shares for the account of an Investor pursuant to this Section 2, Section 2A 2 or Section 3 that such Investor furnish to the Company such information regarding itself, the Registrable Shares held by it, and the method of disposition of such securities as shall be reasonably required to effect the registration of such Investor’s Registrable Shares. (d) If (i) the Mandatory Registration Statement is not filed on or prior to the Mandatory Filing Date, or (ii) the Mandatory Registration Statement filed or required to be filed hereunder is not declared effective by the Commission by the Mandatory Effective Date (any such failure or breach being referred to as an “Event”, and for purposes of clause (i) or (ii) the date on which such Event occurs, referred to as “Event Date”), then on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Investor an amount in cash, as liquidated damages and not as a penalty, equal to 1% of the aggregate purchase price paid by such Investor pursuant to the Securities Purchase Agreement for any Registrable Shares then held by such Investor assuming for such purposes that such calculation is based on a fully converted basis. The parties agree that (1) in no event will the Company be liable for liquidated damages under this Agreement in excess of 1% of the Aggregate Purchase Price of the Investors in any 30-day period and (2) the maximum aggregate liquidated damages payable to an Investor under this Agreement shall be twelve percent (12%) of the Aggregate Purchase Price paid by such Investor pursuant to the Securities Purchase Agreement. If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Investor, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The liquidated damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event. Notwithstanding anything in this Agreement agreement to the contrary, the Investors’ sole remedy at law (but without limiting the availability of equitable remedies) for the failure of the Company to file the a Mandatory Registration Statement as promptly as possible after the date hereof, and in any event on or prior to the Mandatory Filing Date, or for the failure of the Company to make effective the cause such Mandatory Registration Statement on or prior to the Mandatory Effective Date, become effective in accordance with Section 2(a) hereof shall be the vesting of the Warrants as provided for thereinliquidated damages described in this Section 2(d).

Mandatory Registration Statement. (a) As promptly as possible after the Closing Date, and in any event prior to the date that is sixty (60) days following the Closing Date (the “MANDATORY FILING DATE”), the Company shall prepare and file with the SEC a Registration Statement on Form S-1, Form SB-2 S-1 or, if eligible, on Form S-3 for the purpose of registering under the Securities Act all of the Registrable Shares for resale by, and for the account of, each Investor as an initial selling stockholder thereunder (the “MANDATORY REGISTRATION STATEMENT”), which the Investors acknowledge may also register 3,381,538 shares of Common Stock issuable upon conversion of the outstanding shares of Series A Convertible Preferred Stock previously issued by the Company’s subsidiary, Particle Drilling Technologies, Inc., a Delaware corporation. The Mandatory Registration Statement shall permit the Investors to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, any or all of the Registrable Shares. The Company agrees to use its commercially reasonable best efforts to cause the Mandatory Registration Statement to be declared effective as soon as possible but in no event later than the date that is one hundred eighty (180) days following the Closing Date (the “MANDATORY EFFECTIVE DATE”) (including filing with the SEC, within three (3) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the SEC that the Mandatory Registration Statement will not be “reviewed” or will not be subject to further review, a request for acceleration of effectiveness in accordance with Rule 461 promulgated under the Securities Act (an “ACCELERATION REQUEST”), which request shall request an effective date that is within three (3) Business Days of the date of such request); provided that the Company agrees to use its commercially reasonable best efforts to cause the Mandatory Registration Statement to be declared effective no later than the date that is seventy five (75) days after the Closing Date in the event the Mandatory Registration Statement will not be “reviewed”. The Company shall notify each Investor in writing promptly (and in any event within one (1) Business Day) after the Company’s submission of an Acceleration Request to the SEC. The Company shall be required to keep the Mandatory Registration Statement continuously effective (including through the filing of any required post-effective amendments) until the earliest earlier to occur of (i) the date after which all of the Registrable Shares registered thereunder shall have been sold, (ii) the second third (2nd3rd) anniversary of the effective date of the Mandatory Registration Statement Closing Date and (iii) the date on which the Investor may sell all Registrable Shares then held by the Investor without restriction under Rule 144(k) of the Securities Act; provided, that in any case such date shall be extended by the amount of time of any Suspension Period (as defined below) (the “EFFECTIVENESS PERIOD”). Thereafter, the Company shall be entitled to withdraw the Mandatory Registration Statement and, upon such withdrawal, the Investors shall have no further right to offer or sell any of the Registrable Shares pursuant to the Mandatory Registration Statement (or any prospectus relating thereto). (b) Notwithstanding anything in this Section 2 to the contrary, if the Company shall furnish to the Investors a certificate signed by the President or Chief Executive Officer of the Company stating that the Board has made the good faith determination upon the advice of counsel (i) that the continued use by the Investors of a the Mandatory Registration Statement for purposes of effecting offers or sales of Registrable Shares pursuant thereto hereto would require, under the Securities Act and the rules and regulations promulgated thereunder, premature disclosure in a the Mandatory Registration Statement (or the Prospectus relating thereto) of material, nonpublic information concerning the Company, its business or prospects or any proposed material transaction involving the Company, (ii) that such premature disclosure would be materially adverse to the Company, its business or prospects or any such proposed material transaction and (iii) that it is therefore necessary essential to suspend the use by the Investors of, or the filing of, a the Mandatory Registration Statement (and the Prospectus relating thereto), then the right of the Investors to use a the Mandatory Registration Statement (and the Prospectus relating thereto) for purposes of effecting offers or sales of Registrable Shares pursuant thereto or the filing of any the Mandatory Registration Statement shall be suspended for a period (the “SUSPENSION PERIOD”) not greater than forty-five thirty (4530) consecutive Business Days and not more than ninety sixty (9060) Business Days during any consecutive twelve (12) month period. During the Suspension Period, the Investors shall not offer or sell any Registrable Shares pursuant to or in reliance upon a the Mandatory Registration Statement (or the Prospectus relating thereto). The Company agrees that, as promptly as possible, but in no event later than one (1) Business Day, after the consummation, abandonment or public disclosure of the event or transaction that caused the Company to suspend the use of or delay the filing of a the Mandatory Registration Statement (and the Prospectus relating thereto) pursuant to this Section 2(b), the Company will as promptly as possible lift any suspension, provide the Investors with revised Prospectuses, if required, and will notify the Investors of their ability to effect offers or sales of Registrable Shares pursuant to or in reliance upon the Mandatory Registration Statement. (c) It shall be a condition precedent to the obligations of the Company to register Registrable Shares for the account of an Investor pursuant to this Section 2, Section 2A or Section 3 that such Investor furnish to the Company such information regarding itself, the Registrable Shares held by it, and the method of disposition of such securities as shall be reasonably required to effect the registration of such Investor’s Registrable Shares. (d) Notwithstanding anything in this Agreement to the contrary, the Investors’ sole remedy at law (but without limiting the availability of equitable remedies) for the failure of the Company to file the Mandatory Registration Statement as promptly as possible after the date hereof, and in any event on or prior to the Mandatory Filing Date, or for the failure of the Company to make effective the Mandatory Registration Statement on or prior to the Mandatory Effective Date, shall be the vesting of the Warrants as provided for therein.

Mandatory Registration Statement. Not later than thirty (a30) As promptly as possible days after the Closing Date, and in any event prior to the date that is sixty the Company becomes eligible to file on Form S-3 (60) days following the Closing Date (the “MANDATORY FILING DATE”or any successor form thereto), the Company shall prepare and file with the SEC a shelf registration statement pursuant to Rule 415 of the Securities Act (the “Mandatory Registration Statement on Form S-1, Form SB-2 or, if eligible, Statement”) on Form S-3 for (or any successor form thereto) (such date, the purpose of registering under “Mandatory Registration Statement Filing Date”), with respect to the Securities Act resale, from time to time, covering all of the Registrable Shares for resale by, and for the account of, each Investor as an initial selling stockholder thereunder (the “MANDATORY REGISTRATION STATEMENT”), which the Investors acknowledge may also register 3,381,538 shares of Common Stock issuable upon conversion of the outstanding shares of Series A Convertible Preferred Stock previously issued Securities held by the Company’s subsidiary, Particle Drilling Technologies, Inc., a Delaware corporationHolders. The Mandatory Registration Statement shall permit the Investors Holders to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under the Securities ActAct or any similar rule that may be adopted by the SEC, any or all of the Registrable SharesSecurities. Such Registration Statement also shall cover, to the extent allowable under the Securities Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities. Such Registration Statement shall not include any shares of Common Stock or other securities for the account of any other holder without the prior written consent of the Holders, which consent shall not be unreasonably withheld. The Company agrees to use its commercially reasonable best efforts to cause the Mandatory Registration Statement to be declared effective as soon as possible but in no event later than the date that is one hundred eighty (180) days following the Closing Date (the “MANDATORY EFFECTIVE DATEMandatory Effective Date”) forty-five (including filing 45) calendar days after the Mandatory Registration Statement Filing Date (if there is no SEC review of the Mandatory Registration Statement) or one hundred twenty (120) calendar days after the Mandatory Registration Statement Filing Date (if there is an SEC review of the Mandatory Registration Statement), and to file with the SEC, within three (3) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the SEC that the Mandatory Registration Statement will not be “reviewed” or will not be subject to further review, a request for acceleration of effectiveness in accordance with Rule 461 promulgated under the Securities Act (an “ACCELERATION REQUESTAcceleration Request”), which request shall request an effective date that is within three (3) Business Days of the date of such request); provided that the Company agrees to use its commercially reasonable efforts to cause the Mandatory Registration Statement to be declared effective no later than the date that is seventy five (75) days after the Closing Date in the event the Mandatory Registration Statement will not be “reviewed”. The Company shall notify each Investor Holder in writing promptly (and in any event within one (1) Business Day) after the Company’s submission of an Acceleration Request to the SEC. The Company shall promptly prepare and file with the SEC (i) such amendments (including post-effective amendments) and supplements to such Mandatory Registration Statement or (ii) an additional Registration Statement in the event that the original Mandatory Registration Statement does not cover all of the Registrable Securities. The Company shall be required to keep the Mandatory Registration Statement continuously effective (including through the filing of any required post-effective amendments) until the earliest to occur of (i) the date after which all of the Registrable Shares registered thereunder shall have been sold, (ii) the second (2nd) anniversary of the effective date of the Mandatory Registration Statement and (iii) the date on which the Investor may sell all Registrable Shares then held Securities covered by the Investor without restriction under Rule 144(k) of the Securities Act; provided, that in any case such date shall be extended by the amount of time of any Suspension Period (as defined below) (the “EFFECTIVENESS PERIOD”). Thereafter, the Company shall be entitled to withdraw the Mandatory Registration Statement and, upon such withdrawal, the Investors shall have no further right to offer or sell any of the Registrable Shares pursuant to the Mandatory Registration Statement (y) cease to be Registrable Securities or any prospectus relating thereto)(z) are eligible for resale under Rule 144 without limitation. (b) Notwithstanding anything in this Section 2 to the contrary, if the Company shall furnish to the Investors a certificate signed by the President or Chief Executive Officer of the Company stating that the Board has made the good faith determination upon the advice of counsel (i) that the continued use by the Investors of a Registration Statement for purposes of effecting offers or sales of Registrable Shares pursuant thereto would require, under the Securities Act and the rules and regulations promulgated thereunder, premature disclosure in a Registration Statement (or the Prospectus relating thereto) of material, nonpublic information concerning the Company, its business or prospects or any proposed material transaction involving the Company, (ii) that such premature disclosure would be materially adverse to the Company, its business or prospects or any such proposed material transaction and (iii) that it is therefore necessary to suspend the use by the Investors of, or the filing of, a Registration Statement (and the Prospectus relating thereto), then the right of the Investors to use a Registration Statement (and the Prospectus relating thereto) for purposes of effecting offers or sales of Registrable Shares pursuant thereto or the filing of any Registration Statement shall be suspended for a period (the “SUSPENSION PERIOD”) not greater than forty-five (45) consecutive Business Days and not more than ninety (90) Business Days during any consecutive twelve (12) month period. During the Suspension Period, the Investors shall not offer or sell any Registrable Shares pursuant to or in reliance upon a Registration Statement (or the Prospectus relating thereto). The Company agrees that, as promptly as possible, but in no event later than one (1) Business Day, after the consummation, abandonment or public disclosure of the event or transaction that caused the Company to suspend the use of or delay the filing of a Registration Statement (and the Prospectus relating thereto) pursuant to this Section 2(b), the Company will as promptly as possible lift any suspension, provide the Investors with revised Prospectuses, if required, and will notify the Investors of their ability to effect offers or sales of Registrable Shares pursuant to or in reliance upon the Registration Statement. (c) It shall be a condition precedent to the obligations of the Company to register Registrable Shares for the account of an Investor pursuant to this Section 2, Section 2A or Section 3 that such Investor furnish to the Company such information regarding itself, the Registrable Shares held by it, and the method of disposition of such securities as shall be reasonably required to effect the registration of such Investor’s Registrable Shares. (d) Notwithstanding anything in this Agreement to the contrary, the Investors’ sole remedy at law (but without limiting the availability of equitable remedies) for the failure of the Company to file the Mandatory Registration Statement as promptly as possible after the date hereof, and in any event on or prior to the Mandatory Filing Date, or for the failure of the Company to make effective the Mandatory Registration Statement on or prior to the Mandatory Effective Date, shall be the vesting of the Warrants as provided for therein.