REGISTRATION RIGHTS AGREEMENT
EXHIBIT
4.7
This
Registration Rights Agreement (this "Agreement") is made
and entered into as of December 19, 2007, by and among Astrata Group
Incorporated, a Nevada corporation (the "Company"), and
the
purchasers listed on Schedule I hereto
(the "Purchasers").
This
Agreement is being entered into pursuant to the Series B Convertible Preferred
Stock Purchase Agreement dated as of the date hereof among the Company and
the
Purchasers (the "Purchase
Agreement").
The
Company and the Purchasers hereby agree as follows:
1. Definitions.
Capitalized
terms used and not otherwise defined herein shall have the meanings given
such
terms in the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:
"Advice"
shall have
meaning set forth in Section 3(m).
"Affiliate"
means,
with respect to any Person, any other Person that directly or indirectly
controls or is controlled by or under common control with such
Person. For the purposes of this definition, "control," when
used
with respect to any Person, means the possession, direct or indirect, of
the
power to direct or cause the direction of the management and policies of
such
Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms of "affiliated," "controlling"
and
"controlled"
have meanings correlative to the foregoing.
"Board"
shall have
meaning set forth in Section 3(n).
"Business
Day" means
any day except Saturday, Sunday and any day which shall be a legal holiday
or a
day on which banking institutions in the state of New York generally are
authorized or required by law or other government actions to close.
"Commission"
means the
Securities and Exchange Commission.
"Common
Stock" means
the Company's Common Stock, par value $0.0001 per share.
“Demand
Date” means
the date the Purchasers deliver the Demand Notice to the Company.
“Demand
Notice” means
a written request from the holders of at least two-thirds (2/3) of the
outstanding Registrable Securities requesting that the Company register for
resale all or a portion of the Registrable Securities under and in accordance
with the provisions of the Securities Act by filing with the Commission a
Registration Statement providing for the resale of all of the Registrable
Securities.
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"Effectiveness
Date"
means, subject to Section 2(b) hereof, with respect to the Registration
Statement the earlier of (A) the sixtieth (60th)
day following
the Filing Date (or in the event the Registration Statement receives a “full
review” by the Commission, the nintieth (90th)
day following
the Filing Date) or (B) the date which is within three (3) Business Days
after
the date on which the Commission informs the Company (i) that the Commission
will not review the Registration Statement or (ii) that the Company
may
request the acceleration of the effectiveness of the Registration Statement
and
the Company makes such request; provided that,
if the
Effectiveness Date falls on a Saturday, Sunday or any other day which shall
be a
legal holiday or a day on which the Commission is authorized or required
by law
or other government actions to close, the Effectiveness Date shall be the
following Business Day.
"Effectiveness
Period"
shall have the meaning set forth in Section 2.
"Event"
shall have the
meaning set forth in Section 7(e).
"Event
Date" shall
have the meaning set forth in Section 7(e).
"Exchange
Act" means
the Securities Exchange Act of 1934, as amended.
"Filing
Date" means,
subject to Section 2(b) hereof, the thirtieth (30th)
day following
the Demand Date; provided that,
if the Filing
Date falls on a Saturday, Sunday or any other day which shall be a legal
holiday
or a day on which the Commission is authorized or required by law or other
government actions to close, the Filing Date shall be the following Business
Day.
"Holder"
or "Holders" means
the
holder or holders, as the case may be, from time to time of Registrable
Securities.
"Indemnified
Party"
shall have the meaning set forth in Section 5(c).
"Indemnifying
Party"
shall have the meaning set forth in Section 5(c).
"Losses"
shall have
the meaning set forth in Section 5(a).
"Person"
means an
individual or a corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or political subdivision thereof) or other entity
of
any kind.
"Preferred
Stock"
means shares of the Company’s Series B Convertible Preferred Stock issued to the
Purchasers pursuant to the Purchase Agreement.
"Proceeding"
means an
action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced
or threatened.
"Prospectus"
means the
prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted
from a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference in such
Prospectus.
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"Registrable
Securities means (i) the shares of Common Stock issuable upon conversion
of the Preferred Stock and (ii) the shares of Common Stock issuable upon
exercise of the Warrants.
"Registration
Statement" means the registration statements and any additional
registration statements contemplated by Section 2, including (in each case)
the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference in such registration
statement.
"Rule
144" means Rule
144 promulgated by the Commission pursuant to the Securities Act, as such
Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.
"Rule
158" means Rule
158 promulgated by the Commission pursuant to the Securities Act, as such
Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.
"Rule
415" means Rule
415 promulgated by the Commission pursuant to the Securities Act, as such
Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.
"Rule
424" means Rule
424 promulgated by the Commission pursuant to the Securities Act, as such
Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.
"Securities
Act" means
the Securities Act of 1933, as amended.
"Special
Counsel"
means Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, for which the Holders will be
reimbursed by the Company pursuant to Section 4.
"Warrants"
means the
Series A Warrants and the Series B Warrants to purchase shares of Common
Stock
issued to the Purchasers pursuant to the Purchase Agreement.
2. Resale
Registration.
(a) On
or prior to the Filing Date, the Company shall prepare and file with the
Commission a "resale" Registration Statement providing for the resale of
all
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement shall be on Form SB-2 (except
if the Company is not then eligible to register for resale the Registrable
Securities on Form SB-2, in which case such registration shall be on another
appropriate form in accordance herewith and the Securities Act and the rules
promulgated thereunder). Such Registration Statement shall cover to
the extent allowable under the Securities Act and the rules
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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. The Company
shall (i) not permit any securities other than the Registrable Securities
and
the securities listed on Schedule II hereto
to
be included in the Registration Statement and (ii) use its best efforts to
cause
the Registration Statement to be declared effective under the Securities
Act as
promptly as possible after the filing thereof, but in any event prior to
the
Effectiveness Date, and to keep such Registration Statement continuously
effective under the Securities Act until such date as is the earlier of (x)
the
date when all Registrable Securities covered by such Registration Statement
have
been sold or (y) the date on which the Registrable Securities may be sold
without any restriction pursuant to Rule 144(k) as determined by the counsel
to
the Company pursuant to a written opinion letter, addressed to the Company's
transfer agent to such effect (the "Effectiveness
Period"). The Company shall request that the effective time of
the Registration Statement is 4:00 p.m. Eastern Time on the effective
date. If at any time and for any reason, an additional Registration
Statement is required to be filed because at such time the actual number
of
shares of Common Stock into which the Preferred Stock is convertible and
the
Warrants are exercisable plus the number of shares of Common Stock exceeds
the
number of shares of Registrable Securities remaining under the Registration
Statement, the Company shall have twenty (20) Business Days to file such
additional Registration Statement, and the Company shall use its best efforts
to
cause such additional Registration Statement to be declared effective by
the
Commission as soon as possible, but in no event later than sixty (60) days
after
filing.
(b) Notwithstanding
anything to the contrary set forth in this Section 2, in the event the
Commission does not permit the Company to register all of the Registrable
Securities in the Registration Statement because of the Commission’s application
of Rule 415 or the Commission requires the Company to either exclude shares
held
by certain Holders or deem such Holders to be underwriters with respect to
their
Registrable Securities, the Company shall register in the Registration Statement
such number of Registrable Securities as is permitted by the Commission without
naming such Holder as an underwriter (unless such Holder agrees to be named
as
an underwriter), provided, however,
that the
number of Registrable Securities to be included in such Registration Statement
or any subsequent registration statement shall be determined in the following
order: (i) first, the shares of Common Stock issuable upon conversion of
the
Preferred Stock shall be registered on a pro rata basis among the holders
of the
Preferred Stock, (ii) second, the shares of Common Stock issuable upon exercise
of the Warrants shall be registered on a pro rata basis among the holders
of the
Warrants, and (iii) third, any shares listed on Schedule II hereto shall be
registered on a pro rata basis among the holders of such shares. In
the event the Commission does not permit the Company to register all of the
Registrable Securities in the initial Registration Statement, then except
as the
Holders of such excluded Registrable Securities may otherwise agree, the
Company
shall use its best efforts to file subsequent Registration Statements to
register the Registrable Securities that were not registered in the initial
Registration Statement, as promptly as possible and in a manner permitted
by the
Commission. For purposes of this Section 2(b), “Filing Date”
means
with respect to each subsequent Registration Statement filed pursuant hereto,
the later of (i) sixty (60) days following the sale of substantially all
of the
Registrable Securities included in the initial Registration Statement or
any
subsequent Registration Statement and (ii) six (6) months following the
effective date of the initial Registration Statement or any subsequent
Registration Statement, as applicable, or such earlier date as permitted
by the
Commission. For purposes of this Section 2(b), “Effectiveness
Date”
means with respect to each subsequent Registration Statement filed
pursuant
hereto, the earlier of (A) the nintieth (90th)
day following
the filing date of such Registration Statement (or in the event such
Registration Statement receives a “full review” by the Commission, the one
hundred twentieth (120th)
day following
such filing date) or (B) the date which is within three (3) Business Days
after
the date on which the Commission informs the Company (i) that the Commission
will not review such Registration Statement or (ii) that the Company
may
request the acceleration of the effectiveness of such Registration Statement
and
the Company makes such request; provided that,
if the
Effectiveness Date falls on a Saturday, Sunday or any other day which shall
be a
legal holiday or a day on which the Commission is authorized or required
by law
or other government actions to close, the Effectiveness Date shall be the
following Business Day.
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3. Registration
Procedures.
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a) Prepare
and file with the Commission, on or prior to the Filing Date, a Registration
Statement on Form SB-2 (or if the Company is not then eligible to register
for
resale the Registrable Securities on Form SB-2 such registration shall be
on
another appropriate form in accordance herewith and the Securities Act and
the
rules promulgated thereunder) in accordance with the plan of distribution
as set
forth on Exhibit
A hereto and in accordance with applicable law, and cause the
Registration Statement to become effective and remain effective as provided
herein; provided, however,
that not
less than five (5) Business Days prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto,
the
Company shall (i) furnish to the Holders and any Special Counsel, copies
of all
such documents proposed to be filed, which documents will be subject to the
review of such Holders and such Special Counsel, and (ii) cause its officers
and
directors, counsel and independent certified public accountants to respond
to
such inquiries as shall be necessary, in the reasonable opinion of Special
Counsel, to conduct a reasonable review of such documents. The
Company shall not file the Registration Statement or any such Prospectus
or any
amendments or supplements thereto to which the Holders of a majority of the
Registrable Securities or any Special Counsel shall reasonably object in
writing
within three (3) Business Days of their receipt thereof.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement as may be necessary to keep the
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission
such additional Registration Statements as necessary in order to register
for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule
424
(or any similar provisions then in force) promulgated under the Securities
Act;
(iii) respond as promptly as possible, but in no event later than ten (10)
Business Days, to any comments received from the Commission with respect
to the
Registration Statement or any amendment thereto and as promptly as possible
provide the Holders true and complete copies of all correspondence from and
to
the Commission relating to the Registration Statement; (iv) file the final
prospectus pursuant to Rule 424 of the Securities Act no later than 9:00
a.m.
Eastern Time on the Business Day following the date the Registration Statement
is declared effective by the Commission; and (v) comply in all material respects
with the provisions of the Securities Act and the Exchange Act with respect
to
the disposition of all Registrable Securities covered by the Registration
Statement during the Effectiveness Period in accordance with the intended
methods of disposition by the Holders thereof set forth in the Registration
Statement as so amended or in such Prospectus as so supplemented.
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(c) Notify
the Holders of Registrable Securities and any Special Counsel as promptly
as
possible (and, in the case of (i)(A) below, not less than three (3) Business
Days prior to such filing, and in the case of (iii) below, on the same day
of
receipt by the Company of such notice from the Commission) and (if requested
by
any such Person) confirm such notice in writing no later than one (1) Business
Day following the day (i)(A) when a Prospectus or any Prospectus supplement
or
post-effective amendment to the Registration Statement is filed; (B) when
the
Commission notifies the Company whether there will be a "review" of such
Registration Statement and whenever the Commission comments in writing on
such
Registration Statement and (C) with respect to the Registration Statement
or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus
or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering
any or
all of the Registrable Securities or the initiation or threatening of any
Proceedings for that purpose; (iv) if at any time any of the representations
and
warranties of the Company contained in any agreement contemplated hereby
ceases
to be true and correct in all material respects; (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for
sale in
any jurisdiction, or the initiation or threatening of any Proceeding for
such
purpose; and (vi) of the occurrence of any event that makes any statement
made
in the Registration Statement or Prospectus or any document incorporated
or
deemed to be incorporated therein by reference untrue in any material respect
or
that requires any revisions to the Registration Statement, Prospectus or
other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material
fact
or omit to state any material fact required to be stated therein or necessary
to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading.
(d) Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of, as promptly as possible, (i) any order suspending the effectiveness of
the
Registration Statement or (ii) any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale
in
any jurisdiction.
(e) If
requested by the Holders of a majority in interest of the Registrable
Securities, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as
the
Company reasonably agrees should be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as
soon
as practicable after the Company has received notification of the matters
to be
incorporated in such Prospectus supplement or post-effective
amendment.
(f) If
requested by any Holder, furnish to such Holder and any Special Counsel,
without
charge, at least one conformed copy of each Registration Statement and each
amendment thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
to the extent requested by such Person (including those previously furnished
or
incorporated by reference) promptly after the filing of such documents with
the
Commission.
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(g) Promptly
deliver to each Holder and any Special Counsel, without charge, as many copies
of the Prospectus or Prospectuses (including each form of prospectus) and
each
amendment or supplement thereto as such Persons may reasonably request; and
subject to the provisions of Sections 3(m) and 3(n), the Company hereby consents
to the use of such Prospectus and each amendment or supplement thereto by
each
of the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.
(h) Prior
to
any public offering of Registrable Securities, use its best efforts to register
or qualify or cooperate with the selling Holders and any Special Counsel
in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and
sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any Holder requests in writing, to keep each such registration
or
qualification (or exemption therefrom) effective during the Effectiveness
Period
and to do any and all other acts or things necessary or advisable to enable
the
disposition in such jurisdictions of the Registrable Securities covered by
a
Registration Statement; provided, however,
that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action that
would
subject it to general service of process in any such jurisdiction where it
is
not then so subject or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.
(i) Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to a
Registration Statement, which certificates, to the extent permitted by the
Purchase Agreement and applicable federal and state securities laws, shall
be
free of all restrictive legends, and to enable such Registrable Securities
to be
in such denominations and registered in such names as any Holder may request
in
connection with any sale of Registrable Securities.
(j) Upon
the occurrence of any event contemplated by Section 3(c)(vi), as promptly
as
possible, prepare a supplement or amendment, including a post-effective
amendment, to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein
by
reference, and file any other required document so that, as thereafter
delivered, neither the Registration Statement nor such Prospectus will contain
an 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 the
light
of the circumstances under which they were made, not misleading.
(k) Use
its best efforts to cause all Registrable Securities relating to the
Registration Statement to be listed or quoted on the OTC Bulletin Board or
any
other securities exchange, quotation system or market, if any, on which similar
securities issued by the Company are then listed or traded as and when required
pursuant to the Purchase Agreement.
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(l) Comply
in all material respects with all applicable rules and regulations of the
Commission and make generally available to its security holders all documents
filed or required to be filed with the Commission, including, but not limited,
to, earning statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period is
a
fiscal year) commencing on the first day of the first fiscal quarter of the
Company after the effective date of the Registration Statement, which statement
shall conform to the requirements of Rule 158.
(m) The
Company may require each selling Holder to furnish to the Company information
regarding such Holder and the distribution of such Registrable Securities
as is
required by law to be disclosed in the Registration Statement, Prospectus,
or
any amendment or supplement thereto, and the Company may exclude from such
registration the Registrable Securities of any such Holder who unreasonably
fails to furnish such information within a reasonable time after receiving
such
request.
If
the
Registration Statement refers to any Holder by name or otherwise as the holder
of any securities of the Company, then such Holder shall have the right to
require (if such reference to such Holder by name or otherwise is not required
by the Securities Act or any similar federal statute then in force) the deletion
of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
Each
Holder covenants and agrees that it will not sell any Registrable Securities
under the Registration Statement until the Company has electronically filed
the
Prospectus as then amended or supplemented as contemplated in Section 3(g)
and
notice from the Company that the Registration Statement and any post-effective
amendments thereto have become effective as contemplated by Section
3(c).
Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the
kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), 3(c)(vi) or
3(n),
such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of
the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed, and, in
either
case, has received copies of any additional or supplemental filings that
are
incorporated or deemed to be incorporated by reference in such Prospectus
or
Registration Statement.
(n) If
(i) there is material non-public information regarding the Company which
the
Company's Board of Directors (the "Board") determines
not to be in the Company's best interest to disclose and which the Company
is
not otherwise required to disclose, (ii) there is a significant business
opportunity (including, but not limited to, the acquisition or disposition
of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or other similar transaction) available to the
Company which the Board determines not to be in the Company's best interest
to
disclose, or (iii) the Company is required to file a post-effective amendment
to
the Registration Statement to incorporate the Company’s quarterly and annual
reports and audited financial statements on Forms 10-QSB and 10-KSB, then
the
Company may (x) postpone or suspend filing of a registration statement for
a
period not to exceed thirty (30) consecutive days or (y) postpone or suspend
effectiveness of a registration statement for a period not to exceed twenty
(20)
consecutive days; provided that the Company may not postpone or suspend
effectiveness of a registration statement under this Section 3(n) for more
than
forty-five (45) days in the aggregate during any three hundred sixty (360)
day
period; provided, however,
that no such
postponement or suspension shall be permitted for consecutive twenty (20)
day
periods arising out of the same set of facts, circumstances or
transactions.
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4. Registration
Expenses.
All
fees
and expenses incident to the performance of or compliance with this Agreement
by
the Company, except as and to the extent specified in this Section 4, shall
be
borne by the Company whether or not the Registration Statement is filed or
becomes effective and whether or not any Registrable Securities are sold
pursuant to the Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation,
(i) all
registration and filing fees (including, without limitation, fees and expenses
(A) with respect to filings required to be made with the OTC Bulletin Board and each other
securities exchange or market on which Registrable Securities are required
hereunder to be listed, if any (B) with respect to filing fees required to
be
paid to the National Association of Securities Dealers, Inc. and the NASD
Regulation, Inc. (including, without limitation, pursuant to NASD Rule 2710)
and
(C) in compliance with state securities or Blue Sky laws (including, without
limitation, fees and disbursements of counsel for the Holders in connection
with
Blue Sky qualifications of the Registrable Securities and determination of
the
eligibility of the Registrable Securities for investment under the laws of
such
jurisdictions as the Holders of a majority of Registrable Securities may
designate)), (ii) printing expenses (including, without limitation, expenses
of
printing certificates for Registrable Securities and of printing prospectuses
if
the printing of prospectuses is requested by the holders of a majority of
the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for
the
Company and Special Counsel for the Holders, in the case of the Special Counsel,
up to a maximum amount of $7,500, (v) Securities Act liability insurance,
if the
Company so desires such insurance, and (vi) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including, without limitation,
the
Company's independent public accountants (including the expenses of any comfort
letters or costs associated with the delivery by independent public accountants
of a comfort letter or comfort letters). In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its officers
and
employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange if required
hereunder. The Company shall not be responsible for any discounts,
commissions, transfer taxes or other similar fees incurred by the Holders
in
connection with the sale of the Registrable Securities.
5. Indemnification.
(a) Indemnification
by the
Company. The Company shall, notwithstanding any termination of
this Agreement, indemnify and hold harmless each Holder, the officers,
directors, managers, partners, members, shareholders, agents, brokers,
investment advisors and employees of each of them, each Person who controls
any
such Holder (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, agents and employees
of
each such controlling Person, to the fullest extent permitted by applicable
law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, costs of preparation and attorneys' fees)
and
expenses (collectively, "Losses"), as
incurred, arising out of or relating to any violation of securities laws
or
untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising
out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the
case of
any Prospectus or form of prospectus or supplement thereto, in the light
of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that such untrue statements or omissions are based
solely upon information regarding such Holder or such other Indemnified Party
furnished in writing to the Company by such Holder expressly for use
therein. The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding of which the Company is
aware
in connection with the transactions contemplated by this Agreement.
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(b) Indemnification
by
Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents
and
employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents and employees of such controlling Persons, to the fullest
extent permitted by applicable law, from and against all Losses (as determined
by a court of competent jurisdiction in a final judgment not subject to appeal
or review), as incurred, arising solely out of or based solely upon any untrue
statement of a material fact contained in the Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or form of prospectus or supplement
thereto, in the light of the circumstances under which they were made) not
misleading, to the extent, but only to the extent, that such untrue statement
or
omission is contained in any information so furnished in writing by such
Holder
or other Indemnifying Party to the Company specifically for inclusion in
the
Registration Statement or such Prospectus. Notwithstanding anything
to the contrary contained herein, each Holder shall be liable under this
Section
5(b) for only that amount as does not exceed the net proceeds to such Holder
as
a result of the sale of Registrable Securities pursuant to such Registration
Statement.
(c) Conduct
of Indemnification
Proceedings. If any Proceeding shall be brought or asserted
against any Person entitled to indemnity hereunder (an "Indemnified Party"),
such Indemnified Party promptly shall notify the Person from whom indemnity
is
sought (the "Indemnifying Party)
in writing, and the Indemnifying Party shall be entitled to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only)
to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.
-10-
An
Indemnified Party shall have the right to employ separate counsel in any
such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees
and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume
the
defense of such Proceeding and to employ counsel reasonably satisfactory
to such
Indemnified Party in any such Proceeding; or (3) the named parties to any
such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such parties shall have been advised by counsel
that a conflict of interest is likely to exist if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case,
if
such Indemnified Party notifies the Indemnifying Party in writing that it
elects
to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof
and
such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld or delayed. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
or threatened Proceeding in respect of which any Indemnified Party is a party
and indemnity has been sought hereunder, unless such settlement includes
an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
All
fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing
to
defend such Proceeding in a manner not inconsistent with this Section) shall
be
paid to the Indemnified Party, as incurred, within ten (10) Business Days
of
written notice thereof to the Indemnifying Party (regardless of whether it
is
ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the
Indemnified Party shall reimburse all such fees and expenses to the extent
it is
finally judicially determined that such Indemnified Party is not entitled
to
indemnification hereunder).
(d) Contribution.
If a
claim for indemnification under Section 5(a) or 5(b) is due but unavailable
to
an Indemnified Party because of a failure or refusal of a governmental authority
to enforce such indemnification in accordance with its terms (by reason of
public policy or otherwise), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid
or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative benefits received by the Indemnifying
Party on the one hand and the Indemnified Party on the other from the offering
of the Preferred Stock and Warrants. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate
to
reflect not only the relative benefits referred to in the foregoing sentence
but
also the relative fault, as applicable, of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions
that
resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact, has
been
taken or made by, or relates to information supplied by, such Indemnifying
Party
or Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include, subject to the
limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such
fees or
expenses if the indemnification provided for in this Section was available
to
such party in accordance with its terms. In no event shall any
selling Holder be required to contribute an amount under this Section 5(d)
in
excess of the net proceeds received by such Holder upon sale of such Holder’s
Registrable Securities pursuant to the Registration Statement giving rise
to
such contribution obligation.
-11-
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties pursuant to the law.
6. Rule
144.
As
long as any Holder owns Preferred Stock, Warrants or Registrable Securities,
the
Company covenants to timely file (or obtain extensions in respect thereof
and
file within the applicable grace period) all reports required to be filed
by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act. As long as any Holder owns Preferred Stock, Warrants or
Registrable Securities, if the Company is not required to file reports pursuant
to Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish
to
the Holders and make publicly available in accordance with Rule 144(c)
promulgated under the Securities Act annual and quarterly financial statements,
together with a discussion and analysis of such financial statements in form
and
substance substantially similar to those that would otherwise be required
to be
included in reports required by Section 13(a) or 15(d) of the Exchange Act,
as
well as any other information required thereby, in the time period that such
filings would have been required to have been made under the Exchange
Act. The Company further covenants that it will take such further
action as any Holder may reasonably request, all to the extent required from
time to time to enable such Person to sell Conversion Shares and Warrant
Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act, including
providing any legal opinions relating to such sale pursuant to Rule
144. Upon the request of any Holder, the Company shall deliver to
such Holder a written certification of a duly authorized officer as to whether
it has complied with such requirements.
-12-
7. Miscellaneous.
(a) Remedies. In
the event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, such Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under
this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate compensation
for any losses incurred by reason of a breach by it of any of the provisions
of
this Agreement and hereby further agrees that, in the event of any action
for
specific performance in respect of such breach, it shall waive the defense
that
a remedy at law would be adequate.
(b) No
Inconsistent
Agreements. Neither the Company nor any of its subsidiaries
has, as of the date hereof entered into and currently in effect, nor shall
the
Company or any of its subsidiaries, on or after the date of this Agreement,
enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders in this Agreement or otherwise conflicts
with the provisions hereof. Except as disclosed in Schedule 2.1(c) of
the Purchase Agreement or Schedule II hereto,
neither the Company nor any of its subsidiaries has previously entered into
any
agreement currently in effect granting any registration rights with respect
to
any of its securities to any Person. Without limiting the generality
of the foregoing, without the written consent of the Holders of a majority
of
the then outstanding Registrable Securities, the Company shall not grant
to any
Person the right to request the Company to register any securities of the
Company under the Securities Act unless the rights so granted are subject
in all
respects to the prior rights in full of the Holders set forth herein, and
are
not otherwise in conflict with the provisions of this Agreement.
(c) No
Piggyback on
Registrations. Neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto or as disclosed
in Schedule
2.1(c) of the Purchase Agreement or Schedule
II hereto)
may include securities of the Company in the Registration Statement, and
the
Company shall not after the date hereof enter into any agreement providing
such
right to any of its securityholders, unless the right so granted is subject
in
all respects to the prior rights in full of the Holders set forth herein,
and is
not otherwise in conflict with the provisions of this Agreement.
(d) Piggy-Back
Registrations. If at any time when there is not an effective
Registration Statement covering (i) Conversion Shares or (ii) Warrant Shares,
the Company shall determine to prepare and file with the Commission a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued
solely
in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans, the Company shall send to each holder of Registrable Securities written
notice of such determination and, if within thirty (30) days after receipt
of
such notice, or within such shorter period of time as may be specified by
the
Company in such written notice as may be necessary for the Company to comply
with its obligations with respect to the timing of the filing of such
registration statement, any such holder shall so request in writing, (which
request shall specify the Registrable Securities intended to be disposed
of by
the Purchasers), the Company will cause the registration under the Securities
Act of all Registrable Securities which
-13-
the
Company has been so requested to register by the holder, to the extent requisite
to permit the disposition of the Registrable Securities so to be registered,
provided that if at any time after giving written notice of its intention
to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to such holder and, thereupon, (i) in the case of a determination
not to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation
to
pay expenses in accordance with Section 4 hereof), and (ii) in the case of
a
determination to delay registering, shall be permitted to delay registering
any
Registrable Securities being registered pursuant to this Section 7(d) for
the
same period as the delay in registering such other securities. The Company
shall
include in such registration statement all or any part of such Registrable
Securities such holder requests to be registered; provided, however,
that the
Company shall not be required to register any Registrable Securities pursuant
to
this Section 7(d) that are eligible for sale pursuant to Rule 144(k) of the
Securities Act. In the case of an underwritten public offering, if
the managing underwriter(s) or underwriter(s) should reasonably object to
the
inclusion of the Registrable Securities in such registration statement, then
if
the Company after consultation with the managing underwriter should reasonably
determine that the inclusion of such Registrable Securities would materially
adversely affect the offering contemplated in such registration statement,
and
based on such determination recommends inclusion in such registration statement
of fewer or none of the Registrable Securities of the Holders, then (x) the
number of Registrable Securities of the Holders included in such registration
statement shall be reduced pro-rata among such Holders (based upon the
number
of Registrable Securities requested to be included in the registration),
if the
Company after consultation with the underwriter(s) recommends the inclusion
of
fewer Registrable Securities, or (y) none of the Registrable Securities of
the
Holders shall be included in such registration statement, if the Company
after
consultation with the underwriter(s) recommends the inclusion of none of
such
Registrable Securities; provided, however,
that if
securities are being offered for the account of other persons or entities
as
well as the Company, such reduction shall not represent a greater fraction
of
the number of Registrable securities intended to be offered by the Holders
than
the fraction of similar reductions imposed on such other persons or entities
(other than the Company).
(e) Failure
to File Registration
Statement and Other Events. The Company and the Purchasers
agree that the Holders will suffer damages if the Registration Statement
is not
filed on or prior to the Filing Date and not declared effective by the
Commission on or prior to the Effectiveness Date and maintained in the manner
contemplated herein during the Effectiveness Period or if certain other events
occur. The Company and the Holders further agree that it would not be
feasible to ascertain the extent of such damages with
precision. Accordingly, if (A) the Registration Statement is not
filed on or prior to the Filing Date, or (B) the Registration Statement is
not
declared effective by the Commission on or prior to the Effectiveness Date,
or
(C) the Company fails to file with the Commission a request for acceleration
in
accordance with Rule 461 promulgated under the Securities Act within three
(3)
Business Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration Statement will
not
be "reviewed," or not subject to further review, or (D) the Registration
Statement is filed with and declared effective by the Commission but thereafter
ceases to be effective as to all Registrable Securities at any time prior
to the
expiration of the Effectiveness Period, without being succeeded immediately
by a
subsequent Registration Statement filed with and declared effective by the
Commission, or (E) the Company
-14-
has
breached Section 3(n), or (F) trading in the Common Stock shall be suspended
or
if the Common Stock is no longer quoted on or is delisted from the OTC Bulletin
Board (or other principal exchange on which the Common Stock is traded) for
any
reason for more than three (3) Business Days in the aggregate (any such failure
or breach being referred to as an "Event," and
for
purposes of clauses (A) and (B) the date on which such Event occurs, or for
purposes of clause (C) the date on which such three (3) Business Day period
is
exceeded, or for purposes of clause (D) after more than fifteen (15) Business
Days, or for purposes of clause (F) the date on which such three (3) Business
Day period is exceeded, being referred to as "Event Date"), the
Company shall pay an amount in cash as liquidated damages to each Holder
equal
to two percent (2%) of the amount of the Holder’s initial investment in the
Preferred Stock for each calendar month or portion thereof thereafter from
the
Event Date until the applicable Event is cured; provided, however,
that in no
event shall the amount of liquidated damages payable at any time and from
time
to time to any Holder pursuant to this Section 7(e) exceed an aggregate of
ten
percent (10%) of the amount of the Holder’s initial investment in the Preferred
Stock. The Company shall not be liable for liquidated damages under
this Agreement as to any Registrable Securities which are not permitted by
the
Commission to be included in a Registration Statement because of its application
of Rule 415 until such time as the provisions of this Agreement as to the
Registration Statements required to be filed pursuant to Section 2(b) are
triggered, in which case the provisions of this Section 7(e) shall once again
apply, if applicable. In such case, the liquidated damages shall be
calculated to only apply to the percentage of Registrable Securities which
are
permitted by the Commission to be included in the Registration
Statement. Notwithstanding anything to the contrary in this paragraph
(e), if (a) any of the Events described in clauses (A), (B), (C), (D) or
(F)
shall have occurred, (b) on or prior to the applicable Event Date, the Company
shall have exercised its rights under Section 3(n) hereof and (c) the
postponement or suspension permitted pursuant to such Section 3(n) shall
remain
effective as of such applicable Event Date, then the applicable Event Date
shall
be deemed instead to occur on the second Business Day following the termination
of such postponement or suspension. Liquidated damages payable by the
Company pursuant to this Section 7(d) shall be payable on the first (1st)
Business Day of
each thirty (30) day period following the Event Date. Notwithstanding
anything to the contrary contained herein, in no event shall any liquidated
damages be payable with respect to the Warrants or the Warrant
Shares.
(f) Amendments
and
Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented,
and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the Holders
of
seventy-five percent (75%) of the Registrable Securities
outstanding.
-15-
(g) Notices. Any
notice, demand, request, waiver or other communication required or permitted
to
be given hereunder shall be in writing and shall be effective (a) upon hand
delivery, telecopy or facsimile at the address or number designated below
(if
delivered on a business day during normal business hours where such notice
is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice
is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or
upon
actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:
|
If
to the Company:
|
Astrata
Group Incorporated
000
Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxx
Xxxx, Xxxxxxxxxx 00000-0000
Attention:
Chief Executive Officer
Tel.
No.: (000) 000-0000
Fax
No.: (000) 000-0000
|
|
|
with
copies (which shall not constitute notice) to:
|
Xxxxxx
& Xxxxxx, LLP
000
Xxxxx 0 Xxxxx, Xxxxx 000
Xxxxxxxxx,
Xxx Xxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxx, Esq.
Tel.
No.: (000) 000-0000
Fax
No.: (000) 000-0000
|
|
|
If
to any Purchaser:
|
At
the address of such Purchaser set forth on Exhibit
A to
this Agreement, with copies to Purchaser’s counsel as set forth on Exhibit
A or as
specified in writing by such:
|
|
|
with
copies (which shall not constitute notice) to:
|
Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxxxxxxx X. Xxxxxxx
Tel
No.: (000) 000-0000
Fax
No.: (000) 000-0000
|
Any
party
hereto may from time to time change its address for notices by giving at
least
ten (10) days written notice of such changed address to the other party
hereto.
(h) Successors
and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns and shall
inure to the benefit of each Holder and its successors and
assigns. The Company may not assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of each
Holder. Each Purchaser may assign its rights hereunder in the manner
and to the Persons as permitted under the Purchase Agreement.
-16-
(i) Assignment
of Registration
Rights. The rights of each Holder hereunder, including the
right to have the Company register for resale Registrable Securities in
accordance with the terms of this Agreement, shall be automatically assignable
by each Holder to any Person of all or a portion of the Preferred
Stock,
the Common Shares or the Registrable Securities if: (i) the Holder agrees
in
writing with the transferee or assignee to assign such rights, and a copy
of
such agreement is furnished to the Company within a reasonable time after
such
assignment, (ii) the Company is, within a reasonable time after such transfer
or
assignment, furnished with written notice of (a) the name and address of
such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned, (iii) following such
transfer or assignment the further disposition of such securities by the
transferee or assignees is restricted under the Securities Act and applicable
state securities laws unless such securities are registered in a Registration
Statement under this Agreement (in which case the Company shall be obligated
to
amend such Registration Statement to reflect such transfer or assignment)
or are
otherwise exempt from registration, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this Section,
the
transferee or assignee agrees in writing with the Company to be bound by
all of
the provisions of this Agreement, and (v) such transfer shall have been made
in
accordance with the applicable requirements of the Purchase
Agreement. The rights to assignment shall apply to the Holders (and
to subsequent) successors and assigns.
(j) Counterparts. This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement and shall become effective when
counterparts have been signed by each party and delivered to the other parties
hereto, it being understood that all parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or scanned electronic mail (e-mail) attachment, such
signature shall create a valid binding obligation of the party executing
(or on
whose behalf such signature is executed) the same with the same force and
effect
as if such facsimile or scanned signature were the original
thereof.
-17-
(k) Governing
Law;
Jurisdiction. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York,
without
giving effect to any of the conflicts of law principles which would result
in
the application of the substantive law of another jurisdiction. This
Agreement shall not be interpreted or construed with any presumption against
the
party causing this Agreement to be drafted. The Company and the
Holders agree that venue for any dispute arising under this Agreement will
lie
exclusively in the state or federal courts located in New York County, New
York,
and the parties irrevocably waive any right to raise forum non conveniens or any
other argument that New York is not the proper venue. The Company and
the Holders irrevocably consent to personal jurisdiction in the state and
federal courts of the state of New York. The Company and the Holders
consent to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices
to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing in this
Section 7(k) shall affect or limit any right to serve process in any other
manner permitted by law. The Company and the Holders hereby agree
that the prevailing party in any suit, action or proceeding arising out of
or
relating to this Agreement or the Purchase Agreement, shall be entitled to
reimbursement for reasonable legal fees from the non-prevailing
party. The parties hereby waive all rights to a trial by
jury.
(l) Cumulative
Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
(m) Severability.
If any
term, provision, covenant or restriction of this Agreement is held to be
invalid, illegal, void or unenforceable in any respect, the remainder of
the
terms, provisions, covenants and restrictions set forth herein shall remain
in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their reasonable efforts to find and employ
an
alternative means to achieve the same or substantially the same result as
that
contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention
of
the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
(n) Headings. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
(o) Shares
Held by the Company
and its Affiliates. Whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its Affiliates (other than
any
Holder or transferees or successors or assigns thereof if such Holder is
deemed
to be an Affiliate solely by reason of its holdings of such Registrable
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
-18-
(p) Independent
Nature of
Purchasers. The Company acknowledges that the obligations of
each Purchaser under the Transaction Documents are several and not joint
with
the obligations of any other Purchaser, and no Purchaser shall be responsible
in
any way for the performance of the obligations of any other Purchaser under
the
Transaction Documents. The Company acknowledges that the decision of
each Purchaser to purchase Securities pursuant to the Purchase Agreement
has
been made by such Purchaser independently of any other Purchaser and
independently of any information, materials, statements or opinions as to
the
business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company
or of
its Subsidiaries which may have made or given by any other Purchaser or by
any
agent or employee of any other Purchaser, and no Purchaser or any of its
agents
or employees shall have any liability to any Purchaser (or any other person)
relating to or arising from any such information, materials, statements or
opinions. The Company acknowledges that nothing contained herein, or
in any Transaction Document, and no action taken by any Purchaser pursuant
hereto or thereto (including, but not limited to, the (i) inclusion of a
Purchaser in the Registration Statement and (ii) review by, and consent to,
such
Registration Statement by a Purchaser) shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other
kind
of entity, or create a presumption that the Purchasers are in any way acting
in
concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents. The Company acknowledges
that each Purchaser shall be entitled to independently protect and enforce
its
rights, including without limitation, the rights arising out of this Agreement
or out of the other Transaction Documents, and it shall not be necessary
for any
other Purchaser to be joined as an additional party in any proceeding for
such
purpose. The Company acknowledges that for reasons of administrative
convenience only, the Transaction Documents have been prepared by counsel
for
one of the Purchasers and such counsel does not represent all of the
Purchasers. The Company acknowledges that it has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience
of
the Company and not because it was required or requested to do so by the
Purchasers. The Company acknowledges that such procedure with respect
to the Transaction Documents in no way creates a presumption that the Purchasers
are in any way acting in concert or as a group with respect to the Transaction
Documents or the transactions contemplated hereby or thereby.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-19-
IN
WITNESS WHEREOF, the parties hereto
have caused this Registration Rights Agreement to be duly executed by their
respective authorized persons as of the date first indicated above.
| ASTRATA GROUP INCORPORATED | |||
|
|
By:
|
/s/ Xxxxxx Xxxxxx Xxxxx | |
| Name: Xxxxxx Xxxxxx Euler | |||
| Title: Title Executive Officer | |||
| PURCHASER: Vision Opportunity Master Fund, Ltd. | |||
| By: | /s/ Xxxx Xxxxxxxx | ||
| Name: Xxxx Xxxxxxxx | |||
| Title: Director | |||
| Vision Opportunity China Limited Partnership | |||
| By: | /s/ Xxxx Xxxxxxxx | ||
|
Authorized
Signatory
Vision Opportunity China GP Limited
acting in its capacity as general partner
of
Vision Opportunity China Limited
Partnership
|
|||
-20-
Schedule
I
Purchasers
|
Names
and
Addresses
of
Purchasers
|
Number
of Preferred
Shares
& Warrants
Purchased
|
Dollar
Amount
of
Investment
|
||
|
Vision
Opportunity Master Fund, Ltd.
|
Preferred
Shares: 324,286
|
$440,000.40
|
||
|
00
X 00xx
Xxxxxx,
0xx
floor
|
Series
A Warrants: 324,286
|
|||
|
Xxx
Xxxx, XX 00000
|
Series
B Warrants: 324,286
|
|||
|
|
Series
J Warrants
|
|||
|
|
(Series
B-2
|
|||
|
|
Preferred Shares): 324,286 | |||
|
Series
C Warrants: 324,286
|
||||
|
|
Series
D Warrants: 324,286
|
|||
|
Vision
Opportunity China LP
|
Preferred
Shares: 1,828,571
|
$2,559,999.40
|
||
|
00
X 00xx
Xxxxxx,
0xx
floor
|
Series
A Warrants: 1,828,571
|
|||
|
Xxx
Xxxx, XX 00000
|
Series
B Warrants: 1,828,571
|
|||
|
|
Series
J Warrants
|
|||
|
|
(Series
B-2
|
|||
|
|
Preferred
Shares): 1,828,571
|
|||
|
Series
C Warrants: 1,828,571
|
||||
|
|
Series
D Warrants: 1,828,571
|
-21-
Schedule
II
Other
Securities to be
Included on the Registration Statement
None.
-22-
Exhibit
A
Plan
of
Distribution
The
selling security holders and any of their pledgees, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock being offered under this prospectus on any stock exchange,
market or trading facility on which shares of our common stock are traded
or in
private transactions. These sales may be at fixed or negotiated
prices. The selling security holders may use any one or more of the
following methods when disposing of shares:
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal
to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resales by the broker-dealer
for its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
to
cover short sales made after the date that the registration statement
of
which this prospectus is a part is declared effective by the
Commission;
|
|
·
|
broker-dealers
may agree with the selling security holders to sell a specified
number of
such shares at a stipulated price per
share;
|
|
·
|
a
combination of any of these methods of sale;
and
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
shares may also be sold under Rule 144 under the Securities Act of 1933,
as
amended (“Securities Act”), if available, rather than under this
prospectus. The selling security holders have the sole and absolute
discretion not to accept any purchase offer or make any sale of shares if
they
deem the purchase price to be unsatisfactory at any particular
time.
The
selling security holders may pledge their shares to their brokers under the
margin provisions of customer agreements. If a selling security
holder defaults on a margin loan, the broker may, from time to time, offer
and
sell the pledged shares.
Broker-dealers
engaged by the selling security holders may arrange for other broker-dealers
to
participate in sales. Broker-dealers may receive commissions or discounts
from
the selling security holders (or, if any broker-dealer acts as agent for
the
purchaser of shares, from the purchaser) in amounts to be negotiated, which
commissions as to a particular broker or dealer may be in excess of customary
commissions to the extent permitted by applicable law.
-23-
If
sales
of shares offered under this prospectus are made to broker-dealers as
principals, we would be required to file a post-effective amendment to the
registration statement of which this prospectus is a part. In the
post-effective amendment, we would be required to disclose the names of any
participating broker-dealers and the compensation arrangements relating to
such
sales.
The
selling security holders and any broker-dealers or agents that are involved
in
selling the shares offered under this prospectus may be deemed to be
“underwriters” within the meaning of the Securities Act in connection with these
sales. Commissions received by these broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. Any
broker-dealers or agents that are deemed to be underwriters may not sell
shares
offered under this prospectus unless and until we set forth the names of
the
underwriters and the material details of their underwriting arrangements
in a
supplement to this prospectus or, if required, in a replacement prospectus
included in a post-effective amendment to the registration statement of which
this prospectus is a part.
The
selling security holders and any other persons participating in the sale
or
distribution of the shares offered under this prospectus will be subject
to
applicable provisions of the Exchange Act, and the rules and regulations
under
that act, including Regulation M. These provisions may restrict
activities of, and limit the timing of purchases and sales of any of the
shares
by, the selling security holders or any other person. Furthermore,
under Regulation M, persons engaged in a distribution of securities are
prohibited from simultaneously engaging in market making and other activities
with respect to those securities for a specified period of time prior to
the
commencement of such distributions, subject to specified exceptions or
exemptions. All of these limitations may affect the marketability of
the shares.
If
any
of
the shares of common stock offered for sale pursuant to this prospectus are
transferred other than pursuant to a sale under this prospectus, then subsequent
holders could not use this prospectus until a post-effective amendment or
prospectus supplement is filed, naming such holders. We offer no
assurance as to whether any of the selling security holders will sell all
or any
portion of the shares offered under this prospectus.
We
have
agreed to pay all fees and expenses we incur incident to the registration
of the
shares being offered under this prospectus. However, each selling
security holder and purchaser is responsible for paying any discounts,
commissions and similar selling expenses they incur.
We
and
the selling security holders have agreed to indemnify one another against
certain losses, damages and liabilities arising in connection with this
prospectus, including liabilities under the Securities Act.
-24-
