REGISTRATION RIGHTS AGREEMENT
EXHIBIT
99.5
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into as of January 24, 2007 by and among FP
Technology, Inc., a Delaware corporation (the “Company”),
and
the several purchasers signatory hereto (each such purchaser is a “Purchaser”
and
collectively, the “Purchasers”).
This
Agreement is made pursuant to the Master Exchange Agreement, dated as of the
date hereof between the Company and each Purchaser (the “Exchange
Agreement”).
The
Company and each Purchaser hereby agrees as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
Exchange Agreement shall have the meanings given such terms in the Exchange
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
“Advice”
shall
have the meaning set forth in Section 6(d).
“Commission”
shall
mean the Securities and Exchange Commission.
“Common
Stock”
means
the common stock of the Company, par value $0.001 per share, and any other
class
of securities into which such securities may hereafter have been reclassified,
changed into or exchanged for.
“Convertible
Notes”
means
(i) the New Notes, in the aggregate initial face amount of $5,600,000,
issued by the Company to the Purchasers pursuant to the Exchange Agreement
and
the New Indenture and (ii) any notes issued pursuant to Section 9.01(l) of
the
New Indenture.
“Effectiveness
Date”
means,
(i) with respect to the initial Registration Statement required to be filed
hereunder, the 60th
calendar
day following the applicable Filing Date (the 90th
calendar
day if the Registration Statement is reviewed by the Commission), and (ii)
with
respect to any additional Registration Statements which may be required pursuant
to Section 3(c), the 60th
calendar
day following the applicable Filing Date (the 90th
calendar
day if the Registration Statement is reviewed by the Commission); provided,
however,
in the
event the Company is notified by the Commission that one of the above
Registration Statements will not be reviewed or is no longer subject to further
review and comments, the Effectiveness Date as to such Registration Statement
shall be the fifth (5th)
Trading
Day following the date on which the Company is so notified if such date precedes
the dates required above.
“Effectiveness
Period”
shall
have the meaning set forth in Section 2(a).
“Event”
shall
have the meaning set forth in Section 2(b).
“Event
Date”
shall
have the meaning set forth in Section 2(b).
“Exchange
Agreement”
means
that certain Master Exchange Agreement entered into as of the date hereof among
the Company and the Purchasers.
“Filing
Date”
means,
(i) with respect to the initial Registration Statement required hereunder,
the
30th
calendar
day following the Closing Date; and, (ii) with respect to any additional
Registration Statements which may be required pursuant to Section 3(c), the
20th
calendar
day following the date on which the Company first knows, or reasonably should
have known that such additional Registration Statement is required
hereunder.
“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).
“Plan
of Distribution”
shall
have the meaning set forth in Section 2(a).
“Prospectus”
means
the prospectus included in a 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 a Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Registrable
Securities”
means
(i) an aggregate of 1,500,000 New Shares issued to the Holders under the Master
Exchange Agreement; (ii) an aggregate of 1,040,000 shares of Common Stock
issuable or issued upon conversion of the Convertible Notes issued to the
Holders pursuant to the Exchange Agreement; (iii) an aggregate of 1,578,571
shares of Common Stock issuable or issued upon exercise of the Warrants issued
to the Purchasers under the Exchange Agreement; (iv) an aggregate of 71,429
shares of Common Stock issuable or issued upon exercise of the Warrants issued
to Xxxxxx & Xxxxxxx, LLC under the Exchange Agreement, (v) an aggregate
of 150,000 shares of Common Stock issued to Xxxxxx & Xxxxxxx, LLC under the
Master Exchange Agreement, (vi) 130% of the number of any additional shares
of Common Stock issuable or issued upon the conversion of any Convertible Notes
issued by the Company in accordance with Section 9.01(l) of the New Indenture;
(vii) any additional shares that may become issuable in connection with any
anti-dilution provisions in the Warrants or Convertible Notes; (viii) an
aggregate of 390,625 shares of Common Stock issuable or issued upon exercise
of
Common Stock Purchase Warrant No. 1, dated September 13, 2005 and Common Stock
Purchase Warrant No. 2, dated November 15, 2005, each issued to Trident Growth
Fund, L.P., as amended by that Master Amendment, dated as of March 29, 2006;
and
(ix) any shares of Common Stock issued or issuable upon any stock split,
dividend or other distribution, recapitalization or similar event with respect
to the foregoing.
“Registration
Statement”
means
the registration statements required to be filed hereunder and any additional
registration statements contemplated by Section 3(c), 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 or deemed to be incorporated by
reference in such registration statement.
“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 purpose and
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 purpose and
effect as such Rule.
“Selling
Shareholder Questionnaire”
shall
have the meaning set forth in Section 3(a).
“Valid
Suspension Period”
shall
mean a Suspension Period not exceeding twenty (20) consecutive calendar days
or
more than one Suspension Period not collectively exceeding in excess of an
aggregate of thirty (30) calendar days during any three (3) month period or
sixty (60) calendar days during any twelve (12)-month period (which need not
be
consecutive calendar days), in each case only caused solely for valid business
reasons, as determined in good faith by the Company in its reasonable judgment
(which shall not include the avoidance of the Company’s obligations hereunder),
including, without limitation, the acquisition or divestiture of assets, pending
corporate developments, public filings with the SEC and similar events;
provided
that the
Company promptly thereafter complies with the requirements of Section 3(d)
hereof, if applicable; provided further
that the
first day of any such Suspension Period must be at least three (3) Trading
Days
after the last day of any prior Suspension Period; and provided further
that the
twenty, thirty and sixty-day time periods stated in this paragraph shall be
increased by up to seven (7) calendar days in the case of a Suspension Period
caused by a post-effective amendment to a Registration Statement that is
required to be filed in order to update audited financial statements of the
Company for a new fiscal year.
“Warrants”
means
the warrants to purchase an aggregate of 1,285,714 shares of Common Stock at
an
exercise price of $7.00 per share, as may be adjusted pursuant to the terms
and
conditions of the Warrants, issued to the Purchasers pursuant to the Master
Exchange Agreement and to Xxxxxx & Xxxxxxx, LLC in connection with the
transactions contemplated by the Master Exchange Agreement.
2. Shelf
Registration.
(a) On
or
prior to each Filing Date, the Company shall prepare and file with the
Commission a “Shelf” Registration Statement covering the resale of 100% of the
Registrable Securities on such Filing Date for an offering to be made on a
continuous basis pursuant to Rule 415. The Registration Statement shall be
on
Form S-3 (except if the Company is not then eligible to register for resale
the
Registrable Securities on Form S-3, in which case such registration shall be
on
another appropriate form in accordance herewith) and shall contain (unless
otherwise directed by at least an 85% majority in interest of the Holders)
substantially the “Plan
of Distribution”
attached hereto as Annex
A.
Subject
to the terms of this Agreement, the Company shall use its commercially
reasonable best efforts to cause a 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 applicable Effectiveness Date, and shall
use its best efforts to keep such Registration Statement continuously effective
under the Securities Act until all Registrable Securities covered by such
Registration Statement have been sold, or may be sold without volume
restrictions pursuant to Rule 144(k), as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company’s transfer agent and the affected Holders (the
“Effectiveness
Period”).
The
Company shall telephonically request effectiveness of a Registration Statement
as of 5:00 p.m. Eastern time on a Trading Day. The Company shall
immediately notify the Holders via facsimile of the effectiveness of a
Registration Statement on the same Trading Day that the Company telephonically
confirms effectiveness with the Commission, which shall be the date requested
for effectiveness of a Registration Statement. The Company shall, by 9:30 a.m.
Eastern time on the Trading Day after the Effectiveness Date, file a final
Prospectus with the Commission as required by Rule 424. Failure to so notify
the
Holder within one (1) Trading Day of such notification or effectiveness or
failure to file a final Prospectus as aforesaid shall be deemed an Event under
Section 2(b).
(b) Subject
to the other terms and conditions contained herein, if (i) a Registration
Statement is not filed on or prior to its Filing Date, or (ii) the Company
fails
to file with the Commission a request for acceleration in accordance with Rule
461 promulgated under the Securities Act, within five (5) Trading 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 (iii) prior to its Effectiveness Date, the Company
fails to file a pre-effective amendment or otherwise respond in writing to
comments made by the Commission in respect of such Registration Statement within
ten (10) calendar days after the receipt of comments by or notice from the
Commission that such amendment is required in order for a Registration Statement
to be declared effective, or (iv) a Registration Statement filed or required
to
be filed hereunder is not declared effective by the Commission by its
Effectiveness Date, or (v) after the Effectiveness Date, a Registration
Statement ceases for any reason to remain continuously effective as to all
Registrable Securities for which it is required to be effective or the Holders
are otherwise not permitted to utilize the Prospectus therein to resell such
Registrable Securities (each such discontinuity a “Suspension
Period”),
which
Suspension Period is not a Valid Suspension Period, or (vi) if the Registable
Securities are not timely listed as required by Section 3(p), or if they are
delisted or suspended from the market upon which they are listed on the date
hereof (other than a delisting from the OTC Bulletin Board upon securing a
listing of such Shares on any of The New York Stock Exchange, Inc., the American
Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market)
and, after the listing of such Registrable Securities as required by Section
3(p), means that such Registrable Securities are delisted or suspended by any
such market, (any such failure or breach being referred to as an “Event”,
and
for purposes of clause (i), (iv), (v) or (vi) the date on which such Event
occurs, or for purposes of clause (ii) the date on which such five (5) Trading
Day period is exceeded, or for purposes of clause (iii) the date on which such
ten (10) calendar day period is exceeded, being referred to as the “Event
Date”),
then
in addition to any other rights the Holders may have hereunder or under
applicable law, 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 Holder an
amount in cash, as partial liquidated damages and not as a penalty (the
“Liquidated
Damages”),
equal
to (i) one half of one percent (50 basis points) per month (x) on the principal
amount of Convertible Notes constituting Registrable Securities, (y) on the
Warrant Value, and (z) on the value of the New Shares (based on an assumed
value
of $7.00 per New Share), as applicable for the period up to and including the
30th day during which such Event has occurred and is continuing; and (ii) one
percent (100 basis points) per month (x) on the principal amount of Convertible
Notes constituting Registrable Securities, (y) on the Warrant Value, and (z)
on
the value of the New Shares (based on an assumed value of $7.00 per New Share)
as applicable for the period including and subsequent to the 31st
day
during which such Event has occurred and is continuing, it being understood
that
all calculations pursuant to this clause shall be carried out to five decimal
places. As used herein, “Warrant
Value”
means,
for any Warrant, the number of Warrant Shares for which such Warrant is
exercisable multiplied by the Exercise Price then applicable thereto. If the
Company fails to pay any partial Liquidated Damages pursuant to this Section
in
full within ten (10) 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 Holder, accruing daily from
the
date such partial Liquidated Damages are due until such amounts, plus all such
interest thereon, are paid in full. The partial 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 herein or in
the
Exchange Agreement to the contrary, in no event shall the aggregate amount
of
Liquidated Damages (other than Liquidated Damages payable pursuant to Events
that are within the control of the Company) exceed, in the aggregate,
$500,000.00 plus 10% of the consideration paid for any Convertible Notes issued
by the Company in accordance with Section 9.01(l) of the New
Indenture.
(c) Notwithstanding
any other provision hereof, no Liquidated Damages shall be payable by the
Company with respect to a Registration Statement that is otherwise timely filed
by the Company in the event that the Commission advises the Company that it
will
not declare effective such Registration Statement on the basis that the
Purchasers or the Company are ineligible to rely on Rule 415 under the
Securities Act with respect to the proposed registration of Registrable
Securities; provided,
that
the Company shall thereafter reasonably cooperate with the Purchasers to find
alternative methods of registering for resale the Registrable
Securities.
(d) All
of
the Company’s obligations (including, without limitation, the obligation to pay
Liquidated Damages) set forth in the preceding paragraphs which are outstanding
or exist in respect of any transfer restricted Registrable Security at the
time
such security ceases to be a transfer restricted Registrable Security shall
survive until such time as all such obligations in respect of such security
shall have been satisfied in full.
(e) Immediately
upon the occurrence or the termination of an Event, the Company shall give
the
Holders so long as any Registrable Securities remain outstanding, notice of
such
commencement or termination of the obligation to pay Liquidated Damages with
regard to the Registrable Securities, and the amount thereof and of the nature
of the default giving rise to such commencement or the event giving rise to
such
termination, as the case may be (such notice to be contained in an Officer’s
Certificate (as such term is defined in the New Indenture)), and prior to
receipt of such Officer’s Certificate the Holders and any transfer and/or paying
agent shall be entitled to assume that no such commencement or termination
has
occurred, as the case may be.
3. Registration
Procedures
In
connection with the Company’s registration obligations hereunder, the Company
shall:
(a) Not
less
than five (5) Trading Days prior to the filing of each Registration Statement
and not less than one (1) Trading Day prior to the filing of any related
Prospectus or any amendment or supplement thereto (including any document that
would be incorporated or deemed to be incorporated therein by reference), the
Company shall, (i) furnish to each Holder copies of all such documents proposed
to be filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the reasonable and prompt review
of such Holders, 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 respective counsel to each Holder
to
conduct a reasonable investigation within the meaning of the Securities Act.
The
Company shall not file a Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a majority of the
Registrable Securities shall reasonably object in good faith; provided
that,
the Company is notified of such objection in writing no later than five (5)
Trading Days after the Holders have been so furnished copies of a Registration
Statement or one (1) Trading Day after the Holders have been so furnished copies
of any related Prospectus or amendment or supplement thereto. Each Holder agrees
to furnish to the Company a completed Questionnaire in the form attached to
this
Agreement as Annex B (a “Selling
Shareholder Questionnaire”)
not
less than two (2) Trading Days prior to the Filing Date or by the end of the
fourth (4th) Trading
Day following the date on which such Holder receives draft materials in
accordance with this Section.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to a Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep a 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 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 (subject to the terms of
this
Agreement), and as so supplemented or amended to be filed pursuant to Rule
424;
(iii) respond as promptly as reasonably possible (but in any event within five
(5) Trading Days) to any comments received from the Commission with respect
to a
Registration Statement or any amendment thereto; and (iv) 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 a
Registration Statement during the applicable period in accordance (subject
to
the terms of this Agreement) with the intended methods of disposition by the
Holders thereof set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented.
(c) If
during
the Effectiveness Period, the number of Registrable Securities at any time
exceeds the number of shares of Common Stock then registered in a Registration
Statement, then the Company shall file as soon as reasonably practicable but
in
any case prior to the applicable Filing Date, an additional Registration
Statement covering the resale by the Holders of not less than 130% of the number
of such Registrable Securities.
(d) Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant
to clauses (ii) through (vii) hereof, be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been made)
as
promptly as reasonably possible (but in any event within two (2) Trading Days
and, not less than one (1) Trading Day prior to such filing in the case of
clause (i)(A) below) and (if requested by any such Person) confirm such notice
in writing no later than one Trading Day following the day:
(i) (A)
when
a Prospectus or any Prospectus supplement or post-effective amendment to a
Registration Statement is proposed to be filed, (B) when the Commission notifies
the Company whether there will be a “review” of such Registration Statement, and
(C) with respect to a Registration Statement or any post-effective amendment,
when the same has become effective;
(ii) of
any
request, following effectiveness of the Shelf Registration Statement under
the
Securities Act, by the SEC or any other federal or state governmental authority
for amendments or supplements to the Shelf Registration Statement or the
Prospectus or for additional information (other than any such request relating
to a review of the Company’s 1934 Act filings);
(iii) of
the
issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of a Registration Statement
covering any or all of the Registrable Securities or the initiation of any
Proceedings for that purpose;
(iv) 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;
(v) of
the
occurrence of any event or passage of time that makes the financial statements
included in a Registration Statement ineligible for inclusion therein or any
statement made in a 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 a Registration Statement,
Prospectus or other documents so that, in the case of a 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 light of the
circumstances under which they were made, not misleading;
(vi) of
the
occurrence or existence of any pending corporate development with respect to
the
Company that the Company believes may be material and that, in the determination
of the Company, makes it not in the best interest of the Company to allow
continued availability of a Registration Statement or Prospectus; provided
that
any and all of such information shall only be released to a Holder upon such
Holder’s express written consent to receive the same and if so received shall
remain confidential to such Holder until such information otherwise becomes
public, unless disclosure by such Holder is required by law; provided, further,
notwithstanding any Holder’s agreement to keep such information confidential,
such Holder makes no acknowledgement that any such information is material,
non-public information; and
(vii) of
the
commencement (including as a result of any of the events or circumstances
described in paragraph (ii) above) and termination of any Suspension
Period.
(e) Use
its
commercially reasonable best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale
in
any jurisdiction, at the earliest practicable moment.
(f) Furnish
promptly to each Holder, without charge and upon request, at least one conformed
copy of each such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to
be
incorporated therein by reference to the extent requested by such Person, 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.
(g) Subject
to the terms of this Agreement, 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, except
after
the giving of any notice pursuant to Section 3(d).
(h) Prior
to
any resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the selling Holders
in connection with the registration or qualification (or exemption from the
Registration or qualification) of such Registrable Securities for the resale
by
the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by each Registration Statement; provided, that the Company
shall not be required to qualify generally to do business as a foreign
corporation or as a dealer in securities in any jurisdiction where it is not
then so qualified, subject the Company to any material tax in any such
jurisdiction where it is not then so subject or file a general consent to
service of process in any such jurisdiction.
(i) If
requested by any Holder, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the Exchange Agreement,
of all restrictive legends, and to enable such Registrable Securities to be
in
such denominations and registered in such names as any such Holders may
request.
(j) Upon
the
occurrence of any event contemplated by Section 3(d)(ii) through (vii), as
promptly as reasonably possible under the circumstances taking into account
the
Company’s good faith assessment of any adverse consequences to the Company and
its stockholders of the premature disclosure of such event, prepare a supplement
or amendment, including a post-effective amendment, to a 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 a 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 light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders in accordance with clauses
(ii) through (vii) of Section 3(d) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holders
shall suspend use of such Prospectus. The Company will use its commercially
reasonable best efforts to ensure that the use of the Prospectus may be resumed
as promptly as is practicable. The Company shall be entitled to exercise its
right under this Section 3(j) to suspend the availability of a Registration
Statement and Prospectus, subject to the payment of partial liquidated damages
pursuant to Section 2(b), for a period not to exceed ninety (90) calendar days
(which need not be consecutive days) in any twelve (12) month period.
(k) Comply
with all applicable rules and regulations of the Commission.
(l) Provide
all information as may be required by the NASD in connection with the offering
under any Registration Statement of the Registrable Securities, including,
without limitation, such as may be required by NASD Rule 2710 or 2720, and
cooperate with each Holder in connection with any filings required to be made
with the NASD by such Holder in that regard.
(m) The
Company shall use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC and shall make generally available to its
security holders an earnings statement satisfying the provisions of Section
11(a) of the 1933 Act and Rule 158 promulgated by the SEC thereunder (or any
similar rule promulgated under the 0000 Xxx) for a twelve (12) month period
commencing on the first day of the first fiscal quarter of the Company
commencing after the effective date of any Shelf Registration Statement or
each
post-effective amendment to any Shelf Registration Statement, which such
statements shall be made available no later than forty-five (45) days after
the
end of the twelve (12) month period or ninety (90) days after the end of the
twelve (12) month period, if the twelve (12) month period coincides with the
fiscal year of the Company.
(n) The
Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by
such
Holder and, if required by the Commission, the natural persons thereof that
have
voting and dispositive control over the Shares. During any periods that the
Company is unable to meet its obligations hereunder with respect to the
registration of the Registrable Securities solely because any Holder fails
to
furnish such information within three (3) Trading Days of the Company’s request,
any liquidated damages that are accruing at such time as to such Holder only
shall be tolled and any Event that may otherwise occur solely because of such
delay shall be suspended as to such Holder only, until such information is
delivered to the Company.
(o) The
Company shall use its reasonable best efforts to cause the New Indenture to
be
qualified under the TIA (as defined in the New Indenture) not later than the
effective date of the first Registration Statement.
(p) The
Company shall cause all New Shares, shares of Common Stock issuable upon
conversion of the Convertible Notes and exercise of the Warrants to be reserved
for listing on each securities exchange or quotation system on which the Common
Stock is then listed (provided that such securities exchange or quotation system
permits reservation of listing) no later than the date the applicable
Registration Statement is declared effective and, shall cause all Common Stock
to be so listed when issued, and, in connection therewith, to make such filings
as may be required under the 1934 Act and to have such filings declared
effective as and when required thereunder.
(q) If
reasonably requested in writing in connection with any disposition of transfer
restricted Registable Securities pursuant to a Registration Statement, the
Company shall make reasonably available for inspection during normal business
hours by a representative for the Holders of such transfer restricted
Registrable Securities and any broker-dealers, attorneys and accountants
retained by such Holders, all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and
cause the appropriate executive officers, directors and designated employees
of
the Company and its subsidiaries to make reasonably available for inspection
during normal business hours all relevant information reasonably requested
by
such representative for the Holders or any such broker-dealers, attorneys or
accountants in connection with such disposition, in each case as is customary
for similar “due diligence” examinations; provided, however, that any
information that is designated by the Company, in good faith, as confidential
at
the time of delivery of such information shall be kept confidential by such
Persons, unless disclosure thereof is made in connection with a court,
administrative or regulatory proceeding or required by law, or such information
has become available to the public generally through the Company or through
a
third party without an accompanying obligation of confidentiality.
(r) The
Company shall use its reasonable best efforts to take all other steps necessary
to effect the registration of the Registrable Securities covered by the
Registration Statement contemplated hereby.
(s) Rules
144 and 144A.
The
Company covenants that it shall use its reasonable best efforts to file the
reports required to be filed by it under the 1933 Act and the 1934 Act in a
timely manner so long as the transfer restricted Registrable Securities remain
outstanding. If at any time the Company is not required to file such reports,
it
will, upon request of any Holder or beneficial owner of transfer restricted
Registrable Securities, make available such information necessary to permit
sales pursuant to Rule 144A. The Company further covenants that, for as long
as
any transfer restricted Registrable Securities remain outstanding, it will
take
such further action as any Holder of transfer restricted Registrable Securities
may reasonably request, all to the extent required from time to time to enable
such Holder to sell transfer restricted Registrable Securities without
registration under the 1933 Act within the limitation of the exemptions provided
by Rule 144 and Rule 144A. Upon the written request of any Holder of transfer
restricted Registrable Securities, the Company shall deliver to such Holder
a
written statement as to whether it has complied with such
requirements.
4. Registration
Expenses.
All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a 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 any
Trading Market on which the Common Stock is then listed for trading, (B) in
compliance with applicable state securities or Blue Sky laws reasonably agreed
to by the Company in writing (including, without limitation, fees and
disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities) and (C) if not
previously paid by the Company in connection with an Issuer Filing, with respect
to any filing that may be required to be made by any broker through which a
Holder intends to make sales of Registrable Securities with NASD Regulation,
Inc. pursuant to the NASD Rule 2710, so long as the broker is receiving no
more
than a customary brokerage commission in connection with such sale, (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company,
(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. 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 and the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange as
required hereunder. In no event shall the Company be responsible for any broker
or similar commissions of any Holder or, except to the extent provided for
in
the Transaction Documents, any legal fees or other costs of the
Holders.
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, members, partners, agents,
brokers (including brokers who offer and sell Registrable Securities as
principal as a result of a pledge or any failure to perform under a margin
call
of Common Stock), investment advisors and employees (and any other Persons
with
a functionally equivalent role of a Person holding such titles, notwithstanding
a lack of such title or any other title) 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, members,
shareholders, partners, agents and employees (and any other Persons with a
functionally equivalent role of a Person holding such titles, notwithstanding
a
lack of such title or any other title) 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, reasonable
attorneys’ fees) and expenses (collectively, “Losses”),
as
incurred, arising out of or relating to (1) any untrue or alleged untrue
statement of a material fact contained in a 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 light of the circumstances under which
they were made) not misleading, or (2) any violation or alleged violation by
the
Company of the Securities Act, Exchange Act or any state securities law, or
any
rule or regulation thereunder, in connection with the performance of its
obligations under this Agreement
provided,
however,
that
the Company will not be liable in any such case to the extent that any Losses
arise out of or are based upon (i) an untrue statement or alleged untrue
statement or omission or alleged omission in the Registration Statement, the
Prospectus or any amendment or supplement thereto made in reliance upon and
in
conformity with information regarding the Holder demanding such indemnification
furnished in writing to the Company by such Holder expressly for use therein
or
to the extent that such information relates to such Holder’s proposed method of
distribution of Registrable Securities and, in each case, such information
was
reviewed and expressly approved in writing by such Holder expressly for use
in a
Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (ii) in the case of an occurrence
of an event of the type specified in Section 3(d)(ii)-(vii), the use by such
Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior
to
the receipt by such Holder of the Advice contemplated in Section 6(d). The
Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding arising from or in connection with the transactions
contemplated by this Agreement of which the Company is aware.
(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 or employees of
such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses, as incurred, to the extent arising out of or based
solely upon: (x) such Holder’s failure to comply with the prospectus delivery
requirements of the Securities Act or (y) any untrue or alleged untrue statement
of a material fact contained in any 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 not misleading (i) 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 to the Company specifically for inclusion
in
such Registration Statement or such Prospectus or (ii) to the extent that such
information relates to such Holder’s proposed method of distribution of
Registrable Securities and, in each of (i) and (ii), such information was
reviewed and expressly approved in writing by such Holder expressly for use
in a
Registration Statement (it being understood that the Holder has approved Annex
A
hereto for this purpose), such Prospectus or such form of Prospectus or in
any
amendment or supplement thereto or (iii) in the case of an occurrence of an
event of the type specified in Section 3(d)(ii)-(vii), the use by such Holder
of
an outdated or defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of the Advice contemplated in Section 6(d). In no event shall
the
liability of any selling Holder hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification
obligation.
(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 shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying
Party”)
in
writing, and the Indemnifying Party shall have the right 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 prejudiced the Indemnifying
Party.
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; (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 counsel to the Indemnified Party shall
reasonably believe that a material 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 the reasonable fees and expenses of no more than one
separate 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 (which consent shall not be unreasonably
withheld), effect any settlement of any pending Proceeding in respect of which
any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
Subject
to the terms of this Agreement, all reasonable 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) Trading Days of written notice thereof
to
the Indemnifying Party; provided,
that
the Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is judicially determined to be not entitled to indemnification
hereunder.
(d) Contribution.
If the
indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
Party or insufficient to hold an Indemnified Party harmless for any Losses,
then
each Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party, in such proportion as is appropriate to reflect the relative
fault 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 this Agreement, any reasonable attorneys’ or other 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.
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.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which
the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that
such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud
by
such Holder.
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.
(e) The
remedies provided for in this Section 5 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified
party
at law or in equity.
(f) The
provisions of this Section 5 will remain in full force and effect, regardless
of
any investigation made by or on behalf of any Holder, any underwriter or the
Company or any of the officers, directors or controlling Persons referred to
in
Section 5 hereof, and will survive the sale by a Holder of Transfer Restricted
Securities covered by a Shelf Registration Statement. Section 5 of this
Agreement may not be amended except by an instrument in writing signed by the
Indemnified Party affected hereby.
6. Miscellaneous
(a) Remedies.
In the
event of a breach by the Company or by a Holder, of any of their respective
obligations under this Agreement, each 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 not assert or shall
waive the defense that a remedy at law would be adequate.
(b) No
Piggyback on Registrations.
Except
as set forth on Schedule
6(b)
attached
hereto, neither the Company nor any of its security holders (other than the
Holders in such capacity pursuant hereto) may include securities of the Company
in the initial Registration Statement other than the Registrable Securities.
The
Company shall not file any other registration statements until the initial
Registration Statement required hereunder is declared effective by the
Commission, provided that this Section 6(b) shall not prohibit the Company
from
filing amendments to registration statements already filed.
(c) Compliance.
Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to a Registration Statement.
(d) Discontinued
Disposition.
Each
Holder agrees by its acquisition of Registrable Securities that, upon receipt
of
a notice from the Company of the occurrence of any event of the kind described
in Section 3(d)(ii)-(vii), such Holder will forthwith discontinue disposition
of
such Registrable Securities under a Registration Statement until it is advised
in writing (the “Advice”)
by the
Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as it
practicable. The
Company agrees and acknowledges that any periods during which the Holder is
required to discontinue the disposition of the Registrable Securities hereunder
shall be subject to the provisions of Section 2(b).
(e) Piggy-Back
Registrations.
If at
any time during the Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and 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 the stock option or other employee benefit plans, then the
Company shall send to each Holder a written notice of such determination and,
if
within fifteen (15) days after the date of such notice, any such Holder shall
so
request in writing, 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 6(e) that are eligible for resale pursuant to Rule
144(k) promulgated under the Securities Act or that are the subject of a then
effective Registration Statement.
(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 each Holder of a majority of the then outstanding
Registrable Securities. Notwithstanding the foregoing, a waiver or consent
to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of all of the
Registrable Securities to which such waiver or consent relates; provided,
however,
that
the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding
sentence.
(g) Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be delivered as set forth in the Exchange
Agreement.
(h) Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties and shall inure to the benefit of
each
Holder. The Company may not assign its rights (except by merger) or obligations
hereunder without the prior written consent of the Holders of a majority of
the
then-outstanding Registrable Securities. Each Holder may assign their respective
rights hereunder in the manner and to the Persons as permitted under the
Exchange Agreement.
(i) No
Inconsistent Agreements.
The
Company has not entered, as of the date hereof, 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 would be inconsistent with or
would have the effect of impairing the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. In addition, the
Company shall not grant to any holder of securities of the Company (other than
the Holders of transfer restricted Registrable Securities in such capacity)
the
right to include any of its securities in the Registration Statement provided
for in this Agreement. Except as set forth on Schedule
6(b),
the
Company has not previously entered into any agreement granting any registration
rights with respect to any of its securities to any Person that have not been
satisfied in full.
(j) Execution
and Counterparts.
This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.
(k) Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be determined in accordance with the provisions of
the
Exchange Agreement.
(l) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any other remedies
provided by law.
(m) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable, 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 commercially 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 in this Agreement 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) Independent
Nature of Holders’ Obligations and Rights.
The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible
in
any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered at
any
closing, and no action taken by any Holder pursuant hereto or thereto, shall
be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be entitled
to
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Holder to
be
joined as an additional party in any proceeding for such purpose.
*************************
la-893354
|||
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
|
By:
/s/ Xxxxxxx Xxxxx
Name:
Xxxxxxx Xxxxx
Title:
Chief Financial Officer
|
[SIGNATURE
PAGE OF HOLDERS FOLLOWS]
la-89335
[SIGNATURE
PAGE OF HOLDERS TO FP TECHNOLOGY RRA]
Name
of
Holder: __________________________
Signature
of Authorized Signatory of Holder:
__________________________
Name
of
Authorized Signatory: _________________________
Title
of
Authorized Signatory: __________________________
[SIGNATURE
PAGES CONTINUE]
la-89335
ANNEX
A
Plan
of Distribution
Each
Selling Stockholder (the “Selling
Stockholders”)
of the
common stock and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their shares of common stock on
The
OTC Bulletin Board or any other stock exchange, market or trading facility
on
which the shares are traded or in private transactions. These sales may be
at
fixed or negotiated prices. A Selling Stockholder may use any one or more of
the
following methods when selling 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 resale by the broker-dealer for
its
account;
|
| · |
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
| · |
privately
negotiated transactions;
|
| · |
settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a
part;
|
| · |
broker-dealers
may agree with the Selling Stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
| · |
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
|
| · |
a
combination of any such methods of sale;
or
|
| · |
any
other method permitted pursuant to applicable
law.
|
The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act of 1933, as amended (the “Securities
Act”),
if
available, rather than under this prospectus.
Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, but,
except as set forth in a supplement to this Prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in compliance
with
NASDR Rule 2440; and in the case of a principal transaction a markup or markdown
in compliance with NASDR IM-2440.
In
connection with the sale of the common stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the Common
Stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each Selling Stockholder has informed the
Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock. In
no
event shall any broker-dealer receive fees, commissions and markups which,
in
the aggregate, would exceed eight percent (8%).
The
Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
Because
Selling Stockholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act including Rule 172 thereunder. In addition, any securities
covered by this prospectus which qualify for sale pursuant to Rule 144 under
the
Securities Act may be sold under Rule 144 rather than under this prospectus.
There is no underwriter or coordinating broker acting in connection with the
proposed sale of the resale shares by the Selling Stockholders.
We
agreed
to keep this prospectus effective until the earlier of (i) the date on which
the
shares may be resold by the Selling Stockholders without registration and
without regard to any volume limitations by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect or (ii) all of the shares
have been sold pursuant to this prospectus or Rule 144 under the Securities
Act
or any other rule of similar effect. The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale shares may not
be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged
in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to the common stock for the applicable restricted
period, as defined in Regulation M, prior to the commencement of the
distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases
and
sales of shares of the common stock by the Selling Stockholders or any other
person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale.
la-89335
Annex
B
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of common stock, par value $0.001 per share (the
“Common
Stock”),
of FP
Technology, Inc., a Delaware corporation (the “Company”),
and/or Common Stock issued or issuable upon conversion of the Convertible Notes,
and/or Common Stock issued or issuable upon exercise of the Warrants
(collectively, the “Registrable
Securities”)
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”)
a
registration statement on Form S-3 (or such other form as the Company is
eligible to use) (the “Registration
Statement”)
for
the registration and resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities
Act”),
of
the Registrable Securities, in accordance with the terms of the Registration
Rights Agreement, dated as of January 24, 2007 (the “Registration
Rights Agreement”),
among
the Company and the Purchasers named therein. A copy of the Registration Rights
Agreement is available from the Company upon request at the address set forth
below. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Registration Rights Agreement.
Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus.
NOTICE
The
undersigned beneficial owner (the “Selling
Securityholder”)
of
Registrable Securities hereby elects to include the Registrable Securities
owned
by it and listed below in Item 3 (unless otherwise specified under such Item
3)
in the Registration Statement.
The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
QUESTIONNAIRE
1. Name.
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(a)
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Full
Legal Name of Selling
Securityholder
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(b)
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Full
Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are
held:
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(c)
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Full
Legal Name of Natural Control Person (which means a natural person
who
directly or indirectly alone or with others has power to vote or
dispose
of the securities covered by the
questionnaire):
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2.
Address for Notices to Selling Securityholder:
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Telephone:
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Fax:
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Contact
Person:
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3.
Beneficial Ownership of Registrable Securities:
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(a)
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Type
and Number of Registrable Securities beneficially owned (including
the
Registrable Securities that are issuable pursuant to the Exchange
Agreement):
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4.
Broker-Dealer Status:
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(a)
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Are
you a broker-dealer?
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Yes
No
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Note:
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If
yes, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration Statement with respect to your
Registrable Securities.
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(b)
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If
“yes” to Section 4(a), did you receive your Registrable Securities as
compensation for investment banking services to the
Company.
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Yes
No
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(c)
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Are
you an affiliate of a
broker-dealer?
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Yes
No
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(d)
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If
you are an affiliate of a broker-dealer, do you certify that you
bought
the Registrable Securities in the ordinary course of business, and
at the
time of the purchase of the Registrable Securities to be resold,
you had
no agreements or understandings, directly or indirectly, with any
person
to distribute the Registrable
Securities?
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Yes
No
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Note:
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If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration Statement with respect to your
Registrable Securities.
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5.
Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.
Except
as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
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(a)
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Type
and Amount of Other Securities beneficially owned by the Selling
Securityholder:
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6.
Relationships with the Company:
Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.
State
any
exceptions here:
The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at any time while the Registration Statement remains effective.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus
and
any
amendments or supplements thereto.
The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
and Questionnaire to be executed and delivered either in person or by its duly
authorized agent.
Dated:
Beneficial
Owner:
By:
Name:
Title:
PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:
la-89335
Schedule
6(b)
| 1. |
Up
to 990,625 shares of Common Stock issued or issuable to Trident Growth
Fund, L.P. (or its assignees) upon exercise or conversion of exercisable
or convertible securities outstanding on the date hereof.
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