XXXXXXXX CURHAN FORD GROUP, INC.
000 XXXXXXXXXX XXXXXX
0XX XXXXX
XXX XXXXXXXXX, XX 00000
August 27, 2009
Xxxxxx Chez
c/o Xxxxx Xxxxxxx
Xxxxxxxx Xxxxxx Xxxxx Xxxxx
00 X Xxxxxx Xxxxxx
00 Xxxxx
Xxxxxxx, XX 00000
Ladies and Gentlemen:
Reference is made to the Investors' Rights Agreement of even date
herewith (the "Agreement"), and terms otherwise not defined in this letter
agreement shall have the meanings set forth in the Agreement. The undersigned
acknowledges that you, as an Investor, have required the Company to execute
this letter agreement as a condition of purchasing Shares and Warrants in the
Agreement.
In consideration of the above, the Company agrees to use its
commercially reasonable best efforts to determine a method of registering the
Investor Warrants (in addition to the Common Stock underlying the Investor
Warrants), in coordination with you and your counsel, and to effect any such
registration in a manner reasonably acceptable to you. In addition, to reflect
the fact that the Settling Parties would also be participating in any
distribution of Registration Warrants, the Company agrees to use its
commercially reasonable best efforts to cause Section 2.4(b) of the Agreement
to be amended to read as attached as Annex A.
This letter agreement shall be deemed part of the Agreement.
Sincerely,
XXXXXXXX CURHAN FORD GROUP, INC.
/s/ D. Xxxxxxxx Xxxxxxxx
--------------------------------------------
D. Xxxxxxxx Xxxxxxxx,
Chief Executive Officer
ANNEX I
(b) For each 30-calendar day period following the
Registration Penalty Date in which there is not an effective registration
statement covering the Registrable Securities, the Company shall issue to each
Investor pro-rata, in proportion to the number of shares of Registrable
Securities purchased by or issued to such Investor pursuant to the Purchase
Agreement and/or the Settlement Agreement, as the case may be (or the number
of shares of Registrable Securities into which the securities purchased by or
issued to such Investor pursuant to such agreement), five year warrants to
purchase an aggregate of 161,850 shares of the Company's Common Stock at $0.65
per share, on terms identical to those issued to the Investors under the
Purchase Agreement (the "REGISTRATION WARRANTS"), as liquidated damages and
not as a penalty, subject to an overall limit of liquidated damages in the
aggregate of 971,000 Registration Warrants. The liquidated damages pursuant to
the terms hereof shall apply on a daily pro-rata basis for any portion of a
month prior to securing an effective Registration Statement. The foregoing
shall in no way limit any equitable remedies available to Investors for
failure to secure an effective Registration Statement by the Registration
Penalty Date. Investors shall also be able to pursue monetary damages for
failure to secure an effective Registration Statement by the Registration
Penalty Date but only if such failure is due to the willful or deliberate
action or inaction of the Company in breach of the covenants contained herein.
Except as provided for in the preceding sentence, each Investor agrees that
the liquidated damages provided for in this section shall be its sole remedy
for the failure to secure an effective Registration Statement for any
Registrable Securities on a timely basis.
