REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
is made
and entered into as of January 31, 2007, by and among Irish Mag, Inc., a Florida
corporation (the “Company”),
and
the investors signatory hereto (each a “Investor”
and
collectively, the “Investors”).
This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of
January 16, 2007 among the Company and the Investors, as amended (the
“Purchase
Agreement”).
The
Company and the Investors hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
Purchase Agreement will have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms have the respective
meanings set forth in this Section 1:
“2007
Delivery Date”
means
the date on which the 2007 Make Good Shares are required to be delivered to
the
Investors by Xx. Xxxxx Xxxx Xxx
pursuant
to Section 4.11 of the Purchase Agreement.
“2008
Delivery Date”
means
the date on which the 2008 Make Good Shares are required to be delivered to
the
Investors by Xx. Xxxxx Xxxx Xxx
pursuant
to Section 4.11 of the Purchase Agreement.
“Advice”
has
the
meaning set forth in Section 6(d).
“Common
Stock”
means
the common stock of the Company, par value $0.01 per share, and any securities
into which such common stock may hereafter be reclassified or for which it
may
be exchanged as a class.
“Effective
Date”
means,
as to a Registration Statement, the date on which such Registration Statement
is
first declared effective by the Commission.
“Effectiveness
Date”
means
(a) with respect to the
Registration Statement required to be filed under Section 2(a),
the
earlier of (i) the 150th
day
following the Closing Date, and (ii) the fifth Trading Day following the date
on
which the Company is notified by the Commission that such Registration Statement
will not be reviewed or is no longer subject to further review and comments,
(b)
with respect to a Registration Statement required to be filed under Section
2(b), the earlier of: (b)(i) the 60th
day
following the date on which the Company becomes eligible to utilize Form S-3
to
register the resale of Common Stock; provided,
that,
if the Commission reviews and has written comments to such filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (b)(i) shall
be the 90th
day
following the date on which the Company becomes eligible to utilize Form S-3
to
register the resale of Common Stock, and (ii) the fifth Trading Day following
the date on which the Company is notified by the Commission that the
Registration Statement will not be reviewed or is no longer subject to further
review and comments, (c) with respect to a Registration Statement required
to be
filed under Section 2(c), the earlier of: (c)(i) the 90th
day
following the 2007 Delivery Date; provided,
that,
if the Commission reviews and has written comments to such filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (c)(i) shall
be the 120th
day
following the 2007 Delivery Date, and (ii) the fifth Trading Day following
the
date on which the Company is notified by the Commission that the Registration
Statement will not be reviewed or is no longer subject to further review and
comments and (d) with respect to a Registration Statement required to be filed
under Section 2(d), the earlier of: (d)(i) the 90th
day
following the 2008 Delivery Date; provided,
that,
if the Commission reviews and has written comments to such filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (c)(i) shall
be the 120th
day
following the 2008 Delivery Date, and (ii) the fifth Trading Day following
the
date on which the Company is notified by the Commission that the Registration
Statement will not be reviewed or is no longer subject to further review and
comments.
“Effectiveness
Period”
has the
meaning set forth in Section 2(a).
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Filing
Date”
means
(a) with respect to the Registration Statement required to be filed under
Section 2(a), the 45th
day
following the Closing Date, (b) with respect to a Registration Statement
required to be filed under Section 2(b), the 30th
day
following the date on which the Company becomes eligible to utilize Form S-3
to
register the resale of Common Stock, (c) with respect to the Registration
Statement required to be filed under Section 2(c), the 45th
day
following the 2007 Delivery Date (provided that if the Company is then eligible
to utilize Form S-3 to register the resale of Common Stock, the Filing Date
under this clause (c) shall be 30 days following the 2007 Delivery
Date)
and (d)
with
respect to the Registration Statement required to be filed under Section 2(d),
the 45th
day
following the 2008 Delivery Date (provided that if the Company is then eligible
to utilize Form S-3 to register the resale of Common Stock, the Filing Date
under this clause (d) shall be 30 days following the 2008 Delivery
Date).
“Holder”
or
“Holders”
means
the holder or holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified
Party”
has the
meaning set forth in Section 5(c).
“Indemnifying
Party”
has the
meaning set forth in Section 5(c).
“Losses”
has the
meaning set forth in Section 5(a).
“New
York Courts”
means
the state and federal courts sitting in the City of New York, Borough of
Manhattan.
“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.
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“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) the Shares, (ii) any shares of Common Stock issuable upon the exercise
of
warrants issued to any placement agent (the “Placement
Agent Warrants”)
as
compensation in connection with the financing that is the subject of the
Purchase Agreement, (iii) the 2007 Make Good Shares, as applicable, (iv) the
2008 Make Good Shares, as applicable and (v) any securities issued or issuable
upon any stock split, dividend or other distribution, recapitalization or
similar event, or any price adjustment as a result of such stock splits, reverse
stock splits or similar events with respect to any of the securities referenced
in (i), (ii), (iii), or (iv) above.
“Registration
Statement”
means
the registration statement required to be filed in accordance with Section
2(a)
and any additional registration statement(s) required to be filed under Section
2(b), Section 2(c) or Section 2(d), including (in each case) the Prospectus,
amendments and supplements to such registration statements or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference
therein.
“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
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.
“Shares”
means
the shares of Common Stock issued or issuable to the Investors pursuant to
the
Purchase Agreement.
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2. Registration.
(a) On
or
prior to the applicable Filing Date, the Company shall prepare and file with
the
Commission a Registration Statement covering the resale of
all
Registrable Securities (other than the 2007 Make Good Shares and the 2008 Make
Good Shares) not already covered by an existing and effective Registration
Statement for an offering to be made on a continuous basis pursuant to Rule
415,
on Form SB-2 (or on such other form appropriate for such purpose). Such
Registration Statement shall contain (except if otherwise required pursuant
to
written comments received from the Commission upon a review of such Registration
Statement) the “Plan of Distribution” attached hereto as Annex
A.
The
Company shall cause such Registration Statement to be declared effective under
the Securities Act as soon as possible but, in any event, no later than its
Effectiveness Date, and shall use its reasonable best efforts to keep the
Registration Statement continuously effective under the Securities Act until
the
date which is the earliest of (i) two years after its Effective Date (and for
purposes of a Registration Statement contemplated in Section 2(c) and/or Section
2(d) hereof, two years after the Effective Date therefor), (ii) such time as
all
of the Registrable Securities covered by such Registration Statement have been
publicly sold by the Holders, or (iii) such time as all of the Registrable
Securities covered by such Registration Statement may be sold by the Holders
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”).
By
5:00 p.m. (New York City time) on the Business Day immediately following the
Effective Date of such Registration Statement, the Company shall file with
the
Commission in accordance with Rule 424 under the Securities Act the final
prospectus to be used in connection with sales pursuant to such Registration
Statement (whether or not such filing is technically required under such
Rule).
(b) Promptly
following any date on which the Company becomes eligible to use a registration
statement on Form S-3 to register Registrable Securities for resale, the Company
shall file a Registration Statement on Form S-3 covering all such Registrable
Securities (or a post-effective amendment on Form S-3 to the then effective
Registration Statement) and shall cause such Registration Statement to be filed
by the Filing Date for such Registration Statement and declared effective under
the Securities Act as soon as possible thereafter, but in any event prior to
the
Effectiveness Date therefor. Such Registration Statement shall contain (except
if otherwise required pursuant to written comments received from the Commission
upon a review of such Registration Statement) the “Plan of Distribution”
attached hereto as Annex
A.
The
Company shall use its reasonable best efforts to keep such Registration
Statement continuously effective under the Securities Act during the entire
Effectiveness Period. By 5:00 p.m. (New York City time) on the Business Day
immediately following the Effective Date of such Registration Statement, the
Company shall file with the Commission in accordance with Rule 424 under the
Securities Act the final prospectus to be used in connection with sales pursuant
to such Registration Statement (whether or not such filing is technically
required under such Rule).
(c) On
or
prior to the applicable Filing Date, the Company shall prepare and file with
the
Commission a Registration Statement covering the resale of the 2007 Make Good
Shares on Form SB-2 or Form S-3 if the Company is then eligible to utilize
such
Form (or on such other form appropriate for such purpose) and shall cause such
Registration Statement to be filed by the Filing Date for such Registration
Statement and declared effective under the Securities Act as soon as possible
thereafter, but in any event prior to the Effectiveness Date therefor. Such
Registration Statement shall contain (except if otherwise required pursuant
to
written comments received from the Commission upon a review of such Registration
Statement) the “Plan of Distribution” attached hereto as Annex
A.
The
Company shall use its reasonable best efforts to keep such Registration
Statement continuously effective under the Securities Act during the entire
Effectiveness Period which is applicable to it. By 5:00 p.m. (New York City
time) on the Business Day immediately following the Effective Date of such
Registration Statement, the Company shall file with the Commission in accordance
with Rule 424 under the Securities Act the final prospectus to be used in
connection with sales pursuant to such Registration Statement (whether or not
such filing is technically required under such Rule).
4
(d) On
or
prior to the applicable Filing Date, the Company shall prepare and file with
the
Commission a Registration Statement covering the resale of the 2008 Make Good
Shares on Form SB-2 or Form S-3 if the Company is then eligible to utilize
such
Form (or on such other form appropriate for such purpose) and shall cause such
Registration Statement to be filed by the Filing Date for such Registration
Statement and declared effective under the Securities Act as soon as possible
thereafter, but in any event prior to the Effectiveness Date therefor. Such
Registration Statement shall contain (except if otherwise required pursuant
to
written comments received from the Commission upon a review of such Registration
Statement) the “Plan of Distribution” attached hereto as Annex
A.
The
Company shall use its reasonable best efforts to keep such Registration
Statement continuously effective under the Securities Act during the entire
Effectiveness Period which is applicable to it. By 5:00 p.m. (New York City
time) on the Business Day immediately following the Effective Date of such
Registration Statement, the Company shall file with the Commission in accordance
with Rule 424 under the Securities Act the final prospectus to be used in
connection with sales pursuant to such Registration Statement (whether or not
such filing is technically required under such Rule).
(e) If:
(i) a
Registration Statement is not filed on or prior to its Filing Date covering
all
of the Registrable Securities required under this Agreement to be included
therein (if the Company files a Registration Statement without affording the
Holders the opportunity to review and comment on the same as required by Section
3(a) hereof, the Company shall not be deemed to have satisfied this clause
(i)),
or (ii) a Registration Statement is not declared effective by the Commission
on
or prior to its required Effectiveness Date or if by the Business Day
immediately following the Effective Date the Company shall not have filed a
“final” prospectus for the Registration Statement with the Commission under Rule
424(b) (whether or not such a prospectus is technically required by such Rule),
or (iii) after its Effective Date, without regard for the reason thereunder
or
efforts therefore, such Registration Statement ceases for any reason to be
effective and available to the Holders as to all Registrable Securities to
which
it is required to cover at any time prior to the expiration of its Effectiveness
Period for more than an aggregate of 30 Trading Days (which need not be
consecutive) (any such failure or breach being referred to as an “Event,”
and for
purposes of clauses (i) or (ii) the date on which such Event occurs, or for
purposes of clause (iii) the date which such 30 Trading Day-period is exceeded,
being referred to as “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, equal to
1.0% of the aggregate Investment Amount paid by such Holder for Shares pursuant
to the Purchase Agreement; provided,
however,
that
the total amount of partial liquidated damages payable by the Company pursuant
to all Events under this Section shall be capped at an aggregate of 10% of
the
aggregate Investment Amount paid by the Investors under the Purchase Agreement.
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,
except in the case of the first Event Date. In no event will the Company be
liable for liquidated damages under this Agreement in excess of 1.0% of the
aggregate Investment Amount of the Investors in any 30-day period. The Company
will not be liable for liquidated damages under this Agreement with respect
to
any Placement Agent Warrants or any shares of Common Stock issuable upon
exercise of the Placement Agent Warrants.
5
(f) Each
Holder agrees to furnish to the Company a completed Questionnaire in the form
attached to this Agreement as Annex
B
(a
“Selling
Holder Questionnaire”).
The
Company shall not be required to include the Registrable Securities of a Holder
in a Registration Statement and shall not be required to pay any liquidated
or
other damages under Section 2(e) to any Holder who fails to furnish to the
Company a fully completed Selling Holder Questionnaire at least two Trading
Days
prior to the Filing Date (subject to the requirements set forth in Section
3(a)).
3. Registration
Procedures.
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a) Not
less
than four Trading Days prior to the filing of a Registration Statement or any
related Prospectus or any amendment or supplement thereto, the Company shall
furnish to each Holder copies of the “Selling Stockholders” section of such
document, the “Plan of Distribution” and any risk factor contained in such
document that addresses specifically this transaction or the Selling
Stockholders, as proposed to be filed which documents will be subject to the
review of such Holder. The Company shall not file a Registration Statement,
any
Prospectus or any amendments or supplements thereto in which the “Selling
Stockholder” section thereof differs from the disclosure received from a Holder
in its Selling Holder Questionnaire (as amended or supplemented).
(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective as to the applicable Registrable Securities for its 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, and as so supplemented
or
amended to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably possible to any comments received from the Commission with respect
to
each Registration Statement or any amendment thereto and, as promptly as
reasonably possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to such Registration
Statement that would not result in the disclosure to the Holders of material
and
non-public information concerning the Company; and (iv) comply in all material
respects with the provisions of the Securities Act and the Exchange Act with
respect to the Registration Statements and the disposition of all Registrable
Securities covered by each Registration Statement.
6
(c) Notify
the Holders as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than three Trading Days prior to such filing and, in the case
of
(v) below, not less than three Trading Days prior to the financial statements
in
any Registration Statement becoming ineligible for inclusion therein) 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 whenever the Commission comments
in writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the Holders
that pertain to the Holders as a Selling Stockholder or to the Plan of
Distribution, but not information which the Company believes would constitute
material and non-public information); and (C) with respect to each 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 a Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the
Commission 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; and (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 such 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
such
Registration Statement, Prospectus or other documents so that, in the case
of
such 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.
(d) Use
its
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.
(e) Furnish
to each Holder, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto and all exhibits to the extent requested
by
such Person (including those previously furnished) promptly after the filing
of
such documents with the Commission.
(f) Promptly
deliver to each Holder, without charge, as many copies of each Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request. 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.
7
(g) Prior
to
any public offering of Registrable Securities, register or qualify such
Registrable Securities for offer and sale under the securities or Blue Sky
laws
of such jurisdictions within the United States as any Holder may request, 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 the Registration Statements.
(h) Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee
pursuant to the Registration Statements, which certificates shall be free,
to
the extent permitted by the Purchase 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.
(i) Upon
the
occurrence of any event contemplated by Section 3(c)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statements 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, no Registration Statement nor any 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.
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, and (B)
in
compliance with applicable state securities or Blue Sky laws), (ii) printing
expenses (including, without limitation, expenses of printing certificates
for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably 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, (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.
8
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, agents, investment advisors,
partners, members 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, reasonable costs of preparation and reasonable
attorneys' fees) and expenses (collectively, “Losses”),
as
incurred, arising out of or relating to 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 (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, except to the extent, but only to the extent, that (1) such
untrue statements or omissions are based solely upon information regarding
such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use
in
the 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 (2) in the case of an occurrence
of
an event of the type specified in Section 3(c)(ii)-(v), 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 an Advice or an amended or supplemented Prospectus,
but only if and to the extent that following the receipt of the Advice or the
amended or supplemented Prospectus the misstatement or omission giving rise
to
such Loss would have been corrected. 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.
(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, arising solely 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 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 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 not misleading to the
extent, but only to the extent that, (1) such untrue statements or omissions
are
based solely upon information regarding such Holder furnished in writing to
the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the 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 (2) in the case of an occurrence of an event of the type specified
in
Section 3(c)(ii)-(v), 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
an Advice or an amended or supplemented Prospectus, but only if and to the
extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have
been
corrected. 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.
9
(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 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.
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 such Indemnified Party 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. No Indemnifying Party shall, without the prior written consent of
the
Indemnified Party, 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.
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 Trading 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 Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent it
is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).
10
(d) Contribution.
If a
claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (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
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 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.
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.
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.
6. Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by a Holder, of any of their 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 waive the defense
that
a remedy at law would be adequate.
(b) No
Piggyback on Registrations.
Except
as and to the extent specified in Schedule
3.1(v)
to the
Purchase Agreement, 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 a Registration Statement other than the Registrable Securities,
and
the Company shall not during the Effectiveness Period enter into any agreement
providing any such right to any of its security holders.
11
(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 the Registration Statement.
(d) Discontinued
Disposition.
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), 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 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. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.
(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 stock option or other employee benefit plans, then the Company
shall send to each Holder written notice of such determination and, if within
fifteen days after receipt 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,
subject to customary underwriter cutbacks applicable to all holders of
registration rights.
(f) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this Section 6(f),
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 no less than a majority in interest
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 certain Holders and that does not
directly or indirectly affect the rights of other Holders may be given by
Holders of at least a majority of the Registrable Securities to which such
waiver or consent relates.
(g) Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (a) the date of transmission, if such notice or communication
is delivered via facsimile (provided the sender receives a machine-generated
confirmation of successful transmission) at the facsimile number specified
in
this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (b)
the
next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in this Section
on
a day that is not a Trading Day or later than 6:30 p.m. (New York City time)
on
any Trading Day, or (c) upon actual receipt by the party to whom such notice
is
required to be given if sent by any means other than facsimile transmission.
The
address for such notices and communications shall be as follows:
12
| If to the Company: |
Xxxx
X
Xxxxx
0
Xxxx
Xx Xxxxx Xxxx
Xxxxxxxxxxxx
Shenzhen,
Guangdong, 518040
People’s
Republic of China
Facsimile:
Attn.:
Jiang Xxxx Xxx
|
| With a copy to: | Xxxxxx Xxxx Xxxxx Raysman and Xxxxxxx
LLP
000
Xxxxxx Xxxxxx, XX
Xxxxxxxxxx,
X.X. 00000
Facsimile:
(000) 000-0000
Attn.:
Xxxxx X. Xxxxxxxxxx, Esq.
|
| If to a Investor: | To the address set forth under such Investor's name on the signature pages hereto. |
| If to any other Person who is then the registered Holder: |
| To the address of such Holder as it appears in the stock transfer books of the Company |
or
such
other address as may be designated in writing hereafter, in the same manner,
by
such Person.
(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 or obligations hereunder without
the prior written consent of each Holder. Each Holder may assign their
respective rights hereunder in the manner and to the Persons as permitted under
the Purchase Agreement.
(i) Execution
and 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. In the event that any signature
is
delivered by facsimile transmission, 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 signature
were the original thereof.
13
(j) Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all Proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement (whether brought against a party hereto or its
respective Affiliates, employees or agents) will be commenced in the New York
Courts. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert
in
any Proceeding, any claim that it is not personally subject to the jurisdiction
of any New York Court, or that such Proceeding has been commenced in an improper
or inconvenient forum. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such Proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) 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 contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
Proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If either party shall commence a Proceeding to enforce
any
provisions of this Agreement, then the prevailing party in such Proceeding
shall
be reimbursed by the other party for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Proceeding.
(k) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
(l) 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 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.
(m) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
14
(n) Independent
Nature of Investors' Obligations and Rights.
The
obligations of each Investor under this Agreement are several and not joint
with
the obligations of each other Investor, and no Investor shall be responsible
in
any way for the performance of the obligations of any other Investor under
this
Agreement. Nothing contained herein or in any Transaction Document, and no
action taken by any Investor pursuant thereto, shall be deemed to constitute
the
Investors as a partnership, an association, a joint venture or any other kind
of
entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement or any other Transaction Document. Each Investor
acknowledges that no other Investor will be acting as agent of such Investor
in
enforcing its rights under this Agreement. Each Investor shall be entitled
to
independently protect and enforce its rights, including without limitation
the
rights arising out of this Agreement, and it shall not be necessary for any
other Investor to be joined as an additional party in any Proceeding for such
purpose. The Company acknowledges that each of the Investors has been provided
with the same Registration Rights Agreement for the purpose of closing a
transaction with multiple Investors and not because it was required or requested
to do so by any Investor.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES TO FOLLOW]
15
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
| |
|
|
| By: | /s/ Jiang Huai Xxx | |
|
Xxxxx Xxxx Xxx |
||
| President and Chief Executive Officer | ||
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES OF INVESTORS TO FOLLOW]
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
|
INVESTORS:
THE
PINNACLE FUND, L.P.
|
||
| |
|
|
| By: | /s/ Xxxxx X. Xxxx | |
|
Xxxxx X. Xxxx, |
||
|
Sole
Member, Pinnacle Fund Management, L.L.C.,
the
General Partner of Pinnacle Advisors, L.P.,
the
General Partner of The Pinnacle Fund, L.P.
|
||
|
ADDRESS
FOR NOTICE
The
Pinnacle Fund, L.P.
0000
Xxxxxxx Xxxx Xxxx., Xxxxx 000
Xxxxx,
XX 00000
Attention:
Xxxxx X. Xxxx
Tel:
000-000-0000
Fax:
000-000-0000
xx@xxxxxxxxxxxx.xxx
|
||
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOR OTHER INVESTOR
FOLLOWS]
|
PINNACLE
CHINA FUND, L.P.
|
||
| |
|
|
| By: | /s/ Xxxxx X. Xxxx | |
|
Xxxxx X. Xxxx, |
||
|
Manager,
Kitt China Management, L.L.C.,
the
Manager of Pinnacle China Management, L.L.C.,
the
General Partner of Pinnacle China Advisors, L.P.,
the
General Partner of Pinnacle China Fund, L.P.
|
||
|
ADDRESS
FOR NOTICE
Pinnacle
China Fund, L.P.
0000
Xxxxxxx Xxxx Xxxx., Xxxxx 000
Xxxxx,
XX 00000
Attention:
Xxxxx X. Xxxx
Tel:
000-000-0000
Fax:
000-000-0000
xx@xxxxxxxxxxxxxxxxx.xxx
|
||
Annex
A
Plan
of
Distribution
The
Selling Stockholders and any of their pledgees, donees, transferees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of Common Stock on any 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. The Selling Stockholders may use any one or more
of
the following methods when selling shares:
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits Investors;
|
|
·
|
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;
|
|
·
|
to
cover short sales made after the date that this Registration Statement
is
declared effective by the Commission;
|
|
·
|
broker-dealers
may agree with the Selling Stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
|
·
|
a
combination of any such methods of sale;
and
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
Selling Stockholders may also sell shares under Rule 144 under 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. The
Selling Stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved.
The
Selling Stockholders may from time to time pledge or grant a security interest
in some or all of the Shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell shares of Common Stock from time to time under this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
A-1
Upon
the
Company being notified in writing by a Selling Stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of Common
Stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to
this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Stockholder and
of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such the shares of Common Stock were sold, (iv)the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference
in
this prospectus, and (vi) other facts material to the transaction. In addition,
upon the Company being notified in writing by a Selling Stockholder that a
donee
or pledgee intends to sell more than 500 shares of Common Stock, a supplement
to
this prospectus will be filed if then required in accordance with applicable
securities law.
The
Selling Stockholders also may transfer the shares of Common Stock in other
circumstances, in which case the transferees, pledgees or other successors
in
interest will be the selling beneficial owners for purposes of this
prospectus.
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. Discounts, concessions, commissions and
similar selling expenses, if any, that can be attributed to the sale of the
securities will be paid by the Selling Stockholder and/or the purchasers. Each
Selling Stockholder has represented and warranted to the Company that it
acquired the securities subject to this registration statement in the ordinary
course of such Selling Stockholder’s business and, at the time of its purchase
of such securities such Selling Stockholder had no agreements or understandings,
directly or indirectly, with any person to distribute any such securities.
The
Company has advised each Selling Stockholder that it may not use shares
registered on this Registration Statement to cover short sales of Common Stock
made prior to the date on which this Registration Statement shall have been
declared effective by the Commission. If a Selling Stockholder uses this
prospectus for any sale of the Common Stock, it will be subject to the
prospectus delivery requirements of the Securities Act. The Selling Stockholders
will be responsible to comply with the applicable provisions of the Securities
Act and Exchange Act, and the rules and regulations thereunder promulgated,
including, without limitation, Regulation M, as applicable to such Selling
Stockholders in connection with resales of their respective shares under this
Registration Statement.
The
Company is required to pay all fees and expenses incident to the registration
of
the shares, but the Company will not receive any proceeds from the sale of
the
Common Stock. The Company has agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.
A-2
Annex
B
OFFERING
OF COMMON STOCK
INVESTOR
QUESTIONNAIRE
NAME
OF INVESTOR: _________________________________
In
connection with your purchase of shares of common stock (the “Securities”)
of
Irish Mag, Inc. (the “Company”)
in
various transactions (the “Offerings”),
please provide the Company with the following information for the Company’s use
in preparing a Registration Statement (the “Registration
Statement”)
relating to the Securities acquired by you which you are asking the Company
to
register.
A. General
Information
1. Please
state your or your organization’s name exactly
as it should appear on the Registration Statement.
2. Please
provide the Tax Identification Number of the person or entity listed in response
to Item 1 above.
3. Have
you
or your organization had any position, office or other material relationship
within the past three years with the Company or any of its affiliates (other
than as a participant in the Offerings)?
o Yes o No
If
yes,
please indicate the nature of any such relationships below:
4. Does
the
Plan of Distribution attached to this Questionnaire as Annex
A
accurately reflect the means by which you ultimately intend to dispose or sell
the Securities?
o Yes o No
B. Securities
Holdings
Please
fill in all blanks in the following questions related to your beneficial
ownership of
the
Company’s capital stock. Generally, the term “beneficial
ownership”
refers
to any direct or indirect interest in the securities which entitles you to
any
of the rights or benefits of ownership, even though you may not be the holder
of
record of the securities. For example, securities held in “street name” over
which you exercise voting or investment power would be considered beneficially
owned by
you.
Other examples of indirect ownership include ownership by a partnership in
which
you are a partner or by an estate or trust of which you or any member of your
immediate
family is
a
beneficiary. Ownership of securities held in the names of your spouse, minor
children or other relatives who live in the same household may be attributed
to
you.
B-1
Please
note: If
you
have any reason to believe that any interest in securities of the Company which
you may have, however remote, is a beneficial interest, please describe such
interest. For purposes of responding to this questionnaire, it is preferable
to
err on the side of inclusion rather than exclusion. Where the SEC's
interpretation of beneficial
ownership would
require disclosure of your interest or possible interest in certain securities
of the Company, and you believe that you do not actually possess the attributes
of beneficial ownership, an appropriate response is to disclose the interest
and
at the same time disclaim beneficial ownership of the securities.
1. As
of the
closing of the
Purchase Agreement,
I owned
outright (including shares registered in my name individually or jointly with
others, shares held in the name of a bank, broker, nominee, depository or in
“street name” for my account), the following number of shares of the Company’s
capital stock:
2. As
of the
closing of the Purchase Agreement, I owned the following number of securities
that are exercisable or exchangeable for, or convertible into the Company’s
common stock:
3. In
addition to the number of shares I own outright as indicated by my answer to
Item B(l), as of the closing of the Purchase Agreement,
I had or
shared voting power or investment power, directly or indirectly, through a
contract, arrangement, understanding, relationship or otherwise, over the
following number of shares of the Company's capital stock:
4. Please
identify the natural person or persons who have voting and/or investment control
over the Company's securities that you own, and state whether such person(s)
disclaims beneficial ownership of the securities. For example, if you are a
general partnership, please identify the general partners in the partnership.
B-2
C. NASD
Questions
1. Are
you
(i) a “member”1
of
the
National Association of Securities Dealers, Inc. (the “NASD”),
(ii) an “affiliate”2of
a
member of the NASD, (iii) a “person associated with a member” or an
“associated person of a member” of the NASD or (iv) an immediate family
member3
of
any of
the foregoing persons? If yes,
please
identify the member and describe such relationship (whether direct or indirect),
and please respond to Item 2 below; if no,
please
proceed directly to Item 3 below.
o Yes o No
Description:
2. If
you
answered “yes” to Question Number 1, please furnish any information as to
whether any such member intends to participate in any capacity in the proposed
public resale of the Securities, including the details of such
participation:
1
NASD
defines a “member” as any broker or dealer admitted to membership in the NASD,
or any officer or partner or branch manager of such a member, or any person
occupying a similar status or performing a similar function for such a
member.
2 The
term
“affiliate” means a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is in common control with,
the
person specified. Persons who have acted or are acting on behalf of or for
the
benefit of a person include, but are not necessarily limited to, directors,
officers, employees, agents, consultants and sales representatives. The
following should apply for purposes of the foregoing:
(i) a
person
should be presumed to control a Member if the person beneficially owns 10
percent or more the outstanding voting securities of a Member which is a
corporation, or beneficially owns a partnership interest in 10 percent or more
of the distributable profits or losses of a Member which is a
partnership;
(ii)
a
Member should be presumed to control a person if the Member and Persons
Associated With a Member beneficially own 10 percent or more of the outstanding
voting securities of a person which is a corporation, or beneficially own a
partnership interest in 10 percent or more of the distributable profits or
losses of a person which is a partnership; (iii) a person should be
presumed to be under common control with a Member if:
(1) the
same
person controls both the Member and another person by beneficially owning 10
percent or more of the outstanding voting securities of a Member or person
which
is a corporation, or by beneficially owning a partnership interest in 10 percent
or more of the distributable profits or losses of a Member or person which
is a
partnership; or
(2)
a
person having the power to direct or cause the direction of the management
or
policies of the Member or such person also has the power to direct or cause
the
direction of the management or policies of the other entity in
question.
3
Immediate family includes parents, mother-in-law, father-in-law, husband or
wife, brother or sister, brother-in-law or sister-in-law, son-in-law or
daughter-in-law, and children, or any other person who is supported, directly
or
indirectly, to a material extent, by a person associated with a member of the
NASD or any other broker dealer.
B-3
3. Are
you
or have you been an “underwriter or related person”4
or
a
person associated with an underwriter or related person, including, without
limitation, with respect to the proposed public resale of the Securities? If
yes, please identify the underwriter or related person and describe such
relationship (whether direct or indirect).
o Yes o No
Description:
4. If
known,
please describe in detail any underwriting compensation received or underwriting
arrangements or dealings entered into during the previous twelve months, or
proposed to be consummated in the next twelve months, between (i) any
underwriter or related person, member of the NASD, affiliate of a member of
the
NASD, person associated with a member or associated person of a member of the
NASD or any immediate family member thereof, on the one hand, and (ii) the
Company, or any director, officer or shareholder thereof, on the other hand,
which provides for the receipt of any item of value and/or the transfer of
any
warrants, options or other securities from the Company to any such person (other
than the information relating to the arrangements with any investment firm
or
underwriting organization which may participate in the proposed public resale
of
the Securities).
Description:
5. Have
you
purchased the securities in the ordinary course of business?
o Yes o No
D. Regulation
M
You
hereby acknowledge and agree that you have been advised by the Company that
the
anti-manipulation rules of Regulation M under the Exchange Act may apply to
sales of shares in the market and to the activities of you and the other selling
stockholders and your and their affiliates. In addition, you acknowledge that
have agreed to make copies of the prospectus (as it may be supplemented or
amended from time to time) available to you and the other selling stockholders
for the purpose of satisfying the prospectus delivery requirements of the
Securities Act.
E. Signatures
The
undersigned has prepared and carefully read this questionnaire. The undersigned
understands that:
4
The term
“underwriter or related person” includes underwriters, underwriters' counsel,
financial consultants and advisors, finders, members of the selling or
distribution group, and any and all other persons associated with or related
to
any of such persons, including members of the immediate family of such
persons.
B-4
1. Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP, 000 Xxxxxx Xxxxxx, X.X., Xxxxxxxxxx, XX
00000, is the attorney for the Company.
2. The
above
attorney will rely upon the answers and representations made above when
preparing or reviewing documents, including, with limitation, the Registration
Statement.
3. One
who
causes documents to be misleading may be held liable civilly to investors and
other persons who are damaged as a result of such
misrepresentation.
In
view
of the situation described above, the undersigned represents that the
undersigned:
1. has
considered carefully each of the above questions;
2. has
answered each question fully and truthfully; and
3. has
knowledge of no facts other than as set forth above which might be construed
to
qualify any of the above answers to this questionnaire.
The
undersigned hereby agrees to indemnify and hold harmless the Company, its
directors, officers, counsels and affiliates from and against any and all loss,
liability, charge, claim, damage, and expense whatsoever as and when incurred,
arising out of, based upon, or in connection with any incorrect or incomplete
information contained in this questionnaire.
THE
UNDERSIGNED WILL NOTIFY THE COMPANY PROMPTLY OF ANY SUBSTANTIAL CHANGES IN
THE
FOREGOING INFORMATION THAT MAY OCCUR.
Date:
________________
|
For
Individuals:
|
For
Entities:
|
|
_______________________________
|
_______________________________
|
|
Print
Name Above
|
Print
Name Above
|
|
_______________________________
|
By:
____________________________
|
|
Sign
Name Above
|
Name:
|
|
Title:
|
|
|
_______________________________
|
_______________________________
|
|
State
of residence
|
State
of Residence
|
B-5
PLEASE
RETURN THE COMPLETED QUESTIONNAIRE BY FACSIMILE
AND OVERNIGHT MAIL
TO:
Xxxx
X.
Xxxxx-Xxxxxx, Esq.
Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP
000
Xxxxxx Xxxxxx, X.X.
Xxxxxxxxxx,
XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
xxxxxxxxxxxx@xxxxxx.xxx
B-6
