REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into as of June 24, 2008, among Harbin Electric, Inc, a Nevada
corporation (the “Company”),
and
the purchasers identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser,”
and
collectively, the “Purchasers”).
R
E C
I T A L S
WHEREAS,
the Company proposes to sell to the Purchasers an aggregate of up to 3.5 million
shares of the Company’s Common Stock, par value $0.00001 per share (the
“Common
Stock”)
pursuant to that certain Purchase Agreement (the “Purchase
Agreement”)
dated
as of even date herewith by and among the Company and the Purchasers;
and
WHEREAS,
the Company wishes to enter into this Registration Rights Agreement with the
Purchasers, and confer upon the Purchasers the benefits provided hereunder,
as
an inducement to the Purchasers to enter into the Purchase Agreement and
consummate the transactions thereunder.
A
G R
E E M E N T
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and the Purchasers agree as
follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
“Advice”
shall
have the meaning set forth in Section 7(c).
“Allowable
Grace Period”
shall
have the meaning set forth in Section 3(j).
“Effective
Date”
means
the date that the Registration Statement is declared effective by the
Commission.
“Effectiveness
Deadline”
means,
with respect to the initial Registration Statement required hereunder, (i)
in
the event that the Registration Statement is not subject to a review by the
Commission, the earlier of (x) the 5th Business 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
(y)
the date that is 60 calendar days after the Filing Deadline, or (ii) in the
event that the Registration Statement is subject to a review by the Commission,
the date that is 120 calendar days after the Filing Deadline.
“Effectiveness
Failure”
shall
have the meaning set forth in Section 2(b).
“Effectiveness
Period”
means
with respect to any Registrable Securities under any Registration Statement,
the
period commencing with the Effective Date of the Registration Statement and
ending upon the disposition of all Registrable Securities under such
Registration Statement.
“Filing
Date”
means,
with respect to the initial Registration Statement required hereunder, the
date
the Registration Statement is filed with the Commission.
“Filing
Deadline”
means,
with respect to the initial Registration Statement required hereunder, 30
calendar days after the Closing Date.
“Filing
Failure”
shall
have the meaning set forth in Section 2(b).
“Grace
Period”
shall
have the meaning set forth in Section 3(j).
“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
all of (i) the Shares, and (ii) any shares of Common Stock issued or issuable
upon any stock split, dividend or other distribution, recapitalization or
similar event of the Company affecting the Shares; provided, however, a security
shall no longer be a Registrable Security once it has been sold pursuant to
Rule
144 under the Securities Act, or may be sold, without regard to the volume
limitations contained in Rule 144(e) under the Securities Act or sold pursuant
to a Registration Statement.
“Registration
Delay Payments”
shall
have the meaning set forth in Section 2(b).
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“Registration
Statement”
means
the registration statements required to be filed hereunder, 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).
2. Shelf
Registration.
(a) On
or
prior to the Filing Deadline, and subject to the availability of Rule 415,
the
Company shall prepare and file with the Commission a “Shelf” Registration
Statement covering the resale of the Registrable Securities 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
substantially the “Plan
of Distribution”
attached hereto as Annex
A,
as
modified by the Company as necessary to conform to comments from the Commission.
Subject to the terms of this Agreement, the Company shall use its best efforts
to cause the Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof, but in any
event not later than the Effectiveness Deadline, and after the Effective Date,
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, subject, however, to any Allowable
Grace Period. The Company agrees to request the Commission for acceleration
of
effectiveness at 4:00 p.m. Eastern Standard Time on the Effective Date, and
by
12:00 p.m. Eastern Standard Time on the Trading Day following the Effective
Date, by filing a final Prospectus with the Commission pursuant to Rule 424
and
notifying the Holders via facsimile of effectiveness of the Registration
Statement.
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(b) If
(i)
the initial Registration Statement required to be filed by the Company pursuant
to this Agreement that covers all of the Registrable Securities is (A) not
filed
with the Commission on or before the Filing Deadline (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) (a “Filing
Failure”)
or (B)
not declared effective by the Commission on or before the Effectiveness Deadline
(an “Effectiveness
Failure”)
or
(ii) on any day during the Effectiveness Period sales of all of the Registrable
Securities cannot be made (other than during an Allowable Grace Period (as
defined in Section 3(j)) pursuant to such Registration Statement (including,
without limitation, because of a failure to keep such Registration Statement
effective, to disclose such information as is necessary for sales to be made
pursuant to such Registration Statement, or to register all of the Registrable
Securities) (a “Maintenance
Failure”)
then,
as partial relief for the damages to any Holder by reason of any such delay
in
or reduction of its ability to sell the underlying shares of Common Stock (which
remedy shall not be exclusive of any other remedies available at law or in
equity), the Company shall pay to each Holder of Registrable Securities an
amount in cash, as partial liquidated damages, equal to one percent (1%) of
the
aggregate Purchase Price that has actually been paid by such Holder in respect
of its Registrable Securities on each of the following dates: (i) on every
thirtieth day after the day of a Filing Failure (pro rated for periods totaling
less than thirty days) until such Filing Failure is cured; (ii) on every
thirtieth day after the day of an Effectiveness Failure (pro rated for periods
totaling less than thirty days) until such Effectiveness Failure is cured,
subject to adjustment as provided herein; and (iii) on every thirtieth day
after
the initial day of a Maintenance Failure (pro rated for periods totaling less
than thirty days) until such Maintenance Failure is cured; provided, however,
that the Company shall not be liable to a Holder for any such payments in excess
of 10% of the aggregate Purchase Price that has actually been paid by such
Holder in respect of its Registrable Securities. The payments to which a holder
shall be entitled pursuant to this Section 2(b) are referred to herein as
“Registration
Delay Payments.”
Registration Delay Payments shall be paid on the earlier of (I) the dates set
forth above and (II) the third Business Day after the event or failure giving
rise to the Registration Delay Payments is cured.
(c) In
the
event the number of shares available under a Registration Statement filed
pursuant to Section 2(a) when declared effective or at any time thereafter
is
insufficient to cover all of the Registrable Securities required to be covered
by such Registration Statement, the Company shall amend the applicable
Registration Statement, or file a new Registration Statement (on the short
form
available therefor, if applicable), or both, so as to cover all of the
Registrable Securities as of the Trading Day immediately preceding the date
of
the filing of such amendment or new Registration Statement, in each case, as
soon as practicable, but in any event not later than the later of: (i) sixty
(60) days after the date substantially all of the Registrable Securities
previously included in the initial Registration Statement have been sold; or
(ii) the date that is six (6) months after the Effective Date. The Company
shall
use its best efforts to cause such amendment and/or new Registration Statement
to become effective as soon as practicable following the filing
thereof.
(d) For
the
avoidance of doubt and notwithstanding anything contained herein to the
contrary, no Registration Delay Payment is payable by the Company to any
particular Holder if any such Filing Failure, Effectiveness Failure, or
Maintenance Failure, as the case may be, in relation to such Holder’s
Registrable Securities included in such Registration Statement is caused by
the
default of the obligations of the relevant Holder under this Agreement
(including, without limitation, the obligations of the Holder as set forth
in
Section 3(a) below). In addition, notwithstanding anything contained herein
to
the contrary, in the event that the Company is delinquent in filing the
Registration Statement by a period of time such that the Effectiveness Deadline
has passed and an Effectiveness Failure has occurred, so that a Registration
Delay Payment is triggered for both the Filing Failure and the Effectiveness
Failure concurrently, then the Company shall only be obligated to pay one
Registration Delay Payment for the concurrent failures, for whichever failure
results in a greater Registration Delay Payment.
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3. Registration
Procedures.
At
such
time as the Company is obligated to file a Registration Statement with the
SEC
pursuant to Section 2, the Company will use its best efforts to effect the
registration of the Registrable Securities in accordance with the intended
method of distribution thereof and, pursuant thereto, the Company shall have
the
following obligations:
(a) 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
Shareholder Questionnaire (as amended and supplemented). Each Holder agrees
to
be named in the Registration Statement and to carry out the offer and sale
of
Registrable Securities held by such Holder in a conformance with the Plan of
Distribution attached hereto as Annex
A,
as
modified by the Company as necessary to conform to comments from the Commission.
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”)
by the
end of the fifth Trading Day following the date on which such Holder receives
the Selling Shareholder Questionnaire. The Company shall ensure that each
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein,
or
necessary to make the statements therein (in the case of prospectuses, in the
light of the circumstances in which they were made) not misleading, except
to
the extent, but only to the extent, that (i) such untrue statements or omissions
are based solely upon information regarding such Holder furnished in writing
to
the Company by such Holder, its directors, authorized officers or attorneys
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
its
directors, authorized officers or attorneys expressly for use in a Registration
Statement, such Prospectus or such form of Prospectus or in any amendment or
supplement thereto. Each Holder shall ensure that its Selling Shareholder
Questionnaire furnished to the Company shall not contain any 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 not misleading.
(b) Not
less
than four Trading Days prior to the filing of each Registration Statement and
not less than two Trading Days prior to the filing of any related amendment
or
supplement thereto, the Company shall permit the Holders to review and comment
upon the Registration Statement and any amendments and supplements to all
Registration Statements (except for Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and any similar or successor
reports), and not file any Registration Statement or amendment or supplement
thereto in a form to which the Holders or their legal counsel reasonably
objects, provided that the Holders or their legal counsel shall provide the
Company with any comments within two (2) Trading Days of the receipt of the
Registration Statement and shall provide the Company with any comments within
one (1) Trading Day of the receipt of any related amendment or supplement
thereto. The Company shall furnish to the Holder, without charge, upon the
request of such Holder (i) copies of any correspondence from the Commission
or
the staff of the Commission to the Company or its representatives relating
to
any Registration Statement, (ii) promptly after the same is prepared and filed
with the Commission, one copy of any Registration Statement and any amendment(s)
thereto, including financial statements and schedules, all documents
incorporated therein by reference, if requested by a Holder and not otherwise
available on the XXXXX system, and all exhibits and (iii) upon the effectiveness
of any Registration Statement, one copy of the prospectus included in such
Registration Statement and all amendments and supplements
thereto.
5
(c)
(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, except for periods based on events described in Section 3(d), (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 promptly 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 applicable to the Company with
respect to the disposition of all Registrable Securities covered by a
Registration Statement during the applicable period in accordance 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.
(d) Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant
to clauses (ii) through (iv) 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, and in any event within three (3) Trading
Days
after the occurrence of the event requiring notice herein, (i) with respect
to a
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) 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; (iii)
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; (iv) 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; or (v) 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). Any and all of such information
contemplated by subparagraphs (i) through (v) shall remain confidential to
each
Holder until such information otherwise becomes public, unless disclosure by
a
Holder is required by law.
6
(e) 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.
(f) Furnish
to each Holder whose Registrable Securities are included in any Registration
Statement, without charge, if not otherwise available on the XXXXX system (i)
promptly after the same is prepared and filed with the Commission, at least
one
copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, if requested by a Holder, all exhibits and each preliminary
prospectus, (ii) upon the effectiveness of any Registration Statement, ten
(10)
copies of the prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such
Holder may reasonably request) and (iii) such other documents, including copies
of any preliminary or final prospectus, as such Holder may reasonably request
from time to time in order to facilitate the disposition of the Registrable
Securities owned by such Holder.
(g) Subject
to the terms of this Agreement, the Company hereby consents to the use of each
Prospectus and each amendment or supplement thereto, provided by the Company
pursuant to subpart (f) above, 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, 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 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.
7
(i) Within
two (2) Trading Days after a Registration Statement which covers Registrable
Securities is ordered effective by the Commission, deliver, or cause legal
counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Holders whose Registrable Securities are included
in such Registration Statement) confirmation that such Registration Statement
has been declared effective by the Commission. The Company shall 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 Statement, which certificates shall be free, to the extent
permitted by the Securities Act, 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 reasonably request.
(j) Upon
the
occurrence of any event contemplated by this Section 3, 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 (iv) of Section 3(d) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Company
will use its 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, provided that each period (each, a “Grace
Period”)
shall
not exceed fifteen (15) consecutive days and during any three hundred sixty
five
(365) day period such Grace Periods shall not exceed an aggregate of thirty
(30)
days and the first day of any Grace Period must be at least five (5) trading
days after the last day of any prior Grace Period (each, an “Allowable
Grace Period”).
The
Company shall notify the Holders in writing of the date on which any Grace
Period ends. For the purpose of determining the length of a Grace Period above,
the Grace Period shall begin on and include the date the Holders receive the
notice referred to above and shall end on the date the Holders receive the
notice referred to in the preceding sentence.
(k) Comply
with all applicable rules and regulations of the Commission.
(l) Prior
to
the effectiveness of the Registration Statement and all other amendments and
supplements to the Prospectus, the Company may require each selling Holder
to
furnish to the Company a certified statement as to (i) the number of shares
of
Common Stock beneficially owned by such Holder, (ii) the natural persons thereof
that have voting and dispositive control over the shares of Common Stock, and
(iii) any affiliation between the Holder and either the Company’s independent
accountants or any member of the FINRA, The Financial Industry Regulatory
Authority (formerly NASD).
8
(m) The
Company shall use its best efforts either to cause all of the Registrable
Securities covered by a Registration Statement to be listed on the primary
securities exchange or stock market on which securities of the same class or
series issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange or
stock market.
(n) The
Company agrees not to name or describe a Holder as an underwriter in the
Registration Statement, except if Holder provided its express written consent
to
such disclosure to the Company, or if such Holder is required under applicable
securities law to be described in the Registration Statement as an underwriter
or pursuant to the Commission’s comments, in which case the Company shall notify
such Holder and provide such Holder the opportunity to provide input and
response in connection with the disclosure.
(o) If
requested by a Holder, the Company shall as soon as practicable (i) incorporate
in a prospectus supplement or post-effective amendment such information as
a
Holder reasonably requests to be included therein relating to the sale and
distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering; (ii) make
all required filings of such prospectus supplement or post-effective amendment
after being notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment; and (iii) supplement or make amendments
to any Registration Statement if reasonably requested by a Holder holding any
Registrable Securities.
(p) Notwithstanding
anything contained in this Agreement, the right of any Holder to demand or
request inclusion in any registration statement hereunder shall terminate as
to
Registrable Securities held by such Holder that may be immediately sold under
Rule 144(e).
4. Registration
Expenses.
All
fees and expenses incidental 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
securities exchange or stock market on which the Common Stock is then listed
for
trading, and (B) in compliance with applicable state securities or Blue Sky
laws
reasonably agreed to by the Company in writing), (ii) printing expenses incurred
by the Company (including, without limitation, expenses of printing certificates
for Registrable Securities), (iii) messenger, telephone and delivery expenses
incurred by the Company, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance incurred by the Company, 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. The Company shall also reimburse the Holders for the
fees
and disbursements of one legal counsel for all Holders in connection with the
registrations, filings, and qualifications made pursuant to this Agreement,
which amount shall be limited to $5,000 for each Registration Statement filed
hereunder.
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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,
members, partners, 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, members, shareholders,
partners, 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
attorneys’ fees) and expenses (collectively, “Losses”),
as
incurred, arising out of or relating to (1) any 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 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, (2) any
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, except to the extent,
but
only to the extent, that (i) such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing to the
Company by such Holder, its directors, authorized officers, or attorneys
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,
its directors, authorized officers, or attorneys 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), (ii) in the case of an occurrence of an event of the type
specified in Section 3(d)(ii)-(iv), 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 7(c), or (iii) any such untrue statement,
omission or violation is directly related to and primarily the result of a
material breach of this Agreement or violation of law by Holder; or (3) any
material breach of this Agreement by the Company.
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(b) Indemnification
by Holders.
Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents, attorneys 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,
attorneys 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, (y) a material
breach of this Agreement or violation of law by Holder, or (z) 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, its
directors, authorized officers, or attorneys 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 was reviewed and expressly approved
in writing by such Holder, its directors, authorized officers, or attorneys
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)-(iv), 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 7(c). 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 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 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, 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.
11
Subject
to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party owing under this Section 5 (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.
(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 statement of a
material fact or 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.
12
6. Reports
Under the Exchange Act.
With
a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Securities Act or any other similar rule or regulation of the
Commission that may at any time permit the Holders to sell securities of the
Company to the public without registration (“Rule
144”),
the
Company agrees to, so long as any Holder owns any Shares :
(a) make
and
keep public information available, as those terms are understood and defined
in
Rule 144;
(b) file
with
the Commission in a timely manner all reports and other documents required
of
the Company under the Securities Act and the Exchange Act so long as the Company
remains subject to such requirements and the filing of such reports and other
documents is required for the applicable provisions of Rule 144;
and
(c) furnish
to each Holder so long as such Holder owns Registrable Securities, promptly
upon
request, (i) a written statement by the Company, if true, that it has complied
with the reporting requirements of Rule 144, the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, if such reports
are not available on the SEC’s XXXXX filing system and (iii) such other
information as may be reasonably requested to permit the Holders to sell such
securities pursuant to Rule 144 without registration.
7. Miscellaneous.
(a) Other
Registration Rights.
Except
for any registration statements filed or to be filed in respect of the holders
of registration rights as set forth in Schedule 3.2(v) of the Disclosure
Schedules, the Company agrees and covenants that it will not register the shares
of any other holder of its securities prior to registering the Shares until
after such time that all Registrable Shares are registered pursuant to one
or
more Registration Statements and the prospectuses forming a portion of such
Registration Statements is available for the resale of all Registrable Shares.
The Company and its security holders (other than the Holders in such capacity
pursuant hereto) designated by the Company may include securities of the Company
in the Registration Statement in addition to the Registrable Securities;
provided, however, Company agrees to limit the inclusion of, or otherwise
exclude, such securities in the Registration Statement to the extent necessary
in order to satisfy its obligations pursuant to Section 2 above or to the extent
necessary to register of all Registrable Securities as promptly as
possible.
(b) Compliance.
Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable or an exemption therefrom
to it
in connection with sales of Registrable Securities pursuant to a Registration
Statement.
13
(c) 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), 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
possible.
(d) Amendments
and Waivers.
No
provision of this Agreement may be amended or waived except in a written
instrument signed by the Company and the Holders holding not less than two
thirds of the Registrable Securities; provided,
however,
that if
any amendment or waiver operates in a manner that treats any Holder differently
from the other Holders, the consent of such Holder shall also be required for
such amendment or waiver. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be
a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right.
(e) 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 Purchase
Agreement.
(f) 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. The rights under this Agreement shall
be automatically assignable by any Holder to any transferee of such Holder’s
Registrable Securities if: (i) such Holder agrees in writing with the transferee
or assignee to assign such rights and a copy of such agreement is furnished
to
the Company promptly after such assignment; (ii) the Company is, promptly after
such transfer or assignment, furnished with written notice of (a) the name
and
address of such transferee or assignee and (b) the securities with respect
to
which such registration rights are being transferred or assigned; (iii)
immediately following such transfer or assignment the further disposition of
such securities by the transferee or assignee is restricted under the Securities
Act and applicable state securities laws; (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence the
transferee or assignee agrees in writing with the Company to be bound by all
of
the provisions contained herein; and (v) such transfer shall have been made
in
accordance with the applicable requirements of the Purchase
Agreement.
(g) No
Inconsistent Agreements.
Neither
the Company nor any of its Subsidiaries has 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
have the effect of impairing the rights granted to the Holders in this Agreement
or otherwise conflicts with the provisions hereof.
14
(h) 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.
(i) Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.
This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles
thereof. Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York located in New York County
and the United States District Court for the Southern District of New York
for
the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Agreement and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding may be served
on
each party hereto anywhere in the world by the same methods as are specified
for
the giving of notices under this Agreement. Each of the parties hereto
irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court. Each party hereto
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that
any
such suit, action or proceeding brought in any such court has been brought
in an
inconvenient forum. EACH
OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.
(j) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any other remedies
provided by law.
(k) 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.
(l) 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.
15
(m) Independent
Nature of Purchasers’ Obligations and Rights.
The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of each other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under this Agreement. Nothing contained herein or in any Transaction
Document, and no action taken by any Purchaser pursuant thereto, shall be deemed
to constitute the Purchasers as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Purchasers are
in
any way acting in concert or as a group with respect to such obligations or
the
transactions contemplated by this Agreement or any other Transaction Document.
Each Purchaser acknowledges that no other Purchaser will be acting as agent
of
such Purchaser in enforcing its rights under this Agreement. Each Purchaser
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 Purchaser to be joined as an additional party in any
proceeding for such purpose.
(n) Limitation
of Liability. Notwithstanding anything herein to the contrary, the Company
acknowledges and agrees that the liability of a Purchaser arising directly
or
indirectly, under any Transaction Document of any and every nature whatsoever
shall be satisfied solely out of the assets of such Purchaser, and that no
trustee, officer, other investment vehicle or any other Affiliate of such
Purchaser or any investor, shareholder or holder of shares of beneficial
interest of such a Purchaser shall be personally liable for any liabilities
of
such Purchaser .
[Signature
Page Follows]
16
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
|
By:
|
|
|
Name:
Xxxxxx Xxxx
|
|
|
Title:
Chief Executive Officer
|
|
17
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
|
PURCHASER
|
|
|
Name
of Purchaser
|
|
|
Signature
of Purchaser or by Authorized Person executing for
Purchaser
|
|
|
Printed Name:
|
|
|
Title:
|
|
|
Its:
|
|
|
(Printed
Name of Authorized Person and Title
for Person executing for
Purchaser)
|
|
18
ANNEX
A
Plan
of Distribution
The
selling stockholders 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
prices, at prevailing market prices at the time of the sale, at varying prices
determined at the time of sale, or at 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 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;
|
|
·
|
short
sales;
|
|
·
|
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.
The
selling stockholders may also engage in puts and calls and other transactions
in
our securities or derivatives of our securities and may sell or deliver shares
in connection with these trades.
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. Any profits on the
resale of shares of common stock by a broker-dealer acting as principal might
be
deemed to be underwriting discounts or commissions under the Securities Act.
Discounts, concessions, commissions and similar selling expenses, if any,
attributable to the sale of shares will be borne by a selling stockholder.
The
selling stockholders may agree to indemnify any agent, dealer or broker-dealer
that participates in transactions involving sales of the shares if liabilities
are imposed on that person under the Securities Act. In connection with sales
of
the shares of common stock or otherwise, the selling stockholders may enter
into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of common stock in the course of hedging in positions they
assume. The selling stockholders may also sell shares of common stock short
and
deliver shares of common stock covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short sales.
The
selling stockholders may also loan or pledge shares of common stock to
broker-dealers that in turn may sell such shares.
19
The
selling stockholders may from time to time pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time under this
prospectus after we have filed a supplement 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.
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
and may sell the shares of common stock from time to time under this prospectus
after we have filed a supplement 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.
The
selling stockholders and any broker-dealers or agents that are involved in
selling the shares of common stock 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 of common stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
We
are
required to pay all fees and expenses incident to the registration of the shares
of common stock. We have agreed to indemnify the selling stockholders against
certain claims, damages and liabilities, including liabilities under the
Securities Act.
The
selling stockholders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating broker acting in connection with a proposed
sale
of shares of common stock by any selling stockholder. If we are notified by
any
selling stockholder that any material arrangement has been entered into with
a
broker-dealer for the sale of shares of common stock, if required, we will
file
a supplement to this prospectus. If the selling stockholders use this prospectus
for any sale of the shares of common stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
20
Under
the
securities laws of some states, the shares of common stock may be sold in such
states only through registered or licensed brokers or dealers. In addition,
in
some states the shares of common stock may not be sold unless such shares have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
There
can
be no assurance that any selling stockholder will sell any or all of the shares
of common stock registered pursuant to the shelf registration statement, of
which this prospectus forms a part.
The
selling stockholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of
1934,
as amended, and the rules and regulations thereunder, including, without
limitation, Regulation M of the Exchange Act, which may limit the timing of
purchases and sales of any of the shares of common stock by the selling
stockholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common
stock. All of the foregoing may affect the marketability of the shares of common
stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.
Once
sold
under the shelf registration statement, of which this prospectus forms a part,
the shares of common stock will be freely tradable in the hands of persons
other
than our affiliates.
21
ANNEX
B
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of common stock, par value $0.00001 per share
(the
“Common
Stock”),
of
Harbin Electric, Inc., a Nevada corporation (the “Company”),
(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 (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 June 24, 2008 (the “Registration
Rights Agreement”),
among
the Company and the Holders 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.
22
The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
QUESTIONNAIRE
1. Name.
| (a) |
Full
Legal Name of Selling
Securityholder
|
|
(b)
|
Full
Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are
held:
|
|
(c)
|
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):
|
|
2.
|
Address
for Notices to Selling
Securityholder:
|
|
Telephone:
|
|
|
Contact Person:
|
|
3.
|
Beneficial
Ownership of Registrable
Securities:
|
| (a) |
Type
and Number of Registrable Securities beneficially
owned:
|
23
|
4.
|
Broker-Dealer
Status:
|
|
(a)
|
Are
you a broker-dealer?
|
Yes
o No
o
|
(b)
|
If
“yes” to Section 4(a), did you receive your Registrable Securities as
compensation for investment banking services to the
Company.
|
Yes
o No
o
|
Note:
|
If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
|
(c)
|
Are
you an affiliate of a
broker-dealer?
|
Yes
o No
o
|
(d)
|
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?
|
Yes
o No
o
|
Note:
|
If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
|
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.
|
(a)
|
Type
and Amount of Other Securities beneficially owned by the Selling
Securityholder:
|
24
|
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:
|
7.
|
Relationships
with the Company’s Independent
Accountant:
|
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’s independent accountants, Xxxxx
Xxxxxxxx Xxxxx Xxxxxx and Xxxxxx, LLP (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 7 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.
25
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.
|
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:
Xxxx
Xxxxxx, Esq.
Loeb
& Loeb LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Fax:
(000) 000-0000
26
