REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of June 10, 2008, between PERF-GO GREEN Holdings, Inc., a Delaware
corporation (the "Company") and each of the several purchasers signatory hereto
(each such purchaser, a "Purchaser" and, collectively, the "Purchasers").
This Agreement is made pursuant to the Subscription Agreement, dated as of
the date hereof, between the Company and each Purchaser (the "Purchase
Agreement").
The Company and each Purchaser hereby 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 6(d).
"Effectiveness Date" means, with respect to the Initial
Registration Statement required to be filed hereunder, the 120th
calendar day following the date the Initial Registration Statement is
required to be filed hereunder and with respect to any additional
Registration Statements which may be required pursuant to Section
3(c), the 60th calendar day following the date on which the Company
first knows, or reasonably should have known, that such additional
Registration Statement is required to be filed hereunder; provided,
however, that in the event the Company is notified by the Commission
that one or more of the above Registration Statements will not be
reviewed or is no longer subject to further review and comments, the
Effectiveness Date as to such Registration Statement shall be the
fifth Trading Day following the date on which the Company is so
notified if such date precedes the dates otherwise required above.
"Effectiveness Period" shall have the meaning set forth in
Section 2(a).
"Event" shall have the meaning set forth in Section 2(b).
"Event Date" shall have the meaning set forth in Section 2(b).
"Filing Date" means, with respect to the Initial Registration
Statement required hereunder, the 60th calendar day following the date
hereof and, with respect to any additional Registration Statements
which may be required pursuant to Section 3(c), the 45th day following
the date on which the Company first knows, or reasonably should have
known that such additional Registration Statement is required
hereunder.
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"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).
"Initial Registration Statement" means the initial Registration
Statement filed pursuant to this Agreement.
"Initial Shares" means a number of shares of Common Stock equal
to one-third of the number of shares of Common Stock issued and
outstanding and held by non-affiliates of the Company immediately
prior to the filing date of the Initial Registration Statement.
"Losses" shall have the meaning set forth in Section 5(a).
"Prospectus" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes
any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering
of any portion of the Registrable Securities covered by a Registration
Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such
Prospectus.
"Registrable Securities" means (i) all of the shares of Common
Stock issuable upon conversion in full of the Notes (assuming on the
date of determination the Notes are converted in full without regard
to any conversion limitations therein), (ii) all shares of Common
Stock issuable as interest or principal on the Notes assuming all
permissible interest and principal payments are made in shares of
Common Stock and the Notes are held until maturity, (iii) all shares
of Common Stock issuable upon exercise of the Warrants ("Warrant
Shares") (assuming on the date of determination the Warrants are
exercised in full without regard to any exercise limitations therein),
(iv) any additional shares of Common Stock issuable in connection with
any anti-dilution provisions in the Notes or the Warrants (in each
case, without giving effect to any limitations on conversion set forth
in the Notes or limitations on exercise set forth in the Warrant) and
(v) any securities issued or issuable upon any stock split, dividend
or other distribution, recapitalization or similar event with respect
to the foregoing.
"Registration Statement" means the registration statement
required to be filed hereunder and any additional registration
statements contemplated by Section 3(c), including (in each case) the
Prospectus, amendments and supplements to such registration statement
or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
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"Rule 415" means Rule 415 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended or interpreted 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 or interpreted 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).
"SEC Guidance" means (i) any publicly-available written or oral
guidance, comments, requirements or requests of the Commission staff
and (ii) the Securities Act.
2. Shelf Registration
(a) On or prior to each Filing Date, the Company shall prepare and file
with the Commission a Registration Statement covering the resale of all or such
portion of the Registrable Securities as permitted by SEC Guidance (provided
that the Company shall use diligent efforts to advocate with the Commission for
the registration of all of the Registrable Securities in accordance with the SEC
Guidance, including without limitation, the Manual of Publicly Available
Telephone Interpretations D.29) that are not then registered on an effective
Registration Statement 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, it being understood that the Initial Registration
Statement filed hereunder shall be on Form S-1). If the number of shares
registered in the Initial Registration Statement is less than the total number
of Registrable Securities, the balance will be registered in a second
registration statement and any necessary subsequent registration statements as
soon as permitted by SEC Guidance. And, in the event that any Registrable
Securities are excluded from the Registration Statement due to the
interpretation of Rule 415, the Registrable Securities included in each
registration statement shall be allocated among all investors pro rata based on
the total number of Registrable Securities proposed to be included in the
registration statements. Subject to the terms of this Agreement, the Company
shall use its reasonably best efforts to cause a Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event prior to the applicable Effectiveness Date, and
shall use its reasonably 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, disposed of or cancelled,
or, in the case the Company is not and has never been an issuer identified in
Rule 144(i)(1), may be sold without the requirement to be in compliance with
Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule
144 (or any successor thereto) promulgated under the 1933 Act ("Rule 144"), as
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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"). Following notification that there
will be no review or the SEC has no further comments on the Initial Registration
Statement or any subsequent registration statements (as the case may be), the
Company shall use its best efforts to request with the Commission an
acceleration of the effective date of the Registration Statement to within ten
(10) days of such notification. The Company shall telephonically request
effectiveness of a Registration Statement as of 5:00 p.m. New York City time on
a Trading Day. The Company shall immediately notify the Holders via facsimile or
by e-mail delivery of a ".pdf" format data file of the effectiveness of a
Registration Statement on the same Trading Day that the Company telephonically
confirms effectiveness with the Commission, which shall be the date requested
for effectiveness of a Registration Statement. The Company shall, by 9:30 a.m.
New York City time on the Trading Day after the Effective Date, file a final
Prospectus with the Commission as required by Rule 424. Failure to so notify the
Holder within 1 Trading Day of such notification of effectiveness or failure to
file a final Prospectus as foresaid shall be deemed an Event under Section 2(b).
Notwithstanding any other provision of this Agreement and subject to the payment
of liquidated damages in Section 2(b), if any SEC Guidance sets forth a
limitation of the number of Registrable Securities permitted to be registered on
a particular Registration Statement (and notwithstanding that the Company used
diligent efforts to advocate with the Commission for the registration of all or
a greater number of Registrable Securities), unless otherwise directed in
writing by a Holder as to its Registrable Securities, the number of Registrable
Securities to be registered on such Registration Statement will first be reduced
by Registrable Securities represented by Warrant Shares (applied, in the case
that some Warrant Shares may be registered, to the Holders on a pro rata basis
based on the total number of unregistered Warrant Shares held by such Holders),
and second by Registrable Securities represented by Conversion Shares (applied,
in the case that some Conversion Shares may be registered, to the Holders on a
pro rata basis based on the total number of unregistered Conversion Shares held
by such Holders) until such amount of Registrable Securities is acceptable to
the Commission.
(b) If (i) the Initial Registration Statement is not filed on or prior to
its Filing Date (if the Company files the Initial Registration Statement without
affording the Holders the opportunity to review and comment on the same as
required by Section 3(a) herein, the Company shall be deemed to have not
satisfied this clause (i)), or (ii) the Company fails to file with the
Commission a request for acceleration of a Registration Statement in accordance
with Rule 461 promulgated under the Securities Act, within 10 Trading Days of
the date that the Company is notified (orally or in writing, whichever is
earlier) by the Commission that such Registration Statement will not be
"reviewed" or not be subject to further review, or (iii) prior to the
Effectiveness Date of a Registration Statement, the Company fails to file a
pre-effective amendment and otherwise respond in writing to comments made by the
Commission in respect of such Registration Statement within 10 Trading Days
after the receipt of comments by or notice from the Commission that such
amendment is required in order for such Registration Statement to be declared
effective, or (iv) as to, in the aggregate among all Holders on a pro-rata basis
based on their purchase of the Securities pursuant to the Purchase Agreement, a
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Registration Statement registering for resale all of the Initial Shares is not
declared effective by the Commission by the Effectiveness Date of the Initial
Registration Statement, or (v) all of the Registrable Securities are not
registered for resale pursuant to one or more effective Registration Statements
on or before ______________, or (vi) after the Effectiveness Date of a
Registration Statement, such Registration Statement ceases for any reason to
remain continuously effective as to all Registrable Securities included in such
Registration Statement, or the Holders are otherwise not permitted to utilize
the Prospectus therein to resell such Registrable Securities, for more than 10
consecutive calendar days or more than an aggregate of 15 calendar days during
any 12-month period (which need not be consecutive calendar days) or if there
are less than 5 Trading Days between any such periods (any such failure or
breach being referred to as an "Event", and for purposes of clause (i), (iv) or
(v) the date on which such Event occurs, or for purposes of clause (ii) the date
on which such five Trading Day period is exceeded, or for purposes of clause
(iii) the date which such 10 calendar day period is exceeded, or for purposes of
clause (vi) the date on which such 10 or 15 calendar day period, as applicable,
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 1.25% of the aggregate
purchase price paid by such Holder pursuant to the Purchase Agreement for any
unregistered Registrable Securities then held by such Holder. The parties agree
that (1) the Company shall not be liable for liquidated damages under this
Agreement with respect to any Warrants or Warrant Shares and (2) the maximum
aggregate liquidated damages payable to a Holder under this Agreement shall be
15% of the aggregate Subscription Amount paid by such Holder pursuant 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. . In the event the Company fails to make the partial
liquidated damages payments in a timely manner, such payments shall bear
interest at the rate of twelve percent (12%) per annum until paid in full.
3. Registration Procedures.
In connection with the Company's registration obligations hereunder, the
Company shall:
(a) Not less than 5 Trading Days prior to the filing of each Registration
Statement and not less than one Trading Day prior to the filing of any related
Prospectus or any amendment or supplement thereto (including any document that
would be incorporated or deemed to be incorporated therein by reference), the
Company shall (i) furnish to each Holder copies of all such documents proposed
to be filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Holders and
(ii) cause its officers and directors, counsel and independent certified public
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accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel to each Holder, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities shall reasonably object in good faith, provided that the Company is
notified of such objection in writing no later than 5 Trading Days after the
Holders have been so furnished copies of a Registration Statement or 1 Trading
Day after the Holders have been so furnished copies of any related Prospectus or
amendments or supplements thereto. Each Holder agrees to furnish to the Company
a completed questionnaire in the form attached to this Agreement as Annex A (a
"Selling Shareholder Questionnaire") not less than two Trading -------
----------------------------------- Days prior to the Filing Date or by the end
of the fourth Trading Day following the date on which such Holder receives draft
materials in accordance with this Section.
(b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to a Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep a Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act
all of the Registrable Securities; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement (subject to the
terms of this Agreement), and, as so supplemented or amended, to be filed
pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any
comments received from the Commission with respect to a Registration Statement
or any amendment thereto and provide as promptly as reasonably possible to the
Holders true and complete copies of all correspondence from and to the
Commission relating to a Registration Statement (provided that the Company must
excise any information contained therein which would constitute material
non-public information as to any Holder which has not executed a confidentiality
agreement with the Company); and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement
during the applicable period in accordance (subject to the terms of this
Agreement) with the intended methods of disposition by the Holders thereof set
forth in such Registration Statement as so amended or in such Prospectus as so
supplemented.
(c) If during the Effectiveness Period, the number of Registrable
Securities at any time exceeds 100% of the number of shares of Common Stock then
registered in a Registration Statement, then the Company shall file as soon as
reasonably practicable, but in any case prior to the applicable Filing Date, an
additional Registration Statement covering the resale by the Holders of not less
than the number of such Registrable Securities.
(d) Notify the Holders of Registrable Securities to be sold (which notice
shall, pursuant to clauses (iii) through (vi) 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 the case of (i)(A)
below, not less than one Trading Day prior to such filing) and (if requested by
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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; and (C) with respect to a 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 or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose, except that
the Company shall not disclose any information that is causing the suspension if
it would require the disclosure of material non-public information, unless the
investor agrees in writing to receive the material non-public information; (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, except that the Company shall not disclose any
information that is causing the suspension if it would require the disclosure of
material non-public information, unless the investor agrees in writing to
receive the material non-public information; (v) of the occurrence of any event
or passage of time that makes the financial statements included in a
Registration Statement ineligible for inclusion therein or any statement made in
a Registration Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and (vi) of the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may
be material and that, in the determination of the Company, makes it not in the
best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided that any and all of such information shall
remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided, further,
that notwithstanding each Holder's agreement to keep such information
confidential, each such Holder makes no acknowledgement that any such
information is material, non-public information.
(e) Use its best efforts to avoid the issuance of, or, if issued, obtain
the withdrawal of (i) any order stopping or 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.
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(f) Furnish to each Holder, without charge, at least one conformed copy of
each such Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person, and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that any such item which is available
on the XXXXX system need not be furnished in physical form.
(g) Subject to the terms of this Agreement, the Company hereby consents to
the use of such Prospectus and each amendment or supplement thereto by each of
the selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto,
except after the giving of any notice pursuant to Section 3(d).
(h) The Company shall effect a filing with respect to the public offering
contemplated by each Registration Statement (an "Issuer Filing") with the
Financial Industry Regulatory Authority, Inc. ("FINRA") Corporate Financing
Department pursuant to FINRA Rule 2710(b)(10)(A)(i) within one Trading Day of
the date that the Registration Statement is first filed with the Commission and
pay the filing fee required by such Issuer Filing. The Company shall use
reasonably best efforts to pursue the Issuer Filing until the FINRA issues a
letter confirming that it does not object to the terms of the offering
contemplated by the Registration Statement. A copy of the Issuer Filing and all
related correspondence to or from the FINRA with respect thereto shall be
provided to FWS.
(i) Prior to any resale of Registrable Securities by a Holder, use its
reasonably best efforts to register or qualify or cooperate with the selling
Holders in connection with the registration or qualification (or exemption from
the Registration or qualification) of such Registrable Securities for the resale
by the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by each Registration Statement; provided, that the Company
shall not be required to qualify generally to do business 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.
(j) If requested by a Holder, cooperate with such Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement,
which certificates shall be free, to the extent permitted by the 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 Holder may
request.
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(k) Upon the occurrence of any event contemplated by Section 3(d), 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
(iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holders
shall suspend use of such Prospectus. The Company will use its best commercial
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(k) to suspend the availability of a Registration Statement and
Prospectus, subject to the payment of partial liquidated damages otherwise
required pursuant to Section 2(b), for a period not to exceed 40 calendar days
(which need not be consecutive days) in any 12 month period.
(l) Comply with all applicable rules and regulations of the Commission.
(m) The Company may require each selling Holder to furnish to the Company a
certified statement as to the number of shares of Common Stock beneficially
owned by such Holder and, if required by the Commission, the natural persons
thereof that have voting and dispositive control over the shares. During any
periods that the Company is unable to meet its obligations hereunder with
respect to the registration of the Registrable Securities solely because any
Holder fails to furnish such information within three Trading Days of the
Company's request, any liquidated damages that are accruing at such time as to
such Holder only shall be tolled and any Event that may otherwise occur solely
because of such delay shall be suspended as to such Holder only, until such
information is delivered to the Company.
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 of the Company's counsel and
auditors) (A) with respect to filings made with the Commission, (B) with respect
to filings required to be made with any Trading Market on which the Common Stock
is then listed for trading, (C) in compliance with applicable state securities
or Blue Sky laws reasonably agreed to by the Company in writing (including,
without limitation, fees and disbursements of counsel for the Company in
connection with Blue Sky qualifications or exemptions of the Registrable
Securities) and (D) if not previously paid by the Company in connection with an
Issuer Filing, with respect to any filing that may be required to be made by any
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broker through which a Holder intends to make sales of Registrable Securities
with the FINRA pursuant to FINRA Rule 2710, so long as the broker is receiving
no more than a customary brokerage commission in connection with such sale, (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company, (v)
Securities Act liability insurance, if the Company so desires such insurance,
and (vi) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Agreement. In addition, the Company shall be responsible for all of its internal
expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange as
required hereunder. In no event shall the Company be responsible for any broker
or similar commissions of any Holder or, except to the extent provided for in
the Transaction Documents, any legal fees or other costs of the Holders.
The Company shall also reimburse the Holders for the fees and disbursements
of its legal counsel in connection with registration, filing or qualification
pursuant to this Agreement not to exceed $5,000 in the aggregate to all Holders
holding more than $2,000,000 in Notes.
5. Indemnification.
(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, members, partners, agents, brokers (including brokers who
offer and sell Registrable Securities as principal as a result of a pledge or
any failure to perform under a margin call of Common Stock), investment advisors
and employees (and any other Persons with a functionally equivalent role of a
Person holding such titles, notwithstanding a lack of such title or any other
title) of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, members, shareholders, partners, agents and
employees (and any other Persons with a functionally equivalent role of a Person
holding such titles, notwithstanding a lack of such title or any other title) of
each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or ------ relating to (1)
any untrue or alleged untrue statement of a material fact contained in a
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, (2) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or any state securities law, or
any rule or regulation thereunder, in connection with the performance of its
obligations under this Agreement or (3) any violation of this Agreement, except
to the extent, but only to the extent, that (i) such untrue statements or
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omissions are based 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 a Registration Statement, such
Prospectus or in any amendment or supplement thereto (it being understood that
the Holder has approved Annex A hereto for this purpose) or (ii) in the case of
an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the
use by such Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice contemplated in Section 6(d).
The Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding arising from or in connection with the transactions
contemplated by this Agreement of which the Company is aware. The foregoing
indemnity agreement is subject to the condition that, insofar as it related to
any untrue statement, omission or alleged omission made in any preliminary
prospectus but eliminated or remedied in the final prospectus (filed pursuant to
Rule 424 of the Securities Act), such indemnity agreement shall not inure to the
benefit of any Holder, underwriter, broker or other person acting on behalf of
Holders of the Restricted Shares from whom the person asserting any loss, claim
damage, liability or expense purchased the Restricted Shares which are the
subject thereof, if a copy of such final prospectus had been made available to
such person and such Holder, underwriter, broker or other person acting on
behalf of holders of the Registrable Shares and such final prospectus was not
delivered to such person with or prior to the written confirmation of the sale
of such Registrable Shares to such person.
(b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, to the extent arising out of or based solely upon any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading (i) to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so
furnished in writing by such Holder to the Company specifically for inclusion in
such Registration Statement or such Prospectus or (ii) to the extent that such
information relates to such Holder's proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in a Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose), such Prospectus
or in any amendment or supplement thereto or (ii) in the case of an occurrence
of an event of the type specified in Section 3(d)(iii)-(vi), the use by such
Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior to
the receipt by such Holder of the Advice contemplated in Section 6(d). In no
11
event shall the liability of any selling Holder hereunder be greater in amount
than the dollar amount of the net proceeds received by such Holder upon the sale
of the Registrable Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have prejudiced
the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and counsel to the
Indemnified Party shall reasonably believe that a material conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and the reasonable fees and expenses of no
more than one separate counsel shall be at the expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, which consent shall not be
unreasonably withheld or delayed. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.
Subject to the terms of this Agreement, all reasonable fees and expenses of
the Indemnified Party (including reasonable fees and expenses to the extent
incurred in connection with investigating or preparing to defend such Proceeding
in a manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is judicially
determined to be not entitled to indemnification hereunder.
12
(d) Contribution. If the indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party shall contribute to the
amount paid or payable by such Indemnified Party, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys' or
other fees or expenses incurred by such party in connection with any Proceeding
to the extent such party would have been indemnified for such fees or expenses
if the indemnification provided for in this Section was available to such party
in accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
net 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
the 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.
6. Miscellaneous.
(a) Representations and Covenants. The Company hereby represents and
covenants that:
a. Neither it nor any subsidiary of the Company or affiliate thereof
shall identify any Holder as an underwriter in any public
disclosure or filing with the SEC or any securities exchange or
market and any Holder being deemed an underwriter by the SEC
shall not relieve the Company of any obligations it has under
this Agreement or any other Transaction Document (as defined in
the Subscription Agreement)in the event that any Purchaser shall
be deemed an underwriter, such Purchaser shall have the right to
13
inspect the Company's books and records within 5 days of such
Purchaser providing written notice of its intent to do so;
b. it shall file an amendment to any registration statement if any
Purchaser requests that any information contained in such
registration statement be amended; with a view to making
available to the Holders the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the
SEC 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:
(1) make and keep public information available, as those terms
are understood and defined in Rule 144;
(2) file with the SEC, in a timely manner, all reports and other
documents required of the Company under the 1933 Act and the 1934
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
(3) 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 1933 Act and the 1934
Act, (ii) a copy of the most recent annual report of the Company
and such other reports and documents so filed by the Company and
(iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144
without registration.
(b) Remedies. In the event of a breach by the Company or by a Holder of any
of their respective obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
shall be entitled to specific performance of its rights under this Agreement.
The Company and each Holder agree that monetary damages would not provide
adequate compensation for any losses incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event
of any action for specific performance in respect of such breach, it shall not
assert or shall waive the defense that a remedy at law would be adequate.
(c) No Piggyback on Registrations. Except for securities to be registered
by the Company on Form S-8, 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 any Registration Statements other than the Registrable
Securities. The Company shall not file any other registration statements until
all Registrable Securities are registered pursuant to a Registration Statement
that is declared effective by the Commission, provided that this Section 6(b)
shall not prohibit the Company from filing amendments to registration statements
filed prior to the date of this Agreement except that no such amendment shall
14
increase the number of shares being registered pursuant to such registration
statement.
(d) Compliance. Each Holder covenants and agrees that it will comply with
the prospectus delivery requirements, if any, of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
a Registration Statement.
(e) Discontinued Disposition. By its acquisition of Registrable Securities,
each Holder agrees that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(d)(iii) through (vi),
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
reasonable best efforts to ensure that the use of the Prospectus may be resumed
as promptly as it practicable. The Company agrees and acknowledges that any
periods during which the Holder is required to discontinue the disposition of
the Registrable Securities hereunder shall be subject to the provisions of
Section 2(b).
(f) Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with the Company's stock option or
other employee benefit plans, then the Company shall send to each Holder a
written notice of such determination and, if within fifteen days after the date
of such notice, any such Holder shall so request in writing, the Company shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered, subject to customary
underwriter cutbacks applicable to all holders of registration rights; provided,
however, that the Company shall not be required to register any Registrable
Securities pursuant to this Section 6(e) that are eligible for resale pursuant
to Rule 144 promulgated under the Securities Act or that are the subject of a
then effective Registration Statement.
(g) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the Holders of
a majority of the then outstanding Registrable Securities (including, for this
purpose any Registrable Securities issuable upon exercise or conversion of any
Security). If a Registration Statement does not register all of the Registrable
Securities pursuant to a waiver or amendment done in compliance with the
previous sentence, then the number of Registrable Securities to be registered
for each Holder shall be reduced pro rata among all Holders and each Holder
shall have the right to designate which of its Registrable Securities shall be
omitted from such Registration Statement. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
15
that relates exclusively to the rights of some Holders and that does not
directly or indirectly affect the rights of other Holders may be given by
Holders of all of the Registrable Securities to which such waiver or consent
relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the first sentence of this Section 6(f).
(h) 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.
(i) 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
(except by merger) its rights or obligations hereunder without the prior written
consent of all of the Holders of the then-outstanding Registrable Securities.
Each Holder may assign their respective rights hereunder in the manner and to
the Persons as permitted under the Purchase Agreement.
(j) 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. Except as set forth on Schedule 6(i),
neither the Company nor any of its subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been satisfied in full.
(k) 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.
(l) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Purchase Agreement.
(m) Cumulative Remedies. The remedies provided herein are cumulative and
not exclusive of any other remedies provided by law.
(n) 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 reasonably best 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
16
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.
(o) Headings. The headings in this Agreement are for convenience only, do
not constitute a part of the Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
(p) Independent Nature of Holders' Obligations and Rights. The obligations
of each Holder hereunder are several and not joint with the obligations of any
other Holder hereunder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder hereunder. Nothing contained
herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto or thereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Holders are in any way
acting in concert with respect to such obligations or the transactions
contemplated by this Agreement. Each Holder shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose.
********************
17
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
PERF GO GREEN HOLDINGS, INC.
By:________________________________________
Name:
Title:
[SIGNATURE PAGE OF HOLDERS FOLLOWS]
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[SIGNATURE PAGE OF HOLDERS TO RRA]
Name of Holder: __________________________
Signature of Authorized Signatory of Holder: __________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________
[SIGNATURE PAGES CONTINUE]
19
Annex A
PERF-GO GREEN HOLDINGS, INC.
Selling Securityholder Notice and Questionnaire
The undersigned beneficial owner of common stock (the "Registrable
Securities") of PERF-GO GREEN Holdings, Inc., a Delaware corporation (the
"Company"), understands that the Company has filed or intends to file with the
Securities and Exchange Commission (the "Commission") a registration statement
(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 (the "Registration Rights Agreement") to which this document is
annexed. 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 in the Registration Statement.
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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 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:
----------------------------------------------------------------------
Fax:
----------------------------------------------------------------------------
Contact Person:
-----------------------------------------------------------------
3. Broker-Dealer Status:
(a) Are you a broker-dealer?
Yes [ ] No [ ]
(b) If "yes" to Section 3(a), did you receive your Registrable
Securities as compensation for investment banking services to the
Company.
Yes [ ] No [ ]
Note: If no, the Commission's staff has indicated that you should be
identified as an underwriter in the Registration Statement.
21
(c) Are you an affiliate of a broker-dealer?
Yes [ ] No [ ]
(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 [ ] No [ ]
Note: If no, the Commission's staff has indicated that you should be
identified as an underwriter in the Registration Statement.
4. Beneficial Ownership of Securities of the Company Owned by the Selling
Securityholder.
Except as set forth below in this Item 4, the undersigned is not the
beneficial or registered owner of any securities of the Company other than
the securities issuable pursuant to the Purchase Agreement.
(a) Type and Amount of other securities beneficially owned by the Selling
Securityholder:
----------------------------------------------------------------------
----------------------------------------------------------------------
22
5. Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (owners of 5%
of more of the equity securities of the undersigned) has held any position
or office or has had any other material relationship with the Company (or
its predecessors or affiliates) during the past three years.
State any exceptions here:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
The undersigned agrees to promptly notify the Company of any inaccuracies
or changes in the information provided herein that may occur subsequent to the
date hereof at any time while the Registration Statement remains effective.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to Items 1 through 5 and the
inclusion of such information in the Registration Statement and the related
prospectus and any amendments or supplements thereto. The undersigned
understands that such information will be relied upon by the Company in
connection with the preparation or amendment of the Registration Statement and
the related prospectus.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.
Dated: Beneficial Owner:
--------------- -------------------------
By:
---------------------------------------
Name:
Title:
PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:
23
