REGISTRATION RIGHTS AGREEMENT
Exhibit 10.2
This
Registration Rights Agreement (this “Agreement”) is made
and entered into as of April 27, 2010, by and among Eco Building International,
a Nevada corporation (the “Company”) and each of
the several purchasers signatory hereto (each such purchaser, a “Purchaser” and,
collectively, the “Purchasers”).
This
Agreement is being entered into pursuant to the Securities Purchase Agreement,
dated as of the date hereof, between the Company and each Purchaser (the “Purchase
Agreement”).
The
Company and each Purchaser hereby agrees as follows:
1. Definitions
Capitalized terms used and not
otherwise defined herein that are defined in the 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).
“Commission” means the
Securities and Exchange Commission.
“Common Stock” means
the Common Stock, $0.001 par value per share, of the Company and any other
Common Stock into which such stock may hereafter be changed.
“Conversion Shares”
means the shares of Common Stock issuable upon conversion of outstanding shares
of Preferred Shares.
“Effectiveness Date”
means, with respect to the Initial Registration Statement required to be filed
hereunder, the 150th
calendar day following the date hereof (or, in the event the Company receives a
“full review” of its Initial Registration Statement by the Commission, the
180th
calendar day following the date hereof) 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 an 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
earliest practical date on which the Company is permitted by SEC Guidance to
file such additional Registration Statement related to the Registrable
Securities.
“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).
“Initial Registration
Statement” means the initial Registration Statement covering the
Registrable Securities filed pursuant to Section 2(a) of this
Agreement.
“Losses” shall have
the meaning set forth in Section 5(a).
“Maxim Warrants” means
the warrants issued by the Company to Maxim Group LLP, as placement agent,
and/or its employees.
“National Stock
Exchange” means, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market, the American Stock Exchange or the New York Stock
Exchange.
"Person" means an
individual or a corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or political subdivision thereof) or other entity of
any kind.
“Plan of Distribution”
shall have the meaning set forth in Section 2(a).
“Preferred Shares”
means shares of the Company’s Series A Convertible Preferred Stock, par value
$0.001 per share, purchased by the Purchasers pursuant to the Purchase
Agreement.
"Proceeding" means an
action, claim, suit, investigation or proceeding (including, without limitation,
an informal investigation or partial proceeding, such as a deposition), whether
commenced or threatened.
“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 by the Commission pursuant to 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 (a) all of the Conversion Shares, (b) all Warrant
Shares, (c) any additional shares of Common Stock issuable in connection with
any anti-dilution provisions in the Series A Certificate of Designation or the
Warrants, (d) the shares of Common Stock underlying the Maxim Warrants; and (e)
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 any registration statement required to be filed
hereunder pursuant to Section 2(a) and any additional registration statements
contemplated by Section 3(c), including (in each case) the Prospectus,
amendments and supplements to any 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
any such registration statement.
“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.
“SEC Guidance” means
(i) any publicly-available written or oral guidance, comments, requirements or
requests of the Commission staff, including the SEC’s Manual of Publicly
Available Telephone Interpretations D.29, and (ii) the Securities
Act.
“Trading Day” means
(a) a day on which the Common Stock is traded on a National Stock Exchange, or
(b) if the Common Stock is not traded on a National Stock Exchange, a day on
which the Common Stock is quoted in the over-the-counter market as reported by
the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding its functions of reporting prices); provided, however , that in the
event that the Common Stock is not listed or quoted as set forth in (a) or (b)
hereof, then Trading Day shall mean any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.
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 of the Registrable Securities
that are not then registered on an effective Registration Statement for an
offering to be made on a continuous basis. Each Registration Statement filed
hereunder shall be on Form S-3 (except if the Company is not then eligible to
register for resale the Registrable Securities on Form S-3, in which case such
registration shall be on another appropriate form in accordance herewith) and
shall contain (unless otherwise directed by at least an 85% majority in interest
of the Holders) substantially the “Plan of Distribution”
attached hereto as Annex A. In the event
that the Commission does not permit the Company to register in any Registration
Statement all of the Registrable Securities pursuant to Rule 415 (or other
applicable Commission Guidance or rule adopted by the Commission), the Company
shall amend such Registration Statement to register such maximum portion 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. Subject to
the terms of this Agreement, the Company shall use its best efforts to cause a
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event prior to the
applicable Effectiveness Date, and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act until all
Registrable Securities covered by such Registration Statement have been sold, or
may be sold without volume or manner-of-sale restrictions pursuant to Rule 144
and, without the requirement for the Company to be in compliance with the
current public information requirement under Rule 144, as determined by the
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Transfer Agent and the affected Holders (the
“Effectiveness
Period”). The Company shall submit a request for acceleration of
effectiveness of a Registration Statement as of 5:00 p.m. New York City time on
or before the fifth Trading Day following the Commission’s notice to the Company
that the Commission will not be reviewing the Registration Statement. The
Company shall immediately notify the Holders by e-mail of the effectiveness of a
Registration Statement on the same Trading Day that the Company telephonically
confirms effectiveness with the Commission. The Company shall, by 9:30 a.m. New
York City time on the Trading Day after the effective date of such Registration
Statement, file a final Prospectus with the Commission as required by Rule 424.
Failure to so notify the Holders within one (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 pursuant to Section
2(b)(iii), if any SEC Guidance sets forth a limitation on 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 portion 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 be reduced in the following
order; (1) by the total number of shares underlying the Maxim Warrants, on a
pro-rata basis, and (2) pro-rata among all other Holders, and 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 the Warrant Shares
(applied, in the case that some Warrant Shares may already 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 the Conversion Shares (applied, in the case that some Conversion Shares may
already be registered, to the Holders on a pro rata basis based on the total
number of unregistered Shares held by such Holders).
(b) If:
(i) the Initial Registration Statement is not filed on or prior to its Filing
Date, or (ii) the Company fails to file with the Commission a request for
acceleration of a Registration Statement in accordance with Rule 461 promulgated
by the Commission pursuant to the Securities Act, within five 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 will not be subject to further review, or (iii) the Registration
Statement registering for resale all of the Registrable Securities is not
declared effective by the Commission by the Effectiveness Date of the Initial
Registration Statement, or (iv) after the effective 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 (subject to the
periods set forth in Section 3(k)), for more than 15 consecutive calendar days
or more than an aggregate of 20 calendar days (which need not be consecutive
calendar days) during any 12-month period, or (v) the Company shall fail for any
reason to satisfy the current public information requirement under Rule 144 as
to the applicable Registrable Securities, or (vi) if, after twelve months from
the date hereof or such earlier time that the Company’s Common Stock is quoted
or listed and trading on a National Stock Exchange, the Common Stock fails to be
quoted or is delisted from a National Stock Exchange for any reason for more
than three (3) Trading Days in the aggregate (any such failure or breach being
referred to as an “Event”, and for
purposes of clauses (i), (iii), (v) and (viii), the date on which such Event
occurs, and for purpose of clause (ii) the date on which such fifth Trading Day
is exceeded, and for purpose of clause (iv) the date on which such 15 or 20
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;
provided that such Holder (or any successor or assign) is still a beneficial
owner of the Preferred Shares, Conversion Shares, Warrants, or Warrant Shares,
an amount in cash, as partial liquidated damages and not as a penalty, equal to
0.5% of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement for any unregistered Registrable Securities then held by such
Holder. Liquidated damages payable by the Company pursuant to this
Section 2 shall be payable on an Event Date and the first (1st)
Trading Day of each thirty (30) day period following an Event Date, provided, however, that such liquidated
damages shall not exceed 8% of the aggregate purchase price paid by the Holders.
The parties agree that the Company shall not be liable for liquidated damages
under this Agreement with respect to any Registrable Securities that the Company
was not permitted to include on such Registration Statement due solely to the
Commission’s application of Rule 415. If the Company fails to pay any partial
liquidated damages pursuant to this Section in full within seven days after the
date payable, the Company will pay interest thereon at a rate of 18% per annum
(or such lesser maximum amount that is permitted to be paid by applicable law)
to the Holder, accruing daily from the date such partial liquidated damages are
due until such amounts, plus all such interest thereon, are paid in full. The
partial liquidated damages pursuant to the terms hereof shall apply on a daily
pro rata basis for any portion of a month prior to the cure of an
Event.
3. Registration
Procedures.
In
connection with the Company’s registration obligations hereunder, the Company
shall:
(a) Not less than three (3) Trading Days
prior to the filing of each Registration Statement and not less than one (1)
Trading Day prior to the filing of any related Prospectus or any amendment or
supplement thereto (including any document that would be incorporated or deemed
to be incorporated therein by reference), the Company shall (i) furnish to each
Holder copies of all such documents proposed to be filed, which documents (other
than those incorporated or deemed to be incorporated by reference) will be
subject to the review of such Holders, and (ii) cause its officers and
directors, counsel and independent registered public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of respective
counsel to each Holder, to conduct a reasonable investigation within the meaning
of the Securities Act. The Company shall not file a Registration Statement or
any such Prospectus or any amendments or supplements thereto to which the
Holders of a majority of the Registrable Securities shall reasonably object in
good faith, provided that, the Company is notified of such objection in writing
no later than three (3) Trading Days after the Holders have been so furnished
copies of a Registration Statement or one (1) Trading Day after the Holders have
been so furnished copies of any related Prospectus or amendments or supplements
thereto.
(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 may 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 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 which are not
then registered.
(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 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; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose, (v) of the occurrence of any event or passage of time that makes the
financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in a Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to a
Registration Statement, Prospectus or other documents so that, in the case of a
Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading 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.
(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 cooperate with any
broker-dealer through which a Holder proposes to resell its Registrable
Securities in effecting a filing with the FINRA Corporate Financing Department
pursuant to NASD Rule 2710, as requested by any such Holder, and the Company
shall pay the filing fee required by such filing within two (2) Trading Days of
request therefor.
(i) Prior to any resale of Registrable
Securities by a Holder, the Company shall use its commercially reasonable
efforts to register or qualify or cooperate with the selling Holders in
connection with the registration or qualification (or exemption from the
registration or qualification) of such Registrable Securities for the resale by
the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by each Registration Statement; provided, that, the Company
shall not be required to qualify generally to do business 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 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.
(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 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, for a period not to
exceed 30 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. In the event of the failure by such Holder
to comply with the Company’s request within fifteen (15) days from the date of
such request, the Company shall be permitted to exclude such Holder from a
Registration Statement, without being subject to the payment of liquidated
damages to such Holder. At such time that such Holder complies with the
Company’s request the Company shall use its best efforts to include such Holder
on the Registration Statement.
(n) Use its best efforts to cause all
Registrable Securities relating to the Registration Statement to continue to be
listed or quoted on a National Exchange or to be listed or quoted on any other
national securities exchange, quotation system or market, if any, on which
similar securities issued by the Company are then listed or
traded.
(o) Within two (2) Trading Days after a
Registration Statement which covers the Registrable Securities is ordered
effective by the Commission, the Company shall deliver, and shall 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 in the form attached hereto as
Exhibit
A.
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 independent registered public accountants) (A) with
respect to filings made with the Commission, (B) with respect to filings
required to be made with any National Stock Exchange 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) with respect to any filing that may be required to be made
by any broker through which a Holder intends to make sales of Registrable
Securities with the FINRA pursuant to NASD Rule 2710, so long as the broker is
receiving no more than a customary brokerage commission in connection with such
sale, (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions of any Holder or, except to
the extent provided for in the Transaction Documents, any legal fees or other
costs of the Holders.
5. Indemnification.
(a) Indemnification by the
Company. The Company shall, notwithstanding any termination of this
Agreement, indemnify and hold harmless each Holder, the officers, directors,
members, partners, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and employees
(and any other Persons with a functionally equivalent role of a Person holding
such titles, notwithstanding a lack of such title or any other title) of each of
them, each Person who controls any such Holder (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, members, stockholders, 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 or (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, except to the extent, but only to the extent, that (i)
such untrue statements or omissions are based solely upon information regarding
a Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to a 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) the Holder used an outdated or defective Prospectus which
the Company had previously notified such Holder was outdated or defective
pursuant to Sections 3(d)(iii)-(vi) and for which the Company had not yet
provided the Advice contemplated in Section 6(d). The Company shall notify the
Holders promptly of the institution, threat or assertion of any Proceeding
arising from or in connection with the transactions contemplated by this
Agreement of which the Company is aware.
(b) Indemnification by
Holders. Each Holder shall, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, to the extent arising
out of or based solely upon: (x) such Holder’s failure to comply with the
prospectus delivery requirements of the Securities Act or (y) any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or 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 (iii) 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
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 not to be entitled to indemnification hereunder.
(d) Contribution. If the
indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
Party or insufficient to hold an Indemnified Party harmless for any Losses, then
each Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in this Agreement, any reasonable attorneys’ or other fees or expenses incurred
by such party in connection with any Proceeding to the extent such party would
have been indemnified for such fees or expenses if the indemnification provided
for in this Section was available to such party in accordance with its
terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
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.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
6. Miscellaneous.
(a) Remedies. In the event of a breach by the
Company or by a Holder of any of their 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.
(b) No Piggyback on
Registrations; Prohibition on Filing Other Registration Statements.
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.
(c) Compliance. Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to a Registration Statement.
(d) Discontinued
Disposition. 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 best efforts to ensure that the use of the
Prospectus may be resumed as promptly as is practicable. The Company agrees and
acknowledges that any periods during which the Holder is required to discontinue
the disposition of the Registrable Securities hereunder shall be subject to the
provisions of Section 2(b).
(e) Piggy-Back
Registrations. If, at any
time during the Effectiveness Period, there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with the Company’s stock option or other employee benefit plans, then
the Company shall deliver to each Holder a written notice of such determination
and, if within fifteen days after the date of the delivery of such notice, any
such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered; provided, however, that the Company shall not be
required to register any Registrable Securities pursuant to this Section 6(e)
that are eligible for resale without volume or manner-of-sale restrictions
pursuant to Rule 144 promulgated by the Commission pursuant to the Securities
Act or that are the subject of a then effective Registration
Statement.
(f) Amendments and
Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
same shall be in writing and signed by the Company and the Holders of 50% or
more of the then outstanding Registrable Securities (including, for this
purpose, any Registrable Securities issuable upon exercise of the Warrants). 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 that relates
exclusively to the rights of a Holder or some Holders and that does not directly
or indirectly affect the rights of other Holders may be given by such Holder or
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).
(g) Notices. All notices,
demands, consents, requests, instructions and other communications to be given
or delivered or permitted under or by reason of the provisions of this Agreement
or in connection with the transactions contemplated hereby shall be in writing
and shall be deemed to be delivered and received by the intended recipient as
follows: (i) if personally delivered, on the business day of such delivery (as
evidenced by the receipt of the personal delivery service), (ii) if mailed
certified or registered mail return receipt requested, two (2) business days
after being mailed, (iii) if delivered by overnight courier (with all charges
having been prepaid), on the business day of such delivery (as evidenced by the
receipt of the overnight courier service of recognized standing), or (iv) if
delivered by facsimile transmission, on the business day of
such
delivery if sent by 6:00 p.m. in the time zone of the recipient, or if sent
after that time, on the next succeeding business day (as evidenced by the
printed confirmation of delivery generated by the sending party’s telecopier
machine). If any notice, demand, consent, request, instruction or other
communication cannot be delivered because of a changed address of which no
notice was given (in accordance with this Section 6), or the refusal to accept
same, the notice, demand, consent, request, instruction or other communication
shall be deemed received on the second business day the notice is sent (as
evidenced by a sworn affidavit of the sender). All such notices, demands,
consents, requests, instructions and other communications will be sent to the
following addresses or facsimile numbers as applicable.:
|
If
to the Company:
|
Eco
Building International
c/o
City Zone Holdings Limited
Xxxx
000, Xxxx Xxxxxx, Xxxxx XX
000
Xxxxx’s Road
Central
Hong Kong
Attention:
Xxxxxxxx Xxx
Telephone
No.: 86-13828824414 Fax
No.: 00-000-000-0000 |
|
|
with
copies (which
shall
not constitute
notice)
to:
|
Xxxxxx
& Jaclin LLP
000
Xxxxx 0 Xxxxx, Xxxxx 000
Xxxxxxxxx,
Xxx Xxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxx, Esq.
Xxxx
X. Xxxxx, Esq.
Tel.
No.: (000) 000-0000
Fax
No.: (000) 000-0000
|
|
|
If
to any Purchaser:
|
At
the address of such Purchaser set forth in the Purchase Agreement or as
specified in writing by such Purchaser.
|
|
|
With
copies (which copies shall not constitute notice) to:
|
Xxxxxxx
Xxxxxx LLP
000
Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxx Xxxxxxxxx, Esq.
Tel.
No.: (000) 000-0000
Fax
No.: (000) 000-0000
|
Any party hereto may from time to time
change its address for notices by giving at least ten (10) days written notice
of such changed address to the other party hereto.
(h) Assignment of Registration
Rights. The rights of each Holder hereunder, including the right to have
the Company register for resale Registrable Securities in accordance with the
terms of this Agreement, shall be automatically assignable by each Holder to any
Person who acquires all or a portion of the Registrable
Securities if: (i) the Holder agrees in writing with the transferee or assignee
to assign such rights, and a copy of such agreement, along with an investor
questionnaire completed by the transferee or assignee is furnished to the
Company within a reasonable time after such assignment, (ii) the Company is,
within a reasonable time 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) following such transfer or assignment the further
disposition of such securities by the transferee or assignees is restricted
under the Securities Act and applicable state securities laws unless such
securities are registered in a Registration Statement under this Agreement (in
which case the Company shall be obligated to amend such Registration Statement
to reflect such transfer or assignment) or are otherwise exempt from
registration, and (iv) at or before the time the Company receives the written
notice contemplated by clause (ii) of this Section, the transferee or assignee
agrees in writing with the Company to be bound by all of the provisions of this
Agreement. The rights to assignment shall apply to the Holders (and to
subsequent) successors and assigns.
(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.
(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 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.
(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 Company acknowledges that the
obligations of each Holder under this Agreement are several and not joint with
the obligations of any other Holder, and no Holder shall be responsible in any
way for the performance of the obligations of any other Holder under this
Agreement. The Company acknowledges that nothing contained herein, and no action
taken by any Holder pursuant hereto (including, but not limited to, the (i)
inclusion of a Holder in the Registration Statement and (ii) review by, and
consent to, such Registration Statement by a Holder) 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 or as a group with respect to such obligations or the
transactions contemplated by this Agreement. The Company acknowledges that each
Holder 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 Holder to be joined as an additional party
in any proceeding for such purpose. The Company acknowledges that it has elected
to provide all Holders with the same terms for the convenience of the Company
and not because it was required or requested to do so by the Holders. The
Company acknowledges that such procedure with respect to this Agreement in no
way creates a presumption that the Holders are in any way acting in concert or
as a group with respect to this Agreement or the transactions contemplated
hereby.
********************
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.
| ECO BUILDING INTERNATIONAL | |||
|
|
By:
|
/s/ | |
| Name: Xx. Xxxxxxxx Xxx | |||
| Title: Chairman and CEO | |||
[SIGNATURE
PAGE OF HOLDERS FOLLOWS]
[SIGNATURE
PAGE TO REGISTRATION RIGHTS AGREEMENT FOR HOLDERS]
Name of
Holder: __________________________
Signature of Authorized Signatory of
Holder: __________________________
Name of
Authorized Signatory: _________________________
Title of
Authorized Signatory: __________________________
[SIGNATURE
PAGES CONTINUE]
Annex A
Plan of
Distribution
Each
Selling Stockholder (the “Selling
Stockholders”) of the common stock and any of their pledgees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of common stock on the National Stock Exchange or any other stock
exchange, market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated prices. A
Selling Stockholder may use any one or more of the following methods when
selling shares:
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a
part;
|
|
·
|
broker-dealers
may agree with the Selling Stockholders to sell a specified number of such
shares at a stipulated price per
share;
|
|
·
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
|
|
·
|
a
combination of any such methods of sale;
or
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act of 1933, as amended (the “Securities Act”), if
available, rather than under this prospectus.
Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, but,
except as set forth in a supplement to this Prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in compliance with
FINRA NASD Rule 2440; and in the case of a principal transaction a markup or
markdown in compliance with NASD IM-2440.
In
connection with the sale of the common stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each Selling Stockholder has informed the
Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock. In no
event shall any broker-dealer receive fees, commissions and markups which, in
the aggregate, would exceed eight percent (8%).
The
Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
Because
Selling Stockholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act including Rule 172 thereunder. In addition, any securities
covered by this prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than under this prospectus.
There is no underwriter or coordinating broker acting in connection with the
proposed sale of the resale shares by the Selling Stockholders.
We agreed
to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the Selling Stockholders without registration and
without regard to any volume or manner-of-sale limitations by reason of Rule
144, without the requirement for the Company to be in compliance with the
current public information under Rule 144 under the Securities Act or any other
rule of similar effect or (ii) all of the shares have been sold pursuant to this
prospectus or Rule 144 under the Securities Act or any other rule of similar
effect. The resale shares will be sold only through registered or licensed
brokers or dealers if required under applicable state securities laws. In
addition, in certain states, the resale shares may not be sold unless they have
been registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is complied
with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to the common stock for the applicable restricted
period, as defined in Regulation M, prior to the commencement of the
distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
sales of shares of the common stock by the Selling Stockholders or any other
person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale (including by
compliance with Rule 172 under the Securities Act).
EXHIBIT
A
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
[TRANSFER
AGENT]
_____________________________
_____________________________
Attn:
_________________
RE:
Eco Building International
Ladies
and Gentlemen:
We are
counsel to Eco
Building International, a Nevada corporation (the “Company”). The
Company entered into a Registration Rights Agreement, dated April [ • ], 2010
(the “Registration
Rights Agreement”), with _________, ____________ and ________________
(collectively, the “Stockholders”),
pursuant to which the Company agreed, among other things, to register the
Registrable Securities (as defined in the Registration Rights Agreement), under
the Securities Act of 1933, as amended (the “1933 Act”). In
connection with the Company’s obligations under the Registration Rights
Agreement, on ________________, 2008, the Company filed a Registration Statement
on Form S-1 (File No. 333-________) (the “Registration
Statement”) with the Securities and Exchange Commission (the “SEC”) relating to the
resale of the Registrable Securities which names each of the Stockholders as a
selling stockholder thereunder.
In
connection with the foregoing, we advise you that a member of the SEC’s staff
has advised us by telephone that the Commission has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC’s staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the Commission and accordingly,
the Registrable Securities are available for resale under the 1933 Act pursuant
to the Registration Statement.
|
Very
truly yours,
[COUNSEL]
|
||
|
By:
|
||
|
cc: [STOCKHOLDERS]
|
||
