Exhibit 10.5
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of this
23rd day of June, 2008, by and among Forex365, Inc. f/k/a Solar Group, Inc., a
Nevada corporation (the "Company"), and Xxxxx X. Xxxxxxx, an adult resident of
the State of Florida ("Holder").
A. The Company has issued a total of 16,000,000 shares of common stock, par
value $0.01 per share ("Shares") to the Holder for a purchase price of $160,000.
B. As partial consideration for the Holder's purchase of the Shares, the
Company agreed to grant to the Holder the registration rights set forth herein.
C. Unless otherwise provided in this Agreement, capitalized terms used
herein shall have the respective meanings set forth in Section 11 hereof.
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and Holder
hereby agree as follows:
1. Registration.
(a) Demand Registration Rights. Commencing on the date that is thirty
(30) days after the date the Company completes a business combination with a
private company in a reverse merger or reverse take-over transaction ("Reverse
Merger"), the Holder shall have a separate one-time right, by written notice to
the Company, signed by the Holder ("Demand Notice"), to request the Company to
register for resale all of the Registrable Securities included by the Holder in
the Demand Notice ("Demand Registration Right") under and in accordance with the
provisions of the Securities Act for an offering to be made on a continuous
basis pursuant to Rule 415 by filing with the Commission a Registration
Statement covering the resale of such Registrable Securities ("Demand
Registration Statement"). The Demand Registration Statement required hereunder
shall be filed on Form S-3 (except if the Company is not then eligible to
register for resale the Registrable Securities on Form S-3, then such
Registration Statement will be on Form S-1, or such other appropriate form) by
the applicable Filing Date. The Demand Registration Statement required hereunder
shall contain the Plan of Distribution, attached hereto as Exhibit A (which may
be modified to respond to comments, if any, received by the Commission). The
Company shall cause the Demand Registration Statement to be declared effective
under the Securities Act as promptly as possible after the filing thereof and
shall keep the Demand Registration Statement continuously effective under the
Securities Act until the earlier of (i) two years after its Effective Date, (ii)
such time as all of the Registrable Securities covered by such Registration
Statement have been publicly sold by the Holder, or (iii) such time as all of
the Registrable Securities covered by such Registration Statement may be sold by
the Holder pursuant to Rule 144 without regard to the volume limitations for
sales as provided in that regulation, as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company's transfer agent and the affected Holder
("Effectiveness Period"). By 5:00 p.m. (New York City time) on the business day
immediately following the Effective Date of such Registration Statement, the
Company shall file with the Commission in accordance with Rule 424 under the
Securities Act the final Prospectus to be used in connection with sales pursuant
to such Registration Statement (whether or not such filing is technically
required under such Rule).
(b) Restrictions on Demand Registration. The Company may postpone for
up to thirty (30) days the filing or the effectiveness of a Demand Registration
Statement if the Company reasonably determines that such Demand Registration
Statement would have a material adverse effect on any proposal or plan by the
Company or any of its subsidiaries to engage in any acquisition of assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer, reorganization or similar transaction; provided, however, that in such
event, the Holder shall be entitled to withdraw such request and, if such
request is withdrawn, such request for demand registration shall not count as a
request for demand registration under Section 1(a) above and the Company shall
pay all Registration Expenses in connection with such registration. The Company
may delay the filing or effectiveness of a Demand Registration Statement
hereunder only once in any twelve-month period.
(c) Continuing Demand Registration Rights. If all of the Registrable
Securities to be included in the Demand Registration Statement filed pursuant to
Section 1(a) cannot be so included due to Commission Comments, and there is not
an effective Registration Statement otherwise covering the Registrable
Securities, then the Company shall prepare and file by the applicable Filing
Date for such Registration Statement(s), such number of additional Registration
Statements as may be necessary in order to ensure that all Registrable
Securities are covered by an existing and effective Registration Statement.
Accordingly, for example, if shares included in an initial Registration
Statement filed under Section 1(a) are removed from such Registration Statement
filed under Section 1(a) due to Commission Comments and Commission Comments
again require shares to be removed for such newly filed Registration Statement
under this Section 1(c), then the Company will prepare and file additional
Registration Statements until such time as all such required shares are covered
by effective Registration Statements. Any Registration Statements to be filed
under this Section shall be for an offering to be made on a continuous basis
pursuant to Rule 415, on Form S-3 (except if the Company is not then eligible to
register for resale the Registrable Securities on Form S-3, then such
Registration Statement will be on Form S-1, or such other appropriate form).
Such Registration Statements shall contain (except if otherwise required
pursuant to written comments received from the Commission upon a review of such
Registration Statement) the "Plan of Distribution" attached hereto as Exhibit A.
The Company shall cause such Registration Statements to be declared effective
under the Securities Act as promptly as possible after the filing thereof and
shall keep such Registration Statements continuously effective under the
Securities Act during the Effectiveness Period. By 5:00 p.m. (New York City
time) on the business day immediately following the Effective Date of such
Registration Statement, the Company shall file with the Commission in accordance
with Rule 424 under the Securities Act the final Prospectus to be used in
connection with sales pursuant to such Registration Statement (whether or not
such filing is technically required under such Rule).
(d) Piggyback Registrations Rights. At any time there is not an
effective Registration Statement covering the Registrable Securities, and the
Company shall determine to prepare and file with the Commission a Registration
Statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than on Form S-4
or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company
shall send to the Holder a written notice of such determination at least twenty
(20) days prior to the filing of any such Registration Statement and shall
automatically include in such Registration Statement all Registrable Securities
for resale and offer on a continuous basis pursuant to Rule 415; provided,
however, that (i) if, at any time after giving written notice of its intention
to register any securities and prior to the effective date of the Registration
Statement filed in connection with such registration, the Company determines for
any reason not to proceed with such registration, the Company will be relieved
of its obligation to register any Registrable Securities in connection with such
registration, (ii) in case of a determination by the Company to delay
registration of its securities, the Company will be permitted to delay the
registration of Registrable Securities for the same period as the delay in
registering such other securities, (iii) each Holder is subject to
confidentiality obligations with respect to any information gained in this
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process or any other material non-public information he, she or it obtains, (iv)
each Holder is subject to all applicable laws relating to xxxxxxx xxxxxxx or
similar restrictions; and (v) if all of the Registrable Securities of the Holder
cannot be so included due to Commission Comments, then the Company may reduce
the number of the Holder's Registrable Securities covered by such Registration
Statement to the maximum number which would enable the Company to conduct such
offering in accordance with the provisions of Rule 415. The Holder shall be
entitled to include all Registrable Securities for resale in the Registration
Statement filed by the Company in connection with a public offering of equity
securities by the Company after the date of this Agreement (the "Initial
Registration Statement"), pursuant to Rule 415, so long as (1) such shares shall
not be included as part of the underwritten offering of primary shares by the
Company, unless the Company and underwriter agree to allow the inclusion of such
Registrable Shares as part of the underwritten offering and, in such event, the
Holder elects to include the Registrable Securities in the underwriting subject
to an allocation among all holders of registration rights in the manner set
forth in Section 1(e) hereof, (2) the underwriter approves the inclusion of such
Registrable Securities in such Initial Registration Statement, subject to
customary underwriter cutbacks applicable to all holders of registration rights,
(3) the Holder shall enter into the underwriters' form of lockup agreement as
and to the extent requested by the underwriters, which may require that all of
the Registrable Securities held by the Holder not be sold or otherwise
transferred without the consent of the underwriters for a period not to exceed
180 days from the closing of the offering contemplated by the Initial
Registration Statement, and (4) if all of the Registrable Securities of the
Holder cannot be so included due to Commission Comments, then the Company may
reduce the number of the Holder's Registrable Securities covered by such
Registration Statement to the maximum number which would enable the Company to
conduct such offering in accordance with the provisions of Rule 415. The Company
shall cause any Registration Statement filed under this Section 1(d) to be
declared effective under the Securities Act as promptly as possible after the
filing thereof and shall keep such Registration Statement continuously effective
under the Securities Act during the Effectiveness Period. By 5:00 p.m. (New York
City time) on the business day immediately following the Effective Date of such
Registration Statement, the Company shall file with the Commission in accordance
with Rule 424 under the Securities Act the final Prospectus to be used in
connection with sales pursuant to such Registration Statement (whether or not
such filing is technically required under such Rule).
(e) Cutback Provisions. In the event all of the Registrable Securities
of the Holder cannot be included in a Registration Statement under Sections
1(a), 1(c) or 1(d) hereof due to Commission Comments or underwriter cutbacks,
then the Company, unless otherwise prohibited by the Commission, shall cause the
Registrable Securities of the Holder to be included in such Registration
Statement to be reduced pro rata based on the number of registrable securities
held by all holders of registration rights as of the date immediately preceding
the Reverse Merger.
(f) Termination of Registration Rights. The registration rights
afforded to the Holder under this Section 1 shall terminate on the earliest date
when all Registrable Securities of the Holder either: (i) have been publicly
sold by the Holder pursuant to a Registration Statement, (ii) have been covered
by an effective Registration Statement which has been effective for an aggregate
period of twelve (12) months (whether or not consecutive), or (iii) may be sold
by the Holder pursuant to Rule 144 without regard to the volume limitations for
sales as provided in that regulation, as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company's transfer agent and the affected Holder.
2. Registration Procedures. Whenever any Registrable Securities are to be
registered pursuant to this Agreement, the Company shall use its best efforts to
effect the registration and sale of such Registrable Securities in accordance
with the intended method of disposition thereof, and pursuant thereto the
Company shall have the following obligations:
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(a) The Company shall prepare and file with the Commission a
Registration Statement with respect to such Registrable Securities and use its
best efforts to cause such Registration Statement to become effective.
(b) The Company shall prepare and file with the Commission such
amendments (including post-effective amendments) and supplements to a
Registration Statement and the Prospectus used in connection with such
Registration Statement, which Prospectus is to be filed pursuant to Rule 424
promulgated under the Securities Act, as may be necessary to keep such
Registration Statement effective at all times during the Effectiveness Period,
and, during such period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company covered
by such Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended methods
of disposition by the seller or sellers thereof as set forth in such
Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
by reason of the Company filing a report on Form 10-QSB, Form 10-KSB or any
analogous report under the Securities Exchange Act, the Company shall have
incorporated such report by reference into such Registration Statement, if
applicable, or shall file such amendments or supplements with the Commission on
the same day on which the Securities Exchange Act report is filed which created
the requirement for the Company to amend or supplement such Registration
Statement.
(c) The Company shall furnish to each seller of Registrable Securities
in any Registration Statement, without charge, (i) promptly after the same is
prepared and filed with the Commission at least one copy of such Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, if requested by such
seller, all exhibits and each preliminary Prospectus, (ii) upon the
effectiveness of any Registration Statement, ten (10) copies of the Prospectus
included in such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such seller may reasonably request)
and (iii) such other documents, including copies of any preliminary or final
Prospectus, as such seller may reasonably request from time to time in order to
facilitate the disposition of the Registrable Securities owned by such seller.
(d) The Company shall use its best efforts to (i) register and
qualify, unless an exemption from registration and qualification applies, the
resale by any seller of the Registrable Securities covered by a Registration
Statement under such other securities or "blue sky" laws of all applicable
jurisdictions in the United States, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Effectiveness Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Effectiveness Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 2(d), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction.
(e) The Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
or the suspension of the qualification of any of Registrable Securities for sale
in any jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and to
notify the Holder of any Registrable Securities being sold of the issuance of
such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.
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(f) The Company shall notify the Holder in writing of the happening of
any event, as promptly as practicable after becoming aware of such event, as a
result of which the Prospectus included in a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material,
nonpublic information), and, subject to Section 2(r), promptly prepare a
supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver ten (10) copies of such supplement or
amendment to the Holder (or such other number of copies as the Holder may
reasonably request).
(g) The Company shall promptly notify the Holder in writing (i) when a
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective amendment has
become effective (notification of such effectiveness shall be delivered to the
Holder by facsimile on the same day of such effectiveness and by overnight
mail), (ii) of any request by the Commission for amendments or supplements to a
Registration Statement or related Prospectus or related information, and (iii)
of the Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
(h) If the Holder is required under applicable securities laws to be
described in a Registration Statement as an underwriter, at the reasonable
request of such Holder, the Company shall furnish to such Holder, on the date of
the effectiveness of such Registration Statement and thereafter from time to
time on such dates as the Holder may reasonably request (i) a letter, dated such
date, from the Company's independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the Holder, and
(ii) an opinion, dated as of such date, of counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the Holder.
(i) If the Holder is required under applicable securities laws to be
described in a Registration Statement as an underwriter, then at the request of
such Holder in connection with such Holder's due diligence requirements, the
Company shall make available for inspection by (i) the Holder, (ii) the Holder's
legal counsel, and (iii) one firm of accountants or other agents retained by the
Holder (collectively, the "Inspectors"), all pertinent financial and other
records, and pertinent corporate documents and properties of the Company
(collectively, the "Records"), as shall be reasonably deemed necessary by each
Inspector, and cause the Company's officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however,
that each Inspector shall agree to hold in strict confidence and shall not make
any disclosure (except to the Holder) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the Securities Act, (b)
the release of such Records is ordered pursuant to a final, non-appealable
subpoena or order from a court or government body of competent jurisdiction, or
(c) the information in such Records has been made generally available to the
public other than by disclosure in violation of this or any other agreement of
which the Inspector has knowledge. Each Holder agrees that it shall, upon
learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. Nothing herein (or in any other
confidentiality agreement between the Company and the Holder) shall be deemed to
limit the Holder's ability to sell Registrable Securities in a manner which is
otherwise consistent with applicable laws and regulations.
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(j) The Company shall hold in confidence and not make any disclosure
of information concerning the Holder provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning the Holder is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to the Holder and allow the Holder, at the Holder's expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.
(k) The Company shall use its best efforts either to (i) cause all of
the Registrable Securities covered by a Registration Statement to be listed on
each securities exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) secure
designation and quotation of all of the Registrable Securities covered by a
Registration Statement on The NASDAQ Global Market, The NASDAQ Capital Market or
the American Stock Exchange, or (iii) if, despite the Company's best efforts to
satisfy, the preceding clauses (i) and (ii) the Company is unsuccessful in
satisfying the preceding clauses (i) and (ii), to secure the inclusion for
quotation on the Over-the-Counter Bulletin Board for such Registrable Securities
and, without limiting the generality of the foregoing, to use its best efforts
to arrange for at least two market makers to register with the National
Association of Securities Dealers, Inc. ("NASD") as such with respect to such
Registrable Securities. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section 2(k).
(l) The Company shall cooperate with the Holder who hold Registrable
Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the Holder may reasonably request and registered in such
names as the Holder may request.
(m) If requested by the Holder, the Company shall (i) as soon as
practicable incorporate in a Prospectus supplement or post-effective amendment
such information as the Holder reasonably requests to be included therein
relating to the sale and distribution of Registrable Securities, including,
without limitation, information with respect to the number of Registrable
Securities being offered or sold, the purchase price being paid therefor and any
other terms of the offering of the Registrable Securities to be sold in such
offering; (ii) as soon as practicable make all required filings of such
Prospectus supplement or post-effective amendment after being notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment; and (iii) as soon as practicable, supplement or make amendments to
any Registration Statement if reasonably requested by the Holder holding any
Registrable Securities.
(n) The Company shall use its best efforts to cause the Registrable
Securities covered by a Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary to
consummate the disposition of such Registrable Securities.
(o) The Company shall make generally available to its security holders
as soon as practical, but not later than ninety (90) days after the close of the
period covered thereby, an earnings statement (in form complying with, and in
the manner provided by, the provisions of Rule 158 under the Securities Act)
covering a twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the effective date of a Registration
Statement.
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(p) The Company shall otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission in connection with any
registration hereunder.
(q) Within two (2) business days after a Registration Statement which
covers 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 Holder
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 B and the Irrevocable Transfer
Agent Instructions in the form attached hereto as Exhibit C.
(r) Notwithstanding anything to the contrary herein, at any time after
the Effective Date of a Registration Statement, the Company may delay the
disclosure of material, non-public information concerning the Company the
disclosure of which at the time is not, in the good faith opinion of the Board
of Directors of the Company and its counsel, in the best interest of the Company
and, in the opinion of counsel to the Company, otherwise required (a "Grace
Period"); provided, that the Company shall promptly (i) notify the Holder in
writing of the existence of material, non-public information giving rise to a
Grace Period (provided that in each notice the Company will not disclose the
content of such material, non-public information to the Holder) and the date on
which the Grace Period will begin, and (ii) notify the Holder in writing of the
date on which the Grace Period ends; and, provided further, that no Grace Period
shall exceed five (5) consecutive days and during any three hundred sixty five
(365) day period such Grace Periods shall not exceed an aggregate of twenty (20)
days and the first day of any Grace Period must be at least five (5) trading
days after the last day of any prior Grace Period (each, an "Allowable Grace
Period"). For purposes of determining the length of a Grace Period above, the
Grace Period shall begin on and include the date the Holder receives the notice
referred to in clause (i) and shall end on and include the later of the date the
Holder receives the notice referred to in clause (ii) and the date referred to
in such notice. The provisions of Section 2(e) hereof shall not be applicable
during the period of any Allowable Grace Period. Upon expiration of the Grace
Period, the Company shall again be bound by Section 2(f) with respect to the
information giving rise thereto unless such material, non-public information is
no longer applicable. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee of the Holder in connection with any sale of Registrable Securities
with respect to which the Holder has entered into a contract for sale, and
delivered a copy of the Prospectus included as part of the applicable
Registration Statement (unless an exemption from such Prospectus delivery
requirements exists), prior to the Holder's receipt of the notice of a Grace
Period and for which the Holder has not yet settled.
3. Obligations of the Holders.
(a) At least five (5) business days prior to the first anticipated
filing date of a Registration Statement, the Company shall notify the Holder in
writing of the information the Company requires from the Holder if the Holder's
Registrable Securities are to be included in such Registration Statement. It
shall be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of the Holder that the Holder shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect the effectiveness of the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request.
(b) The Holder, by the Holder's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
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Statement hereunder, unless the Holder has notified the Company in writing of
the Holder's election to exclude all of the Holder's Registrable Securities from
such Registration Statement.
(c) The Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Sections 2(e) or
2(f), the Holder will immediately discontinue disposition of Registrable
Securities pursuant to any Registration Statement(s) covering such Registrable
Securities until the Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Sections 2(e) or 2(f) or receipt of notice
that no supplement or amendment is required. Notwithstanding anything to the
contrary, the Company shall cause its transfer agent to deliver unlegended
shares of Common Stock to a transferee of the Holder in connection with any sale
of Registrable Securities with respect to which the Holder has entered into a
contract for sale prior to the Holder's receipt of a notice from the Company of
the happening of any event of the kind described in Sections 2(e) or 2(f) and
for which the Holder has not yet settled.
(d) The Holder covenants and agrees that it will comply with the
Prospectus delivery requirements of the Securities Act as applicable to it or an
exemption therefrom in connection with sales of Registrable Securities pursuant
to a Registration Statement.
4. Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery expenses,
fees and disbursements of custodians, and fees and disbursements of counsel for
the Company and all independent certified public accountants, underwriters
(excluding discounts, commissions and placement agent fees) and other Persons
retained by the Company (all such expenses being herein called "Registration
Expenses"), shall be borne by the Company. Further, the Company shall pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit or quarterly review, the expense of any liability insurance
and the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed.
5. Indemnification.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
(a) To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend the Holder, the directors,
officers, members, partners, employees, agents, representatives of, and each
Person, if any, who controls the Holder within the meaning of the Securities Act
or the Securities Exchange Act (each, an "Indemnified Person"), against any
losses, claims, damages, liabilities, judgments, fines, penalties, charges,
costs, reasonable attorneys' fees, amounts paid in settlement or expenses, joint
or several, (collectively, "Claims") incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the Commission, whether pending or
threatened, whether or not an indemnified party is or may be a party thereto
("Indemnified Damages"), to which any of them may become subject insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or any
post-effective amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other "blue sky" laws of
any jurisdiction in which Registrable Securities are offered ("Blue Sky
Filing"), or the omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary Prospectus if used prior to the effective date of
such Registration Statement, or contained in the final Prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the Commission) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in the light of the
circumstances under which the statements therein were made, not misleading,
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(iii) any violation or alleged violation by the Company of the Securities Act or
the Securities Exchange Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the offer
or sale of the Registrable Securities pursuant to a Registration Statement or
(iv) any violation of this Agreement (the matters in the foregoing clauses (i)
through (iv) being, collectively, "Violations"). Subject to Section 5(c), the
Company shall reimburse the Indemnified Persons, promptly as such expenses are
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 5(a): (i) shall not apply to
a Claim by an Indemnified Person arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information furnished in writing
to the Company by such Indemnified Person for such Indemnified Person expressly
for use in connection with the preparation of the Registration Statement or any
such amendment thereof or supplement thereto, if such Prospectus was timely made
available by the Company pursuant to Section 2(c) and (ii) shall not be
available to the extent such Claim is based on a failure of the Holder to
deliver or to cause to be delivered the Prospectus made available by the
Company, including a corrected Prospectus, if such Prospectus or corrected
Prospectus was timely made available by the Company pursuant to Section 2(c);
and (iv) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Holder pursuant to Section 9.
(b) In connection with any Registration Statement in which the Holder
is participating, the Holder agrees to indemnify, hold harmless and defend, to
the same extent and in the same manner as is set forth in Section 6(a), the
Company, each of its directors, each of its officers who signs the Registration
Statement and each Person, if any, who controls the Company within the meaning
of the Securities Act or the Securities Exchange Act (each, an "Indemnified
Party"), against any Claim or Indemnified Damages to which any of them may
become subject, under the Securities Act or the Securities Exchange Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by the Holder expressly for use in
connection with such Registration Statement; and, subject to Section 5(c), the
Holder will reimburse any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section 5(b)
and the agreement with respect to contribution contained in Section 6 shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Holder, which consent shall not be
unreasonably withheld or delayed; provided, further, however, that the Holder
shall be liable under this Section 5(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to the Holder as a
result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Holder pursuant to
Section 9.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 5 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified Party shall, if a Claim in respect
9
thereof is to be made against any indemnifying party under this Section 5,
deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. The Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person reasonably apprised at all times as to
the status of the defense or any settlement negotiations with respect thereto.
No indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim or litigation, and such settlement shall not include any
admission as to fault on the part of the Indemnified Party. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 5, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.
(d) The indemnification required by this Section 5 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.
(e) The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.
6. Contribution. To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 5 to the fullest extent permitted by law; provided,
however, that: (i) no Person involved in the sale of Registrable Securities
which Person is guilty of fraudulent misrepresentation (within the meaning of
Section 10(f) of the Securities Act) in connection with such sale shall be
entitled to contribution from any Person involved in such sale of Registrable
Securities who was not guilty of fraudulent misrepresentation; and (ii)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities pursuant to such Registration Statement
10
7. Participation in Underwritten Registrations. No Person may participate
in any registration hereunder which is underwritten or sold through a placement
agent unless such Person (i) agrees to sell such Person's securities on the
basis provided in any underwriting or placement agency arrangements approved by
the Company, and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting or placement agency agreements and other
documents required under the terms of such underwriting or placement agency
arrangements.
8. Reports under Securities Exchange Act. With a view to making available
to the Holder the benefits of Rule 144 promulgated under the Securities Act or
any other similar rule or regulation of the Commission that may at any time
permit the Holder to sell securities of the Company to the public without
registration ("Rule 144"), commencing not later than the completion of the
Reverse Merger the Company agrees to,:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
Exchange Act so long as the Company remains subject to such requirements and the
filing of such reports and other documents is required for the applicable
provisions of Rule 144; and
(c) furnish to the Holder so long as the Holder owns Registrable
Securities, promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Securities Exchange Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be reasonably
requested to permit the Holder to sell such securities pursuant to Rule 144
without registration.
9. Assignment of Registration Rights. The rights under this Agreement shall
be automatically assignable by the Holder to any transferee of all or any
portion of the Holder's Registrable Securities if: (i) the Holder agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement 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) immediately
following such transfer or assignment the further disposition of such securities
by the transferee or assignee is restricted under the Securities Act and
applicable state securities laws; and (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein.
10. Amendment of Registration Rights. Provisions of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holder.
11. Definitions.
(a) "Commission" means the Securities and Exchange Commission.
(b) "Commission Comments" means written comments pertaining solely to
Rule 415 which are received by the Company from the Commission, and a copy of
which shall have been provided by the Company to the Holder, to a filed
11
Registration Statement which limit the amount of shares which may be included
therein to a number of shares which is less than such amount sought to be
included thereon as filed with the Commission.
(c) "Common Stock" means the common stock, $0.01 par value per share,
of the Company.
(d) "Effective Date" means, as to a Registration Statement, the date
on which such Registration Statement is first declared effective by the
Commission.
(e) "Filing Date" means (a) with respect to the Registration Statement
required to be filed under Section 1(a), the 30th day following the receipt by
the Company of the Demand Notice, and (b) with respect to any Registration
Statements required to be filed under Section 1(c), each such Registration
Statement shall be filed by the six-month anniversary of the Effective Date of
the Registration Statement required to be filed under Section 1(a) and for all
subsequent Registration Statements, the six-month anniversary of the Effective
Date of the immediately preceding Registration Statement required to be filed
under Section 1(c), as applicable.
(f) "Person" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
(g) "Prospectus" means the prospectus included in the 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 the 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
(h) "Registrable Securities" means (i) the Shares issued to the Holder
and held by the Holder or its assignees, (ii) any shares of Common Stock issued
to the Holder (whether issued before or after the date hereof) and held by the
Holder or its assignees, (iii) any Common Stock issuable upon conversion of any
securities convertible into shares of Common Stock (including the Preferred
Shares) or upon exercise of any warrants, options or similar instruments
(whether such convertible securities, warrants, options or similar instruments
are issued before or after the date hereof), and (iv) any other shares of Common
Stock or any other securities issued or issuable with respect to the securities
referred to in clause (i), (ii) or (iii) by way of a stock dividend or stock
split or in connection with an exchange or combination of shares,
recapitalization, merger, consolidation or other reorganization.
(i) "Registration Statement" means any registration statement required
to be filed hereunder (which, at the Company's option, may be an existing
registration statement of the Company previously filed with the Commission, but
not declared effective), including (in each case) the Prospectus, amendments and
supplements to the 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 the Registration
Statement
(j) "Rule 415" means Rule 415 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
12
(k) "Rule 424" means Rule 424 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
(l) "Securities Act" means the Securities Act of 1933, as amended from
time to time.
(m) "Securities Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
12. Miscellaneous.
(a) A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from the such record owner of such Registrable Securities.
(b) Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one business day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Forex365, Inc.
000 Xxxxxxxx Xxx
Xxxx Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxx, CEO
and
If to the Holder:
Xxxxx X. Xxxxxxx
000 Xxxxxxxx Xxx
Xxxx Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
13
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii) or
(iii) above, respectively.
(c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(d) All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of
the State of Delaware, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of Delaware or other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of Delaware. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the State of Delaware,
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
(e) This Agreement and the instruments referenced herein and therein
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement and the instruments referenced herein and therein
supersede all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof and thereof.
(f) Subject to the requirements of Section 9, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto.
(g) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in identical counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement. This Agreement
may also be executed by electronic signature of such Person.
(i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
14
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(j) All consents and other determinations required to be made by the
Holder pursuant to this Agreement shall be made, unless otherwise specified in
this Agreement, by the Holder.
(k) The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
(l) This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.
(m) The obligations of the Holder hereunder are several and not joint
with the obligations of any other Holder, and no provision of this Agreement is
intended to confer any obligations on a Holder vis-a-vis any other Holder.
Nothing contained herein, and no action taken by any Holder pursuant hereto,
shall be deemed to constitute the Holder as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Holder are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated herein.
(n) Currency. As used herein, "Dollar", "US Dollar" and "$" each mean
the lawful money of the United States.
* * * * * *
15
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
HOLDER:
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx
COMPANY:
Forex365, Inc.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Xxxxx X. Xxxxxxx, CEO
16
Exhibit A
Plan of Distribution
The Selling Stockholders and any of their pledgees, donees,
transferees, assignees and successors-in-interest may, from time to time, sell
any or all of their shares of Common Stock on any stock exchange, market or
trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. The Selling Stockholders may
use any one or more of the following methods when selling shares:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits Investors;
- block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated transactions;
- to cover short sales made after the date that this Registration
Statement is declared effective by the Commission;
- broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the Shares owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell shares of Common Stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 amending the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.
Upon the Company being notified in writing by a Selling Stockholder
that any material arrangement has been entered into with a broker-dealer for the
sale of Common Stock through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a
supplement to this prospectus will be filed, if required, pursuant to Rule
424(b) under the Securities Act, disclosing (i) the name of each such Selling
17
Stockholder and of the participating broker-dealer(s), (ii) the number of shares
involved, (iii) the price at which such the shares of Common Stock were sold,
(iv) the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this prospectus, and (vi) other facts material to the transaction.
In addition, upon the Company being notified in writing by a Selling Stockholder
that a donee or pledgee intends to sell more than 500 shares of Common Stock, a
supplement to this prospectus will be filed if then required in accordance with
applicable securities law.
The Selling Stockholders also may transfer the shares of Common Stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, that can be attributed to the
sale of the securities will be paid by the Selling Stockholder and/or the
purchasers. Each Selling Stockholder has represented and warranted to the
Company that it acquired the securities subject to this registration statement
in the ordinary course of such Selling Stockholder's business and, at the time
of its purchase of such securities such Selling Stockholder had no agreements or
understandings, directly or indirectly, with any person to distribute any such
securities.
The Company has advised each Selling Stockholder that it may not use
shares registered on this Registration Statement to cover short sales of Common
Stock made prior to the date on which this Registration Statement shall have
been declared effective by the Commission. If a Selling Stockholder uses this
prospectus for any sale of the Common Stock, it will be subject to the
prospectus delivery requirements of the Securities Act. The Selling Stockholders
will be responsible to comply with the applicable provisions of the Securities
Act and Exchange Act, and the rules and regulations thereunder promulgated,
including, without limitation, Regulation M, as applicable to such Selling
Stockholders in connection with resales of their respective shares under this
Registration Statement.
The Company is required to pay all fees and expenses incident to the
registration of the shares, but the Company will not receive any proceeds from
the sale of the Common Stock. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
18
EXHIBIT B
---------
FORM OF NOTICE OF EFFECTIVENESS
-------------------------------
OF REGISTRATION STATEMENT
-------------------------
[Transfer Agent]
[Address]
Attention:
Re: ___________________ ("Company")
Ladies and Gentlemen:
[We are][I am] counsel to _________, a _________ corporation
(the "Company"), and have represented the Company in connection with that
certain Registration Rights Agreement with _____________ (the "Holder") (the
"Registration Rights Agreement") 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 ____________ ___, 200_, 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 Registrable Securities which names the Holder as a
selling stockholder thereunder.
In connection with the foregoing, [we][I] advise you that a
member of the SEC's staff has advised [us][me] by telephone that the SEC 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][I] 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 SEC
and the Registrable Securities are available for resale under the 1933 Act
pursuant to the Registration Statement.
This letter shall serve as our standing instruction to you
that the shares of Common Stock are freely transferable by the Holder pursuant
to the Registration Statement. You need not require further letters from us to
effect any future legend-free issuance or reissuance of shares of Common Stock
to the Holders as contemplated by the Company's Irrevocable Transfer Agent
Instructions dated ___________, 200_.
Very truly yours,
19
EXHIBIT B
---------
IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
---------------------------------------
_______________, 2007
[Addressed to Transfer Agent]
-----------------------------
-----------------------------
Attention: [________________________]
Ladies and Gentlemen:
Reference is made to that certain Registration Rights
Agreement, dated as of _________________, 2008 (the "Agreement"), by and among
______________, a _____________ corporation (the "Company"), and
_________________________ (the "Holder"), pursuant to which the Company is
obligated to register the Holders shares (the "Common Shares") of Common Stock
of the Company (the "Common Stock").
This letter shall serve as our irrevocable authorization and
direction to you (provided that you are the transfer agent of the Company at
such time) to issue shares of Common Stock upon transfer or resale of the Common
Shares.
You acknowledge and agree that so long as you have previously
received (a) written confirmation from the Company's legal counsel that either
(i) a registration statement covering resales of the Common Shares has been
declared effective by the Securities and Exchange Commission (the "SEC") under
the Securities Act of 1933, as amended (the "1933 Act"), or (ii) sales of the
Common Shares may be made in conformity with Rule 144 under the 1933 Act ("Rule
144"), (b) if applicable, a copy of such registration statement, and (c) notice
from legal counsel to the Company or any Holder that a transfer of Common Shares
has been effected either pursuant to the registration statement (and a
prospectus delivered to the transferee) or pursuant to Rule 144, then as
promptly as practicable, you shall issue the certificates representing the
Common Shares registered in the names of such transferees, and such certificates
shall not bear any legend restricting transfer of the Common Shares thereby and
should not be subject to any stop-transfer restriction; provided, however, that
if such Common Shares and are not registered for resale under the 1933 Act or
able to be sold under Rule 144, then the certificates for such Common Shares
shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.
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A form of written confirmation from the Company's outside
legal counsel that a registration statement covering resales of the Common
Shares has been declared effective by the SEC under the 1933 Act is attached
hereto.
Please execute this letter in the space indicated to
acknowledge your agreement to act in accordance with these instructions. Should
you have any questions concerning this matter, please contact me at
------------.
Very truly yours,
___________________ ("Company")
By: ___________________________
Name:
Title:
THE FOREGOING INSTRUCTIONS ARE
ACKNOWLEDGED AND AGREED TO
this ___ day of ________________, 2008
[TRANSFER AGENT]
By:
-
Name:
------------------------
Title:
------------------------
Enclosures
Copy: Holder
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