REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.5
This
Registration Rights Agreement (this "Agreement")
is made
and entered into as of June [ ], 2008, by and among Organic To Go Food
Corporation, a Delaware corporation (the "Company"),
and
the investor signatory hereto (the "Investor").
This
Agreement is made pursuant to the Note and Warrant Purchase Agreement among
the
Company and the Investor (the "Purchase
Agreement").
The
Company and the Investor hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
Purchase Agreement will have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms have the respective
meanings set forth in this Section 1:
"Advice"
has
the
meaning set forth in Section 7(d).
“Commission”
means
the
United States Securities and Exchange Commission.
"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 Registration Statement which
requires the Company to 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.
"Effective
Date"
means,
as to a Registration Statement, the date on which such Registration Statement
is
first declared effective by the Commission.
"Effectiveness
Period"
means,
as to any Registration Statement required to be filed pursuant to this
Agreement, the period commencing on the Effective Date of such Registration
Statement and ending on the earliest to occur of (a) the fifth anniversary
of
such Effective Date, or (b) such time as all of the Registrable Securities
covered by such Registration Statement have been publicly sold by the Holder
of
the Registrable Securities included therein.
"Exchange
Act"
means
the Securities Exchange Act of 1934, as amended.
“Date
of Conversion”
means
the date the Note is converted.
"Filing
Date"
means
(a) with respect to the initial Registration Statement required to be filed
under Section 2(a), the 90th
day
following the Date of Conversion; (b) with respect to any
Registration Statements
required
to be filed under Section 2(b),
each
such Registration Statement shall be filed by the
earlier of (i) for
the
initial Registration Statement required to be filed under Section 2(b),
the
six-month anniversary of the Effective Date of the
Registration
Statement required to be filed under Section 2(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 2(b), as applicable, and (ii) for the initial Registration
Statement required to be filed under Section 2(b), the
90th
day
following such time as 75%
of all
Registrable Securities which are included in the Registration Statement required
to be filed under Section 2(a) have been sold
and for
all subsequent Registration Statements, the 90th
day
following such time as 75% of all Registrable Securities which are included
in
the immediately preceding Registration Statement required to be filed under
Section 2(b) have been sold, as applicable;
and (c)
with respect to a Registration Statement required to be filed under Section
2(c), the 30th
day
following the date on which the Company becomes eligible to utilize Form S-3
to
register the resale of Common Stock.
"Holder"
means
the holder of Registrable Securities.
“Indemnified
Party”
has the
meaning set forth in Section 5(c).
“Indemnifying
Party”
has the
meaning set forth in Section 5(c).
“Losses”
has the
meaning set forth in Section 5(a).
“Note
Shares” means
the
shares of Common Stock issued upon conversion of the Notes.
“Notes”
means
one or more convertible promissory notes substantially in the form of Exhibit
A
attached to the Purchase Agreement.
"Proceeding"
means an
action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced
or threatened.
“Prospectus”
means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
"Registrable
Securities"
means:
(i) the Note Shares, and (ii) any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event, or
any
other adjustment with respect to any of the Note Shares.
"Registration
Statement"
means
the initial registration statement required to be filed in accordance with
Section 2(a) and any additional registration statement(s) required to be filed
under Section 2(b), including (in each case) the Prospectus, amendments and
supplements to such registration statements or Prospectus, including pre- and
post-effective amendments, all
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exhibits
thereto, and all material incorporated by reference or deemed to be incorporated
by reference therein.
"Rule
144"
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
"Rule
415"
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
"Rule
424"
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
"Securities
Act"
means
the Securities Act of 1933, as amended.
2. Registration.
(a) On
or
prior to the applicable Filing Date, the Company shall prepare and file with
the
Commission a Registration Statement covering the resale of all Registrable
Securities not already covered by an existing and effective Registration
Statement for an offering to be made on a continuous basis pursuant to Rule
415,
on Form S-1
(or on
such other form appropriate for such purpose). Such Registration Statement
shall
contain (except if otherwise required pursuant to written comments received
from
the Commission upon a review of such Registration Statement, other than as
to
the characterization of any Holder as an underwriter, which shall not occur
without such Holder’s consent) the "Plan of Distribution" attached hereto as
Annex A. The Company shall use its best efforts to cause such Registration
Statement to be declared effective under the Securities Act as
soon as
possible, and shall use its best efforts to keep the Registration Statement
continuously effective during the entire Effectiveness Period. The initial
Registration Statement shall cover all of the Note Shares. 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) If
all of
the Registrable Securities to be included in the Registration Statement filed
pursuant to Section 2(a) cannot be so included due to Commission Comments,
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,
if for example, an initial Registration Statement is filed under this Section
2(b) to register Registrable Securities removed from a Registration Statement
filed under Section 2(a) due to Commission Comments and Commission Comments
again require shares to be removed from such newly filed Registration Statement
under this Section 2(b), then the Company will prepare and file additional
Registration Statement(s) until such time as all such required shares are
covered by effective Registration Statements. Any Registration
Statements
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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-1
(or
on such other form appropriate for such purpose). Such Registration Statement
shall contain (except if otherwise required pursuant to written comments
received from the Commission upon a review of such Registration Statement,
other
than as to the characterization of any Holder as an underwriter, which shall
not
occur without such Holder’s consent) the "Plan of Distribution" attached hereto
as Annex
A.
The
Company shall use its best efforts to cause such Registration Statement to
be
declared effective under the Securities Act as soon as possible, and shall
use
its best efforts to keep such Registration Statement continuously effective
under the Securities Act during the entire Effectiveness Period. By 5:00 p.m.
(New York City time) on the Business Day immediately following the Effective
Date of such Registration Statement, the Company shall file with the Commission
in accordance with Rule 424 under the Securities Act the final prospectus to
be
used in connection with sales pursuant to such Registration Statement (whether
or not such filing is technically required under such Rule).
(c) Promptly
following any date on which the Company becomes eligible to use a registration
statement on Form S-3 to register the Registrable Securities for resale, the
Company shall file a registration statement on Form S-3 covering the Registrable
Securities (or a post-effective amendment on Form S-3 to the then effective
Registration Statement) and shall cause such Registration Statement to be
filed by the Filing Date for such Registration Statement and declared effective
as soon as possible thereafter. Such Registration Statement shall contain
(except if otherwise required pursuant to written comments received from the
Commission upon a review of such Registration Statement) the "Plan of
Distribution" attached hereto as Annex
A.
The
Company shall use its best efforts to keep such Registration Statement
continuously effective under the Securities Act during the entire Effectiveness
Period. By 5:00 p.m. (New York City time) on the Business Day immediately
following the Effective Date of such Registration Statement, the Company shall
file with the Commission in accordance with Rule 424 under the Securities Act
the final prospectus to be used in connection with sales pursuant to such
Registration Statement (whether or not such filing is technically required
under
such Rule).
(d) If:
(i) a
Registration Statement is not filed on or prior to its Filing Date covering
the
Registrable Securities required under this Agreement to
be
included therein (if the Company files a Registration Statement without
affording the Holder the opportunity to review and comment on the same as
required by Section 3(a) hereof, the Company shall not be deemed to have
satisfied this clause (i)), or (ii) if by the Business Day immediately following
the Effective Date the Company shall not have filed a “final” prospectus for the
Registration Statement with the Commission under Rule 424(b) in accordance
with
Section 2(a), 2(b), or 2(c) herein, as the case may be (whether or not such
a
prospectus is technically required by such Rule), or (iii) after its Effective
Date, without regard for the reason thereunder or efforts therefor, such
Registration Statement ceases for any reason to be effective and available
to
the Holder as to all Registrable Securities to which it is required to cover
at
any time prior to the expiration of its Effectiveness Period for more than
an
aggregate of 30 Trading Days (which need not be consecutive) (any such failure
or breach being referred to as an “Event,”
and for
purposes of clauses (i) or (ii) the date on which such Event occurs, or for
purposes of clause (iii) the date which such 30 Trading Day-period is exceeded,
being referred to as “Event
Date”),
then
in addition to any other rights the Holder may have hereunder or under
applicable law: on such Event Date and on each monthly anniversary of each
such
Event Date (if the applicable Event
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shall
not
have been cured by such date) until
the
applicable Event is cured
the
Company shall pay to the Holder an amount in cash, as partial liquidated damages
and not as a penalty, equal to 1.0% of the aggregate Investment Amount paid
by
the Holder pursuant to the Purchase Agreement; provided, however, that, for
purposes of clauses (i) or (ii) above, and in addition to the above liquidated
damages, upon such Event, the Company shall immediately pay to the Holder a
cash
payment of $500,000 as partial liquidated damages and not as a penalty (the
“Initial
Payment”).
In no
event will the Company be liable for liquidated damages under this section
in
excess of 1.0% of the aggregate Investment Amount of the Holder in any 30-day
period (other than the initial 30-day period beginning on the Event Date) and
the maximum aggregate liquidated damages payable to the Holder under this
section shall be fifteen percent (15%) of the aggregate Investment Amount paid
by the Holder pursuant to the Purchase Agreement, inclusive of the Initial
Payment (the “Cap”).
The
partial liquidated damages pursuant to the terms hereof shall apply on a daily
pro-rata basis for any portion of a month prior to the cure of an Event, except
in the case of the first Event Date. The Company shall not be liable for
liquidated damages under this Agreement as to any Registrable Securities which
are not permitted by the Commission to be included in a Registration Statement
due solely to Commission Comments from the time that it is determined that
such
Registrable Securities are not permitted to be registered solely due to
Commission Comments until such time as the provisions of this Agreement as
to
the next applicable Registration Statement required to be filed hereunder are
triggered, in which case the provisions of this Section 2(d) shall once again
apply, if applicable. In such case, the liquidated damages shall be calculated
to only apply to the percentage of Registrable Securities which are permitted
in
accordance with Commission Comments to be included in such Registration
Statement.
(e) The
Holder agrees to furnish to the Company a completed Questionnaire in the form
attached to this Agreement as Annex
B
(a
“Selling
Holder Questionnaire”).
The
Company shall not be required to include the Registrable Securities of a Holder
in a Registration Statement and shall not be required to pay any liquidated
or
other damages under Section 2(d) to a Holder who fails to furnish to the Company
a fully completed Selling Holder Questionnaire at least two Trading Days prior
to the Filing Date (subject to the requirements set forth in Section 3(a)).
3. Registration
Procedures.
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a) Not
less
than four Trading Days prior to the filing of a Registration Statement or any
related Prospectus or any amendment or supplement thereto, the Company shall
furnish to the Holder copies of the “Selling Stockholders” section of such
document, the “Plan of Distribution” and any risk factor contained in such
document that addresses specifically this transaction or the Selling
Stockholders, as proposed to be filed which documents will be subject to the
review of such Holder. The Company shall not file a Registration Statement,
any
Prospectus or any amendments or supplements thereto in which the “Selling
Stockholder” section thereof differs from the disclosure received from a Holder
in its Selling Holder Questionnaire (as amended or supplemented), without such
Holder’s express written authorization. The Company shall not file a
Registration Statement, any Prospectus or any
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amendments
or supplements thereto in which it (i) characterizes the Holder as an
underwriter, (ii) excludes the Holder due to such Holder refusing to be
named as an underwriter, or (iii) reduces the number of Registrable
Securities being registered on behalf of the Holder except in accordance with
Section 2 of this Agreement, without such Holder’s express written
authorization.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective as to the applicable Registrable Securities for its Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of
the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented
or
amended to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably possible to any comments received from the Commission with respect
to
each Registration Statement or any amendment thereto and, as promptly as
reasonably possible provide the Holder true and complete copies of all
correspondence from and to the Commission relating to such Registration
Statement that would not result in the disclosure to the Holder of material
and
non-public information concerning the Company; and (iv) comply in all material
respects with the provisions of the Securities Act and the Exchange Act with
respect to the Registration Statements and the disposition of all Registrable
Securities covered by each Registration Statement.
(c) Notify
the Holder as promptly as reasonably possible (and, in the case of (i)(A) below,
not less than one Trading Day prior to such filing and, in the case of (v)
below, not less than three Trading Days prior to the financial statements in
any
Registration Statement becoming ineligible for inclusion therein) (i)(A) when
a
Prospectus or any Prospectus supplement or post-effective amendment to a
Registration Statement is proposed to be filed; (B) when the Commission notifies
the Company whether there will be a "review" of such Registration Statement
and
whenever the Commission comments in writing on such Registration Statement
(the
Company shall provide true and complete copies thereof and all written responses
thereto to the Holder that pertains to the Holder as a Selling Stockholder
or to
the Plan of Distribution, but not information which the Company believes would
constitute material and non-public information); and (C) with respect to each
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a Registration Statement
or Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation
of
any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein
by
reference untrue in any material respect or that requires any revisions to
such
Registration Statement, Prospectus or other documents so that, in the case
of
such
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Registration
Statement or the Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to
be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) Use
its
reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(e) Furnish
to the Holder, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto and all exhibits to the extent requested
by
such Person (including those previously furnished) promptly after the filing
of
such documents with the Commission;
provided, however, that the filing of such documents with the Commission on
XXXXX shall constitute delivery under this Section 3(e).
(f) Promptly
deliver to the Holder, without charge, as many copies of each Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request;
provided, however, that the filing of each such Prospectus and each amendment
or
supplement thereto with the Commission on XXXXX shall constitute delivery under
this Section 3(f).
The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by the selling Holder in connection with the offering and
sale of the Registrable Securities covered by such Prospectus and any amendment
or supplement thereto.
(g) Prior
to
any public offering of Registrable Securities, register or qualify such
Registrable Securities for offer and sale under the securities or Blue Sky
laws
of all jurisdictions within the United States as the Holder may request, to
keep
each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the Registration Statements.
(h) Cooperate
with the Holder to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee
pursuant to the Registration Statements, which certificates shall be free,
to
the extent permitted by the Purchase Agreement, of all restrictive legends, and
to enable such Registrable Securities to be in such denominations and registered
in such names as the Holder may request.
(i) Upon
the
occurrence of any event contemplated by Section 3(c)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed
to
be incorporated therein by reference, and file any other required document
so
that, as thereafter delivered, no Registration Statement nor any Prospectus
will
contain an untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary to make the statements therein,
in
light of the circumstances under which they were made, not
misleading.
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4. Registration
Expenses.
All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with any
Trading Market on which the Common Stock is then listed or quoted for trading,
and (B) in compliance with applicable state securities or Blue Sky laws), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities and of printing prospectuses if the
printing of prospectuses is reasonably requested by the Holder), (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.
5. Indemnification.
(a) Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless the Holder and its officers, directors, agents, investment
advisors, partners, members and employees, each Person who controls the Holder
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from
and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable costs of preparation and reasonable attorneys'
fees) and expenses (collectively, "Losses"),
as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, any Prospectus
or
any form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus
or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (1) such
untrue statements or omissions are based solely upon information regarding
the
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use
in
the Registration Statement, such Prospectus or such form of Prospectus or in
any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (2) in the case of an occurrence
of
an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder
of an outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior to
the
receipt by such Holder of an Advice or an amended or supplemented Prospectus,
but only if and to the extent that following the receipt of the Advice or the
amended or supplemented Prospectus the misstatement or omission giving rise
to
such Loss would have been corrected.
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The
Company shall notify the Holder promptly of the institution, threat or assertion
of any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
(b) Indemnification
by Holder.
The
Holder shall indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon: (x) such Holder's failure
to comply with the prospectus delivery requirements of the Securities Act or
(y)
any untrue statement of a material fact contained in any Registration Statement,
any Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent that, (1) such
untrue statements or omissions are based solely upon information regarding
the
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use
in
the Registration Statement (it being understood that the Holder has approved
Annex A hereto for this purpose), such Prospectus or such form of Prospectus
or
in any amendment or supplement thereto or (2) in the case of an occurrence
of an
event of the type specified in Section 3(c)(ii)-(v), the use by such Holder
of
an outdated or defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of an Advice or an amended or supplemented Prospectus, but only
if and to the extent that following the receipt of the Advice or the amended
or
supplemented Prospectus the misstatement or omission giving rise to such Loss
would have been corrected. In no event shall the liability of the Holder 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 assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party
and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination
is
not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying
Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably
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satisfactory
to such Indemnified Party in any such Proceeding; or (3) the named parties
to
any such Proceeding (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
have been advised by counsel that a conflict of interest is likely to exist
if
the same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense thereof and such counsel shall be at the expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, which consent shall not
be
unreasonably withheld. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from
all
liability on claims that are the subject matter of such Proceeding.
All
fees
and expenses of the Indemnified Party (including reasonable fees and expenses
to
the extent incurred in connection with investigating or preparing to defend
such
Proceeding in a manner not inconsistent with this Section) shall be paid to
the
Indemnified Party, as incurred, within 10 Trading Days of written notice thereof
to the Indemnifying Party (regardless of whether it is ultimately determined
that an Indemnified Party is not entitled to indemnification hereunder;
provided, that the Indemnifying Party may require such Indemnified Party to
undertake to reimburse all such fees and expenses to the extent it is finally
judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).
(d) Contribution.
If a
claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount
by
-
10 -
which
the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that
such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
6. Notices.
(a) All
notices and other communications made pursuant to this Agreement shall be in
writing and shall be conclusively deemed to have been duly given:
(i) in
the
case of hand delivery to the address set forth below, on the next Business
Day
after delivery;
(ii) in
the
case of delivery by an internationally recognized overnight courier to the
address set forth below, freight prepaid, on the next Business Day after
delivery and signed receipt by the recipient; and
(iii) in
the
case of a notice sent by facsimile transmission to the number and addressed
as
set forth below, on the next Business Day after delivery, if receipt of such
facsimile transmission is confirmed.
(b) For
all
notices given pursuant to one of the methods listed in sub-clause (a) above,
a
copy of the notice should also be sent by email to the email address set forth
below.
(c) Contact
details:
If
to
Investor:
Address
for notices being delivered by hand/courier:
c/o
Inventages Whealth Management Inc.
Winterbotham
Place, Marlborough & Queen Streets
P.
O. Box
N-3026
Nassau,
The Bahamas, Attn: Xx. Xxxxxx Xxxxxxx
Always
with a copy to: IVC SA, Xxxxx xx Xxxxxx 00X, 0000 - Xxxxxxxx, Xxxxxxxxxxx,
Attn:
Xx. Xxxxxx xxx Xxxxxxxxx
Always
with a copy to: xxxxxxx@xxxxxxxxxx.xxx
and
xxxxxxxxx@xxxxxxxxxx.xxx
Number
for notices being delivered by facsimile transmission:
To:
IVC
SA, Attn: Xx. Xxxxxx xxx Xxxxxxxxx, at: x00 00 000 0000
Always
with a copy to: xxxxxxx@xxxxxxxxxx.xxx
and
xxxxxxxxx@xxxxxxxxxx.xxx
-
11 -
If
to the
Company:
Address
for notices being delivered by hand/courier:
Organic
To Go Food Corporation
0000
Xxxxx Xxxxxx Xxxxx
Xxxxxxx,
Xxxxxxxxxx 00000
Attn:
Chief Financial Officer
Always
with a copy to:
Loeb
&
Loeb LLP
00000
Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx
0000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Xxxxxxxx
Xxxxxx, Esq.
Number
for notices being delivered by facsimile transmission:
To:
Organic To Go Food Corporation, Attn: Chief Financial Officer, at: x0 000 000
0000
Always
with a copy to: Loeb
&
Loeb LLP, Attn: Xxxxxxxx Xxxxxx, Esq, at: x0 000 000 0000
If
to any
other Person who is then the registered Holder:
To
the
address of such Holder as it appears in the stock transfer books of the
Company.
(d) A
party
may change or supplement the contact details for service of any notice pursuant
to this Agreement, or designate additional addresses, facsimile numbers and
email addresses for the purposes of this Section 6, by giving the other parties
written notice of the new contact details in the manner set forth
above.
7. Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by the Holder, of any of their obligations
under this Agreement, the Holder or the Company, as the case may be, in addition
to being entitled to exercise all rights granted by law and under this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and the Holder
agree
that monetary damages would not provide adequate compensation for any losses
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.
-
12 -
(b) No
Piggyback on Registrations.
With
respect to the initial Registration Statement required to be filed under Section
2(a) hereof, neither the Company nor any of its security holders (other than
the
Holder in such capacity pursuant hereto) may include securities of the Company
in a Registration Statement other than the Registrable Securities. With respect
to any Registration Statements required to be filed under Section 2(b) or
Section 2(c), except as and to the extent specified in Schedule
3.1(v)
to the
Purchase Agreement, neither the Company nor any of its security holders (other
than the Holder in such capacity pursuant hereto) may include securities of
the
Company in a Registration Statement other than the Registrable Securities.
The
Company shall not during the Effectiveness Period enter into any agreement
providing any such registration rights to any of its security holders without
the prior written consent of the Holder (which consent shall not be unreasonably
withheld); provided, however, that such prior written consent of the Holder
shall not be required after Registration Statements covering all of the
Registrable Securities have been declared effective by the SEC.
(c) Compliance.
The
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.
(d) Discontinued
Disposition.
The
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the
kind
described in Section 3(c), the Holder will forthwith discontinue disposition
of
such Registrable Securities under the Registration Statement until the Holder's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement or until it is advised in writing (the "Advice")
by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.
(e) Piggy-Back
Registrations.
If at
any time during the Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under
the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company
shall send to the Holder written notice of such determination and, if within
15
calendar days after receipt of such notice, the Holder shall so request in
writing, the Company shall include in such registration statement all or any
part of such Registrable Securities such holder requests to be registered,
subject to customary underwriter cutbacks applicable to all holders of
registration rights.
(f) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this Section 7(f),
may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the same shall be in writing
and signed by the Company and the Holder of the then outstanding Registrable
Securities.
-
13 -
(g) 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
the
Holder. The Company may not assign its rights or obligations hereunder without
the prior written consent of the Holder. The Holder may assign their respective
rights hereunder in the manner and to the Persons as permitted under the
Purchase Agreement.
(h) Execution
and Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by facsimile or electronic mail transmission, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile or electronic mail signature were the original thereof.
(i) Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof.
(j) Arbitration. Each
party agrees that any dispute, controversy, or claim arising in relation to
this
Agreement, including with regard to its validity, invalidity, breach,
enforcement or termination, shall be resolved by binding arbitration in London,
England, in accordance with the rules of arbitration which are in force in
the
United Kingdom on the date when the notice of arbitration is submitted. The
arbitrability of such dispute, claim or controversy shall also be determined
in
such arbitration. Such arbitration proceeding shall be conducted in the English
language before one (1) arbitrator agreed to by the parties. Both the foregoing
agreement of the parties to arbitrate any and all such disputes, claims and
controversies, and the results, determinations, findings, judgments and/or
awards rendered through any such arbitration shall be final and binding on
the
parties hereto and may be specifically enforced by legal
proceedings.
(k) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law, and, in the case of the Holder, may include, among other
things, damages resulting from the reduction in value of the Registrable
Securities.
(l) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
-
14 -
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES TO FOLLOW]
-
15 -
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
ORGANIC
TO GO FOOD CORPORATION
By:
_________________________________
Name:
Xxxxx Xxxxx
Title:
Chairman and Chief Executive Officer
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES OF INVESTOR TO FOLLOW]
-
16 -
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
X.XXXXXX
L.P.
By:
_________________________________
Xx.
Xxxxxx Xxxxxxx
Director,
Inventages Whealth Management, Inc.,
as
General Partner of X.Xxxxxx L.P.
By:
__________________________________
Xx.
Xxxxxxxx Xxxxxxxxxxxxx
Director,
Inventages Whealth Management, Inc.,
as
General Partner of X.Xxxxxx L.P.
Signature
Page to Registration Rights Agreement
Annex
A
Plan
of
Distribution
The
Selling Stockholders and any of their pledgees, donees, transferees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of Common Stock on any stock exchange, market or trading facility on
which the shares are traded or quoted 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 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 Shares
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.
Annex
B
ORGANIC
TO GO FOOD CORPORATION
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of common stock (the “Common
Stock”),
of
Organic To Go Food Corporation, a Delaware corporation (the “Company”)
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”)
a
Registration Statement for the registration and resale of the Registrable
Securities, in accordance with the terms of the Registration Rights Agreement,
dated as of June [ ], 2008 (the “Registration
Rights Agreement”),
among
the Company and the Investor named therein. A copy of the Registration Rights
Agreement is available from the Company upon request at the address set forth
below. All capitalized terms used and not otherwise defined herein shall have
the meanings ascribed thereto in the Registration Rights Agreement.
The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
QUESTIONNAIRE
1. Name.
|
(a)
|
Full
Legal Name of Selling
Securityholder
|
|
(b)
|
Full
Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are
held:
|
|
(c)
|
Full
Legal Name of Natural Control Person (which means a natural person
who
directly or indirectly alone or with others has power to vote or
dispose
of the securities covered by the
questionnaire):
|
2.
Address for Notices to Selling Securityholder:
|
Telephone:
|
|
Fax:
|
|
Contact
Person:
|
3.
Beneficial Ownership of Registrable Securities:
|
Type
and Principal Amount of Registrable Securities beneficially
owned:
|
4.
Broker-Dealer Status:
|
(a)
|
Are
you a broker-dealer?
|
Yes
¨ No
¨
|
Note:
|
If
yes, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
|
(b)
|
Are
you an affiliate of a
broker-dealer?
|
Yes
¨ No
¨
|
(c)
|
If
you are an affiliate of a broker-dealer, do you certify that you
bought
the Registrable Securities in the ordinary course of business, and
at the
time of the purchase of the Registrable Securities to be resold,
you had
no agreements or understandings, directly or indirectly, with any
person
to distribute the Registrable
Securities?
|
Yes
¨ No
¨
Note: If
no,
the Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.
5.
Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.
Except
as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
|
Type
and Amount of Other Securities beneficially owned by the Selling
Securityholder:
|
6.
Relationships with the Company:
Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.
State
any
exceptions here:
7.
The
Company has advised each Selling Stockholder that it may not use shares
registered on the Registration Statement to cover short sales of Common Stock
made prior to the date on which the Registration Statement is declared effective
by the Commission, in accordance with 1997 Securities and Exchange Commission
Manual of Publicly Available Telephone Interpretations Section A.65. If a
Selling Stockholder uses the 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 the Registration Statement.
The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
and prior to the Effective Date for the Registration Statement.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
and Questionnaire to be executed and delivered either in person or by its duly
authorized agent.
|
Dated:
_________________________
|
Beneficial
Owner: _______________________________
|
|
By:
__________________________________________
|
|
|
Name:
|
|
|
Title:
|
PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:
Loeb
& Loeb LLP
00000
Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
Attention:
Xxxxxx Xxxxx, Esq.
Facsimile:
(000) 000-0000
