REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this "Agreement") is made and
entered into as of January __, 2011 by and among American Standard Energy Corp.,
a Delaware corporation (the "Company"), and the several
purchasers signatory hereto (each a "Purchaser" and collectively,
the "Purchasers").
This
Agreement is made pursuant to the Securities Purchase Agreement, dated January
__, 2011 between the Company and each Purchaser (the "Purchase
Agreement").
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and each of the Purchasers agree as
follows:
1. Definitions. Capitalized
terms used and not otherwise defined herein that are defined in the Purchase
Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have
the following meanings:
"Advice" has the meaning set
forth in Section 6(d).
"Agreement" has the meaning
set forth in the Preamble.
"Company" has the meaning set
forth in the Preamble.
"Effective Date" means the
date that the Registration Statement filed pursuant to Section 2(a) is first
declared effective by the Commission.
"Effectiveness Deadline"
means, with respect to the Initial Registration Statement or the New
Registration Statement, the one-hundred twentieth (120th) calendar day following
the Closing Date (or, in the event the Commission reviews and has written
comments to the Initial Registration Statement or the New Registration
Statement, the one hundred fiftieth (150th) calendar day following the Closing
Date); provided, however, that if the Company
is notified by the Commission that the Initial Registration Statement or the New
Registration Statement will not be reviewed or is no longer subject to further
review and comments, the Effectiveness Deadline as to such Registration
Statement shall be the fifth (5th) Trading Day following the date on which the
Company is so notified if such date precedes the dates otherwise required above;
provided, further, that if the
Effectiveness Deadline falls on a Saturday, Sunday or other day that the
Commission is closed for business, the Effectiveness Deadline shall be extended
to the next Business Day on which the Commission is open for
business.
"Effectiveness Period" has the
meaning set forth in Section 2(b).
"Event" has the meaning set
forth in Section 2(c).
"Event Date" has the meaning
set forth in Section 2(c).
"Filing Deadline" means, with
respect to the Initial Registration Statement required to be filed pursuant to
Section 2(a), the thirtieth
(30th) calendar day following the Closing Date, provided, however, that if the Filing
Deadline falls on a Saturday, Sunday or other day that the Commission is closed
for business, the Filing Deadline shall be extended to the next business day on
which the Commission is open for business.
"FINRA" has the meaning set
forth in Section 3(i).
"Holder" or "Holders" means the holder or
holders, as the case may be, from time to time 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).
"Initial Registration
Statement" has the meaning set forth in Section 2(a).
"Liquidated Damages" has the
meaning set forth in Section 2(c).
"Losses" has the meaning set
forth in Section 5(a).
"New Registration Statement"
has the meaning set forth in Section 2(a).
"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.
"Purchase Agreement" has the
meaning set forth in the Recitals.
"Purchaser" or "Purchasers" has the meaning
set forth in the Preamble.
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"Registrable Securities" means
all of (i) the Shares, (ii) the Warrant Shares and (iii) any
securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the foregoing,
provided, that the
Holder has completed and delivered to the Company a Selling Stockholder
Questionnaire and provided to the Company any
other information regarding the Holder and the distribution of the Registrable
Securities as the Company may, from time to time, reasonably require for
inclusion in a Registration Statement pursuant to applicable law; and provided, further, that with respect to
a particular Holder, such Holder's Shares and Warrant Shares shall cease to be
Registrable Securities upon the earliest to occur of the following: (A) a
sale pursuant to a Registration Statement or Rule 144 under the Securities
Act (in which case, only such security sold by the Holder shall cease to be a
Registrable Security); or (B) becoming eligible for resale by the Holder
under Rule 144 without the requirement for the Company to be in compliance
with the current public information required thereunder and without volume or
manner-of-sale restrictions, pursuant to a written opinion letter to such
effect, addressed, delivered and acceptable to the Transfer Agent.
"Registration Statements"
means any one or more registration statements of the Company filed under the
Securities Act that covers the resale of any of the Registrable Securities
pursuant to the provisions of this Agreement (including without limitation the
Initial Registration Statement, the New Registration Statement and any Remainder
Registration Statements), amendments and supplements to such Registration
Statements, including post-effective amendments, all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
Registration Statements.
"Remainder Registration
Statement" has the meaning set forth in Section 2(a).
"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.
"SEC Guidance" means
(i) any publicly-available written or oral guidance, comments, requirements
or requests of the Commission staff and (ii) the Securities
Act.
"Selling Stockholder
Questionnaire" means a questionnaire in the form attached as Annex B hereto,
or such other form of questionnaire as may reasonably be adopted by the Company
from time to time.
“Series A Warrants” means the
Series A Warrants issued to the Purchasers pursuant to the Purchase
Agreement.
“Series B Warrants” means the
Series B Warrants issued to the Purchasers pursuant to the Purchase
Agreement.
“Series A Warrant Shares”
means the shares of Common Stock issuable to the Purchasers pursuant to
the exercise of the Series A Warrants.
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“Series B Warrant Shares” means the shares of
Common Stock issuable to the Purchasers pursuant to the exercise of the Series B
Warrants.
"Shares" means the shares of
Common Stock issued or issuable to the Purchasers pursuant to the Purchase
Agreement.
"Warrants" means,
collectively, the Series A Warrants and the Series B Warrants issued pursuant to
the Purchase Agreement.
"Warrant Shares" means,
collectively, the Series A Warrant Shares and the Series B Warrant Shares issued
or issuable upon exercise of the Warrants.
2. Registration.
(a) On
or prior to the Filing Deadline, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all of the
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 or, if Rule 415 is not available for offers and sales of
the Registrable Securities, by such other means of distribution of Registrable
Securities as the Holders may reasonably specify (the "Initial Registration
Statement"). The Initial Registration Statement shall be on
Form S-3 (except if the Company is then ineligible to register for resale
the Registrable Securities on Form S-3, in which case such registration
shall be on such other form available to register for resale the Registrable
Securities as a secondary offering) subject to the provisions of Section 2(e) and 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" section attached hereto as Annex A (which
may be modified to respond to comments, if any, provided by the Commission or
to reflect any non-material changes). Notwithstanding the
registration obligations set forth in this Section 2, if the Commission
informs the Company that all of the Registrable Securities cannot, as a result
of the application of Rule 415, be registered for resale as a secondary
offering on a single registration statement, the Company agrees to promptly
(i) inform each of the holders thereof and use its commercially reasonable
efforts to file amendments to the Initial Registration Statement as required by
the Commission and/or (ii) withdraw the Initial Registration Statement and
file a new registration statement (a "New Registration Statement"),
in either case covering the maximum number of Registrable Securities permitted
to be registered by the Commission, on Form S-3 or such other form
available to register for resale the Registrable Securities as a secondary
offering. Notwithstanding any other provision of this Agreement and subject to
the payment of Liquidated Damages in Section 2(c), if applicable,
if the Commission or any SEC Guidance sets forth a limitation of the number of
Registrable Securities permitted to be registered on a particular Registration
Statement as a secondary offering, unless otherwise directed in writing by a
Holder as to its Registrable Securities, the number of Registrable Securities to
be registered on such Registration Statement will first be reduced by
Registrable Securities represented by holders of Warrant Shares (applied, in the
case that some Warrant Shares may be registered, to the Holders on a pro rata
basis based on the total number of unregistered Warrant Shares held by such
Holders) and second by Registrable Securities represented by Shares (applied, in
the case that some Shares may be registered, to the Holders on a pro rata basis
based on the total number of unregistered Shares held by such Holders, subject
to a determination by the Commission that certain Holders must be reduced first
based on the number of Shares held by such Holders). If the Company
amends the Initial Registration Statement or files a New Registration Statement,
as the case may be, under clauses (i) or (ii) above, the Company will use its
commercially reasonable efforts to file with the Commission, as promptly as
allowed by the Commission or SEC Guidance provided to the Company, one
or more registration statements on Form S-3 or such other form available to
register for resale those Registrable Securities that were not registered for
resale on the Initial Registration Statement, as amended, or the New
Registration Statement (the "Remainder Registration
Statements").
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(b) The
Company shall use its commercially reasonable efforts to cause each Registration
Statement to be declared effective by the Commission as soon as practicable and,
with respect to the Initial Registration Statement or the New Registration
Statement, as applicable, no later than the Effectiveness Deadline (including
filing with the Commission a request for acceleration of effectiveness in
accordance with Rule 461 promulgated under the Securities Act), and shall
use its commercially reasonable efforts to keep each Registration Statement
continuously effective under the Securities Act until the earliest of
(i) such time as all of the Registrable Securities covered by such
Registration Statement have been sold by the Holders; (ii) the date that
all the Shares, the Warrant Shares and any securities issued or issuable upon
any stock split, dividend or other distribution, recapitalization or similar
event with respect to the foregoing cease to be Registrable Securities; and
(iii) the first anniversary of the Closing Date (provided, however, that such one-year
period will be extended for a period of time equal to the period any Purchaser
is required to suspend sales of such Registrable Securities pursuant to the
terms of this Agreement) (the "Effectiveness
Period"). The Company shall promptly notify the Holders via
facsimile or electronic mail of a ".pdf" format data file of the effectiveness
of a Registration Statement on the same Trading Day that the Company
telephonically confirms effectiveness with the Commission. The
Company shall, by 9:30 A.M. New York City time on the first Trading
Day after the Effective Date, file a final Prospectus with the Commission, as
required by Rule 424(b). Failure to so notify the Holders on or
before the second Trading Day after such notification of effectiveness or
failure to file a final Prospectus as aforesaid shall be deemed an Event under
Section 2(c).
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(c) Subject
to the provisions of Sections 3(a), 3(h) and 3(i), if (i) the
Initial Registration Statement is not filed with the Commission on or prior to
the Filing Deadline, (ii) the Initial Registration Statement or the New
Registration Statement, as applicable, is not declared effective by the
Commission (or otherwise does not become effective) for any reason on or prior
to the Effectiveness Deadline or (iii) after its Effective Date,
(A) such Registration Statement ceases for any reason (including without
limitation by reason of a stop order, or the Company's failure to update the
Registration Statement), to remain continuously effective as to all Registrable
Securities included in such Registration Statement for more than twenty (20)
consecutive calendar days or more than an aggregate of thirty (30) calendar days
(which need not be consecutive calendar days) during any 12-month period, or
(B) the Holders are not permitted to utilize the Prospectus therein to
resell such Registrable Securities for any reason for more than an aggregate of
thirty (30) consecutive calendar days (or forty-five (45) consecutive calendar
days if the Company receives comments on its Annual Report on Form 10-K for
the year ended December 31, 2010) or sixty (60) calendar days (which need
not be consecutive days) during any twelve (12) month period, (any
such failure or breach in clauses (i) through (iii) above 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 on which such thirty (30), forty-five (45) or
sixty (60) calendar day period is exceeded, being referred to as an "Event Date"), then on each
monthly anniversary of each such Event Date (if the applicable Event shall not
have been cured by such date) until the earlier of (1) the applicable Event
is cured and (2) the Registrable Securities are eligible for resale
pursuant to Rule 144 without manner of sale or volume restrictions, the
Company shall pay to each Holder an amount in the Company’s common stock, as
liquidated damages and not as a penalty ("Liquidated Damages"), equal
to one percent (1.0%) of the aggregate purchase price paid by such Holder
pursuant to the Purchase Agreement for any unregistered Registrable Securities
then held by such Holder (which remedy shall be exclusive of any other remedies
available under this Agreement or under applicable law). The parties
agree that (1) notwithstanding anything to the contrary herein or in the
Purchase Agreement, no Liquidated Damages shall be payable with respect to any
period after the expiration of the Effectiveness Period (except in respect of an
Event described in Section 2(c)(iv) herein), (it
being understood that this sentence shall not relieve the Company of any
Liquidated Damages accruing prior to the Effectiveness Deadline) and (2) in no
event shall the Company be liable in any thirty (30) day period for Liquidated
Damages under this Agreement in excess of six percent (6.0%) of the aggregate
purchase price paid by the Holders pursuant to the Purchase Agreement, except in
the case of a payment made on an Event Date and the monthly anniversary of such
Event Date. If the Company fails to pay any Liquidated Damages
pursuant to this Section 2(c) in full within
ten (10) Business Days after the date payable, the Company will pay simple
interest thereon at a rate of fifteen percent (15.0%) per year (or such lesser
maximum amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such Liquidated Damages are due until such amounts,
plus all such interest thereon, are paid in full. The 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 SEC Guidance from the time that it is determined that such Registrable
Securities are not permitted to be registered until such time as the provisions
of this Agreement as to the Remainder Registration Statements required to be
filed hereunder are triggered, in which case the provisions of this Section 2(c) 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 SEC Guidance to be included in such Registration
Statement. The Effectiveness Deadline for a Registration Statement
shall be extended without default or Liquidated Damages hereunder in the event
that the Company's failure to obtain the effectiveness of the Registration
Statement on a timely basis results from the failure of a Purchaser to timely
provide the Company with information requested by the Company and necessary to
complete the Registration Statement in accordance with the requirements of the
Securities Act (in which the Effectiveness Deadline would be extended with
respect to Registrable Securities held by such Purchaser).
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(d) Each
Holder agrees to furnish to the Company a completed Selling Stockholder
Questionnaire not more than three (3) Trading Days following the date of this
Agreement. At least five (5) Trading Days prior to the first
anticipated filing date of a Registration Statement for any registration under
this Agreement, the Company will notify each Holder of the information the
Company requires from that Holder other than the information contained in the
Selling Stockholder Questionnaire, if any, which shall be completed and
delivered to the Company promptly upon request and, in any event, within three
(3) Trading Days prior to the applicable anticipated filing
date. Each Holder further agrees that it shall not be entitled to be
named as a selling securityholder in the Registration Statement or use the
Prospectus for offers and resales of Registrable Securities at any time, unless
such Holder has returned to the Company a completed and signed Selling
Stockholder Questionnaire and a response to any reasonable requests for further
information as described in the previous sentence. If a Holder of
Registrable Securities returns a Selling Stockholder Questionnaire or a request
for further information, in either case, after its respective deadline, the
Company shall use its commercially reasonable efforts to take such actions as
are required to name such Holder as a selling security holder in the
Registration Statement or any pre-effective or post-effective amendment thereto
and to include (to the extent not theretofore included) in the Registration
Statement the Registrable Securities identified in such late Selling Stockholder
Questionnaire or request for further information, provided, however, that the Company
shall not be obligated to file more than one post-effective amendment or
supplement in any 60-day period following the date such Registration Statement
is declared effective for the purpose of naming Holders as selling
securityholders who are not named in such Registration Statement at the time of
effectiveness. Each Holder acknowledges and agrees that the information in the
Selling Stockholder Questionnaire or request for further information as
described in this Section 2(d) will be used by
the Company in the preparation of the Registration Statement and hereby consents
to the inclusion of such information in the Registration Statement.
(e) If
Form S-3 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall (i) register the resale
of the Registrable Securities on another appropriate form and
(ii) undertake to register the Registrable Securities on Form S-3
promptly after such form is available, provided that the Company
shall maintain the effectiveness of the Registration Statement then in effect
until such time as a Registration Statement on Form S-3 covering the
Registrable Securities has been declared effective by the
Commission. The Holders acknowledge that as of the Closing Date and
at the time of the Filing Deadline the Company will not be eligible to use a
Form S-3 to register the resale of the Registrable Securities.
3. Registration
Procedures
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a) Not
less than two (2) Trading Days prior to the filing of each Registration
Statement and not less than one (1) Trading Day prior to the filing of any
related Prospectus or any amendment or supplement thereto (except for Annual
Reports on Form 10-K (including portions of the Company's Proxy Statement
for its Annual Meetings of Stockholders to the extent specifically incorporated
by reference into such Annual Reports on Form 10-K), Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and any similar or successor
reports or any prospectus supplement the substance of which is limited to any of
the foregoing filings), (i) furnish to the Holder copies of such
Registration Statement, Prospectus or amendment or supplement thereto, as
proposed to be filed, which documents will be subject to the review of such
Holder (it being acknowledged and agreed that if a Holder does not object to or
comment on the aforementioned documents within such two (2) Trading Day or one
(1) Trading Day period, as the case may be, then the Holder shall be deemed to
have consented to and approved the use of such documents) and (ii) use
commercially reasonable efforts to cause its officers and directors, counsel and
independent registered public accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of respective counsel to each Holder, to
conduct a reasonable investigation within the meaning of the Securities
Act. The Company shall not file any Registration Statement or
amendment or supplement thereto in a form to which a Holder reasonably objects
in good faith, provided
that, the Company is notified of such objection in writing within the two (2)
Trading Day or one (1) Trading Day period described above, as applicable, and
for such period as the Company and such Holder are attempting in good faith to
resolve the objection of such Holder, any time period or deadline for purposes
of Section 2(c) shall be
extended for such period and no Liquidated Damages shall accrue or be payable
for such period.
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(b) (i) Prepare
and file with the Commission such amendments (including post effective
amendments) and supplements, 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; (ii) cause the related Prospectus to be amended
or supplemented by any required Prospectus supplement (subject to the terms of
this Agreement), and, as so supplemented or amended, to be filed pursuant to
Rule 424; (iii) respond as promptly as reasonably practicable 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 Holders true and complete copies of all correspondence from and to
the Commission relating to such Registration Statement that pertains to the
Holders as "Selling Stockholders" but not any other comments or any comments
that would result in the disclosure to the Holders of material and non-public
information concerning the Company; and (iv) comply with the provisions of
the Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by a Registration Statement during the
Effectiveness Period (subject to the terms of this Agreement) in accordance with
the intended methods of disposition by the Holders thereof as set forth in such
Registration Statement as so amended or in such Prospectus as so supplemented;
provided, however, that each Purchaser
shall be responsible for the delivery of the Prospectus, if required, to the
Persons to whom such Purchaser sells any of the Shares or the Warrant Shares
(including in accordance with Rule 172 under the Securities Act), and each
Purchaser agrees to dispose of Registrable Securities in compliance with the
"Plan of Distribution" described in the Registration Statement and otherwise in
compliance with applicable federal and state securities laws. In the case of
amendments and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of
the Company filing a report on Form 10-K, Form 10-Q or Form 8-K
or any analogous report under the 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 Exchange Act report which created the requirement for
the Company to amend or supplement such Registration Statement was
filed.
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(c) Notify
the Holders (which notice shall, pursuant to clauses (iii) through (vi) hereof,
be accompanied by an instruction to suspend the use of the Prospectus until the
requisite changes have been made) as promptly as reasonably practicable (and, in
the case of (i)(A) below, not less than one (1) Trading Day prior to such
filing): (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 any Registration Statement (in which case the Company shall provide
to each of the Holders true and complete copies of all comments that pertain to
the Holders as a "Selling Stockholder" or to the "Plan of Distribution" and all
written responses thereto, but not any other comments or responses or
information that 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 that pertains to the Holders as "Selling Stockholders" or
the "Plan of Distribution"; (iii) of the issuance by the Commission or any
other federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of
the receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; (v) of the occurrence of any event or passage
of time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in 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 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 the case of any Prospectus, form of prospectus
or supplement thereto, in light of the circumstances under which they were
made), not misleading and (vi) of the occurrence or existence of any
pending corporate development with respect to the Company that the Company
believes may be material and that, in the determination of the Company, makes it
not in the best interest of the Company to allow continued availability of a
Registration Statement or Prospectus, provided that, any and all
such information shall remain confidential to each Holder until such information
otherwise becomes public, unless disclosure by a Holder is required by law; and
provided, further, that notwithstanding
each Holder's agreement to keep such information confidential, each such Holder
makes no acknowledgement that any such information is material, non-public
information.
(d) Use
commercially reasonable 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, as soon as practicable.
(e) If
requested by a Holder, furnish to such 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 or incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that the Company
shall have no obligation to provide any document pursuant to this clause that is
available on the Commission's XXXXX system; provided further, that the Company
shall have no obligation to provide an unredacted form of any exhibit if the
Company has filed or the Commission has granted a confidential treatment request
with respect to such exhibit.
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(f) Prior
to any resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the selling Holders
in connection with the registration or qualification (or exemption from the
registration or qualification) of such Registrable Securities for the resale by
the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep each
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by each Registration Statement; provided, that the Company
shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified, subject the Company to any material tax in
any such jurisdiction where it is not then so subject or file a general consent
to service of process in any such jurisdiction.
(g) If
requested by a Holder, cooperate with such Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to (i) the Holder upon effectiveness of a Registration
Statement covering the resales of the Shares or (ii) a transferee pursuant
to transfers made pursuant to the Registration Statement, which certificates
shall be free, to the extent permitted by the Purchase Agreement and the
Warrants and under law, of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names
as any such Holders may reasonably request.
(h) Following
the occurrence of any event contemplated by Section 3(c), as promptly as
reasonably practicable (taking into account the Company's good faith assessment
of any adverse consequences to the Company and its stockholders of the premature
disclosure of such event), prepare a supplement or amendment, including a post
effective amendment, to 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 the case of
any Prospectus, form of prospectus or supplement thereto, in light of the
circumstances under which they were made), not misleading. If the
Company notifies the Holders in accordance with clauses (iii) through (vi) of
Section 3(c) above to suspend
the use of any Prospectus until the requisite changes to such Prospectus have
been made, then the Holders shall suspend use of such Prospectus. The
Company will use its commercially reasonable efforts to ensure that the use of
the Prospectus may be resumed as promptly as is practicable. The
Company shall be entitled to exercise its right under this Section 3(h) to suspend the
availability of a Registration statement and Prospectus, without the payment of
partial Liquidated Damages otherwise required pursuant to Section 2(c), for periods not
to exceed the time periods set forth in Section 2(c)(iii)(B).
-10-
(i) The
Company may require each selling Holder to furnish to the Company a certified
statement as to (i) the number of shares of Common Stock beneficially owned
by such Holder and any Affiliate thereof, (ii) any Financial Industry
Regulatory Authority ("FINRA") affiliations,
(iii) any natural persons who have the power to vote or dispose of the
common stock and (iv) any other information as may be requested by the
Commission, FINRA or any state securities commission. During any
periods that the Company is unable to meet its obligations hereunder with
respect to the registration of Registrable Securities because any Holder fails
to furnish such information within three (3) Trading Days of the Company's
request, any Liquidated Damages that are accruing at such time as to such Holder
only shall be tolled and any Event that may otherwise occur solely because of
such delay shall be suspended as to such Holder only, until such information is
delivered to the Company.
(j) Neither
the Company nor any subsidiary or affiliate thereof shall identify any Purchaser
as an underwriter in any public disclosure or filing with the Commission or any
Trading Market and any Purchaser being deemed an underwriter by the
Commission shall not relieve the Company of any obligations it has under this
Agreement or any other Transaction Document; provided, however, that the
foregoing shall not prohibit the Company from including the disclosure found in
the "Plan of Distribution" section attached hereto in the Registration
Statement, provided, further, if any
Purchaser is required to be identified as an underwriter by the Commission or
the Trading Market, prior to the Company so naming such Purchaser, the Company
shall promptly notify such Purchaser and such Purchaser shall be entitled to
either (i) agree to be so named, or (ii) withdraw as a selling stockholder with
respect to the applicable Registration Statement. If any such
Purchaser refuses to be so named as an underwriter or to withdraw from the
applicable Registration Statement, such Purchaser shall not be entitled to any
Liquidated Damages or to recover from the Company any other damages or losses
caused by such refusal.
4. Registration
Expenses. All fees and expenses incident to the Company's
performance of or compliance with its obligations under this Agreement
(excluding any underwriting discounts and selling commissions and all legal fees
and expenses of legal counsel for any Holder) 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 for trading and (B) with respect to compliance with applicable state
securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities and determination of
the eligibility of the Registrable Securities for investment under the laws of
such jurisdictions as requested by the Holder), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities), (iii) messenger, telephone and delivery expenses
incurred by the Company, (iv) fees and disbursements of counsel for the
Company, and (v) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement. In addition, the Company shall be responsible for all
of its internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the
Company be responsible for any underwriting, broker or similar fees or
commissions of any Holder or any legal fees or other costs of the
Holders.
-11-
5. Indemnification.
(a) Indemnification by the
Company. The Company shall, notwithstanding any termination of
this Agreement, indemnify, defend and hold harmless each Holder, the officers,
directors, agents, partners, members, managers, stockholders, Affiliates and
employees of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, partners, members, managers,
stockholders, agents and employees of each such controlling Person, to the
fullest extent permitted by applicable law, from and against any and all losses,
claims, expenses, damages, liabilities and costs (including, without limitation,
reasonable costs of preparation and investigation and reasonable attorneys'
fees, all of which shall be payable quarterly in arrears as they are incurred)
(collectively, "Losses"), that arise out of
or are based upon (i) 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 to
state 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, or (ii) any violation or alleged violation by the Company
of the Securities Act, Exchange Act or any state securities law or any rule or
regulation thereunder, in connection with the performance of its obligations
under this Agreement, except to the extent, but only to the extent, that
(A) such untrue statements, alleged untrue statements, omissions or alleged
omissions are based solely upon information regarding such Holder furnished in
writing to the Company by such Holder expressly for use therein, or to the
extent that such information relates to such Holder or such Holder's proposed
method of distribution of Registrable Securities and was reviewed and 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 each Holder has approved Annex A hereto
for this purpose) or (B) in the case of an occurrence of an event of the
type specified in Section 3(c)(iii)-(vi), related
to the use by a Holder of an outdated or defective Prospectus after the Company
has notified such Holder that the Prospectus is outdated or defective and prior
to the receipt by such Holder of the Advice contemplated and defined in Section 6(d) below, to the
extent that following the receipt of the Advice the misstatement or omission
giving rise to such Loss would have been corrected or (C) to the extent
that any such Losses arise out of the Purchaser's (or any other indemnified
Person's) failure to send or give a copy of the Prospectus or supplement (as
then amended or supplemented), if required, pursuant to Rule 172 under the
Securities Act (or any successor rule) to the Persons asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such Prospectus or
supplement. The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding arising from or in connection
with the transactions contemplated by this Agreement of which the Company is
aware. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of an Indemnified Party (as
defined in Section 5(c)) and shall
survive the transfer of the Registrable Securities by the
Holders.
-12-
(b) Indemnification by
Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and
employees, each Person who controls the Company (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses (all
of which shall be payable quarterly in arrears as they are incurred), as
incurred, arising out of or are based upon 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 any
form of prospectus or supplement thereto, in light of the circumstances under
which they were made) not misleading (A) to the extent that such untrue
statements or omissions are based solely upon information regarding such Holder
furnished in writing to the Company by such Holder expressly for use therein or
(B) 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 approved in writing by such Holder expressly for use in a
Registration Statement (it being understood that the Holder has approved Annex A hereto
for this purpose), such Prospectus or such form of Prospectus or in any
amendment or supplement thereto or (C) in the case of an occurrence of an
event of the type specified in Section 3(c)(iii)-(vi), to the
extent related to the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the Advice
contemplated in Section 6(d). In
no event shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the net proceeds received by such Holder upon
the sale of the Registrable Securities.
(c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted
against any Person entitled to indemnity hereunder (an "Indemnified Party"), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the "Indemnifying
Party") in writing, and the Indemnifying Party shall have the right to
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all reasonable 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, unless such
failure materially prejudices the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay
such fees and expenses; (2) the Indemnifying Party shall have failed
promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or
(3) the named parties to any such Proceeding (including any impleaded
parties) include both such Indemnified Party and the Indemnifying Party, and
such Indemnified Party shall have been advised by counsel that, in the
reasonable judgment of such counsel, representation of both parties by the same
counsel would be inappropriate under the applicable rules of professional
responsibility (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); provided, that the
Indemnifying Party shall not be liable for the fees and expenses of more than
one separate firm of attorneys at any time for all Indemnified
Parties. The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld or delayed. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.
-13-
Subject
to the terms of this Agreement, 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 5) shall be paid to
the Indemnified Party, quarterly in arrears as they are incurred; provided, that the
Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is finally judicially determined to not be entitled to
indemnification hereunder).
(d) Contribution. If
a claim for indemnification under Section 5(a) or 5(b) is unavailable
to an Indemnified Party or insufficient to hold an Indemnified Party harmless
for any Losses, then each Indemnifying Party, 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 this
Agreement, 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 5 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), (A) no
Holder shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the net proceeds actually received by such Holder from
the sale of the Registrable Securities subject to the Proceeding exceeds the
amount of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission and (B) no contribution will be made under circumstances where the
maker of such contribution would not have been required to indemnify the
Indemnified Party under the fault standards set forth in this Section 5. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent
misrepresentation.
-14-
The
indemnity and contribution agreements contained in this Section 5 are in addition to
any liability that the Indemnifying Parties may have to the Indemnified
Parties.
6. Miscellaneous.
(a) Remedies. In
the event of a breach by the Company or by a Holder of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Piggyback on
Registrations; Prohibition on Filing Other Registration
Statements. Except and to the extent specified in the
Schedules to the Purchase Agreement, neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Company in a Registration Statement other than the Registrable
Securities and the Company shall not prior to the Effective Date enter into any
agreement providing any such right to any of its security
holders. The Company shall not file with the Commission a
registration statement relating to an offering for its own account under the
Securities Act of any of its equity securities other than a registration
statement on Form S-8 or in connection with an acquisition, on Form S-4
until the earlier of (i) the date that is thirty (30) days after the
Initial Registration Statement or New Registration Statement, as the case may
be, is declared effective and (ii) the date that all Registrable Securities
are eligible for resale by non-affiliates without volume or manner of sale
restrictions under Rule 144 and without the requirement for the company to
be in compliance with the current public information requirements under
Rule 144. For the avoidance of doubt, the Company shall not be prohibited
from filing amendments to registration statements filed prior to the date of
this Agreement or a registration statement replacing a registration statement
filed prior to the date of this Agreement; provided that no such amendment or
replacement registration statement shall increase the number of securities
registered on a registration statement so previously filed.
(c) Compliance. Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it (unless an exemption
therefrom is available) in connection with sales of Registrable Securities
pursuant to the Registration Statement and shall sell the Registrable Securities
only in accordance with a method of distribution described in the Registration
Statement
-15-
(d) Discontinued
Disposition. By its acquisition of Registrable Securities,
each Holder agrees that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(c)(iii)-(vi), such
Holder will forthwith discontinue disposition of such Registrable Securities
under a Registration Statement until it is advised in writing (the "Advice") by the Company that
the use of the applicable Prospectus (as it may have been supplemented or
amended) may be resumed. The Company will use its commercially
reasonable efforts to ensure that the use of the Prospectus may be resumed as
promptly as is practicable. The Company agrees and acknowledges that
any periods during which the Holder is required to discontinue the disposition
of the Registrable Securities hereunder shall be subject to the provisions of
Section 2(c) and Section 3(h).
(e) Amendments and
Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, or
waived unless the same shall be in writing and signed by the Company and Holders
holding no less than two-thirds of the Registrable Securities issued and
issuable pursuant to the Securities Purchase Agreement and the Transaction
Documents on the Closing Date, provided that any party may
give a waiver as to itself. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof
with respect to a matter that relates exclusively to the rights of Holders and
that does not directly or indirectly affect the rights of other Holders may be
given by Holders of all of the Registrable Securities to which such waiver or
consent relates; provided, however, that the provisions
of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding
sentence.
(f) Notices. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder
shall be delivered as set forth in the Purchase Agreement.
(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 each Holder. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. The Company may not assign its
rights or obligations hereunder (except in connection with a Fundamental
Transaction (as defined by the Warrants), provided that the Company is
in compliance with the provisions governing Fundamental Transactions set forth
in the Warrants, without the prior written consent of all the Holders of the
then outstanding Registrable Securities. Each Holder may assign its
respective rights hereunder in the manner and to the Persons as permitted under
the Purchase Agreement; provided in each case that
(i) the Holder agrees in writing with the transferee or assignee to assign
such rights and related obligations under this Agreement, and for the transferee
or assignee to assume such obligations, and a copy of such agreement is
furnished to the Company promptly, and in any event within three Business Days,
(ii) the Company is promptly, and in any event within three Business Days,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being transferred or assigned, (iii) at or before the time the
effectiveness of such transfer or assignment, the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained
herein and (iv) the transferee or assignee is an "accredited investor," as
that term is defined in Rule 501 of Regulation D.
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(h) Execution and
Counterparts. This Agreement may be executed in two or more
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 and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. If any signature is delivered by facsimile
transmission or by e-mail delivery of a ".pdf" format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or ".pdf" signature were the original thereof.
(i) Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the provisions of the Purchase Agreement.
(j) Cumulative
Remedies. Except as provided herein, the remedies provided
herein are cumulative and not exclusive of any other remedies provided by
law.
(k) Severability. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their good faith
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(l) Headings. The
headings in this Agreement are for convenience only and shall not limit or
otherwise affect the meaning hereof.
(m) Independent Nature of
Purchasers' Obligations and Rights. The obligations of each
Purchaser under this Agreement are several and not joint with the obligations of
any other Purchaser hereunder, and no Purchaser shall be responsible in any way
for the performance of the obligations of any other Purchaser
hereunder. The decision of each Purchaser to purchase the Securities
pursuant to the Purchase Agreement has been made independently of any other
Purchaser. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this
Agreement. Each Purchaser acknowledges that no other Purchaser has
acted as agent for such Purchaser in connection with making its investment
hereunder and that no Purchaser will be acting as agent of such Purchaser in
connection with monitoring its investment in the Securities or enforcing its
rights under the Transaction Documents. Each Purchaser shall be
entitled to protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any Proceeding for such
purpose. The Company acknowledges that each of the Purchasers has
been provided with the same Registration Rights Agreement for the purpose of
closing a transaction with multiple Purchasers and not because it was required
or requested to do so by any Purchaser.
-17-
(n) Termination. This
Agreement shall be automatically terminated with respect to any Holder and shall
have no force or effect with respect to such Holder upon the termination of the
Purchase Agreement with respect to such Holder (other than such Holder's
obligations under Section 5). Nothing
in this Section 6(n) shall be deemed
to release any party from any liability for any breach by such party of the
terms and provisions of this Agreement.
[REMAINDER
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IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.
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By:
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Name:
Xxxxx Xxxxxxxxxx
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Title:
Chief Executive Officer
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have
executed this Registration Rights Agreement as of the date first written
above.
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NAME
OF INVESTING ENTITY
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AUTHORIZED
SIGNATORY
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By:
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Name:
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Title:
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ADDRESS
FOR NOTICE
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c/o:
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Street:
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City/State/Zip:
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Attention:
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Tel:
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Fax:
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Email:
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ANNEX A
PLAN OF
DISTRIBUTION
We are
registering the shares of common stock issued to the selling stockholders and
issuable upon exercise of the warrants issued to the selling stockholders to
permit the resale of these shares of common stock by the holders of the shares
of common stock and warrants from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by
the selling stockholders of the shares of common stock. We will bear
all fees and expenses incident to our obligation to register the offer and sale
of the shares of common stock.
The
selling stockholders may sell all or a portion of the shares of common stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the
shares of common stock are sold through underwriters or broker-dealers, the
selling stockholders will be responsible for underwriting discounts or
commissions or agent's commissions. The shares of common stock may be
sold on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale, in the over-the-counter
market or in transactions otherwise than on these exchanges or systems or in the
over-the-counter market and in one or more transactions at fixed prices, at
prevailing market prices at the time of the sale, at varying prices determined
at the time of sale, or at negotiated prices. These sales may be
effected in transactions, which may involve crosses or block
transactions. The selling stockholders may use any one or more of the
following methods when selling shares:
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·
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ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
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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;
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·
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purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
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an
exchange distribution in accordance with the rules of the applicable
exchange;
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·
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privately-negotiated
transactions;
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·
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settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a
part;
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·
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broker-dealers
may agree with the selling stockholders to sell a specified number of such
shares at a stipulated price per
share;
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through
the writing or settlement of options or other hedging transactions,
whether such options are listed on an options exchange or
otherwise;
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a
combination of any such methods of sale;
and
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any
other method permitted pursuant to applicable
law.
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The
selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act, as
permitted by that rule, or Section 4(1) under the Securities Act, if
available, rather than under this prospectus, provided that they meet the
criteria and conform to the requirements of those provisions.
Broker
dealers engaged by the selling stockholders may arrange for other broker dealers
to participate in sales. If the selling stockholders effect such
transactions by selling shares of common stock to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions from
the selling stockholders or commissions from purchasers of the shares of common
stock for whom they may act as agent or to whom they may sell as
principal. Such commissions will be in amounts to be negotiated, but,
except as set forth in a supplement to this prospectus, in the case of an agency
transaction will not be in excess of a customary brokerage commission in
compliance with FINRA Rule 2440; and in the case of a principal transaction
a markup or markdown in compliance with FINRA IM-2440.
In
connection with sales of the shares of common stock or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the shares of
common stock in the course of hedging in positions they assume. The
selling stockholders may also sell shares of common stock short and deliver
shares of common stock covered by this prospectus to close out short positions
and to return borrowed shares in connection with such short
sales. The selling stockholders may also loan or pledge shares of
common stock to broker-dealers that in turn may sell such shares, to the extent
permitted by applicable law. The selling stockholders may also enter
into option or other transactions with broker-dealers or other financial
institutions or the creation of one or more derivative securities which require
the delivery to such broker-dealer or other financial institution of shares
offered by this prospectus, which shares such broker-dealer or other financial
institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).
The
selling stockholders may, from time to time, pledge or grant a security interest
in some or all of the warrants or shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or
secured parties may offer and sell the shares of common stock from time to time
pursuant to this prospectus or any amendment to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act,
amending, if necessary, the list of selling stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this
prospectus. The selling stockholders also may transfer and donate the
shares of common stock in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.
The
selling stockholders and any broker-dealer or agents participating in the
distribution of the shares of common stock may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act in connection
with such sales and in which case may be subject to certain statutory
liabilities under the Exchange Act.
-2-
The
selling stockholders will be subject to the applicable prospectus delivery
requirements of the Securities Act unless subject to an exemption therefrom,
including under Rule 172 thereunder.
Each
selling stockholder has informed us that it is not a registered broker-dealer
and does not have any written or oral agreement or understanding, directly or
indirectly, with any person to distribute the common stock. Upon our
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 no event shall any broker-dealer receive fees,
commissions and markups, which, in the aggregate, would exceed
8.0%.
Under the
securities laws of some states, the shares of common stock may be sold in such
states only through registered or licensed brokers or dealers. In
addition, in some states the shares of common stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied
with.
There can
be no assurance that any selling stockholder will sell any or all of the shares
of common stock registered pursuant to the registration statement, of which this
prospectus forms a part.
Each
selling stockholder and any other person participating in such distribution will
be subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, to the extent applicable,
Regulation M of the Exchange Act, which may limit the timing of purchases and
sales of any of the shares of common stock by the selling stockholder and any
other participating person. To the extent applicable, Regulation M
may also restrict the ability of any person engaged in the distribution of the
shares of common stock to engage in market-making activities with respect to the
shares of common stock. All of the foregoing may affect the
marketability of the shares of common stock and the ability of any person or
entity to engage in market-making activities with respect to the shares of
common stock.
We will
pay all expenses of the registration of the shares of common stock pursuant to
the registration rights agreement, including, without limitation, SEC filing
fees and expenses of compliance with state securities or "blue sky" laws; provided, however, that each
selling stockholder will pay all underwriting discounts and selling commissions,
if any and any related legal expenses incurred by it. We will
indemnify the selling stockholders against certain liabilities, including some
liabilities under the Securities Act, in accordance with the registration rights
agreement, or the selling stockholders will be entitled to
contribution. We may be indemnified by the selling stockholders
against civil liabilities, including liabilities under the Securities Act, that
may arise from any written information furnished to us by the selling
stockholders specifically for use in this prospectus, in accordance with the
related registration rights agreement, or we may be entitled to
contribution.
-3-
ANNEX B
SELLING
STOCKHOLDER NOTICE AND QUESTIONNAIRE
The
undersigned holder of shares of the common stock, par value $0.001 per share of
American Standard Energy Corp. (the "Company") issued pursuant to
a certain Securities Purchase Agreement by and among the Company and the
Purchasers named therein, dated as of Janaury __, 2011 (the "Agreement"), understands that
the Company intends to file with the Securities and Exchange Commission a
registration statement on Form S-1 (the "Resale Registration
Statement") for the registration and the resale under Rule 415 of
the Securities Act of 1933, as amended (the "Securities Act"), of the
Registrable Securities in accordance with the terms of the Agreement and the
terms of the Registration Rights Agreement by and among the Company and the
Purchasers named therein, dated as of January __, 2011 (the “Registration Rights
Agreement”). All capitalized terms not otherwise defined herein shall
have the meanings ascribed thereto in either the Agreement or Registration
Rights Agreement.
In order
to sell or otherwise dispose of any Registrable Securities pursuant to the
Resale Registration Statement, a holder of Registrable Securities generally will
be required to be named as a selling stockholder in the related prospectus or a
supplement thereto (as so supplemented, the "Prospectus"), deliver the
Prospectus to purchasers of Registrable Securities, if required (including
pursuant to Rule 172 under the Securities Act) and be bound by the
provisions of the Agreement (including certain indemnification provisions, as
described below). Holders must complete and deliver
this Notice and Questionnaire in order to be named as selling stockholders in
the Prospectus. Holders of Registrable Securities who do not
complete, execute and return this Notice and Questionnaire within three (3)
Trading Days following the date of the Agreement (1) will not be named as
selling stockholders in the Resale Registration Statement or the Prospectus and
(2) may not use the Prospectus for resales of Registrable
Securities.
Certain
legal consequences arise from being named as a selling stockholder in the Resale
Registration Statement and the Prospectus. Holders of Registrable
Securities are advised to consult their own securities law counsel regarding the
consequences of being named or not being named as a selling stockholder in the
Resale Registration Statement and the Prospectus.
NOTICE
The
undersigned holder (the "Selling Stockholder") of
Registrable Securities hereby gives notice to the Company of its intention to
sell or otherwise dispose of Registrable Securities owned by it and listed below
in Item 3, unless otherwise specified in Item 3, pursuant to the Resale
Registration Statement. The undersigned, by signing and returning
this Notice and Questionnaire, understands and agrees that it will be bound by
the terms and conditions of this Notice and Questionnaire, the Agreement and the
Registration Rights Agreement.
The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and
complete:
QUESTIONNAIRE
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1.
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Name.
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(a)
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Full
Legal Name of Selling Stockholder:
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(b)
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Full
Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are
held:
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(c)
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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):
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2.
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Address for Notices to Selling
Stockholder:
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Telephone:
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Fax:
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Contact
Person:
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E-mail
address of Contact Person:
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3.
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Beneficial Ownership of
Registrable Securities Issuable Pursuant to the Purchase
Agreement:
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(a)
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Type
and Number of Registrable Securities beneficially owned and issued
pursuant to the Agreement:
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(b)
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Number
of shares of Common Stock to be registered pursuant to this Notice for
resale:
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4.
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Broker-Dealer
Status:
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(a)
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Are
you a broker-dealer registered pursuant to Section 15 of the Exchange
Act?
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Yes ¨
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No ¨
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(b)
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If
"yes" to Item 4(a), did you receive your Registrable Securities as
compensation for investment banking services to the
Company?
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Yes ¨
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No ¨
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Note:
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If
no, the Commission's staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
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(c)
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Are
you an affiliate of a broker-dealer registered pursuant to Section 15 of
the Exchange Act?
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Yes ¨
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No ¨
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Note: If yes,
provide a narrative explanation below:
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(d)
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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?
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Yes ¨
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No ¨
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Note:
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If
no, the Commission's staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
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For
the purposes of this Item 4, an "affiliate" of a registered broker-dealer
shall include any company that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with such broker-dealer, and does not include any individuals employed by
such broker-dealer or its
affiliates.
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5.
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Nature of Your Beneficial
Ownership:
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(a)
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If
the name of the beneficial owner of the Registrable Securities set forth
in your response to Item 1(a) above is that of a limited partnership,
state the names of the general partners of such limited
partnership:
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(b)
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With
respect to each general partner listed in Item 5(a) above who is not a
natural person, and is not publicly held, name each stockholder (or
managing member, if applicable) of such general partner. If any of these
named stockholders are not natural persons or publicly held entities,
please provide the same information. This process should be repeated until
you reach natural persons or a publicly held
entity.
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(c)
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If
you are not publicly held, name the entity that exercises voting and
dispositive power over the Registrable Securities set forth in Item 3
above (the "Controlling Entity"). If the Controlling Entity is not a
natural person or a publicly held entity, please name the entity that
controls such Controlling Entity and provide the same information for the
entity controlling the Controlling Entity. This process should be repeated
until you reach natural persons or a publicly held
entity.
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(i)
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Full
legal name of Controlling Entity(ies) or natural person(s) who have sole
or shared voting or dispositive power over the Registrable
Securities:
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(a)
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Business
address (including street address) (or residence if no business address),
telephone number and facsimile number of such
person(s):
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Address:
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Telephone:
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Fax:
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(b)
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Name(s)
of stockholders:
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(ii)
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Full
legal name of Controlling
Entity(ies):
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(a)
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Business
address (including street address) (or residence if no business address),
telephone number and facsimile number of such
person(s):
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Address:
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Telephone:
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Fax:
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(b)
Name(s) of shareholders:
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6.
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Beneficial Ownership of Other
Securities of the Company Owned by the Selling
Stockholder.
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Except as set forth below in this
Item 6, 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:
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7.
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Relationships with the
Company:
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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:
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8.
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Plan of
Distribution:
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The undersigned has reviewed the
form of Plan of Distribution attached as Annex A to the Registration Rights
Agreement, and hereby confirms that, except as set forth below, the information
contained therein regarding the undersigned and its plan of distribution is
correct and complete.
State any
exceptions here:
***********
The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may
occur subsequent to the date hereof and prior to the effective date of any
applicable Resale Registration Statement. All notices hereunder and
pursuant to the Agreement shall be made in writing, by hand delivery, confirmed
or facsimile transmission, first-class mail or air courier guaranteeing
overnight delivery at the address set forth below. In the absence of
any such notification, the Company shall be entitled to continue to rely on the
accuracy of the information in this Notice and Questionnaire.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (8) above and the inclusion
of such information in the Resale Registration Statement and the
Prospectus. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of
any such Registration Statement and the Prospectus.
Once this
Notice and Questionnaire is executed by the undersigned and received by the
Company, the terms of this Notice and Questionnaire, and the representations and
warranties contained herein, shall be binding on, shall inure to the benefit of
and shall be enforceable by the respective successors, heirs, personal
representatives, and assigns of the Company and the undersigned with respect to
the Registrable Securities beneficially owned by the undersigned and listed in
Item 3 above.
I confirm
that, to the best of my knowledge and belief, the foregoing statements
(including without limitation the answers to this Questionnaire) are
correct.
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.
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Dated:
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Beneficial
Owner:
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||
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By:
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||||
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Name:
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|||||
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Title:
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|||||
PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:
Xxx
Xxxxxx
Northland
Capital Markets
00 Xxxxx
0xx Xxxxxx
Xxxxx
0000
Xxxxxxxxxxx,
XX 00000
Tel:
000-000-0000
Fax:
000-000-0000
Email:
xxxxxxx@xxxxxxxxxxxxxxxxxxxxxxx.xxx
