Registration Rights Agreement
This
Registration Rights Agreement (the “Agreement”)
is
made as of the date set forth below between PerfectEnergy International Limited,
a Nevada corporation (the “Company”),
and
the purchasers of its Common Stock (as defined below) pursuant to a Securities
Purchase Agreement dated as of the date hereof (each an “Investor”
and,
collectively, the “Investors”).
Capitalized terms used and not defined herein shall have the respective meanings
ascribed to them in the Securities Purchase Agreement.
WHEREAS,
the Company has sold up to [___________] shares (the “Shares”)
of the
common stock of the Company, par value $0.001 per share (the “Common
Stock”),
and
warrants (the “Warrants”)
to
purchase up to [______________] shares of Common Stock at an exercise price
of
$[____] per share (the “Warrant
Shares,”
and
together with the Shares, the “Securities”)
to
certain investors in a private placement (the “Offering”);
and
1. Registration
Procedures and Expenses.
The
Company shall:
(a) subject
to receipt of necessary information from the Investors, use its commercially
reasonable efforts to cause a Registration Statement on Form S-3, or on such
other form as is available to the Company (the “Initial Registration
Statement”),
to be
filed with the Securities and Exchange Commission (“SEC”),
within thirty (30) calendar days following the Closing Date (the “Required
Filing Date”),
to
enable the resale of the Securities by the Investors from time to time.
Notwithstanding the registration obligations set forth in the first sentence
of
this Section
1(a),
in the
event the SEC informs the Company that all of the 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, (ii) use its best efforts to file amendments to
the
Initial Registration Statement as required by the SEC and/or (iii) withdraw
the
Initial Registration Statement and file a new registration statement (a
“New
Registration Statement,
and
together with the Initial Registration Statement, the “Registration
Statement”),
in
either case covering the maximum number of Securities permitted to be registered
by the SEC on Form S-3 or such other form available to register for resale
the
Securities as a secondary offering, with the number of shares included on such
amendment or the New Registration Statement cut back proportionally for each
Investor; provided,
however,
that
prior to filing such amendment or New Registration Statement, the Company shall
be obligated to use its best efforts to advocate with the SEC for the
registration of all of the Securities in accordance with SEC policies. In the
event the Company amends the Initial Registration Statement or files a New
Registration Statement, as the case may be, under clauses (ii) or (iii) above,
the Company will use its commercially reasonable efforts to file with the SEC,
as promptly as allowed by the SEC, one or more registration statements on Form
S-3 or such other form available to register for resale those Securities that
were not registered for resale on the Initial Registration Statement, as
amended, or the New Registration Statement;
(b) subject
to receipt of necessary information from the Investors, use its commercially
reasonable efforts to cause the Registration Statement to become effective
no
later than the date that is 90 calendar days after the Closing Date, (or, in
the
event of a “full review” of the Registration Statement by the SEC, one hundred
fifty (150) calendar days after the Closing Date) (the “Required
Effective Date”).
If
the Registration Statement (i) has not been filed by the Required Filing Date
or
(ii) has not been declared effective by the SEC on or before the Required
Effective Date, the Company shall, on the Business Day immediately following
the
Required Filing Date or the Required Effective Date, as the case may be, and
each 30th
day
thereafter, make a payment to the Investor as partial compensation for such
delay (the “Late
Registration Payments”)
equal
to two percent (2.0%) of the purchase price paid for the Shares purchased by
the
Investor and not previously sold by the Investor until the Registration
Statement is filed or declared effective by the SEC, as the case may be;
provided, however, that in no event shall the payments made pursuant to this
paragraph (b), if any, exceed in the aggregate fifteen percent (15.0%) of such
purchase price. Late Registration Payments will be prorated on a daily basis
during each 30 day period and will be paid to the Investor by wire transfer
or
check within five Business Days after the earlier of (i) the end of each
thirty day period following the Required Effective Date or (ii) the
effective date of the Registration Statement;
(c) subject
to a Suspension (as defined in Section 2(c)) being in effect, use its
commercially reasonable efforts to prepare and file with the SEC such amendments
and supplements to the Registration Statement and the related prospectus (the
“Prospectus”)
as may
be necessary to keep the Registration Statement current and effective for a
period ending on the earlier of (i) the second anniversary of the Closing Date,
(ii) the date on which the Investor may sell Securities pursuant to paragraph
(k) of Rule 144 under the Securities Act or any successor rule (“Rule
144”)
or
(iii) such time as all Securities purchased by such Investor in this Offering
have been sold (A) pursuant to a registration statement, (B) to or through
a
broker, dealer or underwriter in a public distribution or a public securities
transaction and/or (C) in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section 4(1)
thereof so that all transfer restrictions and restrictive legends with respect
thereto, if any, are removed upon the consummation of such sale, and to notify
each Investor promptly upon the Registration Statement and each post-effective
amendment thereto, being declared effective by the SEC;
(d) furnish
to the Investor such number of copies of the Registration Statement and
the
Prospectus (including
supplemental prospectuses) (collectively, the “Prospectuses”)
as the
Investor may reasonably request, in order to facilitate the public sale or
other
disposition of all or any of the Securities by the Investor;
(e) file
documents required of the Company for customary blue sky clearance in states
specified in writing by the Investor; provided, however, that the Company shall
not be required to qualify to do business or consent to service of process
in
any jurisdiction in which it is not now so qualified or has not so consented;
(f) bear
all
expenses (other than underwriting discounts and commissions, if any) in
connection with the procedures in paragraph (a) through (e) of this Section
1
and the registration of the Securities pursuant to the Registration Statement;
(g) advise
the Investors, promptly after it shall receive notice or obtain knowledge of
the
issuance of any stop order by the SEC delaying or suspending the effectiveness
of the Registration Statement or of the initiation of any proceeding for that
purpose; and it will promptly use its commercially reasonable efforts to prevent
the issuance of any stop order or to obtain its withdrawal at the earliest
possible moment if such stop order should be issued; and
2
(h) with
a
view to making available to the Investor the benefits of Rule 144 and any other
rule or regulation of the SEC that may at any time permit the Investor to sell
Securities to the public without registration, the Company covenants and agrees
to use its commercially reasonable efforts to: (i) make and keep public
information available, as those terms are understood and defined in Rule 144,
until the earlier of (A) such date as all of the Investor’s Securities may be
resold pursuant to Rule 144(k) or any other rule of similar effect or (B) such
date as all of the Investor’s Securities shall have been resold; (ii) file with
the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and under the Securities Exchange Act of 1934,
as amended (the “Exchange
Act”);
and
(iii) furnish to the Investor upon request, as long as the Investor owns any
Securities, (A) a written statement by the Company that it has complied with
the
reporting requirements of the Securities Act and the Exchange Act, (B) a copy
of
the Company’s most recent Annual Report on Form 10-KSB or Quarterly Report on
Form 10-QSB, and (C) such other information as may be reasonably requested
in
order to avail the Investor of any rule or regulation of the SEC that permits
the selling of any such Securities without registration.
It
shall
be a condition precedent to the obligations of the Company to take any action
pursuant to this Section 1 that the Investor shall furnish to the Company such
information regarding itself, the Securities to be sold by the Investor, and
the
intended method of disposition of such securities as shall be required to effect
the registration of the Securities.
The
Company understands that the Investor disclaims being an underwriter, but
acknowledges that a determination by the SEC that the Investor is deemed an
underwriter shall not relieve the Company of any obligations it has
hereunder.
(a) The
Investor agrees that it will not effect any disposition of the Securities or
its
right to purchase the Securities that would constitute a sale within the meaning
of the Securities Act other than transactions exempt from the registration
requirements of the Securities Act, as contemplated in the Registration
Statement and as described below, and that it will promptly notify the Company
of any material changes in the information set forth in the Registration
Statement regarding the Investor or its plan of distribution.
(b) Except
in
the event that paragraph (c) below applies, the Company shall: (i) if deemed
necessary by the Company, prepare and file from time to time with the SEC a
post-effective amendment to the Registration Statement or a supplement to the
related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that such
Registration Statement will not 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 not misleading, and so that, as thereafter delivered
to purchasers of the Securities being sold thereunder, such Prospectus will
not
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; (ii)
provide the Investor copies of any documents filed pursuant to Section 2(b)(i);
and (iii) upon request, inform each Investor who so requests that the Company
has complied with its obligations in Section 2(b)(i) (or that, if the Company
has filed a post-effective amendment to the Registration Statement which has
not
yet been declared effective, the Company will notify the Investor to that
effect, will use its commercially reasonable efforts to secure the effectiveness
of such post-effective amendment as promptly as possible and will promptly
notify the Investor pursuant to Section 2(b)(i) hereof when the amendment has
become effective).
3
(c) Subject
to paragraph (d) below, in the event: (i) of any request by the SEC or any
other
federal or state governmental authority during the period of effectiveness
of
the Registration Statement for amendments or supplements to the Registration
Statement or related Prospectus or for additional information; (ii) of the
issuance by the SEC or any other federal or state governmental authority of
any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) 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 Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose; or (iv)
of
any event or circumstance which necessitates the making of any changes in the
Registration Statement or Prospectus, or any document incorporated or deemed
to
be incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any 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 not misleading, and that in the case of the Prospectus,
it
will not contain any 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 light of the circumstances under which they were made, not
misleading; then the Company shall promptly deliver a certificate in writing
to
the Investor (the “Suspension
Notice”)
to the
effect of the foregoing and, upon receipt of such Suspension Notice, the
Investor will refrain from selling any Securities pursuant to the Registration
Statement (a “Suspension”)
until
the Investors are advised in writing by the Company that the current Prospectus
may be used, and has received copies of any additional or supplemental filings
that are incorporated or deemed incorporated by reference in any such
Prospectus. In the event of any Suspension, the Company will use its
commercially reasonable efforts to cause the use of the Prospectus so suspended
to be resumed as soon as reasonably practicable after delivery of a Suspension
Notice to the Investors. In addition to and without limiting any other remedies
(including, without limitation, at law or at equity) available to the Investor,
the Investor shall be entitled to specific performance in the event that the
Company fails to comply with the provisions of this Section 2(c). The Investor
covenants that from the date hereof it will maintain in confidence the receipt
and content of any Suspension Notice provided in accordance with this paragraph
(c) in accordance with and subject to Section 4.6 of Annex I to the Securities
Purchase Agreement.
(d) Notwithstanding
the foregoing paragraphs of this Section 2, the Company shall use its
commercially reasonable efforts to ensure that (i) a Suspension shall not exceed
sixty (60) days individually and (ii) no more than two (2) Suspensions shall
occur during any twelve month period (each Suspension that satisfies the
foregoing criteria being referred to herein as a “Qualifying
Suspension”).
In
the event that there occurs a Suspension (or part thereof) that does not
constitute a Qualifying Suspension, the Company shall pay to the Investor,
on
the sixtieth (60th)
day
following the first day of such Suspension (or the first day of such part),
and
on each sixtieth (60th)
day
thereafter, an amount equal to 2.0% of the purchase price paid for the Shares
purchased by the Investor and not previously sold by the Investor (prorated
in
each such case for partial thirty day periods); provided, however, that in
no
event shall the payments made pursuant to this paragraph (d), if any, exceed
in
the aggregate 15.0% of such purchase price. This liquidated damage shall not
apply after the Company is no longer obligated to maintain the effectiveness
of
the Registration Statement.
(e) If
a
Suspension is not then in effect, the Investor may sell Securities under the
Registration Statement, provided that it complies with any applicable prospectus
delivery requirements. Upon receipt of a request therefor, the Company will
provide an adequate number of current Prospectuses to the Investor and to any
other parties requiring such Prospectuses.
(f) In
the
event of a sale of Securities by the Investor, unless such requirement is waived
by the Company in writing, the Investor must also deliver to the Company’s
transfer agent, with a copy to the Company, a Certificate of Subsequent Sale
substantially in the form attached hereto as Exhibit
A,
so that
the Securities may be properly transferred.
4
(g) The
Company agrees that it shall, immediately prior to the Registration Statement
being declared effective, deliver to its transfer agent an opinion letter of
counsel, opining that at any time the Registration Statement is effective,
the
transfer agent shall issue, in connection with the sale of the Securities,
certificates representing such Securities without restrictive legend, provided
the Securities are to be sold pursuant to the Prospectus contained in the
Registration Statement and the transfer agent receives a Certificate of
Subsequent Sale in the form attached hereto as Exhibit
A.
Upon
receipt of such opinion, the Company shall cause the transfer agent to confirm,
for the benefit of the Investor, that no further opinion of counsel is required
at the time of transfer in order to issue such Securities without restrictive
legend.
The
Company shall cause
its
transfer agent to issue
a
certificate without any restrictive legend to a purchaser of any Securities
from
the Investor, if (a) the sale of such Securities is registered under the
Registration Statement (including registration pursuant to Rule 415 under the
Securities Act) and the Investor has delivered a Certificate of Subsequent
Sale
to the Transfer Agent; (b) the holder has provided the Company with an opinion
of counsel, in form, substance and scope customary for opinions of counsel
in
comparable transactions, to the effect that a public sale or transfer of such
Securities may be made without registration under the Securities Act; or (c)
such Securities are sold in compliance with Rule 144 under the Securities Act.
In addition, the Company shall, at the request of the Investor, remove the
restrictive legend from any Securities held by the Investor following the
expiration of the holding period required by Rule 144(k) under the Securities
Act (or any successor rule).
3. Indemnification.
For
the
purpose of this Section 3:
(a) the
term
“Selling
Shareholder”
shall
mean the Investor and each person, if any, who controls the Investor within
the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act;
(b) the
term
“Registration
Statement”
shall
include any final Prospectus, exhibit, supplement or amendment included in
or
relating to, and any document incorporated by reference in, the Registration
Statement (or deemed to be a part thereof) referred to in Section 1; and
(c) the
term
“untrue
statement”
shall
mean any untrue statement or alleged untrue statement, or any omission or
alleged omission to state in the Registration Statement a material fact required
to be stated therein or necessary to make the statements therein, not
misleading.
(d) (i)The
Company agrees to indemnify and hold harmless each Selling Shareholder from
and
against any losses, claims, damages or liabilities to which such Selling
Shareholder may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon (i) any untrue statement of
a
material fact contained in the Registration Statement, (ii) any inaccuracy
in
the representations and warranties of the Company contained in the Agreement
or
the failure of the Company to perform its obligations hereunder or (iii) any
failure by the Company to fulfill any undertaking included in the Registration
Statement, and the Company will reimburse such Selling Shareholder for any
reasonable legal expense or other actual accountable out of pocket expenses
reasonably incurred in investigating, defending or preparing to defend any
such
action, proceeding or claim; provided, however, that the Company shall not
be
liable in any such case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, an untrue statement made in such Registration
Statement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Selling Shareholder specifically for
use
in preparation of the Registration Statement, or any inaccuracy in
representations made by such Selling Shareholder in the Investor Questionnaire
or the failure of such Selling Shareholder to comply with its covenants and
agreements contained in Section 4 of Annex I to the Securities Purchase
Agreement or Section 2 hereof or any statement or omission in any Prospectus
that is corrected in any subsequent Prospectus that was delivered to the Selling
Shareholder prior to the pertinent sale or sales by the Selling
Shareholder.
5
(ii) The
Investor agrees to indemnify and hold harmless the Company (and each person,
if
any, who controls the Company within the meaning of Section 15 of the Securities
Act, each officer of the Company who signs the Registration Statement and each
director of the Company) from and against any losses, claims, damages or
liabilities to which the Company (or any such officer, director or controlling
person) may become subject (under the Securities Act or otherwise), insofar
as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, (i) any failure to comply
with
the covenants and agreements contained in Section 4 of Annex I to the Securities
Purchase Agreement or Section 2 hereof, or (ii) any untrue statement of a
material fact contained in the Registration Statement if, and only if, such
untrue statement was made in reliance upon and in conformity with written
information furnished by or on behalf of the Investor specifically for use
in
preparation of the Registration Statement, and the Investor will reimburse
the
Company (or such officer, director or controlling person), as the case may
be,
for any reasonable legal expense or other actual accountable out-of-pocket
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim. The obligation to indemnify shall be
limited to the net amount of the proceeds received by the Investor from the
sale
of the Securities pursuant to the Registration Statement.
(iii) Promptly
after receipt by any indemnified person of a notice of a claim or the beginning
of any action in respect of which indemnity is to be sought against an
indemnifying person pursuant to this Section 3, such indemnified person shall
notify the indemnifying person in writing of such claim or of the commencement
of such action, but the omission to so notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party under
this Section 3 (except to the extent that such omission materially and adversely
affects the indemnifying party’s ability to defend such action) or from any
liability otherwise than under this Section 3. Subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person, the indemnifying person shall be entitled to participate
therein, and, to the extent that it shall elect by written notice delivered
to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, shall be entitled to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof (unless it has failed to assume the defense thereof and appoint
counsel reasonably satisfactory to the indemnified party), such indemnifying
person shall not be liable to such indemnified person for any legal expenses
subsequently incurred by such indemnified person in connection with the defense
thereof; provided, however, that if there exists or shall exist a conflict
of
interest that would make it inappropriate, in the reasonable opinion of counsel
to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel
at
the expense of such indemnifying person; provided, however, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate
counsel (together with appropriate local counsel) for all indemnified parties.
In no event shall any indemnifying person be liable in respect of any amounts
paid in settlement of any action unless the indemnifying person shall have
approved the terms of such settlement; provided that such consent shall not
be
unreasonably withheld. No indemnifying person shall, without the prior written
consent of the indemnified person, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified person is or could
reasonably have been a party and indemnification could have been sought
hereunder by such indemnified person, unless such settlement includes an
unconditional release of such indemnified person from all liability on claims
that are the subject matter of such proceeding.
6
(iv) If
the
indemnification provided for in this Section 3 is unavailable to or insufficient
to hold harmless an indemnified party under paragraphs 3(d)(i) or 3(d)(ii)
above
in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and the Investor on the other in connection
with the statements or omissions or other matters which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, in the case of an untrue statement, whether
the untrue statement relates to information supplied by the Company on the
one
hand or the Investor on the other and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement. The Company and the Investor agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by
pro
rata allocation (even if the Investors were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), the Investor shall not be required to contribute any amount
in
excess of the amount by which the gross amount received by the Investor from
the
sale of the Securities to which such loss relates exceeds the amount of any
damages which the Investor has otherwise been required to pay by reason of
such
untrue statement. 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. The Investors’ obligations in this subsection to contribute
are several in proportion to their sales of Securities to which such loss
relates and not joint.
The
parties to this Agreement hereby acknowledge that they are sophisticated
business persons who were represented by counsel during the negotiations
regarding the provisions hereof including, without limitation, the provisions
of
this Section 3, and are fully informed regarding said provisions. They further
acknowledge that the provisions of this Section 3 fairly allocate the risks
in
light of the ability of the parties to investigate the Company and its business
in order to assure that adequate disclosure is made in the Registration
Statement as required by the Securities Act and the Exchange Act.
4. Termination
of Conditions and Obligations. The
conditions precedent imposed by Section 4 of Annex I to the Securities Purchase
Agreement or this Agreement upon the transferability of the Securities shall
cease and terminate as to any particular number of the Securities when such
Securities shall have been effectively registered under the Securities Act
and
sold or otherwise disposed of in accordance with the intended method of
disposition set forth in the Registration Statement covering such Securities
or
at such time as an opinion of counsel satisfactory to the Company shall have
been rendered to the effect that such conditions are not necessary in order
to
comply with the Securities Act.
5. Information
Available. So
long
as the Registration Statement is effective covering the resale of Securities
owned by the Investor, the Company will furnish (or, to the extent such
information is available electronically through the Company’s filings with the
SEC, the Company will make available) to the Investor:
(a) as
soon
as practicable after it is available, one copy of (i) its most recent Annual
Report to Shareholders (which Annual Report shall contain financial statements
audited in accordance with generally accepted accounting principles by an
independent registered public accounting firm, and (ii) if not included in
substance in the Annual Report to Shareholders, its most recent Annual Report
on
Form 10-K (the foregoing, in each case, excluding exhibits);
7
(b) upon
the
reasonable request of the Investor, all exhibits excluded by the parenthetical
to subsection (a)(ii) of this Section 5 as filed with the SEC and all other
information that is made available to shareholders; and
(c) upon
the
reasonable request of the Investor, an adequate number of copies of the
Prospectuses to supply to any other party requiring such Prospectuses; and
the
Company, upon the reasonable request of the Investor, will meet with the
Investor or a representative thereof at the Company’s headquarters during the
Company’s normal business hours to discuss all information relevant for
disclosure in the Registration Statement covering the Securities and will
otherwise reasonably cooperate with the Investor conducting an investigation
for
the purpose of reducing or eliminating the Investor’s exposure to liability
under the Securities Act, including the reasonable production of information
at
the Company’s headquarters; provided, that the Company shall not be required to
disclose any confidential information to or meet at its headquarters with the
Investor until and unless the Investor shall have entered into a confidentiality
agreement, in form and substance reasonably satisfactory to the Company, with
the Company with respect thereto.
6. Limits
on Additional Issuances.
Except
for the issuance of stock options, restricted stock and stock appreciation
rights under the Company’s long term incentive plans, the
issuance of Common Stock purchase warrants, or the issuance of Common Stock
upon
the conversion of preferred stock or upon
exercise of outstanding options, warrants and other equity-based rights and
the
offering contemplated hereby, the Company will not, for a period of six (6)
months following the Closing Date, offer for sale or sell any securities unless,
in the opinion of the Company’s counsel, such offer or sale does not jeopardize
the availability of exemptions from the registration and qualification
requirements under applicable securities laws with respect to the Offering.
The
foregoing shall not apply to securities issued in connection with any
acquisition, including by way of merger, or purchase of stock or all or
substantially all of the assets of any third party. Except for the issuance
of
stock options, restricted stock and stock appreciation rights under the
Company’s long term incentive plans,
the
issuance of Common Stock purchase warrants, or the issuance of Common Stock
upon
the conversion of preferred stock or upon
exercise of outstanding options, warrants and other equity-based rights and
the
offering contemplated hereby, the Company has not engaged in any such offering
during the six (6) months prior to the date of this agreement.
The
foregoing provisions shall not prevent the Company from filing a “shelf”
registration statement pursuant to Rule 415 under the Securities Act, but the
foregoing provisions shall apply to any sale of securities
thereunder.
7. Notices.
All
notices, requests, consents and other communications hereunder shall be in
writing, shall be delivered (A) if within the United States, by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile, or (B) if from outside the United
States, by International Federal Express (or comparable service) or facsimile,
and shall be deemed given (i) if delivered by first-class registered or
certified mail domestic, upon the Business Day received, (ii) if delivered
by
nationally recognized overnight carrier, one (1) Business Day after timely
delivery to such carrier, (iii) if delivered by International Federal Express
(or comparable service), two (2) Business Days after timely delivery to such
carrier, (iv) if delivered by facsimile, upon electric confirmation of receipt
and shall be addressed as follows, or to such other address or addresses as
may
have been furnished in writing by a party to another party pursuant to this
paragraph:
(a) if
to the
Company, to:
8
PerfectEnergy
International Limited
0000
Xxxxxxxxxx Xxxx., Xxxxx 0
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention:
[____________]
Telephone:
[____________]
with
a
copy to:
[__________________]
[__________________]
[__________________]
Attention:
[__________]
Telephone: [_________]
(b) if
to the
Investor, at its address on the signature page to the Securities Purchase
Agreement.
8. Amendments;
Waiver. This
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor. Any waiver of a provision of
this Agreement must be in writing and executed by the party against whom
enforcement of such waiver is sought.
9. Headings.
The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement.
10. Entire
Agreement; Severability. This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements, negotiations and understandings between the parties,
both oral and written relating to the subject matter hereof. If any provision
contained in this Agreement is determined to be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
11. Governing
Law. This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of [New
York],
without
giving effect to the principles of conflicts of law.
12. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one instrument, and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other
parties.
9
Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.
Dated
as of:
______________, 2007
|
||
[Investor
Name]
|
||
By:
|
||
Name:
|
||
Title:
|
||
Address:
|
||
AGREED
AND ACCEPTED:
PERFECTENERGY
INTERNATIONAL LIMITED
By: | ||
Name: | ||
Title: |
[REGISTRATION
RIGHTS AGREEMENT SIGNATURE PAGE]
10
Exhibit
A
PERFECTENERGY
INTERNATIONAL LIMITED
CERTIFICATE
OF SUBSEQUENT SALE
[Transfer
Agent]
__________________________
__________________________
RE:
|
Sale
of Shares of Common Stock of Perfectenergy International Limited
(the
“Company”) pursuant to the Company’s Prospectus dated _______________,
2007 (the “Prospectus”)
|
Dear
Sir/Madam:
The
undersigned hereby certifies, in connection with the sale of shares of Common
Stock of the Company included in the table of Selling Shareholders in the
Prospectus, that the undersigned has sold the Shares pursuant to the Prospectus
and in a manner described under the caption “Plan of Distribution” in the
Prospectus and that such sale complies with all applicable securities laws,
including, without limitation, the Prospectus delivery requirements of the
Securities Act of 1933, as amended.
Selling
Shareholder (the beneficial owner):______________________________
Record
Holder (e.g., if held in name of
nominee):__________________________
Restricted
Stock Certificate No.(s):____________________________________
Number
of
Shares Sold:____________________________________________
Date
of
Sale:____________________________________________________
In
the
event that you receive a stock certificate(s) representing more shares of Common
Stock than have been sold by the undersigned, then you should return to the
undersigned a newly issued certificate for such excess shares in the name of
the
Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you should place a
stop
transfer on your records with regard to such certificate.
Dated:_____________ | Very truly yours, | |
By:
|
||
Print
Name:
|
||
Title:
|
A-1