Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of January 10, 2005, by and among UNITED NETWORK MARKETING
SERVICES, INC. (the "COMPANY"), and the investors signatory hereto (each a
"PURCHASER" and collectively, the "PURCHASERS").
This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof by and among the Company and the Purchasers (the
"PURCHASE AGREEMENT").
The Company and the Purchasers hereby 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:
"CLOSING DATE" shall have the meaning of such term as set forth in the
Purchase Agreement.
"COMMON STOCK" means the common stock, $.001 par value, of the
Company.
"CONVERTIBLE PREFERRED STOCK" means the Series B Convertible Preferred
Stock issued by the Company to the Purchasers pursuant to the Purchase
Agreement.
"EFFECTIVENESS DATE" means, with respect to the Registration Statement
required to be filed pursuant to Section 2(a), the earlier of (a) the 90th
calendar day from the Filing Date (or the 120th day if reviewed by the
Commission), and (b) the date on which the Commission declares the effectiveness
of the Registration Statement.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section
2(a).
"FILING DATE" means, with respect to the Registration Statement
required to be filed hereunder, the date ninety (90) calendar days from the
Closing Date.
"HOLDER" or "HOLDERS" means the holder or holders, as the case may be,
from time to time of Registrable Securities (including any permitted assignee).
"HOLDERS' REPRESENTATIVE" means Xxxxxx Capital LLC, or any other person
that has been appointed by the Holders of a majority of the Registrable
Securities to act as representative of the Holders for purposes of this
Agreement.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 5(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 5(c).
"LOSSES" shall have the meaning set forth in Section 5(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 the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"REGISTRABLE SECURITIES" means the shares of Common Stock issuable upon
any conversion of the Convertible Preferred Stock and exercise of the Warrants,
and any stock split, dividend or other distribution, recapitalization or similar
event with respect to the foregoing.
"REGISTRATION STATEMENT" means the registration statements required to
be filed hereunder, including (in each case) the Prospectus, amendments and
supplements to the registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in the registration
statement.
"RULE 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
Rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"RULE 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
Rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"TRADING DAY" means (i) a day on which the Common Stock is traded or
quoted on a Trading Market, or (ii) if the Common Stock is not traded or quoted
on a Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its functions
of reporting price); provided, that in the event that the Common Stock is not
traded or quoted as set forth in (i), and (ii) hereof, that Trading Day shall
mean a Business Day.
"WARRANTS" means the warrants issued by the Company to the Purchasers
pursuant to the Purchase Agreement.
2. Registration.
(a) Mandatory Registration. No later than the Filing Date, the
Company shall prepare and file with the Commission the Registration Statement
covering the resale of all of the Registrable Securities which a Holder has
requested to be included in such Registration Statement and for which such
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Holder has provided the Company with a completed Selling Securityholder
Questionnaire, which offering shall be made on a continuous basis pursuant to
Rule 415. The Registration Statement required hereunder shall be on Form SB-2
(or other applicable form). The Registration Statement required hereunder shall
contain (except if otherwise directed by the Holders) the "PLAN OF DISTRIBUTION"
substantially in the form attached hereto as ANNEX A (which may be modified as
required by the Securities Act and the rules and regulations thereunder and to
respond to comments, if any, received by the Commission). The Company shall use
its commercially reasonable efforts to cause the Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof and shall use its commercially reasonable efforts to keep the
Registration Statement continuously effective under the Securities Act until the
date when all Registrable Securities covered by the Registration Statement (a)
have been sold pursuant to the Registration Statement or an exemption from the
registration requirements of the Securities Act or (b) may be sold without any
volume or other restrictions pursuant to Rule 144(k) (the "EFFECTIVENESS
PERIOD").
(b) Filing Default Liquidation Damages. If a Registration
Statement is not filed on or prior to the Filing Date, then the Company shall
pay to each Holder an amount in cash until the earlier of the date a
Registration Statement is filed and the Registrable Securities may be sold
pursuant to Rule 144(k), as liquidated damages and not as a penalty, equal to
(i) one (1%) percent of the aggregate purchase price paid by such Holder
pursuant to the Purchase Agreement for the first thirty (30) days (or a pro rata
portion of one (1%) percent for any part thereof) following the Company's
failure to file, and (ii) an additional one (1%) percent of the aggregate
purchase paid by such Holder thereunder for each thirty (30) day period
subsequent thereto (or a pro rata portion of one (1%) percent for any part
thereof), such payment(s) to be made in immediately available funds no later
than five (5) business days after the first date of each thirty (30) day period
(or any part thereof), as the case may be, during the Company's failure to file.
(c) Effectiveness Default Liquidation Damages. In addition to
any liquidated damages paid, accrued and/or to be paid pursuant to Section 2(b),
if (1) a Registration Statement is not declared effective on or prior to ninety
(90) days from the Filing Date (or one hundred twenty (120) days if reviewed by
the Commission), or (2) if a Registration Statement has been declared effective
and subsequent thereto is not effective for any period of time until the date no
Holder owns any Registrable Securities (an "EFFECTIVENESS DEFAULT"), then the
Company shall pay to each Holder an amount in cash until the date a Registration
Statement is declared effective (and permits the resale of the Registrable
Securities covered thereby)(or if previously declared effective until the date
the Registration Statement becomes effective (and otherwise permits the resale
of the Registrable Securities covered thereby) again), as liquidated damages and
not as a penalty, equal to (i) one (1%) percent of the aggregate purchase price
paid by such Holder pursuant to the Purchase Agreement for the first thirty (30)
days (or a pro rata portion of one percent (1%) for any part thereof), and (ii)
an additional one percent (1%) of the aggregate purchase price paid by such
Holder thereunder for each thirty (30) day period subsequent thereto (or a pro
rata portion of one percent (1%) for any part thereof) until the earlier of (a)
such date the Registration Statement is declared effective (or if previously
declared effective until the date the Registration Statement becomes effective
(and otherwise permits the resale of the Registrable Securities covered thereby)
again), and (b) the Registrable Securities may be sold pursuant to Rule 144(k);
provided, however, for purposes of this subsection (c), it shall not be
considered an Effectiveness Default during any such period in which there is a
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Material Development Condition (as defined below) which is permitted pursuant to
Section 6(o). Any such payment(s) shall be made in immediately available funds
no later than five (5) days after the first day of each 30 day period of each
such Effectiveness Default.
(d) Piggyback Registrations Rights.
(i) If, at any time during the Effectiveness Period,
there is not an effective Registration Statement covering all of the
Registrable Securities (other than the Registrable Securities of a
Holder that failed to comply with its obligations under Section 2(d) or
Section 3(j)), and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its
own account or the account of others under the Securities Act of any of
its equity securities (other than on Form S-4 or Form S-8 (each as
promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable
in connection with stock option or other employee or consultant benefit
plans), then the Company shall send to each Holder a written notice of
such determination and, if within ten (10) days after receipt by a
Holder, the Company shall receive a request in writing from any such
Holder, the Company shall include in such registration statement all or
any part of such Registrable Securities such Holder requests to be
registered; provided, however, that (A) if, at any time after giving
written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection
with such registration, the Company determines for any reason not to
proceed with such registration, the Company will be relieved of its
obligation to register any Registrable Securities in connection with
such registration, and (B) in case of a determination by the Company to
delay registration of its securities, the Company will be permitted to
delay the registration of Registrable Securities for the same period as
the delay in registering such other securities, in any such case
without any obligation or liability to any Holder. Any Holder who
elects to include Registrable Securities in a registration statement
pursuant to this Section 2(d) shall sell such Registrable Securities on
the same terms and conditions as the equity securities of the Company
or others (other than other Holders) are being sold pursuant to such
registration statement. Notwithstanding the foregoing, nothing in this
Section 2(d) shall permit the Company to file a registration statement
in contravention of the restrictions in Section 6(b).
(ii) Notwithstanding anything in this Section 2(d) to
the contrary, with respect to any registration described in this
Section 2(d) that is an underwritten registration of the Company's
securities for the Company's own account, if the managing underwriter
advises the Company that the inclusion of some or all of the
Registrable Securities requested to be included in such registration
would interfere with the successful marketing (including pricing) of
the equity securities of the Company to be registered by the Company,
then the number of shares to be included in any such registration shall
be included in the following order: (A) first, the shares to be
registered by the Company; and (B) second, the Registrable Securities
of the Holders requested to be included in such registration pursuant
to Section 2(d)(i), on a pro-rata basis based on the Holders'
respective percentage ownership of the Company on a fully-diluted
basis, and (C) third, Registrable Securities of all other holders who
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are entitled to include securities in such registration, on a pro-rata
basis based on such holders' respective percentage ownership of the
Company on a fully-diluted basis.
(iii) Notwithstanding anything in this Section 2(d)
to the contrary, with respect to any registration described in this
Section 2(d) that is an underwritten registration of the Company's
securities for the account of other holders of such securities ("the
"Demanding Holders"), if the managing underwriter advises the Company
that the inclusion of some or all of the Registrable Securities
requested to be included in such registration pursuant to clause (i) of
this Section 2(d) would interfere with the successful marketing
(including pricing) of the equity securities of the Company to be
registered by the Company, then the number of shares to be included in
any such registration shall be included in the following order: (A)
first, the securities of the Demanding Holders, (B) second, the
Registrable Securities of the Holders requested to be included in such
registration pursuant to Section 2(d)(i), on a pro-rata basis based on
the Holders' respective percentage ownership of the Company on a
fully-diluted basis, (C) third, any shares to be registered by the
Company for its own account, and (D) fourth, Registrable Securities of
all other holders who are entitled to include securities in such
registration, on a pro-rata basis based on such holders' respective
percentage ownership of the Company on a fully-diluted basis.
(e) Sufficient Number of Shares Registered. In the event the
number of shares of Common Stock covered under a Registration Statement filed
pursuant to Section 2(a) or Section 2(d) is insufficient to cover all of the
Registrable Securities which such Registration Statement is required to cover,
the Company shall amend the Registration Statement, or file a new Registration
Statement (on the short form available therefor, if applicable), or both, so as
to cover at least 100% of the Registrable Securities, in each case, as soon as
practicable, but in any event not later than ten (10) business days after the
necessity therefor arises. The Company shall use its commercially reasonable
efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof.
(f) Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration with respect to the Registrable
Securities unless such Holder completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements, lock-up letters and other
documents reasonably required under the terms of such underwriting agreements.
(g) Other Requirements. In connection with any Registration
Statement under Section 2(a) or any registration statement under Section 2(d),
Holders whose Registrable Securities are included therein shall provide such
information and shall execute and deliver to the Company such documents,
including, but not limited to, a selling securityholder questionnaire in
customary form and substance reasonably satisfactory to the Company, as the
Company may reasonably request in order to effect such registration pursuant to
this Agreement and in accordance with applicable securities laws.
3. Registration Procedures. In connection with the Company's
registration obligations hereunder, the Company shall:
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(a) Not less than three (3) Trading Days prior to the filing
of the Registration Statement or any related Prospectus or any amendment or
supplement thereto, (i) furnish to the Holders' Representative copies of all
such documents substantially in the form proposed to be filed (including
documents incorporated or deemed incorporated by reference to the extent
requested by such Person) which documents will be subject to the review of the
Holders' Representative, and (ii) subject, if appropriate, to the execution of
confidentiality agreements in form acceptable to the Company, cause its officers
and directors, counsel and independent certified public accountants to respond
to such inquiries as shall be necessary, in the reasonable opinion of respective
counsel to conduct a reasonable investigation within the meaning of the
Securities Act.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep the
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424; and (iii) respond as
promptly as reasonably practicable to any comments received from the Commission
with respect to the Registration Statement or any amendment thereto and, as
promptly as reasonably practicable, upon request, provide the Holders'
Representative true and complete copies of all correspondence from and to the
Commission relating to the Registration Statement (subject, if appropriate, to
the execution of confidentiality agreements in form acceptable to the Company).
(c) Notify the Holders of Registrable Securities to be sold as
promptly as reasonably possible (and, in the case of (i)(A) below, not less than
three (3) Trading Days prior to such filing) and (if requested by any such
Person) confirm such notice in writing promptly following the day (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed; (B) when the Commission notifies
the Company whether there will be a "review" of the Registration Statement and
whenever the Commission comments in writing on the Registration Statement (the
Company shall upon request provide true and complete copies thereof and all
written responses thereto to the Holders' Representative, subject, if
appropriate, to the execution of confidentiality agreements in form acceptable
to the Company); and (C) with respect to the 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
during the period of effectiveness of the Registration Statement for amendments
or supplements to the Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in the Registration Statement ineligible for
inclusion therein or any statement made in the 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 the
Registration Statement, Prospectus or other documents so that, in the case of
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the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) Use its commercially reasonable efforts to avoid the
issuance of, or, if issued, obtain the withdrawal of (i) any order suspending
the effectiveness of the Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.
(e) Promptly deliver to each Holder no later than five (5)
business days after the Effectiveness Date, without charge, two (2) copies of
the Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto (and, upon the request of the Holder such
additional copies as such Persons may reasonably request in connection with
resales by the Holder of Registrable Securities). The Company hereby consents to
the use of such Prospectus and each amendment or supplement thereto by each of
the selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto,
except after the giving of any notice pursuant to Section 3(c).
(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 such 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 the Registration Statement; provided,
however, 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 the Holders, cooperate with the Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to the
Registration Statement, which certificates shall be free, to the extent
permitted by the Purchase Agreement, of all restrictive legends, and to enable
such Registrable Securities to be in such denominations and registered in such
names as any such Holders may request.
(h) Upon the occurrence of any event contemplated by Section
3(c)(v), as promptly as reasonably possible, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither the Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
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(i) Use its reasonable commercial efforts to comply in all
material respects with all applicable rules and regulations of the Commission
relating to the registration of the Registrable Securities pursuant to the
Registration Statement or otherwise.
(j) The Company shall not be required to include in any
Registration Statement the Registrable Securities of any Holder that does not
complete a Selling Shareholder Questionnaire.
(k) The Company shall use its commercially reasonable efforts
to maintain at least two (2) market makers that are registered with the National
Association of Securities Dealers, Inc. ("NASD") as such with respect to such
Registrable Securities. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section 3(k).
(l) The Company shall make all documents, files, books,
records, officers, directors and employees of the Company reasonably available
to the Holders' Representative, one legal counsel to the Holders and one firm of
accountants retained by the Holders (collectively, the "INSPECTORS"), and make
such other accommodations as are reasonably necessary for the Inspectors, if
any, to perform a due diligence review of the Company; provided, however, that
all such information ("CONFIDENTIAL INFORMATION") will be kept confidential and
not utilized by the Inspectors except as contemplated herein and except as
required by law or court order. The term Confidential Information also includes
any information included in a draft Registration Statement or any related
Prospectus or any amendment or supplement thereto provided to a Holder pursuant
to Section 3(a); for the avoidance of doubt, however, as noted in Section 3(a)
above, the Company shall not furnish to Holders, without their prior approval,
any information that constitutes or might constitute material, non-public
information. The term Confidential Information does not include information that
(a) is already in possession of such other party (other than that which is
subject to another confidentiality agreement or unless obtained from a third
party where the receiving party knows that the third party was subject to a
confidentiality agreement), (b) becomes generally available to the public, or
(c) becomes available on a non-confidential basis from a source other than the
Company unless obtained from a third party where the receiving party knows that
the third party was subject to a confidentiality agreement. Each Holder agrees
that it shall, upon learning that disclosure of such Confidential Information is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company, at
its expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, the information deemed confidential.
(m) The Company shall hold in confidence and not make any
disclosure of information concerning any Holder provided to the Company unless
(a) such information is already in possession of the Company, (b) such
information becomes available to the Company on a non-confidential basis from a
person other than such Holder who is not known by the Company to be otherwise
bound by a confidentiality or comparable agreement with such Holder (c)
disclosure of such information is necessary to comply with federal or state
securities laws, (d) the disclosure of such information is necessary to avoid or
correct a misstatement or omission in any Registration Statement or Prospectus,
(e) the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent
jurisdiction, (f) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
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agreement to which the Company is a party, or (g) such Holder consents to the
form and content of any such disclosure (the Holders shall be deemed to consent
to the inclusion of any information provided in the Selling Shareholder
Questionnaire, in the Registration Statement, any Prospectus related thereto,
and any amendments or supplements thereto). The Company agrees that it shall,
upon learning that disclosure of such information concerning any Holder is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt written notice to such Holder and allow such
Holder, at the Holder's expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.
(n) The Company covenants that it shall file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder so long as the Holder owns
any Registrable Securities, but in no event longer than two (2) years; provided,
however, the Company may delay any such filing but only pursuant to Rule 12b-25
under the Exchange Act, and the Company shall use commercially reasonable
efforts to take such further action as any Holder of Registrable Securities may
reasonably request (including without limitation, promptly obtaining any
required legal opinions from Company counsel necessary to effect the sale of
Registrable Securities under Rule 144 and paying the related fees and expenses
of such counsel), all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any Holder of Registrable Securities, the Company will deliver to such Holder
a written statement as to whether it has complied with such requirements.
4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement, other than fees and expenses of counsel or any other
advisor retained by the Holders and discounts, fees and commissions with respect
to the sale of any Registrable Securities by the Holders. 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 the Trading Market on which
the Common Stock is then listed for trading, and (B) to effect compliance with
applicable state securities or Blue Sky laws), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing Prospectuses), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange or other trading market as required hereunder.
5. Indemnification
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(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, agents 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,
agents and employees of each such controlling Person, to the fullest extent
permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable
attorneys' fees) and expenses (including the cost (including without limitation,
reasonable attorneys' fees) and expenses relating to an Indemnified Party's
actions to enforce the provisions of this Section 5) (collectively, "LOSSES"),
as incurred, to the extent arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in any Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (1) such untrue (or alleged untrue) statements or omissions (or alleged
omissions) are based solely upon information regarding such Holder furnished (or
in the case of an omission, not furnished) in writing to the Company by or on
behalf of 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 by such Holder expressly
for use in the Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto (it being understood that
the Holder has reviewed Annex A hereto for this purpose), (2) in the case of an
occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by
such Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice contemplated in Section 6(d),
or (3) the failure of the Holder to deliver a Prospectus as amended or
supplemented prior to the confirmation of a sale. The Company shall notify the
Holders promptly of the institution, threat or assertion of any Proceeding of
which the Company is aware in connection with the transactions contemplated by
this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally
and not jointly, indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses, as
incurred, to the extent arising out of or based upon: (x) such Holder's failure
to comply with the prospectus delivery requirements of the Securities Act or (y)
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus, or 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
the Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading (i) to the extent, but
only to the extent, that such untrue statement or omission is contained in any
information so furnished (or in the case of an omission, not furnished) in
writing by or on behalf of such Holder to the Company specifically for inclusion
-10-
in the Registration Statement or such Prospectus or (ii) to the extent that (1)
such untrue statements or omissions are based solely upon information regarding
such Holder furnished (or in the case of an omission, not furnished) in writing
to the Company by or on behalf of 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 by
such Holder expressly for use in the Registration Statement (it being understood
that the Holder has reviewed Annex A hereto for this purpose), such Prospectus
or such form of Prospectus or in any amendment or supplement thereto, or (2) in
the case of an occurrence of an event of the type specified in Section
3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the Advice
contemplated in Section 6(d), or (3) the failure of the Holder to deliver a
Prospectus prior to the confirmation of a sale. In no event shall the liability
of any selling Holder hereunder be greater in amount than the gross proceeds
received by the Holder with respect to the sale of its 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 fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that
such failure shall have materially prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in (but not control) 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 to assume the defense of such Proceeding in a timely manner 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 in writing
that a conflict of interest would exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of one separate counsel for all Indemnified
Parties in any matters related on a factual basis shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding affected without its written consent. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.
All reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
-11-
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within fifteen (15) Trading Days of written notice thereof to the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is not entitled to
indemnification hereunder, determined based upon the relative faults of the
parties.
(d) Contribution. If a claim for indemnification under Section
5(a) or Section 5(b) is unavailable to an Indemnified Party (by reason of public
policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
(e) The parties hereto agree that it would not be just and
equitable if contribution pursuant to 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 Section 5(d). Notwithstanding the
provisions of Section 5(d), no Holder shall be required to indemnify or
contribute, in the aggregate, pursuant to this Article 5, any amount in excess
of the amount by which the proceeds actually received by such Holder from the
sale of the Registrable Securities subject to the Proceeding exceeds the amount
of any damages that such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, except
in the case of fraud by such Holder. The indemnity and contribution agreements
contained in this Section are in addition to any liability that the Indemnifying
Parties may have to the Indemnified Parties. No party guilty of fraudulent
misrepresentation pursuant to Section 11(f) of the Securities Act shall be
entitled to contribution from any other party.
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 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
-12-
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. Other than those securities
that may be issued to Holders and/or any placement agent and/or its designee(s),
the securities set forth on Schedule 3.1(v) of the Purchase Agreement and such
other securities as may be consented to in writing by such placement agent,
neither the Company nor any of its security holders may include securities of
the Company in a Registration Statement filed pursuant to Section 2(a) hereof.
Other than pursuant to rights granted to any placement agent and/or to Holders
in this Agreement, no Person has any right to cause the Company to effect a
registration under the Securities Act of any securities of the Company.
(c) Compliance. Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement.
(d) Discontinued Disposition. Each Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a notice from
the Company of the occurrence of any event of the kind described in Section
3(c), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement or
until it is advised in writing (the "ADVICE") by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph.
(e) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of at least sixty-six percent (66%) of the then outstanding
Registrable Securities (assuming the conversion of all Convertible Preferred
Stock and exercise of all Warrants, whether converted or exercised or not),
whereupon such amendment, modification, supplement or waiver shall be binding on
all Holders; provided, however, that no consideration shall be offered or paid
to any Holder to amend or consent to a waiver or modification of any provision
of this Agreement unless the same consideration (on a pro-rata basis) is also
offered to all of the Holders under this Agreement.
(f) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the Trading Day
following the date of mailing, if sent by nationally recognized overnight
courier service, or (ii) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
delivered and addressed 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. Each Holder may
assign their respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.
-13-
(h) Execution and Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and, all of which taken together shall constitute one and the
same Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
regard to the conflicts of laws principles thereof. The parties hereto hereby
irrevocably agree that any suit or proceeding arising directly and/or indirectly
pursuant to or under this Agreement, shall be brought solely in a federal or
state court located in the City, County and State of New York. By its execution
hereof, the parties hereby covenant and irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City, County and
State of New York and agree that any process in any such action may be served
upon any of them personally, or by certified mail or registered mail upon them
or their agent, return receipt requested, with the same full force and effect as
if personally served upon them in New York City. The parties hereto waive any
claim that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in personam jurisdiction with respect
thereto.
(j) Cumulative Remedies. Subject to the first sentence of
Section 6(a), the remedies provided herein are cumulative and not exclusive of
any 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 commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(l) Headings; Section References. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. References to Sections mean Sections of this
Agreement unless otherwise stated.
(m) Independent Nature of Purchasers' Obligations and Rights.
The obligations of each Purchaser hereunder is 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. 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 shall be entitled to independently protect and enforce its
rights, including without limitation the rights arising out of this Agreement,
-14-
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose. Each Purchaser represents
that it has been represented by its own separate legal counsel in its review and
negotiation of this Agreement. The Company has elected to provide all Purchasers
with the same terms and documents for the convenience of the Company and not
because it was required to do so by the Purchasers.
(n) Assignment of Registration Rights. The rights under this
Agreement shall be automatically assignable by any Holder to any permitted
transferee of all or any portion of Registrable Securities if: (a) such Holder
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment; (b) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (i) the name and
address of such transferee or assignee, and (ii) the securities with respect to
which such registration rights are being transferred or assigned; and (c) at or
before the time the Company receives the written notice contemplated by clause
(b) of this sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein.
(o) Deferral Period. With respect to any Registration
Statement filed or to be filed pursuant to Section 2, if the Company determines
that, in its good faith judgment, it would (because of the existence of, or in
reasonable anticipation of, any acquisition or corporate reorganization or other
transaction, financing activity, stock repurchase or other material development
involving the Company or any subsidiary, or the unavailability for reasons
beyond the Company's control of any required financial statements or other
material information, or any other event or condition material to the Company or
any subsidiary) be materially disadvantageous to the Company to proceed with
such Registration Statement or that the Company is required by applicable law,
rules or regulations not to proceed with the Registration Statement (a "MATERIAL
DEVELOPMENT CONDITION"), then the Company shall, notwithstanding any other
provisions of this Agreement, be entitled, upon the giving of a written notice
that a Material Development Condition has occurred (a "DELAY NOTICE") from an
officer of the Company to the Holders' Representative, as the representative of
the Purchasers, (i) to cause sales of Registrable Securities by the Purchasers
pursuant to such Registration Statement to cease, (ii) to cause such
Registration Statement to be withdrawn and the effectiveness of such
Registration Statement suspended, or (iii) in the event no such Registration
Statement has yet been filed or declared effective, to delay filing or
effectiveness of any such Registration Statement until, in the good faith
judgment of the Company, such Material Development Condition shall be disclosed
or no longer exists (notice of which the Company shall promptly deliver to the
Placement Agent, as the representative of the Purchasers). Notwithstanding the
foregoing provisions of this Section 6(o), (1) in no event may such cessation or
delay be for a period of more than sixty (60) consecutive days from giving of
its Delay Notice to the Purchasers with respect to such Material Development
Condition, as above provided, or more than one hundred twenty (120) days in any
twelve (12) months; and (2) in the event a Registration Statement is filed and
subsequently withdrawn by reason of any existing or anticipated Material
Development Condition as provided above, the Company shall cause a new
Registration Statement covering the Registrable Securities to be filed with the
Commission as soon as reasonably practicable after such Material Development
Condition ceases to exist or, if sooner, as soon as practicable after the
expiration of such sixty (60) day period.
-15-
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
UNITED NETWORK MARKETING SERVICES, INC.
By: /s/ Xxxx Xxxxxxx
----------------------------------
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
-16-
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
DCOFI Master LDC
----------------------------------
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Director
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
Bridges & Pipes LLC
----------------------------------
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Managing Member
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
X X Xxxxxxxx & Sons
----------------------------------
By: /s/ X X Xxxxxxxx
------------------------------
Name: X X Xxxxxxxx
Title:
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
Bushido Capital Master Fund L.P.
----------------------------------
By: /s/ Xxxxx Xxxxxx
------------------------------
Name: Xxxxx Xxxxxx
Title: President
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
Gamma Opportunity Capital Partners, LP
--------------------------------------
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: President
--------------------------------------
By:
----------------------------------
Name:
Title:
--------------------------------------
By:
----------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
Bristol Investment Fund, Ltd.
----------------------------------
By: /s/ Xxxx Xxxxxxx
------------------------------
Name: Xxxx Xxxxxxx
Title: Director
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
AJW QUALIFIED PARTNERS, LLC
----------------------------------
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxx
Title: Manager,
AJW Manager, LLC
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
AJW OFFSHORE LTD
----------------------------------
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxx
Title: Manager,
First Street Mgr II, LLC
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
NEW MILLENIUM CAPITAL PARTNERS II, LLC
--------------------------------------
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Manager,
First Street Mgr II, LLC
--------------------------------------
By:
----------------------------------
Name:
Title:
--------------------------------------
By:
----------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
AJW PARTNERS, LLC
----------------------------------
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxx
Title: Manager,
SMS Manager, LLC
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
ANASAZI PARTNERS III LLC
----------------------------------
By: /s/ Xxxxxxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: Manager,
XX Xxxxx LLC, ITS Mgr
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
XXXXXXXXXXX X. XXXXX
----------------------------------
By: /s/ Xxxxxxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: Individual
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
ANASAZI PARTNERS III OFFSHORE LTD
----------------------------------
By: /s/ Xxxxxxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: Manager,
XX Xxxxx LLC, ITS Mgr
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
ROYAL CAPITAL VALUE FUND, LP
----------------------------------
By: /s/ Yale Fergong
------------------------------
Name: Yale Fergong
Title: Managing Partner
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
ROYAL CAPITAL VALUE FUND (QP) LP
----------------------------------
By: /s/ Yale Fergong
------------------------------
Name: Yale Fergong
Title: Managing Partner
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
ROYALCAP VALUE FUND, LTD.
----------------------------------
By: /s/ Yale Fergong
------------------------------
Name: Yale Fergong
Title: Managing Partner
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)
VICIS CAPITAL MASTER FUND
----------------------------------
By: /s/ Xxxxxxx Xxx
------------------------------
Name: Xxxxxxx Xxx
Title: Portfolio Manager
----------------------------------
By:
------------------------------
Name:
Title:
----------------------------------
By:
------------------------------
Name:
Title:
ANNEX A
PLAN OF DISTRIBUTION
The Selling Stockholders and any of their pledgees, donees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of Common Stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The Selling Stockholders may use any one or more of
the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker/dealer solicits purchasers;
o 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;
o purchases by a broker/dealer as principal and resale by the
broker/dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o put or call options transactions;
o settlement of short sales;
o broker/dealers may agree with the Selling Stockholders to sell
a specified number of such shares at a stipulated price per
share;
o a combination of any such methods of sale; and
o any other method permitted by applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker/dealers engaged by the Selling Stockholders may arrange for
other brokers/dealers to participate in sales. Broker/dealers may receive
commissions from the Selling Stockholders (or, if any broker/dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions to exceed
what is customary in the types of transactions involved.
The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
donees, pledgees or secured parties may offer and sell the shares of common
stock from time to time under this prospectus, or under an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act of 1933 amending the list of Selling Stockholders to include the donee,
pledgee, transferee or other successors in interest as Selling Stockholders
under this prospectus.
The Selling Stockholders and any broker/dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker/dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions under the Securities Act. The Selling Stockholders have informed the
Company that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock.
At the time a particular offering of securities is made, to the extent
required, a prospectus supplement will be distributed which will set forth the
number of securities being offered and the terms of the offering, including the
purchase price or the public offering price, the name or names of any
underwriters, dealers or agents, the purchase price paid by any underwriters for
securities purchased from the Selling Stockholders, any discounts, commissions
and other items constituting compensation from the selling security holders and
any discounts, commissions or concessions allowed or reallowed or paid to
dealers.
Pursuant to applicable rules and regulations under the Exchange Act,
any person engaged in the distribution of the securities offered under this
prospectus may not simultaneously engage in market activities for the shares of
common stock for a period of five business days prior to the commencement of
such distribution. In addition, each Selling Stockholder and any other person
who participates in a distribution of the securities will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
may affect the marketability of the securities and the ability of any person to
engage in market activities for the shares of common stock.
The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
