Exhibit 99.9
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of March
29, 2006, by and among AFG Enterprises USA, Inc., a Nevada corporation, with
headquarters located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(the "Company"), and the undersigned buyers (each, a "Buyer", and collectively,
the "Buyers").
WHEREAS:
A. The Company has authorized the issuance of (i) $50,000,000 principal
amount of its Senior Secured Nonconvertible Notes due 2011 (the "Nonconvertible
Notes") exchangeable for up to $50,000,000 principal amount of its Senior
Secured Convertible Notes due 2011 (the "Convertible Notes", and together with
the Nonconvertible Notes, the "Notes"), pursuant to the Indenture dated March
29, 2006, between the Company and The Bank of New York, as Trustee (as the same
may be amended from time to time, the "Indenture"), which will, among other
things, be convertible into shares of the Company's common stock, $0.001 par
value per share (as converted, the "Conversion Shares").
B. In connection with the Securities Purchase Agreement by and among the
parties hereto of even date herewith (the "Securities Purchase Agreement"), the
Company has agreed, upon the terms and subject to the conditions set forth in
the Securities Purchase Agreement, to issue and sell to each Buyer (i) an
aggregate of $50,000,000 principal amount of the Nonconvertible Notes and (ii)
warrants (the "Warrants"), which will be exercisable to purchase shares of
Common Stock (as exercised, the "Warrant Shares") in accordance with the terms
of the Warrants.
C. It is the intention of the Company, within six months of the date
hereof, to enter into a securities purchase agreement (the "PIPE Securities
Purchase Agreement"), by and among the Company and the buyers listed on the
schedule of buyers attached thereto (the "PIPE Buyers"), wherein the Company
will agree, upon the terms and subject to the conditions of the PIPE Securities
Purchase Agreement, to issue and sell to each PIPE Buyer (i) an aggregate of at
least one million shares of Common Stock of the Company (the "PIPE Common
Shares"), and (ii) warrants (the "PIPE Warrants"), which will be exercisable to
purchase additional shares of Common Stock (as exercised, the "PIPE Warrant
Shares") in accordance with the terms of the PIPE Warrants.
D. It is the intention of the Company, within six months of the date
hereof, to enter into a Registration Rights Agreement, (as amended or modified
from time to time, the "PIPE Registration Rights Agreement"), pursuant to which
the Company will agree to provide certain registration rights in respect of the
PIPE Common Shares and the PIPE Warrant Shares under Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the "1933 Act") and the rules and regulations promulgated
thereunder, and applicable state securities laws.
E. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed with the Buyers (i) for their benefit as
Buyers and (ii) for the benefit of the beneficial owners (including the Buyers)
from time to time of the Notes, the Warrants, the Conversion Shares and the
Warrant Shares (each of the foregoing a "Holder" and together the "Holders") to
provide certain registration rights under the 1933 Act, and applicable state
securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Buyers hereby agree as follows:
1. Definitions.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:
"1933 Act" has the meaning set forth in the preamble hereto.
"1934 Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used in respect of any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person
whether through the ownership of voting securities or by agreement or otherwise.
"Business Day" means any day other than Saturday, Sunday or any
other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.
"Closing Date" means the date of the closing of the sale of the
Nonconvertible Notes as contemplated by the Securities Purchase Agreement.
"Common Stock" means the common stock, par value $0.001 per share,
of the Company, as it exists on the date of this Agreement and any other shares
of capital stock or other securities of the Company into which such Common Stock
may be reclassified or changed, together with any and all other securities which
may from time to time be issuable upon conversion of Notes.
"Company" has the meaning set forth in the preamble hereto.
"Convertible Notes" has the meaning set forth in the preamble
hereto.
"Effective Date" means the date the Registration Statement has been
declared effective by the SEC.
"Holder" has the meaning set forth in the preamble hereto.
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"Holder Information" in respect of any Holder means information in
respect of such Holder required to be included in any Shelf Registration
Statement or the related Prospectus pursuant to the 1933 Act and which
information is included therein in reliance upon and in conformity with
information furnished to the Company in writing by such Holder specifically for
inclusion therein.
"Indenture" has the meaning set forth in the preamble hereto.
"Liquidated Damages" has the meaning set forth in Section 2(e)
hereof.
"Losses" has the meaning set forth in Section 5(d) hereof.
"Majority Holders" means the Holders of a majority of the Transfer
Restricted Securities (as determined on an as-exercised basis, in respect of any
Holders of Warrants, and an as-converted basis, in respect of any Holders of
Notes); provided that, any Transfer Restricted Securities which have been sold
or otherwise transferred pursuant to the Shelf Registration Statement shall not
be included in the calculation of Majority Holders.
"NASD" means the National Association of Securities Dealers, Inc.
"Nonconvertible Notes" has the meaning set forth in the preamble
hereto.
"Notes" has the meaning set forth in the preamble hereto.
"Notice and Questionnaire" means a Selling Securityholder Notice and
Questionnaire substantially in the form of Exhibit A attached hereto.
"Notice Holder" means, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date, so long as all
of their Transfer Restricted Securities that have been registered for resale
pursuant to a Notice and Questionnaire have not been sold in accordance with a
Shelf Registration Statement.
"Person" has the meaning set forth in the Indenture.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the 1933 Act), as
amended or supplemented by any prospectus supplement, in respect of the terms of
the offering of any portion of the Transfer Restricted Securities covered by
such Shelf Registration Statement, and all amendments and supplements to such
prospectus, including all documents incorporated or deemed to be incorporated by
reference in such prospectus.
"Questionnaire Deadline" has the meaning set forth in Section 2(b)
hereof.
"Record Holder" means (i) in respect of any Registration Default
relating to any Notes as to which any Liquidated Damages have accrued, the
holder of record of such Note on the record date in respect of the interest
payment date under the Indenture on which such Registration Default Payment Date
shall occur and (ii) in respect of any Registration Default relating to the
Conversion Shares, Warrants or Warrant Shares as to which any Liquidated Damages
have accrued, the registered holder of such Conversion Shares, Warrants or
Warrant Shares 15 days prior to such Registration Default Payment Date.
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"Registration Default" has the meaning set forth in Section 2(e)
hereof.
"Registration Default Payments Payment Date" means each interest
payment date under the Indenture in the case of the Notes, and each March 31,
June 30, September 30 and December 31 in the case of the Conversion Shares and
the Warrants.
"Rule 144" means Rule 144 under the 1933 Act (or any similar
provision promulgated by the SEC).
"Rule 144A" means Rule 144A under the 1933 Act (or any successor
provision promulgated by the SEC).
"Rule 144(k)" means Rule 144(k) under the 1933 Act (or any successor
provision promulgated by the SEC).
"Rule 415" means Rule 415 under the 1933 Act (or any successor
provision promulgated by the SEC).
"SEC" means the Securities and Exchange Commission.
"Securities Purchase Agreement" has the meaning set forth in the
preamble hereto.
"Shares" means shares of Common Stock of the Company, $0.001 par
value.
"Shelf Registration" means a registration effected pursuant to
Section 2 hereof.
"Shelf Registration Period" has the meaning set forth in Section
2(c) hereof.
"Shelf Registration Statement" means any "shelf" registration
statement of the Company filed pursuant to the provisions of Section 2 hereof
which covers resales of the Transfer Restricted Securities on Form S-3 or on
another appropriate form (as determined by the Company) for an offering to be
made on a delayed or continuous basis pursuant to Rule 415 and all amendments
and supplements to any such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all documents incorporated or deemed to be incorporated by
reference therein.
"Suspension Period" has the meaning set forth in Section 2(d)
hereof.
"Transfer Restricted Securities" means (a) each Transfer Restricted
Warrant Share and (b) each Conversion Share issuable upon conversion of the
Convertible Notes (and any security issued in respect thereof upon any stock
dividend, split or similar event) that are represented by certificates that
bear, or, upon issuance thereof, are required to bear, a restricted legend in
accordance with the terms of the Securities Purchase Agreement until the
earliest of the date on which such Conversion Share or any security issued in
respect thereof upon any stock dividend, split or similar event, as the case may
be: (i) has been transferred pursuant to a Shelf Registration Statement or
another registration statement covering such Conversion Share which has been
filed with the SEC pursuant to the 1933 Act, in either case after such
registration statement has become effective and while such registration
statement is effective under the 1933 Act; (ii) has been transferred pursuant to
Rule 144; (iii) may be sold or transferred pursuant to Rule 144(k); or (iv)
ceases to be outstanding.
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"Transfer Restricted Warrant Shares" means the Warrant Shares issued
or issuable upon exercise of the Warrants (and any security issued in respect
thereof upon any stock dividend, stock split or similar event) that are
represented by certificates that bear, or, upon issuance thereof, are required
to bear, a restricted legend in accordance with the terms of the Securities
Purchase Agreement until the earliest of the date on which such Warrant Share or
any security issued in respect thereof upon any stock dividend, split or similar
event, as the case may be: (i) has been transferred pursuant to a Shelf
Registration Statement or another registration statement covering such Warrant
Share which has been filed with the SEC pursuant to the 1933 Act, in either case
after such registration statement has become effective and while such
registration statement is effective under the 1933 Act; (ii) has been
transferred pursuant to Rule 144; (iii) may be sold or transferred pursuant to
Rule 144(k); or (iv) ceases to be outstanding.
"Trustee" means the trustee in respect of the Notes under the
Indenture.
"Warrant Value" means, for any Warrant, the number of Warrant Shares
for which such Warrant is exercisable multiplied by the Exercise Price then
applicable thereto.
"Warrants" has the meaning set forth in the preamble hereto.
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included," or "stated" in
the Shelf Registration Statement, any preliminary Prospectus or Prospectus (and
all other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information incorporated or
deemed to be incorporated by reference in such Shelf Registration Statement,
preliminary Prospectus or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Shelf Registration Statement,
any preliminary Prospectus or Prospectus shall be deemed to mean and include any
document filed with the SEC under the 1934 Act, after the date of such Shelf
Registration Statement, preliminary Prospectus or Prospectus, as the case may
be, which is incorporated or deemed to be incorporated by reference therein.
2. Shelf Registration Statement.
a. The Company shall, at its expense, prepare and file with
the SEC thirty-one (31) days after the Threshold Acquisition Date (as defined in
the Indenture) (the "Filing Deadline") a Shelf Registration Statement in respect
of resales of the Transfer Restricted Securities by the Holders and Trident
Growth Fund, L.P. (who, for purposes of this Section 2, shall be deemed a
"Holder of Transfer Restricted Securities") from time to time on a delayed or
continuous basis pursuant to Rule 415 and in accordance with the methods of
distribution set forth in such Shelf Registration Statement and thereafter shall
use its reasonable best efforts to cause such Shelf Registration Statement to be
declared effective under the 1933 Act (x) within sixty (60) days after the
Filing Deadline or (y) within ninety (90) days after the Filing Deadline if the
Shelf Registration Statement is reviewed by the SEC (the "Effectiveness
Deadline").
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(ii) If the Nonconvertible Notes may be redeemed due
to (x) the failure of the Company to raise at least $7,000,000 of additional
capital within six months of the issuance of the Nonconvertible Notes or (y)
Nonconvertible Notes remaining outstanding 18 months after the issuance of the
Nonconvertible Notes, then, at the expense of the holders of the Warrants, the
Company will (within 60 days after such 6 or 18 month date, as may be
applicable, and in either case shall be a "Filing Deadline") file a Shelf
Registration Statement in respect of resales of the Transfer Restricted Warrant
Shares by the holders of the Warrants from time to time on a delayed or
continuous basis pursuant to Rule 415 and in accordance with the methods of
distribution set forth in such Shelf Registration Statement and thereafter shall
use its reasonable best efforts to cause such Shelf Registration Statement to be
declared effective under the 1933 Act by the Effectiveness Deadline.
(iii) The initial Shelf Registration Statement shall
contain the "Plan of Distribution" and "Selling Securityholders" sections in
form and substance common in the market and reasonably acceptable to each Holder
that delivers a properly completed and signed Notice and Questionnaire to the
Company as a selling shareholder in the Shelf Registration Statement. The
Company shall supplement or amend the Shelf Registration Statement if required
by the rules, regulations or instructions applicable to the registration form
used by the Company for the Shelf Registration Statement, or by the 1933 Act,
the 1934 Act or the SEC.
b. The Company shall name each Holder that delivers a properly
completed and signed Notice and Questionnaire to the Company as a selling
shareholder in the Shelf Registration Statement. A Holder of Transfer Restricted
Securities may include such securities in the Shelf Registration Statement only
if the Holder sends a properly completed Notice and Questionnaire to the
Company. The Company shall deliver the Notice and Questionnaire to the Buyers
within fifteen (15) Business Days after the Threshold Acquisition Date. In order
to be included in the Shelf Registration Statement at the time of its
effectiveness, the completed Notice and Questionnaire must be received by the
Company on or prior to 9:00 a.m., New York time, on the fifth (5th) Business Day
prior to initial effectiveness of the Shelf Registration Statement, in each case
provided that the Company has delivered the Notice and Questionnaire in
accordance with this Section 2.1(b)(i)) (in any case, the "Questionnaire
Deadline"). The Company agrees and undertakes that it shall distribute a Notice
and Questionnaire (A) no less than thirty (30) Business Days prior to the
expected effectiveness of the Shelf Registration Statement to each Holder in
accordance with Section 6(c) hereof, and (B) in the case of a Holder that is a
transferee of Transfer Restricted Securities, upon the request of such
transferee Holder given in accordance with Section 6(c) hereof, to such Holder
at the address set forth in such request.
(ii) Following the effectiveness of the Shelf
Registration Statement, upon receipt of a completed Notice and Questionnaire
from a Holder, the Company will, as promptly as practicable, but in any event
within five (5) Business Days after its receipt thereof, file any amendments to
the Shelf Registration Statement or supplements to the related Prospectus or
file any post-effective amendment to the Shelf Registration Statement that is
required by applicable law to cause a Holder to be named as a selling
securityholder in the Shelf Registration Statement and permit such Holder to
deliver the Prospectus to purchasers of Transfer Restricted Securities (a
"Post-Effective Amendment") (subject to the right of the Company to suspend the
use of the Prospectus as described in Section 2(d) hereof); provided, however,
that (i) if a supplement to the related Prospectus is required to permit the
Holder (or other Holders not included in the Shelf Registration Statement upon
effectiveness) to deliver the Prospectus to purchasers of Transfer Restricted
Securities, the Company shall not be required to file more than one (1) such
supplement during any ten (10) Business Day period and (ii) if a post effective
amendment to the Shelf Registration Statement is required to permit the Holder
(or other Holders not included in the Shelf Registration Statement upon
effectiveness) to deliver the Prospectus to purchasers of Transfer Restricted
Securities, the Company shall not be required to file more than one (1)
post-effective amendment to the Shelf Registration Statement in any sixty (60)
day period. The Company shall use its reasonable best efforts to cause any such
post-effective amendment to become effective under the 1933 Act as promptly as
is practicable; provided that if a Notice and Questionnaire is delivered to the
Company during a Suspension Period, the Company shall not be obligated to amend
the Shelf Registration Statement or supplement the Prospectus until the
termination of such Suspension Period.
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(iii) Each Holder as to which the Shelf Registration
Statement is being effected agrees to furnish promptly to the Company (x) such
other information as the Company may reasonably request for use in connection
with the Shelf Registration Statement or Prospectus or in any application to be
filed with or under state securities laws and (y) all information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not misleading.
c. The Company shall use its reasonable best efforts to keep
the Shelf Registration Statement continuously effective, supplemented and
amended under the 1933 Act in order to permit the Prospectus forming a part
thereof to be usable, subject to Section 2(d) hereof, by all Notice Holders
until the earliest to occur of: (i) all Transfer Restricted Securities are
eligible for sale under Rule 144(k); (ii) the date as of which all Transfer
Restricted Securities have been transferred under Rule 144; (iii) such date as
of which all Transfer Restricted Securities have been sold pursuant to the Shelf
Registration Statement, and (iv) seven (7) years after such Shelf Registration
Statement first becomes effective (in any such case, such period being called
the "Shelf Registration Period"). The Company will, in order to fulfill its
obligations under this Section 2(c): (x) subject to Section 2(d), prepare and
file with the SEC such amendments and post-effective amendments to the Shelf
Registration Statement as may be necessary to keep the Shelf Registration
Statement continuously effective for the Shelf Registration Period; (y) subject
to Section 2(d), cause the related Prospectus to be supplemented by any required
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the 1933 Act; and (z) comply in all
material respects with the provisions of the 1933 Act in respect of the
disposition of all Transfer Restricted Securities covered by the Shelf
Registration Statement during the Shelf Registration Period.
d. The Company may suspend the availability of any Shelf
Registration Statement and the use of any Prospectus (the period during which
the availability of any Shelf Registration Statement and any Prospectus may be
suspended herein referred to as the "Suspension Period"), without incurring any
obligation to pay Liquidated Damages pursuant to Section 2(e), for a period not
to exceed: (i) twenty (20) consecutive days at any one time; (ii) thirty (30)
days in the aggregate in any three-month period; or (iii) sixty (60) days in the
aggregate during any twelve (12) month period, in each case only for valid
business reasons, to be determined in good faith by the Company in its
reasonable judgment (which shall not include the avoidance of the Company's
obligations hereunder), including, without limitation, the acquisition or
divestiture of assets, pending corporate developments, public filings with the
SEC and similar events; provided that the Company promptly thereafter complies
with the requirements of Section 3(k) hereof, if applicable. The first day of
any Suspension Period must be at least three (3) trading days after the last day
of any prior Suspension Period.
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e. The Company and the Buyers agree that the Holders of
Transfer Restricted Securities will suffer damages, and it would not be feasible
to ascertain the extent of such damages with precision, if the Company fails to
fulfill its obligations under Section 2 hereof. Accordingly, if: (i) the Shelf
Registration Statement is not filed with the SEC on the Filing Deadline; (ii)
the Shelf Registration Statement has not been declared effective by the SEC by
the Effectiveness Deadline; (iii) the Company fails to file with the SEC a
request for acceleration in accordance with Rule 461 promulgated under the
Securities Act, within five business days of the date that the Company is
notified (orally or in writing, whichever is earlier) by the SEC that the Shelf
Registration Statement will not be "reviewed," or not subject to further review,
(iv) prior to its Effective Date, the Company fails to file a pre-effective
amendment and otherwise respond in writing to comments made by the SEC in
respect of the Shelf Registration Statement within ten (10) calendar days after
the receipt of comments by or notice from the SEC that such amendment is
required in order for the Shelf Registration Statement to be declared effective,
(v) the Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by a
replacement Shelf Registration Statement filed and declared effective) or usable
(including as a result of a Suspension Period) for the offer and sale of
Transfer Restricted Securities for a period of time (including any Suspension
Period) which exceeds: (x) twenty (20) consecutive days at any time; (y) thirty
(30) days in the aggregate in any three-month period; or (z) sixty (60) days in
the aggregate in any twelve (12) month period or (vi) if the Shares are not
timely listed as required by Section 3(p), or if they are delisted or suspended
from the market upon which they are listed on the date hereof (other than a
delisting from Pink Sheets LLC upon securing a listing of such Shares on the OTC
Bulletin Board, and/or a delisting from the OTC Bulletin Board upon securing a
listing of such Shares on any of The New York Stock Exchange, Inc., the American
Stock Exchange or The Nasdaq Capital Market) and, after the listing of such
Shares as required by Section 3(p), means that such Shares are delisted or
suspended by any such market (each such event referred to in clauses (i) through
(vi), a "Registration Default"), provided that any suspension of the Shelf
Registration Statement as a result of the time required by the SEC to declare
effective a post-effective amendment to the Shelf Registration Statement in
connection with the Company's obligation to file such an amendment pursuant to
Section 2(b)(ii) hereof shall not be included in the calculation of a
Registration Default; the Company shall pay to each Notice Holder (who is also a
Record Holder) during any period in which a Registration Default has occurred or
is continuing, as partial relief (which remedy shall not be exclusive of any
other remedies available at law or in equity), cash in an amount (the
"Liquidated Damages") equal to: (i) one half of one percent (50 basis points)
per month (x) on the principal amount of Notes constituting Transfer Restricted
Securities and (y) on the Warrant Value, as applicable for the period up to and
including the 30th day during which such Registration Default has occurred and
is continuing; and (ii) one percent (100 basis points) per month (x) on the
principal amount of Notes constituting Transfer Restricted Securities and (y)
the Warrant Value, as applicable for the period including and subsequent to the
31st day during which such Registration Default has occurred and is continuing,
it being understood that all calculations pursuant to this clause shall be
carried out to five decimal places, and provided that, if the Registration
Default relates to a Shelf Registration Statement required to be filed by
Section 2(a)(ii) hereof, only those Liquidated Damages provided for pursuant to
clause (y) shall be payable. Following the cure of all Registration Defaults,
Liquidated Damages will cease to accrue in respect of such Registration
Defaults. All accrued Liquidated Damages shall be paid by the Company on each
Registration Default Payments Payment Date in cash to the date of such cure and
Liquidated Damages will be calculated on the basis of a 360-day year consisting
of twelve 30-day months. Notwithstanding anything in the Agreement to the
contrary, Liquidated Damages shall only be payable to Notice Holders.
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f. All of the Company's obligations (including, without
limitation, the obligation to pay Liquidated Damages) set forth in the preceding
paragraph which are outstanding or exist in respect of any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations in respect of such
security shall have been satisfied in full.
g. Immediately upon the occurrence or the termination of a
Registration Default, the Company shall give the Trustee, so long as any Notes
remain outstanding, and the Holders of Warrants, so long as any Warrants remain
outstanding, notice of such commencement or termination of the obligation to pay
Liquidated Damages with regard to the Notes and the Warrants, and the amount
thereof and of the nature of the default giving rise to such commencement or the
event giving rise to such termination, as the case may be (such notice to be
contained in an Officer's Certificate (as such term is defined in the
Indenture)), and prior to receipt of such Officer's Certificate the Trustee, the
Holders of Warrants and the transfer and paying agent shall be entitled to
assume that no such commencement or termination has occurred, as the case may
be.
3. Registration Procedures.
In connection with any Shelf Registration Statement, the following
provisions shall apply:
a. The Company shall: (i) furnish to the Buyers, within a
reasonable period of time, but in any event within five (5) Business Days, prior
to the filing thereof with the SEC to afford the Buyers and their counsel a
reasonable opportunity for review and participate in the preparation thereof, a
copy of each Shelf Registration Statement, and each amendment thereof, and a
copy of each Prospectus, and each amendment or supplement thereto (excluding
amendments caused by the filing of a report under the 1934 Act), and shall
reflect in each such document, when so filed with the SEC, such comments as the
Buyers may reasonably propose therein; and (ii) include information regarding
the Notice Holders and the methods of distribution they have elected for their
Transfer Restricted Securities provided to the Company in Notice and
Questionnaires as necessary to permit such distribution by the methods specified
therein.
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b. Subject to Section 2(d), the Company shall ensure that: (i)
any Shelf Registration Statement and any amendment thereto and any Prospectus
forming a part thereof and any amendment or supplement thereto comply in all
material respects with the 1933 Act and the rules and regulations thereunder;
(ii) any Shelf Registration Statement and any amendment thereto does not, when
it becomes effective, 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 (iii) any Prospectus forming a part of
any Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation in respect of any Holder Information.
c. The Company, as promptly as reasonably practicable (but in
any event within two Business Days), shall notify the Buyers and each Notice
Holder:
(i) when any Prospectus or any supplement thereto
has been filed with the SEC and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request, following effectiveness of the
Shelf Registration Statement under the Securities Act, by the SEC or any other
federal or state governmental authority for amendments or supplements to the
Shelf Registration Statement or the Prospectus or for additional information
(other than any such request relating to a review of the Company's 1934 Act
filings);
(iii) of the issuance by the SEC or any other federal
or state governmental authority of any stop order suspending the effectiveness
of the Shelf Registration Statement or of any order preventing or suspending the
use of any Prospectus or the initiation or threat of any proceedings for that
purpose;
(iv) of the receipt by the Company of any
notification in respect of the suspension of the qualification or exemption from
qualification of the Transfer Restricted Securities included in any Shelf
Registration Statement for sale in any jurisdiction or the initiation or threat
of any proceeding for that purpose;
(v) of the occurrence of, but not the nature of or
details concerning, any event or the existence of any condition that requires
the making of any changes in the Shelf Registration Statement or the Prospectus
or any document incorporated by reference therein so that, as of such date, the
statements therein are not misleading and the Shelf Registration Statement or
the Prospectus or any document incorporated by reference therein, as the case
may be, does not include an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading;
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(vi) of the Company's determination that a
post-effective amendment to the Shelf Registration Statement is necessary
(other than a post-effective amendment pursuant to Section 2(b)(ii)); and
(vii) of the commencement (including as a result of
any of the events or circumstances described in paragraph (ii) above) and
termination of any Suspension Period.
d. The Company shall use its reasonable best efforts to
obtain: (i) the withdrawal of any order suspending the effectiveness of any
Shelf Registration Statement and the use of any related Prospectus; and (ii) the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Transfer Restricted Securities for offer or sale in any
jurisdiction in which they have been qualified for sale, in each case at the
earliest possible time, and shall provide notice to each Notice Holder and the
Buyers of the withdrawal of any such orders or suspensions.
e. The Company shall promptly furnish to the Buyers (and, upon
written request from any Notice Holder to such Notice Holder), without charge,
(i) at least one copy of any Shelf Registration Statement and any post-effective
amendment thereto, excluding all documents incorporated or deemed to be
incorporated therein by reference and all exhibits thereto, (ii) copies of any
correspondence to the SEC or the staff of the SEC from the Company or its
representatives relating to any Registration Statement which affect, or relate
to, any of the Holders or their securities, (iii) copies of any correspondence
from the SEC or the staff of the SEC to the Company or its representatives
related to any Registration Statement which affect, or relate to, any of the
Holders or their securities, (iv) promptly after the same is prepared and filed
with the SEC, one copy of any Registration Statement and any amendment(s)
thereto, including financial statements and schedules, all documents
incorporated therein by reference, if requested by a Holder, and all exhibits
and (v) upon the effectiveness of any Registration Statement, one copy of the
prospectus included in such Registration Statement and all amendments and
supplements thereto.
f. The Company shall, during the Shelf Registration Period,
promptly deliver to the Buyers and each Notice Holder, without charge, as many
copies of the Prospectus (including each preliminary Prospectus) included in any
Shelf Registration Statement, and any amendment or supplement thereto, as such
person may reasonably request and except as provided in Sections 2(d) and 3(p)
hereof; and the Company hereby consents to the use of the Prospectus and any
amendment or supplement thereto by each of the selling Holders in connection
with the offering and sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto.
g. The Company shall submit to the SEC, within two (2)
Business Days after the Company learns that no review of a particular
Registration Statement will be made by the staff of the SEC or that the staff
has no further comments on a particular Registration Statement, as the case may
be, a request for acceleration of effectiveness of such Registration Statement
to a time and date not later than 48 hours after the submission of such request.
11
h. The Company shall promptly furnish to the Legal Counsel
copies of any correspondence from the SEC or the staff of the SEC to the Company
or its representatives relating to any Shelf Registration Statement; provided
that such correspondence shall not be furnished to any Buyer by the Company or
such Legal Counsel unless such Buyer agrees to keep confidential any information
regarding such correspondence.
i. Prior to any offering of Transfer Restricted Securities
pursuant to any Shelf Registration Statement, the Company shall register or
qualify or cooperate with the Notice Holders and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Transfer Restricted Securities for offer
and sale, under the securities or blue sky laws of such jurisdictions within the
United States as any such Notice Holders reasonably request and shall maintain
such qualification in effect so long as required and do any and all other acts
or things necessary or advisable to enable the offer and sale in such
jurisdictions of the Transfer Restricted Securities covered by such Shelf
Registration Statement; provided, however, that the Company will not be required
to: (i) qualify generally to do business as a foreign corporation or as a dealer
in securities in any jurisdiction where it is not then so qualified or; (ii)
take any action which would subject it to service of process or taxation in
excess of a nominal dollar amount in any such jurisdiction where it is not then
so subject.
j. If the Transfer Restricted Securities are in certificated
form, the Company shall cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities sold pursuant to any Shelf Registration Statement free of any
restrictive legends and registered in such names as Holders may request at least
two (2) Business Days prior to settlement of sales of Transfer Restricted
Securities pursuant to such Shelf Registration Statement and otherwise in
accordance with the Securities Purchase Agreement and the Warrants, as
applicable.
k. Subject to the exceptions contained in (i) and (ii) of
Section 3(i) above, the Company shall use its reasonable best efforts to cause
the Transfer Restricted Securities covered by the applicable Shelf Registration
Statement to be registered with or approved by such other federal, state and
local governmental agencies or authorities, and self-regulatory organizations in
the United States as may be necessary to enable the Holders to consummate the
disposition of such Transfer Restricted Securities as contemplated by the Shelf
Registration Statement; without limitation to the foregoing, the Company shall
provide all such information as may be required by the NASD in connection with
the offering under the Shelf Registration Statement of the Transfer Restricted
Securities (including, without limitation, such as may be required by NASD Rule
2710 or 2720), and shall cooperate with each Holder in connection with any
filings required to be made with the NASD by such Holder in that regard.
l. Upon the occurrence of any event described in Section
3(c)(iv) or 3(c)(v) hereof, the Company shall promptly prepare and file with the
SEC a post-effective amendment to any Shelf Registration Statement, or an
amendment or supplement to the related Prospectus, or any document incorporated
therein by reference, or file a document which is incorporated or deemed to be
incorporated by reference in such Shelf Registration Statement or Prospectus, as
the case may be, so that, as thereafter delivered to purchasers of the Transfer
Restricted Securities included therein, the Shelf Registration Statement and the
Prospectus, in each case as then amended or supplemented, will not include an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein (in
the case of the Prospectus, in the light of the circumstances under which they
were made) not misleading and, in the case of a post-effective amendment, use
its reasonable best efforts to cause it to become effective as promptly as
practicable; provided that the Company's obligations under this paragraph (l)
shall be suspended if the Company has suspended the use of the Prospectus in
accordance with Section 2(d) hereof and given notice of such suspension to
Notice Holders, it being understood that the Company's obligations under this
Section 3(l) shall be automatically reinstated at the end of such Suspension
Period.
12
m. The Company shall provide, prior to the effective date of
any Shelf Registration Statement hereunder, a CUSIP number for the Transfer
Restricted Securities registered under such Shelf Registration Statement.
n. The Company shall use its reasonable best efforts to comply
with all applicable rules and regulations of the SEC and shall make generally
available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the 1933 Act and Rule 158 promulgated by the SEC
thereunder (or any similar rule promulgated under the ▇▇▇▇ ▇▇▇) for a twelve
(12) month period commencing on the first day of the first fiscal quarter of the
Company commencing after the effective date of any Shelf Registration Statement
or each post-effective amendment to any Shelf Registration Statement, which such
statements shall be made available no later than forty-five (45) days after the
end of the twelve (12) month period or ninety (90) days after the end of the
twelve (12) month period, if the twelve (12) month period coincides with the
fiscal year of the Company.
o. The Company shall use its reasonable best efforts to cause
the Indenture to be qualified under the TIA (as defined in the Indenture) not
later than the effective date of the first Shelf Registration Statement.
p. The Company shall cause all shares of Common Stock issuable
upon conversion of the Convertible Notes and exercise of the Warrants to be
reserved for listing on each securities exchange or quotation system on which
the Common Stock is then listed (provided that such securities exchange or
quotation system permits reservation of listing) no later than the date the
applicable Shelf Registration Statement is declared effective and, shall cause
all Common Stock to be so listed when issued, and, in connection therewith, to
make such filings as may be required under the 1934 Act and to have such filings
declared effective as and when required thereunder.
q. If reasonably requested in writing in connection with any
disposition of Transfer Restricted Securities pursuant to a Shelf Registration
Statement, the Company shall make reasonably available for inspection during
normal business hours by a representative for the Notice Holders of such
Transfer Restricted Securities and any broker-dealers, attorneys and accountants
retained by such Notice Holders, all relevant financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the appropriate executive officers, directors and
designated employees of the Company and its subsidiaries to make reasonably
available for inspection during normal business hours all relevant information
reasonably requested by such representative for the Notice Holders or any such
broker-dealers, attorneys or accountants in connection with such disposition, in
each case as is customary for similar "due diligence" examinations; provided,
however, that any information that is designated by the Company, in good faith,
as confidential at the time of delivery of such information shall be kept
confidential by such Persons, unless disclosure thereof is made in connection
with a court, administrative or regulatory proceeding or required by law, or
such information has become available to the public generally through the
Company or through a third party without an accompanying obligation of
confidentiality.
13
r. Each Notice Holder agrees that, upon receipt of notice of
the happening of an event described in Sections 3(c)(ii) through and including
3(c)(vi), it shall forthwith discontinue (and shall cause its agents and
representatives to discontinue) disposition of Transfer Restricted Securities
and will not resume disposition of Transfer Restricted Securities until such
Holder has received copies of an amended or supplemented Prospectus contemplated
by Section 3(l) hereof, or until such Notice Holder is advised in writing by the
Company that the use of the Prospectus may be resumed or that the relevant
Suspension Period has been terminated, as the case may be, provided that the
foregoing shall not prevent the sale, transfer or other disposition of Transfer
Restricted Securities by a Holder in a transaction which is exempt from, or not
subject to, the registration requirements of the 1933 Act, so long as such
Holder does not and is not required to deliver the applicable Prospectus or
Shelf Registration Statement in connection with such sale, transfer or other
disposition, as the case may be; and provided, further, that the provisions of
this Section 3(r) shall not prevent the occurrence of a Registration Default or
otherwise limit the obligation of the Company to pay Liquidated Damages.
s. The Company shall use its reasonable best efforts to take
all other steps necessary to effect the registration of the Conversion Shares
and Warrant Shares covered by the Shelf Registration Statement contemplated
hereby.
4. Registration Expenses.
Except in respect of the initial filing of a Shelf Registration
Statement pursuant to Section 2(a)(ii), the Company shall bear all fees and
expenses incurred in connection with the performance of its obligations under
Sections 2 and 3 hereof and shall reimburse the Holders for the reasonable fees
and disbursements of one firm or counsel designated by the Company (and
reasonably acceptable to the Buyers acting on behalf of the Holders) to act as
counsel for the Holders in connection therewith, which firm shall initially be
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP or such other firm as the Holders may from time to time
select (the "Legal Counsel"). Such fees and expenses shall include, without
limitation: (i) all registration and filing fees and expenses (including filings
made with the NASD); (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all expenses of printing
(including printing of Prospectuses and certificates for the Common Stock to be
issued upon conversion of the Notes or exercise of the Warrants) and the
Company's expenses for messenger and delivery services and telephone; (iv) all
fees and disbursements of counsel to the Company; (v) all application and filing
fees in connection with listing (or authorizing for quotation) the Common Stock
on a national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company. The Company shall bear its internal
expenses (including, without limitation, all salaries and expenses of their
officers and employees performing legal, accounting or other duties), the
expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company. Notwithstanding the provisions of this
Section 4, each Holder shall bear the expense of any broker's commission, agency
fee and underwriter's discount or commission, if any, relating to the sale or
disposition of such Holder's Transfer Restricted Securities pursuant to a Shelf
Registration Statement.
14
5. Indemnification and Contribution.
a. The Company agrees to indemnify and hold harmless each
Holder of Transfer Restricted Securities covered by any Shelf Registration
Statement, its directors, officers, partners, members and employees and each
Person, if any, who controls any such Holder within the meaning of either the
1933 Act or the 1934 Act (collectively referred to for purposes of this Section
5, as a "Holder") against any losses, claims, damages or liabilities, joint or
several, or actions in respect thereof, to which any of them may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Shelf Registration
Statement, or in any Prospectus, or any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact necessary to make the statements therein (in the case of
any Prospectus, in the light of the circumstances under which they were made)
not misleading, and will reimburse each such party for any legal or other
expenses reasonably incurred by such party in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that: (i) the Company shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon Holder Information; and (ii) in respect of any untrue statement or omission
of material fact made in any Shelf Registration Statement, or in any Prospectus,
the indemnity agreement contained in this Section 5(a) shall not inure to the
benefit of a Holder from whom the Person asserting any such loss, claim, damage
or liability purchased the securities concerned, to the extent that any such
loss, claim, damage or liability of such Holder occurs under the circumstance
where it shall have been established that: (w) the Company had previously
furnished copies of the Prospectus, and any amendments and supplements thereto,
to such Holder; (x) delivery of the Prospectus, and any amendment or supplements
thereto, was required by the 1933 Act to be made to such Holder; (y) the untrue
statement or omission of a material fact contained in the Prospectus was
corrected in amendments or supplements thereto; and (z) there was not sent or
given to such Holder, at or prior to the written confirmation of the sale of
such securities to such Holder, a copy of such amendments or supplements to the
Prospectus. This indemnity agreement will be in addition to any liability that
the Company may otherwise have. This indemnity agreement will not apply to any
loss, damage, expense, liability or claim arising from an offer or sale,
occurring during a Suspension Period, of Transfer Restricted Securities by a
Notice Holder who has previously received notice from the Company of the
commencement of the Suspension Period pursuant to Section 3(c)(vi).
b. Each Holder, severally and not jointly, agrees to indemnify
and hold harmless the Company, each of its directors and officers and each
Person, if any, who controls the Company within the meaning of either the 1933
Act or the 1934 Act, to the same extent as the foregoing indemnity from the
Company to the Holders and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any loss, claim, damage, liability or
action, but only with reference to Holder Information supplied by such Holder.
In no event shall any Holder, its directors, officers, partners, members or
employees or any Person, if any, who controls such Holder be liable or
responsible for any amount in excess of the amount by which the net amount
received by such Holder in respect of its sale of Transfer Restricted Securities
pursuant to a Shelf Registration Statement exceeds: (i) the amount paid by such
Holder for such Transfer Restricted Securities; plus (ii) the amount of any
damages that such Holder, its directors, officers or any Person who controls
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. This indemnity
agreement will be in addition to any liability that such Holder may otherwise
have.
15
c. Promptly after receipt by an indemnified party under this
Section 5 of notice of any claim or the commencement of any action or proceeding
(including any governmental investigation), such indemnified party will, if a
claim for indemnification in respect thereof is to be made against the
indemnifying party under Section 5(a) or 5(b) hereof, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. In case any such
action or proceeding is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein (jointly with any other indemnifying party
similarly notified), and to the extent that it may elect, by written notice,
delivered to such indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants (including any impleaded parties) in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to appoint counsel to defend such
action and approval by the indemnified party of such counsel, the indemnifying
party will not be liable to such indemnified party under this Section 5 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless: (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expense of more than one separate counsel (in addition to any
local counsel), approved by the Holders in the case of paragraph (a) of this
Section 5, representing the indemnified parties under such paragraph (a) who are
parties to such action); (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice or commencement of the
action; (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party; or (iv) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest. An indemnifying
party will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment in respect of any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding. Subject to the provisions of the immediately following
sentence, no indemnifying party shall be liable for any settlement, compromise
or the consent to the entry of judgment in connection with any such action
effected without its written consent, but if settled with its written consent or
if there be a final judgment for the plaintiff in any such action other than a
judgment entered with the consent of such indemnified party, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or judgment. If at
any time an indemnified party shall have requested that an indemnifying party
reimburse the indemnified party for reasonable fees and expenses of counsel as
contemplated by this Section 5(c) and to which it would be entitled under
Section 5(a) or 5(b) hereof, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if: (x) such settlement is entered into more than 45 days after receipt by such
indemnifying party of such request for reimbursement, (y) such indemnifying
party shall have received notice of the terms of such settlement at least thirty
(30) days prior to such settlement being entered into and (z) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
16
d. In the event that the indemnity provided in paragraph (a)
or (b) of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, each indemnifying party agrees to contribute
to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending
same) (collectively, "Losses") to which the indemnified party may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company from the sale of the Transfer Restricted Securities, on the one
hand, and a Holder in respect of the sale by such Holder of the Transfer
Restricted Securities, on the other hand; provided, however, that no Holder
shall be liable or responsible for any amount in excess of the amount by which
the net amount received by such Holder in respect of its sale of Transfer
Restricted Securities pursuant to a Shelf Registration Statement exceeds: (i)
the amount paid to such Holder for such Transfer Restricted Securities; plus
(ii) the amount of any damages that such Holder, its directors, officers or any
Person who controls such Holder has otherwise been required to pay in respect of
such Losses. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and such Holder shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and of such Holder on the
other in connection with the statements or omissions which resulted in such
Losses, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Holder on the other
shall be deemed to be in the same respective proportions as the total net
proceeds from the sale of the Transfer Restricted Securities (before deducting
expenses) received by or on behalf of the Company, on the one hand, and the
total proceeds received by such Holder in respect of its sale of Transfer
Restricted Securities under the Shelf Registration Statement, on the other hand,
bear to the total gross proceeds from the sale of the Transfer Restricted
Securities. Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or relates to Holder Information
supplied by such Holder, on the other, the intent of the parties and their
relative knowledge, information and opportunity to correct or prevent such
untrue statement or omission. The parties agree that it would not be just and
equitable if contribution pursuant to this paragraph (d) were determined by pro
rata allocation or any other method of allocation that does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution
from any Person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 5(d), each Person who controls such Holder within the
meaning of either the 1933 Act or the 1934 Act shall have the same rights to
contribution as such Holder, and each Person who controls the Company within the
meaning of either the 1933 Act or the 1934 Act shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
17
e. The remedies provided for in this Section 6 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
f. The provisions of this Section 5 will remain in full force
and effect, regardless of any investigation made by or on behalf of any Holder,
any underwriter or the Company or any of the officers, directors or controlling
Persons referred to in Section 5 hereof, and will survive the sale by a Holder
of Transfer Restricted Securities covered by a Shelf Registration Statement.
Section 5 of this Agreement may not be amended except by an instrument in
writing signed by the Indemnified Party affected hereto.
g. Rules 144 and 144A. The Company covenants that it shall use
its reasonable best efforts to file the reports required to be filed by it under
the 1933 Act and the 1934 Act in a timely manner so long as the Transfer
Restricted Securities remain outstanding. If at any time the Company is not
required to file such reports, it will, upon request of any Holder or beneficial
owner of Transfer Restricted Securities, make available such information
necessary to permit sales pursuant to Rule 144A. The Company further covenants
that, for as long as any Transfer Restricted Securities remain outstanding, it
will take such further action as any Holder of Transfer Restricted Securities
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Transfer Restricted Securities without registration under
the 1933 Act within the limitation of the exemptions provided by Rule 144 and
Rule 144A. Upon the written request of any Holder of Transfer Restricted
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.
6. Miscellaneous.
a. No Inconsistent Agreements. The Company has not, as of the
date hereof, entered into nor shall it, on or after the date hereof, enter into,
any agreement in respect of its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
In addition, the Company shall not grant to any holder of securities of the
Company (other than the Holders of Transfer Restricted Securities in such
capacity and the PIPE Buyers as to the PIPE Common Shares and PIPE Warrant
Shares) the right to include any of its securities in the Shelf Registration
Statement provided for in this Agreement other than the Transfer Restricted
Securities. Notwithstanding the foregoing, in the event any PIPE Securities are
included as part of the Shelf Registration Statement and the Trustee or the
Majority Holders reasonably believes that such inclusion may delay the Shelf
Registration Statement being declared effective by the SEC, the Company, at the
request of the Trustee or the Majority Holders, shall withdraw such PIPE
Securities from the Shelf Registration Statement.
18
b. Amendments and Waivers. Except as otherwise provided in
Section 5(f), and except in respect of the Company's obligations to pay
Liquidated Damages (as to which the consent of each holder affected by any
amendment, modification or supplement thereto shall be required to consent), 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 Company has obtained the
written consent of Holders of (x) a majority of the then outstanding Conversion
Shares (with Holders of Convertible Notes deemed to be the Holders, for purposes
of this Section, of the number of outstanding Conversion Shares into which such
Notes are or would be convertible as of the date on which such consent is
requested excluding, for this purpose only, any shares of Common Stock payable
as a Make-Whole Premium (as defined in the Indenture) upon conversion of any
Note) in respect of any amendment, modification or supplement related to the
Conversion Shares, and (y) a majority of the then outstanding Warrant Shares
(with Holders of Warrants deemed to be the Holders, for purposes of this
Section, of the number of outstanding Warrant Shares into which such Warrants
are or would be exercisable as of the date on which such consent is requested)
in respect of any amendment, modification or supplement related to the Warrant
Shares. Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof in respect of a matter that relates exclusively to the rights
of Holders of Transfer Restricted Securities whose securities are being sold
pursuant to a Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders of Transfer Restricted Securities
may be given by Holders of at least a majority of the Transfer Restricted
Securities being sold by such Holders pursuant to such Shelf Registration
Statement; provided that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence. Each Holder at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 6(b), whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the Transfer
Restricted Securities or is delivered to such Holder.
c. Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
an overnight courier service specifying next day delivery with written
verification of receipt, in each case properly addressed to the party to receive
the same. The addresses and facsimile numbers for such communications shall be:
19
If to the Company:
AFG Enterprises USA, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, CEO
Copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to a Buyer, initially to its address and facsimile number set forth on the
Schedule of Buyers attached to the Securities Purchase Agreement, with copies to
such Buyer's representatives as set forth on the Schedule of Buyers, and with a
copy (for informational purposes only) to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to any other Holder, at the most current address of such Holder maintained by
the Registrar under the Indenture or the registrar of the Transferable
Securities (provided that while the Notes are in book-entry form, notice to the
Trustee shall serve as notice to the Holders); or to such other address and/or
facsimile number and/or to the attention of such other Person as the recipient
party has specified by written notice given to each other party five (5) days
prior to the effectiveness of such change. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from
an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
d. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders. The Company hereby agrees to extend the
benefits of this Agreement to any Holder and underwriter and any such Holder and
underwriter may specifically enforce the provisions of this Agreement as if an
original party hereto. In the event that any other Person shall succeed to the
Company under the Indenture, then such successor shall enter into an agreement,
in form and substance reasonably satisfactory to the Buyers, whereby such
successor shall assume all of the Company's obligations under this Agreement.
20
e. Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate 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; provided that a facsimile
signature shall be considered due execution and shall be binding upon the
signatory thereto with the same force and effect as if the signature were an
original, not a facsimile signature.
f. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
g. Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
h. Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
i. Approval of Holders. Whenever the consent or approval of
Holders is required hereunder, Notes and Warrants held by the Company or its
affiliates (as such term is defined in Rule 405 under the ▇▇▇▇ ▇▇▇) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
21
j. Termination. This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the Shelf Registration Period,
except for any liabilities or obligations under Section 2(e), 4 or 5.
k. Independent Nature of Buyers' Obligations and Rights. The
obligations of each Buyer under any Transaction Document (as defined in the
Securities Purchase Agreement) are several and not joint with the obligations of
any other Buyer, and no Buyer shall be responsible in any way for the
performance of the obligations of any other Buyer under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to
constitute the Buyers as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Buyers are in any way
acting in concert or as a group in respect of such obligations or the
transactions contemplated by the Transaction Documents and the Company
acknowledges that the Buyers are not acting in concert or as a group in respect
of such obligations or the transactions contemplated by the Transaction
Documents. Each Buyer confirms that it is not acting in concert or as a group in
respect of such obligations or the transactions contemplated by the Transaction
Documents and it has independently participated in the negotiation of the
transaction contemplated hereby with the advice of its own counsel and advisors.
Each Buyer shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for any other
Buyer to be joined as an additional party in any proceeding for such purpose.
[The remainder of the page is intentionally left blank]
22
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
COMPANY:
AFG ENTERPRISES USA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
[Signature page to Registration Rights Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
AMATIS LIMITED
By: Amaranth Advisors L.L.C., its
Trading Advisor
By: /s/ ▇▇▇▇ ▇. Watcher
-------------------------------
Name: ▇▇▇▇ ▇. Watcher
Title: Authorized Signatory
[Signature page to Registration Rights Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
RADCLIFFE SPC, LTD. for and on behalf
of the Class A Convertible Crossover
Segregated Portfolio,
By: RG Capital Management, L.P.
By: RGC Management Company, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
[Signature page to Registration Rights Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
CONTEXT CONVERTIBLE ARBITRAGE
OFFSHORE, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Co-Chairman and CIO
Context Capital Management, LLC
CONTEXT CONVERTIBLE ARBITRAGE FUND, LP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Co-Chairman and CIO
Context Capital Management, LLC
[Signature page to Registration Rights Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
WOLVERINE CONVERTIBLE ARBITRAGE FUND
TRADING LIMITED
By: /s/ ▇▇▇▇▇ ▇. Hankness
-------------------------------
Name: ▇▇▇▇▇ ▇. Hankness
Title: CEO
[Signature page to Registration Rights Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
PORTSIDE GROWTH AND OPPORTUNITY FUND
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
[Signature page to Registration Rights Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, LP
By: /s/ ▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Director
[Signature page to Registration Rights Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
CHEYNE FUND LP
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇. ▇▇▇▇▇▇▇▇▇
Title: Portfolio Manager
CHEYNE LEVERAGE FUND
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇. ▇▇▇▇▇▇▇▇▇
Title: Portfolio Manager
[Signature page to Registration Rights Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
CRANSHIRE CAPITAL, LP
By: Downsview Capital, Inc., its
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: COO
[Signature page to Registration Rights Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
JMG CAPITAL PARTNERS, LP
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Member Manager of the GP
JMG TRITON OFFSHORE FUND, LTD.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Member Manager of the
Investment Manager
[Signature page to Registration Rights Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
PLEXUS FUND LIMITED
By: /s/
-------------------------------
Dernot ▇▇▇▇▇
-------------------------------
Name: Dernot ▇▇▇▇▇
Title: Director
[Signature page to Registration Rights Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.
BUYERS:
SMITHFIELD FIDUCIARY LLC
By: /s/ ▇▇▇▇ ▇. Chill
-------------------------------
Name: ▇▇▇▇ ▇. Chill
Title: Authorized Signatory
[Signature page to Registration Rights Agreement]
QUESTIONNAIRE
1. (a) Full Legal Name of Selling Securityholder:
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(b) Full Legal Name of Registered Holder (if not the same as (a) above)
through which Transfer Restricted Securities Listed in Item 3 below are
held:
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(c) Full Legal Name of DTC participant (if applicable and if not the same
as (b) above) through which Transfer Restricted Securities listed in
Item 3 below are held:
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2. Address for Notices to Selling Securityholder:
--------------------------------------------------------------------------------
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Telephone:
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Fax:
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Contact Person:
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3. Beneficial Ownership of Transfer Restricted Securities:
(a) Type and Principal Amount of Transfer Restricted Securities beneficially
owned:
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(b) CUSIP No(s). of such Transfer Restricted Securities beneficially owned:
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4. Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.
Except as set forth below in this Item 4, the undersigned is not the
beneficial or registered owner of any securities of the Company other than
the Transfer Restricted Securities listed above in Item 3.
(a) Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:
-----------------------------------------------------------------------
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(b) CUSIP No(s). of such Other Securities beneficially owned:
-----------------------------------------------------------------------
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5. Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (owners of 5% of
more of the equity securities of the undersigned) has held any position or
office or has had any other material relationship with the Company (or its
predecessors or affiliates) during the past three years.
State any exceptions here:
----------------------------------------------------------------------------
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6. Broker-Dealers and their Affiliates
(a) Is the Selling Securityholder a broker-dealer or an affiliate of a
broker-dealer:
Yes ____ No ____
If so, please answer the remaining question in this section.
(i) Please advise whether the notes were received by the Selling
Securityholder as compensation for investment banking services or as
investment shares, and if so please describe the circumstances.
Note that in general we may be required to identify any registered
broker-dealer as an underwriter in the prospectus.
(ii) Except as set forth below, if the Selling Securityholder is a
registered broker- dealer, the Selling Securityholder does not plan to make
a market in the Transfer Restricted Securities. If the Selling
Securityholder plans to make a market in the Transfer Restricted Securities,
please indicate whether the Selling Securityholder plans to use the
prospectus relating to the Transfer Restricted Securities as a market-making
prospectus.
(b) Affiliation with Broker-Dealers
Is the Selling Securityholder an affiliate(1) of a registered
broker-dealer?
Yes ____ No ____
If so, please answer the remaining question in this section.
(i) Please describe the affiliation between the Selling Securityholder and
any registered broker-dealer.
(ii) If the notes were purchased by the Selling Securityholder other than
in the ordinary course of business, please describe the circumstances.
(iii) Please advise whether the notes were received by the Selling
Securityholder as compensation for investment banking services or as
investment shares, and if so please describe the circumstances.
(iv) If the Selling Securityholder, at the time of its purchase of
Transfer Restricted Securities, had any agreements or understandings, directly
or indirectly, with any person to distribute the Transfer Restricted Securities,
please describe such agreements or undertakings.
Note that if the Selling Securityholder is an affiliate of a broker-dealer
and did not purchase its notes in the ordinary course of business or at the time
of the purchase had any agreements or understandings, directly or indirectly, to
distribute the securities, we may be required to identify the Selling
Securityholder as an underwriter in the prospectus.
(c) Beneficial Ownership by Natural Persons:
is the Selling Securityholder is an entity, does any natural person having
voting or investing power over the Transfer Restricted Securities held by the
Selling Securityholder?(2)
------------------------
(1) An "affiliate" of a specified person or entity means a person or entity that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the person or entity specified.
(2) Please answer "Yes" if any natural person, directly or indirectly, through
any contract, arrangement, understanding, relationship, or otherwise has or
shares: (a) voting power which includes the power to vote, or to direct the
voting of, such security; and/or, (b) investment power which includes the power
to dispose, or to direct the disposition of, the Transfer Restricted Securities
held by the Selling Securityholder.
If so, please state the person's or persons' name(s):
7. Beneficial Ownership by Natural Persons or by a Board or Committee
Is the Selling Securityholder a reporting entity with the Securities and
Exchange Commission?
If the Selling Securityholder is a majority owned subsidiary of a
reporting entity, identify the majority stockholder that is a reporting
entity.
Yes ____ No ____
If No, please answer the remaining questions in this section.
(i) Please name the natural person or person(s) having voting and/or
investment control over the Selling Securityholder.(3)
(ii) If the voting and/or investment control over the Selling
Securityholder is held by board or committee, please state the name
of the natural person or person(s) on such board or committee.
8. Plan of Distribution:
Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Transfer Restricted Securities listed
above in Item 3 pursuant to the Shelf Registration Statement only as
follows (if at all): Such Transfer Restricted Securities may be sold from
time to time directly by the undersigned or, alternatively, through
underwriters, broker-dealers or agents. If the Transfer Restricted
Securities are sold through underwriters, broker-dealers or agents, the
Selling Securityholder will be responsible for underwriting discounts or
commissions or agents' commissions. Such Transfer Restricted Securities
may be sold in one or more transactions at fixed prices, at prevailing
market prices at the time of sale, at varying prices determined at the
time of sale or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions,
(3) Please include any natural person that, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or shares:
(a) voting power which includes the power to vote, or to direct the voting of,
such security; and/or, (b) investment power which includes the power to dispose,
or to direct the disposition of, the Transfer Restricted Securities held by the
Selling Securityholder.
o on any national securities exchange or quotation service on which
the securities may be listed or quoted at the time of sale;
o in the over-the-counter market;
o in transactions otherwise than on these exchanges or systems or
in the over-the-counter market;
o through the writing of options, whether such options are listed
on an options exchange or otherwise;
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 short sales;
o sales pursuant to Rule 144;
o broker-dealers may agree with the selling securityholders 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 pursuant to applicable law.
State any exceptions here:
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Transfer Restricted Securities without the prior
written agreement of the Company.
The undersigned acknowledges its obligation to comply with the provisions of the
1934 Act and the rules thereunder relating to stock manipulation, particularly
Regulation M thereunder (or any successor rules or regulations), in connection
with any offering of Transfer Restricted Securities pursuant to the Registration
Rights Agreement. The undersigned agrees that neither it nor any person acting
on its behalf will engage in any transaction in violation of such provisions.
The Selling Securityholder hereby acknowledges its obligations under the
Registration Rights Agreement to indemnify and hold harmless certain persons as
set forth therein.
Pursuant to the Registration Rights Agreement, the Company has agreed under
certain circumstances to indemnify the Selling Securityholder against certain
liabilities.
In accordance with the undersigned's obligation under the Registration Rights
Agreement to provide such information as may be required by law for inclusion in
the Shelf Registration Statement, the undersigned agrees to promptly notify the
Company of any inaccuracies or changes in the information provided herein that
may occur subsequent to the date hereof at any time while the Shelf Registration
Statement remains effective.
All notices hereunder and pursuant to the Registration Rights Agreement shall be
made in writing by hand delivery, first class mail or air courier guaranteeing
overnight delivery to the address set forth below.
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Shelf Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Shelf Registration
Statement and the related prospectus.
Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company, the terms of this Notice and Questionnaire, and the
representations and warranties contained herein, shall be binding on, shall
inure to the benefit of and shall be enforceable by the respective successors,
heirs, personal representatives and assigns of the Company and the Selling
Securityholder in respect of the Transfer Restricted Securities beneficially
owned by such Selling Securityholder and listed in Item (3) above. This
Agreement shall be governed in all respects by the laws of the State of New
York.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
Dated: Beneficial Owner:
------------------------------- -------------------------
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO AFG
ENTERPRISES USA, INC.
AFG Enterprises USA, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel