Exhibit 10.3

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

MANITEX INTERNATIONAL, INC.,

MI CONVERT HOLDINGS LLC

AND

INVEMED ASSOCIATES LLC

DATED AS OF JANUARY 7, 2015

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TABLE OF CONTENTS

 

1.

   DEFINITIONS      1   

2.

   REGISTRATION      5   

3.

   RELATED OBLIGATIONS      9   

4.

   OBLIGATIONS OF THE INVESTORS      15   

5.

   EXPENSES OF REGISTRATION      15   

6.

   INDEMNIFICATION      16   

7.

   CONTRIBUTION      18   

8.

   REPORTS UNDER THE EXCHANGE ACT      19   

9.

   ASSIGNMENT OF REGISTRATION RIGHTS      19   

10.

   AMENDMENT OF REGISTRATION RIGHTS      19   

11.

   MISCELLANEOUS      20   

 

EXHIBIT A

   A-1

EXHIBIT B

   B-1

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Additional Effective Date

     1   

Additional Effectiveness Deadline

     1   

Additional Filing Date

     2   

Additional Filing Deadline

     2   

Additional Registrable Securities

     2   

Additional Registration Statement

     2   

Additional Required Registration Amount

     2   

Agreement

     1   

Allowable Grace Period

     14   

Blue Sky Filing

     16   

Buyer

     1   

Claims

     16   

Common Stock

     2   

Company

     1   

Conversion Shares

     1   

Current Public Information Failure

     8   

Cutback Shares

     3   

Effective Date

     3   

Effectiveness Deadline

     3   

Effectiveness Failure

     8   

Eligible Market

     3   

Filing Deadline

     3   

Filing Failure

     7   

Grace Period

     14   

Indemnified Damages

     16   

Indemnified Party

     17   

Indemnified Person

     16   

Initial Effective Date

     3   

Initial Effectiveness Deadline

     3   

Initial Filing Date

     3   

Initial Filing Deadline

     4   

Initial Registrable Securities

     4   

Initial Registration Statement

     4   

Initial Required Registration Amount

     4   

Inspectors

     12   

Invemed

     1   

Investor

     4   

Lead Investor

     4   

Legal Counsel

     7   

Maintenance Failure

     8   

MI Convert

     1   

Note Purchase Agreement

     1   

Notes

     1   

Person

     4   

Plan of Distribution

     6   

Principal Market

     4   

Records

     12   

Register

     5   

Registered

     5   

Registrable Securities

     5   

Registration

     5   

Registration Delay Payments

     8   

Registration Failure

     7   

Registration Period

     9   

Registration Statement

     5   

Required Holders

     5   

Required Registration Amount

     5   

Rule 144

     19   

Rule 415

     5   

SEC

     5   

Securities Act

     1   

Selling Shareholders

     6   

Violations

     16   

 

 

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REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of January 7, 2015,
by and among Manitex International, Inc., a Michigan corporation (the
“Company”), MI Convert Holdings LLC, a Delaware limited liability company (“MI
Convert”), and Invemed Associates LLC, a New York limited liability company
(“Invemed”, and each of MI Convert and Invemed, individually or together, the
“Buyer”).

RECITALS

A. In connection with that certain Note Purchase Agreement by and among the
parties hereto, dated as of the date hereof (the “Note Purchase Agreement”), the
Company has agreed, upon the terms and subject to the conditions of the Note
Purchase Agreement, to issue and sell to the Buyer an aggregate principal amount
of $15,000,000 of the Company’s 6.50% Convertible Notes due 2021 (the “Notes”),
which will, among other things, be convertible into Common Stock (as defined
below) (the shares of Common Stock issuable pursuant to the terms of the Notes,
including, without limitation, upon conversion or otherwise, collectively, the
“Conversion Shares”).

B. In accordance with the terms of the Note Purchase Agreement, the Company has
agreed to provide certain registration rights under the Securities Act of 1933,
as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the “Securities 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 the Buyer hereby
agree as follows:

AGREEMENT

1. DEFINITIONS.

Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Note Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:

“Additional Effective Date” means the date the Additional Registration Statement
is declared effective by the SEC.

“Additional Effectiveness Deadline” means the date which is the earlier of
(x) one hundred eighty (180) calendar days after the earlier of the Additional
Filing Date and the Additional Filing Deadline and (y) the fifth (5th) Business
Day after the date the Company is notified (orally or in writing, whichever is
earlier) by the SEC that such Additional Registration Statement will not be
reviewed or will not be subject to further review; provided, however, that if
the Additional Effectiveness Deadline falls on a Saturday, Sunday or other day
that the SEC is closed for business, the Additional Effectiveness Deadline shall
be extended to the next Business Day on which the SEC is open for business.

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“Additional Filing Date” means the date on which the Additional Registration
Statement is filed with the SEC.

“Additional Filing Deadline” means if Cutback Shares are required to be included
in any Additional Registration Statement, the later of (i) the date sixty
(60) days after the date substantially all of the Registrable Securities
registered under the immediately preceding Registration Statement are sold and
(ii) the date six (6) months from the Initial Effective Date or the most recent
Additional Effective Date, as applicable.

“Additional Registrable Securities” means (i) any Cutback Shares not previously
included on a Registration Statement and (ii) any capital stock of the Company
issued or issuable with respect to the Notes, the Conversion Shares, or the
Cutback Shares, as applicable, as a result of any stock dividend, stock split,
combination, reorganization and similar event or otherwise, without regard to
any limitations on conversion, amortization and/or redemption of the Notes.

“Additional Registration Statement” means a registration statement or
registration statements of the Company filed under the Securities Act covering
the resale of any Additional Registrable Securities.

“Additional Required Registration Amount” means any Cutback Shares not
previously included on a Registration Statement, all subject to adjustment as
provided in Section 2(f).

“Allowable Grace Period” has the meaning ascribed to such term in Section 3(r).

“Blue Sky Filing” has the meaning ascribed to such term in Section 6(a).

“Buyer” has the meaning ascribed to such term in the preamble.

“Claims” has the meaning ascribed to such term in Section 6(a).

“Common Stock” means (i) the common stock of the Company, no par value, as it
exists on the date of this Agreement and any shares of any class or classes of
capital stock of the Company resulting from any reclassification or
reclassifications thereof, or, in the event of a merger, consolidation or other
similar transaction involving the Company that is otherwise permitted hereunder
in which the Company is not the surviving corporation, the common stock, common
equity interests, ordinary shares or depositary shares or other certificates
representing common equity interests of such surviving corporation or its direct
or indirect parent corporation, and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which are not subject
to redemption by the Company; provided, however, that if at any time there shall
be more than one such resulting class, the shares of each such class then so
issuable on conversion of Notes shall be substantially in the proportion which
the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

“Company” has the meaning ascribed to such term in the preamble.

“Conversion Shares” has the meaning ascribed to such term in the recitals.

 

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“Current Public Information Failure” has the meaning ascribed to such term in
Section 2(g).

“Cutback Shares” means any of the Initial Required Registration Amount or the
Additional Required Registration Amount of Registrable Securities not included
in all Registration Statements previously declared effective hereunder as a
result of a limitation on the maximum number of shares of Common Stock of the
Company permitted to be registered by the staff of the SEC pursuant to Rule 415.

“Effective Date” means the Initial Effective Date and the Additional Effective
Date, as applicable.

“Effectiveness Deadline” means the Initial Effectiveness Deadline and the
Additional Effectiveness Deadline, as applicable.

“Effectiveness Failure” has the meaning ascribed to such term in Section 2(g).

“Eligible Market” means the Principal Market, The New York Stock Exchange, Inc.,
The NYSE MKT LLC, The NASDAQ Global Select, or The NASDAQ Global Market.

“Filing Deadline” means the Initial Filing Deadline and the Additional Filing
Deadline, as applicable.

“Filing Failure” has the meaning ascribed to such term in Section 2(g).

“Grace Period” has the meaning ascribed to such term in Section 3(r).

“Indemnified Damages” has the meaning ascribed to such term in Section 6(a).

“Indemnified Party” has the meaning ascribed to such term in Section 6(b).

“Indemnified Person” has the meaning ascribed to such term in Section 6(a).

“Initial Effective Date” means the date that the Initial Registration Statement
has been declared effective by the SEC.

“Initial Effectiveness Deadline” means the date which is the earlier of
(x) ninety (90) calendar days after the Closing Date and (y) the fifth
(5th) Business Day after the date the Company is notified (orally or in writing,
whichever is earlier) by the SEC that such Initial Registration Statement will
not be reviewed or will not be subject to further review; provided, however,
that if the Initial Effectiveness Deadline falls on a Saturday, Sunday or other
day that the SEC is closed for business, the Initial Effectiveness Deadline
shall be extended to the next Business Day on which the SEC is open for
business.

“Initial Filing Date” means the date on which the Initial Registration Statement
is filed with the SEC.

 

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“Initial Filing Deadline” means the date which is forty-five (45) calendar days
after the Closing Date.

“Initial Registrable Securities” means (i) the Conversion Shares issued or
issuable pursuant to the terms of the Notes and (ii) any capital stock of the
Company issued or issuable with respect to the Notes or the Conversion Shares,
as a result of any stock split, stock dividend, recapitalization, exchange or
similar event or otherwise, in each case without regard to any limitations on
conversion, amortization and/or redemption of the Notes.

“Initial Registration Statement” means a registration statement or registration
statements of the Company filed under the Securities Act covering the resale of
the Initial Registrable Securities.

“Initial Required Registration Amount” means 125% of the maximum number of
Conversion Shares issued and issuable pursuant to the Notes as of the Trading
Day immediately preceding the applicable date of determination and all subject
to adjustment as provided in Section 2(f), without regard to any limitations on
conversion, amortization and/or redemption of the Notes.

“Inspectors” has the meaning ascribed to such term in Section 3(i).

“Investor” means the Buyer or any transferee or assignee thereof to whom the
Buyer assigns its rights under this Agreement and who agrees to become bound by
the provisions of this Agreement in accordance with Section 9 and any transferee
or assignee thereof to whom a transferee or assignee assigns its rights under
this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9.

“Lead Investor” means MI Convert Holdings LLC.

“Legal Counsel” has the meaning ascribed to such term in Section 2(d).

“Maintenance Failure” has the meaning ascribed to such term in Section 2(g).

“Note Purchase Agreement” has the meaning ascribed to such term in the recitals.

“Notes” has the meaning ascribed to such term in the recitals.

“Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

“Plan of Distribution” has the meaning ascribed to such term in Section 2(a).

“Principal Market” means The NASDAQ Capital Market.

“Records” has the meaning ascribed to such term in Section 3(i).

 

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“register,” “registered,” and “registration” refer to a registration effected by
preparing and filing one or more Registration Statements in compliance with the
Securities Act and pursuant to Rule 415, and the declaration or ordering of
effectiveness of such Registration Statement(s) by the SEC.

“Registrable Securities” means the Initial Registrable Securities and the
Additional Registrable Securities.

“Registration Delay Payments” has the meaning ascribed to such term in
Section 2(g).

“Registration Failure” has the meaning ascribed to such term in Section 2(g).

“Registration Period” has the meaning ascribed to such term in Section 3(a).

“Registration Statement” means the Initial Registration Statement and the
Additional Registration Statement, as applicable.

“Required Holders” means the holders of at least a majority of the Registrable
Securities.

“Required Registration Amount” means either the Initial Required Registration
Amount or the Additional Required Registration Amount, as applicable.

“Rule 144” has the meaning ascribed to such term in Section 8.

“Rule 415” means Rule 415 promulgated under the Securities Act or any successor
rule providing for offering securities on a continuous or delayed basis.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” has the meaning ascribed to such term in the recitals.

“Selling Shareholders” has the meaning ascribed to such term in Section 2(a).

“Violations” has the meaning ascribed to such term in Section 6(a).

2. REGISTRATION.

(a) Initial Mandatory Registration. The Company shall prepare, and, as soon as
practicable but in no event later than the Initial Filing Deadline, file with
the SEC the Initial Registration Statement on Form S-3 covering the resale of
all of the Initial Registrable Securities. In the event that Form S-3 is
unavailable for such a registration, the Company shall use such other form as is
available for such a registration on another appropriate form reasonably
acceptable to the Required Holders, subject to the provisions of Section 2(e).
The Initial Registration Statement prepared pursuant hereto shall register for
resale at least the number of shares of Common Stock equal to the Initial
Required Registration Amount determined as of the date the Initial Registration
Statement is initially filed with the SEC, subject to adjustment as provided in
Section 2(f). The Initial Registration Statement shall contain (except if
otherwise

 

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directed by the Required Holders) the “Plan of Distribution” and “Selling
Shareholders” sections in substantially the form attached hereto as Exhibit B.
The Company shall use its reasonable best efforts to have the Initial
Registration Statement declared effective by the SEC as soon as practicable, but
in no event later than the Initial Effectiveness Deadline. By 9:30 a.m. New York
time on the Business Day following the Initial Effective Date, the Company shall
file with the SEC in accordance with Rule 424 under the Securities Act the final
prospectus to be used in connection with sales pursuant to such Initial
Registration Statement.

(b) Additional Mandatory Registrations. The Company shall prepare, and, as soon
as practicable but in no event later than the Additional Filing Deadline, file
with the SEC an Additional Registration Statement on Form S-3 covering the
resale of all of the Additional Registrable Securities not previously registered
on an Additional Registration Statement hereunder. To the extent the staff of
the SEC does not permit the Additional Required Registration Amount to be
registered on an Additional Registration Statement, the Company shall file
Additional Registration Statements successively trying to register on each such
Additional Registration Statement the maximum number of remaining Additional
Registrable Securities until the Additional Required Registration Amount has
been registered with the SEC. In the event that Form S-3 is unavailable for such
a registration, the Company shall use such other form as is available for such a
registration on another appropriate form reasonably acceptable to the Required
Holders, subject to the provisions of Section 2(e). Each Additional Registration
Statement prepared pursuant hereto shall register for resale at least that
number of shares of Common Stock equal to the Additional Required Registration
Amount determined as of the date such Additional Registration Statement is
initially filed with the SEC, subject to adjustment as provided in Section 2(f).
Each Additional Registration Statement shall contain (except if otherwise
directed by the Required Holders) the Plan of Distribution and Selling
Shareholders sections in substantially the form attached hereto as Exhibit B.
The Company shall use its reasonable best efforts to have each Additional
Registration Statement declared effective by the SEC as soon as practicable, but
in no event later than the Additional Effectiveness Deadline. By 9:30 a.m. New
York time on the Business Day following the Additional Effective Date, the
Company shall file with the SEC in accordance with Rule 424 under the Securities
Act the final prospectus to be used in connection with sales pursuant to such
Additional Registration Statement.

(c) Allocation of Registrable Securities. The initial number of Registrable
Securities included in any Registration Statement and any increase or decrease
in the number of Registrable Securities included therein shall be allocated pro
rata among the Investors (if applicable) based on the number of Registrable
Securities held by each Investor at the time the Registration Statement covering
such initial number of Registrable Securities or increase or decrease thereof is
declared effective by the SEC. In the event that an Investor sells or otherwise
transfers any of such Investor’s Registrable Securities, each transferee shall
be allocated a pro rata portion of the then remaining number of Registrable
Securities included in such Registration Statement for such transferor. Any
shares of Common Stock included in a Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable Securities covered
by such Registration Statement shall be allocated to the remaining Investors,
pro rata based on the number of Registrable Securities then held by such
Investors which are covered by such Registration Statement. In no event shall
the Company include any securities other than Registrable Securities on any
Registration Statement without the prior written consent of the Required
Holders.

 

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(d) Legal Counsel. Subject to Section 5 hereof, the Lead Investor shall have the
right to select one legal counsel to review and oversee any registration
pursuant to this Section 2 (“Legal Counsel”), which shall be Akin Gump Strauss
Hauer & Feld LLP or such other counsel as thereafter designated by the Lead
Investor. The Company and Legal Counsel shall reasonably cooperate with each
other in performing the Company’s obligations under this Agreement.

(e) Ineligibility for Form S-3. In the event that Form S-3 is not available for
the registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on Form S-1 or
another appropriate form reasonably acceptable to the Required Holders and
(ii) undertake to register the Registrable Securities on Form S-3 as soon as
such form is available, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form S-3 covering the Registrable Securities has been
declared effective by the SEC.

(f) Sufficient Number of Shares Registered. In the event the number of shares
available under a Registration Statement filed pursuant to Section 2(a) or
Section 2(b) is insufficient to cover the Required Registration Amount of
Registrable Securities required to be covered by such Registration Statement or
an Investor’s allocated portion of the Registrable Securities pursuant to
Section 2(c), the Company shall amend the applicable Registration Statement, or
file a new Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover at least the Required Registration Amount
as of the Trading Day immediately preceding the date of the filing of such
amendment or new Registration Statement, in each case, as soon as practicable,
but in any event not later than thirty (30) days after the necessity therefor
arises. The Company shall use its reasonable best efforts to cause such
amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof. For purposes of the foregoing
provision, the number of shares available under a Registration Statement shall
be deemed “insufficient to cover all of the Registrable Securities” if at any
time the number of shares of Common Stock available for resale under the
Registration Statement is less than the Required Registration Amount. The
calculation set forth in the foregoing sentence shall be made without regard to
any limitations on the conversion, amortization and/or redemption of the Notes
and such calculation shall assume (i) that the Notes are then convertible in
full into shares of Common Stock at the then prevailing Conversion Rate and
(ii) the initial outstanding principal amount of the Notes remains outstanding
through the scheduled Maturity Date and no redemptions of the Notes occur prior
to the scheduled Maturity Date.

(g) Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement. If (i) the Initial Registration Statement when declared
effective fails to register the Initial Required Registration Amount of Initial
Registrable Securities (a “Registration Failure”), (ii) a Registration Statement
covering all of the Registrable Securities required to be covered thereby and
required to be filed by the Company pursuant to this Agreement is (A) not filed
with the SEC on or before the applicable Filing Deadline (a “Filing Failure”) or
(B) not declared effective by the SEC on or before the applicable Effectiveness
Deadline, (an

 

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“Effectiveness Failure”), (iii) on any day after the applicable Effective Date,
sales of all of the Registrable Securities required to be included on such
Registration Statement cannot be made (other than during an Allowable Grace
Period (as defined in Section 3(r))) pursuant to such Registration Statement or
otherwise (including, without limitation, because of the suspension of trading
or any other limitation imposed by an Eligible Market, a failure to keep such
Registration Statement effective, a failure to disclose such information as is
necessary for sales to be made pursuant to such Registration Statement, a
failure to register a sufficient number of shares of Common Stock or a failure
to maintain the listing of the Common Stock) (a “Maintenance Failure”) or
(iv) if a Registration Statement is not effective for any reason or the
prospectus contained therein is not available for use for any reason, the
Company fails to file with the SEC any required reports under Section 13 or
15(d) of the Exchange Act such that it is not in compliance with Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) (a “Current Public Information Failure”) as a
result of which any of the Investors are unable to sell Registrable Securities
without restriction under Rule 144 (including, without limitation, volume
restrictions) then, as partial relief for the damages to any holder by reason of
any such delay in or reduction of its ability to sell the underlying shares of
Common Stock (which remedy shall not be exclusive of any other remedies
available at law or in equity, including, without limitation, specific
performance or the additional obligation of the Company to register any Cutback
Shares), the Company shall pay to each holder of Registrable Securities relating
to such Registration Statement an amount in cash equal to (x) one half of one
percent (0.5%) of the aggregate Purchase Price (as such term is defined in the
Note Purchase Agreement) of such Investor’s Registrable Securities, whether or
not included in such Registration Statement, on each of the following dates:
(i) the day of a Registration Failure, (ii) the day of a Filing Failure;
(iii) the day of an Effectiveness Failure; (iv) the initial day of a Maintenance
Failure; (v) the initial day of a Current Public Information Failure and (y) one
percent (1.0%) of the aggregate Purchase Price (as such term is defined in the
Note Purchase Agreement) of such Investor’s Registrable Securities, whether or
not included in such Registration Statement, on each of the following dates:
(i) on the thirtieth day after the date of a Registration Failure and every
thirtieth day thereafter (pro rated for periods totaling less than thirty days)
until such Registration Failure is cured; (ii) on the thirtieth day after the
date of a Filing Failure and every thirtieth day thereafter (pro rated for
periods totaling less than thirty days) until such Filing Failure is cured;
(iii) on the thirtieth day after the date of an Effectiveness Failure and every
thirtieth day thereafter (pro rated for periods totaling less than thirty days)
until such Effectiveness Failure is cured; (iv) on the thirtieth day after the
initial date of a Maintenance Failure and every thirtieth day thereafter (pro
rated for periods totaling less than thirty days) until such Maintenance Failure
is cured; and (v) on the thirtieth day after the initial date of a Public
Information Failure and every thirtieth day thereafter (pro rated for periods
totaling less than thirty days) until such Public Information Failure is cured.
The payments to which a holder shall be entitled pursuant to this Section 2(g)
are referred to herein as “Registration Delay Payments.” Registration Delay
Payments shall be paid on the earlier of (I) the dates set forth above and (II)
the third Business Day after the event or failure giving rise to the
Registration Delay Payments is cured. In the event the Company fails to make
Registration Delay Payments in a timely manner, such Registration Delay Payments
shall bear interest at the Default Rate per month (prorated for partial months)
until paid in full. Notwithstanding anything to the contrary contained herein,
(i) Registration Delay Payments shall cease to accrue when all of the
Registrable Securities may be sold pursuant to Rule 144 without any restrictions
or limitations, (ii) in no event shall the aggregate amount of all Registration

 

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Delay Payments (without regard to any accrued interest thereon in accordance
with the preceding sentence) paid to an Investor exceed an amount equal to 10%
of such Investor’s original principal amount stated in such Investor’s Note on
the Closing Date, (iii) no single event or failure shall give rise to more than
one type of Registration Delay Payment or (iv) if an Investor would be required
to be named as an “underwriter” in the Registration Statement by the SEC and
such Investor elects, pursuant to Section 3(s) below not to include any
Registrable Securities of such Investor in the Registration Statement, no
Registration Delay Payments shall accrue with respect to such Registrable
Securities of such Investor.

3. RELATED OBLIGATIONS.

At such time as the Company is obligated to file a Registration Statement with
the SEC pursuant to Section 2(a), 2(b), 2(e) or 2(f), the Company will use its
reasonable best efforts to effect the registration of the Registrable Securities
in accordance with the intended method of disposition thereof and, pursuant
thereto, the Company shall have the following obligations:

(a) The Company shall promptly prepare and file with the SEC a Registration
Statement with respect to the Registrable Securities and use its reasonable best
efforts to cause such Registration Statement relating to the Registrable
Securities to become effective as soon as practicable after such filing (but in
no event later than the Effectiveness Deadline). The Company shall keep each
Registration Statement effective pursuant to Rule 415 at all times until the
earlier of (i) the date as of which the Investors may sell all of the
Registrable Securities covered by such Registration Statement without
restriction or limitation pursuant to Rule 144 and without the requirement to be
in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under
the Securities Act or (ii) the date on which the Investors shall have sold all
of the Registrable Securities covered by such Registration Statement (the
“Registration Period”). The Company shall ensure that each Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of prospectuses, in the light of the
circumstances in which they were made) not misleading. The term “reasonable best
efforts” shall mean, among other things, that the Company shall submit to the
SEC, within two (2) Business Days after the later of the date that (i) 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, and (ii) the approval of
Legal Counsel pursuant to Section 3(c) (which approval is immediately sought), a
request for acceleration of effectiveness of such Registration Statement to a
time and date not later than two (2) Business Days after the submission of such
request. The Company shall respond in writing to comments made by the SEC in
respect of a Registration Statement as soon as practicable, but in no event
later than twenty (20) days after the receipt of comments by or notice from the
SEC that an amendment is required in order for a Registration Statement to be
declared effective.

(b) The Company shall prepare and file with the SEC such amendments (including
post- effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may
be necessary to keep such Registration Statement effective at all times during
the Registration Period, and, during such period, comply

 

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with the provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in such Registration Statement. In the case of
amendments and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section 3(b)) by
reason of the Company filing a report on Form 10-K, Form 10-Q, Form 8-K or any
analogous report under the Exchange Act, the Company shall have incorporated
such report by reference into such Registration Statement, if applicable, or
shall file such amendments or supplements with the SEC on the same day on which
the Exchange Act report is filed which created the requirement for the Company
to amend or supplement such Registration Statement.

(c) The Company shall (A) permit Legal Counsel to review and comment upon (i) a
Registration Statement at least three (3) Business Days prior to its filing with
the SEC and (ii) all amendments and supplements to all Registration Statements
(except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, and any similar or successor reports) within a reasonable
number of days prior to their filing with the SEC, and (B) not file any
Registration Statement or amendment or supplement thereto in a form to which
Legal Counsel reasonably objects. The Company shall not submit a request for
acceleration of the effectiveness of a Registration Statement or any amendment
or supplement thereto without the prior approval of Legal Counsel, which consent
shall not be unreasonably withheld. The Company shall furnish to Legal Counsel,
without charge, (i) copies of any correspondence from the SEC or the staff of
the SEC to the Company or its representatives relating to any Registration
Statement, (ii) 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 an Investor, and all exhibits and (iii) upon the
effectiveness of any Registration Statement, one copy of the prospectus included
in such Registration Statement and all amendments and supplements thereto. The
Company shall reasonably cooperate with Legal Counsel in performing the
Company’s obligations pursuant to this Section 3.

(d) The Company shall upon request furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without charge,
(i) promptly after the same is prepared and filed with the SEC, at least one
copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, all exhibits and each preliminary
prospectus, (ii) upon the effectiveness of any Registration Statement, ten
(10) copies of the prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such
Investor may reasonably request) and (iii) such other documents, including
copies of any preliminary or final prospectus, as such Investor may reasonably
request from time to time in order to facilitate the disposition of the
Registrable Securities owned by such Investor; provided, that any such item
which is available on the SEC’s EDGAR System (or successor thereto) need not be
furnished in physical form.

(e) The Company shall use its reasonable best efforts to (i) register and
qualify, unless an exemption from registration and qualification applies, the
resale by Investors of the Registrable Securities covered by a Registration
Statement under such other securities or “blue

 

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sky” laws of all applicable jurisdictions in the United States, (ii) prepare and
file in those jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof during the Registration Period,
(iii) take such other actions as may be necessary to maintain such registrations
and qualifications in effect at all times during the Registration Period, and
(iv) take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or “blue sky” laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.

(f) The Company shall notify Legal Counsel and each Investor in writing (which
may be by email) of the happening of any event, as promptly as practicable after
becoming aware of such event, as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (provided that in no event shall such
notice contain any material, nonpublic information), and, subject to
Section 3(r), promptly prepare a supplement or amendment to such Registration
Statement to correct such untrue statement or omission, and upon request deliver
ten (10) copies of such supplement or amendment to Legal Counsel and each
Investor (or such other number of copies as Legal Counsel or such Investor may
reasonably request). The Company shall also promptly notify Legal Counsel in
writing (which may be by email) (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when a Registration
Statement or any post-effective amendment has become effective (notification of
such effectiveness shall be delivered to Legal Counsel by facsimile or email on
the same day of such effectiveness), (ii) of any request by the SEC for
amendments or supplements to a Registration Statement or related prospectus or
related information, and (iii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate. By
9:30 a.m. New York City time on the date following the date any post-effective
amendment has become effective, the Company shall file with the SEC in
accordance with Rule 424 under the Securities Act the final prospectus to be
used in connection with sales pursuant to such Registration Statement.

(g) The Company shall use its reasonable best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
or the suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest possible
moment and to notify Legal Counsel and each Investor who holds Registrable
Securities being sold of the issuance of such order and the resolution thereof
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.

 

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(h) If any Investor is required under applicable securities laws to be described
in the Registration Statement as an underwriter or an Investor believes that it
could reasonably be deemed to be an underwriter of Registrable Securities, at
the reasonable request of such Investor, the Company shall furnish to such
Investor, on the date of the effectiveness of the Registration Statement and
thereafter from time to time on such dates as an Investor may reasonably request
(i) a letter, dated such date, from the Company’s independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the Investors, and (ii) an opinion, dated as of such date, of
counsel representing the Company for purposes of such Registration Statement, in
form, scope and substance as is customarily given in an underwritten public
offering, addressed to the Investors.

(i) If any Investor is required under applicable securities laws to be described
in the Registration Statement as an underwriter or an Investor believes that it
could reasonably be deemed to be an underwriter of Registrable Securities, the
Company shall make available for inspection by (i) such Investor, (ii) Legal
Counsel and (iii) one firm of accountants or other agents retained by the
Investors (collectively, the “Inspectors”), all pertinent financial and other
records, and pertinent corporate documents and properties of the Company
(collectively, the “Records”), as shall be reasonably deemed necessary by each
Inspector, and cause the Company’s officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however,
that each Inspector shall agree to hold in strict confidence and shall not make
any disclosure (except to an Investor) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the Securities Act,
(b) the release of such Records is ordered pursuant to a final, non-appealable
subpoena or order from a court or government body of competent jurisdiction, or
(c) the information in such Records has been made generally available to the
public other than by disclosure in violation of this Agreement. Each Investor
agrees that it shall, upon learning that disclosure of such Records is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to the Company and allow the Company, at its expense,
to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. Nothing herein (or in any
other confidentiality agreement between the Company and any Investor) shall be
deemed to limit the Investors’ ability to sell Registrable Securities in a
manner which is otherwise consistent with applicable laws and regulations.

(j) The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final, non-
appealable order from a court or governmental body of competent jurisdiction, or
(iv) such information has been made generally available to the public other than
by disclosure in violation of this Agreement or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information
concerning an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to
such Investor and allow such Investor, at the Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.

 

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(k) The Company shall use its reasonable best efforts either to (i) cause all of
the Registrable Securities covered by a Registration Statement to be listed on
each securities exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii) secure the
inclusion for quotation of all of the Registrable Securities on The Principal
Market or (iii) if, despite the Company’s reasonable best efforts, the Company
is unsuccessful in satisfying the preceding clauses (i) and (ii), to secure the
inclusion for quotation on another Eligible Market for such Registrable
Securities. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 3(k).

(l) The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the Investors may reasonably request and registered in
such names as the Investors may request.

(m) If requested by an Investor, the Company shall as soon as practicable
(i) incorporate in a prospectus supplement or post-effective amendment such
information as an Investor reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering;
(ii) make all required filings of such prospectus supplement or post-effective
amendment after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment; and (iii) supplement or make
amendments to any Registration Statement if reasonably requested by an Investor
holding any Registrable Securities.

(n) The Company shall use its reasonable best efforts to cause the Registrable
Securities covered by a Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary to
consummate the disposition of such Registrable Securities.

(o) The Company shall make generally available to its security holders as soon
as practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with, and in the
manner provided by, the provisions of Rule 158 under the Securities Act)
covering a twelve-month period beginning not later than the first day of the
Company’s fiscal quarter next following the applicable Effective Date of a
Registration Statement.

(p) The Company shall otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC in connection with any
registration hereunder.

 

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(q) Within two (2) Business Days after a Registration Statement which covers
Registrable Securities is ordered effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as Exhibit A.

(r) Notwithstanding anything to the contrary herein, at any time after the
Effective Date, the Company may delay the disclosure of material, non-public
information concerning the Company the disclosure of which at the time is not,
in the good faith opinion of the Board of Directors of the Company and its
counsel, in the best interest of the Company and, in the opinion of counsel to
the Company, otherwise required (a “Grace Period”); provided, that the Company
shall promptly (i) notify the Investors in writing (which may be by email) of
the existence of material, non-public information giving rise to a Grace Period
(provided that in each notice the Company will not disclose the content of such
material, non-public information to the Investors) and the date on which the
Grace Period will begin, and (ii) notify the Investors in writing (which may be
by email) of the date on which the Grace Period ends; and, provided further,
that no Grace Period shall exceed ten (10) consecutive Trading Days and during
any three hundred sixty five (365) day period such Grace Periods shall not
exceed an aggregate of forty-five (45) Trading Days and the first day of any
Grace Period must be at least five (5) Trading Days after the last day of any
prior Grace Period (each, an “Allowable Grace Period”). For purposes of
determining the length of a Grace Period above, the Grace Period shall begin on
and include the date the Investors receive the notice referred to in clause
(i) and shall end on and include the later of the date the Investors receive the
notice referred to in clause (ii) and the date referred to in such notice. The
provisions of Section 3(g) hereof shall not be applicable during the period of
any Allowable Grace Period. Upon expiration of the Grace Period, the Company
shall again be bound by the first sentence of Section 3(f) with respect to the
information giving rise thereto unless such material, non-public information is
no longer applicable. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee of an Investor in accordance with the terms of the Note Purchase
Agreement in connection with any sale of Registrable Securities with respect to
which an Investor has entered into a contract for sale, prior to the Investor’s
receipt of the notice of a Grace Period and for which the Investor has not yet
settled.

(s) Neither the Company nor any Subsidiary or affiliate thereof shall identify
any Investor as an “underwriter” in any public disclosure or filing with the
SEC, the Principal Market or any Eligible Market without the prior written
consent of such Investor (it being understood, that if the Company is required
to name such Investor as an “underwriter” in such Registration Statement by the
SEC (after a good faith discussion with the SEC to lift such requirement,
including, without limitation, any reduction in the number of Registrable
Securities of such Investor to be registered on such Registration Statement (to
the extent necessary to lift such requirement)), such Investor shall have the
option of electing to exclude all such Registrable Securities from such
Registration Statement or to be named as an “underwriter” in such Registration
Statement”); provided, however, that the foregoing shall not prohibit the
Company from including the disclosure found in the “Plan of Distribution”
section attached hereto as Exhibit B in the Registration Statement.

 

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(t) Neither the Company nor any of its Subsidiaries has entered, as of the date
hereof, nor shall the Company or any of its Subsidiaries, on or after the date
of this Agreement, enter into any agreement with respect to its securities, that
would have the effect of impairing the rights granted to the Buyer in this
Agreement or otherwise conflicts with the provisions hereof.

4. OBLIGATIONS OF THE INVESTORS.

(a) At least five (5) Business Days prior to the first anticipated Filing Date
of a Registration Statement, the Company shall notify each Investor in writing
(which may be by email) of the information the Company requires from each such
Investor if such Investor elects to have any of such Investor’s Registrable
Securities included in such Registration Statement. It shall be a condition
precedent to the obligations of the Company to complete any registration
pursuant to this Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect and maintain the effectiveness of the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.

(b) Each Investor, by such Investor’s acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of any Registration Statement
hereunder, unless such Investor has notified the Company in writing (which may
be by email) of such Investor’s election to exclude all of such Investor’s
Registrable Securities from such Registration Statement.

(c) Each Investor agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 3(g) or the first
sentence of Section 3(f), such Investor will immediately discontinue disposition
of Registrable Securities pursuant to any Registration Statement(s) covering
such Registrable Securities until such Investor’s receipt of copies of the
supplemented or amended prospectus as contemplated by Section 3(g) or the first
sentence of Section 3(f) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Note Purchase Agreement in
connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale prior to the Investor’s receipt of
a notice from the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of Section 3(f) and for which the Investor
has not yet settled.

(d) Each Investor covenants and agrees that it will comply with the prospectus
delivery requirements of the Securities Act as applicable to it or an exemption
therefrom in connection with sales of Registrable Securities pursuant to the
Registration Statement.

5. EXPENSES OF REGISTRATION. All reasonable expenses, other than underwriting
discounts and commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company shall be paid by the Company.
The Company shall also reimburse the Investors for the

 

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fees and disbursements of Legal Counsel in connection with registration, filing
or qualification pursuant to Sections 2 and 3 of this Agreement which amount
shall be limited to $25,000 for each such registration, filing or qualification.

6. INDEMNIFICATION.

In the event any Registrable Securities are included in a Registration Statement
under this Agreement:

(a) To the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Investor, the directors, officers,
partners, members, employees, agents, representatives of, and each Person, if
any, who controls any Investor within the meaning of the Securities Act or the
Exchange Act (each, an “Indemnified Person”), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, reasonable
attorneys’ fees, amounts paid in settlement or expenses, joint or several
(collectively, “Claims”), incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether or
not an indemnified party is or may be a party thereto (“Indemnified Damages”),
to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post- effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other “blue sky” laws of any jurisdiction in
which Registrable Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any violation of this
Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, “Violations”). Subject to Section 6(c), the Company shall
reimburse the Indemnified Persons, promptly as such expenses are incurred and
are due and payable, for any legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person for such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(d); and (ii) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the

 

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Company, which consent shall not be unreasonably withheld or delayed. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of
any of the Registrable Securities by any of the Investors pursuant to Section 9.

(b) In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement and each Person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act (each, an
“Indemnified Party”), against any Claim or Indemnified Damages to which any of
them may become subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for use in
connection with such Registration Statement; and, subject to Section 6(c), such
Investor shall reimburse the Indemnified Party for any legal or other expenses
reasonably incurred by an Indemnified Party in connection with investigating or
defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld or delayed; provided,
further, however, that the Investor shall be liable under this Section 6(b) for
only that amount of a Claim or Indemnified Damages as does not exceed the net
proceeds to such Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable Securities
by the Investors pursuant to Section 9.

(c) Promptly after receipt by an Indemnified Person or Indemnified Party under
this Section 6 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is
to be made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for all such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the Indemnified Person or
Indemnified Party, as applicable, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. In the case of an Indemnified Person, legal counsel
referred to in the immediately preceding sentence shall be selected by the
Investors holding at least a majority in interest of the Registrable Securities

 

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included in the Registration Statement to which the Claim relates. The
Indemnified Party or Indemnified Person shall reasonably cooperate with the
indemnifying party in connection with any negotiation or defense of any such
action or Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or Claim. The indemnifying party
shall keep the Indemnified Party or Indemnified Person fully apprised at all
times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its prior written consent,
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person, consent to entry
of any judgment or enter into any settlement or other compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such Claim or litigation and such settlement shall not include any
admission as to fault on the part of the Indemnified Party. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.

(d) The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are incurred.

(e) The indemnity agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

7. CONTRIBUTION.

To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under
Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no Person involved in the sale of Registrable Securities which Person is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) in connection with such sale shall be entitled to
contribution from any Person involved in such sale of Registrable Securities who
was not guilty of fraudulent misrepresentation; and (ii) contribution by any
seller of Registrable Securities shall be limited in amount to the amount of net
proceeds received by such seller from the sale of such Registrable Securities
pursuant to such Registration Statement. Notwithstanding the provisions of this
Section 7, no Investor shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the net proceeds actually received by
such Investor from the applicable sale of the Registrable Securities subject to
the Claim exceeds the amount of any damages that such Investor has otherwise
been required to pay, or would otherwise be required to pay under Section 6(b),
by reason of such untrue or alleged untrue statement or omission or alleged
omission.

 

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8. REPORTS UNDER THE EXCHANGE ACT.

With a view to making available to the Investors the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of
the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration (“Rule 144”), the Company agrees to:

(a) make and keep public information available, as those terms are understood
and defined in Rule 144;

(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act so long as
the Company remains subject to such requirements and the filing of such reports
and other documents is required for the applicable provisions of Rule 144; and

(c) furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.

9. ASSIGNMENT OF REGISTRATION RIGHTS.

The rights and obligations under this Agreement shall be automatically
assignable by the Investors to any transferee of all or any portion of such
Investor’s Registrable Securities if: (i) the Investor agrees in writing with
the transferee or assignee to assign such rights and obligations, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment; (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights and obligations hereunder are being transferred or assigned;
(iii) immediately following such transfer or assignment the further disposition
of such securities by the transferee or assignee is restricted under the
Securities Act or applicable state securities laws; (iv) at or before the time
the Company receives the written notice contemplated by clause (ii) of this
sentence the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein; and (v) such transfer shall
have been made in accordance with the applicable requirements of the Note
Purchase Agreement.

10. AMENDMENT OF REGISTRATION RIGHTS.

Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Holders; provided that any such

 

19

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amendment or waiver that complies with the foregoing but that
disproportionately, materially and adversely affects the rights and obligations
of any Investor relative to the comparable rights and obligations of the other
Investors shall require the prior written consent of such adversely affected
Investor. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of this
Agreement unless the same consideration (other than the reimbursement of legal
fees) also is offered to all of the parties to this Agreement.

11. MISCELLANEOUS.

(a) Entire Agreement. This Agreement and the Note Purchase Agreement supersede
all other prior oral or written agreements between the Buyer, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement, the Note Purchase Agreement and the
instruments referenced herein and therein contain the entire understanding of
the parties with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively) other than by an instrument in writing signed by
the Company and Required Holders. Any amendment or waiver effected in accordance
with this Section 11 shall be binding upon the Buyer, Holders of Notes and the
Company.

(b) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective permitted successors and
assigns, including any purchasers of the Notes. The Company shall not assign
this Agreement or any rights or obligations hereunder, including by way of a
Fundamental Change, without the prior written consent of the Required Holders.
No purchaser of any of the Notes from the Buyer shall be deemed a successor or
assign by reason merely of such purchase; provided, however, that the Buyer may
assign some or all of its rights hereunder without the consent of the Company to
any Permitted Assignee, in which event such assignee shall be deemed to be the
Buyer hereunder with respect to such assigned rights. A Buyer assigning some or
all of its rights hereunder shall provide the Company notice of such assignment
in accordance with Section 10(d), however no assignment shall be invalid solely
due to failure to comply with this notice requirement. For the avoidance of
doubt, and without limiting the rights of a Permitted Assignee hereunder, the
assignment of this Agreement to a Permitted Assignee shall not relieve the
Company of any obligations to Buyer for any fees, reimbursement of expenses,
indemnification or any other payments hereunder.

(c) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person, except that each Indemnified Person shall have the right to enforce the
obligations of the Company with respect to Section 6.

 

20

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(d) 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, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

Manitex International, Inc.

9725 Industrial Drive

Bridgeview, Illinois 60455

Attention: Andrew Rooke

Facsimile No.: (708) 430-1335

Telephone No.: (708) 237-2056

With a copy (which shall not constitute notice) to:

Bryan Cave LLP

161 N. Clark Street, Suite 4300

Chicago, Illinois 60601

Attention: John P. Goebel and Todd M. Kaye

Facsimile No.: (312) 698-7555

Telephone No.: (312) 602-5155

If to the Buyer:

to MI Convert:

MI Convert Holdings LLC

c/o Perella Weinberg Partners

767 Fifth Avenue

New York, New York 10153

Attention: Mark McGreenery

                  and Legal Department

Facsimile No.: (212) 287-3201

Telephone No. (212) 287-3200

With a copy (which shall not constitute notice) to:

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

New York, New York 10036

Attention: Edward P. Christian

Facsimile No.: (212) 872-1002

Telephone No. (212) 872-1091

 

21

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to Invemed:

Invemed Associates LLC

375 Park Avenue, Suite 2205

New York, NY 10152

Attention: John Baran

                  and Beverly Lemmon

Facsimile No.: (212) 409-9602 (John Baran)

Facsimile No: (212) 849-6507 (Beverly Lemmon)

Telephone No.: (212) 421-2500

Any party to this Agreement may change such address for notices by sending to
the parties to this Agreement written notice of a new address for such purpose.

(e) Specific Performance. The parties acknowledge that money damages are not an
adequate remedy for violations of this Agreement and that any party may, in its
sole discretion, apply to a court of competent jurisdiction for specific
performance or injunctive or such other relief as such court may deem just and
proper in order to enforce this Agreement or prevent any violation hereof and,
to the extent permitted by applicable law, each party waives any objection to
the imposition of such relief, this being in addition to any other remedy to
which such party is entitled at law or in equity.

(f) Governing Law; Jurisdiction; Jury Trial. 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. 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 WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

22

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(g) Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.

(h) Extensions; Waivers. Any party may, for itself only, (a) extend the time for
the performance of any of the obligations of any other party under this
Agreement, (b) waive any inaccuracies in the representations and warranties of
any other party contained herein or in any document delivered pursuant hereto
and (c) waive compliance with any of the agreements or conditions for the
benefit of such party contained herein. Any such extension or waiver will be
valid only if set forth in a writing signed by the party to be bound thereby. No
waiver by any party of any default, misrepresentation or breach of warranty or
covenant hereunder, whether intentional or not, may be deemed to extend to any
prior or subsequent default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising because of any prior or
subsequent such occurrence. Neither the failure nor any delay on the part of any
party to exercise any right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or remedy
preclude any other or further exercise of the same or of any other right or
remedy.

(i) Severability. If any provision of this Agreement is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest extent that it
would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this
Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter
hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).

(j) Amendments. No party may amend or supplement this Agreement without the
prior written consent of the Required Holders and the Company. After an
amendment or supplement becomes effective, it shall bind the Company and every
Investor.

(k) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. Executed copies of the signature pages of this
Agreement sent by facsimile or transmitted electronically in Portable Document
Format shall be treated as originals, fully binding and with full legal force
and effect, and the parties waive any rights they may have to object to such
treatment.

(l) Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) this Agreement,
whenever the Buyer exercises a right, election, demand or option under this
Agreement and the Company does not timely perform its related obligations within
the periods therein provided, then the Buyer may rescind or withdraw, in its
sole discretion from time to time upon written notice to the Company, any
relevant notice, demand or election in whole or in part without prejudice to its
future actions and rights.

 

23

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(m) No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

(n) Fees. The Company shall reimburse the Buyer (in addition to any other
expense amounts paid to the Buyer or its counsel prior to the date of this
Agreement) for all costs and expenses incurred in connection with the
transactions contemplated by this Agreement and the Note Purchase Agreement
(including all legal fees and disbursements in connection therewith,
documentation and implementation of the transactions contemplated by this
Agreement and the Note Purchase Agreement and due diligence in connection
therewith and the administration, modification and/or enforcement of this
Agreement), whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, which amount may, at the option of
the Buyer, be withheld by the Buyer from its Purchase Price at the Closing. The
Company shall pay, and hold the Buyer harmless against, any liability, loss or
expense (including, without limitation, reasonable attorney’s fees and
out-of-pocket expenses) arising in connection with any claim relating to any
such payment.

(o) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

(p) Several and not Joint. Notwithstanding any other provision of this
Agreement, the rights, duties, and obligations of each Buyer or Holder hereunder
are several and not joint, and no Buyer or Holder shall be liable hereunder for
the duties or obligations of any other Buyer or Holder. No Buyer or Holder makes
any representation or warranty hereunder to or for the benefit of any other
Buyer or Holder.

[Signature Page Follows]

 

24

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

COMPANY: MANITEX INTERNATIONAL, INC. By:  

/s/ David J. Langevin

  Name:   David J. Langevin   Title:   Chief Executive Officer

 

[Signature Page to Registration Rights Agreement]

--------------------------------------------------------------------------------

BUYER: MI CONVERT: MI CONVERT HOLDINGS LLC By: Perella Weinberg Partners Asset
Based Value Master Fund I L.P., its Managing Member By: Perella Weinberg
Partners Asset Based Value GP L.P., its general partner By: Perella Weinberg
Partners Asset Based Value GP LLC, its general partner By:  

/s/ Aaron Hood

  Name:   Aaron Hood   Title:   Authorized Party

 

[Signature Page to Registration Rights Agreement]

--------------------------------------------------------------------------------

BUYER: INVEMED: INVEMED ASSOCIATES LLC By:  

/s/ John Baran

  Name:   John Baran   Title:   Chief Financial Officer

 

[Signature Page to Registration Rights Agreement]

--------------------------------------------------------------------------------

EXHIBIT A

[FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT]

[                    ]

[                    ]

Attention: [                    ]

 

  Re: Manitex International, Inc.

Ladies and Gentlemen:

[We are][I am] counsel to Manitex International, Inc., a Michigan corporation
(the “Company”), and have represented the Company in connection with that
certain Note Purchase Agreement, dated as of January [        ], 2015 (the “Note
Purchase Agreement”), entered into by and among the Company and the buyer named
therein (collectively, the “Holders”) pursuant to which the Company issued to
the Holders convertible notes (the “Notes”) pursuant to which shares of the
Company’s common stock (the “Common Stock”) are issuable thereunder. Pursuant to
the Note Purchase Agreement, the Company also has entered into a Registration
Rights Agreement with the Holders (the “Registration Rights Agreement”) pursuant
to which the Company agreed, among other things, to register the resale of the
Registrable Securities (as defined in the Registration Rights Agreement),
including the shares of Common Stock issuable upon conversion of the Notes under
the Securities Act of 1933, as amended (the “Securities Act”). In connection
with the Company’s obligations under the Registration Rights Agreement, on
[                    ], 2015, the Company filed a Registration Statement on Form
S-3 (File No. 333-[                    ]) (the “Registration Statement”) with
the Securities and Exchange Commission (the “SEC”) relating to the Registrable
Securities which names each of the Holders as a selling shareholder thereunder.

In connection with the foregoing, [we][I] advise you that a member of the SEC’s
staff has advised [us][me] by telephone that the SEC has entered an order
declaring the Registration Statement effective under the Securities Act at
[ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have
no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any
stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the
Registrable Securities are available for resale under the Securities Act
pursuant to the Registration Statement.

 

A-1

--------------------------------------------------------------------------------

This letter shall serve as our standing instruction to you that the shares of
Common Stock are freely transferable by the Holders pursuant to the Registration
Statement. [You need not require further letters from us to effect any future
legend-free issuance or reissuance of shares of Common Stock to the Holders as
contemplated by the Company’s Irrevocable Transfer Agent Instructions dated
[                    ].

 

Very truly yours [ISSUER’S COUNSEL] By:  

 

  Name: [                    ]   Title:  Authorized Signatory

CC: [LIST OF NAMES OF HOLDERS]

 

A-2

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EXHIBIT B

SELLING SHAREHOLDERS

1. The shares of common stock being offered by the selling shareholders are
those issuable to the selling shareholders pursuant to the terms of the
convertible notes. For additional information regarding the issuance of those
convertible notes, see “Private Placement of Convertible Notes” above. We are
registering the shares of common stock in order to permit the selling
shareholders to offer the shares for resale from time to time. Except for the
ownership of the convertible notes issued pursuant to the Note Purchase
Agreement, the selling shareholders have not had any material relationship with
us within the past three years.

2. The table below lists the selling shareholders and other information
regarding the beneficial ownership of the shares of common stock by each of the
selling shareholders. The second column lists the number of shares of common
stock beneficially owned by each selling shareholder, based on its ownership of
the convertible notes, as of [                    ], 2015, assuming conversion
of all convertible notes held by the selling shareholders on that date, without
regard to any limitations on conversion, amortization, redemption or exercise.

3. The third column lists the shares of common stock being offered by this
prospectus by the selling shareholders.

4. In accordance with the terms of a registration rights agreement with the
selling shareholders, this prospectus generally covers the resale of at least
125% of the maximum number of shares of common stock issued and issuable
pursuant to the convertible notes as of the Trading Day immediately preceding
the date the registration statement is initially filed with the SEC. Because the
conversion price of the convertible notes may be adjusted, the number of shares
that will actually be issued may be more or less than the number of shares being
offered by this prospectus. The fourth column assumes the sale of all of the
shares offered by the selling shareholders pursuant to this prospectus.

5. The selling shareholders may sell all, some or none of their shares in this
offering. See “Plan of Distribution.”

 

Name of Selling Shareholder

   Number of
Shares of
Common Stock
Owned Prior to
Offering    Maximum Number of
Shares of Common
Stock to be Sold
Pursuant to this
Prospectus    Number of
Shares of
Common Stock
Owned After
Offering

 

Exhibit B-1

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PLAN OF DISTRIBUTION

We are registering the shares of common stock issuable pursuant to the terms of
the convertible note to permit the resale of these shares of common stock by the
holders of the convertible notes from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by the selling
shareholders of the shares of common stock. We will bear all fees and expenses
incident to our obligation to register the shares of common stock.

The selling shareholders may sell all or a portion of the shares of common stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the shares of
common stock are sold through underwriters or broker-dealers, the selling
shareholders will be responsible for underwriting discounts or commissions or
agent’s commissions. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions,

 

  •   on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;

 

  •   in the over-the-counter market;

 

  •   in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;

 

  •   through the writing of options, whether such options are listed on an
options exchange or otherwise;

 

  •   ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

 

  •   block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

 

  •   purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

 

  •   an exchange distribution in accordance with the rules of the applicable
exchange;

 

  •   privately negotiated transactions;

 

  •   short sales;

 

  •   sales pursuant to Rule 144;

 

  •   broker-dealers may agree with the selling securityholders to sell a
specified number of such shares at a stipulated price per share;

 

Exhibit B-2

--------------------------------------------------------------------------------

  •   a combination of any such methods of sale; and

 

  •   any other method permitted pursuant to applicable law.

If the selling shareholders effect such transactions by selling shares of common
stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling shareholders or commissions from
purchasers of the shares of common stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as
to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of
the shares of common stock or otherwise, the selling shareholders may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of common stock in the course of hedging in positions they
assume. The selling shareholders may also sell shares of common stock short and
deliver shares of common stock covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short sales. The
selling shareholders may also loan or pledge shares of common stock to
broker-dealers that in turn may sell such shares.

The selling shareholders may pledge or grant a security interest in some or all
of the convertible notes or shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock from time to time pursuant
to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933, as amended, amending,
if necessary, the list of selling shareholders to include the pledgee,
transferee or other successors in interest as selling shareholders under this
prospectus. The selling shareholders also may transfer and donate the shares of
common stock in other circumstances in which case the transferees, donees,
pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.

The selling shareholders and any broker-dealer participating in the distribution
of the shares of common stock may be deemed to be “underwriters” within the
meaning of the Securities Act, and any commission paid, or any discounts or
concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act. At the time a particular
offering of the shares of common stock is made, a prospectus supplement, if
required, will be distributed which will set forth the aggregate amount of
shares of common stock being offered and the terms of the offering, including
the name or names of any broker-dealers or agents, any discounts, commissions
and other terms constituting compensation from the selling shareholders and any
discounts, commissions or concessions allowed or reallowed or paid to
broker-dealers.

Under the securities laws of some states, the shares of common stock may be sold
in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of common stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.

 

Exhibit B-3

--------------------------------------------------------------------------------

There can be no assurance that any selling shareholder will sell any or all of
the shares of common stock registered pursuant to the registration statement, of
which this prospectus forms a part.

The selling shareholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, including, without
limitation, Regulation M of the Exchange Act, which may limit the timing of
purchases and sales of any of the shares of common stock by the selling
shareholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common
stock. All of the foregoing may affect the marketability of the shares of common
stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.

We will pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, estimated to be
$[                    ] in total, including, without limitation, Securities and
Exchange Commission filing fees and expenses of compliance with state securities
or “blue sky” laws; provided, however, that a selling shareholder will pay all
underwriting discounts and selling commissions, if any. We will indemnify the
selling shareholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling shareholders will be entitled to contribution. We may be indemnified by
the selling shareholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling shareholder specifically for use in this prospectus, in
accordance with the related registration rights agreement, or we may be entitled
to contribution.

Once sold under the registration statement, of which this prospectus forms a
part, the shares of common stock will be freely tradable in the hands of persons
other than our affiliates.

 

Exhibit B-4