Exhibit 10.1
 
Print Name of Investor: ____________________

Social Security or EIN Number _______________

SUBSCRIPTION/REGISTRATION RIGHTS AGREEMENT

 
SG Blocks, Inc., a Delaware corporation (“Company”), and the Investor hereby
agree as follows:
 
1.           Subscription for Securities.  I (sometimes referred to herein as
the “Investor”) hereby subscribe for and agree to purchase ___________ shares
(“Shares”) of the Company’s common stock (“Common Stock”).  The Shares are
offered by the Company in an offering (“Offering”) for aggregate minimum gross
proceeds of $500,000 and maximum gross proceeds of up to $1,500,000.  Each Share
is offered at a price of $0.35.  The minimum investment is 285,715 Shares or
$100,000, or such lesser amount to which Ladenburg Thalmann & Co. Inc., as
exclusive placement agent in the Offering (the “Placement Agent”) and the
Company may mutually agree.
 
2.           Offering Period; Minimum; Maximum.  The Offering shall continue
until March 30, 2012, unless extended by the Company and the Placement Agent
without notice to Investors to a date no later than April 30, 2012 (such date,
as it may be extended, is referred to as the “Termination Date”).  The Offering
is being conducted on a “best efforts, 1,428,572 Shares ($500,000) minimum,
4,285,715 Shares ($1,500,000) maximum” basis; provided, however, that the
maximum amount of the Offering may be increased by up to $2,500,000 (or
7,142,858 Shares) upon the mutual consent of the Company and the Placement
Agent, without notice to Investors.  Officers, directors and shareholders of the
Company and/or the Placement Agent and their respective affiliates may purchase
Shares in the Offering, and such purchases may be counted to reach the minimum
number of Shares to be sold.
 
3.           Closings.   If, at any time prior to the Termination Date,
subscriptions for at least 1,428,572 Shares have been received  and accepted by
the Placement Agent and the Company (and funds in payment therefor have
cleared), then, upon the mutual consent of the Company and the Placement Agent,
a closing shall take place with respect to the accepted subscriptions. If
subscriptions for at least 1,428,572 Shares are not received and accepted (and
funds in payment therefor cleared) by the Termination Date, the Offering will be
terminated and all funds received from Investors will be returned, without
interest and without any deduction.  After an initial closing has occurred and
prior to the Termination Date, the Offering may continue and the Company shall
sell additional Shares in an aggregate amount, when combined with the amounts
sold at the initial closing and any subsequent closings, of up to
$1,500,000.  Additional closings may occur provided that subscriptions have been
received and accepted and funds in payment therefor have cleared prior to 5:00
pm New York City time on the Termination Date.  The initial closing and each
additional closing is referred to herein as a “Closing.”
 
4.           Investor Delivery of Payment and Documents.
 
4.1           I have tendered the full purchase price for the Shares by wiring
funds in accordance with the instructions set forth in Section 1 to Schedule 1
hereto.
 
4.2           I hereby tender to the Placement Agent an executed copy of this
Subscription/Registration Rights Agreement.
 
 
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4.3           In the event that a Closing does not take place with respect to my
subscription for any reason or if my subscription is otherwise rejected, all
cash proceeds delivered by me in accordance with the foregoing shall be returned
to me as soon as practicable, without interest, offset or deduction.
 
4.4           In the event my subscription is accepted and there is a Closing,
the Shares for which I am subscribing will be delivered promptly to me along
with a copy of a fully executed version of this Agreement.
 
5.           Acceptance or Rejection of Subscription/Registration Rights
Agreement.  Each of the Company and the Placement Agent have the right to reject
this subscription for Shares, in whole or in part, for any reason and at any
time prior to a Closing with respect to this subscription, notwithstanding prior
receipt by me of notice of acceptance of my subscription. The Shares subscribed
for herein will not be deemed issued to or owned by me until a copy of this
Subscription/Registration Rights Agreement has been executed by me and accepted
and countersigned by the Company, and a Closing with respect to my subscription
has occurred.
 
6.           Offering to Accredited Investors.  This Offering is limited to
accredited investors as defined in Section 2(15) of the Securities Act of 1933,
as amended (“Securities Act”), and Rule 501 promulgated thereunder, and is being
made without registration under the Securities Act in reliance upon the
exemptions contained in Regulation D promulgated under the Securities Act
(“Regulation D”) and applicable state securities laws.  As indicated by my
responses herein, I am an “accredited investor” within the meaning of Section
2(15) of the Securities Act and Rule 501 of Regulation D.
 
7.           Investor Representations and Warranties.  I acknowledge, represent
and warrant to the Company and the Placement Agent as follows:
 
7.1           Obligations of the Company and the Investor.   The Company has no
obligation to me other than as set forth in this Agreement.  I am aware that,
except for any rescission rights that may be provided under applicable laws, I
am not entitled to cancel, terminate or revoke this subscription, and any
agreements made in connection herewith will survive my death or disability.  In
order to induce the Company to issue and sell the Shares to me, I represent and
warrant that the information relating to me stated herein is true and complete
as of the date hereof and will be true and complete as of the date on which my
purchase of Shares becomes effective.  If, prior to the termination of the
Offering, there should be any change in such information or any of such
information becomes incorrect or incomplete, I agree to notify the Company and
supply the Company promptly with corrective information.
 
7.2           Information About the Company.
 
(a)           I have been given reasonable opportunity to meet with officers of
the Company for the purpose of asking reasonable questions of such officers
concerning the terms and conditions of the Offering and the business and
operations of the Company and all such questions have been answered to my full
satisfaction. I have also been given an opportunity to obtain any additional
relevant information to the extent reasonably available to the Company.  I have
received all information regarding the Company that I have reasonably
requested.  I understand that there is no assurance as to the future performance
of the Company.
 
(b)           The Company has made available to me a copy of the Company’s Final
Prospectus dated February 10, 2012 and the Company’s Current Report on Form 8-K
dated November 4, 2011, as amended (together the “Disclosure
Documents”).  Investor has read the Disclosure Documents, including the “Risk
Factors” set forth in the Final Prospectus, together with this
Subscription/Registration Rights Agreement, and fully understands the
information set forth therein and herein.  Investor has been given access to
full and complete information regarding the Company as Investor has requested
and has utilized such access to Investor’s satisfaction for the purpose of
verifying the information included herein and therein, and Investor has either
met with or been given reasonable opportunity to meet with the officers of the
Company for the purpose of asking reasonable questions of such officers
concerning the terms and conditions of the Offering and the business of the
Company and all such questions have been answered to Investor’s full
satisfaction.  Investor has also been given an opportunity to obtain any
additional relevant information to the extent reasonably available to the
Company.  After reading such information and materials, Investor understands
that there is no assurance as to the future performance of the Company and the
Shares.
 
 
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7.3           No assurances; No general solicitation.  I have received no
representation or warranty from the Company or any of its officers, directors,
employees or agents in respect of my investment in the Company.  I am not
participating in the Offering as a result of or subsequent to:  (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television, radio or the
Internet or (ii) any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising.
 
7.4           Speculative Investment.  I am aware that my purchase of Shares is
a speculative investment.  I acknowledge that I can lose the entire amount of my
investment in the Company.  I have such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of an
investment in the Shares and have obtained, in my judgment, sufficient
information from the Company to evaluate the merits and risks of an investment
in the Company.  I have not utilized any person as my purchaser representative
(as defined in Regulation D) in connection with evaluating such merits and risks
and have relied solely upon my own investigation in making a decision to invest
in the Company. I have been urged to seek independent advice from my
professional advisors relating to the suitability of an investment in the
Company in view of my overall financial needs and with respect to the legal and
tax implications of such investment.  I believe that the investment in the
Company represented by my purchase of Shares in the Offering is suitable for me
based upon my investment objectives and financial needs, and I have adequate
means for providing for my current financial needs and contingencies and have no
need for liquidity with respect to my investment in the Company.  My investment
in the Company does not constitute all, or substantially all, of my investment
portfolio.
 
7.5           Restrictions on Transfer.  I understand that (i) the Shares have
not been registered under the Securities Act or the securities laws of certain
states in reliance on specific exemptions from registration, (ii) no securities
administrator of any state or the federal government has recommended or endorsed
this Offering or made any finding or determination relating to the fairness of
an investment in the Company and (iii) the Company is relying on my
representations and agreements for the purpose of determining whether this
transaction meets the requirements of the exemptions afforded by the Securities
Act and certain state securities laws. I acknowledge that the Shares, when
issued, will be subject to restrictions on transferability and may not be
resold, assigned or otherwise disposed of unless they are subsequently
registered under the Securities Act and under applicable securities laws of
certain states or an exemption from such registration is available.  I further
acknowledge that, notwithstanding the Company’s commitment herein, there can be
no assurance that the Company will file any registration statement for the
securities I am purchasing, that such registration statement, if filed, will be
declared effective or, if declared effective, that the Company will be able to
keep it effective until I sell the securities registered thereon.  I understand
that each certificate evidencing the Shares will bear the legends substantively
similar to that set forth below:
 
“THIS HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(“ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, PLEDGED,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
WITH RESPECT THERETO UNDER THE ACT AND COMPLIANCE WITH ANY APPLICABLE STATE
SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
 
THE COMPANY’S SUBSCRIPTION/REGISTRATION RIGHTS AGREEMENT WITH THE HOLDER SETS
FORTH THE COMPANY’S OBLIGATIONS TO REGISTER THE RESALE OF THE SHARES. A COPY OF
SUCH SUBSCRIPTION/REGISTRATION RIGHTS AGREEMENT IS AVAILABLE FOR INSPECTION AT
THE COMPANY’S OFFICE.  SUCH SUBSCRIPTION/REGISTRATION RIGHTS AGREEMENT ALSO
CONTAINS CERTAIN RESTRICTIONS REGARDING THE TRANSFER OF SUCH SECURITIES.”
 
 
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7.6           Investment Representation.  I am purchasing Shares for my own
account for investment and not with a view to, or for sale in connection with,
any subsequent distribution of Shares, nor with any present intention of selling
or otherwise disposing of all or any part of the Shares in violation of the
Federal securities laws.  I understand that, although there is a public market
for the Shares, there is no assurance that such market will continue in the
future.  I understand that the Company is under no obligation to register the
Shares, except as may be set forth in Schedule 1, or to assist me in complying
with any exemption from such registration under the Securities Act or any state
securities laws.
 
7.7           Placement Agent Commissions and Relationships.  I am aware
that  (A) with respect to each Closing, the Placement Agent will receive a cash
commission equal to 6% of the aggregate purchase price of the Shares sold to all
Investors at such Closing (or a lesser percentage with respect to certain
Investors, as agreed upon between the Placement Agent and the Company) and will
be issued a five-year warrant (“Warrant”) to purchase shares of Common Stock of
the Company equal to nine percent (9%) of the total number of Shares sold to all
Investors at such Closing (or a lesser percentage in the event certain Investors
invest, as agreed upon between the Placement Agent and the Company), (B) the
shares of Common Stock underlying the Warrants issued to the Placement Agent
will have the same registration rights as the Investors with respect to their
Shares and (C) at the initial Closing, the Company shall reimburse the Placement
Agent for its reasonable expenses incurred in connection with the offering up to
a maximum of $15,000, or such greater amount as agreed to by the Company and the
Placement Agent in writing.  I am also aware that (i) the Placement Agent acted
as exclusive placement agent for the Company in connection with a private
placement offering, for which it was paid cash commissions and was issued a
warrant to purchase an aggregate of 1,044,584 shares at $0.2477 per share and
(ii) the Company recently completed a reverse merger with a company controlled
by affiliates of the Placement Agent in November 2011 and certain affiliates of
the Placement Agent continue to hold shares of the Company’s Common Stock.
 
7.8           Entity Authority.
 
(a)           If the Investor is a corporation, partnership, company, trust,
employee benefit plan, individual retirement account, Keogh Plan, or other
tax-exempt entity, it is authorized and qualified to become an investor in the
Company and the person signing this Subscription/Registration Rights Agreement
and FINRA/Selling Securityholder Questionnaire on behalf of such entity has been
duly authorized by such entity to do so.
 
(b)           The undersigned represents and warrants to the Company that (i) if
an entity, its principal place of business and executive offices are located in
the State set forth on the Signature Page for Entity Investors and (ii) if an
individual, his or her state of residency is the State set forth on the
Signature Page for Individual Investors.
 
 
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7.9           No Offer Until Determination of Suitability.  I acknowledge that
any delivery to me of the documents relating to the offering of the Shares prior
to the determination by the Company of my suitability will not constitute an
offer of the Shares until such determination of suitability is made.
 
7.10           For Florida Residents.   The Shares have not been registered
under the Securities Act or the Florida Securities Act, by reason of specific
exemptions thereunder relating to the limited availability of the Offering.  The
Shares cannot be sold, transferred, or otherwise disposed of to any person or
entity unless subsequently registered under the Securities Act or the Securities
Act of Florida, if such registration is required.  Pursuant to Section
517.061(11) of the Florida Securities Act, when sales are made to five (5) or
more persons in Florida, any sale made pursuant to Subsection 517.061(11) of the
Florida Securities Act will be voidable by such Florida purchaser either within
three days after the first tender of consideration is made by the purchaser to
the issuer, an agent of the issuer, or an escrow agent, or within three days
after the availability of the privilege is communicated to such purchaser,
whichever occurs later.  In addition, as required by Section 517.061(11)(a)(3),
Florida Statutes and by Rule 3-500.05(a) thereunder, if I am a Florida resident
I may have, at the offices of the Company, at any reasonable hour, after
reasonable notice, access to certain prescribed materials that the Company can
obtain without unreasonable effort or expense.
 
8.           Company Representations and Warranties.  The Company hereby
represents and warrants to the Investor and the Placement Agent as follows:
 
8.1           Authority.  The Company has all necessary corporate power and
authority to enter into this Agreement and the other documents necessary to
consummate the transactions contemplated hereby.  All corporate action necessary
to be taken by the Company to authorize the execution, delivery and performance
of this Agreement and all other agreements and instruments delivered by the
Company in connection with the transactions contemplated hereby has been duly
and validly taken and this Agreement has been duly executed and delivered by the
Company.  Subject to the terms and conditions of this Agreement, this Agreement
constitutes the valid, binding and enforceable obligation of the Company,
enforceable in accordance with its terms, except as enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws of general application now or hereafter in
effect affecting the rights and remedies of creditors and by general principles
of equity (regardless of whether enforcement is sought in a proceeding at law or
in equity); and (ii) the applicability of the federal and state securities laws
and public policy as to the enforceability of the indemnification provisions of
this Agreement.  The sale by the Company of the Shares does not conflict with
the certificate of incorporation or bylaws of the Company, as each may be
amended, or any material contract by which the Company or its property is bound,
or any federal or state laws or regulations or decree, ruling or judgment of any
United States or state court applicable to the Company or its property.  The
sale of the Shares will not trigger any pre-emptive or, to the knowledge of the
Company, other rights held by any party and no governmental or regulatory
consent is required for the consummation of the transactions contemplated by
this Agreement.

8.2           SEC Filings; Financial Statements.  All reports, registration
statements and definitive proxy statements (“Company Reports”) required to be
filed by the Company with the SEC during the last two fiscal years and the
interim period prior to the date of this Agreement were filed in a timely
manner.  As of their respective dates, the Company Reports: (i) were prepared in
accordance and complied in all material respects with the requirements of the
Securities Act or the Securities Exchange Act of 1934, as amended (“Exchange
Act”), as the case may be, and the rules and regulations of the SEC thereunder
applicable to such Company Reports, and (ii) did not at the time they were filed
(and if amended or superseded by a filing prior to the date of this Agreement
then on the date of such filing and as so amended or superseded) contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.  Each set of
financial statements (including, in each case, any related notes thereto)
contained in the Company Reports complied as to form in all material respects
with the published rules and regulations of the SEC with respect thereto, was
prepared in accordance with U.S. GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, do not contain footnotes as permitted by Form 10-Q
of the Exchange Act) and each fairly presents in all material respects the
financial position of the Company at the respective dates thereof and the
results of its operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were, are subject to normal
adjustments which were not or are not expected to have a material adverse effect
on the Company taken as a whole.
 
 
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9.           Indemnification.  I hereby agree to indemnify and hold harmless the
Company and the Placement Agent, their respective officers, directors,
stockholders, employees, agents, and attorneys against any and all losses,
claims, demands, liabilities, and expenses (including reasonable legal or other
expenses incurred by each such person in connection with defending or
investigating any such claims or liabilities, whether or not resulting in any
liability to such person or whether incurred by the indemnified party in any
action or proceeding between the indemnitor and  indemnified party or between
the indemnified party and any third party) to which any such indemnified party
may become subject, insofar as such losses, claims, demands, liabilities and
expenses (a) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact made by me and contained herein or in the
FINRA/Selling Securityholder Questionnaire, or (b) arise out of or are based
upon any breach by me of any representation, warranty, or agreement made by me
contained herein.  The Placement Agent is a third-party beneficiary of this
Section and this Section may not be modified or amended without the prior
written agreement of the Placement Agent.
 
10.           Severability; Remedies.  In the event any parts of this
Subscription/Registration Rights Agreement are found to be void, the remaining
provisions of this Subscription/Registration Rights Agreement are nevertheless
binding with the same effect as though the void parts were deleted.
 
11.           Governing Law and Jurisdiction.
 
11.1           This Subscription/Registration Rights Agreement will be deemed to
have been made and delivered in New York City and will be governed as to
validity, interpretation, construction, effect and in all other respects by the
internal law of the State of New York.
 
11.2           Each of the Company and the Investor, as between the two, hereby
(i) agrees that any legal suit, action or proceeding between them arising out of
or relating to this Subscription/Registration Rights Agreement will be
instituted exclusively in New York State Supreme Court, County of New York, or
in the United States District Court for the Southern District of New York, (ii)
waives any objection to the venue of any such suit, action or proceeding and the
right to assert that such forum is not a convenient forum for such suit, action
or proceeding, (iii) irrevocably consents to the jurisdiction of the New York
State Supreme Court, County of New York, and the United States District Court
for the Southern District of New York in any such suit, action or proceeding,
(iv) agrees to accept and acknowledge service of any and all process that may be
served in any such suit, action or proceeding in New York State Supreme Court,
County of New York or in the United States District Court for the Southern
District of New York and (v) agrees that service of process upon it mailed by
certified mail to its address set forth on my signature page will be deemed in
every respect effective service of process upon it in any suit, action or
proceeding.
 
11.3           Each Investor agrees that all controversies that may arise
between such Investor and the Placement Agent concerning any subject matter
related to such Investor’s subscription for Shares shall be determined by
arbitration in accordance with the rules then prevailing of the Financial
Industry Regulatory Authority (FINRA) or any United States securities
self-regulatory organization or United States securities exchange of which the
person, entity or entities against whom the claim is made is a member, as
Investor may designate. If Investor designates the rules of a United States
self-regulatory organization or United States securities exchange and those
rules fail to be applied for any reason, then Investor shall designate the
prevailing rules of any other United States securities self-regulatory
organization or United States securities exchange of which the Placement Agent
is a member. If Investor does not notify Placement Agent in writing of its
designation within five (5) days after such failure or after Investor receives
from Placement Agent a written demand for arbitration, then Investor authorizes
Placement Agent to make such designation on its behalf. The designation of the
rules of a United States self-regulatory organization or United States
securities exchange is not integral to the underlying agreement to arbitrate.
Investor understands that judgment upon any arbitration award may be entered in
any court of competent jurisdiction.  This section may not be changed, amended
or modified without the prior written consent of the Placement Agent who the
Investor specifically agrees is and shall be a third party beneficiary for
purposes of this Agreement.
 
 
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12.           Counterparts.  This Subscription/Registration Rights Agreement may
be executed in one or more counterparts, each of which will be deemed an
original but all of which together will constitute one and the same
instrument.  The execution of this Subscription/Registration Rights Agreement
may be by actual or facsimile signature.
 
13.           Benefit.  This Subscription/Registration Rights Agreement is
binding upon and inures to the benefit of the parties hereto (and the Placement
Agent to the extent it is a third-party beneficiary hereof) and their respective
heirs, executors, personal representatives, successors and assigns.  The
Placement Agent is a third-party beneficiary with respect to any sections hereof
that so state or that otherwise indicate that the Placement Agent would be
entitled to rely on the representations, warranties or covenants made by me
therein.
 
14.           Notices.  All notices, offers, acceptance and any other acts under
this Subscription/Registration Rights Agreement (except payment) must be in
writing, and are sufficiently given if delivered to the addressees in person, by
overnight courier service, or, if mailed, postage prepaid, by certified mail
(return receipt requested), and will be effective three days after being placed
in the mail if mailed, or upon receipt or refusal of receipt, if delivered
personally or by courier or confirmed telecopy, in each case addressed to a
party.  All communications to me should be sent to my preferred address on the
signature page hereto.  All communications to the Company should be sent to the
addresses set forth on Schedule 1.  Each party may designate another address by
notice to the other parties.
 
15.           Oral Evidence.  This Subscription/Registration Rights Agreement
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior oral and written agreements between the
parties hereto with respect to the subject matter hereof.  This
Subscription/Registration Rights Agreement may not be changed, waived,
discharged, or terminated orally, but rather, only by a statement in writing
signed by the party or parties against which enforcement or the change, waiver,
discharge or termination is sought.
 
16.           Section Headings.  Section headings herein have been inserted for
reference only and will not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part, any of the terms or
provisions of this Subscription/Registration Rights Agreement.
 
17.           Survival of Representations, Warranties and Agreements.  The
representations, warranties and agreements contained herein will survive the
delivery of, and the payment for, the Shares.
 
18.           Acceptance of Subscription.  The Company may accept this
Subscription/Registration Rights Agreement at any time for all or any portion of
the Shares subscribed for by executing a copy hereof as provided and notifying
me within a reasonable time thereafter.
 
 
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SIGNATURE PAGE
 

The undersigned hereby agrees and enters into this Subscription/Registration
Rights Agreement and confirms that all the information and representations
regarding the Investor contained herein are true, including the attached
exhibits and schedules.  If the undersigned is signing on behalf of an entity or
trust the undersigned represents, the undersigned has the authority to make
investment decisions for the entity.  The undersigned also understand that a
background/credit check maybe conducted for the purposes of detecting and
deterring money laundering.
 

     
Signature
 
Date
                 
Print Name
                     
Title (if applicable)
                     
Signature
 
Date
                 
Print Name
                     
Title (if applicable)
   

The foregoing subscription is accepted and the Company hereby agrees to be bound
by its terms.

SG BLOCKS, INC.

 

     
Name
 
Title:
           
Date
   

 
 
 
 

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SCHEDULE 1
 
 
 
1.
Wiring Instructions.

 
 
Please instruct your bank to wire funds to Continental Stock Transfer & Trust
Company, the escrow agent, as follows:
 
 

 
 

 
 
2.
“Piggy-back” Registration Rights.

 
(i)           The Shares of Common Stock issuable to the Investors and the
shares of Common Stock underlying the warrants issued to the Placement Agent in
connection herewith are referred to herein collectively as “Registrable
Securities.”
 
(ii)           If at any time the Company proposes to file a registration
statement under the Securities Act of 1933, as amended, with respect to an
offering of equity securities, or securities or other obligations exercisable or
exchangeable for, or convertible into, equity securities, by the Company for its
own account or for shareholders of the Company for their account (or by the
Company and by shareholders of the Company), other than a registration statement
(i) filed in connection with any employee stock option or other benefit plan,
(ii) for an exchange offer or offering of securities solely to the Company’s
existing shareholders, (iii) for an offering of debt that is convertible into
equity securities of the Company, (iv) for a dividend reinvestment plan or (v)
that is a post-effective amendment to the Company’s Registration Statement on
Form S-1 (SEC File No. 333-178321), then the Company shall (x) give written
notice of such proposed filing to the holders of Registrable Securities as soon
as practicable but in no event less than ten (10) days before the anticipated
filing date, which notice shall describe the amount and type of securities to be
included in such offering, the intended method(s) of distribution, and the name
of the proposed managing underwriter or underwriters, if any, of the offering,
and (y) offer to the holders of Registrable Securities in such notice the
opportunity to register the sale of such number of Registrable Securities as
such holders may request in writing within five (5) days following receipt of
such notice (a “Piggy-Back Registration”). The Company shall cause such
Registrable Securities to be included in such registration and shall use its
best efforts to cause the managing underwriter or underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in a Piggy-Back Registration on the same terms and conditions as any
similar securities of the Company and to permit the sale or other disposition of
such Registrable Securities in accordance with the intended method(s) of
distribution thereof. All holders of Registrable Securities proposing to
distribute their securities through a Piggy-Back Registration that involves an
underwriter or underwriters shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such Piggy-Back
Registration.
 
(ii)           If the managing underwriter or underwriters for a Piggy-Back
Registration that is to be an underwritten offering advises the Company and the
holders of Registrable Securities in writing that the dollar amount or number of
shares of Common Stock which the Company desires to sell, taken together with
shares of Common Stock, if any, as to which registration has been demanded
pursuant to written contractual arrangements with persons other than the holders
of Registrable Securities hereunder, the Registrable Securities as to which
registration has been requested, and the shares of Common Stock, if any, as to
which registration has been requested pursuant to the written contractual
piggy-back registration rights of other shareholders of the Company, exceeds the
maximum dollar amount or maximum number of shares that can be sold in such
offering without adversely affecting the proposed offering price, the timing,
the distribution method, or the probability of success of such offering (such
maximum dollar amount or maximum number of shares, as applicable, the “Maximum
Number of Shares”), then the Company shall include in any such registration:
 
 
 

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(a)           If the registration is undertaken for the Company’s account: (A)
first, the shares of Common Stock or other securities that the Company desires
to sell that can be sold without exceeding the Maximum Number of Shares; (B)
second, to the extent that the Maximum Number of Shares has not been reached
under the foregoing clause (A), the Registrable Securities as to which
registration has been requested pursuant to the applicable written contractual
piggy-back registration rights of such holders, Pro Rata, that can be sold
without exceeding the Maximum Number of Shares; and (C) third, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clauses (A) and (B), the shares of Common Stock or other securities for the
account of other persons that the Company is obligated to register pursuant to
written contractual piggy-back registration rights with such persons and that
can be sold without exceeding the Maximum Number of Shares; and
 
(b)           If the registration is a “demand” registration undertaken at the
demand of persons other than the holders of Registrable Securities, (A) first,
the shares of Common Stock or other securities for the account of the demanding
persons that can be sold without exceeding the Maximum Number of Shares; (B)
second, to the extent that the Maximum Number of Shares has not been reached
under the foregoing clause (A), the shares of Common Stock or other securities
that the Company desires to sell that can be sold without exceeding the Maximum
Number of Shares; (C) third, to the extent that the Maximum Number of Shares has
not been reached under the foregoing clauses (A) and (B), the Registrable
Securities, Pro Rata, as to which registration has been requested pursuant to
the terms hereof that can be sold without exceeding the Maximum Number of
Shares; and (D) fourth, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clauses (A), (B) and (C), the shares of Common
Stock or other securities for the account of other persons that the Company is
obligated to register pursuant to written contractual arrangements with such
persons, that can be sold without exceeding the Maximum Number of Shares.
 
(iii)           The Company will keep the Registration Statement which registers
the Registrable Securities pursuant hereto effective and current until the
earlier of the date by which all the registered Registrable Securities have been
sold and the date that the Registrable Securities may be sold pursuant to Rule
144 without any volume restrictions and, subject to the Black-Out Periods
(defined below).
 
(iv)           The Company will notify each holder of Registrable Securities as
expeditiously as possible following the filing of the Piggy-Back Registration
and all amendments thereto and the effectiveness of the Piggy-Back Registration
filed pursuant to this section, and/or of any request by the Commission for the
amending or supplementing of such Piggy-Back Registration or prospectus included
in the Piggy-Back Registration (“Prospectus”).  The Company will promptly notify
the holders, if after delivery of a Prospectus to the holders, that, in the
judgment of the Company, it is advisable to suspend use of the Prospectus
delivered to the holders due to pending material developments or other events
that have not yet been publicly disclosed and as to which the Company believes
public disclosure would be detrimental to the Company. Upon receipt of such
notice, each such holder will immediately discontinue any sales of Registrable
Securities pursuant to such registration statement until such holder has
received copies of a supplemented or amended Prospectus or until such holder is
advised in writing by the Company that the then current Prospectus may be used
and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus (such period
of discontinuance is referred to herein as a “Black-Out
Period”).  Notwithstanding anything to the contrary herein, the Company will not
exercise its rights under this subsection to suspend sales of Registrable
Securities for a period in excess of 90 days in any 365-day period.
 
 
(2)

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(v)           The Company will as expeditiously as possible furnish to each
Holder such reasonable numbers of copies of the Prospectus, including any
preliminary Prospectus, in conformity with the requirements of the Securities
Act, and such other documents as such holder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities
owned by such holder.
 
(vi)           The Company will bear all expenses and pay all fees incurred in
connection with the registration of the Registrable Securities, excluding
underwriting discounts and commissions or brokerage fees incurred by the holders
payable with respect to the Registrable Securities, and fees and expenses of
counsel and/or other experts retained by the holders of the Registrable
Securities (except as set forth below) but including the expenses of preparing
the Piggy-Back Registration, filing it with the Commission and FINRA and having
it declared effective (or cleared) by such agencies, providing a reasonable
number of copies of the prospectus contained therein to the holders, and the
reasonable fees (capped at $15,000) and disbursements of one special counsel for
all of the holders of Registrable Securities, which counsel shall be selected by
the Placement Agent.
 
(vii)           (a)           The Company shall indemnify the holders of the
Registrable Securities to be sold or resold pursuant to the Piggy-Back
Registration hereunder and any underwriter or person deemed to be an underwriter
under the Securities Act and each person, if any, who controls such Holder or
underwriters or persons deemed to be underwriters within the meaning of Section
15 of the Securities Act or Section 20(a) of the Exchange Act , against all
loss, claim, damage, expense or liability (including all reasonable attorneys’
fees and other expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which the Holder may become subject
under the Securities Act, the Exchange Act or otherwise, arising from such
registration statement, except to the extent (a) arising from information
furnished (or omitted to be furnished) by or on behalf of the Holder, in
writing, for specific inclusion in such registration statement or (b) because
the holder failed to suspend the use of such registration statement and
discontinue any sales of Registrable Securities during a Black-Out Period (of
which it was reasonably made aware by the Company) or failed to timely deliver a
final prospectus to the purchasers of such holder’s Registrable Securities.  The
Holder of the Registrable Securities to be sold or resold pursuant to the
Registration Statement, and their successors and assigns, shall indemnify the
Company, against all loss, claim, damage, expense or liability (including all
reasonable attorneys’ fees and other expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which the
Company may become subject under the Securities Act, the Exchange Act or
otherwise, (a) arising from information furnished (or omitted to be furnished)
by or on behalf of the Holder, in writing, for specific inclusion in such
Piggy-Back Registration or (b) because the holder failed to suspend the use of
such Piggy-Back Registration and discontinue any sales of Registrable Securities
during a Black-Out Period (of which it was reasonably made aware by the Company)
or failed to timely deliver a final prospectus to the purchasers of such
holder’s Registrable Securities.
 
(b)           If any action is brought against a party hereto, (“Indemnified
Party”) in respect of which indemnity may be sought against the other party
(“Indemnifying Party”), such Indemnified Party shall promptly notify
Indemnifying Party in writing of the institution of such action and Indemnifying
Party shall assume the defense of such action, including the employment and fees
of counsel reasonably satisfactory to the Indemnified Party.  Such Indemnified
Party shall have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless (i) the employment of such counsel shall have been
authorized in writing by Indemnifying Party in connection with the defense of
such action, or (ii) Indemnifying Party shall not have employed counsel to
defend such action, or (iii) such Indemnified Party shall have been advised by
counsel that there may be one or more legal defenses available to it which may
result in a conflict between the Indemnified Party and Indemnifying Party (in
which case Indemnifying Party shall not have the right to direct the defense of
such action on behalf of the Indemnified Party), in any of which events, the
reasonable fees and expenses of not more than one additional firm of attorneys
designated in writing by the Indemnified Party shall be borne by Indemnifying
Party.  Notwithstanding anything to the contrary contained herein, if
Indemnified Party shall assume the defense of such action as provided above,
Indemnifying Party shall not be liable for any settlement of any such action
effected without its written consent.
 
 
(3)

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(c)           If the indemnification or reimbursement provided for hereunder is
finally judicially determined by a court of competent jurisdiction to be
unavailable to an Indemnified Party (other than as a consequence of a final
judicial determination of willful misconduct, bad faith or gross negligence of
such Indemnified Party), then Indemnifying Party agrees, in lieu of indemnifying
such Indemnified Party, to contribute to the amount paid or payable by such
Indemnified Party (i) in such proportion as is appropriate to reflect the
relative benefits received, or sought to be received, by Indemnifying Party on
the one hand and by such Indemnified Party on the other or (ii) if (but only if)
the allocation provided in clause (i) of this sentence is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in such clause (i) but also the relative fault of
Indemnifying Party and of such Indemnified Party; provided, however, that in no
event shall the aggregate amount contributed by the Holder exceed the profit, if
any, earned by the Holder as a result of the exercise by him of the Placement
Agent Warrants and the sale or resale by him of the Registrable Securities.
 
(d)           The rights accorded to Indemnified Parties hereunder shall be in
addition to any rights that any Indemnified Party may have at common law, by
separate agreement or otherwise.

 
4.           Notices.  All communications to the Company should be sent to:

SG Blocks, Inc.
400 Madison Avenue, Suite 16C
New York, New York 10017
Attn: Paul M. Galvin, CEO
Tel No.:  (646) 747-2423
Fax No.:  (212) 619-1028

with copies to:

Olshan Grundman Frome Rosenzweig & Wolosky LLP
Park Avenue Tower, 65 East 55th Street
New York, New York 10022
Attention:  Kenneth A. Schlesinger, Esq.
Tel No.:   (212) 451-2252
Fax No.:   (212) 451-2222

and

Ladenburg Thalmann & Co. Inc.
4400 Biscayne Boulevard, 14th Floor
Miami, Florida 33137
Attn:  Barry Steiner
Tel No.:    (305) 572-4200
 
 
(4)

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Fax No.:    (305) 572-4220

and

Graubard Miller
405 Lexington Avenue, 19th Floor
New York, New York 10174
Attn: David Alan Miller, Esq.
Tel:           (212) 818-8661
Fax:           (212) 818-8881
 
 
(5)

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