Exhibit 10.2





Exhibit 10.2




REGISTRATION RIGHTS AGREEMENT




This Registration Rights Agreement (this “Agreement”) is made and entered into as of
October 29, 2010, between UFood Restaurant Group, Inc., a Nevada corporation (the
“Company”), and each of the several purchasers signatory hereto (each such purchaser, a
“Purchaser” and, collectively, the “Purchasers”).



This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date
hereof, between the Company and each Purchaser (the “Purchase Agreement”).



The Company and each Purchaser hereby agrees as follows:




1. Definitions.



Capitalized terms used and not otherwise defined herein that are defined in the Purchase
Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:




“Advice” shall have the meaning set forth in Section 6(d).




“Effectiveness Date” means, with respect to the Initial Registration Statement
required to be filed hereunder, the 90th calendar day following the date the
Initial Registration Statement is required to be filed hereunder (or, in the event of a
“full review” by the Commission, the 120th calendar day following the date the
Initial Registration Statement is required to be filed hereunder) and with respect to any
additional Registration Statements which may be required pursuant to Section 3(c), the
90th calendar day following the date on which an additional Registration
Statement is required to be filed hereunder; provided, however, that in the
event the Company is notified by the Commission that one or more of the above Registration
Statements will not be reviewed or is no longer subject to further review and comments, the
Effectiveness Date as to such Registration Statement shall be the fifth Trading Day
following the date on which the Company is so notified if such date precedes the dates
otherwise required above.




“Conversion Shares” means the shares of Common Stock issuable upon conversion
of the Preferred Stock.




“Effectiveness Period” shall have the meaning set forth in Section 2(a).




“Filing Date” means, with respect to the Initial Registration Statement
required hereunder, the 90th calendar day following the date hereof and, with
respect to any additional Registration Statements which may be required pursuant
to Section 3(c), the earliest practical date on which the Company is permitted by SEC
Guidance to file such additional Registration Statement related to the Registrable
Securities.


 


 









 






“Holder” or “Holders” means the holder or holders, as the case may be,
from time to time of Registrable Securities.




“Indemnified Party” shall have the meaning set forth in Section 5(c).




“Indemnifying Party” shall have the meaning set forth in Section 5(c).




“Initial Registration Statement” means the initial Registration Statement
filed pursuant to this Agreement.




“Losses” shall have the meaning set forth in Section 5(a).




“Plan of Distribution” shall have the meaning set forth in Section 2(a).




“Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated by the Commission pursuant to the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in such
Prospectus.




“Registrable Securities” means, as of any date of determination, (a) all of
the shares of Common Stock then issuable upon conversion in full of the Preferred Shares
(assuming on such date the Preferred Shares are converted in full), (b) all Warrant Shares
then issuable upon exercise of the Warrants (assuming on such date the Warrants are
exercised in full), (c) any additional shares of Common Stock issuable in connection with
any anti-dilution provisions in the Preferred Shares or the Warrants and (d) any securities
issued or then issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing; provided,
however, that any such Registrable Securities shall cease to be Registrable
Securities (and the Company shall not be required to maintain the effectiveness of any, or
file another, Registration Statement hereunder with respect thereto) for so long as (a) a
Registration Statement with respect to the sale of such Registrable Securities is declared
effective by the Commission under the Securities Act and such Registrable Securities have
been disposed of by the Holder in accordance with such effective Registration Statement,
(b) such Registrable Securities have been previously sold in accordance


 


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with  Rule 144, or
(c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current
public information pursuant to Rule 144 as set forth in a written opinion letter to such
effect, addressed, delivered and acceptable to the Transfer Agent and the affected Holders
(assuming that such securities and any securities issuable upon exercise, conversion or
exchange of which, or as a dividend upon which, such securities were issued or are
issuable, were at no time held by any Affiliate of the Company, and all Warrants are
exercised by “cashless exercise” as provided in Section 2(c) of each of the Warrants), as
reasonably determined by the Company, upon the advice of counsel to the Company.




“Registration Statement” means any registration statement required to be filed
hereunder pursuant to Section 2(a) and any additional registration statements contemplated
by Section 3(c), including (in each case) the Prospectus, amendments and supplements to any
such registration statement or Prospectus, including pre- and post-effective amendments,
all exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference in any such registration statement.




“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.




“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.




“Selling Stockholder Questionnaire” shall have the meaning set forth in
Section 3(a).




“SEC Guidance” means (i) any publicly-available written or oral guidance of
the Commission staff, or any comments, requirements or requests of the Commission staff and
(ii) the Securities Act.



2. Shelf Registration. On or prior to each Filing Date, the Company shall prepare and
file with the Commission a Registration Statement covering the resale of all or such maximum
portion of the Registrable Securities as permitted by SEC Guidance (provided that, the Company
shall use diligent efforts to advocate with the Commission for the registration of all of the
Registrable Securities in accordance with the SEC Guidance, including without limitation, the
Manual of Publicly Available Telephone Interpretations D.29) that are not then registered on an
effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule
415. Each Registration Statement filed hereunder shall be on Form S-3 (except if the Company is
not then eligible to register for resale the Registrable Securities on Form S-3, in which case such
registration shall be on another appropriate form in accordance herewith)


 


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 and shall contain substantially the “Plan of Distribution” attached hereto as Annex A.
Subject to the terms of this Agreement, the Company shall use its reasonable best efforts to cause
a Registration Statement filed hereunder to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event prior to the applicable
Effectiveness Date, and shall use its reasonable best efforts to keep such Registration Statement
continuously effective under the Securities Act until all Registrable Securities covered by such
Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) (A) may be
sold without volume or manner-of-sale restrictions pursuant to Rule 144 and (B) (I) may be sold
without the requirement for the Company to be in compliance with the current public information
requirement under Rule 144 or (II) the Company is in compliance with the current public information
requirement under Rule 144, as determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the Transfer Agent and the affected
Holders (the “Effectiveness Period”). The Company shall request effectiveness of a
Registration Statement as of 5:00 p.m. New York City time on a Trading Day. The Company shall
file a final Prospectus with the Commission as required by Rule 424. Notwithstanding any other
provision of this Agreement, if any SEC Guidance sets forth a limitation on the number of
Registrable Securities permitted to be registered on a particular Registration Statement (and
notwithstanding that the Company used diligent efforts to advocate with the Commission for the
registration of all or a greater portion of Registrable Securities), the number of Registrable
Securities to be registered on such Registration Statement will first be reduced by Registrable
Securities represented by Warrant Shares (applied, in the case that some Warrant Shares may be
registered, to the Holders on a pro rata basis based on the total number of unregistered Warrant
Shares held by such Holders), and second by Registrable Securities represented by Conversion Shares
(applied, in the case that some Conversion Shares may be registered, to the Holders on a pro rata
basis based on the total number of unregistered Conversion Shares held by such Holders);
provided, however, that, prior to any reduction in the number of Registrable
Securities included in a Registration Statement as set forth in this sentence, all shares of Common
Stock set forth on Schedule 6(b) hereto shall be reduced first. In the event of a cutback
hereunder, the Company shall give the Holder at least five (5) Trading Days prior written notice
along with the calculations as to such Holder’s allotment.




3. Registration Procedures.




In connection with the Company’s registration obligations hereunder, the Company shall:




(a) Not less than five (5) Trading Days prior to the filing of each Registration
Statement and not less than one (1) Trading Day prior to the filing of any related
Prospectus or any amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company shall (i)
furnish to each Holder copies of all such documents proposed to be filed, which documents
(other than those incorporated or deemed to be incorporated by reference) will be subject
to the review of such Holders, and (ii) cause its officers and directors, counsel and
independent


 


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registered public accountants to respond to such inquiries as shall be necessary, in
the reasonable opinion of respective counsel to each Holder, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not file a
Registration Statement or any such Prospectus or any amendments or supplements thereto to
which the Holders of a majority of the Registrable Securities shall reasonably object in
good faith, provided that, the Company is notified of such objection in writing no later
than five (5) Trading Days after the Holders have been so furnished copies of a
Registration Statement or one (1) Trading Day after the Holders have been so furnished
copies of any related Prospectus or amendments or supplements thereto. Each Holder agrees
to furnish to the Company a completed questionnaire in the form attached to this Agreement
as Annex B (a “Selling Stockholder Questionnaire”) on a date that is not
less than two (2) Trading Days prior to the Filing Date or by the end of the fourth
(4th) Trading Day following the date on which such Holder receives draft
materials in accordance with this Section.




(b) (i) Prepare and file with the Commission such amendments, including post-effective
amendments, to a Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep a Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare and file with
the Commission such additional Registration Statements in order to register for resale
under the Securities Act all of the Registrable Securities, (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement (subject to
the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to
Rule 424, (iii) respond as promptly as reasonably possible to any comments received from
the Commission with respect to a Registration Statement or any amendment thereto, and (iv)
comply in all material respects with the applicable provisions of the Securities Act and
the Exchange Act with respect to the disposition of all Registrable Securities covered by a
Registration Statement during the applicable period in accordance (subject to the terms of
this Agreement) with the intended methods of disposition by the Holders thereof set forth
in such Registration Statement as so amended or in such Prospectus as so supplemented.




(c) If during the Effectiveness Period, the number of Registrable Securities at any
time exceeds 100% of the number of shares of Common Stock then registered in a Registration
Statement, then the Company shall file as soon as reasonably practicable, but in any case
prior to the applicable Filing Date, an additional Registration Statement covering the
resale by the Holders of not less than the number of such Registrable Securities.


 


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(d) Notify the Holders of Registrable Securities to be sold (which notice shall,
pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend
the use of the Prospectus until the requisite changes have been made) as promptly as
reasonably possible (and, in the case of (i)(A) below,
not less than one (1) Trading Day prior to such filing) and (if requested by any such
Person) confirm such notice in writing no later than one (1) Trading Day following the day
(i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a
Registration Statement is proposed to be filed, (B) when the Commission notifies the
Company whether there will be a “review” of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement, and (C) with respect to a
Registration Statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the Commission or any other federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for additional
information, (iii) of the issuance by the Commission or any other federal or state
governmental authority of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation of any
Proceedings for that purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or threatening
of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time
that makes the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in a Registration Statement or Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to a Registration Statement, Prospectus or
other documents so that, in the case of a Registration Statement or the Prospectus, as the
case may be, it will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading and (vi)
of the occurrence or existence of any pending corporate development with respect to the
Company that the Company believes may be material and that, in the determination of the
Company, makes it not in the best interest of the Company to allow continued availability
of a Registration Statement or Prospectus, provided that, any and all of such information
shall remain confidential to each Holder until such information otherwise becomes public,
unless disclosure by a Holder is required by law; provided, further, that
notwithstanding each Holder’s agreement to keep such information confidential, each such
Holder makes no acknowledgement that any such information is material, non-public
information.




(e) Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain
the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration
Statement, or (ii) any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable
moment.


 


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(f) Furnish to each Holder, without charge, at least one conformed copy of each such
Registration Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person, and all
exhibits to the extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the Commission;
provided, that any such item which is available on the EDGAR system (or successor thereto)
need not be furnished in physical form.




(g) Subject to the terms of this Agreement, the Company hereby consents to the use of
such Prospectus and each amendment or supplement thereto by each of the selling Holders in
connection with the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto, except after the giving of any notice
pursuant to Section 3(d).




(h) The Company shall cooperate with any broker-dealer through which a Holder proposes
to resell its Registrable Securities in effecting a filing with the FINRA Corporate
Financing Department pursuant to FINRA Rule 5110, as requested by any such Holder, and the
Company shall pay the filing fee required by such filing within two (2) Business Days of
request therefor.




(i) Prior to any resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the selling Holders in
connection with the registration or qualification (or exemption from the Registration or
qualification) of such Registrable Securities for the resale by the Holder under the
securities or Blue Sky laws of such jurisdictions within the United States as any Holder
reasonably requests in writing, to keep each registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of the
Registrable Securities covered by each Registration Statement; provided, that, the Company
shall not be required to qualify generally to do business in any jurisdiction where it is
not then so qualified, subject the Company to any material tax in any such jurisdiction
where it is not then so subject or file a general consent to service of process in any such
jurisdiction.




(j) If requested by a Holder, cooperate with such Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to be
delivered to a transferee pursuant to a Registration Statement, which certificates shall be
free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to
enable such Registrable Securities to be in such denominations and registered in such names
as any such Holder may request.


 


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(k) Upon the occurrence of any event contemplated by Section 3(d), as promptly as
reasonably possible under the circumstances taking into account the Company’s good faith
assessment of any adverse consequences to the Company and its stockholders of the premature
disclosure of such event, prepare a
supplement or amendment, including a post-effective amendment, to a Registration
Statement or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document so that, as
thereafter delivered, neither a Registration Statement nor such Prospectus will contain an
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. If the Company notifies the Holders in accordance
with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holders shall
suspend use of such Prospectus. The Company will use its reasonable best efforts to ensure
that the use of the Prospectus may be resumed as promptly as is practicable. The Company
shall be entitled to exercise its right under this Section 3(k) to suspend the availability
of a Registration Statement and Prospectus, for a period not to exceed 60 calendar days
(which need not be consecutive days) in any 12-month period.




(l) Comply with all applicable rules and regulations of the Commission.




(m) The Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such Holder and,
if required by the Commission, the natural persons thereof that have voting and dispositive
control over the shares.



4. Registration Expenses. All fees and expenses incident to the performance of or
compliance with, this Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses of the Company’s counsel and
independent registered public accountants) (A) with respect to filings made with the Commission,
(B) with respect to filings required to be made with any Trading Market on which the Common Stock
is then listed for trading, (C) in compliance with applicable state securities or Blue Sky laws
reasonably agreed to by the Company in writing (including, without limitation, fees and
disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions
of the Registrable Securities) and (D) if not previously paid by the Company in connection with a
filing by the Company, with respect to any filing that may be required to be made by any broker
through which a Holder intends to make sales of Registrable Securities with FINRA pursuant to FINRA
Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in
connection with such sale, (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the transactions
contemplated by this


 


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Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred
in connection with the consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities exchange as required
hereunder. In no event shall the Company be responsible for any broker or similar commissions of
any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or
other costs of the Holders.




5. Indemnification.




(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the officers,
directors, members, partners, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to perform under
a margin call of Common Stock), investment advisors and employees (and any other Persons
with a functionally equivalent role of a Person holding such titles, notwithstanding a lack
of such title or any other title) of each of them, each Person who controls any such Holder
(within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, members, stockholders, partners, agents and employees (and any
other Persons with a functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of each such controlling Person,
to the fullest extent permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’
fees) and expenses (collectively, “Losses”), as incurred, arising out of or
relating to (1) any untrue or alleged untrue statement of a material fact contained in a
Registration Statement, any Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading or (2) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act or any state
securities law, or any rule or regulation thereunder, in connection with the performance of
its obligations under this Agreement, except to the extent, but only to the extent, that
(i) such untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use therein, or to
the extent that such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved in writing
by such Holder expressly for use in a Registration Statement, such Prospectus or in any
amendment or supplement thereto (it being understood that the Holder has approved Annex A
hereto for this purpose) or (ii) in the case of an occurrence of an event of the type
specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated, defective or
otherwise unavailable Prospectus after
the Company has notified such Holder in writing that the Prospectus is outdated,
defective or otherwise unavailable for use by such Holder and prior to the receipt by such
Holder of the Advice contemplated in Section 6(d). The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding arising from or in
connection with the transactions contemplated by this Agreement of which the Company is
aware.


 


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(b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and employees,
each Person who controls the Company (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees
of such controlling Persons, to the fullest extent permitted by applicable law, from and
against all Losses, as incurred, to the extent arising out of or related solely to: (x)
such Holder’s failure to comply with the prospectus delivery requirements of the Securities
Act or (y) any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to make the statements
therein not misleading (i) to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing by such
Holder to the Company specifically for inclusion in such Registration Statement or such
Prospectus or (ii) to the extent that such information relates to such Holder’s proposed
method of distribution of Registrable Securities and was reviewed and expressly approved in
writing by such Holder expressly for use in a Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose), such Prospectus or in any
amendment or supplement thereto or (ii) in the case of an occurrence of an event of the
type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated, defective
or otherwise unavailable Prospectus after the Company has notified such Holder in writing
that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder
and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). In no
event shall the liability of any selling Holder under this Section 5(b) be greater in
amount than the dollar amount of the net proceeds received by such Holder upon the sale of
the Registrable Securities giving rise to such indemnification obligation.




(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is
sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have
the right to assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that, the failure of any Indemnified Party to
give such notice shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined by a
court of competent jurisdiction (which determination is not subject to appeal or further
review) that such failure shall have prejudiced the Indemnifying Party.


 


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An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the
Indemnifying Party has agreed in writing to pay such fees and expenses, (2) the
Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and
to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding,
or (3) the named parties to any such Proceeding (including any impleaded parties) include
both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified
Party shall reasonably believe that a material conflict of interest is likely to exist if
the same counsel were to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and the
reasonable fees and expenses of no more than one separate counsel shall be at the expense
of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement
of any such Proceeding effected without its written consent, which consent shall not be
unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending Proceeding in
respect of which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.




Subject to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within
ten Trading Days of written notice thereof to the Indemnifying Party; provided, that, the
Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such
fees and expenses applicable to such actions for which such Indemnified Party is judicially
determined not to be entitled to indemnification hereunder.




(d) Contribution. If the indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless
for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable
by such Indemnified Party, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the actions,
statements or omissions that resulted in such Losses as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and Indemnified
Party shall be determined


 


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by reference to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by, such Indemnifying
Party or Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed to include,
subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other
fees or expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the indemnification
provided for in this Section was available to such party in accordance with its terms.




The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d),
no Holder shall be required to contribute pursuant to this Section 5(d), in the aggregate,
any amount in excess of the amount by which the net proceeds actually received by such
Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the
amount of any damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.




The indemnity and contribution agreements contained in this Section are in addition to
any liability that the Indemnifying Parties may have to the Indemnified Parties.




6. Miscellaneous.



(a) Remedies. In the event of a breach by the Company or by a Holder of any of their
respective obligations under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, shall be entitled to specific performance of its rights under this
Agreement. Each of the Company and each Holder agrees that monetary damages would not provide
adequate compensation for any losses incurred by reason of a breach by it of any of the provisions
of this Agreement and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall not assert or shall waive the defense that a remedy
at law would be adequate.


(b) No Piggyback on Registrations; Prohibition on Filing Other Registration
Statements. Except as set forth on Schedule 6(b) attached hereto and in connection with
transactions contemplated by clauses (d) and (f) under Exempt Issuance, neither the Company nor any
of its security holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Company in any Registration Statements other than the Registrable Securities.
The Company shall not file any other registration statements (other than on Form S-8 or equivalent
for up to $200,000 of shares of Common Stock
(calculated based on the average closing bid price per share of Common Stock for the five (5)
Trading Days immediately prior to each applicable Form S-8 filing) per each 12 month period
following the date hereof) until all Registrable Securities are registered pursuant to a
Registration Statement that is declared effective by the Commission, provided that this Section
6(b) shall not prohibit the Company from filing amendments to registration statements filed prior
to the date of this Agreement.


 


12









 





(c) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to a Registration Statement.



(d) Discontinued Disposition. By its acquisition of Registrable Securities, each
Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is advised in
writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may
have been supplemented or amended) may be resumed. The Company will use its reasonable best
efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.



(e) Piggy-Back Registrations. If, at any time during the Effectiveness Period, there
is not an effective Registration Statement covering all of the Registrable Securities and the
Company shall determine to prepare and file with the Commission a registration statement relating
to an offering for its own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in connection with the
Company’s stock option or other employee benefit plans, then the Company shall deliver to each
Holder a written notice of such determination and, if within fifteen days after the date of the
delivery of such notice, any such Holder shall so request in writing, the Company shall include in
such registration statement all or any part of such Registrable Securities such Holder requests to
be registered; provided, however, that the Company shall not be required to
register any Registrable Securities pursuant to this Section 6(e) that are eligible for resale
pursuant to Rule 144 promulgated by the Commission pursuant to the Securities Act or that are the
subject of a then effective Registration Statement.



(f) Amendments and Waivers. The provisions of this Agreement, including the provisions
of this sentence, may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and the Holders of 67% or more of the then outstanding Registrable Securities
(including, for this purpose any Registrable Securities issuable upon exercise or conversion of any
Security). If a Registration Statement does not register all of the Registrable Securities
pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of
Registrable Securities to be registered for each Holder shall be reduced pro rata


 


13









 






 among all Holders and each Holder shall have the right to designate which of its Registrable Securities
shall be omitted from such Registration Statement. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that relates exclusively to
the rights of a Holder or some Holders and that does not directly or indirectly affect the rights
of other Holders may be given by such Holder or Holders of all of the Registrable Securities to
which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance with the
provisions of the first sentence of this Section 6(f).



(g) Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement.



(h) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and shall inure to the
benefit of each Holder. The Company may not assign (except by merger) its rights or obligations
hereunder without the prior written consent of all of the Holders of the then outstanding
Registrable Securities. Each Holder may assign their respective rights hereunder in the manner and
to the Persons as permitted under Section 5.7 of the Purchase Agreement.



(i) No Inconsistent Agreements. 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 Holders in this Agreement or otherwise conflicts
with the provisions hereof. Except as set forth on Schedule 6(i), neither the Company nor
any of its Subsidiaries has previously entered into any agreement granting any registration rights
with respect to any of its securities to any Person that have not been satisfied in full.



(j) Execution and Counterparts. This Agreement may be executed in two or more
counterparts, all of which when taken together 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, it being understood that both parties need not sign the same counterpart. In the event that
any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data
file, such signature shall create a valid and binding obligation of the party executing (or on
whose behalf such signature is executed) with the same force and effect as if such facsimile or
“.pdf” signature page were an original thereof.



(k) Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be determined in accordance with the provisions of the
Purchase Agreement.


 


14









 





(l) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive
of any other remedies provided by law.



(m) Severability. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties
that they would have executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or unenforceable.



(n) Headings. The headings in this Agreement are for convenience only, do not
constitute a part of the Agreement and shall not be deemed to limit or affect any of the provisions
hereof.



(o) Independent Nature of Holders’ Obligations and Rights. The obligations of each
Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and
no Holder shall be responsible in any way for the performance of the obligations of any other
Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Holders are in any way acting in concert with respect to
such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled
to protect and enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an additional party
in any proceeding for such purpose.



********************




(Signature Pages Follow)



 


15









 







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



	 	 	 	 	 
	 	UFOOD RESTAURANT GROUP, INC.

 	 
	 	By:  	/s/ George Naddaff
 	 
	 	 	Name:  	George Naddaff 	 
	 	 	Title:  	Chief Executive Officer 	 
	 



[SIGNATURE PAGE OF PURCHASERS FOLLOWS]



 


16









 







[SIGNATURE PAGE OF PURCHASERS TO UFFC RRA]




	 	 	 
	Name of Purchaser:
	 	 
	 

	 	 






	 	 	 
	Signature of Authorized Signatory of Purchaser:
	 	 
	 

	 	 






	 	 	 
	Name of Authorized Signatory:
	 	 
	 

	 	 






	 	 	 
	Title of Authorized Signatory:
	 	 
	 

	 	 






[SIGNATURE PAGES CONTINUE]



 


17









 







Annex A




Plan of Distribution




Each Selling Stockholder (the “Selling Stockholders”) of the common stock and any of
their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of
their shares of common stock covered hereby on the OTC Bulletin Board or any other stock exchange,
market or trading facility on which the shares are traded or in private transactions. These sales
may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the
following methods when selling shares:




	 	•	 	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;

	 
	 	•	 	settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;

	 
	 	•	 	in transactions through broker-dealers that agree with the Selling Stockholders
to sell a specified number of such shares at a stipulated price per share;

	 
	 	•	 	through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;

	 
	 	•	 	a combination of any such methods of sale; or

	 
	 	•	 	any other method permitted pursuant to applicable law.






The Selling Stockholders may also sell shares under Rule 144 under the Securities Act of 1933,
as amended (the “Securities Act”), if available, rather than under this prospectus.


 


18









 





Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the Selling
Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, but, except as set forth
in a supplement to this Prospectus, in the case of an agency transaction not in excess of a
customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal
transaction a markup or markdown in compliance with FINRA IM-2440.



In connection with the sale of the common stock or interests therein, the Selling Stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the common stock in the course of hedging the positions they
assume. The Selling Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common stock to broker-dealers
that in turn may sell these securities. The Selling Stockholders may also enter into option or
other transactions with broker-dealers or other financial institutions or create one or more
derivative securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction).



The Selling Stockholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it
does not have any written or oral agreement or understanding, directly or indirectly, with any
person to distribute the Common Stock. In no event shall any broker-dealer receive fees,
commissions and markups which, in the aggregate, would exceed eight percent (8%).



The Company is required to pay certain fees and expenses incurred by the Company incident to
the registration of the shares. The Company has agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities under the Securities
Act.



Because Selling Stockholders may be deemed to be “underwriters” within the meaning of the
Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act
including Rule 172 thereunder. The Selling Stockholders have advised us that there is no
underwriter or coordinating broker acting in connection with the proposed sale of the resale shares
by the Selling Stockholders.


 


19









 





We agreed to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the Selling Stockholders without registration and without regard to any
volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company
to be in compliance with the current public information under Rule 144 under the Securities Act or
any other rule of similar effect or (ii) all of the shares have been sold pursuant to this
prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale
shares will be sold only through registered or licensed brokers or dealers if required under
applicable state
securities laws. In addition, in certain states, the resale shares of Common Stock covered
hereby may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is
complied with.



Under applicable rules and regulations under the Exchange Act, any person engaged in the
distribution of the resale shares may not simultaneously engage in market making activities with
respect to the common stock for the applicable restricted period, as defined in Regulation M, prior
to the commencement of the distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations thereunder, including
Regulation M, which may limit the timing of purchases and sales of shares of the common stock by
the Selling Stockholders or any other person. We will make copies of this prospectus available to
the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to
each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the
Securities Act).


 


20









 





Annex B




UFOOD RESTAURANT GROUP, INC.


Selling Stockholder Notice and Questionnaire




The undersigned beneficial owner of common stock (the “Registrable Securities”) of
UFood Restaurant Group, Inc., a Nevada corporation (the “Company”), understands that the
Company has filed or intends to file with the Securities and Exchange Commission (the
“Commission”) a registration statement (the “Registration Statement”) for the
registration and resale under Rule 415 of the Securities Act of 1933, as amended (the
“Securities Act”), of the Registrable Securities, in accordance with the terms of the
Registration Rights Agreement (the “Registration Rights Agreement”) to which this document
is annexed. A copy of the Registration Rights Agreement is available from the Company upon request
at the address set forth below. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Registration Rights Agreement.



Certain legal consequences arise from being named as a selling stockholder in the Registration
Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable
Securities are advised to consult their own securities law counsel regarding the consequences of
being named or not being named as a selling stockholder in the Registration Statement and the
related prospectus.



NOTICE




The undersigned beneficial owner (the “Selling Stockholder”) of Registrable Securities
hereby elects to include the Registrable Securities owned by it in the Registration Statement.


 


21









 





The undersigned hereby provides the following information to the Company and represents and
warrants that such information is accurate:



QUESTIONNAIRE





	1.	 	Name.







	 	(a)	 	Full Legal Name of Selling Stockholder

	 
	 	 	 	 


	 
	 	(b)	 	Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities are held:

	 
	 	 	 	 


	 
	 	(c)	 	Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by this Questionnaire):

	 
	 	 	 	 








	2.	 	Address for Notices to Selling Stockholder:

	 
	 


	 
	 


	 
	 







	 	 	 
	Telephone:
	 	 
	 

	 	 






	 	 	 
	Fax:
	 	 
	 

	 	 






	 	 	 
	Contact Person:
	 	 
	 

	 	 







	3.	 	Broker-Dealer Status:







	 	(a)	 	Are you a broker-dealer?






Yes o      No o





	 	(b)	 	If “yes” to Section 3(a), did you receive your Registrable Securities as
compensation for investment banking services to the Company?






Yes o      No o





	Note:	 	If “no” to Section 3(b), the Commission’s
staff has indicated that you should be
identified as an underwriter in the
Registration Statement.




 


22









 





	 	(c)	 	Are you an affiliate of a broker-dealer?






Yes o      No o





	 	(d)	 	If you are an affiliate of a broker-dealer, do you certify that you purchased
the Registrable Securities in the ordinary course of business, and at the time of the
purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the Registrable
Securities?






Yes o      No o





	Note:	 	If “no” to Section 3(d), the Commission’s staff has indicated that
you should be identified as an underwriter in the Registration
Statement.







	4.	 	Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.







Except as set forth below in this Item 4, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the securities issuable
pursuant to the Purchase Agreement.




	 	(a)	 	Type and Amount of other securities beneficially owned by the Selling
Stockholder:

	 
	 	 	 	 


	 
	 	 	 	 






 


23









 






	5.	 	Relationships with the Company:







Except as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship
with the Company (or its predecessors or affiliates) during the past three years.




State any exceptions here:




 





 




The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof at any time while the
Registration Statement remains effective.



By signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items 1 through 5 and the inclusion of such information in the
Registration Statement and the related prospectus and any amendments or supplements thereto. The
undersigned understands that such information will be relied upon by the Company in connection with
the preparation or amendment of the Registration Statement and the related prospectus and any
amendments or supplements thereto.



IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly authorized agent.



	 	 	 	 	 	 	 	 	 
	Date:	 	 	 	Beneficial Owner:	 	 
	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:






PLEASE FAX A COPY (OR EMAIL A .PDF COPY) OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE,
AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:



 


24









 







DISCLOSURE SCHEDULES




Reference is hereby made to that certain Registration Rights Agreement (the “Registration
Rights Agreement”) dated as of October 29, 2010 between UFood Restaurant Group, Inc., a Nevada
corporation (the “Company”), and each of the purchasers identified on the signature pages
thereto (each, a “Purchaser” and collectively, the “Purchasers”). All capitalized
terms used herein without definition shall have the meanings ascribed to such terms in the
Registration Rights Agreement.



These Disclosure Schedules are not intended to constitute, and shall not be construed as
constituting, representations or warranties of the parties, except as and to the extent provided in
the Registration Rights Agreement. These Disclosure Schedules may include items or information
which the parties are not required to disclose under the Registration Rights Agreement, and
disclosure of such items or information shall not affect (directly or indirectly) the
interpretation of the Registration Rights Agreement or the scope of the disclosure obligations
thereunder. Such additional items are set forth for informational purposes only, and these
Disclosure Schedules do not necessarily include other items of a similar nature. The disclosures in
any schedule herein shall qualify and apply to other schedules herein so long as it is readily
apparent on its face (without the need for further inquiry) notwithstanding the omission of a
cross-reference thereto. No presumption shall be made as to materiality or whether a particular
category of matters are required to be disclosed herein by virtue of the fact that any similar
matters are disclosed.



 


 









 







SCHEDULE 6(i)




The Company retained a consultant to provide investor relations consulting services to the Company
in exchange for 10,000 shares of Series B 8% Convertible Preferred Stock (the “Series B
Preferred Stock”). The shares of Common Stock underlying the Series B Preferred Stock issued
to the consultant will be included in the registration statement filed in connection with the
transactions contemplated by the Purchase Agreement.



The Company’s 8% Senior Secured Debentures (the “Debentures”) are convertible into shares
of the Company’s common stock, and those shares have previously been registered by the Company
under the Securities Act. The Company’s Series A 8% Convertible Preferred Stock is (the “Series
A Preferred Stock”) also convertible into shares of the Company’s common stock on the same
basis as the conversion of the Debentures into shares of common stock. The Company has agreed to
register the shares of common stock underlying the Series A Preferred Shares for those former
Debenture holders who exchanged their Debentures for Series A Preferred Shares. The registration of
these shares of common stock will not increase the total number of shares of common stock that have
been registered by the Company under the Securities Act.



On October 4, 2010, the Company sold 27,950 shares of its Series B Preferred Stock and, in
connection therewith, agreed to register the shares of common stock issuable upon conversion of the
Series B Preferred Stock.