Document:

Exhibit 10.2

Exhibit 10.2

 

 

 

                                          
Exhibit A                 

 

 

 

REGISTRATION
RIGHTS AGREEMENT

 

This Registration Rights Agreement
(this “Agreement”) is made and entered into as of January 27, 2014, by
and among Southern First Bancshares, Inc., a South Carolina corporation (the “Company”),
and the purchasers signatory hereto (each a “Purchaser” and
collectively, the “Purchasers”). 

 

This Agreement is made pursuant to
the Securities Purchase Agreement, dated as of January 27, 2014, between the
Company and each Purchaser (the “Purchase Agreement”). 

 

NOW, THEREFORE,
IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Company and each of the Purchasers agree as follows: 

 

1.                 
Definitions. Capitalized terms used and not otherwise defined
herein that are defined in the Purchase Agreement shall have the meanings given
such terms in the Purchase Agreement. As used in this Agreement, the following
terms shall have the following meanings: 

 

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

 

“Affiliate”
means, with respect to any person, any other person which directly or
indirectly controls, is controlled by, or is under common control with, such
person. 

 

“Agreement”
shall have the meaning set forth in the Preamble. 

 

“Business Day”
means a day, other than a Saturday or Sunday, on which banks in South Carolina
are open for the general transaction of business. 

 

“Closing”
has the meaning set forth in the Purchase Agreement. 

 

“Closing Date”
has the meaning set forth in the Purchase Agreement. 

 

“Commission”
means the Securities and Exchange Commission. 

 

“Common Stock”
means the common stock of the Company, par value $0.01 per share, and any
securities into which such shares of common stock may hereinafter be
reclassified. 

 

“Company”
shall have the meaning set forth in the Preamble. 

 

“Effective
Date” means the date that the Registration Statement filed pursuant to
Section 2(a) is first declared effective by the Commission. 

 

A-1

 

 

 

 

                                          
Exhibit A                 

 

 

“Effectiveness
Deadline” means, with respect to the Initial Registration Statement or the
New Registration Statement, the earlier of (i) the 120th calendar day
following the Closing Date in the event that such registration statement is
subject to review by the Commission and (ii) if the Company is notified
(orally or in writing, whichever is earlier) by the Commission that such
Registration Statement will not be “reviewed” or will not be subject to further
review (and the Commission does not rescind such notice), then the 5th
Trading Day after such notification date.   Notwithstanding the foregoing, (i)
if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the
Commission is closed for business, the Effectiveness Deadline shall be extended
to the next Business Day on which the Commission is open for business, and (ii)
if the Effectiveness Deadline falls after December 31, 2013, then the
Effectiveness Deadline shall not be prior to five days following the date that
the Company's complete Annual Report on Form 10-K for the fiscal year ending
December 31, 2013, including Part III information, is on file with the
Commission.

 

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

 

“Event”
shall have the meaning set forth in Section 2(c). 

 

“Event Date”
shall have the meaning set forth in Section 2(c). 

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder. 

 

“Filing
Deadline” means, with respect to the Initial Registration Statement
required to be filed pursuant to Section 2(a), the 21st calendar day following
the Closing Date, provided, that if the Filing Deadline falls on a
Saturday, Sunday or other day that the Commission is closed for business, the
Filing Deadline shall be extended to the next business day on which the
Commission is open for business. 

 

“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 Section 2(a) of this Agreement. 

 

“Liquidated
Damages” shall have the meaning set forth in Section 2(c). 

 

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

 

“New
Registration Statement” shall have the meaning set forth in
Section 2(a). 

 

“Person”
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind. 

 

A-2

 

 

 

 

                                          
Exhibit A                 

 

 

“Principal
Market” means the Trading Market on which the Common Stock is primarily
listed on and quoted for trading, which, as of the Closing Date, shall be the
NASDAQ Global Market. 

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened. 

 

“Prospectus”
means the prospectus included in 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 under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by 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. 

 

“Purchase
Agreement” shall have the meaning set forth in the Recitals. 

 

“Purchaser”
or “Purchasers” shall have the meaning set forth in the Preamble. 

 

“Registrable
Securities” means all of the Common Shares and any securities issued or
issuable upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the Common Shares, provided, that the
Holder has completed and delivered to the Company a Selling Shareholder
Questionnaire; and provided, further, that Common Shares shall cease to
be Registrable Securities upon the earliest to occur of the following:
(A) a sale pursuant to a Registration Statement or Rule 144 under the
Securities Act (in which case, only such security sold shall cease to be a
Registrable Security); (B) becoming eligible for sale without the
requirement for the Company to be in compliance with the current public
information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable)
and without volume or manner of sale restrictions by Holders who are not
Affiliates of the Company; (C) if such Common Shares have ceased to be
outstanding; or (D) if such Common Shares have been sold in a private
transaction in which the Holder’s rights under this Agreement have not been
assigned to the transferee. 

 

“Registration
Statements” means any one or more registration statements of the Company
filed under the Securities Act that covers the resale of any of the Registrable
Securities pursuant to the provisions of this Agreement (including without
limitation the Initial Registration Statement, the New Registration Statement
and any Remainder Registration Statements), amendments and supplements to such
Registration Statements, including post-effective amendments, all exhibits and
all material incorporated by reference or deemed to be incorporated by
reference in such Registration Statements. 

 

“Remainder
Registration Statement” shall have the meaning set forth in
Section 2(a). 

 

A-3

 

 

 

 

                                          
Exhibit A                 

 

 

“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule. 

 

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

 

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

 

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

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder. 

 

“Selling
Shareholder Questionnaire” means a questionnaire in the form attached as Annex
B hereto, or such other form of questionnaire as may reasonably be adopted
by the Company from time to time. 

 

“Trading Day”
means (i) a day on which the Common Stock is listed or quoted and traded
on its Principal Market (other than the OTC Bulletin Board), or (ii) if
the Common Stock is not listed on a Trading Market (other than the OTC Bulletin
Board), a day on which the Common Stock is traded in the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common
Stock is not quoted on any Trading Market, a day on which the Common Stock is
quoted in the over-the-counter market as reported in the “pink sheets” by Pink
Sheets LLC (or any similar organization or agency succeeding to its functions
of reporting prices); provided, that in the event that the Common Stock
is not listed or quoted as set forth in (i), (ii) and (iii) hereof,
then Trading Day shall mean a Business Day. 

 

“Trading
Market” means whichever of the New York Stock Exchange, the NYSE Amex, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital
Market or OTC Bulletin Board on which the Common Stock is listed or quoted for
trading on the date in question. 

 

2.                 
Registration. 

 

A-4

 

 

 

 

                                          
Exhibit A                 

 

 

(a)               
On or prior to the Filing Deadline, the Company shall prepare and file
with the Commission a Registration Statement covering the resale of all of the
Registrable Securities not already covered by an existing and effective
Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of
the Registrable Securities, by such other means of distribution of Registrable
Securities as the Company may reasonably determine (the “Initial
Registration Statement”). The Initial Registration Statement shall be on
Form S-3 (except if the Company is then ineligible to register for resale of
the Registrable Securities on Form S-3, in which case such registration shall
be on such other form available to the Company to register for resale of the
Registrable Securities as a secondary offering) subject to the provisions of
Section 2(f) and shall contain (except if otherwise required pursuant to
written comments received from the Commission upon a review of such
Registration Statement) the “Plan of Distribution” section substantially in the
form attached hereto as Annex A. Notwithstanding the registration
obligations set forth in this Section 2, in the event the Commission
informs the Company that all of the Registrable Securities cannot, as a result
of the application of Rule 415, be registered for resale as a secondary
offering on a single registration statement, the Company agrees to promptly
(i) inform each of the Holders thereof and use its commercially reasonable
efforts to file amendments to the Initial Registration Statement as required by
the Commission and/or (ii) withdraw the Initial Registration Statement and
file a new registration statement (a “New Registration Statement”), in
either case covering the maximum number of Registrable Securities permitted to
be registered by the Commission, on Form S-3 or such other form available to
the Company to register for resale the Registrable Securities as a secondary
offering; provided, that prior to filing such amendment or New
Registration Statement, the Company shall be obligated to use its commercially
reasonable efforts to advocate with the Commission for the registration of all
of the Registrable Securities in accordance with the SEC Guidance, including
without limitation, Compliance and Disclosure Interpretation 612.09.
Notwithstanding any other provision of this Agreement and subject to the
payment of Liquidated Damages in Section 2(c), if any SEC Guidance sets
forth a limitation of the number of Registrable Securities or other shares of
Common Stock permitted to be registered on a particular Registration Statement
as a secondary offering (and notwithstanding that the Company used diligent
efforts to advocate with the Commission for the registration of all or a
greater number of Registrable Securities), the number of Registrable Securities
or other shares of Common Stock to be registered on such Registration Statement
will be reduced on a pro rata basis. In the event the Company amends the
Initial Registration Statement or files a New Registration Statement, as the
case may be, under clauses (i) or (ii) above, the Company will use
its commercially reasonable efforts to file with the Commission, as promptly as
allowed by Commission or SEC Guidance provided to the Company or to registrants
of securities in general, one or more registration statements on Form S-3 or
such other form available to the Company to register for resale those
Registrable Securities that were not registered for resale on the Initial
Registration Statement, as amended, or the New Registration Statement (the “Remainder
Registration Statements”). No Holder shall be named as an “underwriter” in
any Registration Statement without such Holder’s prior written consent. 

 

A-5

 

 

 

 

                                          
Exhibit A                 

 

 

(b)              
The Company shall use its commercially reasonable efforts to cause each
Registration Statement to be declared effective by the Commission as soon as
practicable and, with respect to the Initial Registration Statement or the New
Registration Statement, as applicable, no later than the Effectiveness
Deadline, and shall use its commercially reasonable efforts to keep each
Registration Statement continuously effective under the Securities Act until
the earlier of (i) such time as all of the Registrable Securities covered
by such Registration Statement have been publicly sold by the Holders or
(ii) the date that all Registrable Securities covered by such Registration
Statement may be sold by non-affiliates of the Company without volume or manner
of sale restrictions under Rule 144, without the requirement for the Company to
be in compliance with the current public information requirements under Rule
144(c)(1) (or Rule 144(i)(2), if applicable), as determined by counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
reasonably acceptable to the Company’s 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 promptly notify the Holders via facsimile or electronic mail
of a “.pdf” format data file of the effectiveness of a Registration Statement
within one (1) Business Day of the Effective Date. The Company shall, by
9:30 a.m. New York City time on the first Trading Day after the Effective Date,
file a final Prospectus with the Commission, as required by Rule 424(b). 

 

A-6

 

 

 

 

                                          
Exhibit A                 

 

 

(c)               
If: (i) the Initial Registration Statement is not filed with the
Commission on or prior to the Filing Deadline, (ii) the Initial
Registration Statement or the New Registration Statement, as applicable, is not
declared effective by the Commission (or otherwise does not become effective)
for any reason on or prior to the Effectiveness Deadline, other than as a result
of any open issues arising out of any routine Commission review of Exchange Act
filings in effect as of the date hereof, or (iii) after its Effective
Date, (A) such Registration Statement ceases for any reason (including
without limitation by reason of a stop order, or the Company’s failure to
update the Registration Statement), to remain continuously effective as to all
Registrable Securities for which it is required to be effective or (B) the
Holders are not permitted to utilize the Prospectus therein to resell such
Registrable Securities, in the case of (A) and (B) other than during
an Allowable Grace Period (as defined in Section 2(e) of this Agreement),
(iv) a Grace Period (as defined in Section 2(e) of this Agreement)
exceeds the length of an Allowable Grace Period, or (v) after the date six
months following the Closing Date, and only in the event a Registration
Statement is not effective or available to sell all Registrable Securities, the
Company fails to file with the SEC any required reports under Section 13
or 15(d) of the 1934 Act such that it is not in compliance with Rule 144(c)(1)
(or Rule 144(i)(2), if applicable), as a result of which the Holders who are
not affiliates are unable to sell Registrable Securities without restriction
under Rule 144 (or any successor thereto) (any such failure or breach in
clauses (i) through (v) above being referred to as an “Event,”
and, for purposes of clauses (i), (ii), (iii) or (v), the date on which
such Event occurs, or for purposes of clause (iv) the date on which such
Allowable Grace Period is exceeded, being referred to as an “Event Date”),
then in addition to any other rights the Holders may have hereunder or under
applicable law, on each such Event Date and on each monthly anniversary of each
such Event Date (if the applicable Event shall not have been cured by such
date) until the applicable Event is cured, the Company shall pay to each Holder
an amount in cash, as liquidated damages and not as a penalty (“Liquidated
Damages”), equal to 0.5% of the aggregate purchase price paid by such
Holder pursuant to the Purchase Agreement for any Registrable Securities held
by such Holder on the Event Date. The parties agree that notwithstanding
anything to the contrary herein or in the Purchase Agreement, no Liquidated Damages
shall be payable (i) if as of the relevant Event Date (or the relevant
monthly anniversary thereof, if applicable), the Registrable Securities may be
sold by non-affiliates without volume or manner of sale restrictions under Rule
144 and the Company is in compliance with the current public information
requirements under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), as
determined by counsel to the Company pursuant to a written opinion letter to
such effect, addressed and reasonably acceptable to the Company’s transfer
agent or (ii) with respect to any period after the expiration of the
Effectiveness Period (it being understood that this sentence shall not relieve
the Company of any Liquidated Damages accruing prior to the expiration of the
Effectiveness Period). If the Company fails to pay any Liquidated Damages
pursuant to this Section 2(c) in full within five (5) Business Days
after the date payable, the Company will pay interest thereon at a rate of
1.0% per month (or such lesser maximum amount that is permitted to be paid
by applicable law) to the Holder, accruing daily from the date such Liquidated
Damages are due until such amounts, plus all such interest thereon, are paid in
full. The Liquidated Damages pursuant to the terms hereof shall apply on a
daily pro-rata basis for any portion of a month prior to the cure of an Event,
except in the case of the first Event Date. The Effectiveness Deadline for a
Registration Statement shall be extended without default or Liquidated Damages
hereunder in the event that the Company’s failure to obtain the effectiveness
of the Registration Statement on a timely basis results directly from the
failure of a Purchaser to timely provide the Company with information requested
by the Company and necessary to complete the Registration Statement in
accordance with the requirements of the Securities Act (in which case the
Effectiveness Deadline would be extended with respect to Registrable Securities
held by such Purchaser). 

 

(d)              
Each Holder agrees to furnish to the Company a completed Selling
Shareholder Questionnaire not more than ten (10) Trading Days following
the date of this Agreement. At least five (5) Trading Days prior to the
first anticipated filing date of a Registration Statement for any registration
under this Agreement, the Company will notify each Holder of the information
the Company requires from that Holder other than the information contained in
the Selling Shareholder Questionnaire, if any, which shall be completed and
delivered to the Company promptly upon request and, in any event, within two
(2) Trading Days prior to the applicable anticipated filing date. Each
Holder further agrees that it shall not be entitled to be named as a selling
securityholder in the Registration Statement or use the Prospectus for offers
and resales of Registrable Securities at any time, unless such Holder has
returned to the Company a completed and signed Selling Shareholder
Questionnaire and a response to any requests for further information as
described in the previous sentence. If a Holder of Registrable Securities
returns a Selling Shareholder Questionnaire or a request for further
information, in either case, after its respective deadline, the Company shall
use its commercially reasonable efforts at the expense of the Holder who failed
to return the Selling Shareholder Questionnaire or to respond for further
information to take such actions as are required to name such Holder as a
selling security holder in the Registration Statement or any pre-effective or
post-effective amendment thereto and to include (to the extent not theretofore
included) in the Registration Statement the Registrable Securities identified
in such late Selling Shareholder Questionnaire or request for further
information. Each Holder acknowledges and agrees that the information in the
Selling Shareholder Questionnaire or request for further information as
described in this Section 2(d) will be used by the Company in the
preparation of the Registration Statement and hereby consents to the inclusion
of such information in the Registration Statement. 

 

A-7

 

 

 

 

                                          
Exhibit A                 

 

 

(e)               
Notwithstanding anything to the contrary herein, at any time after the
Registration Statement has been declared effective by the Commission, the
Company may delay the disclosure of material non-public information concerning
the Company if the disclosure of such information at the time is not, in the
good faith judgment of the Company, in the best interests of the Company (a “Grace
Period”); provided, the Company shall promptly (i) notify the
Holders in writing of the existence of material non-public information giving
rise to a Grace Period (provided that the Company shall not disclose the
content of such material non-public information to the Holders) or the need to
file a post-effective amendment, as applicable, and the date on which such
Grace Period will begin, (ii) use commercially reasonable best efforts to
terminate a Grace Period as promptly as practicable and (iii) notify the
Holders in writing of the date on which the Grace Period ends; provided,
further, that no single Grace Period shall exceed thirty
(30) consecutive days, and during any three hundred sixty-five
(365) day period, the aggregate of all Grace Periods shall not exceed an
aggregate of sixty (60) days (each Grace Period complying with this provision
being an “Allowable Grace Period”). For purposes of determining the
length of a Grace Period, the Grace Period shall be deemed to begin on and
include the date the Holders receive the notice referred to in clause
(i) above and shall end on and include the later of the date the Holders
receive the notice referred to in clause (iii) above and the date referred
to in such notice; provided, that no Grace Period shall be longer than
an Allowable Grace Period. Notwithstanding anything to the contrary, the
Company shall cause the Transfer Agent to deliver unlegended Common Stock to a
transferee of a Holder in accordance with the terms of the Purchase Agreement
in connection with any sale of Registrable Securities with respect to which a
Holder has entered into a contract for sale prior to the Holder’s receipt of
the notice of a Grace Period and for which the Holder has not yet settled. 

 

(f)               
In the event that Form S-3 is not available for the registration of
the resale of Registrable Securities hereunder, the Company shall (i) use
commercially reasonable best efforts to register the resale of the Registrable
Securities on another appropriate form and (ii) use commercially reasonable
best efforts to undertake to register the Registrable Securities on Form
S-3 promptly after such form is available, provided that the Company
shall maintain the effectiveness of the Registration Statement then in effect
until such time as a Registration Statement on Form S-3 covering the
Registrable Securities has been declared effective by the Commission. 

 

3.                 
Registration Procedures 

 

In
connection with the Company’s registration obligations hereunder: 

 

(a)               
not less than three (3) Trading Days prior to the filing of a
Registration Statement and not less than two (2) Trading Days prior to the
filing of any related Prospectus or any amendment or supplement thereto (except
for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K and any similar or successor reports), the Company shall
furnish to the Holder copies of such Registration Statement, Prospectus or
amendment or supplement thereto, as proposed to be filed, which documents will
be subject to the reasonable review of such Holder (it being acknowledged and
agreed that if a Holder does not object to or comment on the aforementioned
documents within such three (3) Trading Day or two (2) Trading Day
period, as the case may be, then the Holder shall be deemed to have consented
to and approved the use of such documents). The Company shall not file any
Registration Statement or amendment or supplement thereto in a form to which a
Holder reasonably objects in good faith, provided that, the Company is notified
of such objection in writing within the three (3) Trading Day or two
(2) Trading Day period described above, as applicable. 

 

A-8

 

 

 

 

                                          
Exhibit A                 

 

 

(b)              
(i) the Company shall prepare and file with the Commission such
amendments (including post-effective amendments) and supplements, to each
Registration Statement and the Prospectus used in connection therewith as may
be necessary to keep such Registration Statement continuously effective as to
the applicable Registrable Securities for its Effectiveness Period (except
during an Allowable Grace Period); (ii) the Company shall 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 (except during an Allowable Grace
Period); (iii) the Company shall respond as promptly as reasonably
practicable to any comments received from the Commission with respect to each
Registration Statement or any amendment thereto and, as promptly as reasonably
possible, provide the Holders true and complete copies of all correspondence
from and to the Commission relating to such Registration Statement that
pertains to the Holders as “Selling Shareholders” but not any comments that would
result in the disclosure to the Holders of material and non-public information
concerning the Company; and (iv) the Company shall comply with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of (subject to the terms of this Agreement) in accordance with the intended
methods of disposition by the Holders thereof as set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented; provided,
that each Purchaser shall be responsible for the delivery of the Prospectus to
the Persons to whom such Purchaser sells any of the Registrable Securities (including
in accordance with Rule 172 under the Securities Act), and each Purchaser
agrees to dispose of Registrable Securities in compliance with the plan of
distribution described in the Registration Statement and otherwise in
compliance with applicable federal and state securities laws. In the case of
amendments and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section 3(b))
by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or
any analogous report under the Exchange Act, the Company shall have
incorporated such report by reference into such Registration Statement, if
applicable, or shall file such amendments or supplements with the Commission on
the same day on which the Exchange Act report which created the requirement for
the Company to amend or supplement such Registration Statement was filed. 

 

A-9

 

 

 

 

                                          
Exhibit A                 

 

 

(c)               
the Company shall notify the Holders (which notice shall, pursuant to
clauses (iii) through (v) hereof, be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been made)
as promptly as reasonably practicable (and, in the case of (i)(A) below, not
less than two (2) Trading Days prior to such filing, in the case of
(iii) and (iv) below, not more than one Trading Day after such
issuance or receipt, and in the case of (v) below, not more than one
Trading Day after the occurrence or existence of such development) and (if
requested by any such Person) confirm such notice in writing no later than one
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 any Registration Statement (in which case the Company
shall provide to each of the Holders true and complete copies of all comments
that pertain to the Holders as a “Selling Shareholder” or to the “Plan of
Distribution” and all written responses thereto, but not information that the
Company believes would constitute material and non-public information); and
(C) with respect to each 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
that pertains to the Holders as “Selling Shareholder” or the “Plan of
Distribution”; (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; and (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 such 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 such Registration Statement, Prospectus or
other documents so that, in the case of such 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 the case of any Prospectus,
form of prospectus or supplement thereto, in light of the circumstances under
which they were made), not misleading. 

 

(d)              
the Company shall use commercially reasonable efforts to avoid the
issuance of, or, if issued, obtain the withdrawal of (i) any order
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, as soon as practicable. 

 

(e)               
the Company shall, if requested by a Holder, furnish to such Holder,
without charge, at least one conformed copy of each Registration Statement and
each amendment thereto 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
the Company shall have no obligation to provide any document pursuant to this
clause that is available on the Commission’s EDGAR system. 

 

(f)               
the Company shall, 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. 

A-10

 

 

 

 

                                          
Exhibit A                 

 

 

 

(g)              
the Company shall cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to the Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement
and under law, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any such
Holders may reasonably request. Certificates for Registrable Securities free
from all restrictive legends may be transmitted by the transfer agent to a
Holder by crediting the account of such Holder’s prime broker with DTC as
directed by such Holder. 

 

(h)              
the Company shall following the occurrence of any event contemplated by
Section 3(c)(iii)-(v), as promptly as reasonably practicable (taking into
account the Company’s good faith assessment of any adverse consequences to the
Company and its shareholders of the premature disclosure of such event),
prepare and file a supplement or amendment, including a post-effective
amendment, to the affected Registration Statements 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, no Registration Statement nor any 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
the case of any Prospectus, form of prospectus or supplement thereto, in light
of the circumstances under which they were made), not misleading. 

 

(i)                
the Company may require each selling Holder to furnish to the Company a
certified statement as to (i) the number of shares of Common Stock
beneficially owned by such Holder and any Affiliate thereof, (ii) any
Financial Industry Regulatory Authority (“FINRA”) affiliations,
(iii) any natural persons who have the power to vote or dispose of the
Common Stock and (iv) any other information as may be requested by the
Commission, FINRA or any state securities commission. During any periods that
the Company is unable to meet its obligations hereunder with respect to the
registration of Registrable Securities because any Holder fails to furnish such
information within three (3) Trading Days of the Company’s request, any
Liquidated Damages that are accruing at such time as to such Holder only shall
be tolled and any Event that may otherwise occur solely because of such delay
shall be suspended as to such Holder only, until such information is delivered
to the Company. 

 

(j)                
the Company shall cooperate with any registered broker through which a
Holder proposes to resell its Registrable Securities in effecting a filing with
FINRA pursuant to FINRA Rule 5110 as requested by any such Holder and the
Company shall pay the filing fee required for the first such filing within two
(2) Business Days of the request therefore. 

 

(k)              
the Company shall use its commercially reasonable efforts to maintain
eligibility for use of Form S-3 (or any successor form thereto) for the
registration of the resale of Registrable Securities. 

 

A-11

 

 

 

 

                                          
Exhibit A                 

 

 

(l)                
if requested by a Holder, the Company shall (i) promptly
incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the Company reasonably agrees should
be included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as reasonably practicable
after the Company has received notification of the matters to be incorporated
in such Prospectus supplement or post-effective amendment. 

 

(m)            
the Company shall otherwise use commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission under the
Securities Act and the Exchange Act, including Rule 172, notify the Holders
promptly if the Company no longer satisfies the conditions of Rule 172 and take
such other actions as may be reasonably necessary to facilitate the
registration of the Registrable Securities hereunder. 

 

4.                 
Registration Expenses. All fees and expenses incident to the
Company’s performance of or compliance with its obligations under this
Agreement (excluding any underwriting discounts and selling commissions) 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 (A) with
respect to filings required to be made with any Trading Market on which the
Common Stock is then listed for trading, (B) with respect to compliance
with applicable state securities or Blue Sky laws (including, without
limitation, fees and disbursements of counsel for the Company in connection
with Blue Sky qualifications or exemptions of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as requested by the Holders) and
(C) if not previously paid by the Company in connection with an Issuer
Filing, 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 and of printing prospectuses
if the printing of prospectuses is reasonably requested by the Holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses of the Company,
(iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires such
insurance, (vi) reasonable legal fees and expenses of the Holders, and
(vii) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit and the fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange as required hereunder. In no event shall the Company be responsible
for any underwriting, broker or similar fees or 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-12

 

 

 

 

                                          
Exhibit A                 

 

 

(a)               
Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify, defend and hold harmless each
Holder, the officers, directors, agents, general partners, managing members,
managers, Affiliates and employees of each of them, each Person who controls
any such Holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the officers, directors, general
partners, managing members, managers, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable costs of preparation and investigation and
reasonable attorneys’ fees) and expenses (collectively, “Losses”), as
incurred, that arise out of or are based upon any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (A) such untrue statements, alleged untrue statements, omissions or
alleged 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
approved (or deemed reviewed and approved) by such Holder expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in
any amendment or supplement thereto (it being understood that each Holder has
approved Annex A hereto for this purpose), or (B) in the case of an
occurrence of an event of the type specified in Section 3(c)(iii)-(v),
related to the use by a Holder of an outdated or defective Prospectus after the
Company has notified such Holder in writing that the Prospectus is outdated or
defective and prior to the receipt by such Holder of the Advice contemplated
and defined in Section 6(d) below, but only if and to the extent that
following the receipt of the Advice the misstatement or omission giving rise to
such Loss would have been corrected. 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. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of an Indemnified Party
(as defined in Section 5(c)) and shall survive the transfer of the
Registrable Securities by the Holders. 

 

A-13

 

 

 

 

                                          
Exhibit A                 

 

 

(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, arising out of or are based upon any untrue or alleged
untrue statement of a material fact contained in any Registration Statement,
any Prospectus, or any form of prospectus, or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein (in the case of any Prospectus, or
any form of prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading (i) to the extent, but only to
the extent, that such untrue 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 (ii) to the extent, but only 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 approved
(or deemed reviewed and approved) 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 such form of Prospectus or
in any amendment or supplement thereto or (iii) in the case of an
occurrence of an event of the type specified in Section 3(c)(iii)-(v), to
the extent, but only to the extent, related to the use by such Holder of an
outdated or defective Prospectus after the Company has notified such Holder in
writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of the Advice contemplated in Section 6(d), but only if and
to the extent that following the receipt of the Advice the misstatement or
omission giving rise to such Loss would have been corrected. In no event shall
the liability of any selling Holder hereunder 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 reasonable fees and expenses incurred in
connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying Party
of its obligations or liabilities pursuant to this Agreement, except (and only)
to the extent that such failure shall have materially and adversely prejudiced
the Indemnifying Party (as finally determined by a court of competent jurisdiction,
which determination is not subject to appeal or further review). 

 

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 such Indemnified Party shall
have been advised by counsel that a conflict of interest exists if the same
counsel were to represent such Indemnified Party and the Indemnifying Party; provided,
that the Indemnifying Party shall not be liable for the fees and expenses of
more than one separate firm of attorneys at any time for all Indemnified
Parties. 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, delayed or conditioned. 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. 

 

A-14

 

 

 

 

                                          
Exhibit A                 

 

 

Subject to the
terms of this Agreement, all 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 5(c)) shall be paid to the Indemnified
Party, as incurred, within twenty 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 finally
judicially determined to not be entitled to indemnification hereunder). The
failure to deliver written notice to the Indemnifying Party within a reasonable
time of the commencement of any such action shall not relieve such Indemnifying
Party of any liability to the Indemnified Party under this Section 5, except
to the extent that the Indemnifying Party is materially and adversely
prejudiced in its ability to defend such action. 

 

(d)              
Contribution. If a claim for 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, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the limitations set
forth in this Agreement, any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section 5(d) 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, 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. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. 

 

The indemnity
and contribution agreements contained in this Section 5 are in addition to
any liability that the Indemnifying Parties may have to the Indemnified Parties
and are not in diminution or limitation of the indemnification provisions under
the Purchase Agreement. 

 

A-15

 

 

 

 

                                          
Exhibit A                 

 

 

6.                 
Miscellaneous. 

 

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

 

(b)              
No Piggyback on Registrations; Prohibition on Filing Other
Registration Statements. Neither the Company nor any of its security
holders may include securities of the Company in a Registration Statement
hereunder and the Company shall not prior to the Effective Date enter into any
agreement providing any such right to any of its security holders. The Company
shall not, from the date hereof until the date that is 30 days after the
Effective Date of the Initial Registration Statement, prepare and file with the
Commission a registration statement relating to an offering for its own account
under the Securities Act of any of its equity securities, other than (i) a
registration statement on Form S-8, (ii) in connection with an acquisition
on Form S-4, (iii) one shelf registration statement and one resale registration
statement on Form S-3 or (iv) a registration statement to register for
resale securities issued by the Company pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the
Company, provided that any such issuance shall only be to a Person which is,
itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company and in which the Company receives
benefits in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is investing
in securities. For the avoidance of doubt, the Company shall not be prohibited
from preparing and filing with the Commission a registration statement relating
to an offering of Common Stock by existing shareholders of the Company under
the Securities Act pursuant to the terms of registration rights held by such
shareholder or from filing amendments to registration statements filed prior to
the date of this Agreement (or, for the avoidance of doubt, filing any
prospectus supplements related thereto pursuant to Rule 424). 

 

(c)               
Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable
to it (unless an exemption therefrom is available) in connection with sales of
Registrable Securities pursuant to the Registration Statement and shall sell
the Registrable Securities only in accordance with a method of distribution
described in the Registration Statement 

 

A-16

 

 

 

 

                                          
Exhibit A                 

 

 

(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(c)(iii)-(v), 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 may provide appropriate stop orders to enforce the
provisions of this paragraph.  

 

(e)               
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 hereof, 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. 

 

(f)               
Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or supplemented,
or waived unless the same shall be in writing and signed by the Company and
Holders holding at least two-thirds of the then outstanding Registrable
Securities, provided that any party may give a waiver as to itself.
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 Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of all of the Registrable Securities to
which such waiver or consent relates; provided, that the provisions of
this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding sentence.
Notwithstanding the foregoing, if any such amendment, modification or waiver
would adversely affect in any material respect any Holder or group of Holders
who have comparable rights under this Agreement disproportionately to the other
Holders having such comparable rights, such amendment, modification, or waiver
shall also require the written consent of the Holder(s) so adversely affected. 

 

(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; provided that the Company may deliver to
each Holder the documents required to be delivered to such Holder under
Section 3(a) of this Agreement by e-mail to the e-mail addresses provided
by such Holder to the Company solely for such specific purpose. 

 

(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. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. The Company may not assign its
rights (except by merger or in connection with another entity acquiring all or
substantially all of the Company’s assets) or obligations hereunder without the
prior written consent of all the Holders of the then outstanding Registrable
Securities. Each Holder may assign its respective rights hereunder in the
manner and to the Persons as permitted under the Purchase Agreement. 

 

A-17

 

 

 

 

                                          
Exhibit A                 

 

 

(i)                
Execution and Counterparts. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement 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 were the original
thereof. 

 

(j)                
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. 

 

(k)              
Cumulative Remedies. Except as provided in Section 2(c) with
respect to Liquidated Damages, the remedies provided herein are cumulative and
not exclusive of any other remedies provided by law. 

 

(l)                
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 good faith 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. 

 

(m)            
Headings. The headings in this Agreement are for convenience only
and shall not limit or otherwise affect the meaning hereof. 

 

A-18

 

 

 

 

                                          
Exhibit A                 

 

 

(n)              
Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser hereunder, and no Purchaser shall
be responsible in any way for the performance of the obligations of any other
Purchaser hereunder. The decision of each Purchaser to purchase the Common
Shares pursuant to the Transaction Documents has been made independently of any
other Purchaser. Nothing contained herein or in any other agreement or document
delivered at any closing, and no action taken by any Purchaser pursuant hereto
or thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert with respect
to such obligations or the transactions contemplated by this Agreement. Each
Purchaser acknowledges that no other Purchaser has acted as agent for such
Purchaser in connection with making its investment hereunder and that no
Purchaser will be acting as agent of such Purchaser in connection with
monitoring its investment in the Common Shares or enforcing its rights under
the Transaction Documents. Each Purchaser 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 Purchaser to be
joined as an additional party in any Proceeding for such purpose. The Company
acknowledges that each of the Purchasers has been provided with the same
Registration Rights Agreement for the purpose of closing a transaction with
multiple Purchasers and not because it was required or requested to do so by
any Purchaser. 

 

(o)              
Effectiveness; Termination. This Agreement shall become
automatically effective, without further action of the parties, upon the
Closing. Notwithstanding anything to the contrary herein, this Agreement shall
automatically terminate and be of no further force and effect immediately upon
the termination of the Purchase Agreement. 

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

A-19

 

 

 

 

                                          
Exhibit A                 

 

 

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

 

SOUTHERN FIRST BANCSHARES, INC.

 

 

By:                                                                  

                                                                        Name:

Title:

 

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK,

SIGNATURE PAGES OF
HOLDERS TO FOLLOW]

 

 

Company Signature
Page

 

 

 

 

                                          
Exhibit A                 

 

 

 

 

 

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

 

                                                                                        [NAME OF INVESTING ENTITY]

 

                                                                                        AUTHORIZED SIGNATORY

 

                                                                                        By:                                                                  

                                                                                                                                                                Name:

                                                                                        Title: 

 

                                                                                                                                                                ADDRESS
FOR NOTICE

 

                                                                                                                                                                c/o
                                                                  

 

                                                                                                                                                                Street
                                                              

 

                                                                                                                                                                City/State/Zip                                                 

 

                                                                                                                                                                Attention:                                                        

                                                                        

                                                                                                                                                                Tel:                                                                 

 

                                                                                                                                                                Fax:                                                                 

 

                                                                                                                                                                Email:                                                              

 

Company Signature
Page

 

 

 

 

Annex A

 

PLAN OF
DISTRIBUTION

 

We are registering the Common
Shares issued to the selling shareholder to permit the resale of these Common
Shares by the holders of the Common Shares from time to time after the date of
this prospectus. We will not receive any of the proceeds from the sale by the
selling shareholders of the Common Shares. We will bear all fees and expenses
incident to our obligation to register the Common Shares. 

 

The selling shareholders may sell
all or a portion of the Common Shares beneficially owned by them and offered
hereby from time to time directly or through one or more underwriters,
broker-dealers or agents.  If the Common Shares are sold through underwriters
or broker-dealers, the selling shareholders will be responsible for
underwriting discounts or commissions or agent’s commissions.  The Common
Shares may be sold on any national securities exchange or quotation service on
which the securities may be listed or quoted at the time of sale, in the
over-the-counter market or in transactions otherwise than on these exchanges or
systems or in the over-the-counter market and in one or more transactions at
fixed prices, at prevailing market prices at the time of the sale, at varying
prices determined at the time of sale, or at negotiated prices.  These sales
may be effected in transactions, which may involve crosses or block transactions. 
The selling shareholders may use any one or more of the following methods when
selling Common 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; 

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

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

•        
a combination of any such methods of sale; and 

•        
any other method permitted pursuant to applicable law. 

 

The selling shareholders also may
resell all or a portion of the Common Shares in open market transactions in
reliance upon Rule 144 under the Securities Act, as permitted by that rule, or
Section 4(1) under the Securities Act, if available, rather than under this
prospectus, provided that they meet the criteria and conform to the
requirements of those provisions. 

 

A1-1

 

 

 

 

Annex A

 

Broker-dealers engaged by the
selling shareholders may arrange for other broker-dealers to participate in
sales.  If the selling shareholders effect such transactions by selling Common
Shares to or through underwriters, broker-dealers, or agents, such
underwriters, broker-dealers, or agents may receive commissions in the form of
discounts, concessions or commissions from the selling shareholders, or
commissions from purchasers of the Common Shares for whom they may act as agent
or to whom they may sell as principal.  Such commissions will be in amounts to
be negotiated, but, except as set forth in a supplement to this prospectus, in
the case of an agency transaction will not be in excess of a customary
brokerage commission in compliance with NASD Rule 2440, and in the case of a
principal transaction, a markup or markdown in compliance with NASD IM-2440. 

 

In connection with sales of the
Common Shares or otherwise, the selling shareholders may enter into hedging
transactions with broker-dealers or other financial institutions, which may in
turn engage in short sales of the Common Shares in the course of hedging in
positions they assume.  The selling shareholders may also sell Common Shares
short and, if such short sale shall take place after the date that this
Registration Statement is declared effective by the Commission, the selling shareholders
may deliver Common Shares covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short sales. 
The selling shareholders may also loan or pledge Common Shares to
broker-dealers that in turn may sell such shares, to the extent permitted by
applicable law.  The selling shareholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation
of 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).  Notwithstanding the foregoing, the selling shareholders have
been advised that they may not use shares registered on this registration
statement to cover short sales of our Common Shares made prior to the date the
registration statement, of which this prospectus forms a part, has been
declared effective by the SEC. 

 

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

 

The selling shareholders and any
broker-dealer or agents participating in the distribution of the Common Shares
may be deemed to be “underwriters” within the meaning of Section 2(11) of the
Securities Act in connection with such sales.  In such event, any commissions
paid, or any discounts or concessions allowed, to any such broker-dealer or
agent 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. 
Selling Shareholders who are “underwriters” within the meaning of Section 2(11)
of the Securities Act will be subject to the applicable prospectus delivery
requirements of the Securities Act and may be subject to certain statutory
liabilities of, including but not limited to, Sections 11, 12, and 17 of the
Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as
amended, or the Exchange Act. 

A1-2

 

 

 

 

Annex A

 

 

Each selling shareholder has
informed the Company that it is not a registered broker-dealer and does not
have any written or oral agreement or understanding, directly or indirectly,
with any person to distribute the Common Shares. Upon the Company being
notified in writing by a selling shareholder that any material arrangement has
been entered into with a broker-dealer for the sale of Common Shares through a
block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, a supplement to this prospectus will be
filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing
(i) the name of each such selling shareholder and of the participating
broker-dealer(s), (ii) the number of shares involved, (iii) the price at which
such the Common Shares were sold, (iv) the commissions paid or discounts or
concessions allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information
set out or incorporated by reference in this prospectus, and (vi) other facts
material to the transaction.  In no event shall any broker-dealer receive fees,
commissions and markups, which, in the aggregate, would exceed eight percent
(8%). 

 

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

 

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

 

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

 

A1-3

 

 

 

 

Annex A

 

We will pay all expenses of the
registration of the Common Shares pursuant to the registration rights
agreement, including, without limitation, Securities and Exchange Commission
filing fees and expenses of compliance with state securities or “blue sky”
laws; provided, that each selling shareholder will pay all underwriting
discounts and selling commissions, if any.   We will reimburse the selling
shareholders for the reasonable legal fees and expenses that they collectively
incur in connection with the registration of the Common Shares. We will
indemnify the selling shareholders against certain liabilities, including some
liabilities under the Securities Act, in accordance with the registration
rights agreement, or the selling shareholders will be entitled to contribution.
We may be indemnified by the selling shareholders against civil liabilities,
including liabilities under the Securities Act, that may arise from any written
information furnished to us by the selling shareholders specifically for use in
this prospectus, in accordance with the related registration rights agreements,
or we may be entitled to contribution. 

 

 

#                                                                           #                                                                  #

 

A1-4

 

 

 

 

Annex B

 

SOUTHERN FIRST
BANCSHARES, INC.

 

SELLING
SHAREHOLDER NOTICE AND QUESTIONNAIRE

 

The undersigned holder of
securities of Southern First Bancshares, Inc., a South Carolina corporation
(the “Company”), issued pursuant to a Securities Purchase Agreement by and
among the Company and the Purchasers named therein, dated as of January          27,
2014, understands that the Company intends to file with the Securities and
Exchange Commission a registration statement on Form S-3 (the “Resale
Registration Statement”) for the registration and the 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 a certain Registration
Rights Agreement by and among the Company and the Purchasers named therein,
dated as of January 27, 2014 (the “Agreement”).  All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the
Agreement. 

 

In order to sell or otherwise
dispose of any Registrable Securities pursuant to the Resale Registration
Statement, a holder of Registrable Securities generally will be required to be
named as a selling shareholder in the related prospectus or a supplement
thereto (as so supplemented, the “Prospectus”), deliver the Prospectus to
purchasers of Registrable Securities (including pursuant to Rule 172 under the
Securities Act), and be bound by the provisions of the Agreement (including
certain indemnification provisions, as described below).  Holders must complete
and deliver this Notice and Questionnaire in order to be named as selling
shareholders in the Prospectus.  Holders of Registrable Securities who do not
complete, execute, and return this Notice and Questionnaire within ten (10)
Trading Days following the date of the Agreement (1) will not be named as
selling shareholders in the Resale Registration Statement or the Prospectus and
(2) may not use the Prospectus for resales of Registrable Securities. 

 

Certain legal consequences arise
from being named as a selling shareholder in the Resale Registration Statement
and the Prospectus.  Holders of Registrable Securities are advised to consult
their own securities law counsel regarding the consequences of being named or
not named as a selling shareholder in the Resale Registration Statement and the
Prospectus. 

 

NOTICE

 

The undersigned holder (the
“Selling Shareholder”) of Registrable Securities hereby gives notice to the
Company of its intention to sell or otherwise dispose of Registrable Securities
owned by it and listed below in Item (3), unless otherwise specified in Item
(3), pursuant to the Resale Registration Statement. The undersigned, by signing
and returning this Notice and Questionnaire, understands and agrees that it
will be bound by the terms and conditions of this Notice and Questionnaire and
the Agreement. 

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

 

 

QUESTIONNAIRE

A2-1

 

 

 

 

Annex B

 

 

1.         Name. 

 

(a)    Full Legal Name
of Selling Shareholder: 

 

_____________________________________________________________________

 

(b)   Full Legal Name of
Registered Holder (if not the same as (a) above) through which Registrable
Securities Listed in Item 3 below 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 the questionnaire):

 

____________________________________________________________________

 

2.         Address for Notices to Selling Shareholder: 

 

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

Telephone:       __________________________________________________________________

Fax:                 __________________________________________________________________

Contact
Person:_________________________________________________________________

E-mail address of Contact
Person:__________________________________________________

 

3.         Beneficial
Ownership of Registrable Securities Issuable Pursuant to the Purchase Agreement:

 

(a)    Type and Number
of Registrable Securities beneficially owned and issued pursuant to the
Agreement:  

 

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

 

(b)   Number of Securities
to be registered pursuant to this Notice for resale:  

 

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

 

4.         Broker-Dealer Status: 

 

A2-2

 

 

 

 

Annex B

 

(a)    Are you a
broker-dealer?  

 

Yes 
                      No  

 

 

 

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

 

Yes
                      No 

 

 

 

Note:    If no, the Commission’s
staff has indicated that you should be identified as an underwriter in the
Registration Statement.  

 

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

 

Yes
                      No 

 

 

 

Note:   If yes, provide a narrative
explanation below:  

 

(d)   If you are an
affiliate of a broker-dealer, do you certify that you bought 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
                       No   

 

 

Note:   If no, the Commission’s
staff has indicated that you should be identified as an underwriter in the
Registration Statement.  

 

5.         Beneficial
Ownership of Other Securities of the Company Owned by the Selling Shareholder.

 

Except as set forth below in
this Item 5, the undersigned is not the beneficial or registered owner of any
securities of the Company other than the Registrable Securities listed above in
Item 3. 

 

Type and amount of other securities
beneficially owned: 

 

6.         Relationships with the Company: 

A2-3

 

 

 

 

Annex B

 

 

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: 

 

________________________________________________________________________________________________________________________________________________

 

 

7.         Plan of Distribution: 

 

The undersigned has reviewed the
form of Plan of Distribution attached as Annex A to the Registration Rights
Agreement, and hereby confirms that, except as set forth below, the information
contained therein regarding the undersigned and its plan of distribution is
correct and complete. 

 

State any exceptions here: 

 

________________________________________________________________________________________________________________________________________________

 

***********

 

By signing below, the undersigned
consents to the disclosure of the information contained herein in its answers
to Items (1) through (7) above and the inclusion of such information in the
Resale Registration Statement and the Prospectus. The undersigned understands
that such information will be relied upon by the Company in connection with the
preparation or amendment of any such Registration Statement and the Prospectus.
The undersigned will immediately notify the Company of any inaccuracies in the
information disclosed in this Questionnaire. 

 

By signing below, the undersigned
acknowledges that it understands its obligation to comply, and agrees that it
will comply, with the provisions of the Exchange Act and the rules and
regulations thereunder, particularly Regulation M in connection with any
offering of Registrable Securities pursuant to the Resale Registration
Statement. The undersigned also acknowledges that it understands that the
answers to this Questionnaire are furnished for use in connection with
Registration Statements filed pursuant to the Registration Rights Agreement and
any amendments or supplements thereto filed with the Commission pursuant to the
Securities Act. 

            

I confirm that, to the best of my
knowledge and belief, the foregoing statements (including without limitation
the answers to this Questionnaire) are correct. 

 

A2-4

 

 

 

 

Annex B

 

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

 

 

 

Dated: ____________                        Beneficial
Owner:     ____________________________________

 

    By:                  ____________________________________

Name: 

Title:

 

 

A2-5exhibit10-4.htm

Exhibit 10.4

 

CONTRACT OF TRANSFER OF RIGHTS OF EXPLORATION, EXPLOITATION AND COMERCIALIZATION WHICH ON THE ONE HAND HELD JIM CHRISTIAN LANDEROS AMADOR WHO APPEAR IN THEIR OWN RIGHT AND ALSO IN SUE CHARACTER OF MR. FABIAN JAVIER GARCÍA GONZÁLEZ AGENT WHO AS A WHOLE HEREINAFTER BE CALLED AS THE ASSIGNOR AND ANOTHER MINING COMPANY, GEO IRON RESOURCES SOCIETY ANONIMA DE CAPITAL VARIABLEREPRESENTED BY CAIFENG SONG, WHO THEREAFTER CALLED AS THE ASSIGNEE TO THE TENOR OF THE FOLLOWING DENOMINATIONS, DECLARATIONS AND CLAUSES:

 

DENOMINATIONS:

THE PARTIES INVOLVED FOR THE PURPOSE OF CLARIFICATION OF THE TERMS OF THIS CONTRACT ARE UNDERSTOOD BY:

 

ASSIGNEE: IS THE MORAL PERSON WHO HELD THE LEADING WORK OF EXPLORATION, EXPLOITATION, EXTRACTION, COMERCIALIZATION OF MEXICAN IRON ORE AND OTHER MINERALS, MINES LOCATED IN THE AREA THAT CORRESPONDS TO THE GRANTING OF THE TITLE MINING "MARIAS" BY WHAT HAS OBTAINED THE AUTHORIZATION ON THE PART OF THE ASSIGNOR TO PERFORM EXPLORATION, EXPLOITATION, EXTRACTION AND MARKETING OF ORE OF IRON AND OTHER MINERALSFINISHED PRODUCT THAT CAN TRADE WITH ITS CUSTOMERS WITHOUT ANY RESTRICTION.

 

THE ASSIGNOR: IS THE PHYSICAL PERSON OR INDIVIDUALS, WHO OR WHO HAVE THE RIGHTS TO EXPLORE, EXPLOIT AND EXTRACT THE MINERALS ACCORDING TO DEMONSTRATED WITH A CONTRACT SIGNED AND RATIFIED BEFORE A NOTARY TO BE APPENDED TO THIS INSTRUMENT TO LEGALLY PROTECT THE RIGHTS TRANSMITTED TO THE TRANSFEREE WITH THE MINING PART NAME NO. 234918 ELICIT "MARIAS" WHICH DEMONSTRATE THE OWNERSHIP OF THE SAME AND WHICH SERVES AS A LEGAL INSTRUMENT TO WHICH THE ASSIGNOR, EXPLOIT, EXPLORE AND MERCHANDISE THE ORE FROM THE MINE TO EMBRACE SUCH CONCESSION.

 

RIGHT AND ENTITLEMENT: THE RIGHT OF EXPLORATION, EXPLOITATION AND COMERCIALIZATION WHICH GIVES THE ASSIGNEE, REGARDING THE TITLE MINING NO. 234918 CALLED "MARIAS", WHOSE LOCATION IS IN THE MUNICIPALITY AND WITHIN AN AREA OF 363.734 ACRES.

 

MINING TITLE: IS THE TITLE NO. 234918 KNOWN AS "MARIAS"

  

1

  

 

PRODUCT : ARE MINERALS THAT WILL BE EXTRACTED FROM THE MINES THAT ARE FOUND INSIDE OF NO. 234918 CALLED MARIAS

 

ROYALTIES - IS THE AGREED AMOUNT IN CASH IN DOLLARS AND IT WILL BE GIVEN BY THE ASSIGNEE TO THE ASSIGNOR BY THE EXPLORATION, EXPLOITATION, EXTRACTION AND COMERCIALIZATION OF IRON ORE WITH LEGAL MINIMUM OF 60% PER METRIC TON.

 

CONTRACT: THIS INSTRUMENT

 

BUSINESS: DEVELOPMENT OF THE OBJECT UNDER THIS CONTRACT

 

DECLARATIONS:

 

1) JIM CHRISTIAN LANDEROS AMADOR IS OF AGE, SINGLE AND FULFILLED ITS OBLIGATIONS AND GOOD STANDING WITHIN THE LAW, WITH REGISTRATION OF TAXPAYERS IS LÁAJ-801213-KU1 FEDERAL; AND YOUR ADDRESS IS FOUND IN THE CART #786, COLONIA INDUSTRIAL PARK BLVD NORTH NATIVITY SCENES IN ZAPOPAN JALISCO, 45150

POSTAL CODE WITH REGISTRATION NO. LAAJ801213HJCNMM04.

 

(2) THAT THE MR FABIAN JAVIER GARCÍA GONZÁLEZ-GENERAL IS TAKEN OVER WHICH PROVES THROUGH SCRIPTURE PUBLISHED NUMBER THIRTY AND SIX THOUSAND SEVEN HUNDRED EIGHTY-EIGHT OF THE VOLUME % VIENTICINCO, ROMAN FOURTH BOOK LAST BEFORE THE FAITH OF MR. FELIPE TORRES PACHECO NOTARY PUBLIC NUMBER ELEVEN OF GUADALAJARA, JALISCO. FACULTIES MANIFEST NOT HIM HAVE BEEN REVOKED OR LIMITED IN ANY WAY.

 

3) THE PERCENTAGE SPLIT IS 75% AND ITS PRINCIPAL MR. FABIAN JAVIER GARCIA AMADAOR HOLDER OF THE REMAINING 25% THAT REPRESENT ALTOGETHER THE TOTALITY OF THE RIGHTS THAT THEY EMANATE FROM THE MINING CONCESSION CALLED “MARIAS” AND SHOWING WITH THE CONTRACTS SIGNED IN ORIGINAL AND RATIFIED NOTARY SO SAME ACCREDITAN OWNED COPY OF THE TIUTLO FOR NOT GRANTING. 234918 WHOSE LOCATION IS IN THE MUNICIPALITY OF CUAUITITLAN, JALISCO, WITH AN AREA OF 363,734 ACRES. HEREINAFTER CALLED AT THE SAME TIME AS THE DEPOSIT.

 

(4) THAT APPEAR AT THE CONCLUSION OF THIS AGREEMENT IN ORDER TO MAKE THE TRANSFER TO THE TRANSFEREE WITH THE AIM THAT THIS LAST CAN PERFORM EXPLORATION, EXPLOITATION, EXTRACTION AND CASKETS OF THE RIGHTS THAT THEY EMANATE FROM THE TITLE MINING NO. 23418 CALLED “MARIAS” SUBJECTING TO SUCH EFFECT TO THE TERMS AND CONDITIONS CONTENTS IN THE CLAUSES OF THIS INSTRUMENT.

  

2

  

 

(5) THAT IT IS IDENTIFIED WITH CREDENTIAL VOTER NUMBER 3116087104485 FOLIO.

 

(6) THAT IT HAS MADE PREVIOUS STUDIES, WHICH SHOW THAT THE PRODUCT WILL BE EXTRACTED FROM THE OBJECT OF THIS CONTRACT MINE IRON ORE HAS A 60% MINIMUM PURITY LAW.

 

(7) THAT CURRENTLY MINE OBJECT OF EXPLOITATION CALLED MARIAS DENOUNCED IS LOCATED WITHOUT ANY EXPLORATION WORK AND UNTAPPED, BY WHICH TO COMPLETE SUCH EXPLORATION WORKS AND CARRY OUT OPERATION IS NECESSARY CAPITAL SUFFICIENT TO DEVELOP DIRECT WORK, CONSULTANT WORK AND STUDIES THAT ARE GEOLOGICAL AIMED TO STUDY AND PROPERLY DETERMINE THEIR POTENTIAL TO QUANTIFY ITS PROVEN RESERVES AND PROBABLIES DOING THE WORK NECESSARY FOR EXPLORATION IN DIRECT WORK OR DRILLING.

 

(8) THAT SO TO SUIT THEIR INTERESTS OF ITS REPRESENTED AND BE HIS WILL UNDER COVER OF THE FRACTION VII PROVISIONS OF THE ARTICLE 19 OF LAW MINING IS YOUR CONVENIENCE TRANSFER OR CONVEY TO THE CESENARIO OF RIGHTS THAT IS DERIVED FROM THE REALIZATION OF WORKS, EXPLORATION, EXTRACTION, EXPLOITATION AND COMMERCIALIZATION OF ORE MINING CONCESSION DOMINATED MARIAS WITH A SURFACE TOTAL OF 363.734 ACRES APPROXIMATELY THEREFORE THE WORKS AND THAT IS DEVELOPED DURING THE TERM OF THIS CONTRACT UNDER CHAPTERS 1, 2, AND 3 OF THE ABOVEMENTIONED ARTICLE AND REMAIN UNDER THE TERMS AND CONDITIONS IN THE SUBSEQUENT CLAUSES IS ESTABLISHED. AN ANNEX WILL BE ATTACHED.

 

9) THE MARIAS TO MINE IS DESCRIBED IN DECLARATION 3, AS WELL AS HAVING THE ECONOMIC MEANS AND HUMAN TECHNICAL ELEMENTS, AS WELL AS OF ORGANIZATION ADMINISTRATIVE NECESSARY TO CARRY OUT THEIR OBLIGATIONS DERIVED FROM THIS CONTRACT.

 

(10) BEING A NATIONAL COMPANY, LEGALLY INCORPORATED UNDER MEXICAN LAW, WHICH CREDITED THROUGH THE WRITING PUBLISHED NUMBER SEVEN THOUSAND TWO HUNDRED FIFTY-FOUR, VOLUME % NINETY AND EIGHT, GIVES RISE TO THE NOTARY PUBLIC NUMBER VIENTIUNO OF THE STATE OF MICHOACÁN DE OCAMPO THAT IS ADDS COPY AS ANNEX B REPRESENTED BY CAIFENG SONGY FULFILLED THEIR TAX OBLIGATIONSWITH LEGAL CAPACITY TO CONTRACT AND SIGN THIS AGREEMENT IN ACCORDANCE WITH MEXICAN, REGISTRATION OF TAXPAYERS IS GIR120530M27 FEDERAL LAWS.

 

(11) TO THE CONCLUSION OF THIS AGREEMENT SO THAT THE ASSIGNOR, GIVE YOU THE RIGHTS THAT THEY EMANATE FROM THE TITLE NOT MINING. 234918 CALLED MARIAS SO THE TRANSFEREE HAVING THE AUTHORIZATION TO CARRY OUT THE EXPLORATION, EXPLOITATION AND COMERCIALIZATION OF THE TITLE NO. 234918 CALLED “MARIAS” SUBJECTING TO SUCH EFFECT TO THE TERMS AND CONDITIONS CONTENTS IN THE CLAUSES OF THIS INSTRUMENT.

 

  

3

  

(12) BE RESPONSIBLE BEFORE ANY EVENT ADVERSE FOR THE PURPOSES OF THIS BUSINESS, I.E., ANY LEGAL SITUATION THAT HAS TO DO WITH THE TITLE MINING COVERED BY THIS CONTRACT.

 

(13) THAT IS IDENTIFIA WITH YOUR PASSPORT NO. G 19607194.

 

(14) HAVING INTEREST IN THE PRESENT AGREEMENT OF TRANSFER OF RIGHTS OF EXPLORATION, EXPLOITATION, AND MARKETING WITH THE ASSIGNOR.

 

(15) THAT HAS ACCESS TO RESOURCES ECONOMIC AND CAPACITY LEGAL PLEA FOR THE COMMENCEMENT OF THE AGREEMENT OF TRANSFER OF RIGHTS OF EXPLORATION, EXPLOITATION AND MARKETING IN ACCORDANCE WITH THE FOLLOWING

 

CLAUSES:

 

FIRST - SUBJECT OF THE CONTRACT. THE ASSIGNOR IN THEIR OWN RIGHT AND ALSO IN THE ROLE OF AGENT FABIAN CEDE THE RIGHTS OF EXPLORATION, EXPLOITATION AND MARKETING TO THE ASSIGNEE COMPANY CALLED GEO IRON RESOURCES SOCIETY ANONIMA DE CAPITAL VARIABLE WITH THE MINE CALLED “MARIAS” IN ORDER THAT THE ASSIGNEE CAN PERFORM EXPLORATION, EXPLOITATION, EXTRACTION AND COMERCIALIZATION OF THE MINERAL IRON AND OTHER MEXICAN MINERALS THAT CORRESPOND TO PROPERTIES MINERS WITHIN THE AREA OF THE CONCESSION CALLED MARIAS IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT. BY JOINING THEIR EFFORTS, KNOWLEDGE AND EXPERIENCE TO CARRY OUT THE WORKS IN ACCORDANCE WITH THE MINERS, OF WORKS PROJECTS, PLANS AND STRATEGIES TO BENEFIT ADEQUATELY THE DEPOSIT UP TO EXHAUST THIS AND REACH VENTE LA OF IRON ORE WITH A MINIMUM OF 60% PURITY CERTIFICATE BY SGS.

 

SECOND - OBLIGATIONS OF THE TRANSFEROR. THE ASSIGNOR IS REQUIRES:

 

2.1 GRANT TO THE ASSIGNEE ALL THOSE FACILITIES NECESSARY TO OPERATE THE MINING PROJECTS, WORKS, PLANS AND STRATEGIES, TO CARRY OUT EXPLORATION AND IN YOUR CASE THE EXPLOITATION AND MARKETING OF THE SITE.

 

  

4

  

 

2.2 PERMISSION OF EXPLOITATION GRANTED BY THE COMMUNITY.

 

2.3 CARRY OUT PAYMENTS AND ALLOWANCES TO THE BROKERS INVOLVED IN NEGOTIATIONS AT THE CONCLUSION OF THIS CONTRACT.

 

2.4 ENSURE THE FREE PASSAGE OF THE ASSIGNEE ITS REPRESENTATIVES AND WORKERS FOR THE FREE AND PEACEFUL REALIZACOIN OF THE WORK REQUIRED FOR THE PURPOSE OF THIS CONTRACT.

 

THIRD. OBLIGATIONS OF THE TRANSFEREE. 

 

 

THE TRANSFEREE IS OBLIGED:

 

 

3.1. THE INITIATION OF THE WORK OF EXPLOITATION. WHICH WILL GET PERMISSIONS RELATING TO THE EXPLOITATION OF THIS DEPOSIT.

 

3.2. THE SEARCH AND ACQUISITION OF EQUIPMENT, UPDATED MACHINERY, AND HIRING STAFF AS PROVIDED FOR IN THE PROJECT OF EXPLOITATION MINING FOR THE BENEFIT OF THE SITE.

 

3.3. THE REALIZATION OF THE EXPLOITATION AND EXTRACTION OF ORE OF IRON OPEN-PIT DEPOSIT.

 

3.4. THE OPERATION OF THE ORE CRUSHING PLANT.

 

3.5. THE TRANSPORT OF THE ORE PROCESSING AND STANDARDIZED STORAGE FOR SUECERTIFICACION IRON.

 

3.6. THE TRANSPORT OF ORE TO THE PORT OF EMBARKMENT.

 

3.7. ONCE INITIATED EFFORTS TO EXPLOIT THE ORE DEPOSIT THE ASSIGNEE IS OBLIGATED, TO MAKE AVAILABLE TO THE ASSIGNOR'S MONTHLY PRODUCTION REPORT AND RECORDS PROOF OF WEIGHTS OF THE ORE EXTRACTED AND MARKETED.

 

FOURTH - TERM.

 

THIS AGREEMENT IS KEPT CURRENT UP TO EXHAUST THE “YACIMIENTO” OR UNTIL THE WORKING CONDITIONS ARE BECOME IMPOSSIBLE, DANGEROUS OR UNAFFORDABLE FOR EXPLOITATION, WHICH MAY BE REVIEWED BY BOTH PARTIES EVERY 12 MONTHS TO THE CITY OF GUADALAJARA, JALISCO, ANALYZING THE TERMS AND CONDITIONS OF COMMON AGREEMENT.

 

FIFTH - CONTINUATION.

 

IF IN A TERM OF 60 CALENDAR DAYS, THE CONDITIONS OF EXPLORATION, EXPLOITATION AND COMERCIALIZATION OF THE SITE BECOME APPROPRIATE IN DIRECTION OPPOSITE TO WHAT WAS AGREED IN THE FOURTH CLAUSE IMMEDIATE PREVIOUS WILL CONTINUE WORK ON THE SAME TERMS AS ARE CONTAINED IN THIS AGREEMENT.

 

  

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SIXTH. - PAYMENT OF ROYALTIES.

 

THE PAYMENT OF ROYALTIES BY MINERAL EXTRACTED IS WEEKLY ACCORDING TO THE TONS OF IRON ORE, SHAPE, HEAVY, UNLOADED PRODUCT OF ASSIGNEE WHO WILL ELECTRONICALLY TRANSFER PAYMENT TO THE ACCOUNT FOR SUCH EFFECTS AS SPECIFIED.  DDED AS ANNEX “C” EITHER NON-NEGOTIABLE CHEQUE ON BEHALF OF THE ASSIGNOR, ON PRESENTATION OF INVOICE THURSDAYS OF EVERY WEEK SO THAT THE PAYMENT IS MADE IMMEDIATELY AFTER WEDNESDAY THE PRESENTATION OF THE SAME. INVOICE MUST COMPLY WITH TAX REQUIREMENTS, AND IS IN TURN ALLOW THE TASKS OF SUPERVISION, INSPECTION, CHECKOUT, AND VERIFICATION OF EXTRACTED ORE.

 

SEVENTH - ROYALTIES AND COMPENSATIONS.

 

THE ROYALTY SHALL BE DETERMINED IN ANNEX E. PER TONNE EXTRACTED HEAVY AND UNLOADED IN THE COURTYARD OF THE ASSIGNEE THAT IS WITH A MINIMUM OF 60% PURE AND CERTIFIED BY SGS, AS CONSIDERATION WILL AMOUNT. IF THE EXTRACTED ORE FAILED TO COMPLY WITH THE SPECIFIED PURITY WILL BE DISCUSSED BY THE PARTIES. THE DISCOUNT THAT IS SEND TO THE PAYMENT OF THE ROYALTY. BEING RIGHT TO THE ASSIGNEE THE RETURN OF ORE TO BE USED AS BEST SUITS THE INTERESTS OF THE ASSIGNOR DISCOUNTING EXPENDITURES INCURRED.

 

EIGHTH- CESSATION OF PAYMENT OF ROYALTIES-

 

THE PAYMENT OF ROYALTIES TO RIGHTS BY CLAUSES ADDRESSED PREVIOUS SIXTH AND SEVENTH CEASE; IF THERE IS SUBSEQUENT SALE TO THE SIGNING OF THIS CONTRACT, THAT SEE THE RIGHTS TO RECEIVE PAYMENT OF EXTRA CONSIDERATION AND THAT IS GIVE EXCLUSIVELY BETWEEN THE ASSIGNOR PARTIES AND ASSIGNEE AND AS SALES FALL IN THE SAME PERSON, EITHER PHYSICAL OR MORAL. OVERCOME THE DUALITY OF PERSONALITY ON THE CONTENT OF THE CLAUSES SIXTH AND SEVENTH.

 

NINTH - DOCUMENTS. TO PROVIDE THE NECESSARY DOCUMENTATION REQUIRED BY THE ASSIGNEE FOR GOVERNMENTAL UNITS.

 

  

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DECIMA - PASSAGES. 

 

 

THE ASSIGNOR HAS THE RIGHT TO APPOINT SUITABLE PERSON TO REPRESENT AT THE TIME THE ORE EXTRACTED

 

BEFORE THE ENTRANCE TO THE COURTYARD OF THE ASSIGNEE AND NOT ANY REPRESENTATIVE BE PRESENT THE ASSIGNEE IS COMMITTED TO DELIVER COPY OF ALL WEIGHINGS AT THE REQUEST OF THE ASSIGNOR AT THE TIME IN WHICH IT IS REQUESTED FOR WHICH WILL KEEP THE ORIGINAL UNTIL THE DATE OF THE INVOICE.

 

PARTIES AGREE THAN THURSDAYS AT 12:00 HOURS EACH WEEK , THE COLLECTION AT THE PORT IN MANZANILLO, COLIMA, THE WEIGHT (TONNAGE) EXTRACTED PRODUCT IS HAS A NOTE OF ENTRY COVERING THE ORE ACCOUNTED TOGETHER WITH NOTE OUTPUT OF ORE FROM THE MINE, WHICH MUST MATCH. IF IT DOES NOT HAPPEN, TIME IS SET TO DETERMINE THE PAYMENT TO PERFORM.

 

TENTH - ACCESS TO THE PORT OR DOCK. 

 

THE ASSIGNOR HAS THE RIGHT TO ENTER THE COURTYARD OF THE TRANSFEREE IN DAYS AND HOURS FOR THE PURPOSE OF OVERSEEING WEIGHTS AND MATERIALS EXTRACTED FROM THE SITE WHICH SHALL NOTIFY THE TRANSFEREE WITH 24 HOURS IN ADVANCE FOR CONDITIONS SUITABLE FOR THE VISITS THAN NECESSARY AND THIS DOES NOT DISRUPT THE WORK OF THE STAFF RESPONSIBLE FOR YOUR CARE AND SUPERVISION.

 

REPORTS. THE ASSIGNEE IS COMMITTED TO BE PRESENT IN TIME AND BEFORE GOVERNMENT AGENCIES TO PROVIDE REPORTS BEFORE THE SECRETARY OF ECONOMIC AS ALSO TO THE MINISTRY OF THE ENVIRONMENT AND NATURAL RESOURCES (SEMARNAT) OF PERFORMED WORKS, DELIVERING COPIES OF EACH ONE OF THEM THE SCENDING FOR ITS CONTROL AND MANAGEMENT.

 

THE ASSIGNEE SHALL TAKE CARE THAT THE EXPLOITATION WORKS DOES NOT EXCEED AUTHORIZED COORDINATES AND MUST COMPLY WITH TECHNICAL STANDARDS APPLICABLE TO GEOLOGICAL SPECIFICATION, WHILE RESPECTING ALL THE TIME ENVIRONMENTAL STANDARDS CONCERNING THE DECLARATION OF ORIGIN.

 

RIGHTS AND PAYMENTS. THE ASSIGNOR IS COMMITTED TO MAKE SEMI- ANNUAL PAYMENTS TAX ON THE RIGHTS OF THE TITLE CALLED MARIAS IN TIME AND FORM.  IN CASE THAT THE ASSIGNOR DOES NOT COMPLY WITH SUCH OBLIGATIONS, THE TRANSFEREE AT ALL TIMES MUST MAKE THESE PAYMENTS OF THE TOTAL CONCEPT OF THE ESTABLISHED ROYALTY IN THE SEVENTH CLAUSE THE MATCH THE RESPECTIVE RECEIPT OF PAYMENT MADE TO THE ASSIGNOR.

 

AUTHORIZATION AND LICENSES. THE TRANSFEREE IS FORCES ON THEIR OWN AND COST TO OBTAIN AND HOLD FORCE ALL AUTHORIZATIONS, LICENSES AND PERMITS THAT IS REQUIRED TO CARRY OUT THE EXPLORATION, EXPLOITATION, EXTRACTION AND MARKETING OF MINERAL IRON AND OTHER MEXICAN MINERALS OBJECT OF THE PRESENT CONTRACT.

 

  

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OPERATING COSTS. EXPENDITURES THAT IS GENERATED DURING PERFORMANCE OF THIS CONTRACT SHALL BE BORNE BY THE TRANSFEREE RELATING TO EXPLORATION WORKS, EXPLOITATION AND COMMERCIALIZATION OF MINERAL EXTRACTED WITH A MINIMUM OF 60% PURITY DEGREE LAW IN RELATION TO THE OBJECT OF THIS AGREEMENT.

 

 

DISTRIBUTION AND PROTECTION OF MINERAL. THE ASSIGNEE OPERATES SEVERAL DEPOSITS OF IRON ORE AND IS THEREFORE THAT IS COMMITTED TO SEPARATE FULLY IDENTIFY THE SOURCE OF ALL THE ORE THAT IS FOUND TO EFFECTIVELY AND CLEARLY SEPARATE THE ORE THAT HAS BEEN EXTRACTED FROM THE SITE OBJECT OF THIS CONTRACT.

 

RESPONSIBILITY OF THE WEIGH-IN. IT IS RESPONSIBILITY OF THE TRANSFEROR OR BY A PERSON OF TRUST AND BE AT THE TIME OF THE WEIGH-INS PRIOR TO THE ENTRY OF THE MINERAL IN THE COURTYARD OF THE ASSIGNEE AND IS THE RESPONSIBILITY OF THE TRANSFEREE SAVE RECEIPTS FOR PASSAGE IN CASE THERE IS NO REPRESENTATIVE OF THE TRANSFEROR UNTIL THEY ARE SHOWN AND REGISTERED BY THE TRANSFEROR OR PERSON OF CONFIDENCE.

 

LABOR, CIVIL LIABILITY OR CRIMINAL. THE ASSIGNOR ASSUMES NO RISK OR RESPONSIBILITY WITH WORKERS, ADMINISTRATIVE PERSONNEL AND TRUSTED THAT YOU WORK AT THE MINE, EQUALLY ASSUMES NO RISK OR DISCLAIMERS IN IT CONCERNING OCCUPATIONAL ACCIDENTS AND EMPLOYER-EMPLOYEE CONTRIBUTIONS, THE MEXICAN INSTITUTE OF SOCIAL INSURANCE, IN RELATION TO THE OBJECT OF THE PRESENT CONTRACT. LIKEWISE THE ASSIGNEE IS ASSUMED AS THE ONLY RESPONSIBLE TO PARTICULARLES OR MUNICIPAL AUTHORITIES, ESTATLES OR FEDERAL CIVILIAN, CRIMINAL, IF NEED BE THAT EXPLOSION OR REMOVE THE PRODUCT, UNAUTHORIZED AREAS OR CAUQUIER ANOTHER SITUATION THAT JURISDICTION ITS EXTRACTION PROCESS, AND MUST BRING IN PEACE AND UNLESS THE TRANSFEROR OF ANY LEGAL ACTION THAT COULD BE LODGED AGAINST AND MAKE DISCLAIMER OF THE ASSIGNEE.

 

RIGHTS OF PASSAGE. ASSIGNOR WILL BE RESPONSIBLE FOR PAYING THE OWNERS OF TERRESTRIAL HEAT DRILLINGS, AND/OR OWN INTERMEDIARIES IN THE AREA, RIGHTS-OF-WAY AND ANY OTHER RIGHT, SHARE OR USE THAT TO THAT END MIGHT CAUSE.

 

ENROLLMENT AND RATIFICATION COSTS. THE COSTS OF FEES AND RIGHTS AS IS GENERATED BY CONCEPT OF RATIFICATION AND

  

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REGISTRATION OF THIS AGREEMENT WILL BE IN CHARGE OF THE ASSIGNEE.

 

ASSIGNMENT. NEITHER PARTY MAY ASSIGN THE RIGHTS AND OBLIGATIONS SET OUT IN THIS AGREEMENT TO ANY THIRD PARTY, EXCEPT WITH THE PRIOR CONSENT BY WRITTEN ON THE OTHER HAND, HOWEVER THE ABOVE THE TRANSFEREE SHALL HAVE THE POWER TO DESIGNATE ANY OF THEIR FILLIALES COMPANIES, SO ASSUME ACCUMULATION OF OBLIGATIONS AND RESPONSIBILITIES WHICH BY VIRTUE OF THIS CONTRACT HAS ACQUIRED OBLIGANDOSE THEREFORE GIVE THE ASSIGNOR WITH 15 DAYS PRIOR NOTICE OF SUCH DESIGNATION IN WRITING TO THE DATE SCHEDULED FOR THE ASSIGNMENT.

 

NOTIFICATIONS. ANY NOTICE OR NOTIFICATION THAT SHALL HACERCSE THE PARTIES IN CONNECTION WITH THIS CONTRACT SHALL BE BY WRITTEN ACKNOWLEDGEMENT OF RECEIPT TO THE DOMICILLIOS BEFORE MENCIONADES OR TO ANY OTHER ADDRESS THAN WITH POSTERIORDAD COULD POINT THE PARTIES MAY MAKE ANNOUNCEMENTS AND VERBAL NOTIFICATIONS PROVIDED SUCH NOTICES OR NOTIFICATIONS TO BE CONFIRMED IN WRITING WITHIN 24 TWENTY-FOUR HOURS NOTICE TO CONFIRMFOR THE PURPOSES OF ITS VALIDITY.

 

 

THE HEADLINES THAT APEARS AT THE BEGINNING OF EACH OF THE CLAUSES THAT THEY INTEGRATE THIS AGREEMENT ONLY ARE INSERTED FOR REFERENCE PURPOSES AND IN ORDER TO FACILITATE ITS READING AND MANAGEMENT.

 

LEGISLATION. THE PARTIES TO THIS AGREEMENT AGREE THAT THE PLACE TO GATHER, REMEMBER, COMMENCE CONTRACTS, AGREEMENTS AND MINUTES DESCRIBED THE PHASES OF THE PROCESS FOR THE PURPOSES OF THE BUSINESS WILL BE IN THE CITY OF GUADALAJARA, JALISCO, BY WHAT IS SUBJECT TO INTERPRETATION AND ENFORCEMENT OF THE LEGISLATION IN FORCE IN GUADALAJARA, JALISCO, MEXICO.

 

CONFIDENTIALITY - PARTIES AGREE TO HOLD STRICT CONFIDENTIALITY AND NOT TO MAKE KNOWN TO ANY PERSON, SOCIETY OR ORGANIZATION ANY INFORMATION WHICH HAS THE NATURE OF CONFIDENTIAL IN TERMS THAT ARE LISTED BELOW.

 

TAXES. EACH OF THE PARTIES IS COMMITTED TO COVER THE TAXES THAN THE LAW THEM CORRESPONDING REVENUES DERIVED FROM THIS AGREEMENT, FREEING THE OTHER PARTY OF ANY RESPONSIBILITY TO RESPECT.

 

  

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INVALIDITY OR ILLEGALITY. THE INVALIDITY OR ILLEGALITY OF ANY OF THE PROVISIONS OR CLAUSES OF THIS CONTRACT NOT AFECTURA TO OTHER PROVISIONS OF THE SAME, BUT THIS SHOULD BE INTERPRETED CONSIDERING THAT SUCH PROVISIONS WERE NEVER AGREED.

 

CANCELLATION. CONTRACT IS CANCELLED AUTOMATICALLY IN CASE OF FAILURE TO COMPLY WITH THE CLAUSES OF THE PRESENT WITHOUT HAVING TO APPEAR IN THE COURTS OF ANY STATE MUTUALLY PRO ABMAS PARTS.

 

CONSENT. THE PARTIES DECLARE THAT THE CONCLUSION OF THE PRESENT CONTRACT THAT THERE DOES NOT EXIST INJURY, BAD FAITH, VIOLENCE, OR ANY OTHER DEFECT OF CONSENT THAT COULD INVALIDATE THE AGREEMENT. AWARE PARTS OF THE CONTENT AND LEGAL SCOPE OF THIS AGREEMENT OR RATIFY AND SIGN IN TRIPLICATE IN THE CITY OF MANZANILLO, COLIMA, ON THE THIRTIETH DAY OF THE MONTH OF JANUARY OF THE YEAR TWO THOUSAND THIRTEEN FALLING SOMEWHAT IN THE HANDS OF EACH OF THE PARTIES TO THE SIGN OF CONFORMITY AND HAS TO BE AWARE OF THE CONTENT OF ITS CLAUSES CONTRACTING PARTIES TO SIGN BEFORE A NOTARY OR CORRIDOR PUBLIC FOR PURPOSES OF ITS RATIFICATION.

 

SIGNED IN MANZANILLO, COLIMA, TO 30 JANUARY 2013

 

(SIGNATURES OF THE PARTIES)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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