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EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of November 18, 1996,
among AIR-CURE TECHNOLOGIES, INC., a Delaware corporation (the "COMPANY"),
INTERNATIONAL MEZZANINE CAPITAL, B.V. ("IMC") and FIRST COMMERCE CORPORATION
("FCC", and together with IMC, collectively, the "PURCHASERS").
1. Background. The Company and the Purchasers have entered into
that certain Subordinated Note and Warrant Purchase Agreement (the "PURCHASE
AGREEMENT"), dated as of November 18, 1996, pursuant to which the Company has
agreed, among other things, to issue and sell its Common Stock Purchase
Warrants Expiring November 18, 2003 (the "WARRANTS"), evidencing rights to
purchase an aggregate of 1,760,000 shares (subject to adjustment as provided
therein) of the Company's Common Stock, par value $0.001 per share (the "COMMON
STOCK"). This agreement shall become effective upon the issuance of such
Warrants.
2. Registration under Securities Act, etc.
2.1. Registration on Request.
(a) Request by Holders of Warrants or Registrable
Securities. The holders of 51% (by number of shares and shares then
purchasable by exercise of the Warrants) or more of the then outstanding
Registrable Securities and Warrants (the "MAJORITY HOLDERS") may, at any time,
request in writing that the Company effect the registration under the
Securities Act of all or part of such holders' Registrable Securities. Such
request shall specify the intended method of disposition thereof and whether or
not such requested registration is to be an underwritten offering. Promptly
after receiving such request, the Company will give written notice of such
requested registration to all other holders of Warrants or Registrable
Securities and, so long as the aggregate number of Registrable Securities
requested to be so registered under (i) and (ii) below equals at least 880,000
shares (as adjusted to reflect any stock splits, stock dividends, combinations
of common stock, reclassifications and comparable transactions occurring after
November 18, 1996), thereupon the Company will use its best efforts to effect
the registration under the Securities Act of:
(i) the Registrable Securities which the Company
has been so requested to register by such holders initiating such
request, and
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(ii) all other Registrable Securities which the
Company has been requested to register by such other holders of
Warrants or Registrable Securities by written request given to the
Company within 30 days after the giving of such written notice by the
Company (which request shall specify the intended method of
disposition of such Registrable Securities), all to the extent
requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be
registered.
The holders of Warrants or Registrable Securities shall be entitled to only one
requested registration pursuant to this Section 2.1 (unless such requested
registration is deemed not to have been effected as described in Section 2.1(e)
hereof).
(b) Registration of Other Securities. If the Company
effects the registration pursuant to this Section 2.1 in connection with an
underwritten offering by one or more holders of Registrable Securities, no
securities other than Registrable Securities shall be included among the
securities covered by the registration unless the holders of all Registrable
Securities to be covered by the registration (and the holders of all Warrants
therefor) shall have consented in writing to the inclusion of such other
securities.
(c) Registration Statement Form. The registration under
this Section 2.1 shall be on such appropriate registration form of the
Commission (i) as shall be selected by the Company and as shall be reasonably
acceptable to the Requisite Holders and (ii) as shall permit the disposition of
such Registrable Securities in accordance with the intended method or methods
of disposition specified in their request for such registration. The Company
agrees to include in such registration statement all information which holders
of Registrable Securities being registered (or holders of Warrants therefor)
shall reasonably request. The Company agrees that if the holders of
Registrable Securities so indicate in the request for registration of
Registrable Securities pursuant to this Section 2.1, the registration statement
filed in response to such request shall be a "shelf" registration statement
pursuant to Rule 415 (or any successor provision that may be adopted by the
Commission) under the Securities Act (a "Demand Shelf Registration Statement").
(d) Expenses. The Company will pay all Registration
Expenses in connection with the registration requested pursuant to this Section
2.1.
(e) Effective Registration Statement. The registration
requested pursuant to this Section 2.1 shall not be deemed to have been
effected (i) unless a registration statement with respect thereto has become
effective, (ii) if after it has become effective, the registration is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason, (iii) if,
in the event a Demand Shelf Registration Statement is effected pursuant to
Section 2.1 hereof, such Demand Shelf Registration Statement expires or
otherwise permanently ceases to be effective prior to the sale thereunder of
all Registrable Securities registered pursuant to such Demand Registration
Statement or (iv) if the
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conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with the registration are not satisfied.
(f) Selection of Underwriters. If the requested
registration pursuant to this Section 2.1 involves an underwritten offering,
the underwriter or underwriters thereof shall be selected by the Company with
the approval of the Designated Holder.
(g) Priority in Requested Registration. If the requested
registration pursuant to this Section 2.1 involves an underwritten offering,
and the managing underwriter shall advise the Company in writing (with a copy
to each holder of Warrants or Registrable Securities requesting registration)
that, in its opinion, the number of securities requested to be included in the
registration exceeds the number which can be sold in such offering within a
price range acceptable to the Designated Holder, the Company will include in
the registration to the extent of the number which the Company is so advised
can be sold in such offering Registrable Securities requested to be included in
the registration, pro rata among the holders of Registrable Securities (or
Warrants therefor) requesting the registration on the basis of the percentage
of such Registrable Securities held by or issuable to such holders. In
connection with a registration as to which the provisions of this clause (g)
apply, no securities other than Registrable Securities shall be covered by such
registration.
(h) Dispositions by the Company During Underwritten
Demand Registration. Without the prior written consent of the Requisite
Holders, the Company agrees not to effect any public sale or distribution of
any of its equity securities during the seven days prior to and the 90 days
after any underwritten registration of Registrable Securities pursuant to this
Agreement becomes effective (or, in the case of an underwritten offering of
Registrable Securities pursuant to a Demand Shelf Registration Statement, seven
days prior to and the 90 days after the date of the underwriting or purchase
agreement in connection with such underwritten offering); provided, however,
that the Company shall not be so prohibited from effecting such a public sale
or distribution made as part of such underwritten registration, or pursuant to
registrations on Form S-4 or S-8 or any successor or similar forms thereto, or
pursuant to registrations theretofore filed with the Commission under Rule 415
(or any successor or similar provision that may be adopted by the Commission)
under the Securities Act.
2.2. Incidental Registration.
(a) Right to Include Registrable Securities. If the
Company at any time proposes to register any of its securities under the
Securities Act (other than by a registration on Form S-4 or S-8 or any
successor or similar form and other than pursuant to Section 2.1), whether or
not for sale for its own account, it will each such time give prompt written
notice to all holders of Warrants or Registrable Securities of its intention to
do so and of such holders' rights under this Section 2.2. Upon the written
request of any such holder made within 30 days after the receipt of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such holder and the intended method of disposition thereof), the
Company will use
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its best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the holders thereof, provided that if, at any time after giving written notice
of its intention to register any securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register or to delay registration
of such securities, the Company may, at its election, give written notice of
such determination to each holder of Warrants or Registrable Securities and,
thereupon, (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of
any holder or holders of Warrants or Registrable Securities entitled to do so
to request that such registration be effected as a registration under Section
2.1, and (ii) in the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Securities, for the same period
as the delay in registering such other securities. No registration effected
under this Section 2.2 shall be deemed to have been effected pursuant to
Section 2.1 or shall relieve the Company of its obligation to effect a
registration upon request under Section 2.1. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this Section 2.2.
(b) Priority in Incidental Registrations. If (i) a
registration pursuant to this Section 2.2 involves an underwritten offering of
the securities so being registered, whether or not for sale for the account of
the Company, to be distributed (on a firm commitment basis) by or through one
or more underwriters of recognized standing under underwriting terms
appropriate for such a transaction, (ii) the Registrable Securities so
requested to be registered for sale are not also to be included in such
underwritten offering (because the Company has not been requested so to include
such Registrable Securities pursuant to Section 2.4 (b), or if so requested, is
not obligated to do so under Section 2.4 (b)), and (iii) the managing
underwriter of such underwritten offering shall inform the Company and the
holders of Warrants or Registrable Securities requesting such registration by
letter of its belief that the number of securities requested to be included in
such registration exceeds the number which can be sold in (or during the time
of) such offering, then the Company may include all securities proposed by the
Company to be sold for its own account and may decrease the number of
Registrable Securities and other securities of the Company so proposed to be
sold and so requested to be included in such registration (pro rata among the
holders thereof on the basis of the percentage of the securities of the Company
held by such holders) to the extent necessary to reduce the number of
securities to be included in the registration to the level recommended by the
managing underwriter, provided that no holder of Common Stock whose exercise of
a demand registration right caused the filing of a registration statement shall
be required to reduce the number of shares included in such registration by
such holder.
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2.3. Registration Procedures.
(a) Company Procedures. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2, the
Company will as expeditiously as possible:
(i) prepare and (as soon thereafter as possible
or in any event no later than 60 days after the end of the period
within which requests for registration may be given to the Company)
file with the Commission the requisite registration statement to
effect such registration and thereafter use its best efforts to cause
such registration statement to become effective, provided that the
Company may discontinue any registration of its securities which are
not Registrable Securities (and, under the circumstances specified in
Section 2.2(a), its securities which are Registrable Securities) at
any time prior to the effective date of the registration statement
relating thereto;
(ii) prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep
such registration statement effective, to permit continuous resales
thereunder by the holders of Registrable Securities, and to comply
with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement
until such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement;
(iii) furnish to each seller of Registrable
Securities covered by such registration statement such number of
conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424
under the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, as the Designated Holder may
reasonably request;
(iv) use its best efforts to register or qualify
all Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of
such jurisdictions as the Designated Holder shall reasonably request,
to keep such registration or qualification in effect for so long as
such registration statement remains in effect, and take any other
action which may be reasonably necessary or advisable to enable each
seller to consummate the disposition in such jurisdictions of the
securities owned by such seller, except that the Company shall not for
any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for
the requirements of this subdivision (iv) be obligated to be so
qualified or to consent to general service of process in any such
jurisdiction;
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(v) use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as
may be necessary to enable the seller or sellers thereof to consummate
the disposition of such Registrable Securities;
(vi) furnish to the Designated Holder a signed
counterpart, addressed to each seller of Registrable Securities, the
Designated Holder and any underwriters (or, if not so addressed,
explicitly stating that such parties may rely thereupon) of:
(x) an opinion of counsel for the
Company, dated the effective date of such registration
statement (and, if such registration includes an underwritten
public offering, dated the date of the closing under the
underwriting agreement), reasonably satisfactory in form and
substance to the Designated Holder, and
(y) a "comfort" letter, dated the
effective date of such registration statement (and, if such
registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement),
signed by the independent public accountants who have
certified the Company's financial statements included in such
registration statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in
the case of the accountants' letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered
in opinions of issuer's counsel and in accountants' letters delivered
to the underwriters in underwritten public offerings of securities
and, in the case of the accountants' letter, such other financial
matters, and, in the case of the legal opinion, such other legal
matters, as the Designated Holder may reasonably request;
(vii) notify the Designated Holder at any time when
a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any
event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made, and at the request of the Designated Holder promptly
prepare and furnish to the Designated Holder or any seller of
Registrable Securities covered by such registration statement a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made;
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(viii) otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable,
an earnings statement covering the period of at least twelve months,
but not more than eighteen months, beginning with the first full
calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act, and will furnish to the
Designated Holder and each such seller at least five business days
prior to the filing thereof a copy of any amendment or supplement to
such registration statement or prospectus and shall not file any
thereof to which the Designated Holder shall have reasonably objected
on the grounds that such amendment or supplement does not comply in
all material respects with the requirements of the Securities Act or
of the rules or regulations thereunder;
(ix) provide and cause to be maintained a transfer
agent and registrar for all Registrable Securities covered by such
registration statement from and after a date not later than the
effective date of such registration statement;
(x) use its best efforts to cause all Registrable
Securities covered by such registration statement to be listed on any
securities exchange on which any of the Registrable Securities are
then listed or to be quoted by the Nasdaq National Market (or any
successor thereto or any comparable system) on which any of the
Registrable Securities are then quoted; and
(xi) enter into such agreements and take such
other actions as the Designated Holder shall reasonably request in
order to expedite or facilitate the disposition of such Registrable
Securities.
(b) Certain Other Procedures.
(i) The Company may require each seller of
Registrable Securities as to which any registration is being effected
to furnish the Company such information regarding such seller and the
distribution of such securities as the Company may from time to time
reasonably request in writing.
(ii) Notwithstanding anything herein to the
contrary, if the Company determines in its good faith judgment that
the filing of a registration statement otherwise required to be filed
hereunder, or of any supplement or amendment to a registration
statement to keep such registration statement continuously effective
under the Securities Act and usable by holders for resales of
Registrable Securities as would otherwise be required hereunder, would
require disclosure of material information the disclosure of which
would materially adversely affect the Company's ability to consummate
a significant transaction, upon written notice of such determination
by the Company, the obligation of the Company to file, supplement or
amend the registration statement will be suspended
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until the Company notifies the holders in writing that the reasons for
suspension of such obligations on the part of the Company no longer
exist; provided that no such suspension shall last more than 60
consecutive days. In addition, if the Company initiates and is in
good faith pursuing an underwritten primary offering of equity
securities (as defined in Rule 405 under the Securities Act) on a
registration statement (other than any registration by the Company on
Form S-8, or a successor or substantially similar form, of an employee
stock option, stock purchase or compensation plan or of securities
issued or issuable pursuant to any such plan), the obligation
hereunder of the Company to file, supplement or amend a registration
statement shall be suspended during the registration period of such
underwritten primary equity offering; provided that no such suspension
shall last more than 60 consecutive days.
(iii) Each holder of Registrable Securities agrees
by acquisition of such Registrable Securities that (a) upon receipt of
any notice from the Company of the happening of any event of the kind
described in the subdivision (vii) of Section 2.3(a), such holder will
forthwith discontinue such holder's disposition of Registrable
Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of
the supplemented or amended prospectus contemplated by subdivision
(vii) of Section 2.3(a) and (b) upon the receipt of any notice from
the Company of any suspension period referred to in subdivision (ii)
of Section 2.3(b), such holder will forthwith discontinue such
holder's disposition of Registrable Securities pursuant to the
registration statement until it is advised in writing by the Company
that the resales under the registration statement may be resumed. The
Company will use its best efforts to take such action as is necessary
to allow resales to so resume; and will promptly notify the holder's
of Registrable Securities when such resales may be resumed.
2.4 Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by
the underwriters for any underwritten offering of Registrable Securities
pursuant to a registration requested under Section 2.1, the Company will enter
into an underwriting agreement with such underwriters for such offering, such
agreement to be satisfactory in substance and form to the Designated Holder and
the underwriters and to contain such representations and warranties by the
Company and such other terms as are generally prevailing in agreements of this
type, including, without limitation, indemnities to the effect and to the
extent provided in Section 2.6. The holders of Registrable Securities to be
distributed by such underwriters shall be parties to such underwriting
agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all
of the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. Any such holder of Registrable Securities
shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than the indemnity
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agreement specified in Section 2.6(b) hereof and representations, warranties or
agreements regarding such holder, such holder's Registrable Securities and such
holder's intended method of distribution and any other representation required
by law.
(b) Incidental Underwritten Offerings. If the Company at
any time proposes to register any of its securities under the Securities Act as
contemplated by Section 2.2 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any holder
of Warrants or Registrable Securities as provided in Section 2.2 and subject to
the provisions of Section 2.2(b), arrange for such underwriters to include all
the Registrable Securities to be offered and sold by such holder among the
securities to be distributed by such underwriters. The holders of Registrable
Securities to be distributed by such underwriters shall be parties to the
underwriting agreement between the Company and such underwriters and may, at
their option, require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such holders of Registrable
Securities. Any such holder of Registrable Securities shall not be required to
make any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding
such holder, such holder's Registrable Securities and such holder's intended
method of distribution and any other representation required by law, and other
than the indemnity agreement specified in Section 2.6(b) hereof.
2.5. Preparation; Reasonable Investigation. In connection
with the preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company will give the Designated
Holder, underwriters for the holders of Registrable Securities registered under
such registration statement, if any, and their respective counsel and
accountants the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give
each of them such access to its books and records and such opportunities to
discuss the business of the Company with its officers and the independent
public accountants who have certified its financial statements as shall be
necessary, in the opinion of such Designated Holder's and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
2.6. Indemnification.
(a) Indemnification by the Company. In the event of any
registration of any securities of the Company under the Securities Act, the
Company will, and hereby does, (i) in the case of any registration statement
filed pursuant to Section 2.1 or 2.2 indemnify and hold harmless the seller of
any Registrable Securities covered by such registration statement, its
directors and officers, each other Person who participates as an underwriter in
the offering or sale of such securities and each other Person, if any, who
controls such seller or any such underwriter within
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the meaning of the Securities Act, and (ii) in the case of any registration
statement of the Company, indemnify and hold harmless the Designated Holder,
its directors and officers and each other Person, if any, who controls the
Designated Holder within the meaning of the Securities Act, in each case
against any losses, claims, damages or liabilities, joint or several, to which
such seller or the Designated Holder or any such director or officer or
underwriter or controlling person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will reimburse such seller,
the Designated Holder and each such director, officer, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company through an
instrument duly executed by such seller or the Designated Holder, as the case
may be, specifically stating that it is for use in the preparation thereof and,
provided further that the Company shall not be liable to any Person who
participates as an underwriter, in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within
the meaning of the Securities Act, in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such seller
or any such director, officer, underwriter or controlling person and shall
survive the transfer of such securities by such seller.
(b) Indemnification by the Sellers. The Company may
require, as a condition to including any Registrable Securities in any
registration statement filed pursuant to Section 2.3, that the Company shall
have received an undertaking satisfactory to it from the prospective seller of
such securities, to indemnify and hold harmless (in the same manner and to the
same extent as set forth in subdivision (a) of this Section 2.6) the Company,
each director of the Company, each officer of the Company and each other
Person, if any, who controls the Company within the meaning of the Securities
Act, with respect to any statement or alleged statement in or omission or
alleged omission from such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, if such
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statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller specifically stating
that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Such indemnity shall remain in full force and effect, regardless
of any investigation made by or on behalf of the Company or any such director,
officer or controlling Person and shall survive the transfer of such securities
by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section
2.6, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action, provided that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under the preceding subdivisions of this Section 2.6, except to
the extent that the indemnifying party is actually prejudiced by such failure
to give notice. In case any such action is brought against an indemnified
party, unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such claim, the indemnifying party shall be entitled to participate in and
to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
(d) Other Indemnification. Indemnification similar to
that specified in the preceding subdivisions of this Section 2.6 (with
appropriate modifications) shall be given by the Company and each seller of
Registrable Securities with respect to any required registration or other
qualification of securities under any Federal or state law or regulation of any
governmental authority other than the Securities Act.
(e) Indemnification Payments. The indemnification
required by this Section 2.6 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense as and when bills are
received or expense, loss, damage or liability is incurred.
2.7. Adjustments Affecting Registrable Securities. The
Company will not effect or permit to occur any combination or subdivision of
shares which would have a material adverse effect upon the ability of the
holders of Registrable Securities or Warrants therefor to include such
Registrable Securities in any registration of its securities contemplated by
this Section 2 or the
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marketability of such Registrable Securities under any such registration,
whether by materially increasing or decreasing the price per share of such
Registrable Securities or otherwise.
2.8 Granting of Registration Rights. The Company shall
not, without the prior written consent of the Majority Holders, grant any right
to any other person to register any shares of capital stock or other securities
of the Company if such right could reasonably be expected to conflict with, or
be superior to the rights of the holders of Registrable Securities under, this
Agreement, unless the holders of Registrable Securities are granted the same
right as is granted to such other person.
3. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
Common Stock: As defined in Section 1.
Commission: The Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
Company: As defined in the introductory paragraph of this
Agreement.
Designated Holder: With respect to any registration of
Registrable Securities by the Company pursuant to Section 2, a holder
of Registrable Securities (or Warrants therefor) appointed by the
Requisite Holders to act as agent for all holders of Registrable
Securities to be registered (or Warrants therefor), with written
notice of such appointment provided to the Company. The Designated
Holder shall be entitled to indemnification by such other holders of
Registrable Securities (or Warrants therefor).
Exchange Act: The Securities Exchange Act of 1934, or any
similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Securities Exchange Act of
1934 shall include a reference to the comparable section, if any, of
any such similar Federal statute.
Majority Holders: As defined in Section 1.
Person: A corporation, an association, a partnership, a
business, an individual, a governmental or political subdivision
thereof or a governmental agency.
Purchase Agreement: As defined in Section 1.
Purchasers: As defined in the introductory paragraph of this
Agreement.
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Registrable Securities: (a) Any shares of Common Stock issued
or issuable upon exercise of any of the Warrants and (b) any
securities issued or issuable with respect to any such Common Stock by
way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or
other reorganization or otherwise. As to any particular Registrable
Securities, once issued such securities shall cease to be Registrable
Securities when (a) a registration statement with respect to the sale
of such securities shall have become effective under the Securities
Act and such securities shall have been disposed of in accordance with
such registration statement, (b) they shall have been distributed to
the public pursuant to Rule 144 (or any successor provision) under the
Securities Act, (c) they shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent
disposition of them shall not require registration or qualification of
them under the Securities Act or any similar state law then in force,
or (d) they shall have ceased to be outstanding.
Registration Expenses: All expenses incident to the Company's
performance of or compliance with Section 2, including, without
limitation, all registration, filing and National Association of
Securities Dealers fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and
printing expenses, messenger and delivery expenses, the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and
compliance, the fees and disbursements incurred by the holders of
Registrable Securities to be registered and the holders of Warrants
therefor (but excluding the fees and disbursements of (a) any
accountants retained by any such holders and (b) any counsel other
than counsel retained by the Designated Holder on behalf of all such
holders) and any fees and disbursements of underwriters customarily
paid by issuers or sellers of securities, but excluding underwriting
discounts and commissions and transfer taxes, if any.
Requisite Holders: With respect to any registration of
Registrable Securities by the Company pursuant to Section 2, any
holder or holders of 51% (by number of shares) of the Registrable
Securities to be so registered or of Warrants for such Registrable
Securities.
Securities Act: The Securities Act of 1933, or any similar
Federal statute, and the rules and regulations of the Commission
thereunder, all as of the same shall be in effect at the time.
References to a particular section of the Securities Act of 1933 shall
include a reference to the comparable section, if any, of any such
similar Federal Statute.
4. Rule 144: If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act, the
Company will file the reports required to be filed by it under the Securities
Act and the Exchange Act and the rules and regulations adopted by the
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Commission thereunder (or, if the Company is not required to file such reports,
will, upon the request of any holder of Warrants or Registrable Securities,
make publicly available other information) and will take such further action as
any holder of Warrants or Registrable Securities may reasonably request, all to
the extent required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time or (b) any similar rule or regulation
hereafter adopted by the Commission. Upon the request of any holder of
Warrants or Registrable Securities, the Company will deliver to such holder a
written statement as to whether it has complied with such requirements.
5. Amendments and Waivers. This Agreement may be amended and the
Company may take any action herein prohibited or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the Majority
Holders. Each holder of any Warrants or Registrable Securities at the time or
thereafter outstanding shall be bound by any consent authorized by this Section
5, whether or not such Registrable Securities shall have been marked to
indicate such consent.
6. Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election, be treated as the holder of
such Warrants or Registrable Securities for purposes of any request or other
action by any holder or holders of Warrants or Registrable Securities pursuant
to this Agreement or any determination of any number or percentage of shares of
Warrants or Registrable Securities held by any holder or holders of Warrants or
Registrable Securities contemplated by this Agreement. If the beneficial owner
of any Warrants or Registrable Securities so elects, the Company may require
assurances reasonably satisfactory to it of such owner's beneficial ownership
of such Warrants or Registrable Securities.
7. Notices. All communications provided for hereunder shall be
sent by first-class mail and (a) if addressed to a party other than the
Company, addressed to such party in the manner set forth in the Purchase
Agreement, or at such other address as such party shall have furnished to the
Company in writing, or (b) if addressed to the Company, at 0000 Xxxxx Xxxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attention: Chief Financial Officer, or at such
other address, or to the attention of such other officer, as the Company shall
have furnished to each holder of Warrants or Registrable Securities at the time
outstanding; provided, however, that any such communication to the Company may
also, at the option of any of the parties hereunder, be either delivered to the
Company at its address set forth above or to any officer of the Company.
8. Assignment. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and assigns. In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the
benefit of the parties hereto other than the Company shall also be for the
benefit of and enforceable by any subsequent holder of any Warrants or
Registrable Securities, subject to the provisions respecting the minimum
numbers or percentages of shares of Warrants or
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Registrable Securities required in order to be entitled to certain rights, or
to take certain actions contained herein.
9. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
10. Specific Performance. The parties hereto recognize and agree
that money damages may be insufficient to compensate the holders of any
Warrants or Registrable Securities for breaches by the Company of the terms
hereof and, consequently, that the equitable remedy of specific performance of
the terms hereof will be available in the event of any such breach.
11. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the
laws of the State of New York. In the event a final judgment by a court of
competent jurisdiction holds that such choice of New York law is unenforceable,
then this Agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of Louisiana.
12. Counterparts. This Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed an original, but
all such counterparts shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
AIR-CURE TECHNOLOGIES, INC.
By:
------------------------------------
Name:
Title:
INTERNATIONAL MEZZANINE CAPITAL, B.V.
By:
------------------------------------
Sjaak Xxxxxxxx
Authorized Officer
FIRST COMMERCE CORPORATION
By:
------------------------------------
Xxxxxx X. Xxxx, Xx.
Senior Executive Vice President
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