REGISTRATION RIGHTS AGREEMENT AMONG PURE EARTH, INC. AND CERTAIN HOLDERS OF ITS SHARES Dated as of March 4, 2008
Exhibit 4.14
AMONG
AND
CERTAIN HOLDERS OF ITS SHARES
Dated as of March 4, 2008
TABLE OF CONTENTS
ARTICLE I |
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DEFINITIONS |
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ARTICLE II |
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REGISTRATION UNDER SECURITIES ACT |
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2.1 Registration on Request |
3 | |||
2.2 Incidental Registration |
4 | |||
2.3 Registration Procedures |
5 | |||
2.4 Underwritten Offerings |
8 | |||
2.5 Preparation; Reasonable Investigation |
9 | |||
2.6 Indemnification |
9 | |||
2.7 Participation in Underwritten Registrations |
12 | |||
2.8 Adjustments Affecting Registrable Securities |
12 | |||
ARTICLE III |
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MISCELLANEOUS |
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3.1 Rule 144; Rule 144A |
12 | |||
3.2 Other Registration Rights |
13 | |||
3.3 Amendments and Waivers |
13 | |||
3.4 Notices |
13 | |||
3.5 Binding Agreement |
13 | |||
3.6 Nominees for Beneficial Owners |
14 | |||
3.7 Descriptive Headings |
14 | |||
3.8 Specific Performance |
14 | |||
3.9 GOVERNING LAWS |
14 | |||
3.10 Counterparts |
14 | |||
3.11 Severability |
14 | |||
3.12 Entire Agreement |
15 | |||
This REGISTRATION RIGHTS AGREEMENT is made and entered into this 4th day of March, 2008
between PURE EARTH, INC., a Delaware corporation (the “Company”), and each of the Persons
signatory hereto, whether on the signature pages hereto or pursuant to a joinder agreement
(together with their respective successors and permitted assigns, the “Holders” and
individually as a “Holder”).
In consideration of the parties entering into the agreements and carrying out the transactions
herein described, and for other good and valuable consideration, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used herein, unless the context otherwise requires, the following terms have the following
respective meanings:
“Commission” means the Securities and Exchange Commission or any other United States
agency at the time administering the Securities Act.
“Common Shares” means shares of Common Stock.
“Common Stock” means the then outstanding shares of the capital stock of the Company,
however designated, that is not limited as to the amount of dividends or the amount of
distributions upon liquidation or dissolution of the Company.
“Exchange Act” means the Securities Exchange Act of 1934, or any successor statute,
and the rules and regulations of the Commission thereunder, all as the same shall be in effect at
the time.
“Initial Public Offering” means the first Public Offering by the Company.
“Person” means an individual, a partnership, a joint venture, a corporation, a limited
liability company, a trust, an unincorporated organization and a government or any department or
agency thereof.
“Public Offering” means any primary or secondary public offering of Common Shares
pursuant to an effective registration statement under the Securities Act other than a registration
statement on a form registering the types of transactions generally eligible for registration on
Form S-4 or S-8 (or any successor forms thereto).
“Public Sale” means any Public Offering or any sale of Common Shares to the public
pursuant to Rule 144 effected through a broker or dealer.
“Qualified Public Offering” means the consummation of one or more public offerings of
Common Stock or Common Stock Equivalents of the Company pursuant to an effective registration
statement (other than on Form S-4 or Form S-8) under the Securities Act, (i) in each case
underwritten by a regionally or nationally recognized investment bank pursuant to which the Company
receives gross cash proceeds (before reduction for underwriting commissions, registration fees and
expense and other costs and expenses relating to the offering) of at least $20,000,000 and (ii)
that alone or in the aggregate for all such offerings described in the immediately preceding clause
(i) have gross cash proceeds (before reduction for underwriting commissions, registration fees and
expenses and other costs and expenses relating to such offerings) of at least $50,000,000.
“Registrable Securities” means (i) any outstanding Common Shares issued or issuable to
the Holders and (ii) any securities issued or issuable with respect to any such Common Shares 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
(i) 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 distributed in accordance
with such registration statement, (ii) such securities have been distributed to the public pursuant
to Rule 144 (or any successor provision) under the Securities Act, (iii) such securities shall have
been otherwise transferred and the subsequent disposition thereof shall not require registration or
qualification under the Securities Act or any similar state law then in force or (iv) such
securities shall have ceased to be outstanding.
“Registration Expenses” means all expenses incident to the Company’s performance of or
compliance with Article II, including, without limitation, (i) all registration, filing and NASD
fees, (ii) all fees and expenses of complying with securities or blue sky laws, (iii) all word
processing, duplicating and printing expenses, (iv) messenger and delivery expenses, (v) 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, (vi) the reasonable fees and expenses of one counsel, who may be
counsel for the Company, chosen by the Holders of a majority of the Registrable Securities included
in such Public Offering, (vii) premiums and other costs of policies of insurance against
liabilities arising out of the public offering of the Registrable Securities being registered (if
the Company elects to obtain any such insurance), and (viii) 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.
“Requesting Holder” means, in respect of any registration pursuant to Article II
hereof, any Holder who gives notice to the Company of its request to include Registrable Securities
in such registration.
“Rule 144” means Rule 144 promulgated by the Commission under the Securities Act as
such rule may be amended from time to time, or any similar rule then in force.
“Securities Act” means the Securities Act of 1933, or any successor statute, and the
rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.
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ARTICLE II
REGISTRATION UNDER SECURITIES ACT
2.1 Registration on Request.
(a) Request. If at any time after the Company consummates a Qualified Public Offering
through the tenth anniversary of the date hereof, the Holders of a majority of Registrable
Securities request in writing that the Company effect the registration under the Securities Act of
a specified number of the Registrable Securities held by them, specifying the intended method of
disposition thereof, the Company will promptly give written notice of such requested registration
to all registered Holders, and thereupon the Company, in accordance with the provisions of Section
2.3 hereof, will use its reasonable efforts to effect the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so requested to register for
disposition in accordance with the intended method or methods of disposition stated in such
request, and
(ii) all other Registrable Securities which the Company has been requested to register
by the Holders thereof by written request given to the Company within 20 days after the
giving of such written notice by the Company,
all to the extent required to permit the disposition (in accordance with the intended methods
thereof as aforesaid) of Registrable Securities to be so registered. The Company shall be required
to effect only one registration pursuant to this Section 2.1(a).
(b) Effective Registration Statement. A registration requested pursuant to this
Section 2.1 shall not be deemed to be effected (i) if a registration statement with respect thereto
shall not have become effective, (ii) if, after it has become effective, such registration is
interfered with for any reason by any stop order, injunction or other order or requirement of the
Commission or any other governmental agency or any court, and the result of such interference is to
prevent the Holders of Registrable Securities to be sold thereunder from disposing of such
Registrable Securities in accordance with the intended methods of disposition, or (iii) if the
conditions to closing specified in the purchase agreement or underwriting agreement entered into in
connection with any underwritten registration shall not be satisfied or waived with the consent of
the Holders of a majority of the Registrable Securities that were to have been sold thereunder,
other than as a result of any breach by any Holder of its obligations thereunder or hereunder.
(c) Registration Statement Form. Registrations under this Section 2.1 shall be on
such appropriate registration form of the Commission as shall be selected by the Company and as
shall permit the disposition of the Registrable Securities to be so registered in accordance with
the intended method or methods of disposition specified in the request of the Holders of
Registrable Securities being registered for such registration. The Company agrees to include in
any such registration statement all information which the Holders of Registrable Securities being
registered shall reasonably request.
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(d) Expenses. The Registration Expenses in connection with any registration requested
pursuant to this Section 2.1 shall be paid one-half by the Company and one-half by the participants
(including the Company in respect of any primary or original issuance shares) in such registration
pro rata based on the number of shares included in the registration.
(e) Selection of Underwriters. If a requested registration pursuant to this Section
2.1 involves an underwritten offering, the managing underwriter or underwriters shall be selected
by the Holders of a majority of the Registrable Securities requested by the Requesting Holders to
be included in such registration statement, subject to the reasonable approval of the Company’s
Board of Directors.
(f) Priority in Requested Registrations. If a 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 Requesting Holder) that, in its opinion, the number of
securities requested to be included in such registration exceeds the number which can be sold in
such offering within a price range acceptable to the Company and Holders of a majority of the
Registrable Securities who initiated the registration, the Company will include in such
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 such registration by all Holders
thereof, pro rata among such Holders on the basis of the number of Registrable Securities requested
to be so registered.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. Through the tenth anniversary of the
date hereof, if the Company at any time proposes to register any of its securities under the
Securities Act (other than the Company’s Initial Public Offering and other than by a registration
on Form S-4 or S-8 (or any successor forms thereto) or filed in connection with an exchange offer,
or any offering of securities solely to the Company’s existing security holders, and other than
pursuant to Section 2.1), whether or not for sale for its own account, the Company will at each
such time give prompt written notice to all Holders of its intention to do so and of such Holders’
rights under this Section 2.2. Upon the written request of any Holder made within 20 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,
subject to the provisions of Section 2.2(c), use its reasonable 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, to the extent required to permit the disposition (in accordance
with the intended methods thereof as aforesaid) of the Registrable Securities to be so registered;
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 Requesting Holder 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 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. Notwithstanding anything herein to the contrary, if any
Registrable Securities are
included in the registration constituting the Initial Public Offering, all Holders shall,
subject to the provisions of Section 2.2(c), be entitlted to include Registrable Securities
therein.
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(b) Expenses. The Company will pay all Registration Expenses (other than the expenses
of any counsel to the Holders of Registrable Securities) in connection with each registration of
Registrable Securities requested pursuant to this Section 2.2 including, without limitation, any
such registration not effected by the Company. To the extent expenses of the registration are not
required to be paid by the Company, each holder of securities included in the registration will pay
its own expenses.
(c) Priority in Incidental Registrations. If a registration pursuant to this Section
2.2 involves an underwritten offering, and the managing underwriter shall advise the Company in
writing, that, in its opinion, the number of securities requested and otherwise proposed to be
included in such registration exceeds the number which can be sold in such offering within a price
range acceptable to the Company, or that the kind of securities requested or otherwise proposed to
be included in such registration statement would materially and adversely affect the success of
such offering, the Company will include in such registration, to the extent of the number which the
Company is so advised can be sold in such offering, (i) if the registration is a primary
registration on behalf of the Company, (A) first, the securities proposed to be registered by the
Company, and (B) second, the Registrable Securities and securities of other Persons included in
such registration pro rata in accordance with the number of Registrable Securities requested to be
included by the Requesting Holders and the number of other securities proposed to be registered by
the other Persons with registration rights under written agreements (notwithstanding anything to
the contrary in any other such written agreement), and (ii) if the registration is a secondary
registration on behalf of other Persons, the Registrable Securities and securities of other Persons
included in such registration pro rata in accordance with the numbers of Registrable Securities
requested to be included by the Requesting Holders and the numbers of other securities proposed to
be registered by the other Persons. Without the consent of the Holders of at least a majority of
Registrable Securities, the Company will not grant any registration rights inconsistent with the
provisions of this Section 2.2. In the event a contemplated distribution does not involve an
underwritten public offering, the determinations contemplated by this Section 2.2 shall be made by
the Board of Directors in its reasonable discretion.
2.3 Registration Procedures. If and whenever the Company is required to use its
reasonable 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:
(a) prepare and as soon thereafter as practicable file with the Commission the requisite
registration statement to effect such registration and thereafter use its reasonable efforts to
cause such registration statement to become effective; provided, that before filing such
registration statement or any amendments thereto, the Company will furnish to the Requesting
Holders copies of all such documents proposed to be filed; provided, further, that,
in addition to the delay or cancellation rights of the Company set forth in Section 2.2(a), the
Company may postpone the filing or effectiveness of a registration for a period not to exceed
ninety (90) days if
the Company reasonably believes that such registration might reasonably be expected to have an
adverse effect on any proposal or plan to engage in any acquisition of assets or capital stock or
any merger, consolidation, tender offer or similar transaction; or would otherwise require
disclosure of information which the Board of Directors of the Company determines should not be
disclosed; provided, further, that no more than one postponement under this
Section 2.3(a) may be imposed during any twelve-month period.
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(b) 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 continuously effective for a period of either (i) not more than 90 days
(subject to extension pursuant to the last paragraph of this Section 2.2) or, if such registration
statement relates to an underwritten offering, such longer period as, in the opinion of counsel for
the underwriters, a prospectus is required by law to be delivered in connection with sales of
Registrable Securities by an underwriter or dealer or (ii) such shorter period as will terminate
when all of the securities covered by such registration statement have been disposed of in
accordance with the intended methods of disposition by the seller or sellers thereof set forth in
such registration statement (but in any event not before the expiration of any longer period
required under the Securities Act), 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;
provided, that the Company may terminate the effectiveness of a registration if the Company
reasonably believes that such registration might reasonably be expected to have an adverse effect
on any proposal or plan to engage in any acquisition of assets or capital stock or any merger,
consolidation, tender offer or similar transaction or would otherwise require disclosure of
information which the Board of Directors of the Company determines should not be disclosed, in
which event, such registration will not count as a registration pursuant to Section 2.1 with
respect to Requesting Holders who have not sold thereunder all of the Registrable Securities
included in such registration;
(c) furnish to each Requesting Holder such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case including all exhibits,
but only one copy thereof to each such Requesting Holder), 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 in order to facilitate the
disposition of the Registrable Securities owned by such Requesting Holder, as such Requesting
Holder may reasonably request;
(d) use its reasonable efforts to register or qualify such Registrable Securities and other
securities covered by such registration statement under such other securities or blue sky laws of
such jurisdictions as each Requesting Holder thereof shall reasonably request, to keep such
registration or qualification in effect for so long as such registration statement remains in
effect, and to take any other action which may be reasonably necessary or advisable to enable such
Requesting Holder to consummate the disposition in such jurisdictions of the securities owned by
such Requesting Holder; provided, that the Company shall not for any such purpose be
required to (i) qualify generally to do business as a foreign corporation in any jurisdiction where
it would not otherwise be required to qualify but for the requirements of this Section 2.3(d),
(ii) consent to general service of process in any such jurisdiction or (iii) subject itself to
taxation in such jurisdiction;
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(e) use its reasonable 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 by virtue of the business and operations of the Company to enable
the Requesting Holder or Requesting Holders thereof to consummate the disposition of such
Registrable Securities;
(f) promptly notify each Requesting Holder, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or upon the discovery of
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 any
such Requesting Holder, promptly prepare and furnish to such Requesting Holder 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;
(g) otherwise use its reasonable 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 a 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 each Requesting Holder a copy of any amendment or supplement to such
registration statement or prospectus upon the filing thereof with the Commission;
(h) 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;
(i) use its reasonable efforts to cause all such Registrable Securities covered by such
registration statement to be listed on any securities exchange on which similar securities issued
by the Company are then listed, if the listing of such Registrable Securities is then permitted
under the rules of such exchange;
(j) if such registration is an underwritten public offering, obtain one or more comfort
letters, 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),
signed by the Company’s independent public accountants in customary form and covering matters
customarily covered by comfort letters; and
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(k) obtain a legal opinion of the Company’s counsel, dated the effective date of such
registration statement (or, if such registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement) as required by the underwriters, if any,
or, if such registration does not include an underwritten public offering, in customary form and
covering such matters customarily covered by opinion letters as the Holders of a majority of the
Registrable Securities being sold reasonably request.
The Company may require each Holder of Registrable Securities as to which any registration is
being effected to furnish the Company such information regarding such Holder and the distribution
of such securities as the Company may from time to time reasonably request in writing.
Each Holder agrees that upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 2.3(f), 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 Section 2.3(f) and, if so directed by the Company, such Holder will use
its reasonable efforts to deliver to the Company all copies, other than permanent file copies then
in such Holder’s possession, of the prospectus relating to such Registrable Securities current at
the time of receipt of such notice. In the event the Company shall give any such notice, the
applicable time period mentioned in Section 2.3(b) during which a Registration Statement is to
remain effective shall be extended by the number of days during the period from and including the
date of the giving of such notice pursuant to Section 2.3(g), to and including the date when each
Holder of a Registrable Security covered by such registration statement shall have received the
copies of the supplemented or amended prospectus contemplated by Section 2.3(g).
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 shall be reasonably satisfactory in substance and form to the Holders of
a majority of the Registrable Securities included in such registration and the underwriters and
shall contain such representations and warranties by the Company and by the selling Holders 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 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.
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(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, (i) the managing
underwriter or underwriters shall be selected by the Company, and (ii) the Company will, if
requested by any Holder as provided in Section 2.2, and subject to the provisions of Section
2.2(b), use its reasonable efforts to 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 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.
(c) Holdback Agreements. Each Holder agrees for the benefit of the Company not to
effect any Public Sale of any equity securities of the Company, or any securities convertible into
or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 under the
Securities Act (or any similar provision then in force), during the ten days before and the number
of days established for a lockup by the underwriters (but in any event not to exceed 180 days)
after the effective date of the Company’s Initial Public Offering; provided,
however, that such limitation shall be applicable only in the event and only for as long as
all officers, directors and other affiliates of the Company are subject to the same limitation;
provided, further, however, that such limitation shall cease to apply
immediately upon the effectiveness of any subsequent registration statement with respect to the
Company’s equity securities (other than any registration statement on Form S-4 or S-8 (or any
successor forms thereto)).
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 Holders of Registrable Securities registered under such registration
statement, their underwriters, if any, and their respective counsel and accountants reasonable
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,
but only to the extent of disclosure about such Holders contained in each such document.
2.6 Indemnification.
(a) Indemnification by the Company. In the event of any registration of any
securities of the Company under the Securities Act pursuant to this Article II, the Company will,
and hereby does, indemnify and hold harmless, the Holder of any Registrable Securities covered by
such registration statement, each director of the Company, each officer of the Company, and 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 Holder or any such underwriter within the meaning of the
Securities Act, against any losses, claims, damages, liabilities or expenses, joint or several, to
which such Holder or any such director, officer, agent, employee, underwriter or controlling person
may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained (x) in any registration statement
under which such securities
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were
registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein or used in connection with the offering of
securities covered thereby, or any amendment or supplement thereto or any document included by
reference therein, or (y) in any application or other document or communication (in this Section
2.7 collectively called an “application”) executed by or on behalf of the Company or based
upon written information furnished by or on behalf of the Company filed in any jurisdiction in
order to qualify any securities covered by such registration statement under the “blue sky” or
securities laws thereof, or (ii) 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 Holder and each such director, officer, agent, employee, underwriter
and controlling person for any reasonable legal or any other expenses 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, or in any application, in reliance upon and in
conformity with written information prepared and furnished to the Company by such Holder
specifically for use in the preparation thereof. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such Holder or any such director,
officer, agent, employee, underwriter or controlling Person and shall survive the transfer of such
securities by such Holder. The Company shall not be obligated to pay the fees and expenses of more
than one counsel or firm of counsel for all parties indemnified in respect of a claim for each
jurisdiction in which such counsel is required unless in the reasonable judgment of such counsel a
conflict of interest may exist between such indemnified party and any other indemnified party in
respect of such claim.
(b) Indemnification by the Holders. Each Holder of any Registrable Securities covered
by any registration under the Securities Act pursuant to this Article II shall indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section 2.6(a)) 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, or any application, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written information prepared and
furnished to the Company by such Holder specifically for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement, or such application. 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 Holder. The indemnity
provided by each Holder under this Section 2.6(b) shall be provided severally, and not jointly or
jointly and severally with any other seller or prospective seller of the Company’s securities, and,
in the absence of fraud on the part of such Holder, shall be limited in amount to the lesser of (i)
such Holder’s allocable portion (based upon the number of Registrable Securities included in the
registration statement) of the liability for
indemnification and (ii) the net amount of proceeds received by such Holder from the sale of
Registrable Securities pursuant to such registration statement.
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(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. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement which includes any
admission of liability of such indemnified party or 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) 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, subject
to refund if the party receiving such payments is subsequently found not to have been entitled
thereto hereunder.
(e) Contribution. If for any reason the indemnities provided under Sections 2.6(a)
and 2.6(b) are unavailable or insufficient to hold harmless an indemnified party thereunder, then
each indemnifying party shall contribute to the amount paid or payable by such indemnified party as
a result of any claim in such proportion as is appropriate too reflect the relative fault of the
indemnifying party, on the one hand, and the indemnified party, on the other hand, with respect to
such offering of securities. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the indemnifying party
or the indemnified party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. If, however, the allocation
provided in the second preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative faults but also the relative
benefits of the indemnifying party and the indemnified party as well as any other relevant
equitable considerations. 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 Company and each Person selling securities agree
with each other that no Holder shall be required to contribute any amount in excess of the amount
such Holder would have been required to pay to an indemnified party if the indemnities Sections
2.6(a) and 2.6(b) were available. The Company and each such Holder
agree with each other and the underwriters of the Registrable Securities, if requested by such
underwriters, that it would not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation. For purposes of this Section 2.6(e), each Person, if any,
who
“controls” an underwriter within the meaning of Section 15 of the Securities Act shall have the
same rights to contribution as such underwriter, and each director and each officer of the Company
who signed the registration statement, and each Person, if any, who “controls” the Company or a
Holder within the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company or such Holder, as the case may be.
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2.7 Participation in Underwritten Registrations.
No Person may participate in any underwritten registration hereunder unless such Person agrees
to sell such Person’s securities on the basis provided in any underwriting arrangements reasonably
approved by the Company.
2.8 Adjustments Affecting Registrable Securities.
In connection with the Initial Public Offering, the Company will effect such sub division of
Common Shares as may be reasonably recommended by the underwriters to increase the marketability of
the Registrable Securities.
ARTICLE III
MISCELLANEOUS
3.1 Rule 144; Rule 144A.
If the Company shall have filed a registration statement which has become effective pursuant
to Section 12 of the Exchange Act or a registration statement which has become effective pursuant
to the Securities Act, the Company will use its reasonable best efforts to file the reports
required to be filed by it under the Exchange Act and the rules and regulations adopted by the
Commission thereunder (or, if the Company is not required to file such reports, will, upon the
request of any Holder make publicly available other information) and will take such further action
as such Holders may reasonably request, all to the extent required from time to time to enable such
Holders 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, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
Except at such times as the Company is a reporting company under Section 13 or 15(d) of the
Exchange Act, the Company shall, upon the written request of any Holder, provide to any such Holder
and to any prospective institutional transferee of Registrable Securities designated by such
Holder, such financial and other information as is available to the Company or can be obtained by
the Company without material expense and as such Holder may reasonably determine is required to
permit a transfer of such Registrable Securities to comply with the requirements of Rule 144A
promulgated under the Securities Act.
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3.2 Other Registration Rights.
Notwithstanding anything to the contrary in this Agreement, the Company shall be permitted to
grant to any Person the right to request that the Company register any equity securities of the
Company, or any securities convertible or exchangeable into or exercisable for such securities,
without any consent of the Holders of the Registrable Securities being necessary; provided,
that any such right granted to any such Person shall not conflict with, interfere with, modify or
in any way diminish the rights granted to the Holder under this Agreement (provided that the
provisions of Sections 2.1(f) and 2.2(c) shall not be deemed to breach this Section 3.2), and the
equity securities with respect to which such rights are granted to such Person shall not rank
superior or senior to the Registrable Securities.
3.3 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 Holders of at least a
majority of all Registrable Securities at the time outstanding; provided, that any
amendment to this Agreement that materially adversely affects the rights of any Holder differently
than such amendment affects the rights of other Holders shall also require the approval of the
affected Holder; provided, further, that this Agreement may be amended by the
Company and the Holders of a majority of the Registrable Securities to add as parties hereto
Persons who in the future become Holders.
3.4 Notices.
All communications provided for hereunder shall be in writing and shall be delivered
personally or by telecopy or sent by first-class mail and addressed to such Holder at the address
that such Holder shall have furnished to the Company in writing, and if to the Company:
Pure Earth, Inc.
Xxx Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxxx
Fax: (000) 000-0000
Xxx Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxxx
Fax: (000) 000-0000
3.5 Binding Agreement.
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 Holders of Registrable Securities as such shall be for the benefit of and enforceable by any
subsequent Holder of any Registrable Securities, subject to the provisions respecting the minimum
numbers or percentages of shares of Registrable Securities required in order to be entitled to
certain rights, or take certain actions, contained herein.
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3.6 Nominees for Beneficial Owners.
In the event that Registrable Securities are held by a nominee for the beneficial owner
thereof, the beneficial owner thereof may, at its option and by written notice to the Company, be
treated as the Holder of such Registrable Securities for purposes of any request or other action by
any Holder or Holders of Registrable Securities pursuant to this Agreement (or any determination of
any percentage of Registrable Securities held by any Holder or Holders of Registrable Securities
contemplated by this Agreement).
3.7 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.
3.8 Specific Performance.
The parties hereto recognize and agree that money damages may be insufficient to compensate
the Holders 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.
3.9
GOVERNING LAWS.
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF NEW YORK.
3.10 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.
3.11 Severability.
In the event that any one or more of the provisions contained herein, or the application
thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision in every other respect and
of the remaining provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the Holders shall be enforceable to the fullest
extent permitted by law.
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3.12 Entire Agreement.
This Agreement is intended by the parties hereto as a final expression of their agreement and
intended to be a complete and exclusive statement of their agreement and understanding in respect
to the subject matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed
and delivered as of the date first above written.
| PURE EARTH, INC. |
||||
| By: | /s/ Xxxx Xxxxxxxxx | |||
| Name: | Xxxx Xxxxxxxxx | |||
| Title: | President & CEO | |||
| FIDUS MEZZANINE CAPITAL L.P. | ||||||||
| By: | Fidus Mezzanine Capital GP, LLC, its General Partner | |||||||
| By: | /s/ Xxxxxx X. Xxxx
|
|||||||
| Title: Managing Partner | ||||||||
