Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - BioNeutral Group, Inc | f8k020310_bioneutral.htm |
| EX-10.1 - FIRST AMENDMENT TO THE ADVISORY AGREEMENT - BioNeutral Group, Inc | f8k020310ex10i_bioneutral.htm |
| EX-10.3 - RESTRICTED STOCK UNIT AGREEMENT - BioNeutral Group, Inc | f8k020310ex10iii_bioneutral.htm |
| EX-10.2 - STOCK APPRECIATION RIGHT AGREEMENT - BioNeutral Group, Inc | f8k020310ex10ii_bioneutral.htm |
| EX-4.1 - 8% EXCHANGEABLE PROMISSORY NOTE - MICHAEL D. FRANCIS - BioNeutral Group, Inc | f8k020310ex4i_bioneutral.htm |
| EX-4.2 - 8% EXCHANGEABLE PROMISSORY NOTE - CAPARA INVESTMENTS LLC - BioNeutral Group, Inc | f8k020310ex4ii_bioneutral.htm |
| EX-4.3 - 8% EXCHANGEABLE PROMISSORY NOTE - MICHAEL D. FRANCIS - BioNeutral Group, Inc | f8k020310ex4iii_bioneutral.htm |
Exihibit
10.4
BIONEUTRAL
GROUP, INC.
REGISTRATION
AGREEMENT
February
3, 2010
TABLE OF
CONTENTS
| Page | ||
| Section 1. | Definitions | 1 |
| Section 2. | Required Registrations | 5 |
| Section 3. | Incidental Registration. | 8 |
| Section 4. | Holdback Agreements. | 9 |
| Section 5. | Registration Procedures. | 10 |
| Section 6. | Registration Expenses. | 13 |
| Section 7. | Indemnification and Contribution. | 14 |
| Section 8. | Underwritten Registrations. | 16 |
| Section 9. | Additional Parties; Joinder | 17 |
| Section 10. | [Intentionally omitted]. | 17 |
| Section 11. | [Intentionally omitted]. | 17 |
| Section 12. | Preemptive Rights. | 17 |
| Section 13. | Transfer Restrictions. | 18 |
| Section 14. | Liquidated Damages | 18 |
| Section 15. | General Provisions. | 19 |
BIONEUTRAL
GROUP, INC.
REGISTRATION
AGREEMENT
THIS
REGISTRATION AGREEMENT (this “Agreement”) is made
as of February 3, 2010, among BioNeutral Group, Inc., a Nevada corporation (the
“Company”),
Chertoff Group, L.L.C., a Delaware limited liability company (the “Investor”), each
Eligible Investor Transferee who becomes a party to this Agreement by the
execution and delivery of a Joinder (collectively, the “Other Investors”),
and solely for purposes of
Section 13 of this
Agreement each of the executives listed on the signatory pages attached hereto
(the “Executives”). Except
as otherwise specified herein, all capitalized terms used in this Agreement are
defined in
Section
1.
The
Company and the Investor are parties to that certain Restricted Stock Unit
Agreement (the “RSU
Agreement”) and that certain Stock Appreciation Rights Agreement (the
“SAR
Agreement”), each dated as of the date hereof (collectively, the “Grant Agreements”),
pursuant to which the Investor will receive shares of Common Stock from the
Company. In order to induce the Investor to enter into the Grant
Agreements and the amendment dated as of the date hereof (the “Amendment”) to that
certain Advisory Agreement, dated as of August 26, 2009, by and between the
Company and Investor, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution and delivery of this
Agreement is a condition to the consummation of the execution of the
Amendment.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as
follows:
Section 1. Definitions. Unless
otherwise set forth below or elsewhere in this Agreement, other capitalized
terms contained herein have the meanings set forth in the RSU
Agreement.
“Acquired Common” has
the meaning set forth in
Section
9.
“Affiliate” of any
Person means any other Person controlled by, controlling or under common control
with such Person; provided that the
Company and its Subsidiaries shall not be deemed to be Affiliates of any holder
of Registrable Securities. As used in this definition, “control”
(including, with its correlative meanings, “controlling,” “controlled by” and
“under common control with”) shall mean possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities, by contract or otherwise). With
respect to any Person who is an individual, “Affiliates” shall also include,
without limitation, any member of such individual’s Family Group.
“Agreement” has the
meaning set forth in the recitals.
“Amendment” has the
meaning set forth in the recitals.
“Board” means the
Board of Directors of the Company.
1
“Capital Stock” means
(i) with respect to any Person that is a corporation, any and all shares,
interests or equivalents in capital stock of such corporation (whether voting or
nonvoting and whether common or preferred) and (ii) with respect to any Person
that is not a corporation, individual or governmental entity, any and all
partnership, membership, limited liability company or other equity interests of
such Person that confer on the holder thereof the right to receive a share of
the profits and losses of, or the distribution of assets of, the issuing Person,
including in each case any and all warrants, rights (including conversion and
exchange rights) and options to purchase any of the foregoing.
“Change in Control”
has the meaning set forth in the SAR Agreement.
“Common Stock” means
the Company’s common stock, par value $0.00001 per share.
“Company” has the
meaning set forth in the preamble.
“Convertible
Securities” means any evidences of indebtedness, shares or other
securities directly or indirectly convertible into or exchangeable for Common
Stock, including, but not limited to, any options and warrants.
“Eligible Investor
Transferee” has the meaning set forth in
Section
9.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time, or any
successor federal law then in force, together with all rules and regulations
promulgated thereunder.
“Excluded
Registration” means a registration on Form S-8 (or a successor for
thereto) relating to the sale of securities to employees of the Company or a
Subsidiary of the Company.
“Executive” has the
meaning set forth in the recitals.
“Exempted Securities”
means (i) shares of Common Stock or Convertible Securities issued by reason of a
dividend, stock split, split-up or other distribution on shares of Common Stock;
(ii) compensatory issuances of shares of Common Stock or Convertible Securities
to employees or directors of, or consultants or advisors to, the Company or any
of its subsidiaries pursuant to a plan, agreement or arrangement approved by the
Board; (iii) shares of Common Stock or Convertible Securities actually issued
upon the exercise, conversion or exchange of Convertible Securities, in each
case provided such issuance is pursuant to the terms of such Convertible
Security; or (iv) shares of Common Stock or Convertible Securities issued
pursuant to the acquisition of another corporation by the Company by merger,
purchase of substantially all of the assets or other reorganization or to a
joint venture agreement.
“Fair Market Value”
has the meaning set forth in the SAR Agreement.
“Family Group” means,
with respect to a Person who is an individual, (i) such individual’s spouse
and descendants (whether natural or adopted) (collectively, for purposes of this
definition, “relatives”),
(ii) such individual’s executor or personal representative, (iii) any
2
trust,
the trustee of which is such individual or such individual’s executor or
personal representative and which at all times is and remains solely for the
benefit of such individual and/or such individual’s relatives, (iv) any
corporation, limited partnership, limited liability company or other tax
flow-through entity the governing instruments of which provide that such
individual or such individual’s executor or personal representative shall have
the exclusive, nontransferable power to direct the management and policies of
such entity and of which the sole owners of stock, partnership interests,
membership interests or any other equity interests are limited to such
individual, such individual’s relatives and/or the trusts described in clause (iii) above,
and (v) any retirement plan for such individual.
“FINRA” means the
Financial Industry Regulatory Authority.
“Free Writing
Prospectus” means a free-writing prospectus, as defined in Rule
405.
“Grant Agreements” has
the meaning set forth in the recitals.
“Grant Date” has the
meaning set forth in the SAR Agreement.
“Holdback Extension”
has the meaning set forth in
Section
4(a).
“Holdback Period” has
the meaning set forth in
Section
4(a).
“Incidental
Registration” has the meaning set forth in
Section
3(a).
“Indemnified Parties”
has the meaning set forth in
Section
7(a).
“Investor” has the
meaning set forth in the recitals.
“Joinder” has the
meaning set forth in
Section
9.
“Other Investors” has
the meaning set forth in the recitals.
“Outside Date” has the
meaning set forth in
Section
2.
“Penalty SARs” has the
meaning set forth in
Section
14.
“Person” means an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
“Permitted Transfer”
has the meaning set forth in
Section
13(b).
“Permitted Transferee”
has the meaning set forth in
Section
13(b).
“Preemptive
Securities” has the meaning set forth in
Section
12(a).
3
“Public Offering”
means any sale or distribution by the Company and/or holders of Registrable
Securities to the public of any Capital Stock of the Company pursuant to an
offering registered under the Securities Act.
“Qualifying Change of
Control” means a Change of Control that arises solely in connection with
the events referenced in clause (i), (ii) or (iii) of the definition of Change
of Control, except to the extent that a holder SARs is entitled to participate
in an event constituting a Change of Control pursuant to the last sentence of
the definition thereof.
“Registrable
Securities” means (i) any Common Stock issued pursuant to the Grant
Agreements or distributed (directly or indirectly) to the Investor or any of its
Affiliates as required by the Grant Agreements, (ii) any Common Stock issued or
issuable with respect to the securities referred to in clause (i) above by
way of dividend, distribution, split or combination of securities, (iii) any
Common Stock or any common Capital Stock of any Subsidiary of the Company issued
in exchange for the securities referred to in clause (i) above by
way of any recapitalization, merger, consolidation or other reorganization, and
(iv) any Common Stock issuable upon exercise of Penalty SARs. As to
any particular Registrable Securities, such securities shall cease to be
Registrable Securities when they have been (a) sold or distributed pursuant
to a Public Offering, (b) sold in compliance with Rule 144, (c) repurchased
by the Company or a Subsidiary of the Company or (d) may be sold without
restriction pursuant to Rule 144. For purposes of this Agreement, a
Person shall be deemed to be a holder of Registrable Securities, and the
Registrable Securities shall be deemed to be in existence, whenever such Person
has the right to acquire, directly or indirectly, such Registrable Securities
(upon conversion or exercise in connection with a transfer of securities or
otherwise, but disregarding any restrictions or limitations upon the exercise of
such right), whether or not such acquisition has actually been effected, and
such Person shall be entitled to exercise the rights of a holder of Registrable
Securities hereunder.
“Registration Default”
has the meaning set forth in
Section
14.
“Registration Default
Value” means, with respect to any Registable Security, the average of
(a) the Fair Market Value of such Registrable Security as of the Grant Date
and (b) the Fair Market Value of such Registrable Security as of the date
of the Registration Default.
“Registration
Expenses” has the meaning set forth in
Section
6(a).
“RSU” has the meaning
set forth in the RSU Agreement.
“RSU Agreement” has
the meaning set forth in the recitals.
“Rule 144”, “Rule 158”, “Rule 405”, “Rule 415” and “Rule 462” mean, in
each case, such rule promulgated under the Securities Act (or any successor
provision) by the Securities and Exchange Commission, as the same shall be
amended from time to time, or any successor rule then in force.
“SAR” has the meaning
set forth in the SAR Agreement.
4
“Sale Transaction”
means when any holder shall (A) offer, sell, contract to sell, pledge or
otherwise dispose of (including sales pursuant to Rule 144), directly or
indirectly, any Capital Stock of the Company (including Capital Stock of the
Company that may be deemed to be owned beneficially by such holder in accordance
with the rules and regulations of the Securities and Exchange Commission)
(collectively, “Securities”), (B)
enter into a transaction which would have the same effect as described in clause
(A) above, (C) enter into any swap, hedge or other arrangement that transfers,
in whole or in part, any of the economic consequences or ownership of any
Securities, whether such transaction is to be settled by delivery of such
Securities, in cash or otherwise.
“SAR Agreement” has
the meaning set forth in the recitals.
“Securities Act” means
the Securities Act of 1933, as amended from time to time, or any successor
federal law then in force, together with all rules and regulations promulgated
thereunder.
“Shelf Registration”
has the meaning set forth in
Section 2(a).
“Shelf Registration Lapse
Date” shall mean the date, if any, that to the extent the Initial Shelf
Registration Statement is filed on Form S-3 in accordance with
Section 2, the
Company is not permitted to file or maintain such registration statement in
connection with the Shelf Registration in accordance with
Section 2(a).
“Shelf Registration
Statement” has the meaning set forth in
Section 2(a).
“Subsidiary” means,
with respect to the Company, any corporation, limited liability company,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by the Company or one or more of the other Subsidiaries of the
Company or a combination thereof, or (ii) if a limited liability company,
partnership, association or other business entity, a majority of the limited
liability company, partnership or other similar ownership interest thereof is at
the time owned or controlled, directly or indirectly, by the Company or one or
more Subsidiaries of the Company or a combination thereof. For
purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control the managing director or general partner
of such limited liability company, partnership, association or other business
entity.
“Suspension Period”
has the meaning set forth in
Section
2(d).
“Violation” has the
meaning set forth in
Section
7(a).
Section 2. Required
Registrations. (a) Shelf Registration
Statement. The Investor may, at any time request (such
request, the "Investor
Request") that the Company file a registration statement under the
Securities Act covering, except as set forth in the fourth to last
5
sentence
of this Section
2(a), all of the Registrable Securities then held by the holders of such
Registrable Securities on Form S-3 or such other form the Company is eligible to
use to allow for the resale of the Registrable Securities (the “Shelf Registration”)
and shall have such Registration Statement declared effective by the Securities
and Exchange Commission with respect to such resale of such Registrable
Securities as expeditiously as possible but in any event by not later than the
later to occur of the 150 day anniversary of the date of delivery of the
Investor Request or June 30, 2012 (the “Outside Date”), on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act (such
registration statement filed pursuant to the first sentence of this Section 2(a), the
“Initial Shelf
Registration Statement”); provided, however, that (i) if
a Qualifying Change in Control is consummated prior to the Outside Date, the
Company shall file and have declared effective by the Securities and Exchange
Commission the Initial Shelf Registration Statement within 120 days of the
consummation such Qualifying Change in Control; and (ii) if an Incidential
Registration Statement is proposed to be filed prior the Outside Date, and
holders of such Registrable Securities have not been afforded the opportunity to
include all Registrable Securities in such Incidental Registration Statement,
the Company shall file and have declared effective by the Securities and
Exchange Commission the Initial Shelf Registration Statement by not later than
the date of effectiveness of such Incidental Registration
Statement. For purposes of clarity, the Company shall only be
obligated to file one Initial Shelf Registration Statement. The
Company will cause the Shelf Registration Statement to remain continuously
effective under the Securities Act until the earliest of (i) the date that
is two (2) years (or in the case of a registration statement on Form S-3, such
longer period as may be permitted under applicable law) after the initial
effectiveness thereof and (ii) the earliest date on which all Registrable
Securities shall have either (A) been sold pursuant to the Shelf Registration or
(B) ceased to be outstanding or constitute Registrable Securities (such
period, the "Effectiveness
Period"). At any time and from time to time after the Shelf
Registration Lapse Date, the Company shall, if requested by the holders of
Registrable Securities, file and have declared effective as expeditiously as
possible a subsequent registration statement for the Shelf Registration in the
form specified herein for an Initial Shelf Registration Statement to enable the
resale of such Registrable Securities that either (1) have not been sold in
accordance with this
Section 2(a) or (2) remain
outstanding or continue to constitute Registrable Securities. In the
event that the Securities and Exchange Commission will not allow the Company to
include all Registrable Securities in the Initial Shelf Registration Statement
or any Subsequent Shelf Registration Statement, the Company shall, if requested
by the holders of Registrable Securities, file as promptly as practicable
following such time as it is permitted to do so by the Securities and Exchange
Commission, and have declared effective, a subsequent registration for a Shelf
Registration in accordance with this
Section 2 to register
the resale of such Registrable Securities in accordance with the terms of this
Agreement. Any registration statement for a Shelf Registration that
is not the Initial Shelf Registration Statement is referred to herein as a
"Subsequent Shelf
Registration Statement" and the Initial Shelf Registration Statement and
the Subsequent Shelf Registration Statements are sometimes referred to
collectively as the "Shelf Registration
Statement". Notwithstanding anything in this Agreement to the
contrary, in the event an Eligible Investor Transferee becomes a party to this
Agreement in accordance with
Section 9 hereof
subsequent to the time of effectiveness of a Shelf Registration Statement, the
Company's obligation to register Registrable Securities acquired by such
Eligible Investor Transferee pursuant to such
Section 9 shall be
limited to filing a prospectus supplement to the applicable existing Shelf
Registration Statement to include such Eligible Investor Transferee as a
6
selling
shareholder thereunder and in any event only to the extent such filing is
permitted by law. For the avoidance of doubt, the Company shall not
be obligated to file any new Shelf Registration Statement or a post-effective
amendment to any existing Shelf Registration Statement in respect of Registrable
Securities acquired by such Eligible Investor Transferee.
(b) [intentionally
omitted]
(c) [intentionally
omitted]
(d) Restrictions on
Registrations.
(i) Notwithstanding
any other provision of this Agreement to the contrary, if the Board reasonably
determines that the registration and distribution of Registrable Securities (A)
would reasonably be expected to impede, delay or interfere with, or require
premature disclosure of, any material financing, offering, acquisition, merger,
corporate reorganization, segment reclassification or discontinuation of
operations, or other significant transaction or any negotiations, discussions or
pending proposals with respect thereto, involving the Company or any of its
Subsidiaries, (B) would require disclosure of non-public material
information, the disclosure of which would be reasonably expected to adversely
affect the Company, or (C) renders the Company unable to comply with Securities
and Exchange Commission requirements, the Company shall (x) be entitled to
postpone the filing or effectiveness or suspend the effectiveness of a
registration statement and/or the use of any prospectus for a period of time not
to exceed ninety (90) days (the “Suspension Period”)
and (y) promptly give the holders of Registrable Securities written notice of
such postponement or suspension (which notice need not specify the nature of the
event giving rise to such suspension); provided, that the
Company shall not utilize the right described in
Section 2(d) more
than once in any six (6) month period.
(ii) The
Company shall not undertake any voluntary act that could be reasonably expected
to result in a Suspension Period under
Section 2(d)(i)
without a legitimate business purpose. Prior to the end of the
Suspension Period, the Company will file or cause to become effective, or amend
or supplement the Shelf Registration Statements and the prospectuses included
therein or make such other filings or disclosures as necessary to file and cause
to become effective or terminate the suspension of use or effectiveness, as the
case may be, the subject registration statement. In the event that
the Company shall exercise its right to delay or suspend the filing or
effectiveness of a registration hereunder, the applicable time period during
which the registration statement is to remain effective shall be extended by a
period of time equal to the duration of the Suspension Period. If so
directed by the Company, all holders of Registrable Securities registering
shares under such registration statement shall (A) not offer to sell any
Registrable Securities pursuant to the registration statement during the period
in which the delay or suspension is in effect after receiving notice of such
delay or suspension and (B) use their best efforts to deliver to the Company (at
the Company’s expense) all copies, other than permanent file copies then in such
holders’ possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.
7
(e) [intentionally
omitted].
Section 3. Incidental
Registration.
(a) Filing of Registration
Statement. If, at any time after the date hereof the Company
proposes to register, for its own account or for the account of any other Person
any of its securities under the Securities Act for sale to the public
(other than an Excluded Registration) (an “Incidental
Registration”), it will at each such time give prompt written notice to
all holders of Registrable Securities that are not included in an effective
registration statement filed pursuant to Section 2(a) of its
intention to do so, which notice shall be given at least thirty (30) days prior
to the date that a registration statement relating to such registration is
proposed to be filed with the Securities and Exchange
Commission. Upon the written request of Investor to include
Registrable Securities held by it or Other Investors that are not otherwise
covered by a Shelf Registration Statement in such Incidental Registration
statement (which request shall (i) be made within fifteen (15) days after the
receipt of any such notice, and (ii) specify the Registrable Securities
intended to be included by such holder), the Company will, subject to the last
sentence of this Section 3(a), Section 3(b) and the
fourth to last sentence of Section 2(a), effect
the registration of all Registrable Securities that the Company has been so
requested to register by such Stockholder. The Company may, in its
sole discretion, refuse to file, withdraw, refuse to request acceleration or
suspend the use of any registration statement for an Incidental
Registration. Any registration statement filed in respect of an
Incidental Registration is referred to in this Agreement as an "Incidental Registration
Statement."
(b) Priority on Incidental
Registrations. If the managing underwriter for the offering
contemplated by
Section 3 shall
advise the Company in writing that, in such underwriter’s opinion, the number of
securities requested to be included in such Incidental Registration would
adversely affect the offering and sale (including pricing) of such securities,
the Company shall include in such Incidental Registration the number of
securities that the Company is so advised can be sold in such offering, in the
following amounts and order of priority:
(i) first, securities
proposed to be sold by the Company for its own account; and
(ii) second, the
Registrable Securities requested to be registered by the holders of Registrable
Securities, pro rata among such holders on the basis of the number of
Registrable Securities owned by each such holder.
(c) Expenses for Incidental
Registrations. The Registration Expenses of the holders of
Registrable Securities shall be paid by the Company in all Incidental
Registrations, whether or not any such registration became
effective.
(d) Other Registration
Rights. Except as set forth in that certain Consulting
Agreement between the Company and James Crane dated May 2009, the Company
represents and warrants that it is not a party to, or otherwise subject to, any
other agreement granting registration rights to any other Person with respect to
any securities of the Company. Except as provided in this Agreement,
the Company shall not grant to any Persons the right to request the
8
Company
or any Subsidiary to register any Capital Stock of the Company or any
Subsidiary, or any securities convertible or exchangeable into or exercisable
for such securities, without the prior written consent of the Investor; provided that the
Company (i) may grant such rights to any Person so long as such rights are
subordinate to the rights of the Investor contained herein, (ii) the Company may
grant such rights to employees of the Company and its Subsidiaries to
participate in Incidental Registrations so long as such rights are subordinate
to the rights of the holders of Registrable Securities with respect to such
Incidental Registrations as provided in
Section
3.
Section 4. Holdback
Agreements.
(a) Holders of Registrable
Securities. If required by the managing underwriter in
connection with any Incidental Registration, each holder of Registrable
Securities shall enter into customary lock-up agreements with the managing
underwriter(s) of an underwritten Public Offering in such form as reasonably
satisfactory to the holders of a majority of the Registrable Securities,
provided, that in no event will holders of Registrable Securities be required to
enter into a lock-up agreement that is more restrictive than lock-up agreements
entered into by any of the Company’s directors, officers or holders of more than
5% of the Company’s Common Stock. In the absence of any such lock-up
agreement, each holder of Registrable Securities agrees as follows:
(i) in
connection with all underwritten Public Offerings, such
holder shall not effect any Sale Transaction from the date on which the Company
gives notice to the holders of Registrable Securities of the circulation of a
preliminary or final prospectus for such Public Offering to the date that is 90
days following the date of the final prospectus for such Public Offering (a
“Holdback
Period”), unless, if an underwritten Public Offering, the underwriters
managing the such Public Offering otherwise agree in writing; and
(ii) in the
event that (A) the Company issues an earnings release or discloses other
material information or a material event relating to the Company and its
Subsidiaries occurs during the last 17 days of the Holdback Period or
(B) prior to the expiration of the Holdback Period, the Company announces
that it will release earnings results during the 16-day period beginning upon
the expiration of such period, then to the extent necessary for a managing or
co-managing underwriter of a registered offering hereunder to comply with FINRA
Rule 2711(f)(4), the Holdback Period shall be extended until 18 days after the
earnings release or disclosure of other material information or the occurrence
of the material event, as the case may be (a “Holdback
Extension”).
The
Company may impose stop-transfer instructions with respect to the shares of
Common Stock (or other securities) subject to the restrictions set forth in this
Section 4(a) until
the end of such period, including any Holdback Extension.
(b) The
Company. Except with respect to any Excluded Registration, the
Company (i) shall not file any registration statement for a Public Offering
or cause any such registration statement to become effective (for purposes of
this Section
4(b), the words
9
“Common
Stock” shall be replaced with the words “Capital Stock of the Company” in the
definition of “Public Offering”) during any Holdback Period, as extended during
any Holdback Extension, and (ii) shall use its commercially reasonable efforts
to cause (A) each holder of its Common Stock, or any securities convertible into
or exchangeable or exercisable for Common Stock, and (B) each of its directors
and executive officers to agree not to effect any Sale Transaction during any
Holdback Period (as extended by any Holdback Extension), except as part of such
underwritten registration, if otherwise permitted, unless the underwriters
managing the Public Offering otherwise agree in writing.
(c) Other
Holders. Notwithstanding anything in this
Section 4 to the
contrary, no holder of shares of Common Stock (or other Company securities)
shall be released from the restrictions contained in this
Section 4 unless all
holders of Registrable Securities are also so released.
Section 5. Registration
Procedures.
(a) Whenever
the holders of Registrable Securities have requested that any Registrable
Securities be registered pursuant to a Shelf Registration Statement, the Company
shall use its best efforts to effect the registration of the offer and sale of
such Registrable Securities in accordance with the intended method of
disposition thereof held by a holder of Registrable Securities requesting
registration as to which the Company has received reasonable assurances that
only Registrable Securities shall be distributed to the public), and pursuant
thereto the Company shall as expeditiously as possible:
(i) in
accordance with the Securities Act and all applicable rules and regulations
promulgated thereunder, prepare and file with the Securities and Exchange
Commission a registration statement as specified in Section 2(a), and all
amendments and supplements thereto and related prospectuses, with respect to
such Registrable Securities and use its best efforts to cause such registration
statement to become effective (provided that before filing a registration
statement or prospectus or any amendments or supplements thereto, the Company
shall furnish to the counsel selected by the holders of a majority of the
Registrable Securities covered by such registration statement copies of all such
documents proposed to be filed, which documents shall be subject to the review
and comment of such counsel);
(ii) notify
each holder of Registrable Securities of (A) the issuance by the Securities and
Exchange Commission of any stop order suspending the effectiveness of any
registration statement or the initiation of any proceedings for that purpose,
(B) the receipt by the Company or its counsel of any notification with respect
to the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, and (C) the effectiveness of each registration statement filed
hereunder;
(iii) prepare
and file with the Securities and Exchange 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
during the Effectiveness Period and comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement;
10
(iv) furnish
to each seller of Registrable Securities thereunder at least one conformed copy
of each Shelf Registration Statement and any post-effective amendment thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and each Free Writing Prospectus;
(v) use its
best efforts to register or qualify such Registrable Securities under such other
securities or blue sky laws of such jurisdictions as any seller reasonably
requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such seller (provided that the
Company shall not be required to (A) qualify generally to do business or as a
dealer of securities in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph or (B) consent to general service
of process or taxation in any such jurisdiction);
(vi) notify
each seller of such Registrable Securities (A) promptly after it receives
notice thereof, of the date and time when such registration statement and each
post-effective amendment thereto has become effective or a prospectus or
supplement to any prospectus relating to a registration statement has been filed
and when any registration or qualification has become effective under a state
securities or blue sky law or any exemption thereunder has been obtained,
(B) promptly after receipt thereof, of any request by the Securities and
Exchange Commission for the amendment or supplementing of such registration
statement or prospectus or for additional information, and (C) at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
(vii) use best
efforts to cause all such Registrable Securities to be listed on each securities
exchange (domestic or foreign) on which similar securities issued by the Company
are then listed;
(viii) use best
efforts to provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration
statement;
(ix) make
available for inspection by any seller of Registrable Securities and any
attorney, accountant or other agent retained by any such seller, all financial
and other records, pertinent corporate and business documents and properties of
the Company as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors, employees, agents,
11
representatives
and independent accountants to supply all information reasonably requested by
any such seller, attorney, accountant or agent in connection with such
registration statement;
(x) take all
reasonable actions to ensure that any Free-Writing Prospectus utilized
in connection with any Incidental Registration hereunder complies in
all material respects with the Securities Act, is filed in accordance with the
Securities Act to the extent required thereby, is retained in accordance with
the Securities Act to the extent required thereby and, when taken together with
the related prospectus, shall not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading;
(xi) otherwise
use its best efforts to comply with all applicable rules and regulations of the
Securities and Exchange Commission, and make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the period of
at least twelve months beginning with the first day of the Company’s first full
calendar quarter after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158.
(xii) permit
any holder of Registrable Securities which holder, in its sole and exclusive
judgment, might be deemed to be an underwriter or a controlling person of the
Company, to participate in the preparation of such registration or comparable
statement and to allow such holder to provide language for insertion therein,
which in the reasonable judgment of such holder and its counsel should be
included and that is reasonably acceptable to the Company;
(xiii) in the
event of the issuance of any stop order suspending the effectiveness of such
registration statement, or the issuance of any order suspending or preventing
the use of any related prospectus or suspending the qualification of any Common
Stock included in such registration statement for sale in any jurisdiction use
best efforts promptly to obtain the withdrawal of such order;
(xiv) cooperate
with the holders of Registrable Securities covered by such registration
statement to facilitate the timely preparation and delivery of certificates
(which, to the extent permitted under the Securities Act, shall not bear any
restrictive legends) representing securities sold pursuant to such registration
statement and enable such securities to be in such denominations and registered
in such names as such holders may request; and
(xv) cooperate
with each holder of Registrable Securities covered by such registration
statement and their respective counsel in connection with any filings required
to be made with FINRA.
(xvi) [intentionally
omitted]
(xvii) [intentionally
omitted]
12
(xviii) [intentionally
omitted]
(b) Each
holder of Registrable Securities will promptly furnish in writing the
information about such holder and the plan of distribution required to be
included in each Shelf Registration Statement and Incidental Registration
Statement or prospectus included therein or under state securities
laws. Notwithstanding any other provision hereof, no holder of
Registrable Securities may include any of its Registrable Securities in a Shelf
Registration Statement or Incidental Registration Statement pursuant to this
Agreement unless such holder has furnished such information to the Company in
connection with such Shelf Registration Statement or prospectus included therein
and in any application to be filed with or under state securities
laws. Each holder named as a selling securityholder in the prospectus
agrees to promptly furnish to the Company all additional information required to
be disclosed in order to make information previously furnished to the Company by
such holder not materially misleading and any other information regarding such
holder and the distribution of such holder’s Registrable Securities as the
Company may from time to time reasonably request in writing.
(c) Without
limiting the provisions of Section 2.1(b), the Company may (as a condition
to such holder’s participation in a Shelf Registration or Incidental
Registration) require each holder of Registrable Securities to furnish to the
Company such information regarding the holder and the proposed distribution by
such holder of such Registrable Securities as the Company may from time to time
reasonably request in writing.
(d) Each
holder of Registrable Securities agrees not to sell any Registrable Securities
pursuant to a Shelf Registration Statement or Incidental Registration without
delivering, or causing to be delivered, a prospectus included in such
registration statement, as amended or supplemented, to the purchaser
thereof.
Section 6. Registration
Expenses.
(a) The Company’s
Obligation. All expenses incident to the Company’s performance
of or compliance with this Agreement (including, without limitation, all
registration, qualification and filing fees, fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger and delivery
expenses, fees and disbursements of custodians, and fees and disbursements of
counsel for the Company and all independent certified public accountants, and
other Persons retained by the Company) (all such expenses being herein called
“Registration
Expenses”), shall be borne as provided in this Agreement, except that the
Company shall, in any event, pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit or quarterly
review, the expense of any liability insurance and the expenses and fees for
listing the securities to be registered on each securities exchange on which
similar securities issued by the Company are then listed. Each Person
that sells securities pursuant to the Shelf Registration or an Incidental
Registration hereunder shall bear and pay all underwriting discounts and
commissions applicable to the securities sold for such Person’s
account.
(b) [intentionally
omitted].
13
(c) Security
Holders. To the extent Registration Expenses are not required
to be paid by the Company, each holder of securities included in any
registration hereunder shall pay those Registration Expenses allocable to the
registration of such holder’s securities so included, and any Registration
Expenses not so allocable shall be borne by all sellers of securities included
in such registration in proportion to the aggregate selling price of the
securities to be so registered. Without limiting the foregoing, each
holder of Registrable Securities shall pay all underwriting discounts and
commissions, broker fees and commissions, and transfer taxes, if any, relating
to the sale or disposition of such holder’s Registrable Securities pursuant to
any Shelf Registration Statement or Incidental Registration
Statement.
Section 7. Indemnification and
Contribution.
(a) By the
Company. The Company shall indemnify and hold harmless, to the
extent permitted by law, each holder of Registrable Securities, such holder’s
officers, directors employees, agents and representatives, and each Person who
controls such holder (within the meaning of the Securities Act) (the “Indemnified Parties”)
against all losses, claims, actions, damages, liabilities and expenses
(including with respect to actions or proceedings, whether commenced or
threatened, and including reasonable attorney fees and expenses) caused by,
resulting from, arising out of, based upon or related to any of the following
statements, omissions or violations (each a “Violation”) by the
Company: (i) any untrue or alleged untrue statement of material
fact contained in (A) any Shelf Registration Statement or Incidental
Registration Statement covering Registrable Securities, prospectus, preliminary
prospectus or Free-Writing Prospectus, or any amendment thereof or supplement
thereto or (B) any application or other document or communication (in this
Section 7,
collectively called an “application”)
executed by or on behalf of the Company and filed in any jurisdiction in order
to qualify any securities covered by such registration under the securities laws
thereof, (ii) any omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or (iii) any violation or alleged violation by the Company of
the Securities Act or any other similar federal or state securities laws or any
rule or regulation promulgated thereunder applicable to the Company and relating
to action or inaction required of the Company in connection with any such
registration, qualification or compliance. In addition, the Company
will reimburse such Indemnified Party for any legal or any other third party
expenses reasonably incurred by them in connection with investigating or
defending any such losses. Notwithstanding the foregoing, the Company
shall not be liable in any such case to the extent that any such losses result
from, arise out of, are based upon, or relate to an untrue statement or alleged
untrue statement, or omission or alleged omission, made in such registration
statement, any such prospectus, preliminary prospectus or Free-Writing
Prospectus or any amendment or supplement thereto, or in any application, in
reliance upon, and in conformity with, written information prepared and
furnished in writing to the Company by such Indemnified Party expressly for use
therein or by such Indemnified Party’s failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such Indemnified Party with a copy of the
same.
(b) By Each Security
Holder. In connection with any registration statement in which
a holder of Registrable Securities is participating, each such holder shall
furnish to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the extent permitted by
14
law,
shall indemnify the Company, its officers, directors, employees, agents and
representatives, and each Person who controls the Company (within the meaning of
the Securities Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus, application or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in any information or
affidavit so furnished in writing by such holder; provided that the
obligation to indemnify shall be individual, not joint and several, for each
holder and shall be limited to the net amount of proceeds received by such
holder from the sale of Registrable Securities pursuant to such registration
statement.
(c) Claim
Procedure. Any Person entitled to indemnification hereunder
shall (i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give
prompt notice shall impair any Person’s right to indemnification hereunder only
to the extent such failure has prejudiced the indemnifying party) and (ii)
unless in such indemnified party’s reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. If such
defense is assumed, the indemnifying party shall not be subject to any liability
for any settlement made by the indemnified party without its consent (but such
consent shall not be unreasonably withheld, conditioned or
delayed). An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim. In such instance, the conflicted indemnified parties shall have a right
to retain one separate counsel, chosen by the holders of a majority of the
Registrable Securities included in the registration if such holders are
indemnified parties, at the expense of the indemnifying party.
(d) Contribution. If
the indemnification provided for in this
Section 7 is held by
a court of competent jurisdiction to be unavailable to, or is insufficient to
hold harmless, an indemnified party or is otherwise unenforceable with respect
to any loss, claim, damage, liability or action referred to herein, then the
indemnifying party shall contribute to the amounts paid or payable by such
indemnified party as a result of such loss, claim, damage, liability or action
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other
hand in connection with the statements or omissions which resulted in such loss,
claim, damage, liability or action as well as any other relevant equitable
considerations; provided that the
maximum amount of liability in respect of such contribution shall be limited, in
the case of each seller of Registrable Securities, to an amount equal to the net
proceeds actually received by such seller from the sale of Registrable
Securities effected pursuant to such registration. The relative fault
of the indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent
15
such
statement or omission. The parties hereto agree that it would not be
just or equitable if the contribution pursuant to this
Section 7(d) were to
be determined by pro rata allocation or by any other method of allocation that
does not take into account such equitable considerations. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses referred to herein shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending against any action or claim which is
the subject hereof. 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 is not guilty of such fraudulent
misrepresentation.
(e) Release. No
indemnifying party shall, except with the consent of the indemnified party,
consent to the entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect to such claim
or litigation.
(f) Non-exclusive Remedy;
Survival. The indemnification and contribution provided for
under this Agreement shall be in addition to any other rights to indemnification
or contribution that any indemnified party may have pursuant to law or contract
and shall remain in full force and effect regardless of any investigation made
by or on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and shall survive the transfer of Registrable
Securities and the termination or expiration of this Agreement.
Section 8. Underwritten
Registrations.
(a) Participation. No
Person may participate in any registration hereunder which is underwritten
unless such Pers
on (i) agrees to sell such Person’s
securities on the basis provided in any underwriting arrangements approved by
the Person or Persons entitled hereunder to approve such arrangements
(including, without limitation, pursuant to any over-allotment or “green shoe”
option requested by the underwriters; provided that no
holder of Registrable Securities shall be required to sell more than the number
of Registrable Securities such holder has requested to include) and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements; provided that no
holder of Registrable Securities included in any underwritten registration shall
be required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding such holder
(including with respect to its ownership of Registrable Securities) and such
holder’s intended method of distribution) or to undertake any indemnification
obligations to the Company or the underwriters with respect thereto that are
materially more burdensome than those provided in
Section
7.
(b) Suspended
Distributions. Each Person that is participating in any
registration under this Agreement, upon receipt of any notice from the Company
of the happening of any event of the kind described in
Section 5(a)(vi),
shall immediately discontinue the disposition of its Registrable Securities
pursuant to the registration statement until such Person’s receipt of the copies
of a supplemented or amended prospectus as contemplated by
Section 5(a)(vi). In
the event the Company has given any such notice, the applicable time period set
forth in
Section 5(a)(ii)
during which a Registration Statement is to remain effective shall be
16
extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to this
Section 8(b) to and
including the date when each seller of Registrable Securities covered by such
registration statement shall have received the copies of the supplemented or
amended prospectus contemplated by
Section
5(a)(vi).
Section 9. Additional Parties;
Joinder. The Company shall permit any Person who acquires
SARs and/or RSUs from the Investor pursuant to the terms of
the Grant Agreements after the date hereof (any such Person, an "Eligible Investor
Transferee") to become a party to this Agreement and to succeed to all of
the rights and obligations of a “holder of Registrable Securities” under this
Agreement by obtaining an executed joinder to this Agreement from such Person in
the form of Exhibit A
attached hereto (a “Joinder”). Upon
the execution and delivery of a Joinder by such Person, the Registrable
Securities acquired by such Person (the “Acquired Common”)
shall be Registrable Securities hereunder, such Person shall be a “holder of
Registrable Securities” under this Agreement with respect to the Acquired
Common, and the Company shall add such Person’s name and address to the
appropriate schedule hereto and circulate such information to the parties to
this Agreement.
Section 10. [Intentionally
omitted].
Section 11. [Intentionally
omitted].
Section 12. Preemptive
Rights.
(a) Subject
to the terms and conditions of this
Section 12(a) and the
applicable securities laws, the Company may not, and shall not permit any
Subsidiary of the Company to, issue, sell or exchange, agree to issue, sell or
exchange, or reserve or set aside for issuance, sale or exchange, any equity
securities or rights, warrants, options or other securities exercisable for or
convertible into Capital Stock of the Company or of any Subsidiary of the
Company (excluding ordinary course compensatory grants of equity securities to
directors or officers of the Company or its Subsidiaries) (collectively, the
“Preemptive
Securities”) to any person unless the Company also offers to the holders
of Registrable Securities a “Pro Rata Share” (as defined below) of the
Preemptive Securities on the same terms and conditions as proposed to be sold to
such person. Any such offer to a holder of Registrable Securities
shall by its terms remain open and irrevocable for a period of at least ten (10)
business days from the date that it is delivered by the Company. Each
holder of Registrable Securities may elect to purchase all or any portion of
such holder’s Pro Rata Share of the Preemptive
Securities. Notwithstanding anything contained herein to the
contrary, if the Company issues, agrees to issue, sells or exchanges, or
reserves or sets aside for issuance any Preemptive Securities in connection with
the issuance of any debt or other equity securities of the Company or any of its
subsidiaries, then each holder of Registrable Securities, if such holder elects
to purchase such Preemptive Securities pursuant to this
Section 12(a), must
also purchase a corresponding proportion of such other debt or equity
securities, all at the proposed purchase price and on terms of sale as specified
in the offer. Such election shall be made by holder of Registrable
Securities by written notice to the Company as soon as practical but in any
event within the period in which the offer remains open and irrevocable as
provided above. For purposes hereof, the holder’s “Pro Rata Share” of
the Preemptive Securities shall be determined as follows: the total
number of Preemptive Securities, multiplied by a fraction (i) the numerator of
which is the number of shares of Common Stock then held by the
17
holder of
Registrable Securities or its permitted transferees or then subject to this or
any other outstanding equity award held by the holder of Registrable Securities
or its permitted transferees, and (ii) the denominator of which is the number of
shares of Common Stock then outstanding (on a fully diluted
basis).
(b) The
rights set forth in
Section 12(a) shall
expire upon the earlier to occur of (i) the Investor ceasing to hold shares of
Common Stock (including, for this purpose, shares of Common Stock subject to the
Grant Agreements or any other outstanding equity award) representing at least
three percent (3%) of the number of shares of Common Stock then outstanding
(including any shares of Common Stock subject to the Grant Agreement), and (ii)
the fourth anniversary of the date of this Agreement (on a fully diluted
basis).
(c) The
rights set forth in this
Section 12(a) shall
not be applicable to (i) Exempted Securities, and (ii) shares of Common
Stock issued, or issuable upon conversion, in an underwritten offering of the
Company’s securities pursuant to an effective registration
statement.
Section 13. Transfer
Restrictions.
(a) Each
Executive agrees that he will not, voluntarily or involuntarily, directly or
indirectly, enter into a Sale Transaction until the earliest of (i) the
Outside Date, (ii) the consummation of a Change in Control, (iii) the
date on which the Company files a registration statement in connection with an
Incidental Registration, and (iv) the date on which Investor ceases to hold any
Registrable Securities, in each case except pursuant to a Permitted
Transfer. Any attempt to transfer any Capital Stock of the Company
which is not in accordance with this Agreement shall be null and void and the
Company agrees that it will not cause, permit or give any effect to any Sale
Transaction to be made on its books and records unless such Sale Transaction is
permitted by this Agreement and has been made in accordance with the terms
hereof.
(b) Notwithstanding
anything to the contrary contained herein, an Executive may at any time effect
any transfer of any or all Capital Stock of the Company held by an Executive who
is a natural Person (i) following such Executive’s death by will or
intestacy to such Executive’s legal representative, heir or legatee, or
(ii) as a gift or gifts during such Executive’s lifetime to such
Executive’s spouse, children, grandchildren or a trust or other legal entity for
the exclusive benefit of such Executive or any one or more of the foregoing
(each a “Permitted
Transfer”, and each transferee of such Executive in respect of such Sale
Transaction, a “Permitted
Transferee”).
(c) In any
Permitted Transfer, the Permitted Transferee shall agree in writing to be bound
by all of the provisions of this Agreement, shall execute and deliver to the
Company a Joinder to this Agreement, and shall hold all such Capital Stock of
the Company as an “Executive” hereunder as if such Permitted Transferee was an
original signatory hereto and shall be deemed to be a party to this
Agreement.
Section 14. Liquidated
Damages. On the Outside Date, if the Company has failed to
comply with the requirements set forth in
Section 2 (a “Registration
Default”), the
18
Company
shall, at the time that the Company cures the Registration Default and registers
the Registrable Securities as set forth in
Section 2(a), pay liquidated
damages (“Liquidated
Damages”) in the manner set forth in this
Section 14 to each
holder of Registrable Securities in an amount equal to the sum of (a) four
percent (4%) per annum on the Registration Default Value of Registrable
Securities held by each such holder of Registrable Securities at the time of the
Registration Default, other than Registrable Securities subject to the RSU
Agreement and (b) for each thirty-day period following initial thirty-day
period following the Registration Default, for which the Company has failed to
register the Registrable Securities as set forth in
Section 2(a), an additional
amount equal to two percent (2%) per annum on the Registration Default Value of
Registrable Securities held by such holders of Registrable Securities at the
time of the Registration Default, other than Registrable Securities subject to
the RSU Agreement. The Company shall pay the Liquidated Damages by
delivering to the subject holder a number stock appreciation rights equal to the
dollar amount of the Liquidated Damages divided by the Registration Default
Value (such securities, the “Penalty SARs”), which
stock appreciation rights shall be issued pursuant to an agreement substantially
similar to the SAR Agreement. Other than with respect to its right to
seek specific performance in accordance with the terms of this Agreement, the
Company’s obligation to pay Liquidated Damages shall be the Investor’s and the
Other Investor’s sole and exclusive remedy with respect to any Registration
Default. Notwithstanding anything in this
Section 14 to the
contrary, each holder of Registrable Securities may, in its sole and absolute
discretion, elect to waive the Company’s obligation to pay Liquidated Damages to
such holder for any reason including, in the event that such holder determines
that the primary cause of the Registration Default was beyond the control of the
Company.
Section 15. General
Provisions.
(a) Amendments and
Waivers. Except as otherwise provided herein, the provisions
of this Agreement may be amended, modified or waived only with the prior written
consent of the Company and holders of at least 75% of the Registrable
Securities. The failure or delay of any Person to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such Person thereafter to enforce
each and every provision of this Agreement in accordance with its
terms. A waiver or consent to or of any breach or default by any
Person in the performance by that Person of his, her or its obligations under
this Agreement shall not be deemed to be a consent or waiver to or of any other
breach or default in the performance by that Person of the same or any other
obligations of that Person under this Agreement.
(b) Remedies. Except
in the case of a Registration Default as set forth in Section 14 hereof, the
parties to this Agreement shall be entitled to enforce their rights under this
Agreement specifically (without posting a bond or other security), to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in their favor. The parties hereto
agree and acknowledge that a breach of this Agreement would cause irreparable
harm and money damages would not be an adequate remedy for any such breach and
that, in addition to any other rights and remedies existing hereunder, any party
shall be entitled to specific performance and/or other injunctive relief from
any court of law or equity of competent jurisdiction (without posting any bond
or other security) in order to enforce or prevent violation of the provisions of
this Agreement.
19
(c) Entire
Agreement. Except as otherwise provided herein, this Agreement
contains the complete agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties hereto,
written or oral, which may have related to the subject matter hereof in any
way.
(d) Successors and
Assigns. Except as otherwise provided herein, this Agreement
shall bind and inure to the benefit and be enforceable by the Company and its
successors and assigns and the holders of Registrable Securities and their
respective successors and permitted assigns (whether so expressed or
not).
(e) Notices. Any
notice or communication given hereunder shall be in writing and shall be deemed
to have been duly given when delivered in person, or by overnight courier
service or United States mail, to the appropriate party at the address set forth
below (or such other address as the party shall from time to time
specify):
If to the Company,
to:
BioNeutral
Group, Inc.
211
Warren Street, 4th Floor
Newark,
New Jersey 07103
Attention:
Stephen J. Browand
If to the Investor,
to:
Chertoff
Group, L.L.C.
1110
Vermont Avenue, NW
Suite
1200
Washington,
DC 20005
Attention: Bennet
Waters
If to any Other Investor,
to: the address of such Person specified in the applicable
Joinder.
If to Stephen J. Browand,
to:
c/o
BioNeutral Group, Inc.
211
Warren Street, 4th Floor
Newark,
New Jersey 07103
Attention:
Stephen J. Browand
If to Raj Pamani,
to:
c/o
BioNeutral Group, Inc.
211
Warren Street, 4th Floor
Newark,
New Jersey 07103
Attention: Raj
Pamani
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(f) Governing
Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware (regardless of the law that
might otherwise govern under applicable Delaware principles of conflict of
laws).
(g) MUTUAL WAIVER OF JURY
TRIAL. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF
THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO
CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY
JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS
AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.
(h) CONSENT TO JURISDICTION AND
SERVICE OF PROCESS. EACH OF THE PARTIES IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF DELAWARE, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING
ARISING OUT OF THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO FURTHER
AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S.
REGISTERED MAIL TO SUCH PARTY’S RESPECTIVE ADDRESS SET FORTH ABOVE SHALL BE
EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO
ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS
PARAGRAPH. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING
ARISING OUT OF THIS AGREEMENT, ANY RELATED DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF DELAWARE, AND HEREBY AND THEREBY FURTHER IRREVOCABLY AND
UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT
ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
(i) No
Recourse. Notwithstanding anything to the contrary in this
Agreement, the Company and each holder of Registrable Securities agrees and
acknowledges that no recourse under this Agreement or any documents or
instruments delivered in connection with this Agreement, shall be had against
any current or future director, officer, employee, general or limited partner or
member of the Company, any holder of Registrable Securities or of any Affiliate
or assignee of either such Person, whether by the enforcement of any assessment
or by any legal or equitable proceeding, or by virtue of any statute, regulation
or other applicable law, it being expressly agreed and acknowledged that no
personal liability whatsoever shall attach to, be imposed on or otherwise be
incurred by any current or future officer, agent or employee of the Company, any
holder of Registrable Securities or any current or future member of any holder
of Registrable Securities or any current or future director, officer, employee,
partner or member of the Company, any holder of Registrable Securities or of any
Affiliate or assignee of any such Person, as such for any obligation of any
holder of Registrable Securities under this Agreement or any documents or
instruments delivered in connection with this Agreement for any claim based on,
in respect of or by reason of such obligations or their creation.
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(j) No Strict
Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any
party.
(k) Electronic
Delivery. This Agreement, the agreements referred to herein,
and each other agreement or instrument entered into in connection herewith or
therewith or contemplated hereby or thereby, and any amendments hereto or
thereto, to the extent executed and delivered by means of a photographic,
photostatic, facsimile or similar reproduction of such signed writing using a
facsimile machine or electronic mail shall be treated in all manner and respects
as an original agreement or instrument and shall be considered to have the same
binding legal effect as if it were the original signed version thereof delivered
in person. At the request of any party hereto or to any such
agreement or instrument, each other party hereto or thereto shall re-execute
original forms thereof and deliver them to all other parties. No
party hereto or to any such agreement or instrument shall raise the use of a
facsimile machine or electronic mail to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine or electronic mail as a defense to the formation or
enforceability of a contract and each such party forever waives any such
defense.
(l) Further
Assurances. In connection with this Agreement and the
transactions contemplated hereby, each holder of Registrable Securities shall
execute and deliver any additional documents and instruments and perform any
additional acts that may be necessary or appropriate to effectuate and perform
the provisions of this Agreement and the transactions contemplated
hereby.
(m) No Inconsistent
Agreements. The Company shall not hereafter enter into any
agreement with respect to its securities which is inconsistent with or violates
the rights granted to the holders of Registrable Securities in this
Agreement.
(n) Severability; Counterparts;
Headings and Captions. If any provision of this Agreement
shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions hereof, and this Agreement shall be
construed and enforced as if such provisions had not been
included. If any provision of this Agreement shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and this Agreement shall be construed and enforced as if such
provisions had not been included. The headings and captions herein
are provided for reference and convenience only, shall not be considered part of
this Agreement, and shall not be employed in the construction of this
Agreement.
* * * * *
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IN
WITNESS WHEREOF, the parties have executed this Registration Agreement as of the
date first written above.
BIONEUTRAL
GROUP, INC.
By: Stephen J.
Browand
Its: Chief Executive
Officer
CHERTOFF
GROUP, L.L.C.
By:
Its:
Solely
for purposes of Section 13 of the Agreement:
_____________________________
Stephen
J. Browand
_____________________________
Raj
Pamani
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EXHIBIT
A
REGISTRATION
AGREEMENT
JOINDER
The
undersigned is executing and delivering this Joinder pursuant to the
Registration Agreement dated as of February __, 2010 (as the same may hereafter
be amended, the “Registration
Agreement”), among BioNeutral Group, Inc., a Nevada corporation (the
“Company”), and
the other person named as parties therein.
By
executing and delivering this Joinder to the Company, the undersigned hereby
agrees to become a party to, to be bound by, and to comply with the provisions
of the Registration Agreement as a holder of Registrable Securities in the same
manner as if the undersigned were an original signatory to the Registration
Agreement, and the undersigned’s ____ shares of Common Stock shall be included
as Registrable Securities under the Registration Agreement.
Accordingly,
the undersigned has executed and delivered this Joinder as of the ___ day of
____________, ____.
Signature
of Stockholder
Print
Name of Stockholder
Address:
Agreed
and Accepted as of
_____________________.
BIONEUTRAL
GROUP, INC.
By:
Its: