EXHIBIT 10.13
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made by and
between Chiste Corporation, a Nevada corporation (the "Company"), and the
undersigned investors (individually. an "Investor" and collectively, the
"Investors") effective as of this 7th day of June, 2005.
This Agreement is being entered into pursuant to the separate Subscription
Agreements, dated as of the date hereof between the Company and each Investor
(individually, a "Purchase Agreement" and collectively, the "Purchase
Agreements").
The Company and the Investors hereby agree as follows:
Section 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Advice" shall have meaning set forth in Section 3(m).
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common
control with such Person. For the purposes of this definition, "Control,"
when used with respect to any Person, means the possession, direct or
indirect, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise; and the terms "Affiliated,"
"Controlling" and "Controlled" have meanings correlative to the foregoing.
"Board" shall have meaning set forth in Section 3(n).
"Business Day" means any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in
the State of New York generally are authorized or required by law or other
government actions to close.
"Closing Date" means the date hereof.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's common stock, par value $0.001
per share.
"Effectiveness Date" means, with respect to the Registration
Statement required to be filed hereunder, the earlier of (a) the 150th
calendar day following the date of the Purchase Agreement, and (b) the
second trading day following the date on which the Company is notified by
the Commission that the Registration Statement will not be reviewed or is
no longer subject to further review and comments.
"Effectiveness Period" shall have the meaning set forth in Section
2.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Filing Date" means the later of (i) the 90th day following the date
hereof, and (ii) 10 days after the filing by the Company of the financial
statements of the Company and HydroGen on a combined basis in a Form 8-K
filing or other periodic report filed under the Exchange Act, provided,
however, that if such financial statements shall not be so filed within
120 days of the date hereof, the "Filing Date" shall be the 121st day
after the date hereof.
"Holder" or "Holders" means the holder or holders, as the case may
be, from time to time of Registrable Securities pursuant to this Agreement
or any other similar agreement between the Company and such holder.
"HydroGen" means HydroGen, L.L.C., an Ohio limited liability
company.
"Indemnified Party" shall have the meaning set forth in Section
5(c).
"Indemnifying Party" shall have the meaning set forth in Section
5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Memorandum" means HydroGen's Investment Summary, dated May 13,
2005, with respect to the offer and sale of up to 80 Units.
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind.
"Preferred Stock" means the Company's Series B Convertible Preferred
Stock, par value $0.001 per share.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of
the Registrable Securities covered by the Registration Statement, and all
other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference in
such Prospectus.
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"Registrable Securities" means (i) the Shares, and (ii) any
securities issued or issuable with respect to such Shares or the Preferred
Stock by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization with respect to any of the securities referenced above.
"Registration Statement" means the registration statements and any
additional registration statements contemplated by Section 2 and Section
7(c), including (in each case) the Prospectus, amendments and supplements
to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material
incorporated by reference in such registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of Common Stock issuable or issued to the
Investors up conversion of the Preferred Stock.
Section 2. Mandatory Registration. On or prior to the Filing Date, the
Company shall prepare and file with the Commission a Registration Statement
covering all Registrable Securities. The Registration Statement shall be on Form
S-3 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form). The Company shall use its commercially reasonable
efforts to cause the Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof and to keep such
Registration Statement continuously effective under the Securities Act until
such date as is the earlier of (x) the date when all Registrable Securities
covered by such Registration Statement have been sold or (y) the date on which
the Registrable Securities may be sold without any restriction pursuant to Rule
144 as determined by the counsel to the Investors pursuant to a written opinion
letter, addressed to the Company's transfer agent to such effect (the
"Effectiveness Period").
Section 3. Registration Procedures. In connection with the Company's
registration obligations hereunder, the Company shall:
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(a) (i) Prepare and file with the Commission on or prior to the
Filing Date, a Registration Statement on Form S-3 (or if the Company is
not then eligible to register for resale the Registrable Securities on
Form S-3 such registration shall be on another appropriate form) in
accordance with the method or methods of distribution thereof as specified
by the Holders, and use its commercially reasonable efforts to cause the
Registration Statement to become effective, but in any event not later
than the Effectiveness Date, and remain effective as provided herein;
provided, however, that not less than five (5) Business Days prior to the
filing of the Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would be
incorporated therein by reference), the Company shall (i) furnish to the
Holders copies of all such documents proposed to be filed, which documents
(other than those incorporated by reference) will be subject to the review
of such Holders, and (ii) cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries as
shall be necessary, in the reasonable opinion of counsel to such Holders,
to conduct a reasonable investigation within the meaning of the Securities
Act. The Company shall not file the Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the Holders
of a majority of the Registrable Securities shall reasonably object in
writing within four (4) Business Days of their receipt thereof. The
Company shall promptly notify the Holders via facsimile of the
effectiveness of the Registration Statement no later than the second
trading day after the Company receives notification (including oral
notification) of the effectiveness from the Commission. Failure to so
notify the Holders within such period shall be deemed an Event under
Section 3(a)(ii). In no event shall the Company give such notice of
effectiveness to any holder of the Company's securities (other than
officers of the Company) prior to giving such notice to the Holders. The
Company shall, if necessary, within two trading days after the day that
the Company receives notification of the effectiveness from the
Commission, file a Form 424(b) prospectus with the Commission.
(ii) If: (i) a Registration Statement is not filed on or prior to
the Filing Date (if the Company files a Registration Statement without
affording the Holders the opportunity to review and comment on the same as
required by Section 3(a), the Company shall not be deemed to have
satisfied this clause (i)), or (ii) the Company fails to file with the
Commission a request for acceleration in accordance with Rule 461
promulgated under the Securities Act, within two trading days of the date
that the Company is notified (orally or in writing, whichever is earlier)
by the Commission that a Registration Statement will not be "reviewed," or
is not subject to further review, or (iii) a Registration Statement filed
or required to be filed hereunder is not declared effective by the
Commission on or before the Effectiveness Date, or (iv) after a
Registration Statement is first declared effective by the Commission, it
ceases for any reason to remain continuously effective as to all
Registrable Securities for which it is required to be effective, or the
Holders are not permitted to utilize the Prospectus therein to resell such
Registrable Securities, for more than an aggregate of 30 trading days
during any 12-month period (which need not be consecutive trading days)
(any such failure or breach being referred to as an "EVENT," and for
purposes of clause (i) or (iii) the date on which such Event occurs, or
for purposes of clause (ii) the date on which such two trading day period
is exceeded, or for purposes of clause (iv) the date on which such 30
trading day period is exceeded being referred to as "Event Date"), then in
addition to any other rights the Holders may have hereunder or under
applicable law (even if permitted by Section 3(h)), then, on each such
Event Date and on each monthly anniversary of each such Event Date (if the
applicable Event shall not have been cured by such date) until the
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applicable Event is cured, the Company shall pay to each Holder an amount
in cash, as partial liquidated damages and not as a penalty, equal to 1.0%
of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement for any Registrable Securities then held by such Holder
up to a maximum of 10% in the aggregate for all liquidated damages payable
hereunder (exclusive of interest as provided in the next sentence). If the
Company fails to pay any partial liquidated damages pursuant to this
Section in full within seven days after the date payable, the Company will
pay interest thereon at a rate of 12% per annum (or such lesser maximum
amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such partial liquidated damages are due until
such amounts, plus all such interest thereon, are paid in full. The
partial liquidated damages pursuant to the terms hereof shall accrue on a
daily pro-rata basis for any portion of a month prior to the cure of an
Event and shall be paid within 2 trading days of the cure of such Event.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement as may
be necessary to keep the Registration Statement continuously effective as
to the applicable Registrable Securities for the Effectiveness Period and
prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of
the Registrable Securities; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424 (or any similar
provisions then in force) promulgated under the Securities Act; (iii)
respond as promptly as possible to any comments received from the
Commission with respect to the Registration Statement or any amendment
thereto and as promptly as possible provide the Holders true and complete
copies of all correspondence from and to the Commission relating to the
Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the Registration
Statement during the applicable period in accordance with the intended
methods of disposition by the Holders thereof set forth in the
Registration Statement as so amended or in such Prospectus as so
supplemented.
(c) Notify the Holders of Registrable Securities to be sold as
promptly as possible (and, in the case of (i)(A) below, not less than
three (3) days prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one (1) Business Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be
filed; (B) when the Commission notifies the Company whether there will be
a "review" of such Registration Statement and whenever the Commission
comments in writing on such Registration Statement; and (C) with respect
to the Registration Statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the Commission or any
other federal or state governmental authority for amendments or
supplements to the Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for
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that purpose; (iv) if at any time any of the representations and
warranties of the Company contained in any agreement contemplated hereby
ceases to be true and correct in all material respects; (v) of the receipt
by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening
of any Proceeding for such purpose; and (vi) of the occurrence of any
event that makes any statement made in the Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires any
revisions to the Registration Statement, Prospectus or other documents so
that, in the case of the Registration Statement or the Prospectus, as the
case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(d) Use its commercially reasonable efforts to avoid the issuance
of, or, if issued, obtain the withdrawal of, (i) any order suspending the
effectiveness of the Registration Statement or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable
moment.
(e) If requested by the Holders of a majority in interest of the
Registrable Securities, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment to the Registration Statement such
information as the Company reasonably agrees should be included therein
and (ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
(f) Furnish to each Holder, without charge, at least one conformed
copy of each Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed
to be incorporated therein by reference, and all exhibits to the extent
requested by such Holder (including those previously furnished or
incorporated by reference) promptly after the filing of such documents
with the Commission.
(g) Promptly deliver to each Holder, without charge, as many copies
of the Prospectus or Prospectuses (including each form of prospectus) and
each amendment or supplement thereto as such Persons may reasonably
request; and the Company hereby consents to the use of such Prospectus and
each amendment or supplement thereto, during periods in which such
Prospectus and each amendment or supplement thereto are effective, by each
of the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.
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(h) Prior to any public offering of Registrable Securities, use its
commercially reasonable efforts to register or qualify (or obtain an
exemption from such registration or qualification) such Registrable
Securities for offer and sale under the securities or Blue Sky laws of
such jurisdictions within the United States as any Holder requests in
writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all
other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by a Registration
Statement; provided, however, that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not then
so qualified or to take any action that would subject it to general
service of process in any such jurisdiction where it is not then so
subject or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.
(i) Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be
sold pursuant to a Registration Statement, which certificates shall, if
required under the terms of this Agreement, be free of all restrictive
legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any Holder may request.
(j) Upon the occurrence of any event contemplated by Section
3(c)(vi), as promptly as possible, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, and file any other
required document so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus will contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(k) Use its commercially reasonable efforts to cause all Registrable
Securities relating to such Registration Statement to be traded on the OTC
Bulletin Board, or listed on the Nasdaq SmallCap Market, Nasdaq National
Market, American Stock Exchange and any other securities exchange,
quotation system or market, if any, on which similar securities issued by
the Company are then listed.
(l) Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 not later than 45 days after the end of
any 12-month period (or 90 days after the end of any 12-month period if
such period is a fiscal year) commencing on the first day of the first
fiscal quarter of the Company after the effective date of the Registration
Statement, which statement shall conform to the requirements of Rule 158.
(m) If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder
shall have the right to require (if such reference to such Holder by name
or otherwise is not required by the Securities Act or any similar federal
statute then in force) the deletion of the reference to such Holder in any
amendment or supplement to the Registration Statement filed or prepared
subsequent to the time that such reference ceases to be required.
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Each Holder covenants and agrees that (i) it will not sell any Registrable
Securities under the Registration Statement until it has received copies of the
Prospectus as then amended or supplemented as contemplated in Section 3(g) and
notice from the Company that such Registration Statement and any post-effective
amendments thereto have become effective as contemplated by Section 3(c), (ii)
it will comply with the prospectus delivery requirements of the Securities Act
as applicable to it in connection with sales of Registrable Securities pursuant
to the Registration Statement and (iii) it will furnish to the Company
information regarding such Holder and the distribution of such Registrable
Securities as is required by law or by the Securities and Exchange Commission to
be disclosed in the Registration Statement, and the Company may exclude from
such registration the Registrable Securities of any such Holder who unreasonably
fails to furnish such information within a reasonable time after receiving a
written request by the Company for such information.
Each Holder agrees by its acquisition of such Registrable Securities that,
upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi),
such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing (the "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.
(n) If (i) there is material non-public information regarding the
Company which the Company's Board of Directors (the "Board") reasonably
determines not to be in the Company's best interest to disclose and which
the Company is not otherwise required to disclose, or (ii) there is a
significant business opportunity (including, but not limited to, the
acquisition or disposition of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer or other similar
transaction) available to the Company which the Board reasonably
determines not to be in the Company's best interest to disclose, then the
Company may postpone or suspend filing or effectiveness of a registration
statement for a period not to exceed 20 consecutive days, provided that
the Company may not postpone or suspend its obligation under this Section
3(n) for more than 30 days in the aggregate during any 12 month period;
provided, however, that no such postponement or suspension shall be
permitted for consecutive 15 day periods, arising out of the same set of
facts, circumstances or transactions.
(o) Enter into such customary agreements (including an underwriting
agreement, in the event that the Shares are to be distributed by means of
an underwritten public offering) and take such other actions in connection
therewith as a Holder of the Registrable Securities shall reasonably
request in order to expedite or facilitate the disposition of such
Registrable Securities in accordance herewith and in such connection,
whether or not an underwriting agreement is entered into and whether or
not the disposition is an underwritten offering, (i) make such
representations and warranties to the Holders and the underwriters, if
any, in form, substance and scope as are customarily made in an
underwritten offering; (ii) obtain an opinion of counsel to the Company in
customary form and covering such matters of the type customarily covered
by such opinions as a Holder and the underwriters, if any, may reasonably
request, addressed to the selling Holders and the underwriters, if any,
and dated the effective date of such registration statement and dated the
effective date of a post-effective amendment to the registration
statement, if such is filed (or, if such registration statement covers an
underwritten offering, dated the date of the closing as specified in the
underwriting agreement); and (iii) obtain a "cold comfort" or procedures
letter from the independent certified public accountants of the Company
addressed to the selling Holders and to the underwriters, if any, dated
the effective date of such registration statement and dated the effective
date of a post-effective amendment to the registration statement, if such
is filed (and, if such registration statement covers an underwritten
offering, dated the date of the closing as specified in the underwriting
agreement), such letter to be in customary form and covering such matters
of the type customarily covered by such letter;
Section 4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company, except as and
to the extent specified in this Section 4, shall be borne by the Company whether
or not the Registration Statement is filed or becomes effective and whether or
not any Registrable Securities are sold pursuant to the Registration Statement.
The fees and expenses referred to in the foregoing sentence shall include,
without limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses (A) with respect to filings required to be made
with the OTC Bulletin Board, Nasdaq SmallCap Market, Nasdaq National Market,
American Stock Exchange and each other securities exchange or market on which
Registrable Securities are required hereunder to be listed, and (B) in
compliance with state securities or Blue Sky laws), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is requested by the holders of a majority of the Registrable
Securities included in the Registration Statement), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
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Company in connection with the consummation of the transactions contemplated by
this Agreement, including, without limitation, the Company's independent public
accountants (including the expenses of any comfort letters or costs associated
with the delivery by independent public accountants of a comfort letter or
comfort letters). In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. The Company shall also be responsible
for one half of the reasonable fees and expenses of one counsel for the Holders
in connection with the registration of the Shares contemplated hereby; provided,
however, the Company shall not be required to pay more than $50,000 pursuant to
this Section 4.
Section 5. Indemnification.
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, agents, brokers (including
brokers who offer and sell Registrable Securities as principal as a result
of a pledge or any failure to perform under a margin call of Common
Stock), investment advisors and employees of each of them, each Person who
controls each Holder (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) and the officers, directors, agents
and employees of each such controlling Person, from and against any and
all losses, claims, damages, liabilities, costs (including, without
limitation, costs of preparation and attorneys' fees) and expenses
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(collectively, "Losses") as incurred, arising out of or based upon any
untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or
arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of
prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, except to the extent, but only to
the extent, that such untrue statement or omission is based solely upon
information regarding such Holder or such other Indemnified Party
furnished in writing to the Company by such Holder expressly for use
therein. The Company shall notify such Holder promptly of the institution,
threat or assertion of any Proceeding of which the Company is aware in
connection with the transactions contemplated by this Agreement.
(b) Indemnification by Holder. Each Holder, severally and not
jointly, shall indemnify and hold harmless the Company, the directors,
officers, agents and employees, each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, agents or employees of
such controlling Persons, to the fullest extent permitted by applicable
law, from and against all Losses as incurred, arising solely out of or
based solely upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Prospectus, or
any form of prospectus or form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising solely out
of or based solely upon any omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of
any Prospectus or supplement thereto, in the light of the circumstances
under which they were made) not misleading, to the extent, but only to the
extent, that such untrue statement or omission or alleged untrue statement
or omission is contained in any information furnished in writing by such
Holder to the Company specifically for inclusion in the Registration
Statement or such Prospectus. In no event shall the liability of any
Holder hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall
be brought or asserted against any Person entitled to indemnity hereunder
(an "Indemnified Party"), such Indemnified Party promptly shall notify the
Person from whom indemnity is sought (the "Indemnifying Party") in
writing, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, however, that the failure of
any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party.
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An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed
in writing to pay such fees and expenses; or (2) the Indemnifying Party
shall have failed promptly to assume the defense of such Proceeding and to
employ counsel reasonably satisfactory to such Indemnified Party in any
such Proceeding; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and
the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying
Party in writing that it elects to employ separate counsel at the expense
of the Indemnifying Party, the Indemnifying Party shall not have the right
to assume the defense thereof and such counsel (in addition to any local
counsel) shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not
be unreasonably withheld or delayed. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement
of any pending Proceeding in respect of which any Indemnified Party is a
party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter
of such Proceeding and does not contain any admission of wrongdoing by
such Indemnified Party.
All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating
or preparing to defend such Proceeding in a manner not inconsistent with
this Section 5) shall be paid to the Indemnified Party, as incurred,
within ten (10) Business Days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately determined that
an Indemnified Party is not entitled to indemnification hereunder;
provided, however, that the Indemnifying Party may require such
Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party
is not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section 5(a)
or Section 5(b) is unavailable to an Indemnified Party because of a
failure or refusal of a governmental authority to enforce such
indemnification in accordance with its terms (by reason of public policy
or otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions
that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such action, statement or omission. The amount paid or payable by
a party as a result of any Losses shall be deemed to include, subject to
the limitations set forth in Section 5(c), any reasonable attorneys' or
other reasonable fees or expenses incurred by such party in connection
with any Proceeding to the extent such party would have been indemnified
for such fees or expenses if the indemnification provided for in this
Section was available to such party in accordance with its terms.
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The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately
preceding paragraph. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to
the Indemnified Parties. Notwithstanding the foregoing, the obligations of
the Holders herein shall be the several, and not joint, obligation of each
Holder as to itself and not as to any other Holder.
Section 6. Rule 144. The Company covenants to timely file all reports
required to be filed by the Company after the date hereof pursuant to Section
13(a) or 15(d) of the Exchange Act. As long as the Holder owns Shares, if the
Company is not required to file reports pursuant to Section 13(a) or 15(d) of
the Exchange Act, it will prepare and furnish to the Holder and make publicly
available in accordance with Rule 144(c) promulgated under the Securities Act
annual and quarterly financial statements, together with a discussion and
analysis of such financial statements in form and substance substantially
similar to those that would otherwise be required to be included in reports
required by Section 13(a) or 15(d) of the Exchange Act, as well as any other
information required thereby, in the time period that such filings would have
been required to have been made under the Exchange Act. The Company further
covenants that it will take such further action as the Holder may reasonably
request, all to the extent required from time to time to enable such Person to
sell Shares without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 promulgated under the Securities Act,
including providing any legal opinions relating to such sale pursuant to Rule
144. Upon the request of the Holder, the Company shall deliver to the Holder a
written certification of a duly authorized officer as to whether it has complied
with such requirements.
Section 7. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by any
Holder, of any of their obligations under this Agreement, the Holder or
the Company, as the case may be, will be entitled to specific performance
of its rights hereunder, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of
damages. The Company and the Holders agree that monetary damages would not
provide adequate compensation for any losses incurred by reason of a
breach of any of the provisions of this Agreement and hereby further agree
that, in the event of any action for specific performance in respect of
such breach, it shall waive the defense that a remedy at law would be
adequate.
(b) No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries has, as of the date hereof entered into and currently in
effect, nor shall the Company or any of its subsidiaries, on or after the
date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof.
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(c) Piggy-Back Registrations. If at any time when there is not an
effective Registration Statement covering the Registrable Securities, the
Company shall determine to prepare and file with the Commission a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any
entity or business or equity securities issuable in connection with stock
option or other employee benefit plans, the Company shall send to each
holder of Registrable Securities written notice of such determination and,
if within fifteen (15) days after receipt of such notice, any such holder
shall so request in writing (which request shall specify the Registrable
Securities intended to be disposed of by the Investors), the Company will
cause the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the
Holders, to the extent requisite to permit the disposition of the
Registrable Securities so to be 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
the Holders and, thereupon (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its
obligation to pay expenses in accordance with Section 4 hereof), and (ii)
in the case of a determination to delay registering, shall be permitted to
delay registering any Registrable Securities being registered pursuant to
this Section 7(c) for the same period as the delay in registering such
other securities; provided, however, that nothing contained in this
Section 7(c) shall be deemed to relieve the Company from its obligations
with respect to the Mandatory Registration required by Section 2 hereof.
The Company shall include in such registration statement all or any part
of such Registrable Securities the Holders request to be registered;
provided, however, that the Company shall not be required to register any
Registrable Securities pursuant to this Section 7(c) that are eligible for
sale pursuant to Rule 144(k) of the Securities Act. In the case of a firm
commitment underwritten public offering, if the managing underwriter(s) or
underwriter(s) should reasonably object to the inclusion of the
Registrable Securities in such registration statement, then if the Company
after consultation with the managing underwriter should reasonably
determine that the inclusion of such Registrable Securities, would
materially adversely affect the offering contemplated in such registration
statement, and based on such determination recommends inclusion in such
registration statement of fewer or none of the Registrable Securities of
the Holders, then (x) the number of Registrable Securities of the Holders
included in such registration statement shall be reduced pro-rata among
such Holders (based upon the number of Registrable Securities requested to
be included in the registration), if the Company after consultation with
the underwriter(s) recommends the inclusion of fewer Registrable
Securities, or (y) none of the Registrable Securities of the Holders shall
be included in such registration statement, if the Company after
consultation with the underwriter(s) recommends the inclusion of none of
such Registrable Securities; provided, however, that if Securities are
being offered for the account of other persons or entities as well as the
Company, such reduction shall not represent a greater fraction of the
number of Registrable Securities intended to be offered by the Holders
than the fraction of similar reductions imposed on such other persons or
entities (other than the Company).
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(d) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the same shall be in writing and signed by
the Company and the Holders of a majority of the Registrable Securities.
(e) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earlier of (i) the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified for notice prior to
5:00 p.m., New York time, on a Business Day, (ii) the Business Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified for notice later
than 5:00 p.m., New York time, on any date and earlier than 11:59 p.m.,
New York time, on such date, (iii) the Business Day following the date of
mailing, if sent by nationally recognized overnight courier service or
(iv) actual receipt by the party to whom such notice is required to be
given. The addresses for such communications shall be with respect to each
Holder at its address set forth under its name on the signature page
hereto or as otherwise provided to the Company, or with respect to the
Company, addressed to:
Chiste Corporation/HydroGen LLC
0000 Xxxxx 00 Xxxxx
Xxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
or to such other address or addresses or facsimile number or numbers as
any such party may most recently have designated in writing to the other
parties hereto by such notice.
(f) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted
assigns and shall inure to the benefit of the Holders and their successors
and permitted assigns.
(g) Assignment of Registration Rights. Prior to the effective date
of the initial Registration Statement filed pursuant to Section 2, the
rights of the Holders hereunder, including the right to have the Company
register for resale Registrable Securities in accordance with the terms of
this Agreement, shall be automatically assignable by any Holder to any
Affiliate of the Holder or any other Holder or Affiliate of any other
Holder of all or a portion of the Registrable Securities if: (i) the
Holder agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment, (ii) the Company is, within a
reasonable time after such transfer or assignment, furnished with written
notice of (a) the name and address of such transferee or assignee, and (b)
the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment the
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further disposition of such securities by the transferee or assignees is
restricted under the Securities Act and applicable state securities laws,
and (iv) at or before the time the Company receives the written notice
contemplated by clause (ii) of this Section, the transferee or assignee
agrees in writing with the Company to be bound by all of the provisions of
this Agreement. In addition, each Holder shall have the right to assign
its rights hereunder to any other Person with the prior written consent of
the Company, which consent shall not be unreasonably withheld. The rights
to assignment shall apply to the Holders (and to subsequent) successors
and assigns.
(h) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the
same Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of
the party executing (or on whose behalf such signature is executed) the
same with the same force and effect as if such facsimile signature were
the original thereof.
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
principles of conflicts of law thereof.
(j) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(k) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable in
any respect, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(l) Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
(m) Independent Nature of Holders' Obligations and Rights. The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be
responsible in any way for the performance of the obligations of any other
Holder hereunder. Nothing contained herein or in any other agreement or
document delivered and no action taken by any Holder pursuant hereto or
thereto, shall be deemed to constitute the Holders as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Holders are in any way acting in concert with respect
to such obligations or the transactions contemplated by this Agreement.
Each Holder shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall
not be necessary for any other Holder to be joined as an additional party
in any proceeding for such purpose.
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(n) In the event that the Mandatory Conversion (as such term is
defined in the Certificate of Designation relating to the Preferred Stock)
has not occurred by July 7, 2006, the obligations of the Company with
respect to the registration of the Shares shall apply to the Preferred
Stock.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement effective as of the date indicated below as the date the
Agreement is accepted by the Company.
-00-
XXXXXX XXXXXXXXXXX
By: ______________________________________________
Name: ____________________________________________
Title: ___________________________________________
INVESTORS:
SBL FUND, SERIES J
By: Security Management Company, LLC, as agent
By: ______________________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President & Sr. Portfolio Manager
One Security Benefit Xxxxx
Xxxxxx, XX 00000
SECURITY MID CAP GROWTH FUND
By: Security Management Company, LLC, as agent
By: ______________________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President & Sr. Portfolio Manager
One Security Benefit Xxxxx
Xxxxxx, XX 00000
[REGISTRATION RIGHTS AGREEMENT]
-18-
SECURITY EQUITY FUND, MID CAP VALUES SERIES
By: Security Management Company, LLC, as agent
By: ______________________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President & Sr. Portfolio Manager
One Security Benefit Xxxxx
Xxxxxx, XX 00000
SBL FUND, SERIES V
By: Security Management Company, LLC, as agent
By: ______________________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President & Sr. Portfolio Manager
One Security Benefit Xxxxx
Xxxxxx, XX 00000
[REGISTRATION RIGHTS AGREEMENT]
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