Contract
Exhibit
10.1
This
STOCK PURCHASE & REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
is
made and entered into as of May 23, 2006, by and between STARTECH ENVIRONMENTAL
CORPORATION, a Colorado corporation (the “Company”),
and
FB U.S. Investments, L.L.C., an Alabama limited liability company (the
“Purchaser”).
RECITALS
The
Company desires to issue and sell to the Purchaser in a private placement
(the
“Offering”),
and
the Purchaser desires to purchase from the Company, on the terms and subject
to
the conditions set forth herein, one
million three hundred thousand
(1,300,000) shares (the “Shares”)
of
common stock, no par value (“Common
Stock”),
of
the Company, along with two million six hundred thousand (2,600,000) three-year
warrants (the “Warrants”
and,
together with the Shares, the “Securities”),
the
terms of such Warrants being as set forth in the Warrant Agreement substantially
in the form attached as Exhibit
A
hereto.
This Agreement and the Warrants shall be referred to herein collectively
as the
“Transaction
Documents”.
The
Purchaser desires, upon the terms and conditions set forth in this Agreement,
to
purchase Securities in the Offering.
The
Company and the Purchaser are executing and delivering this Agreement in
reliance upon the exemption from securities regulation afforded by
Section 4(2) of the Securities Act (as defined in Section 3
hereof) and Rule 506 under Regulation D.
IN
CONSIDERATION of the premises and mutual covenants contained in this Agreement
and other good and valuable consideration, the receipt and sufficiency of
which
are hereby acknowledged, the Company and the Purchaser agree as
follows:
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Purchase
and Sale of Securities.
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(a)
Purchase
and Sale of Shares.
Subject
to the terms and conditions hereof, at the Closing identified in Section
2
hereof,
the Company shall issue and sell to the Purchaser, and the Purchaser shall
purchase from the Company, one
million three hundred thousand (1,300,000)
Shares,
which
number of Shares have been calculated by dividing TWO MILLION SIX HUNDRED
THOUSAND DOLLARS ($2,600,000) (the “Purchase
Price”)
by
$2.00 per Share (the “Share
Price”),
which
said Share
Price is Two Dollars per share ($2.00)
(b)
Purchase
and Sale of Warrants.
In
addition to the foregoing, and subject to the terms and conditions hereof,
at
the Closing identified in Section
2
hereof,
the Company shall issue to the Purchaser One Warrant to purchase shares of
Common Stock on the following terms:
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Warrant
Coverage:
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The
Purchaser will be entitled to receive TWO
warrants (the “Purchased
Warrants”)
for each of the common Shares of the Company purchased. The Shares
of
Common Stock purchased into which the Warrants are exercisable
(the
“Warrant
Shares”)
will have piggyback registration rights as provided in this
Agreement.
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Term:
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The
Purchased Warrants shall be exercisable for a term of three-years
from the
Closing Date (as defined below).
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Exercise
Price:
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The
Warrants will be exercisable into 1,300,000
shares of Common Stock at a warrant-price of $5.00
each
(the “Series
A Warrants”)
and also 1,300,000
shares of Common Stock at a warrant-price of $6.00
each (the “Series
B Warrants”);.
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(c) Exemption.
The
purchase and sale of the Securities pursuant to the terms hereof will be
made in
reliance upon the provisions of Section 4(2) of the Securities Act of 1933,
as
amended (the “Securities
Act”),
Rule
506 of Regulation D promulgated thereunder by the United States Securities
and
Exchange Commission (the “SEC”),
or
such other exemptions from the registration requirements of the Securities
Act
as may be available with respect to the investment in the Securities to be
made
hereunder.
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2.
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Closings
and Deliverables.
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(a) Payment.
At the
Closing, the Purchaser will make a wire transfer payment to the Company,
to the
account set forth on Exhibit
B
hereto,
in an amount equal to the Purchase Price, which Purchase Price shall entitle
the
Purchaser, subject to the satisfaction of the terms and conditions herein,
to
receive the Shares and the Purchased Warrants. Together with the Purchase
Price,
at the Closing, the Purchaser shall deliver to the Company a fully completed
and
executed copy of the Investor Questionnaire in the form attached as Exhibit
C
hereto
(the “Investor
Questionnaire”).
(b) Closing.
The
closing of the purchase and sale of the Securities shall take place at 12:00
p.m. (Eastern Standard Time) on the date hereof (the “Closing
Date”),
at
the offices of the Company (the “Closing”).
(c) Deliverables.
At the
Closing, or as soon as is reasonably practicable thereafter, and assuming
the
Company has received the Purchase Price and the Investor Questionnaire, the
Company (or its transfer agent) shall deliver to the Purchaser a stock
certificate (or certificates) representing the Shares so purchased at the
Closing, as well as one or more Warrant Agreements representing the Series
A
Warrants and Series B Warrants, in each case registered in the name of the
Purchaser, and such other documents and certificates as are required by this
Agreement at the Closing.
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3. Representations
and Warranties by the Company.
The
Company hereby represents and warrants to the Purchaser, as of the date hereof,
as follows:
(a) Incorporation
and Qualification.
The
Company has been duly organized and is validly existing as a Corporation
and in
good standing under the laws of the State of Colorado with the requisite
corporate power and authority to own and use its properties and assets and to
carry on its business as currently conducted.
(b) Authority.
The
Company has the requisite corporate power and authority to enter into this
Agreement and to issue and deliver the Shares and the Warrants and, upon
exercise of the Warrants in accordance with the terms thereof, the Warrant
Shares. The execution and delivery of this Agreement and the issuance and
delivery of the Shares and the Warrants hereunder and the consummation of
the
transactions contemplated hereby have been duly and validly authorized by
all
necessary corporate action by the Company. This Agreement has been duly and
validly executed and delivered by and on behalf of the Company and constitutes
a
valid, legal and binding agreement, enforceable against the Company in
accordance with its terms, except as enforceability may be limited by general
equitable principles, bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting creditors’ rights generally.
Assuming payment of the Purchase Price in full at the Closing, the Shares
and
the Warrants will be duly authorized, validly issued, fully paid and
non-assessable. Upon exercise of the Warrants in accordance with the terms
thereof, including payment of the exercise price in full, the Warrant Shares
will be duly authorized, validly issued, fully paid and non-assessable.
(c) No
Conflicts.
The
execution, delivery and performance of this Agreement by the Company and
the
consummation by the Company of the Offering do not and will not: (i) conflict
with or violate any provision of the Company’s articles of incorporation or
bylaws, or (ii) subject to obtaining the Required Approvals (as defined below),
conflict with, or constitute a default (or an event that with notice or lapse
of
time or both would become a default) under, or give to others any rights
of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) to which the Company
is a
party or by which any property or asset of the Company is bound or affected,
or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
as currently in effect to which the Company is subject (including federal
and
state securities laws and regulations), or by which any property or asset
of the
Company is bound or affected; except in the case of each of clauses (ii)
and
(iii), such as could not, individually or in the aggregate (x) adversely
affect
the legality, validity or enforceability of the Offering, (y) have or result
in
a material adverse effect on the results of operations, assets, business
or
condition (financial or otherwise) of the Company, taken as a whole (other
than
any change, effect, event or condition that arises from changes in general
economic conditions or conditions affecting the industry of the business
of the
Company generally, or such changes, events or conditions resulting directly
from
the announcement of or the consummation of the Offering contemplated hereby),
or
(z) adversely impair the Company’s ability to perform fully on a timely basis
its obligations under this Agreement (any of (x), (y) or (z), a “Material
Adverse Effect”).
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(d) Capital
Stock; Fully Paid and Non-Assessable.
(i) As
of the
date hereof, the
authorized capital stock of the Company consists of 10,000,000 shares of
preferred stock, no par value (the “Preferred
Stock”),
of
which there are no shares issued and outstanding, and 800,000,000 shares
of
Common Stock, of which 26,517,745 shares are issued and !9,320,845 are
outstanding, of which: (x) 1,000,000 shares are authorized for issuance under
the Company’s stock option plans; (y) 1,557,500 shares are reserved for issuance
upon the exercise of options granted and issuable by the Company thereunder;
and
(z) 2,363,611 shares are reserved for issuance upon the exercise of warrants
to
purchase shares of Common Stock.
(ii) All
outstanding shares of Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable and were issued in compliance
with
all applicable Federal and state securities laws. Except
as
contemplated by this Agreement or as set forth in all
forms, reports and documents filed with the SEC pursuant to the Securities
Act
and Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
from
January 1, 2003 through the date hereof
(collectively, the “SEC
Reports”),
the
Company has no outstanding subscription, option, warrant, right of first
refusal, preemptive right, call, contract, demand, commitment, convertible
security or other instrument, agreement or arrangement of any character or
nature whatever under which the Company is or may be obligated to issue Common
Stock or any other equity security of any kind or which otherwise relates
to the
Company’s securities.
(e) Filings,
Consents and Approvals.
The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court
or
other federal, state, local or other governmental authority or other person
or
entity in connection with the execution, delivery and performance by the
Company
of this Agreement, other than (i) the filing with the SEC of a Form D pursuant
to Regulation D of the Securities Act, and (iii) applicable state securities
law
Blue Sky filings (collectively, the “Required
Approvals”).
(f) SEC
Reports; Financial Statements.
Since
January 1, 2003, the Company has filed (i) all reports required to be filed
by it under the Securities Act; (ii) all annual reports on Form 10-K and
all quarterly reports on Form 10-Q required to be filed by it under the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, in
order for it to satisfy its filing requirements under the Exchange Act for
the
periods to which each such report relates; (iii) an annual report on Form
10-K,
covering the fiscal year ended October 31, 2003, which was filed with the
SEC on
January 29, 2004; (iv) a quarterly report on Form 10-Q, covering the fiscal
quarter ended January 31, 2004, which was filed with the SEC on March 15,
2004;
and (v) a quarterly report on Form 10-Q, covering the fiscal quarter ended
April
30, 2004, which was filed with the SEC on June 2, 2004; (the foregoing
materials, as amended, where applicable, being collectively referred to herein
as the “SEC
Reports”).
As of
their respective dates, the SEC Reports complied in all material respects
with
the requirements of the Securities Act and the Exchange Act and the rules
and
regulations of the SEC promulgated thereunder, and to the Knowledge (as defined
below) of the Company, none of the SEC Reports, when filed, contained any
untrue
statement of a material fact or omitted to state a material fact required
to be
stated therein or necessary in order to make the statements therein, in light
of
the circumstances under
4
which
they were made, not misleading. The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto
as in
effect at the time of filing. Such financial statements have been prepared
in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the
notes
thereto, and fairly present in all material respects the financial position
of
the Company and its consolidated subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments.
(g) No
Legal Proceedings.
Except
as may be described in the SEC Filings, there is no action, suit or proceeding
before or by any court or any governmental agency or body, domestic or foreign,
now pending or, to the actual knowledge (without the need for inquiry or
special
investigation) of the Chief Financial Officer, Chief Operating Officer or
Chief
Executive Officer of the Company (“Knowledge”),
threatened against or affecting the Company, or any of its properties or
assets,
which is reasonably likely to have a Material Adverse Effect.
4. Representations
and Warranties of the Purchaser.
The
Purchaser represents and warrants to the Company, as of the date hereof,
as
follows:
(a) Power.
The
Purchaser has been duly
organized, is validly existing and is in good standing under the laws of
its
state of incorporation, with all limited
liability company power
and
authority to execute, deliver and perform its obligations under the Agreement.
(b) Authority.
The
Purchaser has the requisite power and authority to enter into this Agreement
and
to purchase the Shares and the Warrants and, upon exercise of the Warrants
in
accordance with the terms thereof, the Warrant Shares. The execution and
delivery of this Agreement and the purchase of the Shares and the Warrants
hereunder and the consummation of the transactions contemplated hereby have
been
duly and validly authorized by all necessary action by the Purchaser. This
Agreement has been duly and validly executed and delivered by or on behalf
of
the Purchaser and constitutes a valid, legal and binding agreement, enforceable
against the Purchaser in accordance with its terms, except as enforceability
may
be limited by general equitable principles, bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws affecting creditors’ rights
generally.
(c) No
Conflicts.
The
execution, delivery and performance of this Agreement by the Purchaser and
the
consummation by the Purchaser of the purchase of the Securities do not and
will
not: (i) conflict with or violate any provision of the Purchaser’s
organizational or charter documents, or (ii) conflict with, or constitute
a
default (or an event that with notice or lapse of time or both would become
a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both)
of,
any agreement, credit facility, debt or other instrument (evidencing a Company
debt or otherwise) to which the Purchaser is a party or by which any property
or
asset of the Purchaser is bound or affected, or (iii) result in a violation
of
any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority as currently in effect
to
which the Purchaser is subject (including federal and state securities laws
and
regulations), or by which any property or asset of the Purchaser is bound
or
affected; except in the case of each of clauses (ii) and (iii), such as could
not, individually or in the aggregate,
result
in a Material Adverse Effect.
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(d) Investment
in Securities.
The
Purchaser represents and warrants to, and covenants with, the Company that:
(i) the Purchaser, either individually, or together with a purchaser
representative, is knowledgeable, sophisticated and experienced in making,
and
is qualified to make, decisions with respect to investments in shares
representing an investment decision like that involved in the purchase of
the
Securities, including investments in securities issued by the Company and
comparable entities, and has requested, received, reviewed and considered
all
information it deems relevant in making an informed decision to purchase
the
Securities; (ii) the Purchaser is acquiring the Securities in the ordinary
course of its business and for its own account for investment only and with
no
present intention or view toward the public sale or distribution thereof,
and no
arrangement or understanding exists with any other persons regarding the
public
sale or distribution of any Securities; (iii) the Purchaser will not,
directly or indirectly, except in compliance with the Securities Act, the
rules
and regulations promulgated thereunder and such other securities or blue
sky
laws as may be applicable, offer, sell, pledge, transfer or otherwise dispose
of
(or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the Securities or engage in any Short Sale (as defined below);
(iv) the Purchaser has completed or caused to be completed the Investor
Questionnaire and the answers thereto are true and correct in all respects
as of
the date hereof; (v) the Purchaser has, in connection with its decision to
purchase the Securities, relied solely upon its own independent investigation
of
the Company and the representations and warranties of the Company contained
herein; and (vi) the Purchaser is an “accredited investor” within the
meaning of Rule 501(a) of Regulation D promulgated under the Securities
Act.
(e) Short
Sales.
Neither
the Purchaser nor any affiliate of the Purchaser (as defined in Rule 405 of
the Securities Act (each a “Purchaser/Affiliate”)
and
which (i) had knowledge about the transactions contemplated hereby, (ii)
has or shares discretion relating to the Purchaser’s investments or trading or
information concerning Purchaser’s investments, including the Units, or (iii) is
subject to the Purchaser’s review or input concerning such Purchaser/Affiliate’s
investments or trading) has or will, directly or indirectly, engage (A) in
any “short sale” (as defined in Rule 3b-3 promulgated under the Exchange Act),
including, without limitation, the maintaining of any short position with
respect to, establishing or maintaining a “put equivalent position” (within the
meaning of Rule 16a-1(h) under the Exchange Act) with respect to, entering
into
any swap, derivative transaction or other arrangement (whether any such
transaction is to be settled by delivery of Common Stock, other securities,
cash
or other consideration) that transfers to another, in whole or in part, any
of
the economic consequences of ownership, or otherwise dispose of, any of the
Securities by the Purchaser or (B) in any hedging transaction which establishes
a net short position with respect to the Securities (clauses (A) and (B)
together, a “Short
Sale”);
except for (1) Short Sales by a Purchaser/Affiliate which was, prior to the
date
on which the Purchaser was first notified that the Company intended to engage
in
the transactions contemplated by this Agreement, a market maker for the Common
Stock, provided
that
such Short Sales are in the ordinary course of such Purchaser/Affiliate’s
business and are in compliance with the Securities Act, and the rules and
regulations promulgated thereunder, and such other securities or blue sky
laws
as may be applicable or (2) Short Sales by a Purchaser/Affiliate which by
virtue
of the procedures of the Purchaser are made without knowledge of the
transactions contemplated in this Agreement and were not induced or encouraged
by the Purchaser).
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(f) Exemptions.
The
Purchaser understands that the Securities are being offered and sold to it
in
reliance upon specific exemptions from the registration requirements of
Securities Act, the rules and regulations and state securities laws, and
that
the Company is relying upon the truth and accuracy of, and the Purchaser’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Purchaser set forth herein in order to determine
the
availability of such exemptions and the eligibility of the Purchaser to acquire
the Securities.
(g) Use
of
Information.
The
Purchaser acknowledges that it is prohibited from and has not reproduced
or
distributed this Agreement or any other offering materials or other information
provided by the Company in connection with the Purchaser’s consideration of its
investment in the Company, in whole or in part, or divulged or discussed
any of
their contents except to its advisors and representatives for the purpose
of
evaluating such investment. The foregoing shall not apply to any information
that is or becomes publicly available through no fault of the Purchaser,
or that
the Purchaser is legally required to disclose; provided,
however,
that if
the Purchaser is requested or ordered to disclose any such information pursuant
to any court or other government order or any other applicable legal procedure,
it shall provide the Company with prompt notice of any such request or order
in
time sufficient to enable the Company to seek an appropriate protective order
and shall provide the Company with reasonable assistance in obtaining such
protective order.
(h) Investment
Risk.
The
Purchaser understands that its investment in the Securities involves a
significant degree of risk and that the market price of the Common Stock
has
been and continues to be volatile, that no representation is being made as
to
the future value of the Common Stock and that the Purchaser has carefully
read
and considered the matters set forth in the SEC Reports. The Purchaser has
the
knowledge and experience in financial and business matters as to be capable
of
evaluating the merits and risks of an investment in the Securities and has
the
ability to bear the economic risks of an investment in the Securities. The
Purchaser has had a reasonable opportunity to ask questions of the Company
and
its representatives; and the Company has answered all inquiries that the
Purchaser or the Purchaser’s representatives have put to it, and all such
inquiries have been answered to the full satisfaction of the
Purchaser.
(i) Reliance.
The
Purchaser is not relying on the Company or any of its employees or agents
with
respect to the legal, tax, economic and related considerations as to an
investment in the Securities, and the Purchaser has relied on the advice
of, or
has consulted with, only his own advisors as it deems necessary or
advisable.
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(j) No
General Solicitation.
The
Purchaser is unaware of, is in no way relying on, and did not become aware
of
the offering of the Securities through or as a result of, any form of general
solicitation or general advertising including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media or broadcast over television or radio, in connection
with the offering and sale of the Securities and is not subscribing for
Securities and did not become aware of the Offering through or as a result
of
any seminar or meeting to which the Purchaser was invited by, or any
solicitation of a subscription by, a person not previously known to the
Purchaser in connection with investments in securities generally.
(k) No
Endorsement of Securities.
The
Purchaser understands that no United States federal or state agency or any
other
government or governmental agency has passed upon or made any recommendation
or
endorsement of the Securities.
(l) No
Registration of Securities.
The
Purchaser understands that the Securities and the Warrant Shares have not
been
registered under the Securities Act and will not sell, offer to sell, assign,
pledge, hypothecate or otherwise transfer any of the Securities or Warrant
Shares unless (i) pursuant to an effective registration statement under the
Securities Act, (ii) the Purchaser provides the Company with an opinion of
counsel, in a generally acceptable form, to the effect that a sale, assignment
or transfer of the Securities may be made without registration under the
Securities Act and the transferee agrees to be bound by the terms and conditions
of this Agreement, (iii) the Purchaser provides the Company with evidence
of
compliance with Rule 144 promulgated under the Securities Act (“Rule
144”),
including reasonable assurances (in the form of seller and broker representation
letters) that the Securities and Warrant Shares can be sold pursuant to Rule
144
or (iv) pursuant to Rule 144(k) following the applicable holding
period.
(m) Legend.
The
Purchaser understands that, until such time as a registration statement has
been
declared effective or the Securities and Warrant Shares may be sold by
non-affiliates of the Company pursuant to Rule 144 under the Securities Act
without any restriction as to the number of securities as of a particular
date
that can then be immediately sold, the certificates for the Securities and
Warrant Shares shall bear a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of the
certificates for the Securities and Warrant Shares):
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“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER
THE SECURITIES LAWS OF ANY OTHER JURISDICTION. THE SECURITIES
MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE
STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN FORM, SUBSTANCE
AND SCOPE
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT
REQUIRED
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS
OR UNLESS
SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES
ACT.”
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(n) Executive Offices. The Purchaser’s principal executive offices are located in the State of Alabama.
(o) Brokers
and Finders.
There
is no investment banker, broker, finder or other intermediary (other than
any
placement agent retained by the Company) which has been retained by or is
authorized to act on behalf of the Purchaser who might be entitled to any
fee or
commission from the Purchaser, the Company, any of their respective Affiliates
upon consummation of the transactions contemplated by this
Agreement.
5. Certain
Covenants.
(a) Delisting.
In
the
event that the Company is no longer subject to the reporting requirements
of the
Exchange Act, the Company hereby covenants and agrees with the
Purchaser
that, so long as the Purchaser
owns at least ten percent (10%) of the issued and outstanding shares of Common
Stock, except as otherwise required in this Agreement, the Company shall
provide
the
Purchaser
with customary and reasonable financial information on at least a quarterly
basis and such other information rights as provided to an investor in a
privately held corporation.
(b) Confidentiality.
The
Purchaser covenants and agrees to keep confidential any and all material
non-public information which it has heretofore obtained or shall hereafter
obtain, directly or indirectly, from the Company pursuant to this Agreement
or
otherwise, and agrees that it has not: (i) used the same except for the purpose
of determining whether to purchase the Securities in the Offering; or (ii)
disclosed the same to any party except as provided below, without the Company’s
prior written consent; provided
that the
terms of this Section
5(b)
shall
not extend to any such information that: (A) is already publicly known; (B)
has
become publicly known without any fault of the
Purchaser
or anyone to whom the
Purchaser
has made disclosure in compliance with the terms of this Section
5(b);
or (C)
is required to be disclosed to any governmental authorities or courts of
law as
a result of operation of law, regulation, or court order; provided,
however,
that
the
Purchaser
shall have first given prompt written notice of such requirement to the Company
(if permissible) and cooperates with the Company to restrict such disclosure
and/or obtain confidential treatment thereof.
(c) Short-Selling.
The
Purchaser covenants and agrees that it will not, and shall cause each
Purchaser/Affiliate not to, engage in any Short Sales.
6. Registration
Rights.
(a) Defined
Terms.
The
following capitalized terms, when used in this Section
6,
have
the respective meanings set forth below:
“Affiliate”
means,
with respect to any Person (as defined below), any other Person, directly
or
indirectly, controlling, controlled by, or under common control with, such
Person, and shall include (i) any Person who is an executive officer, director
or beneficial holder of at least 10% of the outstanding capital stock of
the
Company (or other specified Person), (ii) any Person of which the Company
(or
other
9
specified
Person) or an Affiliate of the Company (or other specified Person) shall,
directly or indirectly, either beneficially own at least 10% of the outstanding
equity securities or constitute at least a 10% participant, and (iii) in
the
case of a specified Person who is an individual, each parent, spouse, child,
brother, sister or the spouse of a child, brother or sister of such Person,
and
each trust or family limited partnership created for the benefit of one or
more
of such Persons. For the purposes of this definition, “control” when used with
respect to any Person, means the possession, directly or indirectly, 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 “controlling” and “controlled” have meanings
correlative to the foregoing. Notwithstanding the foregoing, the term
“Affiliate” as used elsewhere in this Agreement shall have the same meaning as
given to such term in this Section
6(a).
“Business
Day”
means
any day, other than a Saturday or a Sunday, that is neither a legal holiday
nor
a day on which banking institutions are generally authorized or required
by law
or regulation to close in the State of Connecticut.
“Holder”
shall
mean any Person that owns Registrable Securities, including such successors
and
assigns as acquire Registrable Securities, directly or indirectly, from such
Person. For purposes of this Agreement, the Company may deem the registered
holder of a Registrable Security as the Holder thereof.
“Other
Approved Holders”
shall
mean holders of Common Stock having registration rights with respect to the
Common Stock, other than pursuant to the terms of this Agreement.
“Person”
means
any individual, company, corporation, partnership, limited liability company,
trust, division, governmental, quasi-governmental or regulatory entity or
authority or other entity. Notwithstanding the foregoing, the term “Person” as
used elsewhere in this Agreement shall have the same meaning as given to
such
term in this Section
6(a).
“Prospectus”
shall
mean the prospectus (including a preliminary prospectus) included in any
Registration Statement, as amended or supplemented by a prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and
all
material incorporated by reference in such prospectus.
“Registrable
Securities”
shall
mean the Shares, the Warrant Shares and any other capital stock or other
securities issued or issuable as a result of or in connection with any stock
dividend, stock split or reverse stock split, combination, recapitalization,
reclassification, merger or consolidation, exchange, distribution or similar
transaction in respect of the Shares or the Warrant Shares.
“Registration
Statement”
shall
mean any registration statement which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the Prospectus included
therein, all amendments and supplements to such Registration Statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such Registration Statement.
10
“Rule
144”
shall
mean Rule 144 promulgated under the Securities Act, as amended from time
to
time, or any similar successor rule thereto that may be promulgated by the
SEC.
“Rule
144A”
shall
mean Rule 144A promulgated under the Securities Act, as amended from time
to
time, or any similar successor rule thereto that may be promulgated by the
SEC.
(b) Piggyback
Registration Rights.
(i) Whenever
the Company proposes to register any of its securities under the Securities
Act,
either pursuant to an underwritten primary registration on behalf of the
Company
or pursuant to an underwritten secondary registration on behalf of a holder
or
holders of the Company’s securities (other than on Form X-0, Xxxx X-0 or any
successor form) and the registration form to be used may be used for the
registration of any Registrable Securities (a “Piggyback
Registration”),
the
Company will give written notice to each holder of Registrable Securities
of its
intention to effect such a registration and will include in such registration
all Registrable Securities (subject to, and in accordance with, the priorities
set forth in Section
6(b)(ii)
hereof),
with respect to which the Company has received written requests for inclusion
within ten (10) days after delivery of the Company’s notice to each holder of
Registrable Securities.
(ii) If
the
managing underwriter(s) advise the Company in writing, or the Board of Directors
determines, that in their opinion, the number of Registrable Securities
requested to be included in such registration exceeds the number which can
be
sold in such offering without adversely affecting the marketability or pricing
thereof, the Company will include in such registration up to an aggregate
amount
determined advisable by such underwriter(s): (i) first,
any
shares of Common Stock that the Company desires to register; (ii) second,
any
shares of Common Stock requested to be registered by the holder(s) of Common
Stock pursuant to which the Registration Statement is being filed and to
which
the holders of Registrable Securities hereunder are receiving Piggyback
Registration; and (iii) pro rata
among
the holders of Registrable Securities on the basis of the number of Registrable
Securities which are requested to be registered hereunder.
(iii) Notwithstanding
anything herein to the contrary, the Company may withdraw any registration
statement referred to in this Section
6(b)
at any
time in its sole discretion without thereby incurring any liability or expense
to the holders of Registrable Securities.
(c) Registration
Procedures.
In
connection with the Company’s registration obligations pursuant to Section
6(b)
hereof,
the Company will use its commercially reasonable efforts to:
11
(i) register
or qualify such Registrable Securities under the securities or blue sky laws
of
the jurisdictions as any seller reasonably requests in writing and do any
and
all other acts and things which may be reasonably necessary to permit such
seller to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided
that the
Company will not be required to (A) qualify generally to do business in any
jurisdic-tion where it would not otherwise be required to qualify but for
this
subparagraph or (B) consent to general service of process in any such
jurisdiction);
(ii) notify
each seller of Registrable Securities 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 will prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain any untrue statement
of
a material fact or omit to state any fact necessary to make the statements
therein not misleading;
(iii) cause
all
such Registrable Securities to be listed on each securities exchange, if
any, on
which the same securities issued by the Company are then listed;
(iv) provide
a
transfer agent and registrar for all such Registrable Securities not later
than
the effective date of such registration statement; and
(v) advise
each seller of such Registrable Securities promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by
the SEC
suspending the effectiveness of such registration statement or the initiation
or
threatening of any proceeding for such purpose and use commercially
reasonable efforts
to prevent the issuance of any stop order or to obtain its withdrawal if
such
stop order should be issued.
(d) Material
Development Election.
(i) Subject
to Section
6(d)(ii)
below,
the Company shall be entitled, for a period of time not to exceed thirty
consecutive (30) days (a “Suspension
Period”),
to
postpone the filing of any Registration Statement otherwise required to be
filed
by it pursuant to Section
6(b)
and/or
request that the Holders refrain from effecting any public sales or
distributions of their Registrable Securities if the Company’s Board of
Directors shall have reasonably determined in good faith and in its reasonable
business judgment that such
registration would interfere in any material respect with any financing (other
than an underwritten secondary offering of any securities of the Company),
acquisition, corporate reorganization or other transaction or development
involving the Company or any subsidiary of the Company that in the reasonable
good faith business judgment of such board is a transaction or development
that
is or would be material to the Company (a “Material
Development Election”).
(ii) The
Board
of Directors shall, as promptly as practicable, give the Holders written
notice
of any such Material Development Election. In the event of a determination
by
the Board of Directors to postpone the filing of a Registration Statement
required to be filed pursuant to Section
6(b)
hereof,
the Company shall be required to file such Registration
12
Statement
as soon as practicable after the Board of Directors of the Company shall
determine, in its reasonable business judgment, that the filing of such
Registration Statement and the offering thereunder will not interfere with
the
aforesaid material transaction or development, but in any event no later
than
the end of such Suspension Period. In addition, if the Board of Directors
of the
Company has requested that the Holders refrain from making public sales or
distributions of their Registrable Securities, such board shall, as promptly
as
practicable following its determination that the Holders may recommence such
public sales and distributions, notify such Holders in writing of such
determination (but in any event no later than the end of such Suspension
Period). In the event the Company shall exercise a Material Development Election
during a period when a Registration Statement filed pursuant to Section
6(b)
hereof
is effective, the time period specified in Section
6(b)
hereof
during which such Registration Statement is required to be kept effective
shall
be extended by the number of days during which the Holders are prohibited
by the
Company from publicly selling or distributing their securities.
(iii) The
Purchaser agrees that, upon receipt of any notice from the Company of a
Suspension Period, the Purchaser shall forthwith discontinue disposition
of
shares of Common Stock covered by such Registration Statement or Prospectus
until such Purchaser (A) is notified in writing by the Company that the use
of
the applicable prospectus may be resumed, (B) has received copies of a
supplemental or amended prospectus, if applicable, and (C) has received copies
of any additional or supplemental filings which are incorporated or deemed
to be
incorporated by reference into such prospectus.
(iv) Notwithstanding
the foregoing, no more than one Suspension Period may occur during any
twelve-month period, unless approved by a majority-in-interest of the then
outstanding Holders (on a common equivalent basis). The Company shall use
its
best efforts to limit the duration and aggregate number of any Suspension
Periods.
(e) Registration
Expenses.
All
expenses incident to the Company’s performance of or compliance with
Section
6
of this
Agreement, including all registration and filing fees, fees and expenses
of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications or
registrations (or the obtaining of exemptions therefrom) of the Registrable
Securities), printing expenses (including expenses of printing Prospectuses),
messenger and delivery expenses, internal expenses (including all salaries
and
expenses of its officers and employees performing legal or accounting duties),
fees and disbursements of its counsel and its independent certified public
accountants, securities acts liability insurance (if the Company elects to
obtain such insurance), fees and expenses of any special experts retained
by the
Company in connection with any registration hereunder, fees and expenses
of
other Persons retained by the Company, (all such expenses being referred
to as
“Registration
Expenses”),
shall
be borne by the Company, whether or not any registration statement becomes
effective; provided
that
Registration Expenses shall not include any underwriting discounts, commissions
or fees attributable to the sale of the Registrable Securities.
13
(f) Registration
Rights Indemnification.
(i) Indemnification
by the Company.
(1) The
Company will indemnify and hold harmless, to the fullest extent permitted
by
law, but without duplication, each Holder, including
any managed or advised accounts and any investment advisor or agent
therefore,
officers,
directors, employees, partners, representatives and agents, and each Person
who
controls such Holder or such other Persons (within the meaning of the Securities
Act) (for
purposes of this Section
6(f)(i),
a
“Holder
Indemnified Person”),
from
and against, and will reimburse such Holder Indemnified Person with respect
to,
any and all claims, actions, demands, losses, damages, liabilities, costs
and
expenses (including
reasonable costs of investigation and reasonable legal fees and expenses)
(“Indemnifiable Costs and Expenses”) to
which
such Holder Indemnified Person may become subject under the Securities Act
or
otherwise and arise out of or are based upon (A) violation of securities
laws or
(B) any untrue statement or alleged untrue statement of any material fact
contained in,
or any
omission or alleged omission to state therein a material fact required to
be
stated in,
any such
Registration Statement, any Prospectus contained therein or any amendment
or
supplement thereto or necessary to make the statements contained therein,
in
light of the circumstances under which they were made, not misleading;
provided,
however,
that
the Company will not be liable in any such case to the extent that any costs
or
expenses covered by the preceding clauses (A) or (B) arise out of or result
from
any untrue or alleged untrue statement of any material fact contained in
such
Registration Statement, any Prospectus contained therein or any amendment
or
supplement thereto or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was so made solely
in reliance upon and in substantial conformity with written information
furnished by such Holder Indemnified Person specifically for use in the
preparation of any such Registration Statement, Prospectus or amendment or
supplement thereto.
(2) The
Company further agrees promptly upon demand by each Holder Indemnified Person
to
reimburse each Holder Indemnified Person for any Holder Indemnifiable Costs
and
Expenses as they are incurred by it; provided
that if
the Company reimburses a Holder Indemnified Person hereunder for any expenses
incurred in connection with a lawsuit, claim, inquiry or other proceeding
or
investigation for which indemnification is sought, such Holder Indemnified
Person agrees to refund such reimbursement of Holder Indemnifiable Costs
and
Expenses to the extent it is finally judicially determined that the indemnity
provided for in this Section
6(f)(i)
is not
applicable to, or the Company is not otherwise obligated to pay, such Holder
Indemnified Person in accordance with the terms hereof or otherwise. The
indemnity, contribution and expense reimbursement obligation of the Company
under this Section
6(f)(i)
shall be
in addition to any liability it may otherwise have. The obligations of the
Company hereunder shall survive the Closing and the termination of any
Registration Statement under which any Registrable Securities were registered
and shall not be extinguished with respect to any Person because any other
Person is not entitled to indemnity or contribution hereunder.
14
(ii) Indemnification
by Holders of Registrable Securities.
Each
Holder whose Registrable Securities are included in a Registration Statement
pursuant to the provisions of this Section
6
will
indemnify and hold harmless the Company and its officers, directors, employees,
partners, stockholders, agents, representatives, and any Person who controls
the
Company or any of its subsidiaries or Affiliates (within the meaning of the
Securities Act) (each, a “Company
Indemnified Person”),
from
and against, and will reimburse such Company Indemnified Person with respect
to,
any and all Indemnifiable Costs and Expenses to which the Company or such
Company Indemnified Person may become subject under the Securities Act or
otherwise and which arise out of or result from any untrue or alleged untrue
statement of any material fact contained in such Registration Statement,
any
Prospectus contained therein or any amendment or supplement thereto, or any
omission or the alleged omission to state therein any material fact required
to
be stated therein or necessary to make the statements therein, in light of
the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or omission or
alleged untrue statement or alleged omission was so made solely in reliance
upon
and in substantial conformity with written information furnished by such
Holder
specifically for use in the preparation thereof; provided,
however,
that
the liability of any Holder pursuant to this subsection (ii) shall be limited
to
an amount not to exceed the net proceeds received by such Holder pursuant
to the
Registration Statement which gives rise to such obligation to
indemnify.
(iii) Conduct
of Indemnification Proceedings; Contribution.
(1) Each
indemnifying party and indemnified party under this Section
6(f)
shall
comply with the procedures set forth in Section
7(a)(iii)
with
respect to any indemnity sought pursuant to this Section
6(f).
(2) Each
indemnifying party and indemnified party under this Section
6(f)
also
agrees to comply with the provisions in Section
7(a)(iv)
as they
relate to contribution.
(g) Reporting
Requirements Under the Exchange Act.
The
Company shall use its commercially reasonable efforts to make publicly available
and available to the Holders, pursuant to Rule 144, such information as is
necessary to enable the Holders to make sales of Registrable Securities pursuant
to that Rule. The Company shall use its commercially reasonable efforts to
file
timely with the SEC all documents and reports required of the Company under
the
Exchange Act. The Company shall furnish to any Holder, upon request, a written
statement executed on behalf of the Company as to compliance with the current
public information requirements of Rule 144. In addition, the Company will
provide to any Holder of a Registrable Security, or any potential purchaser
of a
Registrable Security, upon any such Person’s reasonable request, the information
required by paragraph (d)(4) of Rule 144A.
(h) Stockholder
Information.
The
Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such securities as the Company
or
the Managing Underwriter may from time to time reasonably request in
writing.
15
(a) Indemnification.
In
addition to any indemnification provided elsewhere in this Agreement, the
parties hereto agree as follows:
(i) Company
Indemnification.
(1) The
Company will
indemnify and hold harmless, to the fullest extent permitted by law, but
without
duplication, the
Purchaser,
including any managed or advised accounts and any investment advisor or agent
therefor, and their respective,
officers,
directors, employees, partners, representatives, agents, and each Person
who
controls the Company and each of its Affiliates within the meaning of the
Securities Act) (each of the foregoing Persons being a “Purchaser
Indemnified Person”),
from
and against any and
all
Indemnifiable Costs and Expenses to
which
such Purchaser Indemnified Person may become subject under the Securities
Act or
otherwise
arising
out of or based in any manner upon any breach by the Company of any of its
representations, warranties or covenants contained in the Agreement or in
any
agreement, instrument or document delivered by the Company
hereunder.
(2) The
obligations of the Company hereunder shall survive the Closing and any
repurchase, conversion, exchange or transfer of the Shares, the Warrants
and the
Warrant Shares and the termination of this Agreement and shall not be
extinguished with respect to any Person because any other Person is not entitled
to indemnity or contribution hereunder.
(ii) Purchaser
Indemnification.
The
Purchaser agrees and covenants to hold harmless and indemnify each Company
Indemnified Person from and against any and all Indemnifiable Costs and Expenses
to
which
such Company Indemnified Person may become subject under the Securities Act
or
otherwise which
arises out of or is based in any manner upon any breach by the
Purchaser
of any of its representations, warranties or covenants contained in the
Agreement or in any agreement, instrument or document delivered by the
Purchaser
hereunder.
(iii) Conduct
of Indemnification Proceedings.
Promptly
after receipt by a party indemnified pursuant to the provisions of paragraphs
(i) or (ii) of this Section
7(a)
or
paragraphs (i) or (ii) of Section
6(f)
of
notice of the commencement of any action involving the subject matter of
the
foregoing indemnity provisions, such indemnified party will, if a claim thereof
is to be made against the indemnifying party pursuant to the provisions of
paragraphs (i) or (ii) of this Section
7(a)
or
paragraphs (i) or (ii) of Section
6(f),
notify
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which
it
may have to an indemnified party otherwise than under paragraphs (i) or (ii)
of
this Section
7(a)
or
paragraphs (i) or (ii) of Section
6(f)
and
shall not relieve the indemnifying party from liability under this Section
7(a)
or
Section
6(f)
unless
such indemnifying party is materially prejudiced by such omission. In case
such
action is brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party shall have the
right
to participate in, and, to the extent that it may wish, jointly with any
other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and after notice
from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the
16
indemnifying
party will not be liable to such indemnified party pursuant to the provisions
of
such paragraphs (i) or (ii) of this Section
7(a)
or
paragraphs (i) or (ii) of Section
6(f)
for any
legal or other expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall be liable to an indemnified party
for
any settlement of any action or claim without the consent of the indemnifying
party. No indemnifying party will consent to entry of any judgment or enter
into
any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release
from
all liability in respect to such claim or litigation, and no settlement can
have
non-monetary remedies.
(iv) Contribution.
If
the
indemnification provided for in subsections (i) or (ii) of this Section
7(a)
or in
subsections (i) or (ii) of Section
6(f)
is held
by a court of competent jurisdiction to be unavailable to a party to be
indemnified with respect to any Indemnifiable Costs and Expenses, then each
indemnifying party under any such subsection, in lieu of indemnifying such
indemnified party thereunder, hereby agrees to contribute to the amount paid
or
payable by such indemnified party as a result of Indemnifiable Costs and
Expenses, 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
in connection with the statements or omissions, acts, facts, matters or
circumstances which resulted in such Indemnifiable Costs and Expenses, as
well
as any other relevant equitable considerations. To the extent applicable
to
Section
6(f)
hereof,
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 or alleged 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 such statement or omission.
No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution hereunder
from
any Person who was not guilty of such fraudulent misrepresentation.
(b) Entire
Agreement; Survival of Provisions. This
Agreement constitutes the entire agreement of the parties with respect to
the
transactions contemplated hereby and supersedes all prior agreements and
understandings with respect thereto, whether written or oral. All of the
covenants of the parties made herein shall remain operative and in full force
and effect pursuant to their respective terms regardless of acceptance of
the
Securities and the Warrant Shares and payment therefor. The representations
and
warranties set forth herein shall survive the execution and delivery of this
Agreement until the first anniversary of the date hereof (the “Expiration
Date”)
and
shall in no way be affected by any investigation of the subject matter thereof
made by or on behalf of the
Purchaser
or the Company. Notwithstanding the preceding sentence, any representation
or
warranty in respect of which an indemnity may be sought hereof shall survive
the
time at which it would otherwise terminate pursuant to the preceding sentence,
if a claim for indemnification shall have been given to the party against
whom
such indemnity may be sought prior to the Expiration Date. The representations,
warranties, agreements and covenants made in the Agreement shall be deemed
to
have been relied upon by the parties hereto.
(c) No
Waiver; Modifications in Writing.
No
failure or delay by a party in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
of
any such right, power or remedy preclude any other or further exercise thereof
17
or
the
exercise of any other right, power or remedy. Except as otherwise expressly
provided herein with respect to any right of indemnification, the remedies
provided for herein are cumulative and are not exclusive of any remedies
that
may be available to any party at law or in equity or otherwise. No waiver
of or
consent to any departure by a party from any provision of this Agreement
shall
be effective unless signed in writing by the parties entitled to the benefit
thereof. No amendment, modification or termination of any provision of this
Agreement shall be effective unless signed in writing by all parties. Any
amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement
and
any consent to any departure from the terms of any provision of this Agreement,
shall be effective only in the specific instance and for the specific purpose
for which made or given.
(d) Notices.
All
notices, demands and other communications provided for hereunder shall be
in
writing, shall be given by registered or certified mail, return receipt
requested, on the date sent by telecopy with electronic confirmation of such
transmission, the business day next following deposit with a courier service
for
overnight delivery with written confirmation of such delivery or upon personal
delivery, addressed to the parties, as follows:
If
to the
Company, to:
Startech
Environmental Corporation
00
Xxx
Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxxxxx 00000-0000
Attention:
Chief Financial Officer
Fax:
(000) 000-0000
with
a
copy to:
Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxxxxxxx Esq.
Fax:
(000) 000-0000
If
to the
Purchaser, to:
FB
U.S.
Investments, L.L.C.
0000
Xxxxx Xxxxx Xxxxx
Xxxxxx,
Xxxxxxx 00000
Attention:
Xxxxxxx Xxxxxxxxx
With
a
copy to:
Partridge,
Smith, P.C.
P.
O. Xxx
00000
Xxxxxx,
Xxxxxxx 00000
Attention:
Xxxxxx X. Xxxxx, Esquire
Fax:
(000) 000-0000
18
or
to
such other address as any party shall designate in writing in compliance
with
the provisions of this Section
7(d).
(e) Execution
in Counterparts.
This
Agreement may be executed in any number of counterparts and by different
parties
hereto on separate counterparts, each of which counterparts, when so executed
and delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
(f) Binding
Effect; Assignment.
The
rights and obligations of the parties under this Agreement may not be assigned
or otherwise transferred to any other person without the prior written consent
of the other party hereto; provided
that a
Purchaser may assign or otherwise transfer the Shares to any of its Affiliates
without obtaining any such consent, but
only if
such
Affiliate: (i) agrees to be bound by the terms of this Agreement; (ii) is,
at
the time of such transfer, an “accredited Investor” and provides a fully
completed Investor Questionnaire and such other written certification as
the
Company may reasonably require as to the transferee’s status as an “accredited
investor”; and (iii) such transfer to any such transferee does not violate
federal or state securities laws and counsel for transferee, at the Company’s
request, provides an opinion of counsel as to the same. Except as expressly
provided in this Agreement, this Agreement shall not be construed so as to
confer any right or benefit upon any person other than the parties to this
Agreement, their respective permitted heirs, representatives, executors,
successors and assigns, each Company Indemnified Person and each Purchaser
Indemnified Person. This Agreement shall be binding upon and shall inure
to the
benefit of the Company, the
Purchaser
and their
respective permitted heirs, representatives, executors, successors and
assigns.
(g) Governing
Law.
This
Agreement shall be deemed to be a contract made under and shall be governed
by
and construed in accordance with the internal laws of the State of Connecticut
without reference to the principles of conflict of laws.
(h) Consent
to Jurisdiction and Service of Process.
Any
suit, action or proceeding arising
out of or relating to the Agreement or the transactions contemplated hereby
may
be instituted in any Federal court situated in the State of Connecticut or
any
state court of the State of Connecticut, and each party agrees not to assert,
by
way of motion, as a defense or otherwise, in any such suit, action or
proceeding, any claim that it is not subject personally to the jurisdiction
of
such court, that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that
the
Agreement or the subject matter hereof or thereof may not be enforced
in or by such court. Each party further irrevocably submits to the jurisdiction
of such court in any such suit, action or proceeding. Any and all service
of
process and any other notice in any such suit, action or proceeding shall
be
effective against any party if given
personally or by registered or certified mail, return receipt requested,
if sent
to such party at the address for such party set forth in Section
7(d)
hereof,
or by any other means of mail that requires a signed receipt, postage fully
prepaid, mailed to such party as herein provided. Nothing herein contained
shall
be deemed to affect the right of any party
to
serve process in any manner permitted by law or to commence legal proceedings
or
otherwise proceed against any other party in any other
jurisdiction.
19
(i) Severability.
Any
provision hereof that is prohibited or unenforceable in any jurisdiction
shall,
as to such jurisdiction, be ineffective to the extent of such prohibition
or
unenforceability without invalidating the remaining provisions hereof, and
any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by law, the parties hereto waive any provision of law that renders
any
such provision prohibited or unenforceable in any respect.
(j) Headings.
The
Article, Section and subsection headings used or contained in this Agreement
are
for convenience of reference only and shall not affect the construction of
this
Agreement.
(k) Expenses.
Each
party shall bear its own fees, costs and expenses in connection with the
execution, delivery and performance of the Agreement. (l) Waiver
of Jury Trial.
TO THE
EXTENT THEY MAY LEGALLY DO SO, THE PARTIES HERETO EXPRESSLY WAIVE ANY RIGHT
TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION OR PROCEEDING
ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT OR IN ANY WAY CONNECTED WITH,
OR
RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH RESPECT
TO
THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE. TO THE EXTENT THEY MAY LEGALLY DO SO, THE PARTIES HERETO
AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION
OR
PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY
PARTY
HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION
7(m)
WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES HERETO
TO
WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
(m) Publicity.
The
parties agree that no public release or announcement concerning the Agreement
or
the transactions contemplated hereby shall be made without advance review
and
approval by each party hereto, except as otherwise required by applicable
law,
and which review and approval shall not be unreasonably withheld or
delayed.
(n) Enforcement.
The
Purchaser acknowledges that the Company will be irreparably damaged if the
provisions of this Agreement applicable to the Purchaser are not specifically
enforced. If the Purchaser shall default in any of its obligations under
this
Agreement or if any representation or warranty made by or on behalf of the
Purchaser in this Agreement or in any certificate, report or other instrument
delivered under or pursuant to any term hereof or thereof shall be untrue
or
misleading as of the date made, the Company may proceed to protect and enforce
its rights by suit in equity or action at law (without the posting of any
bond
and without proving that damages would be inadequate), whether for the specific
performance of any term contained in this Agreement, injunction against the
breach of any such term or in furtherance of the exercise of any power granted
in this Agreement, or to enforce any other legal or equitable right of the
Company or to take any one or more of such actions. The Company shall be
permitted to enforce specifically the terms and provisions hereof in any
court
of the United States or any state thereof or any other court having
jurisdiction, this being in addition to any other remedy to which the Company
may be entitled at law or in equity or otherwise.
20
(o) Further
Assurances.
Each
party shall execute and deliver such documents, instruments and agreements
and
take such further actions as may be reasonably required or desirable to carry
out the provisions of this Agreement and
the
transactions contemplated hereby, and each of the parties hereto shall cooperate
with each other in connection with the foregoing.
(p) Broker’s
Fee.
The
Purchaser acknowledges that the Company may pay a fee to one or more placement
agents in respect of the sale of the Securities to the Purchaser. The Purchaser
and the Company hereby agree that the Purchaser shall not be responsible
for
such fee and that the Company will indemnify and hold harmless the Purchaser
and
each Purchaser/Affiliate against any losses, claims, damages, liabilities
or
expenses, joint or several, to which the Purchaser or Purchaser/Affiliate
may
become subject with respect to such fee. Each of the parties hereto hereby
represents that, on the basis of any actions and agreements by it, there
are no
other brokers or finders entitled to compensation in connection with the
sale of
the Securities to the Purchaser.
(q) Force
Majeure.
Neither
party shall be deemed in default of any provision of this Agreement (other
than
provisions regarding confidentiality) to the extent that performance of its
obligations or attempts to cure a breach are materially delayed or prevented
by
any event reasonably beyond the control of such party, including, without
limitation, war, hostilities, acts of terrorism, revolution, riot, civil
commotion, national emergency, strike, lockout, unavailability of supplies,
epidemic, fire, flood, earthquake, force of nature, explosion, embargo, or
any
other Act of God, or any law, proclamation, regulation, ordinance, or other
act
or order of any court, government or governmental agency, provided that such
party gives the other party written notice thereof promptly upon discovery
thereof and uses reasonable efforts to cure or mitigate the delay or failure
to
perform
[SIGNATURE
PAGE FOLLOWS]
21
SIGNATURE
PAGE
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the
date first above written.
FB
U.S.
INVESTMENTS, L.L.C.
By:
_________________________
Name:
Xxxxxxx Xxxxxxxxx
Title:
Member
Federal
Taxpayer Identification Number:
00-0000000
STARTECH
ENVIRONMENTAL CORPORATION
By:
_________________________
Name:
Title:
