EXHIBIT 10.6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of June 28, 2001, by and among JLM Industries, Inc., a Delaware
corporation (the "COMPANY"), each of the investors listed on the signature pages
hereto as an investor (each an "INVESTOR" and collectively, the "INVESTORS") and
each of the warrant holders listed on the signature page hereto as a warrant
holder (each a "WARRANT HOLDER" and collectively, the "WARRANT HOLDERS").
WHEREAS, the Company is issuing and selling to the Investors and the
Investors are purchasing from the Company, pursuant to that certain Purchase
Agreement, dated as of June 7, 2001 (the "PURCHASE AGREEMENT"), by and among the
Company and the Investors, an aggregate of 2,173,913 shares of the Company's
Common Stock (as defined below) for an aggregate purchase price of
$2,499,999.95;
WHEREAS, the Company has also issued to the Warrant Holders warrants
(the "WARRANTS") to purchase an aggregate of up to 675,000 shares of Common
Stock (the "WARRANT SHARES");
WHEREAS, the Company desires to grant registration rights as set
forth herein with respect to the shares of Common Stock being purchased under
the Purchase Agreement; and
WHEREAS, the Company desires to grant registration rights as set
forth herein with respect to the shares of Common Stock issuable upon exercise
of the Warrants.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions contained
herein, the sufficiency of which is hereby acknowledged, the Company, the
Investors and the Warrant Holders hereby agree as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined
herein shall have the meanings given such terms in the Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:
"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 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.
"BLACKOUT PERIOD" shall have the meaning set forth in Section
3(n).
"BOARD" shall have the 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" shall have the meaning set forth in the Purchase
Agreement.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Company's Common Stock, par value
$.01 per share.
"EFFECTIVENESS DATE" means the 180th day following the date of
the Closing.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in
Section 2.
"EVENT" shall have the meaning set forth in Section 8(e).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FILING DATE" means the 30th calendar day following the
Closing Date.
"HOLDER" or "HOLDERS" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"HOLDERS' REPRESENTATIVE" shall mean Phoenix Enterprises
LLC.
"INDEMNIFIED PARTY" shall have the meaning set forth in
Section 6(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in
Section 6(c).
"LOSSES" shall have the meaning set forth in Section 6(a).
"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.
"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
2
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.
"REGISTRABLE SECURITIES" means (i) the Common Stock issued to
the Investors pursuant to the Purchase Agreement, (ii) the shares of Common
Stock issuable to the Warrant Holders upon exercise of the Warrants, and (iii)
any other dividend or other distribution with respect to, conversion or exchange
of, or in replacement of, the foregoing (i) and (ii).
"REGISTRATION STATEMENT" means the registration statements and
any additional registration statements contemplated by Section 2, 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.
"RULE 415" means Rule 415 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.
"SPECIAL COUNSEL" means Xxxx Marks & Xxxxx LLP, counsel to the
Holders.
2. REGISTRATION RIGHTS. The Company shall prepare and file with
the Commission, on or prior to the Filing Date, a "shelf" registration statement
covering all Registrable Securities for an offering to be made on a continuous
basis pursuant to Rule 415. Such shelf 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 in accordance herewith).
The Company shall (i) not permit any securities other than the
Registrable Securities to be included in the Registration Statement and (ii) use
its best efforts to cause the Registration Statement to be declared effective
under the Securities Act as promptly as possible after the filing thereof, but
in any event prior to the Effectiveness Date, 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
3
have been sold or (y) the date on which all of the Registrable Securities may be
sold without any restriction pursuant to Rule 144(k) or any successor provision
as determined by the counsel to the Company pursuant to a written opinion
letter, addressed to the Company's transfer agent to such effect (the
"EFFECTIVENESS PERIOD"). If the Company is notified orally or in writing by the
Commission that the Commission has no comments with respect to the Registration
Statement (the "COMMISSION NOTICE"), the Company shall use its best efforts to
cause the Registration Statement to be declared effective no later than five (5)
business days after receipt of the Commission Notice. If an additional
Registration Statement is required to be filed because the actual number of
shares of Common Stock into which the Warrants are exercisable exceeds the
number of shares of Common Stock initially registered in respect of the Warrant
Shares based upon the computation on the Closing Date or the Filing Date, the
Company shall have twenty (20) Business Days to file such additional
Registration Statement, and the Company shall use its best efforts to cause such
additional Registration Statement to be declared effective by the Commission as
soon as possible, but in no event later than thirty (30) days after filing.
If, during the three (3) year period immediately following the
Effectiveness Period, any of the Registrable Securities have not been sold
pursuant to the shelf registration statement contemplated in the two preceding
paragraphs and such Registrable Securities may not be sold without any
restriction pursuant to the Securities Act or the rules and regulations
promulgated thereunder (by virtue of the fact that such person may be deemed to
be an "affiliate" of the Company), then Holders of a then majority in interest
of outstanding Registrable Securities may exercise one (1) demand registration
right with respect thereto by delivering to the Company a written notice (a
"DEMAND REGISTRATION NOTICE") informing the Company of such exercise and
specifying the number of Registrable Securities to be offered by such Holder.
Upon receipt of a Demand Registration Notice, the Company will notify all other
Holders of Registrable Securities and cause to be filed with the Commission as
soon as reasonably practicable after receiving the Demand Registration Notice
(but in no event later than thirty (30) days after the receipt of such notice) a
new registration statement and related prospectus (a "NEW REGISTRATION
STATEMENT") that complies as to Form in all material respects with applicable
Commission rules providing for the sale by all such Holders of then outstanding
Registrable Securities, and agrees to use its best efforts to cause such new
Registration Statement to be declared effective by the Commission as soon as
practicable.
3. REGISTRATION PROCEDURES. In connection with the Company's
registration obligations hereunder, the Company shall:
(a) 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 herewith) and
use its best efforts to cause the Registration Statement to become effective and
remain effective as provided herein; provided, however, that not less than ten
(10) 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 and Special Counsel, copies of all such documents
proposed to be filed and shall use its reasonable best efforts to reflect in
each such document, when so filed with the Commission, such comments as any
Holder may
4
reasonably propose and (ii) at the request of any Holder 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'
Representative or the Special Counsel shall reasonably object in writing within
five (5) Business Days of their receipt thereof.
(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 amendments 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' Representative and Special Counsel
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' Representative (and in the case of
(c)(i), (iii), (iv) and (v) hereof the Holders) and Special Counsel as promptly
as possible (and, in the case of (i)(A) below, not less than five (5) Business
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 thereto, 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 that purpose; (iv) 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 (v) of the occurrence of any event 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
5
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d) Use its best 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 any Holder of the Registrable Securities,
(i) promptly incorporate in a Prospectus supplement or post-effective amendment
to the Registration Statement such information as 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 and Special Counsel, 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 Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the
Commission.
(g) Promptly deliver to each Holder and Special Counsel,
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 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.
(h) Promptly use its reasonable best efforts to register or
qualify or cooperate with the selling Holders and Special Counsel in connection
with the registration or qualification (or exemption from such registration or
qualification) of 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.
(i) Cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing the Registrable Securities
to be sold pursuant to a Registration Statement, which certificates shall be
free of all restrictive legends when sold or transferred pursuant to the
Registration Statement, and to enable such Registrable Securities to be in such
denominations and registered in such names as any Holder may request within two
(2) Business Days after such request.
6
(j) Upon the occurrence of any event contemplated by Section
3(c)(v), as promptly as possible, (i) 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, in the light of the circumstances under which they were
made, not misleading, and (ii) advise the Holders as to when they may resume
distribution of the Registrable Securities.
(k) Use its best efforts to maintain the listing of the Common
Stock on The Nasdaq National Market and cause all Registrable Securities
relating to such Registration Statement to be listed on The Nasdaq National
Market or any such other securities exchange, quotation system, market or
over-the-counter bulletin board, if any, on which the Common Stock is 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) Request each selling Holder to furnish to the Company
information regarding such Holder and the distribution of such Registrable
Securities as is required by law to be disclosed in the 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 and which the Company would be required to disclose
under the Registration Statement, then the Company may suspend use of a
registration statement for a period not to exceed twenty (20) consecutive days,
provided that the Company may not suspend its obligation under this Section 3(n)
for more than forty-five (45) days in the aggregate during any 12-month period
(each, a "BLACKOUT PERIOD"); provided, however, that no such suspension shall be
permitted for consecutive twenty (20) day periods, arising out of the same set
of facts, circumstances or transactions; and provided further, that if the
Company decides to suspend its obligation pursuant to this sentence, it shall
give written notice of such suspension to the Holders and Special Counsel to
that effect. If the Company shall give notice of the occurrence of any event of
the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv) and 3(c)(v) or of
the postponement or suspension of the Registration Statement pursuant to this
Section 3(n), then the Effectiveness Period shall be
7
extended by the number of days during such period from and including the date of
the giving of such notice to and including the date when each Holder shall have
received (i) the copies of the supplement or amendment to the Registration
Statement contemplated by Section 3(j) (if an amended or supplemental prospectus
is required) or (ii) the Advice (as defined below) (if no supplement or
amendment to the Registration Statement is required).
(o) Each Holder covenants and agrees that it will comply with
the prospectus delivery requirements of the Securities Act as applicable to them
in connection with sales of Registrable Securities pursuant to the Registration
Statement. Each Holder further 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)(iii), 3(c)(iv), 3(c)(v) or 3(n),
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.
4. REGISTRATION EXPENSES. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company 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 Nasdaq National Market and each other securities
exchange or market on which Registrable Securities are required hereunder to be
listed, (B) with respect to filings required to be made with the Commission, (C)
with respect to filings required to be made under the NASD and the NASD
Regulation, Inc. and (D) in compliance with state securities or Blue Sky laws
(including, without limitation, reasonable fees and disbursements of counsel for
the Holders in connection with Blue Sky qualifications of the Registrable
Securities and determination of the eligibility of the Registrable Securities
for investment under the laws of such jurisdictions as the Holders'
Representative may designate)), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of
printing prospectuses), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company and Special Counsel, (v)
Securities Act liability insurance, if the Company so desires such insurance,
and (vi) fees and expenses of all other Persons retained by the 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, and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.
8
5. UNDERWRITTEN REGISTRATIONS. If any of the Registrable
Securities covered by a Registration Statement are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering must be acceptable to the Holders'
Representative, subject to the consent of the Company (which shall not be
unreasonably withheld or delayed). Notwithstanding anything else herein to the
contrary, such Holders shall be responsible for all underwriting commissions and
discounts in connection therewith.
No Holder may participate in any underwritten registration hereunder
unless such person (i) agrees to sell its Registrable Securities on the basis
reasonably provided in any underwriting arrangements agreed to by the Holders'
Representative and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents agreed to by
the Holders' Representative reasonably required under the terms of such
underwriting arrangements.
6. 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 and employees of each of
them, each Person who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) any such Holder and the
officers, directors, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
reasonable costs of preparation and reasonable attorneys' fees) and expenses
(collectively, "LOSSES"), as incurred, arising out of or relating to 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
relating to any omission or alleged omission of 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 statements or omissions are based
solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, which information was
reasonably relied on by the Company for use therein or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such Form of Prospectus or in any amendment or supplement thereto.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of an Indemnified Party and shall survive the
transfer of the Registrable Securities by the Holders.
(b) INDEMNIFICATION BY HOLDERS. Each Holder shall, severally
and not jointly, 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 or 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 of a
material fact contained in the Registration Statement, any Prospectus, or any
Form of prospectus, or
9
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 Form of 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 is
contained in any information so furnished in writing by such Holder to the
Company specifically for inclusion in the Registration Statement or such
Prospectus and that such information was reasonably relied upon by the Company
for use in the Registration Statement, such Prospectus or such Form of
prospectus. Notwithstanding anything to the contrary contained herein, a Holder
shall be liable under this Section 6(b) for only that amount as does not exceed
the net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement.
(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 may 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,
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.
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 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. 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.
(d) CONTRIBUTION. If a claim for indemnification under Section
6(a) or 6(b) is unavailable or insufficient to an Indemnified Party, 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,
10
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 this Agreement,
any reasonable attorneys' or other reasonable fees or expenses reasonably
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. Notwithstanding anything to the contrary contained
herein, none of the Holders shall not be liable or required to contribute under
this Section 6(d) for any amount in excess of the net proceeds received by such
Holder as a result of the sale of Registrable Securities pursuant to such
Registration Statement. No party shall be liable for contribution with respect
to any action or claim settled without its written consent; provided however,
that such written consent was not unreasonably withheld.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(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.
7. RULE 144. As long as any Holder owns any Registrable Securities,
the Company shall timely file (or obtain extensions in respect thereof and file
within the applicable grace period) 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 and to promptly furnish such Holders with true and complete copies of all
such filings. As long as any Holder owns any Registrable Securities, 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 Holders 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
shall take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Person to sell the Registrable
Securities 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 referred to in the Purchase Agreement.
Upon the written request of any Holder,
11
the Company shall deliver to such Holder a written certification of a duly
authorized officer as to whether it has complied with such requirements.
8. MISCELLANEOUS. (a) REMEDIES. In the event of a breach by the
Company or by a Holder, of any of their obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would not
provide adequate compensation for any losses incurred by reason of a breach by
it of any of the provisions of this Agreement. It is accordingly agreed that the
parties shall be entitled to specific performance of the provisions of this
Agreement in addition to any other remedy to which any of them may be entitled
at law or in equity.
(b) NO INCONSISTENT AGREEMENTS. The Company has not, as of the
date hereof entered into any agreement that is currently in effect, nor shall
the Company, 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.
Without limiting the generality of the foregoing, without the written consent of
the Holders of a majority of the then outstanding Registrable Securities, the
Company shall not grant to any Person the right to request the Company to
register any securities of the Company under the Securities Act unless the
rights so granted are subject in all respects to the prior rights in full of the
Holders set forth herein, and are not otherwise in conflict with the provisions
of this Agreement.
(c) NO PIGGYBACK ON REGISTRATIONS. Neither the Company nor any
of its security holders (other than the Holders of Registrable Securities) may
include securities of the Company in the Registration Statement, and the Company
shall not after the date hereof enter into any agreement providing such right to
any of its security holders, unless the right so granted is subject in all
respects to the prior rights in full of the Holders set forth herein, and is not
otherwise in conflict with the provisions of this Agreement.
(d) PIGGY-BACK REGISTRATIONS. If at any time when there is not
an effective Registration Statement covering (i) shares of Common Stock issued
pursuant to the Purchase Agreement or (ii) Warrant Shares issuable upon exercise
of the Warrants, 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 its 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 thirty (30) 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 Holders), the Company will use its best efforts to cause the registration
under the Securities Act of all Registrable Securities which the Company has
been so requested to register by such Holder, to the extent necessary to permit
the disposition of the Registrable Securities so to be registered, provided that
if at any time after giving written
12
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 such Holder and, thereupon, (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration pursuant to this
Section 8(d) (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 8(d) for the same period as the delay in
registering such other securities. The Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered; provided, however, that, subject to Section 2
hereof, the Company shall not be required to register any Registrable Securities
pursuant to this Section 8(d) that are eligible for sale pursuant to Rule 144(k)
of the Securities Act. In the case of an underwritten public offering, if the
managing underwriter should reasonably object to the inclusion of the
Registrable Securities in such registration statement, and 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
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 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).
(e) DEFAULT PAYMENT; REDEMPTION. (i) The Company and the
Investors agree that the Investors will suffer damages if the Registration
Statement is not filed on or prior to the Filing Date, or not declared effective
by the Commission on or prior to the Effectiveness Date or not maintained in the
manner contemplated herein during the Effectiveness Period or if certain other
events occur. The Company and the Investors further agree that if (i) the
Registration Statement is not filed on or prior to the Filing Date, or is not
declared effective by the Commission on or prior to the Effectiveness Date (or
in the event an additional Registration Statement is filed because the actual
number of shares of Common Stock into which the Warrants are exercisable exceeds
the number of shares of Common Stock initially registered and is not filed and
declared effective within the time periods set forth in Section 2), or (ii) the
Company fails to file with the Commission a request for acceleration within five
(5) Business 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 not subject to further review, or (iii) the
Registration Statement is filed with and declared effective by the Commission
but thereafter ceases to be effective as to all Registrable Securities at any
time prior to the expiration of the Effectiveness Period for more than 90 days
in the aggregate, without being succeeded within 30 days by a subsequent
Registration Statement filed with and declared
13
effective by the Commission or within two (2) calendar days following written
notice by a Holder of its intent to sell, or (iv) the Company breaches in a
material respect any covenant or other material term or condition to this
Agreement, and such breach continues for a period of thirty (30) days after
written notice thereof to the Company, or (v) the Company has breached Section
3(n) of this Agreement (any such failure or breach being referred to as an
"EVENT"), the Company shall promptly (but in no event later than 35 days after
such event) pay a default payment for such failure to each Holder an amount
equal to 1.5% of such Holder's pro rata share of the purchase price paid by such
Holder for all of the shares of Common Stock purchased under the Purchase
Agreement and then owned by such Holder on the date of such Event for each
30-day period (or any portion thereof) such Event shall be continuing (the
"DEFAULT AMOUNT"). Payments to be made pursuant to this Section 8(e) shall be
due and payable in cash or in shares of Common Stock based upon the then Market
Price on the due date of each payment. In the event such payment is not made on
such respective due date, such Default Payment shall accrue interest at the rate
of 15% per annum. For purposes of this Agreement, "MARKET PRICE" shall mean the
average of the closing sales prices per share of the Common Stock on The Nasdaq
National Market (or such other registered national stock exchange on which the
Common Stock is then listed) for the twenty (20) consecutive trading days
immediately preceding such measurement date, or if the Common Stock is not
listed then on The Nasdaq National Market or any registered national stock
exchange, the closing bid price for a share of Common Stock in the
over-the-counter market, as reported by the OTC Bulletin Board or in the
National Quotation Bureau Incorporated (or similar organization or agency
succeeding to its functions of reporting prices) at the close of business on
such date, or if the Common Stock is not then reported by the OTC Bulletin Board
or the National Quotation Bureau Incorporated (or similar organization or agency
succeeding to its functions of reporting prices), then the average of the "Pink
Sheet" quotes for the relevant conversion period, as determined in good faith by
the holder, or if the Common Stock is not then publicly traded the fair market
value of a share of Common Stock as determined by an Independent Appraiser (as
defined below) selected in good faith by the Holders' Representative; provided,
however, that the Issuer, after receipt of the determination by such Independent
Appraiser, shall have the right to select an additional Independent Appraiser,
in which case, the fair market value shall be equal to the average of the
determinations by each such Independent Appraiser; and provided, further that
all determinations of the Market Price shall be appropriately adjusted for any
stock dividends, stock splits or other similar transactions during such period.
The Company shall pay all costs and expenses of each Independent Appraiser. The
determination of fair market value by an Independent Appraiser shall be based
upon the fair market value of the Company determined on a going concern basis as
between a willing buyer and a willing seller and taking into account all
relevant factors determinative of value, and shall be final and binding on all
parties. In determining the fair market value of any shares of Common Stock, no
consideration shall be given to any restrictions on transfer of the Common Stock
imposed by agreement or by federal or state securities laws, or to the existence
or absence of, or any limitations on, voting rights. For purposes of this
Agreement, the term "Independent Appraiser" shall mean an independent investment
banking firm or accounting firm of national or regional reputation.
(i) If the Registration Statement has not been declared
effective by the first anniversary of the Closing Date, each holder of
Registrable Securities shall have the right, subject to Delaware law and then
applicable bank restrictions, if any, to cause the
14
Company to redeem the Registrable Securities held by such holder for a period of
30 calendar days following such first anniversary at a redemption price equal to
the higher of (a) 130% of the Purchase Price per Share and (b) the Market Price.
(f) SPECIFIC ENFORCEMENT, CONSENT TO JURISDICTION. Each of the
Company and the Holders (A) hereby irrevocably submits to the jurisdiction of
the United States District Court sitting in the Southern District of New York
and if jurisdiction of such Federal courts is not available, the state courts of
New York, for the purposes of any suit, action or proceeding arising out of or
relating to this Agreement or the Purchase Agreement and (B) hereby waives, and
agrees not to assert in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such court, that the suit,
action or Proceeding is brought in an inconvenient forum or that the venue of
the suit, action or Proceeding is improper. Each of the Company and the Holders
consents to process being served in any such suit, action or Proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing in this Section 8(f)
shall affect or limit any right to serve process in any other manner permitted
by law.
(g) AMENDMENTS AND WAIVERS. Except as provided in Section 8.3
of the Purchase Agreement, 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 each of the
Holders. Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders and that does not directly or indirectly affect the rights of
any other Holders may be given by Holders to which such waiver or consent
relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.
(h) 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 to have been given on (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., eastern standard 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., eastern standard time, on any
date and earlier than 11:59 p.m., eastern standard time, on such date, (iii) the
second 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, whichever shall first occur. The addresses
for such communications shall be with respect to each Holder at its address set
forth under its name on the signature page attached hereto, or with respect to
the Company, addressed to:
15
JLM Industries, Inc.
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile No.: (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. Copies of notices to the Company shall be sent to Holland &
Knight LLP, Attention: Xxxxxxx X. Xxxxxxxx, Esq., Facsimile No.: (000) 000-0000.
Copies of notices to any Holder shall be sent to (i) Xxxx Marks & Xxxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx X. Xxxxx, Esq.,
Facsimile No.: (000) 000-0000.
(i) 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 each Holder and its successors and
assigns. The Company may not assign this Agreement or any of its rights or
obligations hereunder without the prior written consent of each Holder. Each
Investor may assign its rights hereunder in the manner and to the Persons as
permitted hereunder and under the Purchase Agreement.
(j) ASSIGNMENT OF REGISTRATION RIGHTS. The rights of each
Holder hereunder, including the right to have the Company register for resale
the Registrable Securities in accordance with the terms of this Agreement, shall
be automatically assignable by each Holder to any transferee of such 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 as promptly as possible after such
assignment, (ii) the Company is, as promptly as possible 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 further disposition of such securities by the
transferee or assignees is restricted under the Securities Act and applicable
state securities laws, (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. Additionally, each
Holder shall have the right to assign its rights hereunder to any Affiliate of
such Holder without the consent to the Company. The rights to assignment shall
apply to the Holders (and to subsequent) successors and assigns.
(k) 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.
16
(l) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(m) CUMULATIVE REMEDIES. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(n) 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.
(o) 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.
(p) OPINION. Within two (2) business days after any
Registration Statement which includes the Registrable Securities is declared
effective by the Commission, the Company shall deliver, or shall cause legal
counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Holders whose Registrable Securities are included
in such Registration Statement) confirmation that such Registration Statement
has been declared effective by the Commission in the Form attached hereto as
EXHIBIT A.
17
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.
JLM INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
18
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXX XXX XXXX LLC
Number of Shares purchased: By: /s/ Xxxxxx Tick
--------------------------------------
Name: Xxxxxx Tick
Title: Partner
195,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXX BROTHERS LIMITED PARTNERSHIP
Number of Shares purchased: By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: Partner
195,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXXXX X. XXXXXXXXX 4/8/71 TRUST
Number of Shares purchased: By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Trustee
195,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXXX X. XXXXX JLM GRAT
Number of Shares purchased: By: /s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
Title: Trustee
195,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXXX XXXXXXXX
Number of Shares purchased: By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxx
Title:
195,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXXX X. XXXXXXXX
Number of Shares purchased: By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title:
195,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
JAM CAPITAL ASSOC. LLC
Number of Shares purchased: By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Manager
110,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
SACHS INVESTING CO.
Number of Shares purchased: By: /s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
Title: Partner
110,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXXX XXXXXXXX SACK
Number of Shares purchased: By: /s/ Xxxxxx Xxxxxxxx Sack
--------------------------------------
Name: Xxxxxx Xxxxxxxx Sack
Title:
105,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXX X. X'XXXXXXX
Number of Shares purchased: By: /s/ Xxxxx. X. X'Xxxxxxx
--------------------------------------
Name: Xxxxx X. X'Xxxxxxx
Title:
85,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXXXXX X. XXXXXX
Number of Shares purchased: By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Trustee
75,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
EURYCLEIA PARTNERS, L.P.
Number of Shares purchased: By: /s/ Xxxxxxxxx X. Xxxxxxxxxxx
--------------------------------------
Name: Marchessini & Company,
General Partner
75,000 Title: Xxxxxxxxx X. Xxxxxxxxxxx,
Chairman
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
RAVICH REVOCABLE TRUST
Number of Shares purchased: By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title:
75,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXXX XXXXXXXXXXX XXXXXXXX
Number of Shares purchased: By: /s/ Xxxxxx Xxxxxxxxxxx Sassower
--------------------------------------
Name: Xxxxxx Xxxxxxxxxxx Xxxxxxxx
Title:
74,729
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXX XXXXXXXXXXX SASSOWER
Number of Shares purchased: By: /s/ Xxxx Xxxxxxxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxxxxx Sassower
Title:
74,728
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXXXXX XXXXXXXXXXX SACK
Number of Shares purchased: By: /s/ Xxxxxxxx Xxxxxxxxxxx Sack
--------------------------------------
Name: Xxxxxxxx Xxxxxxxxxxx Sack
Title:
74,728
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXXX XXXXXXXXXXX SASSOWER
Number of Shares purchased: By: /s/ Xxxxxx Xxxxxxxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxxxx Sassower
Title:
74,728
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
INVESTOR:
XXXXXX XXXXXX LESSER
Number of Shares purchased: By: /s/ Xxxxxx Xxxxxx Lesser
--------------------------------------
Name: Xxxxxx Xxxxxx Lesser
Title:
70,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
WARRANT HOLDER:
XXXXX X. XXXXXXXX
Number of Warrants issued: By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title:
50,000
Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
WARRANT HOLDER:
XXXXX XXXXX
Number of Warrants issued: By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title:
50,000 @ $1.43 per share
20,000 @ $1.15 per share Address:
Facsimile:
REGISTRATION RIGHTS AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the
Registration Rights Agreement.
WARRANT HOLDER:
PHOENIX ENTERPRISES LLC
Number of Warrants issued: By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer
200,000 @ $1.43 per share
355,000 @ $1.15 per share Address:
Facsimile:
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
EquiServe
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Re: JLM Industries, Inc.
--------------------
Ladies and Gentlemen:
We are counsel to JLM Industries, Inc., a Delaware corporation (the
"COMPANY"), and have represented the Company in connection with that certain
Purchase Agreement (the "PURCHASE AGREEMENT") entered into by and among the
Company and the other signatures thereto (the "INVESTORS") pursuant to which the
Company issued to the Investors 2,173,913 shares of its common stock, par value
$.01 per share (the "COMMON STOCK"), and issued to the warrant holders (the
"WARRANT HOLDERS" and, together with the Investors, the "Holders") warrants to
purchase up to 675,000 shares of the Common Stock (the "WARRANTS"). Pursuant to
the Purchase Agreement, the Company has also entered into a Registration Rights
Agreement with the Holders (the "REGISTRATION RIGHTS AGREEMENT") pursuant to
which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement) under the
Securities Act of 1933, as amended (the "1933 ACT"). In connection with the
Company's obligations under the Registration Rights Agreement, on ____________
___, 2001, the Company filed a Registration Statement on Form (File No.
333-_____________) (the "REGISTRATION STATEMENT") with the Securities and
Exchange Commission (the "SEC") relating to the Registrable Securities which
names each of the Holders as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[COMPANY'S COUNSEL]
A-1
