Exhibit 4.6
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of May 25, 2001 by and between KFx Inc., a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxx ("Holder") to provide
Holder with certain registration rights relative to 33,333 shares of Common
Stock of KFx Inc. that Holder has the right to purchase pursuant to a
warrant provided by the Company to the Holder dated the date hereof (the
"Warrant").
NOW, THEREFORE, in consideration of the mutual promises
hereinafter set forth, the parties hereto agree as follows:
Article I
REGISTRATION RIGHTS
Section 1.01. Definitions. For purposes of this Agreement:
(a) Common Shares. The term "Common Shares" means shares of
Common Stock, $.001 par value, of the Company.
(b) Holder. The term "Holder" means any person owning of
record Registrable Securities that have not been sold to the public or
sold pursuant to Rule 144 promulgated under the Securities Act, or any
assignee of record of such Registrable Securities to whom rights under
this Agreement have been duly assigned in accordance with this
Agreement and the Warrant.
(c) Registrable Securities or Registrable Shares. The terms
"Registrable Securities" or "Registrable Shares" means (i) all Common
Shares of the Company that may hereafter be acquired by Holder
pursuant to the exercise of the Warrant or any warrant that is issued
by the Company to Holder as a replacement for all or any portion of
the Warrant, (ii) all Common Shares of the Company that may hereafter
be acquired by Holder pursuant to the Stock Purchase Agreement dated
the date hereof to which the Company and Holder are parties, and (iii)
any Common Shares of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which
is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, all such Common Shares described in
clauses (i) and (ii) of this subsection (c); excluding in all cases,
however, any Registrable Securities sold by a person in a transaction
in which rights under this Article I are not assigned in accordance
with this Agreement or any Registrable Securities sold to the public
or sold pursuant to Rule 144 promulgated under the Securities Act.
(d) Registration. The terms "register," "registration" and
"registered" mean a registration effected by preparing and filing a
registration statement in compliance with the Securities Act and the
declaration or ordering of effectiveness of such registration
statement.
(e) Registration Expenses. The term "Registration Expenses"
means all expenses incurred by the Company in complying with Section
1.02 hereof, including, without limitation, all registration and
filing fees, listing fees, printing expenses, fees and disbursements
of counsel for the Company, blue sky fees and expenses, the expense of
any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company) and the expenses of
underwriters customarily paid by similarly situated companies in
connection with underwritten offerings of equity securities to the
public (including any qualified independent underwriter required in
connection with such underwritten offering), excluding any such fees
based on the proceeds of sales of Registrable Securities by selling
Holders.
(f) Registration Statement. The term "Registration Statement"
means any registration statement under the Securities Act for purposes
of effecting a public offering of securities of the Company.
(g) SEC. The term "SEC" means the U.S. Securities and Exchange
Commission.
(h) Securities Act. The term "Securities Act" means the
Securities Act of 1933, as amended from time to time.
Section 1.02. Piggyback Registrations.
(a) Right to Piggyback. The Company shall notify all Holders
in writing at least thirty (30) days prior to filing any Registration
Statement (including, but not limited to, Registration Statements
relating to secondary offerings of securities of the Company, but
excluding Registration Statements relating to any employee benefit
plan or a corporate reorganization) and will afford each such Holder
an opportunity to include in such Registration Statement all or any
part of the Registrable Securities then held by such Holder. Each
Holder desiring to include in any such Registration Statement all or
any part of the Registrable Securities held by such Holder shall,
within twenty (20) days after receipt of the above-described notice
from the Company, so notify the Company in writing, and in such notice
shall inform the Company of the number of Registrable Securities such
Holder wishes to include in such Registration Statement. The Company
thereupon will use its best efforts as a part of its filing of such
Registration Statement to effect the registration under the Securities
Act of all Registrable Securities which the Company has been so
requested to register by the Holder, to the extent required to permit
the disposition of the Registrable Securities so to be registered. If
a Holder decides not to include all of its Registrable Securities in
any Registration Statement thereafter filed by the Company, such
Holder shall nevertheless continue to have the right to include any
Registrable Securities in any subsequent Registration Statement or
Registration Statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set
forth herein.
(b) Underwriting. If a Registration Statement under which the
Company gives notice under this Section 1.02 is for an underwritten
offering, then the Company shall so advise the Holders. In such event,
the right of any such Holder's Registrable Securities to be included
in a registration pursuant to this Section 1.02 shall be conditioned
upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting
to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter
into an underwriting agreement in customary form with the managing
underwriter or underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter(s) determine(s) in good faith that marketing factors
require a limitation of the number of shares to be underwritten, then
the managing underwriter(s) may exclude shares (including Registrable
Securities) from the registration and the underwriting, and the number
of shares that may be included in the registration and the
underwriting shall be allocated, first, to the Company, and second,
the maximum number of Registrable Securities requested to be included
therein by the Holders and the maximum number of any other securities
of the same class as the Registrable Securities ("Other Securities")
requested to be included therein by other shareholders of the Company
having registration rights ("Other Holders"), pro rata among the
respective Holders and Other Holders on the basis of the number of
Registrable Securities and Other Securities requested to be included
in such registration by each such Holder and Other Holder. If any
Holder disapproves of the terms of any such underwriting, such Holder
may elect to withdraw all or any part of such Holder's Registrable
Securities therefrom by written notice to the Company and the
underwriter, delivered at any time prior to the effective date of the
Registration Statement. Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from
the registration. For any Holder that is a partnership or corporation,
the partners, retired partners and shareholders of such Holder, or the
estates and family members of any such partners and retired partners
and any trusts for the benefit of any of the foregoing persons shall
be deemed to be a single "Holder," and any pro rata reduction with
respect to such "Holder" shall be based upon the aggregate amount of
shares carrying registration rights owned by all entities and
individuals included in such "Holder," as defined in this sentence.
(c) Expenses. All Registration Expenses incurred in connection
with a registration pursuant to this Section 1.02 shall be borne by
the Company, except that notwithstanding anything to the contrary
herein, if a Holder withdraws all or any part of such Holder's
Registrable Securities from an underwriting at any time less than ten
(10) business days prior to the effective date of the Registration
Statement, such Holder shall pay its pro rata share (based on the
number of Registrable Securities included in the Registration
Statement on behalf of such Holder, or if no Registration Statement
had been filed as of the date of such withdrawal, the number of
Registrable Securities such Holder requested to be included in the
Registration Statement) of all Registration Expenses, excluding all
discounts, commissions or other amounts payable to underwriters or
brokers in connection with the offering. Each Holder participating in
a registration pursuant to this Section 1.02 shall bear such Holder's
proportionate share (based on the total number of shares sold in such
registration) of all discounts, commissions or other amounts payable
to underwriters or brokers in connection with such offering.
Section 1.03 Obligations of the Company. Whenever required to
effect the registration of any Registrable Securities under this Agreement,
the Company shall:
(a) Prepare and file with the SEC a Registration Statement
with respect to such Registrable Securities and use reasonable,
diligent efforts to cause such Registration Statement to become
effective.
(b) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in
connection with such Registration Statement as may be necessary to
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement.
(c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act and such other documents as they
may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by them that are included in such
registration.
(d) Use reasonable, diligent efforts to register and qualify
the securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as shall be
reasonably requested by the Holders, provided that the Company shall
not be required solely as a result of such Registration or as a
condition thereto to qualify to do business or to file a general
consent to service of process in any such jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter(s) of such
offering.
(f) Notify each Holder of Registrable Securities covered by
such Registration Statement 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, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing, and at the request of each Holder promptly prepare and
furnish to such Holder a reasonable number of copies of a supplement
to or amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances then existing.
(g) Use its best efforts to list such Registrable Securities
on each securities exchange on which any equity security of the
Company is then listed.
Section 1.04 Obligations of the Holders.
(a) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to Section 1.02 that the
selling Holders furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as is required to timely
effect the registration of their Registrable Securities.
(b) Each Holder delivering a written request to participate in
an underwritten registered offering in accordance with Section 1.02
shall, if requested by the Company, as soon as practicable after such
delivery, execute and deliver to the Company a custody agreement and
power of attorney in customary form satisfactory to the Company and
any managing underwriter with respect to the Registrable Securities
identified for sale by such Holder (a "Custody Agreement" and "Power
of Attorney," respectively). Each Custody Agreement and Power of
Attorney shall provide, among other things, that such Holder will
deliver to and deposit in custody with the custodian named therein
(which shall be designated by the Company) a certificate or
certificates representing such Registrable Securities (duly endorsed
in blank by the registered owner or owners thereof or accompanied by
duly executed stock powers in blank) and irrevocably appoint such
custodian and attorney-in-fact with full power and authority to act
under the Custody Agreement and Power of Attorney, respectively, on
the Holder's behalf with respect to matters specified therein,
including the execution and delivery of an underwriting agreement.
(c) Each Holder that has Registrable Securities included in
any Registration Statement shall not (until further notice from the
Company) effect sales thereof after receipt of notice from the Company
to suspend sales to permit the Company to correct or update any
Registration Statement, including any prospectus.
Section 1.05. Delay of Registration. No Holder shall have any
right to obtain or seek an injunction restraining or otherwise delaying any
such registration as the result of any controversy that might arise with
respect to the interpretation or implementation of this Article I.
Section 1.06 Indemnification. In the event any Registrable
Securities are included in a Registration Statement pursuant to Section 1.02:
(a) By the Company. To the extent permitted by law, the
Company will indemnify and hold harmless each Holder, the partners,
officers, directors, legal counsel and accountants of each Holder, any
underwriter (as defined in the Securities Act) for such Holder and
each person, if any, who controls such Holder or underwriter within
the meaning of the Securities Act or the Exchange Act against any
losses, claims, expenses, damages, or liabilities (joint or several)
to which they may become subject under the Securities Act, the
Exchange Act or any other securities or other law of any jurisdiction,
common law or otherwise, insofar as such losses, claims, expenses,
damages, or liabilities (or actions proceedings or settlements in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively, "Violations" and,
individually, a "Violation"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in or incorporated by reference in any
Registration Statement, including any preliminary prospectus or
final prospectus contained therein or any amendments or
supplements thereto or any document incorporated by reference
therein;
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to
make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act, or any other
securities or other law of any jurisdiction, common law or
otherwise, or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any such other laws, in
connection with the offering covered by such Registration
Statement;
and the Company will reimburse each such Holder, partner, officer
or director, underwriter or controlling person for any legal or
other expenses reasonably incurred by them, as incurred, in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity
agreement contained in this subsection 1.06(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for
any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by such
Holder, partner, officer, director, underwriter or controlling
person of such Holder.
(b) By Selling Holders. To the extent permitted by law, each
selling Holder, severally and not jointly, will indemnify and hold
harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement, each person, if any, who
controls the Company within the meaning of the Securities Act, its
legal counsel, its accountants, any underwriter and any other Holder
selling securities under such Registration Statement or any of such
other Holder's partners, directors or officers or any person who
controls such Holder within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or liabilities
(joint or several) to which the Company or any such director, officer,
controlling person, legal counsel, accountant, underwriter or other
such Holder, partner or director, officer or controlling person of
such other Holder may become subject under the Securities Act, the
Exchange Act or any other securities or other law of any jurisdiction,
common law or otherwise, insofar as such losses, claims, expenses,
damages or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder
will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, legal
counsel, accountant, underwriter or other Holder, partner, officer,
director, legal counsel, accountant or controlling person of such
other Holder in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 1.06(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; and
provided, further, that the total amounts payable by a Holder under
this Section 1.07 in respect of any Violation shall not exceed the net
proceeds received by such Holder in the registered offering out of
which such Violation arises.
(c) Notice. Promptly after receipt by an indemnified party under
this Section 1.07 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party
under this Section 1.06, deliver to the indemnifying party a written
notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if representation
of such indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential conflict of
interests between such indemnified party and any other party
represented by such counsel in such proceeding or if, and for such
period, such indemnified party was required to retain counsel prior to
the indemnifying party's retention of counsel. The failure to deliver
written notice to the indemnifying party within a reasonable time of
the commencement of any such action shall relieve such indemnifying
party of its liability to the indemnified party under this Section
1.06 only if and to the extent it is prejudicial to its ability to
defend such action, and the omission to so deliver written notice to
the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section
1.06.
(d) Defect Eliminated in Final Prospectus. The foregoing indemnity
agreements of the Company and Holders are subject to the limitation
that, insofar as they relate to any Violation made in a preliminary
prospectus but eliminated or remedied in the amended prospectus on
file with the SEC at the time the Registration Statement in question
becomes effective or the amended prospectus filed with the SEC
pursuant to SEC Rule 424(b) (the "Final Prospectus"), such indemnity
agreement shall not inure to the benefit of any person if a copy of
the Final Prospectus was furnished to the indemnified party and was
not furnished to the person asserting the loss, liability, claim or
damage at or prior to the time such action is required by the
Securities Act.
(e) Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act, in any case
in which either (i) any Holder exercising rights under this Agreement,
or any controlling person of any such Holder, makes a claim for
indemnification pursuant to this Section 1.06 but it is judicially
determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not
be enforced or is otherwise unavailable in such case notwithstanding
the fact that this Section 1.06 provides for indemnification in such
case, or (ii) contribution under the Securities Act may be required on
the part of any such selling Holder or any such controlling person in
circumstances for which indemnification is provided under this Section
1.06; then, and in each such case, the Company and such Holder will
contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (after contribution from others) in such
proportion so that such Holder is responsible for the portion
represented by the percentage that the public offering price of its
Registrable Securities offered by and sold under the Registration
Statement bears to the public offering price of all securities offered
by and sold under such Registration Statement, and the Company and
other selling Holders are responsible for the remaining portion;
provided, however, that, in any such case, (A) no such Holder will be
required to contribute any amount in excess of the net proceeds
received from the sale of all such Registrable Securities offered and
sold by such Holder pursuant to such Registration Statement; and (B)
no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
(f) Survival; Release. The obligations of the Company and Holders
under this Section 1.06 shall survive the completion of any offering
of Registrable Securities in a Registration Statement and otherwise.
No indemnifying party, in the defense of any such claim or litigation,
shall, except with the consent of each indemnified party, consent to
entry of any judgment or enter into any settlement which admits fault
on behalf of the indemnified party or which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect to
such claim or litigation.
Section 1.07. "Market Stand-Off" Agreement. Each Holder hereby
agrees that it shall not, to the extent requested by the Company or an
underwriter of securities of the Company, sell or otherwise transfer or
dispose of any Registrable Securities or other shares of stock of the
Company then owned by such Holder (other than to donees of the Holder who
agree to be similarly bound) for up to ninety (90) days following the
effective date of a Registration Statement of the Company for an
underwritten offering filed under the Securities Act; provided that all
officers and directors of the Company have entered into similar agreements.
In order to enforce the foregoing covenant, the Company shall have the
right to place restrictive legends on the certificates representing the
shares subject to this Section and to impose stop transfer instructions
with respect to the Registrable Securities and such other shares of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
Section 1.08. Termination of the Company's Obligations. The
Company shall have no obligations pursuant to Section 1.02 with respect to
any Registrable Securities proposed to be sold by a Holder in a
registration pursuant to Section 1.02 if, in the opinion of counsel to the
Company, all such Registrable Securities proposed to be sold by a Holder
and all other Common Shares then owned by such Holder may be sold in a
three-month period without registration under the Securities Act pursuant
to Rule 144 under the Securities Act. In such event, such Holder shall not
be subject to the provisions of Section 1.07.
Article II
AMENDMENT
Section 2.01. Amendment. Any provision of this Agreement may be amended
and the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and Holders holding Registrable Securities
representing more than fifty percent (50%) of all the Registrable
Securities (on an as-converted basis). Any amendment or waiver effected in
accordance with this Section 2.01 shall be binding upon each Holder and the
Company.
Article III
GENERAL PROVISIONS
Section 3.01. Notices. Any and all notices required or permitted to
be given to a party pursuant to the provisions of this Agreement must be in
writing and will be effective and deemed to provide such party sufficient
notice under this Agreement on the earliest of the following: (i) at the
time of personal delivery, if delivery is in person; (ii) at the time of
transmission by facsimile, addressed to the other party at its facsimile
number, with confirmation of receipt made by both telephone and printed
confirmation sheet verifying successful transmission of the facsimile;
(iii) one (1) business day after deposit with an express overnight courier
for deliveries within a country, or three (3) business days after such
deposit for international deliveries or (iv) three (3) business days after
deposit in mail by certified mail (return receipt requested) or equivalent
for deliveries within a country.
All notices for international delivery will be sent by facsimile
or by express courier. All notices not delivered personally or by facsimile
will be sent with postage and/or other charges prepaid and properly
addressed to the party to be notified at the following address or facsimile
number:
Company: KFx Inc.
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
Holder: Xxxx X. Xxxxxx
___________________________________
___________________________________
___________________________________
Any party may by notice so given change its address for future
notices hereunder. Notice shall conclusively be deemed to have been given
in the manner set forth above.
Section 3.02. Entire Agreement. This Agreement and the Warrant
constitute and contain the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and
all prior negotiations, correspondence, agreements, understandings, duties
or obligations between the parties respecting the subject matter hereof.
Section 3.03. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware.
Section 3.04. No Third Party Beneficiaries. This Agreement shall
be binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is intended
to or shall confer upon any other person any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
Section 3.05. Successors and Assigns. The provisions of this
Agreement shall inure to the benefit of, and shall be binding upon, the
successors and permitted assigns of the parties hereto.
Section 3.06. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
Section 3.07. Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same
agreement.
Section 3.08. Expenses. All costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
costs and expenses.
Section 3.09. Construction. Words used herein, regardless of the
gender specifically used, shall be deemed and construed to include any
other gender, masculine, feminine or neuter, as the context requires.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first written above.
THE COMPANY:
------------
KFX INC.
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Executive Vice President & CFO
HOLDER:
-------
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
