Exhibit 10.30
This STOCK PURCHASE & REGISTRATION RIGHTS AGREEMENT (this "Agreement"),
is made and entered into as of June 29, 2005, by and between STARTECH
ENVIRONMENTAL CORPORATION, a Colorado corporation (the "Company"), and FINANCIAL
ALCHEMY, LLC, a Texas limited liability company (the "Purchaser").
RECITALS
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The Company desires to issue and sell to the Purchaser in a private
placement (the "Offering"), and the Purchaser desire to purchase from the
Company, on the terms and subject to the conditions set forth herein, 96,154
shares (the "Shares") of common stock, no par value ("Common Stock"), of the
Company, and an equivalent number of three-year warrants to purchase shares of
Common Stock (the "Warrants" and, together with the Shares, the "Securities"),
the terms of such Warrants being as set forth in the Warrant Agreement
substantially in the form attached as Exhibit A hereto. This Agreement and the
Warrants shall be referred to herein collectively as the "Transaction
Documents".
The Purchaser desires, upon the terms and conditions set forth in this
Agreement, to purchase Securities in the Offering.
The Company and the Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities regulation afforded by
Section 4(2) of the Securities Act (as defined in Section 3 hereof) and Rule 506
under Regulation D.
IN CONSIDERATION of the premises and mutual covenants contained in this
Agreement and other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the Company and the Purchaser agree as
follows:
1. Purchase and Sale of Securities.
(a) Purchase and Sale of Shares. Subject to the terms and conditions
hereof, at the Closing identified in Section 2 hereof, the Company shall issue
and sell to the Purchaser, and the Purchaser shall purchase from the Company,
the Shares, which number of Shares are calculated by dividing (x) $200,000
dollars (the "Purchase Price") by (y) $2.08 per Share (the "Share Price"), which
Share Price is equal to a twenty-one percent (21%) discount to the average
closing price per share of the Common Stock for the ten (10) consecutive trading
days immediately preceding June 29, 2005, shall hereinafter be referred to as
the "Average Closing Price."
(b) Purchase and Sale of Warrants. In addition to the foregoing and
subject to the terms and conditions hereof, at the Closing identified in Section
2 hereof, the Company shall issue to the Purchaser one or more Warrants to
purchase shares of Common Stock on the following terms:
Warrant Coverage: The Purchaser will be entitled to warrants to
purchase the same number of Shares (the "Purchased
Warrants"). The shares of Common Stock into which
the Warrants are exercisable (the "Warrant
Shares") will have piggyback registration rights
as provided in this Agreement.
Term: Each Purchased Warrant shall be exercisable for a
term of three-years from the Closing Date (as
defined below).
Exercise Price: One third (1/3) of the Warrants will be
exercisable into 32,051 shares of Common Stock at
a price equal to $2.00 plus the Average Closing
Price (the "Series A Warrants"); one third (1/3)
of the Warrants will be exercisable into 32,051
shares of Common Stock at a price equal to $4.00
plus the Average Closing Price (the "Series B
Warrants"); and one third (1/3) of the Warrants
will be exercisable into 32,052 shares of Common
Stock at a price equal to $6.00 plus the Average
Closing Price (the "Series C Warrants").
(c) Exemption. The purchase and sale of the Securities pursuant to the
terms hereof will be made in reliance upon the provisions of Section 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"), Rule 506 of
Regulation D promulgated thereunder by the United States Securities and Exchange
Commission (the "SEC"), or such other exemptions from the registration
requirements of the Securities Act as may be available with respect to the
investment in the Securities to be made hereunder.
2. Closings and Deliverables.
(a) Payment. At the Closing, the Purchaser will make a wire transfer
payment to the Company, to the account set forth on Exhibit B hereto, in an
amount equal to the Purchase Price, which Purchase Price shall entitle the
Purchaser, subject to the satisfaction of the terms and conditions herein, to
receive the Shares and the Purchased Warrants. Together with the Purchase Price,
at the Closing, the Purchaser shall deliver to the Company a fully completed and
executed copy of the Investor Questionnaire, in the form attached as Exhibit C
hereto (the "Investor Questionnaire").
(b) Closing. The closing of the purchase and sale of the Securities
shall take place at 12:00 p.m. (Eastern Standard Time) on the date hereof (the
"Closing Date"), at the offices of the Company (the "Closing").
(c) Deliverables. At the Closing, or as soon as is reasonably
practicable thereafter, and assuming the Company has received the Purchase Price
and the Investor Questionnaire, the Company (or its transfer agent) shall
deliver to the Purchaser a stock certificate (or certificates) representing the
Shares so purchased at the Closing, as well as one or more Warrant Agreements
representing the Series A Warrants, Series B Warrants and Series C Warrants, in
each case registered in the name of the Purchaser, and such other documents and
certificates as are required by this Agreement at the Closing.
3. Representations and Warranties by the Company. The Company hereby
represents and warrants to the Purchaser, as of the date hereof, as follows:
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(a) Incorporation and Qualification. The Company has been duly
organized and is validly existing as a Corporation and in good standing under
the laws of the State of Colorado with the requisite corporate power and
authority to own and use its properties and assets and to carry on its business
as currently conducted.
(b) Authority. The Company has the requisite corporate power and
authority to enter into this Agreement and to issue and deliver the Shares and
the Warrants and, upon exercise of the Warrants in accordance with the terms
thereof, the Warrant Shares. The execution and delivery of this Agreement and
the issuance and delivery of the Shares and the Warrants hereunder and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action by the Company. This Agreement has
been duly and validly executed and delivered by and on behalf of the Company and
constitutes a valid, legal and binding agreement, enforceable against the
Company in accordance with its terms, except as enforceability may be limited by
general equitable principles, bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting creditors' rights generally.
Assuming payment of the Purchase Price in full at the Closing, the Shares and
the Warrants will be duly authorized, validly issued, fully paid and
non-assessable. Upon exercise of the Warrants in accordance with the terms
thereof, including payment of the exercise price in full, the Warrant Shares
will be duly authorized, validly issued, fully paid and non-assessable.
(c) No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the Offering do
not and will not: (i) conflict with or violate any provision of the Company's
articles of incorporation or bylaws, or (ii) subject to obtaining the Required
Approvals (as defined below), conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company debt or
otherwise) to which the Company is a party or by which any property or asset of
the Company is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority as currently in effect to which the Company
is subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not, individually or in
the aggregate (x) adversely affect the legality, validity or enforceability of
the Offering, (y) have or result in a material adverse effect on the results of
operations, assets, business or condition (financial or otherwise) of the
Company, taken as a whole (other than any change, effect, event or condition
that arises from changes in general economic conditions or conditions affecting
the industry of the business of the Company generally, or such changes, events
or conditions resulting directly from the announcement of or the consummation of
the Offering contemplated hereby), or (z) adversely impair the Company's ability
to perform fully on a timely basis its obligations under this Agreement (any of
(x), (y) or (z), a "Material Adverse Effect").
(d) Capital Stock; Fully Paid and Non-Assessable.
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(i) As of the date hereof, the authorized capital stock of the
Company consists of 10,000,000 shares of preferred stock, no par value (the
"Preferred Stock"), of which there are no shares issued and outstanding, and
800,000,000 shares of Common Stock, of which 17,540,698 shares are issued and
outstanding, of which: (x) 1,000,000 shares are authorized for issuance under
the Company's stock option plans; (y) 1,557,500 shares are reserved for issuance
upon the exercise of options granted and issuable by the Company thereunder; and
(z) 2,868,491 shares are reserved for issuance upon the exercise of warrants to
purchase shares of Common Stock.
(ii) All outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable and were
issued in compliance with all applicable Federal and state securities laws.
Except as contemplated by this Agreement or as set forth in all forms, reports
and documents filed with the SEC pursuant to the Securities Act and Securities
Exchange Act of 1934, as amended (the "Exchange Act") from January 1, 2003
through the date hereof (collectively, the "SEC Reports"), the Company has no
outstanding subscription, option, warrant, right of first refusal, preemptive
right, call, contract, demand, commitment, convertible security or other
instrument, agreement or arrangement of any character or nature whatever under
which the Company is or may be obligated to issue Common Stock or any other
equity security of any kind or which otherwise relates to the Company's
securities.
(e) Filings, Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other person or entity in connection with the
execution, delivery and performance by the Company of this Agreement, other than
(i) the filing with the SEC of a Form D pursuant to Regulation D of the
Securities Act, and (iii) applicable state securities law Blue Sky filings
(collectively, the "Required Approvals").
(f) SEC Reports; Financial Statements. Since January 1, 2003, the
Company has filed (i) all reports required to be filed by it under the
Securities Act; (ii) all annual reports on Form 10-K and all quarterly reports
on Form 10-Q required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, in order for it to satisfy its
filing requirements under the Exchange Act for the periods to which each such
report relates; (iii) an annual report on Form 10-K, covering the fiscal year
ended October 31, 2003, which was filed with the SEC on January 29, 2004; (iv) a
quarterly report on Form 10-Q, covering the fiscal quarter ended January 31,
2004, which was filed with the SEC on March 15, 2004; and (v) a quarterly report
on Form 10-Q, covering the fiscal quarter ended April 30, 2004, which was filed
with the SEC on June 2, 2004; (the foregoing materials, as amended, where
applicable, being collectively referred to herein as the "SEC Reports"). As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the SEC promulgated thereunder, and to the Knowledge (as defined
below) of the Company, none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the SEC with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with generally accepted
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accounting principles applied on a consistent basis during the periods involved
("GAAP"), except as may be otherwise specified in such financial statements or
the notes thereto, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
(g) No Legal Proceedings. Except as may be described in the SEC
Filings, there is no action, suit or proceeding before or by any court or any
governmental agency or body, domestic or foreign, now pending or, to the actual
knowledge (without the need for inquiry or special investigation) of the Chief
Financial Officer, Chief Operating Officer or Chief Executive Officer of the
Company ("Knowledge"), threatened against or affecting the Company, or any of
its properties or assets, which is reasonably likely to have a Material Adverse
Effect.
4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company, as of the date hereof, as follows:
(a) Power. The Purchaser has been duly organized, is validly existing
and is in good standing under the laws of its state of incorporation, with all
limited liability company power and authority to execute, deliver and perform
its obligations under the Agreement.
(b) Authority. The Purchaser has the requisite power and authority to
enter into this Agreement and to purchase the Shares and the Warrants and, upon
exercise of the Warrants in accordance with the terms thereof, the Warrant
Shares. The execution and delivery of this Agreement and the purchase of the
Shares and the Warrants hereunder and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action by the Purchaser. This Agreement has been duly and validly executed and
delivered by or on behalf of the Purchaser and constitutes a valid, legal and
binding agreement, enforceable against the Purchaser in accordance with its
terms, except as enforceability may be limited by general equitable principles,
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other laws affecting creditors' rights generally.
(c) No Conflicts. The execution, delivery and performance of this
Agreement by the Purchaser and the consummation by the Purchaser of the purchase
of the Securities do not and will not: (i) conflict with or violate any
provision of the Purchaser's organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) to which the Purchaser is a
party or by which any property or asset of the Purchaser is bound or affected,
or (iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
as currently in effect to which the Purchaser is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Purchaser is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not, individually or in the aggregate result in a Material
Adverse Effect.
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(d) Investment in Securities. The Purchaser represents and warrants to,
and covenants with, the Company that: (i) the Purchaser, either individually, or
together with a purchaser representative, is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that involved in
the purchase of the Securities, including investments in securities issued by
the Company and comparable entities, and has requested, received, reviewed and
considered all information it deems relevant in making an informed decision to
purchase the Securities; (ii) the Purchaser is acquiring the Securities in the
ordinary course of its business and for its own account for investment only and
with no present intention or view toward the public sale or distribution
thereof, and no arrangement or understanding exists with any other persons
regarding the public sale or distribution of any Securities; (iii) the Purchaser
will not, directly or indirectly, except in compliance with the Securities Act,
the rules and regulations promulgated thereunder and such other securities or
blue sky laws as may be applicable, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise acquire or take
a pledge of) any of the Securities or engage in any Short Sale (as defined
below); (iv) the Purchaser has completed or caused to be completed the Investor
Questionnaire and the answers thereto are true and correct in all respects as of
the date hereof; (v) the Purchaser has, in connection with its decision to
purchase the Securities, relied solely upon its own independent investigation of
the Company and the representations and warranties of the Company contained
herein; and (vi) the Purchaser is an "accredited investor" within the meaning of
Rule 501(a) of Regulation D promulgated under the Securities Act.
(e) Short Sales. Neither the Purchaser nor any affiliate of the
Purchaser (as defined in Rule 405 of the Securities Act (each a
"Purchaser/Affiliate") and which (i) had knowledge about the transactions
contemplated hereby, (ii) has or shares discretion relating to the Purchaser's
investments or trading or information concerning Purchaser's investments,
including the Units, or (iii) is subject to the Purchaser's review or input
concerning such Purchaser/Affiliate's investments or trading) has or will,
directly or indirectly, engage (A) in any "short sale" (as defined in Rule 3b-3
promulgated under the Exchange Act), including, without limitation, the
maintaining of any short position with respect to, establishing or maintaining a
"put equivalent position" (within the meaning of Rule 16a-1(h) under the
Exchange Act) with respect to, entering into any swap, derivative transaction or
other arrangement (whether any such transaction is to be settled by delivery of
Common Stock, other securities, cash or other consideration) that transfers to
another, in whole or in part, any of the economic consequences of ownership, or
otherwise dispose of, any of the Securities by the Purchaser or (B) in any
hedging transaction which establishes a net short position with respect to the
Securities (clauses (A) and (B) together, a "Short Sale"); except for (1) Short
Sales by a Purchaser/Affiliate which was, prior to the date on which the
Purchaser was first notified that the Company intended to engage in the
transactions contemplated by this Agreement, a market maker for the Common
Stock, provided that such Short Sales are in the ordinary course of such
Purchaser/Affiliate's business and are in compliance with the Securities Act,
and the rules and regulations promulgated thereunder, and such other securities
or blue sky laws as may be applicable or (2) Short Sales by a
Purchaser/Affiliate which by virtue of the procedures of the Purchaser are made
without knowledge of the transactions contemplated in this Agreement and were
not induced or encouraged by the Purchaser).
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(f) Exemptions. The Purchaser understands that the Securities are being
offered and sold to it in reliance upon specific exemptions from the
registration requirements of Securities Act, the rules and regulations and state
securities laws, and that the Company is relying upon the truth and accuracy of,
and the Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Purchaser set forth herein
in order to determine the availability of such exemptions and the eligibility of
the Purchaser to acquire the Securities.
(g) Use of Information. The Purchaser acknowledges that it is
prohibited from and has not reproduced or distributed this Agreement or any
other offering materials or other information provided by the Company in
connection with the Purchaser's consideration of its investment in the Company,
in whole or in part, or divulged or discussed any of their contents except to
its advisors and representatives for the purpose of evaluating such investment.
The foregoing shall not apply to any information that is or becomes publicly
available through no fault of the Purchaser, or that the Purchaser is legally
required to disclose; provided, however, that if the Purchaser is requested or
ordered to disclose any such information pursuant to any court or other
government order or any other applicable legal procedure, it shall provide the
Company with prompt notice of any such request or order in time sufficient to
enable the Company to seek an appropriate protective order and shall provide the
Company with reasonable assistance in obtaining such protective order.
(h) Investment Risk. The Purchaser understands that its investment in
the Securities involves a significant degree of risk and that the market price
of the Common Stock has been and continues to be volatile, that no
representation is being made as to the future value of the Common Stock and that
the Purchaser has carefully read and considered the matters set forth in the SEC
Reports. The Purchaser has the knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Securities and has the ability to bear the economic risks of
an investment in the Securities. The Purchaser has had a reasonable opportunity
to ask questions of the Company and its representatives; and the Company has
answered all inquiries that the Purchaser or the Purchaser's representatives
have put to it, and all such inquiries have been answered to the full
satisfaction of the Purchaser.
(i) Reliance. The Purchaser is not relying on the Company or any of its
employees or agents with respect to the legal, tax, economic and related
considerations as to an investment in the Securities, and the Purchaser has
relied on the advice of, or has consulted with, only his own advisors as it
deems necessary or advisable.
(j) No General Solicitation. The Purchaser is unaware of, is in no way
relying on, and did not become aware of the offering of the Securities through
or as a result of, any form of general solicitation or general advertising
including, without limitation, any article, notice, advertisement or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio, in connection with the offering and sale of the
Securities and is not subscribing for Securities and did not become aware of the
Offering through or as a result of any seminar or meeting to which the Purchaser
was invited by, or any solicitation of a subscription by, a person not
previously known to the Purchaser in connection with investments in securities
generally.
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(k) No Endorsement of Securities. The Purchaser understands that no
United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the
Securities.
(l) No Registration of Securities. The Purchaser understands that the
Securities and the Warrant Shares have not been registered under the Securities
Act and will not sell, offer to sell, assign, pledge, hypothecate or otherwise
transfer any of the Securities or Warrant Shares unless (i) pursuant to an
effective registration statement under the Securities Act, (ii) the Purchaser
provides the Company with an opinion of counsel, in a generally acceptable form,
to the effect that a sale, assignment or transfer of the Securities may be made
without registration under the Securities Act and the transferee agrees to be
bound by the terms and conditions of this Agreement, (iii) the Purchaser
provides the Company with evidence of compliance with Rule 144 promulgated under
the Securities Act ("Rule 144"), including reasonable assurances (in the form of
seller and broker representation letters) that the Securities and Warrant Shares
can be sold pursuant to Rule 144 or (iv) pursuant to Rule 144(k) following the
applicable holding period.
(m) Legend. The Purchaser understands that, until such time as a
registration statement has been declared effective or the Securities and Warrant
Shares may be sold by non-affiliates of the Company pursuant to Rule 144 under
the Securities Act without any restriction as to the number of securities as of
a particular date that can then be immediately sold, the certificates for the
Securities and Warrant Shares shall bear a restrictive legend in substantially
the following form (and a stop-transfer order may be placed against transfer of
the certificates for the Securities and Warrant Shares):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY OTHER
JURISDICTION. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, OR AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER THE SECURITIES ACT."
(l) Executive Offices. The Purchaser's principal executive offices are
located in the State of Connecticut.
(m) Brokers and Finders. There is no investment banker, broker, finder
or other intermediary (other than any placement agent retained by the Company)
which has been retained by or is authorized to act on behalf of the Purchaser
who might be entitled to any fee or commission from the Purchaser, the Company,
any of their respective Affiliates upon consummation of the transactions
contemplated by this Agreement.
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5. Certain Covenants.
(a) Delisting. In the event that the Company is no longer subject to
the reporting requirements of the Exchange Act, the Company hereby covenants and
agrees with the Purchaser that, so long as the Purchaser owns at least ten
percent (10%) of the issued and outstanding shares of Common Stock, except as
otherwise required in this Agreement, the Company shall provide the Purchaser
with customary and reasonable financial information on at least a quarterly
basis and such other information rights as provided to an investor in a
privately held corporation.
(b) Confidentiality. The Purchaser covenants and agrees to keep
confidential any and all material non-public information which it has heretofore
obtained or shall hereafter obtain, directly or indirectly, from the Company
pursuant to this Agreement or otherwise, and agrees that it has not: (i) used
the same except for the purpose of determining whether to purchase the
Securities in the Offering; or (ii) disclosed the same to any party except as
provided below, without the Company's prior written consent; provided that the
terms of this Section 5(b) shall not extend to any such information that: (A) is
already publicly known; (B) has become publicly known without any fault of the
Purchaser or anyone to whom the Purchaser has made disclosure in compliance with
the terms of this Section 5(b); or (C) is required to be disclosed to any
governmental authorities or courts of law as a result of operation of law,
regulation, or court order; provided, however, that the Purchaser shall have
first given prompt written notice of such requirement to the Company (if
permissible) and cooperates with the Company to restrict such disclosure and/or
obtain confidential treatment thereof.
(c) Short-Selling. The Purchaser covenants and agrees that it will not,
and shall cause each Purchaser/Affiliate not to, engage in any Short Sales.
6. Registration Rights.
(a) Defined Terms. The following capitalized terms, when used in this
Section 6, have the respective meanings set forth below:
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"Affiliate" means, with respect to any Person (as defined
below), any other Person, directly or indirectly, controlling,
controlled by, or under common control with, such Person, and shall
include (i) any Person who is an executive officer, director or
beneficial holder of at least 10% of the outstanding capital stock of
the Company (or other specified Person), (ii) any Person of which the
Company (or other specified Person) or an Affiliate of the Company (or
other specified Person) shall, directly or indirectly, either
beneficially own at least 10% of the outstanding equity securities or
constitute at least a 10% participant, and (iii) in the case of a
specified Person who is an individual, each parent, spouse, child,
brother, sister or the spouse of a child, brother or sister of such
Person, and each trust or family limited partnership created for the
benefit of one or more of such Persons. For the purposes of this
definition, "control" when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing. Notwithstanding the foregoing, the term "Affiliate"
as used elsewhere in this Agreement shall have the same meaning as
given to such term in this Section 6(a).
"Business Day" means any day, other than a Saturday or a
Sunday, that is neither a legal holiday nor a day on which banking
institutions are generally authorized or required by law or regulation
to close in the State of Connecticut.
"Holder" shall mean any Person that owns Registrable
Securities, including such successors and assigns as acquire
Registrable Securities, directly or indirectly, from such Person. For
purposes of this Agreement, the Company may deem the registered holder
of a Registrable Security as the Holder thereof.
"Other Approved Holders" shall mean holders of Common Stock
having registration rights with respect to the Common Stock, other than
pursuant to the terms of this Agreement.
"Person" means any individual, company, corporation,
partnership, limited liability company, trust, division, governmental,
quasi-governmental or regulatory entity or authority or other entity.
Notwithstanding the foregoing, the term "Person" as used elsewhere in
this Agreement shall have the same meaning as given to such term in
this Section 6(a).
"Prospectus" shall mean the prospectus (including a
preliminary prospectus) included in any Registration Statement, as
amended or supplemented by a prospectus supplement with respect to the
terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and
all material incorporated by reference in such prospectus.
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"Registrable Securities" shall mean the Shares, the Warrant
Shares and any other capital stock or other securities issued or
issuable as a result of or in connection with any stock dividend, stock
split or reverse stock split, combination, recapitalization,
reclassification, merger or consolidation, exchange, distribution or
similar transaction in respect of the Shares or the Warrant Shares.
"Registration Statement" shall mean any registration statement
which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus included
therein, all amendments and supplements to such Registration Statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such Registration Statement.
"Rule 144" shall mean Rule 144 promulgated under the
Securities Act, as amended from time to time, or any similar successor
rule thereto that may be promulgated by the SEC.
"Rule 144A" shall mean Rule 144A promulgated under the
Securities Act, as amended from time to time, or any similar successor
rule thereto that may be promulgated by the SEC.
(b) Piggyback Registration Rights.
(i) Whenever the Company proposes to register any of its
securities under the Securities Act, either pursuant to an underwritten
primary registration on behalf of the Company or pursuant to an
underwritten secondary registration on behalf of a holder or holders of
the Company's securities (other than on Form X-0, Xxxx X-0 or any
successor form) and the registration form to be used may be used for
the registration of any Registrable Securities (a "Piggyback
Registration"), the Company will give written notice to each holder of
Registrable Securities of its intention to effect such a registration
and will include in such registration all Registrable Securities
(subject to, and in accordance with, the priorities set forth in
Section 6(b)(ii) hereof), with respect to which the Company has
received written requests for inclusion within ten (10) days after
delivery of the Company's notice to each holder of Registrable
Securities.
(ii) If the managing underwriter(s) advise the Company in writing,
or the Board of Directors determines, that in their opinion, the number
of Registrable Securities requested to be included in such registration
exceeds the number which can be sold in such offering without adversely
affecting the marketability or pricing thereof, the Company will
include in such registration up to an aggregate amount determined
advisable by such underwriter(s): (i) first, any shares of Common Stock
that the Company desires to register; (ii) second, any shares of Common
Stock requested to be registered by the holder(s) of Common Stock
pursuant to which the Registration Statement is being filed and to
which the holders of Registrable Securities hereunder are receiving
Piggyback Registration; and (iii) pro rata among the holders of
Registrable Securities on the basis of the number of Registrable
Securities which are requested to be registered hereunder.
11
(iii) Notwithstanding anything herein to the contrary, the Company
may withdraw any registration statement referred to in this Section
6(b) at any time in its sole discretion without thereby incurring any
liability or expense to the holders of Registrable Securities.
(c) Registration Procedures. In connection with the Company's
registration obligations pursuant to Sections 6(b) hereof, the Company will use
its commercially reasonable efforts to:
(i) register or qualify such Registrable Securities under the
securities or blue sky laws of the jurisdictions as any seller
reasonably requests in writing and do any and all other acts and things
which may be reasonably necessary to permit such seller to consummate
the disposition in such jurisdictions of the Registrable Securities
owned by such seller (provided that the Company will not be required to
(A) qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this subparagraph or (B)
consent to general service of process in any such jurisdiction);
(ii) notify each seller of Registrable Securities at any time when
a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of any such
seller, the Company will prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain any untrue
statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading;
(iii) cause all such Registrable Securities to be listed on each
securities exchange, if any, on which the same securities issued by the
Company are then listed;
(iv) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
registration statement; and
(v) advise each seller of such Registrable Securities promptly
after it shall receive notice or obtain knowledge thereof, of the
issuance of any stop order by the SEC suspending the effectiveness of
such registration statement or the initiation or threatening of any
proceeding for such purpose and use commercially reasonable efforts to
prevent the issuance of any stop order or to obtain its withdrawal if
such stop order should be issued.
(d) Material Development Election.
(i) Subject to Section 6(d)(ii) below, the Company shall be
entitled, for a period of time not to exceed thirty consecutive (30)
days (a "Suspension Period"), to postpone the filing of any
Registration Statement otherwise required to be filed by it pursuant to
Section 6(b) and/or request that the Holders refrain from effecting any
public sales or distributions of their Registrable Securities if the
Company's Board of Directors shall have reasonably determined in good
12
faith and in its reasonable business judgment that such registration
would interfere in any material respect with any financing (other than
an underwritten secondary offering of any securities of the Company),
acquisition, corporate reorganization or other transaction or
development involving the Company or any subsidiary of the Company that
in the reasonable good faith business judgment of such board is a
transaction or development that is or would be material to the Company
(a "Material Development Election").
(ii) The Board of Directors shall, as promptly as practicable,
give the Holders written notice of any such Material Development
Election. In the event of a determination by the Board of Directors to
postpone the filing of a Registration Statement required to be filed
pursuant to Section 6(b) hereof, the Company shall be required to file
such Registration Statement as soon as practicable after the Board of
Directors of the Company shall determine, in its reasonable business
judgment, that the filing of such Registration Statement and the
offering thereunder will not interfere with the aforesaid material
transaction or development, but in any event no later than the end of
such Suspension Period. In addition, if the Board of Directors of the
Company has requested that the Holders refrain from making public sales
or distributions of their Registrable Securities, such board shall, as
promptly as practicable following its determination that the Holders
may recommence such public sales and distributions, notify such Holders
in writing of such determination (but in any event no later than the
end of such Suspension Period). In the event the Company shall exercise
a Material Development Election during a period when a Registration
Statement filed pursuant to Section 6(b) hereof is effective, the time
period specified in Section 6(b) hereof during which such Registration
Statement is required to be kept effective shall be extended by the
number of days during which the Holders are prohibited by the Company
from publicly selling or distributing their securities.
(iii) The Purchaser agrees that, upon receipt of any notice
from the Company of a Suspension Period, the Purchaser shall forthwith
discontinue disposition of shares of Common Stock covered by such
Registration Statement or Prospectus until such Purchaser (A) is
notified in writing by the Company that the use of the applicable
prospectus may be resumed, (B) has received copies of a supplemental or
amended prospectus, if applicable, and (C) has received copies of any
additional or supplemental filings which are incorporated or deemed to
be incorporated by reference into such prospectus.
(iv) Notwithstanding the foregoing, no more than one
Suspension Period may occur during any twelve-month period, unless
approved by a majority-in-interest of the then outstanding Holders (on
a common equivalent basis). The Company shall use its best efforts to
limit the duration and aggregate number of any Suspension Periods.
13
(e) Registration Expenses. All expenses incident to the Company's
performance of or compliance with Section 6 of this Agreement, including all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications or registrations (or the obtaining of
exemptions therefrom) of the Registrable Securities), printing expenses
(including expenses of printing Prospectuses), messenger and delivery expenses,
internal expenses (including all salaries and expenses of its officers and
employees performing legal or accounting duties), fees and disbursements of its
counsel and its independent certified public accountants, securities acts
liability insurance (if the Company elects to obtain such insurance), fees and
expenses of any special experts retained by the Company in connection with any
registration hereunder, fees and expenses of other Persons retained by the
Company, (all such expenses being referred to as "Registration Expenses"), shall
be borne by the Company, whether or not any registration statement becomes
effective; provided that Registration Expenses shall not include any
underwriting discounts, commissions or fees attributable to the sale of the
Registrable Securities.
(f) Registration Rights Indemnification.
(i) Indemnification by the Company.
(1) The Company will indemnify and hold harmless, to
the fullest extent permitted by law, but without duplication, each
Holder, including any managed or advised accounts and any investment
advisor or agent therefore, officers, directors, employees, partners,
representatives and agents, and each Person who controls such Holder or
such other Persons (within the meaning of the Securities Act) (for
purposes of this Section 6(f)(i), a "Holder Indemnified Person"), from
and against, and will reimburse such Holder Indemnified Person with
respect to, any and all claims, actions, demands, losses, damages,
liabilities, costs and expenses (including reasonable costs of
investigation and reasonable legal fees and expenses) ("Indemnifiable
Costs and Expenses") to which such Holder Indemnified Person may become
subject under the Securities Act or otherwise and arise out of or are
based upon (A) violation of securities laws or (B) any untrue statement
or alleged untrue statement of any material fact contained in, or any
omission or alleged omission to state therein a material fact required
to be stated in, any such Registration Statement, any Prospectus
contained therein or any amendment or supplement thereto or necessary
to make the statements contained therein, in light of the circumstances
under which they were made, not misleading; provided, however, that the
Company will not be liable in any such case to the extent that any
costs or expense covered by the preceding clauses (A) or (B) arises out
of or results from any untrue or alleged untrue statement of any
material fact contained in such Registration Statement, any Prospectus
contained therein or any amendment or supplement thereto or any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was so made solely in reliance upon and in substantial conformity with
written information furnished by such Holder Indemnified Person
specifically for use in the preparation of any such Registration
Statement, Prospectus or amendment or supplement thereto.
14
(2) The Company further agrees promptly upon demand
by each Holder Indemnified Person to reimburse each Holder Indemnified
Person for any Holder Indemnifiable Costs and Expenses as they are
incurred by it; provided that if the Company reimburses a Holder
Indemnified Person hereunder for any expenses incurred in connection
with a lawsuit, claim, inquiry or other proceeding or investigation for
which indemnification is sought, such Holder Indemnified Person agrees
to refund such reimbursement of Holder Indemnifiable Costs and Expenses
to the extent it is finally judicially determined that the indemnity
provided for in this Section 6(f)(i) is not applicable to, or the
Company is not otherwise obligated to pay, such Holder Indemnified
Person in accordance with the terms hereof or otherwise. The indemnity,
contribution and expense reimbursement obligation of the Company under
this Section 6(f)(i) shall be in addition to any liability it may
otherwise have. The obligations of the Company hereunder shall survive
the Closing and the termination of any Registration Statement under
which any Registrable Securities were registered the termination of
this Agreement and shall not be extinguished with respect to any Person
because any other Person is not entitled to indemnity or contribution
hereunder.
(ii) Indemnification by Holders of Registrable Securities.
Each Holder whose Registrable Securities are included in a Registration
Statement pursuant to the provisions of this Section 6 will indemnify
and hold harmless the Company and its officers, directors, employees,
partners, stockholders, agents, representatives, and any Person who
controls the Company or any of its subsidiaries or Affiliates (within
the meaning of the Securities Act) (each, a "Company Indemnified
Person"), from and against, and will reimburse such Company Indemnified
Person with respect to, any and all Indemnifiable Costs and Expenses to
which the Company or such Company Indemnified Person may become subject
under the Securities Act or otherwise and which arise out of or result
from any untrue or alleged untrue statement of any material fact
contained in such Registration Statement, any Prospectus contained
therein or any amendment or supplement thereto, or any omission or the
alleged omission to state therein any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
omission or alleged untrue statement or alleged omission was so made
solely in reliance upon and in substantial conformity with written
information furnished by such Holder specifically for use in the
preparation thereof; provided, however, that the liability of any
Holder pursuant to this subsection (ii) shall be limited to an amount
not to exceed the net proceeds received by such Holder pursuant to the
Registration Statement which gives rise to such obligation to
indemnify.
(iii) Conduct of Indemnification Proceedings; Contribution.
(1) Each indemnifying party and indemnified party
under this Section 6(f) shall comply with the procedures set forth in
Section 7(a)(iii) with respect to any indemnity sought pursuant to
this Section 6(f).
(2) Each indemnifying party and indemnified party
under this Section 6(f) also agrees to comply with the provisions in
Section 7(a)(iv) as they relate to contribution.
15
(g) Reporting Requirements Under the Exchange Act. The Company shall
use its commercially reasonable efforts to make publicly available and available
to the Holders, pursuant to Rule 144, such information as is necessary to enable
the Holders to make sales of Registrable Securities pursuant to that Rule. The
Company shall use its commercially reasonable efforts to file timely with the
SEC all documents and reports required of the Company under the Exchange Act.
The Company shall furnish to any Holder, upon request, a written statement
executed on behalf of the Company as to compliance with the current public
information requirements of Rule 144. In addition, the Company will provide to
any Holder of a Registrable Security, or any potential purchaser of a
Registrable Security, upon any such Person's reasonable request, the information
required by paragraph (d)(4) of Rule 144A.
(h) Stockholder Information. The Company may require each seller of
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding such seller and the distribution of
such securities as the Company or the Managing Underwriter may from time to time
reasonably request in writing.
7. Miscellaneous.
(a) Indemnification. In addition, to any indemnification provided
elsewhere in this Agreement, the parties hereto agree as follows:
(i) Company Indemnification.
(1) The Company will indemnify and hold harmless, to
the fullest extent permitted by law, but without duplication, the
Purchaser, including any managed or advised accounts and any investment
advisor or agent therefor, and their respective, officers, directors,
employees, partners, representatives, agents, and each Person who
controls the Company and each of its Affiliates within the meaning of
the Securities Act) (each of the foregoing Persons being a "Purchaser
Indemnified Person"), from and against any and all Indemnifiable Costs
and Expenses to which such Purchaser Indemnified Person may become
subject under the Securities Act or otherwise arising out of or based
in any manner upon any breach by the Company of any its
representations, warranties or covenants contained in the Agreement or
in any agreement, instrument or document delivered by the Company
hereunder.
(2) The obligations of the Company hereunder shall
survive the Closing and any repurchase, conversion, exchange or
transfer of the Shares, the Warrants and the Warrant Shares and the
termination of this Agreement and shall not be extinguished with
respect to any Person because any other Person is not entitled to
indemnity or contribution hereunder.
(ii) Purchaser Indemnification. The Purchaser agrees and
covenants to hold harmless and indemnify each Company Indemnified
Person, from and against any and all Indemnifiable Costs and Expenses
to which such Company Indemnified Person may become subject under the
Securities Act or otherwise which arises out of or is based in any
manner upon any breach by the Purchaser of any its representations,
warranties or covenants contained in the Agreement or in any agreement,
instrument or document delivered by the Purchaser hereunder.
16
(iii) Conduct of Indemnification Proceedings. Promptly after
receipt by a party indemnified pursuant to the provisions of paragraph
(i) or (ii) of this Section 7(a) or paragraph (i) or (ii) of Section
6(f) of notice of the commencement of any action involving the subject
matter of the foregoing indemnity provisions, such indemnified party
will, if a claim thereof is to be made against the indemnifying party
pursuant to the provisions of paragraph (i) or (ii) of this Section
7(a) or paragraph (i) or (ii) of Section 6(f), notify the indemnifying
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to an indemnified party otherwise than under paragraph (i) or (ii)
of this Section 7(a) or paragraph (i) or (ii) of Section 6(f), and
shall not relieve the indemnifying party from liability under this
Section 7(a) or Section 6(f) unless such indemnifying party is
materially prejudiced by such omission. In case such action is brought
against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party shall have the right
to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party
pursuant to the provisions of such paragraph (i) or (ii) of this
Section 7(a) or paragraph (i) or (ii) of Section 6(f) for any legal or
other expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall be liable to an indemnified
party for any settlement of any action or claim without the consent of
the indemnifying party. No indemnifying party will consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect to
such claim or litigation and no settlement can have non-monetary
remedies.
17
(iv) Contribution. If the indemnification provided for in
subsection (i) or (ii) of this Section 7(a) or in subsection (i) or
(ii) of Section 6(f) is held by a court of competent jurisdiction to be
unavailable to a party to be indemnified with respect to any
Indemnifiable Costs and Expenses, then each indemnifying party under
any such subsection, in lieu of indemnifying such indemnified party
thereunder, hereby agrees to contribute to the amount paid or payable
by such indemnified party as a result of Indemnifiable Costs and
Expenses, in such proportion as is appropriate to reflect the relative
fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions,
acts, facts matters or circumstances which resulted in such
Indemnifiable Costs and Expenses, as well as any other relevant
equitable considerations. To the extent applicable to Section 6(f)
hereof, the relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution hereunder from any Person who was not guilty of such
fraudulent misrepresentation.
(b) Entire Agreement; Survival of Provisions. This Agreement
constitutes the entire agreement of the parties with respect to the transactions
contemplated hereby and supersedes all prior agreements and understandings with
respect thereto, whether written or oral. All of the covenants of the parties
made herein shall remain operative and in full force and effect pursuant to
their respective terms regardless of acceptance of the Securities and the
Warrant Shares, and payment therefor. The representations and warranties set
forth herein shall survive the execution and delivery of this Agreement until
the first anniversary of the date hereof (the "Expiration Date"), and shall in
no way be affected by any investigation of the subject matter thereof made by or
on behalf of the Purchaser or the Company. Notwithstanding the preceding
sentence, any representation or warranty in respect of which an indemnity may be
sought hereof shall survive the time at which it would otherwise terminate
pursuant to the preceding sentence, if a claim for indemnification shall have
been given to the party against whom such indemnity may be sought prior to the
Expiration Date. The representations, warranties, agreements and covenants made
in the Agreement shall be deemed to have been relied upon by the parties hereto.
(c) No Waiver; Modifications in Writing. No failure or delay by a party
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. Except as otherwise expressly provided herein with
respect to any right of indemnification, the remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to any
party at law or in equity or otherwise. No waiver of or consent to any departure
by a party from any provision of this Agreement shall be effective unless signed
in writing by the parties entitled to the benefit thereof. No amendment,
modification or termination of any provision of this Agreement shall be
effective unless signed in writing by all parties. Any amendment, supplement or
modification of or to any provision of this Agreement, any waiver of any
provision of this Agreement, and any consent to any departure from the terms of
any provision of this Agreement, shall be effective only in the specific
instance and for the specific purpose for which made or given.
18
(d) Notices. All notices, demands and other communications provided for
hereunder shall be in writing, shall be given by registered or certified mail,
return receipt requested, on the date sent by telecopy with electronic
confirmation of such transmission, the business day next following deposit with
a courier service for overnight delivery with written confirmation of such
delivery or upon personal delivery, addressed to the parties, as follows:
If to the Company, to:
Startech Environmental Corporation
00 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx Esq.
Fax: (000) 000-0000
If to the Purchaser, to:
Financial Alchemy, LLC
00000 Xxxxxx Xxx #0000
Xxxxxx, XX 00000
000-000-0000
Attention: Xxxx Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
0000 Xxxxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Fax: (000) 000-0000
or to such other address as any party shall designate in writing in compliance
with the provisions of this Section 7(d).
(e) Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same Agreement.
(f) Binding Effect; Assignment. The rights and obligations of the
parties under this Agreement may not be assigned or otherwise transferred to any
other person, without the prior written consent of the other party hereto;
provided that a Purchaser may assign or otherwise transfer the Shares to any of
its Affiliates without obtaining any such consent, but only if such Affiliate:
(i) agrees to be bound by the terms of this Agreement; (ii) is, at the time of
such transfer, an "accredited Investor" and provides a fully completed Investor
Questionnaire and such other written certification as the Company may reasonably
require as to the transferee's status as an "accredited investor"; and (iii)
such transfer to any such transferee does not violate federal or state
19
securities laws and counsel for transferee, at the Company's request, provides
and opinion of counsel as to the same. Except as expressly provided in this
Agreement, this Agreement shall not be construed so as to confer any right or
benefit upon any person other than the parties to this Agreement, their
respective permitted heirs, representatives, executors, successors and assigns,
each Company Indemnified Person and each Purchaser Indemnified Person. This
Agreement shall be binding upon and shall inure to the benefit of the Company,
the Purchaser and their respective permitted heirs, representatives, executors,
successors and assigns.
(g) Governing Law. This Agreement shall be deemed to be a contract made
under and shall be governed by and construed in accordance with the internal
laws of the State of Connecticut without reference to the principles of conflict
of laws.
(h) Consent to Jurisdiction and Service of Process. Any suit, action or
proceeding arising out of or relating to the Agreement or the transactions
contemplated hereby may be instituted in any Federal court situated in the State
of Connecticut or any state court of the State of Connecticut, and each party
agrees not to assert, by way of motion, as a defense or otherwise, in any such
suit, action or proceeding, any claim that it is not subject personally to the
jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that the Agreement or the subject matter hereof or thereof may not be
enforced in or by such court. Each party further irrevocably submits to the
jurisdiction of such court in any such suit, action or proceeding. Any and all
service of process and any other notice in any such suit, action or proceeding
shall be effective against any party if given personally or by registered or
certified mail, return receipt requested if sent to such party at the address
for such party set forth in Section 7(d) hereof, or by any other means of mail
that requires a signed receipt, postage fully prepaid, mailed to such party as
herein provided. Nothing herein contained shall be deemed to affect the right of
any party to serve process in any manner permitted by law or to commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction.
(i) Severability. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by law, the parties hereto waive any
provision of law that renders any such provision prohibited or unenforceable in
any respect.
(j) Headings. The Article, Section and subsection headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
20
(k) Expenses. Each party shall bear its own fees, costs and expenses in
connection with the execution, delivery and performance of the Agreement.
(l) Waiver of Jury Trial. TO THE EXTENT THEY MAY LEGALLY DO SO, THE
PARTIES HERETO EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION, CAUSE OF ACTION OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS
AGREEMENT OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE
DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT OR THE
TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. TO
THE EXTENT THEY MAY LEGALLY DO SO, THE PARTIES HERETO AGREE THAT ANY SUCH CLAIM,
DEMAND, ACTION, CAUSE OF ACTION OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION 7(m) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY
JURY.
(m) Publicity. The parties agree that no public release or announcement
concerning the Agreement or the transactions contemplated hereby shall be made
without advance review and approval by each party hereto, except as otherwise
required by applicable law, and which review and approval shall not be
unreasonably withheld or delayed.
(n) Enforcement. The Purchaser acknowledges that the Company will be
irreparably damaged if the provisions of this Agreement applicable to the
Purchaser are not specifically enforced. If the Purchaser shall default in any
of its obligations under this Agreement or if any representation or warranty
made by or on behalf of the Purchaser in this Agreement or in any certificate,
report or other instrument delivered under or pursuant to any term hereof or
thereof shall be untrue or misleading as of the date made, the Company may
proceed to protect and enforce its rights by suit in equity or action at law
(without the posting of any bond and without proving that damages would be
inadequate), whether for the specific performance of any term contained in this
Agreement, injunction against the breach of any such term or in furtherance of
the exercise of any power granted in this Agreement, or to enforce any other
legal or equitable right of the Company or to take any one of more of such
actions. The Company shall be permitted to enforce specifically the terms and
provisions hereof in any court of the United States or any state thereof or any
other court having jurisdiction, this being in addition to any other remedy to
which the Company may be entitled at law or in equity or otherwise.
(o) Further Assurances. Each party shall execute and deliver such
documents, instruments and agreements and take such further actions as may be
reasonably required or desirable to carry out the provisions of this Agreement
and the transactions contemplated hereby, and each of the parties hereto shall
cooperate with each other in connection with the foregoing.
21
(p) Broker's Fee. The Purchaser acknowledges that the Company may pay a
fee to one or more placement agents in respect of the sale of the Securities to
the Purchaser. The Purchaser and the Company hereby agree that the Purchaser
shall not be responsible for such fee and that the Company will indemnify and
hold harmless the Purchaser and each Purchaser/Affiliate against any losses,
claims, damages, liabilities or expenses, joint or several, to which the
Purchaser or Purchaser/Affiliate may become subject with respect to such fee.
Each of the parties hereto hereby represents that, on the basis of any actions
and agreements by it, there are no other brokers or finders entitled to
compensation in connection with the sale of the Securities to the Purchaser.
(q) Force Majeure. Neither party shall be deemed in default of any
provision of this Agreement (other than provisions regarding confidentiality),
to the extent that performance of its obligations or attempts to cure a breach
are materially delayed or prevented by any event reasonably beyond the control
of such party, including, without limitation, war, hostilities, acts of
terrorism, revolution, riot, civil commotion, national emergency, strike,
lockout, unavailability of supplies, epidemic, fire, flood, earthquake, force of
nature, explosion, embargo, or any other Act of God, or any law, proclamation,
regulation, ordinance, or other act or order of any court, government or
governmental agency, provided that such party gives the other party written
notice thereof promptly upon discovery thereof and uses reasonable efforts to
cure or mitigate the delay or failure to perform
[SIGNATURE PAGE FOLLOWS]
22
.
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
-----------------------------------------
By:
------------------------------------
Name:
Title:
Federal Taxpayer Identification Number:
-----------------------------------------
STARTECH ENVIRONMENTAL CORPORATION
By:
------------------------------------
Name:
Title:
.
EXHIBIT A
FORM OF WARRANT AGREEMENT
EXHIBIT B
WIRE TRANSFER INSTRUCTIONS
Wire transfer information for: Startech Environmental Corp.
00 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xx. 00000-0000
Financial Institution: Chase Manhattan Bank
00 Xxx Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
Financial Institution Contact: Branch Manager
(000) 000-0000
FAX: (000) 000-0000
Accounting Number: 699500462165
ABA/Routing Number: 000000000
EXHIBIT C
INVESTOR QUESTIONNAIRE
