REGISTRATION RIGHTS AGREEMENT
Exhibit
10.8
This
Registration Rights Agreement is made and entered into as of October 31,
2007
(as amended, modified or supplemented from time to time, this
“Agreement”) by and between General Environmental Management, Inc., a
Nevada (the “Company”), and Valens U.S. SPV I, LLC (the
“Investor”).
This
Agreement is made pursuant to the Securities Purchase Agreement dated as
of the
date hereof by and between the Company, the Investor, the other Purchasers
and
the LV Administrative Services Corp., as administrative and collateral agent
for
the Purchasers (as amended, restated modified and/or supplemented from time
to
time, the “Purchase Agreement”).
The
Company and the Investor hereby agree as follows:
1.
Definitions. Capitalized terms used and not
otherwise defined herein that are defined in the Purchase Agreement shall
have
the meanings given such terms in the Purchase Agreement. As used in
this Agreement, the following terms shall have the following
meanings:
“Commission”
means the Securities and Exchange Commission.
“Common
Stock” means shares of the Company’s common stock, par value $0.001 per
share.
“Company”
has the meaning given to such term in the Preamble hereto.
“Cut
Back Registration” has the meaning set forth in Section 2(d).
“Effectiveness
Date” means, (i) with respect to the initial Registration Statement
required to be filed in connection with the Notes and the Warrants issued
on the
date hereof, a date no later than one hundred eighty (180) days following
the
date hereof and (ii) with respect to each additional Registration Statement
required to be filed hereunder (if any), including a Cut Back Registration,,
a
date no later than thirty (30) days following the applicable Filing
Date.
“Effectiveness
Period” has the meaning set forth in Section 2(a).
“Event”
has the meaning set forth in Section 2(b).
“Event
Date” has the meaning set forth in Section 2(b).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and any
successor statute.
“Filing
Date” means, with respect to (1) the Registration Statement required to be
filed in connection with the shares of Common Stock issuable to the Holder
upon
(x) conversion of the Notes issued as of the date hereof and (y) exercise
of any
Warrant issued as of the date hereof, the date which is sixty (60) days
following the date hereof (subject to the provisions of Section 2(d) hereof),
(2) the Registration Statement required to be filed in connection with the
shares of Common Stock issuable to the Holder upon exercise of any Warrant
issued after the date hereof, the date which is thirty (30) days after the
issuance of such Warrant and (3) the Registration Statement required to be
filed
in connection with the shares of Common Stock issuable to the Holder as a
result
of adjustments to (x) the Fixed Conversion Price made pursuant to Section
3.6 of
the Notes, or (y) the Exercise Price made pursuant to Section 4 of the Warrant,
or otherwise, thirty (30) days after the occurrence of such event or the
date of
the adjustment of the Fixed Conversion Price or Exercise Price, as
applicable.
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“Holder”
or “Holders” means the Investor or any of its affiliates or transferees
to the extent any of them hold Registrable Securities, other than those
purchasing Registrable Securities in a market transaction.
“Indemnified
Party” has the meaning set forth in Section 5(c).
“Indemnifying
Party” has the meaning set forth in Section 5(c).
“Notes”
has the meaning given to the term in the Purchase Agreement.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Prospectus”
means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted
from a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement,
and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or
deemed
to be incorporated by reference in such Prospectus.
“Purchase
Agreement” has the meaning given to such term in the Preamble
hereto.
“Registrable
Securities” means the shares of Common Stock issuable upon conversion of
the Notes and exercise of the Warrants.
“Registration
Statement” means each registration statement required to be filed
hereunder, including the Prospectus therein, amendments and supplements to
such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference
or
deemed to be incorporated by reference in such registration
statement.
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially
the
same effect as such Rule.
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“Rule
415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially
the
same effect as such Rule.
“Securities
Act” means the Securities Act of 1933, as amended, and any successor
statute.
“Trading
Market” means any of the NASD Over The Counter Bulletin Board, NASDAQ
Capital Market, the NASDAQ Global Market, the American Stock Exchange or
the New
York Stock Exchange.
“Warrants”
means the Common Stock purchase warrants issued in connection with the Purchase
Agreement, whether on the date thereof or thereafter.
2.
Registration.
(a) On
or prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the Registrable Securities for
a
selling stockholder resale offering to be made on a continuous basis pursuant
to
Rule 415. Each Registration Statement shall be on Form S-3 (except if
the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be on another
appropriate form in accordance herewith). The Company shall cause
each Registration Statement to become effective and remain effective as provided
herein. The Company shall use its best efforts to cause each
Registration Statement to be declared effective under the Securities Act
as
promptly as possible after the filing thereof, but in any event no later
than
the Effectiveness Date. The Company shall use its best efforts to
keep each Registration Statement continuously effective under the Securities
Act
until the date which is the earlier date of when (i) all Registrable Securities
covered by such Registration Statement have been sold or (ii) all Registrable
Securities covered by such Registration Statement may be sold immediately
without registration under the Securities Act and without volume restrictions
pursuant to Rule 144(k), as determined by the counsel to the Company pursuant
to
a written opinion letter to such effect, addressed and acceptable to the
Company’s transfer agent and the affected Holders (each, an “Effectiveness
Period”).
(b) If:
(i) the Registration Statement is not filed on or prior to the Filing Date;
(ii)
the Registration Statement is not declared effective by the Commission by
the
Effectiveness Date; (iii) after the Registration Statement is filed with
and
declared effective by the Commission, the Registration Statement ceases to
be
effective (by suspension or otherwise) as to all Registrable Securities to
which
it is required to relate at any time prior to the expiration of the
Effectiveness Period (without being succeeded immediately by an additional
registration statement filed and declared effective) for a period of time
which
shall exceed 30 days in the aggregate per year or more than 20 consecutive
calendar days (defined as a period of 365 days commencing on the date the
Registration Statement is declared effective); or (iv) the Common Stock is
not
listed or quoted, or is suspended from trading on any Trading Market for
a
period of three (3) consecutive Trading Days (provided the Company shall
not
have been able to cure such trading suspension within 30 days of the notice
thereof or list the Common Stock on another Trading Market); (any such failure
or breach being referred to as an “Event,” and for purposes of clause (i) or
(ii) the date on which such Event occurs, or for purposes of clause (iii)
the
date which such 30 day or 20 consecutive day period (as the case may be)
is
exceeded, or for purposes of clause (iv) the date on which such three (3)
Trading Day period is exceeded, being referred to as “Event Date”), then
until the applicable Event is cured, the Company shall pay to each Holder
an
amount in cash, as liquidated damages and not as a penalty, equal to 2.0%
for
each thirty (30) day period (prorated for partial periods) on a daily basis
of
the original principal amount of the Note. While such Event
continues, such liquidated damages shall be paid not less often than each
thirty
(30) days. Any unpaid liquidated damages as of the date when an Event
has been cured by the Company shall be paid within three (3) days following
the
date on which such Event has been cured by the Company.
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(c) Within
three (3) business days of the Effectiveness Date, the Company shall cause
its
counsel to issue a blanket opinion in the form attached hereto as Exhibit
A, to
the transfer agent stating that the shares are subject to an effective
registration statement and can be reissued free of restrictive legend upon
notice of a sale by the Investor and confirmation by the Investor that it
has
complied with the prospectus delivery requirements, provided that the
Company has not advised the transfer agent orally or in writing that the
opinion
has been withdrawn. Copies of the blanket opinion required by this Section
2(c)
shall be delivered to the Investor within the time frame set forth
above.
(d) Notwithstanding
the other provisions of this Agreement, if at any time the SEC takes the
position that the offering of some or all of the Registrable Securities in
a
Registration Statement is not eligible to be made on a delayed or continuous
basis under the provisions of Rule 415, the Company shall (i) remove from
the
Registration Statement such portion of the Registrable Securities (the “Cut Back
Shares”) and/or (ii) agree to such restrictions and limitations on the
registration and resale of the Registrable Securities as the SEC may require
to
assure the Company’s compliance with the requirements of Rule 415 (collectively,
the “SEC Restrictions”). Any cut-back imposed pursuant to this Section 2(d)
shall be allocated among the Investor and any other selling security holder
holding shares that are not eligible to be made on a delayed or continuous
basis
under the provisions of Rule 415, on a pro-rata basis, unless the SEC
Restrictions otherwise require. The Company shall file a Registration
Statement covering the Cut Back Shares (a "Cut Back Registration") within
thirty
(30) days after the date on which the SEC declares the initial Registration
Statement effective, or April 30, 2008 which ever date is earlier, as the
SEC
may mandate (the "Cut Back Filing Date") and shall cause such Registration
Statement to become effective by the applicable Effectiveness
Date. No damages shall accrue on or as to any Cut Back Shares unless
and until the Company has failed to meet the Cut Back Filing Date or the
applicable Effectiveness Date.
3.
Registration Procedures. If and whenever the
Company is required by the provisions hereof to effect the registration of
any
Registrable Securities under the Securities Act, the Company will, as
expeditiously as possible:
(a) prepare
and file with the Commission a Registration Statement with respect to such
Registrable Securities, respond as promptly as possible to any comments received
from the Commission, and use its best efforts to cause such Registration
Statement to become and remain effective for the Effectiveness Period with
respect thereto, and promptly provide to the Investor copies of all filings
and
Commission letters of comment relating thereto and before filing a Registration
Statement or Prospectus or any amendments or supplements thereto, furnish
to the
Investor copies of all such
documents proposed to be filed, including documents incorporated by reference
in
the Prospectus and, if requested by the Investor, the exhibits incorporated
by
reference, and the Investor shall have the opportunity
to object to
any information pertaining to itself that is contained therein and the
Company will make the corrections reasonably requested by the
Investor with respect to
such information prior to filing any Registration Statement or amendment
thereto
or any Prospectus or any supplement thereto;
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(b) prepare
and file with the Commission such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as
may be
necessary to comply with the provisions of the Securities Act with respect
to
the disposition of all Registrable Securities covered by such Registration
Statement and to keep such Registration Statement effective until the expiration
of the Effectiveness Period applicable to such Registration
Statement;
(c) furnish
to the Investor such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus and any
amendments and supplements to the Registration Statement and the Prospectus)
and
such other documents as the Investor reasonably may request to facilitate
the
public sale or disposition of the Registrable Securities covered by such
Registration Statement;
(d) use
its best efforts to register or qualify the Investor’s Registrable Securities
covered by such Registration Statement under the securities or “blue sky” laws
of such jurisdictions within the United States as the Investor may reasonably
request and do any and all other acts and things which may be reasonably
necessary or advisable to enable the Investor to consummate the disposition
in
such jurisdiction of the Registrable Securities, provided,
however, that the Company shall not for any such purpose be required
to
qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service
of
process in any such jurisdiction;
(e) immediately
notify the Investor 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 contained 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, and, at the request of the Investor, the Company
shall
prepare a supplement or amendment to such Prospectus so that, as thereafter
delivered to the purchasers of Registrable Securities, such Prospectus shall
not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statement therein
not misleading;
(f) make
available for inspection by the Investor and any attorney, accountant or
other
agent retained by the Investor, all publicly available, non-confidential
financial and other records, pertinent corporate documents and properties
of the
Company, and cause the Company’s officers, directors and employees to supply all
publicly available, non-confidential information reasonably requested by
the
attorney, accountant or agent of the Investor;
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(g) provide
a transfer agent and registrar for all such Registrable Securities not later
than the effective date of such Registration Statement;
(h) if
requested, cause to be delivered, immediately prior to the effectiveness
of the
Registration Statement, letters from the Company’s independent certified public
accountants addressed to the Investor (unless the Investor does not provide
to
such accountants the appropriate representation letter required by rules
governing the accounting profession) stating that such accountants are
independent public accountants within the meaning of the Securities Act and
the
applicable rules and regulations adopted by the Commission thereunder, and
otherwise in customary form and covering such financial and accounting matters
as are customarily covered by letters of the independent certified public
accountants delivered in connection with primary or secondary underwritten
public offerings, as the case may be;
(i) at
all times after the Company has filed a Registration Statement with the
Commission pursuant to the requirements of either the Securities Act or the
Exchange Act, the Company shall file all reports required to be filed by
it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder, and take such further action as the
Investor may reasonably request, all to the extent required to enable the
Investor to be eligible to sell Registrable Securities pursuant to Rule 144
(or
any similar rule then in effect); and
(j) notify
the Holder if the Company receives a comment, verbal or written, from the
SEC to
the effect that the offering of some or all of the Registrable Securities
cannot
be made on a delayed or continuous basis under the provisions of Rule 415
and
provide the Holder’s counsel an opportunity to comment upon the Company’s
proposed response to such comment.
4.
Registration Expenses. All expenses relating
to the Company’s compliance with Sections 2 and 3 hereof, including, without
limitation, all registration, filing and listing application fees, costs
of
distributing any prospectuses and supplements thereto, printing expenses,
fees
and disbursements of counsel and independent public accountants for the Company,
fees and expenses (including counsel fees) incurred in connection with complying
with state securities or “blue sky” laws, fees of the NASD, transfer taxes, fees
of transfer agents and registrars, fees of, and disbursements incurred by,
one
counsel for the Holders are called “Registration Expenses.” All selling
commissions applicable to the sale of Registrable Securities, including any
fees
and disbursements of any special counsel to the Holders beyond those included
in
Registration Expenses, are called “Selling Expenses.” The Company
shall only be responsible for all Registration Expenses. The
obligation of the Company to bear the expenses
described above shall apply irrespective of whether a
registration, becomes effective, is withdrawn or suspended, is converted
to
another form of registration and irrespective of when any of the foregoing
shall
occur.
5.
Indemnification.
(a) In
the event of a registration of any Registrable Securities under the Securities
Act pursuant to this Agreement, the Company will indemnify and hold harmless
each Holder, and its officers, directors and each other person, if any, who
controls such Holder within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such Holder,
or such persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement under
which such Registrable Securities were registered under the Securities Act
pursuant to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or arise out of
or
are based upon 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 any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or applicable “blue sky” laws, and will
reimburse such Holder, and each such person for any legal or other expenses
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case if and to the extent that any
such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so
made in
conformity with information furnished by or on behalf of the Investor or
any
such person in writing specifically for use in any such document.
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(b) In
the event of a registration of the Registrable Securities under the Securities
Act pursuant to this Agreement, the Investor will indemnify and hold harmless
the Company, and its officers, directors and each other person, if any, who
controls the Company within the meaning of the Securities Act, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or such persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact which was furnished in writing by the Investor
to
the Company expressly for use in (and such information is contained in) the
Registration Statement under which such Registrable Securities were registered
under the Securities Act pursuant to this Agreement, any preliminary Prospectus
or final Prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon 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, and will reimburse the Company and each
such
person for any reasonable legal or other expenses incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action, provided, however, that the Investor will be liable in any
such case if and only to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished in writing to the Company by or on behalf of the Investor specifically
for use in any such document. Notwithstanding the provisions of this
paragraph, the Investor shall not be required to indemnify any person or
entity
in excess of the amount of the aggregate net proceeds received by the Investor
in respect of Registrable Securities in connection with any such registration
under the Securities Act.
(c) Promptly
after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified Party”) of notice of the commencement of any action, such
Indemnified Party shall, if a claim for indemnification in respect thereof
is to
be made against a party hereto obligated to indemnify such Indemnified Party
(an
“Indemnifying Party”), notify the Indemnifying Party in writing thereof,
but the omission so to notify the Indemnifying Party shall not relieve it
from
any liability which it may have to such Indemnified Party other than under
this
Section 5(c) and shall only relieve it from any liability which it may have
to
such Indemnified Party under this Section 5(c) if and to the extent the
Indemnifying Party is prejudiced by such omission. In case any such action
shall
be brought against any Indemnified Party and it shall notify the Indemnifying
Party of the commencement thereof, the Indemnifying Party shall be entitled
to
participate in and, to the extent it shall wish, to assume and undertake
the
defense thereof with counsel satisfactory to such Indemnified Party, and,
after
notice from the Indemnifying Party to such Indemnified Party of its election
so
to assume and undertake the defense thereof, the Indemnifying Party shall
not be
liable to such Indemnified Party under this Section 5(c) for any legal expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof; if the Indemnified Party retains its own counsel, then the Indemnified
Party shall pay all fees, costs and expenses of such counsel, provided,
however, that, if the defendants in any such action include both
the
Indemnified Party and the Indemnifying Party and the Indemnified Party shall
have reasonably concluded that there may be reasonable defenses available
to it
which are different from or additional to those available to the Indemnifying
Party or if the interests of the Indemnified Party reasonably may be deemed
to
conflict with the interests of the Indemnifying Party, the Indemnified Party
shall have the right to select one separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with
the
reasonable expenses and fees of such separate counsel and other expenses
related
to such participation to be reimbursed by the Indemnifying Party as
incurred.
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(d) In
order to provide for just and equitable contribution in the event of joint
liability under the Securities Act in any case in which either (i) the Investor,
or any officer, director or controlling person of the Investor, makes a claim
for indemnification pursuant to this Section 5 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 in such case notwithstanding
the
fact that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of the
Investor or such officer, director or controlling person of the Investor
in
circumstances for which indemnification is provided under this Section 5;
then,
and in each such case, the Company and the Investor 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 the Investor
is
responsible only for the portion represented by the percentage that the public
offering price of its securities offered by the Registration Statement bears
to
the public offering price of all securities offered by such Registration
Statement, provided, however, that, in any such case, (A) the
Investor will not be required to contribute any amount in excess of the public
offering price of all such securities offered by it pursuant to such
Registration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of
such
fraudulent misrepresentation.
(e) The
indemnification provided for under this Agreement shall remain in full force
and
effect regardless of any investigation made by or on behalf of the indemnified
party or any officer, director or controlling Person of such indemnified
party
and shall survive the transfer of securities.
6.
Representations and Warranties.
(a) The
Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act and, except with respect to certain matters which the Company has disclosed
to the Investor on Schedule 4.21 to the Purchase Agreement, the Company
has timely filed all proxy statements, reports, schedules, forms, statements
and
other documents required to be filed by it under the Exchange
Act. The Company has filed (i) its Annual Report on Form 10-KSB for
its fiscal year ended December 31, 2006 and (ii) its Quarterly Report on
Form
10-QSB for the fiscal quarters ended March 31, 2007 and June 30, 2007
(collectively, the “SEC Reports”). Each SEC Report was, at the time
of its filing, in substantial compliance with the requirements of its respective
form and none of the SEC Reports, nor the financial statements (and the notes
thereto) included in the SEC Reports, as of their respective filing dates,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary 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 as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission or other applicable rules and regulations with respect
thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles (“GAAP”) applied on a
consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the
case
of unaudited interim statements, to the extent they may not include footnotes
or
may be condensed) and fairly present in all material respects the financial
condition, the results of operations and the cash flows of the Company and
its
subsidiaries, on a consolidated basis, as of, and for, the periods presented
in
each such SEC Report.
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(b) The
Common Stock is listed or quoted, as applicable, for trading on the NASDAQ
Over
The Counter Bulletin Board and satisfies all requirements for the continuation
of such listing or quotation, as applicable, and the Company shall do all
things
necessary for the continuation of such listing or quotation, as
applicable. The Company has not received any notice that its Common
Stock will be delisted from or no longer be quoted on, as applicable, the
NASDAQ
Over The Counter Bulletin Board (except for prior notices which have been
fully
remedied) or that the Common Stock does not meet all requirements for the
continuation of such listing or quotation, as applicable.
(c) Neither
the Company, nor any of its affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security
or
solicited any offers to buy any security under circumstances that would cause
the offering of the Securities pursuant to the Purchase Agreement to be
integrated with prior offerings by the Company for purposes of the Securities
Act which would prevent the Company from selling the Common Stock pursuant
to
Rule 506 under the Securities Act, or any applicable exchange-related
stockholder approval provisions, nor will the Company or any of its affiliates
or subsidiaries take any action or steps that would cause the offering of
the
Securities to be integrated with other offerings (other than such concurrent
offering to the Investor).
(d) The
Warrants and the shares of Common Stock that the Investor may acquire pursuant
to the Warrants are all restricted securities under the Securities Act as
of the
date of this Agreement. The Company will not issue any stop transfer
order or other order impeding the sale and delivery of any of the Registrable
Securities at such time as such Registrable Securities are registered for
public
sale or an exemption from registration is available, except as required by
federal or state securities laws.
(e) The
Company understands the nature of the Registrable Securities issuable upon
the
conversion of each Note and exercise of each Warrant and recognizes that
the
issuance of such Registrable Securities may have a potential dilutive
effect. The Company specifically acknowledges that its obligation to
issue the Registrable Securities is binding upon the Company and enforceable
regardless of the dilution such issuance may have on the ownership interests
of
other shareholders of the Company.
(f) Except
for agreements made in the ordinary course of business, there is no agreement
that has not been filed with the Commission as an exhibit to a registration
statement or to a form required to be filed by the Company under the Exchange
Act, the breach of which could reasonably be expected to have a material
and
adverse effect on the Company and its subsidiaries, or would prohibit or
otherwise interfere with the ability of the Company to enter into and perform
any of its obligations under this Agreement in any material
respect.
(g) The
Company will at all times have authorized and reserved a sufficient number
of
shares of Common Stock for the full conversion of the Notes and exercise
of the
Warrants.
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(h) The
Company shall provide written notice to each Holder of (i) the occurrence
of
each Discontinuation Event (as defined below) and (ii) the declaration of
effectiveness by the Commission of each Registration Statement required to
be
filed hereunder, in each case within one (1) business day of the date of
each
such occurrence and/or declaration.
7.
Miscellaneous.
(a) Remedies. In
the event of a breach by the Company or by a Holder, of any of their respective
obligations under this Agreement, each Holder or the Company, as the case
may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.
(b) No
Piggyback on Registrations. Except as and to the extent set
forth on Schedule 7(b) hereto, neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Company in any Registration Statement other than the
Registrable Securities, and the Company shall not after the date hereof enter
into any agreement providing any such right for inclusion of shares in the
Registration Statement to any of its security holders. Except as and
to the extent specified in Schedule 7(b) hereto, the Company has not
previously entered into any agreement granting any registration rights with
respect to any of its securities to any person or entity that have not been
fully satisfied.
(c) Compliance. Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with
sales
of Registrable Securities pursuant to any Registration Statement.
(d) Discontinued
Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of
the
occurrence of a Discontinuation Event (as defined below), such Holder will
forthwith discontinue disposition of such Registrable Securities under the
applicable Registration Statement until such Holder’s receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until
it is
advised in writing (the “Advice”) by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed
to be
incorporated by reference in such Prospectus or Registration
Statement. The Company may provide appropriate stop orders to enforce
the provisions of this paragraph. For purposes of this Agreement, a
“Discontinuation Event” shall mean (i) when the Commission notifies the Company
whether there will be a “review” of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company
shall
provide true and complete copies thereof and all written responses thereto
to
each of the Holders); (ii) any request by the Commission or any other Federal
or
state governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance
by the
Commission of any stop order suspending the effectiveness of such Registration
Statement covering any or all of the Registrable Securities or the initiation
of
any Proceedings for that purpose; (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and/or (v) the occurrence of any event or passage of time that makes
the financial statements included in such Registration Statement ineligible
for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein
by
reference untrue in any material respect or that requires any revisions to
such
Registration Statement, Prospectus or other documents so that, in the case
of
such Registration Statement or Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
10
(e) Piggy-Back
Registrations. If at any time during the applicable
Effectiveness Period there is not an effective Registration Statement covering
all of the Registrable Securities required to be covered during such
Effectiveness Period and the Company shall determine to prepare and file
with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents relating to equity securities
to
be issued solely in connection with any acquisition of any entity or business
or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall promptly send to each Holder written
notice of such determination and, if within fifteen (15) days after receipt
of
such notice, any such Holder shall so request in writing, the Company shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered, to the extent the Company
may
do so without violating registration rights of others which exist as of the
date
of this Agreement, subject to customary underwriter cutbacks applicable to
all
holders of registration rights and subject to obtaining any required consent
of
any selling stockholder(s) to such inclusion under such registration
statement.
(f) Amendments
and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented,
and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the Holders
of
the then outstanding Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with
respect
to a matter that relates exclusively to the rights of certain Holders and
that
does not directly or indirectly affect the rights of other Holders may be
given
by Holders of at least a majority of the Registrable Securities to which
such
waiver or consent relates; provided, however, that the provisions
of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding
sentence.
(g) Notices. Any
notice or request hereunder may be given to the Company or the Investor at
the
respective addresses set forth below or as may hereafter be specified in
a
notice designated as a change of address under this Section 7(g). Any
notice or request hereunder shall be given by registered or certified mail,
return receipt requested, hand delivery, overnight mail, Federal Express
or
other national overnight next day carrier (collectively, “Courier”) or
telecopy (confirmed by mail). Notices and requests shall be, in the
case of those by hand delivery, deemed to have been given when delivered
to any
party to whom it is addressed, in the case of those by mail or overnight
mail,
deemed to have been given three (3) business days after the date when deposited
in the mail or with the overnight mail carrier, in the case of a Courier,
the
next business day following timely delivery of the package with the Courier,
and, in the case of a telecopy, when confirmed. The address for such
notices and communications shall be as follows:
|
|
If
to the Company:
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|
|
3100
Xxxxxx Xxxxxx, Xxxxx 000
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|
|
Xxxxxx,
XX 00000
|
|
|
Attention: Chief
Financial Officer
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|
|
Facsimile
No.: 909-444-9900
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|
|
with
a copy to:
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xx
Xxxxxx, P.C.
|
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300
Xxxxxx Xxxxxx
|
|
|
Xxx
Xxxxx, XX 00000
|
|
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Attention: Xxxxxxx
Xxxxxxxxx
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Facsimile
No.: 000-000-0000
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11
|
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If
to Investor:
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To
the address set forth under Investor’s name on the signature page
hereto
|
|
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If
to any other Person who is
then
the registered Holder:
|
To
the address of such Holder as it appears in the stock transfer
books of
the Company
|
or
such
other address as may be designated in writing hereafter in accordance with
this
Section 7(g) by such Person.
(h) Successors
and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties
and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent
of
each Holder. Each Holder may assign their respective rights hereunder
in the manner and to the persons and entities as permitted under the Purchase
Agreement.
(i) Execution
and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to
be an
original and, all of which taken together shall constitute one and the same
agreement. In the event that any signature is delivered by facsimile
or electronic transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile or
electronic signature were the original thereof.
(j) Governing
Law, Jurisdiction and Waiver of Jury Trial. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The Company hereby
consents and agrees that the state or federal courts located in the County
of
New York, State of New York shall have exclusion jurisdiction to hear and
determine any Proceeding between the Company, on the one hand, and the Investor,
on the other hand, pertaining to this Agreement or to any matter arising
out of
or related to this Agreement; provided, that the Investor and the Company
acknowledge that any appeals from those courts may have to be heard by a
court
located outside of the County of New York, State of New York, and
furtherprovided, that nothing in this Agreement shall be deemed or
operate to preclude the Investor from bringing a Proceeding in any other
jurisdiction to collect the obligations, to realize on the Collateral or
any
other security for the obligations, or to enforce a judgment or other court
order in favor of the Investor. The Company expressly submits and
consents in advance to such jurisdiction in any Proceeding commenced in any
such
court, and the Company hereby waives any objection which it may have based
upon
lack of personal jurisdiction, improper venue or forum non
conveniens. The Company hereby waives personal service of the
summons, complaint and other process issued in any such Proceeding and agrees
that service of such summons, complaint and other process may be made by
registered or certified mail addressed to the Company at the address set
forth
in Section 7(g) and that service so made shall be deemed completed upon the
earlier of the Company’s actual receipt thereof or three (3) days after deposit
in the U.S. mails, proper postage prepaid. The parties hereto desire
that their disputes be resolved by a judge applying such applicable
laws. Therefore, to achieve the best combination of the benefits of
the judicial system and of arbitration, the parties hereto waive all rights
to
trial by jury in any Proceeding brought to resolve any dispute, whether arising
in contract, tort, or otherwise between the Investor and/or the Company arising
out of, connected with, related or incidental to the relationship established
between then in connection with this Agreement. If either party
hereto shall commence a Proceeding to enforce any provisions of this Agreement,
the Purchase Agreement or any Related Agreement, then the prevailing party
in
such Proceeding shall be reimbursed by the other party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such Proceeding.
12
(k) Cumulative
Remedies. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
(l) Severability. If
any term, provision, covenant or restriction of this Agreement is held by
a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that
may be
hereafter declared invalid, illegal, void or unenforceable.
(m) Headings. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
[Balance
of page intentionally left blank; signature page follows]
13
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
|
a
Nevada
corporation
|
||||
|
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By:
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||
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|
Name:
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|||
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|
Title:
|
|||
| VALENS U.S. SPV I, LLC | ||||
|
By:
|
VALENS
CAPITAL MANAGEMENT, LLC,
its
investment manager
|
|||
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|
By:
|
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||
|
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Name:
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|||
|
|
Title:
Authorized Signatory
|
|||
| Address for Notices: | ||||
|
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330
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, XX 00000
Xttention: Portfolio
Services
Facsimile
No.: 000-000-0000
|
|||
| with copy to: | ||||
| Valens
Capital Management, LLC
330
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Xttention: Portfolio
Services
Facsimile
No.: 000-000-0000
|
||||
14
EXHIBIT
A
____________,
200___
[Continental
Stock Transfer
&
Trust Company
Two
Brxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxxx
Xxxxxxxxx]
|
|
Re:
|
General
Environmental Management, Inc. Registration Statement on Form
SB-2
|
Ladies
and Gentlemen:
As
counsel to General Environmental Management, Inc., a Nevada corporation (the
“Company”), we have been requested to render our opinion to you in
connection with the resale by the individuals or entitles listed on Schedule
A attached hereto (the “Selling Stockholders”), of an aggregate of
__________ shares (the “Shares”) of the Company’s Common
Stock.
A
Registration Statement on Form SB-2 under the Securities Act of 1933, as
amended
(the “Act”), with respect to the resale of the Shares was declared
effective by the Securities and Exchange Commission on
[date]. Enclosed is the Prospectus dated [date]. We
understand that the Shares are to be offered and sold in the manner described
in
the Prospectus.
Based
upon the foregoing, upon request by the Selling Stockholders at any time
while
the registration statement remains effective, it is our opinion that the
Shares
have been registered for resale under the Act and new certificates evidencing
the Shares upon their transfer or re-registration by the Selling Stockholders
may be issued without restrictive legend. We will advise you if the
registration statement is not available or effective at any point in the
future.
|
Very
truly yours,
|
||||
|
[Company
counsel]
|
15
Schedule
A to Exhibit A
|
Selling
Stockholder
|
R/N/O
|
Shares
Being
Offered
|
16
SCHEDULE
7(b)
