EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of the 14th day of April, 1999 by and between VENTURI
TECHNOLOGIES, INC., a Nevada corporation (the "Company") and XXXXXXXX GROUP,
LLC, a Georgia limited liability company (the "Shareholder").
R E C I T A L S:
WHEREAS, the Shareholder is acquiring Two Million Three Hundred Three
Thousand Seven Hundred Thirty-Eight (2,303,738) shares (the "Shares") of the
Company's Series D Convertible Preferred Stock (the "Series D Preferred Stock")
pursuant to that certain Stock Purchase Agreement by and between the Company and
the Shareholder of even date herewith (the "Stock Purchase Agreement"); and
WHEREAS, the Company desires to grant to the Shareholder certain
registration rights relating to the shares of the common stock of the Company,
par value $0.001 per share (the "Common Stock") issuable upon conversion of the
Shares and the Shareholder desires to obtain such registration rights, subject
to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual premises,
representations, warranties and conditions set forth in this Agreement, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. DEFINITIONS AND REFERENCES. For purposes of this Agreement, in
addition to the definitions set forth above and elsewhere herein, the following
terms shall have the following meanings:
(a) The term "Commission" shall mean the Securities and Exchange
Commission and any successor agency.
(b) The terms "register", "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the 1933 Act (as
herein defined) and the declaration or ordering of effectiveness of
such registration statement or document.
(c) For purposes of this Agreement, the term "Registrable Stock"
shall mean (i) any shares of Common Stock issued or issuable upon the
conversion of the Shares, (ii) any shares of Common Stock issued by way
of a stock split, reorganization, merger or consolidation, and (iii)
any Common Stock issued as a dividend on the Shares. For purposes of
this Agreement, any Registrable Stock shall cease to be Registrable
Stock when (v) a registration statement covering such Registrable Stock
has been declared
effective and such Registrable Stock has been disposed of pursuant to
such effective registration statement, (w) such Registrable Stock is
sold pursuant to Rule 144 (or any similar provision then in force)
under the 1933 Act (x) such Registrable Stock is eligible to be sold
pursuant to Rule 144(k) under the 1933 Act, (y) such Registrable Stock
has been otherwise transferred, no stop transfer order affecting such
stock is in effect and the Company has delivered new certificates or
other evidences of ownership for such Registrable Stock not bearing any
legend indicating that such shares have not been registered under the
1933 Act, or (z) such Registrable Stock is sold by a person in a
transaction in which the rights under the provisions of this Agreement
are not assigned.
(d) The term "Holder" shall mean the Shareholder or any transferee
or assignee thereof to whom the rights under this Agreement are
assigned in accordance with Section 10 hereof, PROVIDED that the
Shareholder or such transferee or assignee shall then own the
Registrable Stock.
(e) The term "1933 Act" shall mean the Securities Act of 1933, as
amended.
(f) An "affiliate of such Holder" shall mean a person who controls,
is controlled by or is under common control with a Holder, or the
spouse or children (or a trust exclusively for the benefit of the
spouse and/or children) of a Holder, or, in the case of a Holder that
is a partnership, its partners.
(g) The term "Person" shall mean an individual, corporation,
partnership, trust, limited liability company, unincorporated
organization or association or other entity, including any governmental
entity.
(h) The term "Requesting Holder" shall mean a Holder or Holders of
in the aggregate at least a majority of the Registrable Stock.
(i) References in this Agreement to any rules, regulations or forms
promulgated by the Commission shall include rules, regulations and
forms succeeding to the functions thereof, whether or not bearing the
same designation.
2. DEMAND REGISTRATION.
(a) Commencing on the date hereof, any Requesting Holders may make
a written request to the Company (specifying that it is being made pursuant to
this Section 2) that the Company file a registration statement under the 1933
Act (or a similar document pursuant to any other statute then in effect
corresponding to the 0000 Xxx) covering the registration of Registrable Stock.
In such event, the Company shall (x) within ten (10) days thereafter notify in
writing all other Holders of Registrable Stock of such request, and (y) use its
best efforts to cause to be registered under the 1933 Act all Registrable Stock
that the Requesting Holders and such other Holders have, within forty-five (45)
days after the Company has given such notice, requested be registered.
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(b) If the Requesting Holders intend to distribute the Registrable
Stock covered by their request by means of an underwritten offering, they shall
so advise the Company as a part of their request pursuant to Section 2(a) above,
and the Company shall include such information in the written notice referred to
in clause (x) of Section 2(a) above. In such event, the Holder's right to
include its Registrable Stock in such registration shall be conditioned upon
such Holder's participation in such underwritten offering and the inclusion of
such Holder's Registrable Stock in the underwritten offering to the extent
provided in this Section 2. All Holders proposing to distribute Registrable
Stock through such underwritten offering shall enter into an underwriting
agreement in customary form with the underwriter or underwriters. Such
underwriter or underwriters shall be selected by a majority in interest of the
Requesting Holders and shall be approved by the Company, which approval shall
not be unreasonably withheld; PROVIDED, that all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
such Holders and that any or all of the conditions precedent to the obligations
of such underwriters under such underwriting agreement shall be conditions
precedent to the obligations of such Holders; and PROVIDED FURTHER, that no
Holder shall be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Holder, the Registrable Stock of such
Holder and such Holder's intended method of distribution and any other
representation required by law or reasonably required by the underwriter.
(c) Notwithstanding any other provision of this Section 2 to the
contrary, if the managing underwriter of an underwritten offering of the
Registrable Stock requested to be registered pursuant to this Section 2 advises
the Requesting Holders in writing that in its opinion marketing factors require
a limitation of the number of shares to be underwritten, the Requesting Holders
shall so advise all Holders of Registrable Stock that would otherwise be
underwritten pursuant hereto, and the number of shares of Registrable Stock that
may be included in such underwritten offering shall be allocated among all such
Holders, including the Requesting Holders, in proportion (as nearly as
practicable) to the amount of Registrable Stock requested to be included in such
registration by each Holder at the time of filing the registration statement;
PROVIDED, that in the event of such limitation of the number of shares of
Registrable Stock to be underwritten, the Holders shall be entitled to an
additional demand registration pursuant to this Section 2. If any Holder of
Registrable Stock disapproves of the terms of the underwriting, such Holder may
elect to withdraw by written notice to the Company, the managing underwriter and
the Requesting Holders. The securities so withdrawn shall also be withdrawn from
registration.
(d) Notwithstanding any provision of this Agreement to the
contrary, the Company shall not be required to effect a registration pursuant to
this Section 2 during the period starting with the fourteenth (14th) day
immediately preceding the date of an anticipated filing by the Company of, and
ending on a date ninety (90) days following the effective date of, a
registration statement pertaining to a public offering of securities for account
of the Company; PROVIDED, that the Company shall actively employ in good faith
all reasonable efforts to cause such registration statement to become effective;
and PROVIDED FURTHER, that the Company's estimate of the date of filing such
registration statement shall be made in good faith.
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(e) The Company shall be obligated to effect and pay for a total of
only one (1) registration pursuant to this Section 2, unless the number of
demand registrations permitted shall be increased as provided in Section 2(c)
hereof; PROVIDED, that a registration requested pursuant to this Section 2 shall
not be deemed to have been effected for purposes of this Section 2(e), unless
(i) it has been declared effective by the Commission, (ii) if it is a shelf
registration, it has remained effective for the period set forth in Section
3(b), (iii) the offering of Registrable Stock pursuant to such registration is
not subject to any stop order, injunction or other order or requirement of the
Commission (other than any such action prompted by any act or omission of the
Holders), and (iv) no limitation of the number of shares of Registrable Stock to
be underwritten has been required pursuant to Section 2(c) hereof.
3. OBLIGATIONS OF THE COMPANY. Whenever required under Section 2 to use
its best efforts to effect the registration of any Registrable Stock, the
Company shall, as expeditiously as possible:
(a) prepare and file with the Commission, not later than ninety
(90) days after receipt of a request to file a registration statement with
respect to such Registrable Stock, a registration statement on any form for
which the Company then qualifies or which counsel for the Company shall deem
appropriate and which form shall be available for the sale of such issue of
Registrable Stock in accordance with the intended method of distribution
thereof, and use its best efforts to cause such registration statement to become
effective as promptly as practicable thereafter; PROVIDED that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company will (i) furnish to one (1) counsel selected by the Requesting
Holders copies of all such documents proposed to be filed, and (ii) notify each
such Holder of any stop order issued or threatened by the Commission and take
all reasonable actions required to prevent the entry of such stop order or to
remove it if entered;
(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 keep such registration statement effective for
such period of time as would satisfy the holding period requirements of Rule
144(k) promulgated by the Commission with respect to the Shares or such shorter
period which will terminate when all Registrable Stock covered by such
registration statement has been sold (but not before the expiration of the forty
(40) or ninety (90) day period referred to in Section 4(3) of the 1933 Act and
Rule 174 thereunder, if applicable), and comply with the provisions of the 1933
Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement;
(c) furnish to each Holder and any underwriter of Registrable Stock
to be included in a registration statement copies of such registration statement
as filed and each amendment and supplement thereto (in each case including all
exhibits thereto), the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as such Holder
may reasonably request in order to facilitate the disposition of the Registrable
Stock owned by such Holder;
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(d) use its best efforts to register or qualify such Registrable
Stock under such other securities or blue sky laws of such jurisdictions as any
selling Holder or any underwriter of Registrable Stock reasonably requests, and
do any and all other acts which may be reasonably necessary or advisable to
enable such Holder to consummate the disposition in such jurisdictions of the
Registrable Stock owned by such Holder; PROVIDED that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(d) hereof,
(ii) subject itself to taxation in any such jurisdiction, or (iii) consent to
general service of process in any such jurisdiction;
(e) use its best efforts to cause the Registrable Stock covered by
such registration statement to be registered with or approved by such other
governmental agencies or other authorities as may be necessary by virtue of the
business and operations of the Company to enable the selling Holders thereof to
consummate the disposition of such Registrable Stock;
(f) notify each selling Holder of such Registrable Stock and any
underwriter thereof, at any time when a prospectus relating thereto is required
to be delivered under the 1933 Act (even if such time is after the period
referred to in Section 3(b)), 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 to state any material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances being made not misleading, and prepare a supplement or amendment
to such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Stock, such prospectus will 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 statements therein in light of the circumstances being
made not misleading;
(g) make available for inspection by any selling Holder, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by any such
seller or underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records"), and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Inspector,
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, in connection with such registration statement. Records or other
information which the Company determines, in good faith, to be confidential and
which it notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records or other information is
necessary to avoid or correct a misstatement or omission in the registration
statement or (ii) the release of such Records or other information is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction.
Each selling Holder shall, upon learning that disclosure of such Records or
other information is sought in a court of competent jurisdiction, give notice to
the Company and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of the Records or other information
deemed confidential;
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(h) furnish, at the request of any Requesting Holder, on the date
that such shares of Registrable Stock are delivered to the underwriters for sale
pursuant to such registration or, if such Registrable Stock is not being sold
through underwriters, on the date that the registration statement with respect
to such shares of Registrable Stock becomes effective, (1) a signed opinion,
dated such date, of the legal counsel representing the Company for the purposes
of such registration, addressed to the underwriters, if any, and if such
Registrable Stock is not being sold through underwriters, then to the Requesting
Holders as to such matters as such underwriters or the Requesting Holders, as
the case may be, may reasonably request and as would be customary in such a
transaction; and (2) a letter dated such date, from the independent certified
public accountants of the Company, addressed to the underwriters, if any, and if
such Registrable Stock is not being sold through underwriters, then to the
Requesting Holders and, if such accountants refuse to deliver such letter to
such Holder, then to the Company (i) stating that they are independent certified
public accountants within the meaning of the 1933 Act and that, in the opinion
of such accountants, the financial statements and other financial data of the
Company included in the registration statement or the prospectus, or any
amendment or supplement thereto, comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act, and (ii) covering such
other financial matters (including information as to the period ending not more
than five (5) business days prior to the date of such letter) with respect to
the registration in respect of which such letter is being given as the
Requesting Holders may reasonably request and as would be customary in such a
transaction;
(i) enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of the Registrable Stock to be so
included in the registration statement;
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, but not later than eighteen (18)
months after the effective date of the registration statement, an earnings
statement covering the period of at least twelve (12) months beginning with the
first full month after the effective date of such registration statement, which
earnings statements shall satisfy the provisions of Section 11(a) of the 1933
Act; and
(k) use its best efforts to cause all such Registrable Stock to be
listed on a national securities exchange, Nasdaq, and/or any other securities
exchange on which similar securities issued by the Company are then listed or
traded.
The Company may require each selling Holder of Registrable Stock as to
which any registration is being effected to furnish to the Company such
information regarding the distribution of such Registrable Stock as the Company
may from time to time reasonably request in writing.
Each Holder agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 3(f) hereof, such
Holder will forthwith discontinue disposition of Registrable Stock pursuant to
the registration statement covering such Registrable
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Stock until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(f) hereof, and, if so directed by the
Company, such Holder will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such Holder's possession, of
the prospectus covering such Registrable Stock current at the time of receipt of
such notice. In the event the Company shall give any such notice, the Company
shall extend the period during which such registration statement shall be
maintained effective pursuant to this Agreement (including the period referred
to in Section 3(b)) by the number of days during the period from and including
the date of the giving of such notice pursuant to Section 3(f) hereof to and
including the date when each selling Holder of Registrable Stock covered by such
registration statement shall have received the copies of the supplemented or
amended prospectus contemplated by Section 3(f) hereof.
4. INCIDENTAL REGISTRATION. Commencing on the date hereof, if the
Company determines that it shall file a registration statement under the 1933
Act (other than a registration statement on a Form S-4 or S-8 or filed in
connection with an exchange offer or an offering of securities solely to the
Company's existing stockholders) on any form that would also permit the
registration of the Registrable Stock and such filing is to be on its behalf
and/or on behalf of selling holders of its securities for the general
registration of its common stock to be sold for cash, at each such time the
Company shall promptly give each Holder written notice of such determination
setting forth the date on which the Company proposes to file such registration
statement, which date shall be no earlier than thirty (30) days from the date of
such notice, and advising each Holder of its right to have Registrable Stock
included in such registration. Upon the written request of any Holder received
by the Company no later than twenty (20) days after the date of the Company's
notice, the Company shall use its best efforts to cause to be registered under
the 1933 Act all of the Registrable Stock that each such Holder has so requested
to be registered. If, in the written opinion of the managing underwriter or
underwriters (or, in the case of a non-underwritten offering, in the written
opinion of the placement agent, or if there is none, the Company), the total
amount of such securities to be so registered, including such Registrable Stock,
will exceed the maximum amount of the Company's securities which can be marketed
(i) at a price reasonably related to the then current market value of such
securities, or (ii) without otherwise materially and adversely affecting the
entire offering, then the amount of Registrable Stock to be offered for the
accounts of Holders shall be reduced pro rata to the extent necessary to reduce
the total amount of securities to be included in such offering to the
recommended amount; PROVIDED, that if securities are being offered for the
account of other Persons as well as the Company, such reduction shall not
represent a greater fraction of the number of securities intended to be offered
by Holders than the fraction of similar reductions imposed on such other Persons
other than the Company over the amount of securities they intended to offer.
5. HOLDBACK AGREEMENT-- RESTRICTIONS ON PUBLIC SALE BY HOLDER.
(a) To the extent not inconsistent with applicable law, each Holder
whose Registrable Stock is included in a registration statement agrees not to
effect any public sale or distribution of the issue being registered or a
similar security of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, including a sale pursuant to
Rule 144 under the 1933 Act, during the fourteen (14) days prior to, and during
the ninety (90)
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day period beginning on, the effective date of such registration statement
(except as part of the registration), if and to the extent requested by the
Company in the case of a non-underwritten public offering or if and to the
extent requested by the managing underwriter or underwriters in the case of an
underwritten public offering.
(b) The Company agrees (i) not to effect any public sale or
distribution of any securities similar to those being registered, or any
securities convertible into or exchangeable or exercisable for such securities,
during the fourteen (14) days prior to, and during the ninety (90) day period
beginning on, the effective date of any registration statement in which Holders
are participating (except as part of such registration), if and to the extent
requested by the Holders in the case of a non-underwritten public offering or if
and to the extent requested by the managing underwriter or underwriters in the
case of an underwritten public offering; and (ii) that any agreement entered
into after the date of this Agreement pursuant to which the Company issues or
agrees to issue any securities convertible into or exchangeable or exercisable
for such securities (other than pursuant to an effective registration statement)
shall contain a provision under which holders of such securities agree not to
effect any public sale or distribution of any such securities during the periods
described in (i) above, in each case including a sale pursuant to Rule 144 under
the 1933 Act.
6. EXPENSES OF REGISTRATION. The Company shall bear all expenses
incurred in connection with each registration pursuant to Sections 2 and 4 of
this Agreement, excluding underwriters' discounts and commissions, but
including, without limitation, all registration, filing and qualification fees,
word processing, duplicating, printers' and accounting fees (including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance), exchange listing fees or National
Association of Securities Dealers fees, messenger and delivery expenses, all
fees and expenses of complying with securities or blue sky laws, fees and
disbursements of counsel for the Company. The selling Holders shall bear and pay
the underwriting commissions and discounts applicable to the Registrable Stock
offered for their account in connection with any registrations, filings and
qualifications made pursuant to this Agreement.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify,
to the full extent permitted by law, each Holder, its officers, directors and
agents and each Person who controls such Holder (within the meaning of the 0000
Xxx) against all losses, claims, damages, liabilities and expenses caused by (i)
any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement therein (in case of a prospectus or
preliminary prospectus, in the light of the circumstances under which they were
made) not misleading, (ii) any violation by the Company of the 1933 Act or any
state securities law or any rule or regulation promulgated thereunder, or (iii)
any action or inaction required of the Company in connection with any such
registration statement, prospectus or preliminary prospectus. The Company will
also indemnify any underwriters of the Registrable Stock, their officers and
directors and each Person who
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controls such underwriters (within the meaning of the 0000 Xxx) to the same
extent as provided above with respect to the indemnification of the selling
Holders.
(b) INDEMNIFICATION BY HOLDERS. In connection with any registration
statement in which a Holder is participating, each such Holder will furnish to
the Company in writing such information with respect to such Holder as the
Company reasonably requests for use in connection with any such registration
statement or prospectus and agrees to indemnify, to the extent permitted by law,
the Company, its directors and officers and each Person who controls the Company
(within the meaning of the 0000 Xxx) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged untrue statement
of material fact or any omission or alleged omission of a material fact required
to be stated in the registration statement, prospectus or preliminary prospectus
or any amendment thereof or supplement thereto or necessary to make the
statements therein (in the case of a prospectus or preliminary prospectus, in
the light of the circumstances under which they were made) not misleading, to
the extent, but only to the extent, that such untrue statement or omission is
contained in any information with respect to such Holder so furnished in writing
by such Holder. Notwithstanding the foregoing, the liability of each such Holder
under this Section 7(b) shall be limited to an amount equal to the initial
public offering price of the Registrable Stock sold by such Holder, unless such
liability arises out of or is based on willful misconduct of such Holder.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such Person of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which such Person will claim indemnification or contribution
pursuant to this Agreement and, unless in the reasonable judgment of such
indemnified party, a conflict of interest may exist between such indemnified
party and the indemnifying party with respect to such claim, permit the
indemnifying party to assume the defense of such claims with counsel reasonably
satisfactory to such indemnified party. Whether or not such defense is assumed
by the indemnifying party, the indemnifying party will not be subject to any
liability for any settlement made without its consent (but such consent will not
be unreasonably withheld). Failure by such Person to provide said notice to the
indemnifying party shall itself not create liability except to the extent of any
injury caused thereby. 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 of such claim or litigation. If the
indemnifying party is not entitled to, or elects not to, assume the defense of a
claim, it will not be obligated to pay the fees and expenses of more than one
(1) counsel with respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such indemnified
party and any other such indemnified parties with respect to such claim, in
which event the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels.
(d) CONTRIBUTION. If for any reason the indemnity provided for in
this Section 7 is unavailable to, or is insufficient to hold harmless, an
indemnified party, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such
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losses, claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the indemnified party on the other, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, or
provides a lesser sum to the indemnified party than the amount hereinafter
calculated, in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other but also the relative fault of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations; PROVIDED that each Holder shall not be required to contribute an
amount greater than the difference between the net proceeds received by such
Holder with respect to the sale of any Common Stock and all amounts already
contributed by such Holder with respect to such claims, including, without
limitation, amounts paid for any legal or other fees or expenses incurred by
such Holder. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such indemnifying party or
indemnified parties; and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 7(c), any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
If indemnification is available under this Section 7, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
Sections 7(a) and 7(b) without regard to the relative fault of said indemnifying
party or indemnified party or any other equitable consideration provided for in
this Section 7.
8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's securities on the basis provided in any
underwriting arrangements approved by the Holders entitled hereunder to approve
such arrangements, and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
9. RULE 144. The Company covenants that it will file the reports
required to be filed by it under the 1933 Act and the Securities Exchange Act of
1934, as amended, and the rules and regulations adopted by the Commission
thereunder; and it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Stock without registration under the 1933 Act within the
limitations of the
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exemptions provided by (a) Rule 144 under the 1933 Act, as such Rule may be
amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any Holder, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
10. TRANSFER OF REGISTRATION RIGHTS. The registration rights of any
Holder under this Agreement with respect to any Registerable Stock may be
transferred to any transferee of such Registrable Stock; PROVIDED that such
transfer may otherwise be effected in accordance with applicable securities
laws; PROVIDED FURTHER, that the transferring Holder shall give the Company
written notice at or prior to the time of such transfer stating the name and
address of the transferee and identifying the securities with respect to which
the rights under this Agreement are being transferred; PROVIDED FURTHER, that
such transferee shall agree in writing, in form and substance satisfactory to
the Company, to be bound as a Holder by the provisions of this Agreement; and
PROVIDED FURTHER, that such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by such
transferee is restricted under the 1933 Act. Except as set forth in this Section
10, no transfer of Registrable Stock shall cause such Registrable Stock to lose
such status.
11. MERGERS, ETC. The Company shall not, directly or indirectly, enter
into any merger, consolidation or reorganization in which the Company shall not
be the surviving corporation unless the proposed surviving corporation shall,
prior to such merger, consolidation or reorganization, agree in writing to
assume the obligations of the Company under this Agreement, and for that purpose
references hereunder to "Registrable Stock" shall be deemed to be references to
the securities which the Holders would be entitled to receive in exchange for
Registrable Stock under any such merger, consolidation or reorganization;
PROVIDED, HOWEVER, that the provisions of this Section 11 shall not apply in the
event of any merger, consolidation or reorganization in which the company is not
the surviving corporation if each Holder is entitled to receive in exchange for
its Registrable Stock consideration consisting solely of (i) cash, (ii)
securities of the acquiring corporation which may be immediately sold to the
public without registration under the 1933 Act, or (iii) securities of the
acquiring corporation which the acquiring corporation has agreed to register
within ninety (90) days of completion of the transaction for resale to the
public pursuant to the 1933 Act.
12. NO ADDITIONAL REGISTRATION RIGHTS. Except as otherwise provided in
this Agreement, the Company shall not grant to any Person at any time on or
after the date of this Agreement (i) the right to request the Company to
register any securities of the Company under the 1933 Act that is superior to
the rights granted to the Holders pursuant to this Agreement or (ii) any other
rights that would adversely affect the rights of such Holders to seek
registration of Common Stock hereunder.
13. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the Holders in this Agreement.
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(b) REMEDIES. Each Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive (to the extent permitted by law) the defense in any
action for specific performance that a remedy of law would be adequate.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given unless the Company has obtained the
written consent of the Holders of at least a majority of the Registrable Stock
then outstanding affected by such amendment, modification, supplement, waiver or
departure.
(d) SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties hereto.
Nothing in this Agreement, express or implied, is intended to confer upon any
Person other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
(e) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Georgia
applicable to contracts made and to be performed wholly within that state,
without regard to the conflict of law rules thereof.
(f) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) HEADINGS. The headings in this Agreement are used for
convenience of reference only and are not to be considered in construing or
interpreting this Agreement.
(h) NOTICES. Any notice required or permitted under this Agreement
shall be given in writing and shall be delivered in person or by telecopy or by
overnight courier guaranteeing no later than second business day delivery,
directed to (i) the Company at the address set forth below its signature hereof
or (ii) a Holder at the address of the Shareholder set forth below its signature
hereof. Any party may change its address for notice by giving ten (10) days
advance written notice to the other parties. Every notice or other communication
hereunder shall be deemed to have been duly given or served on the date on which
personally delivered, or on the date actually received, if sent by telecopy or
overnight courier service, with receipt acknowledged.
(i) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired
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thereby, it being intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
(j) ENTIRE AGREEMENT. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(k) ENFORCEABILITY. This Agreement shall remain in full force and
effect notwithstanding any breach or purported breach of, or relating to, the
Stock Purchase Agreement.
(l) RECITALS. The recitals are hereby incorporated in this
Agreement as if fully set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written hereinabove.
VENTURI TECHNOLOGIES, INC.
By: /s/ XXXXXXX XXXXXX
-----------------------------
XXXXXXX XXXXXX
Chairman and CEO
0000 X. Xxxxx Xxxxxx
Xxxx, Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
XXXXXXXX GROUP, LLC
By: /s/ XXXX X. XXXXXXXXX
-----------------------------
Name: XXXX X. XXXXXXXXX
Title: CEO
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
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