EXHIBIT 10.15
EXHIBIT A TO WARRANT
EXHIBIT C TO SECURITIES PURCHASE AGREEMENT
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of April 17, 1997 (this
"Agreement"), by and among QuietPower Systems, Inc., a Delaware corporation (the
"Company"), and the Purchasers appearing on the signature pages hereto under the
heading "Purchasers" (collectively, the "Purchasers") and the assignee of one of
the Purchasers named on the signature pages hereto.
WHEREAS, the Purchasers are simultaneously herewith entering into a
Securities Purchase Agreement (the "Purchase Agreement") with the Company
pursuant to which the Purchasers will acquire warrants (the "Warrants") to
purchase shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), pursuant to a private offering; and
WHEREAS, the Company desires to grant certain registration rights to the
Purchasers with respect to the shares of Common Stock issuable upon exercise of
the Warrants.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
1. Securities Subject to this Agreement; Certain Definitions. For purposes
of this Agreement, "Registrable Securities" shall mean (i) the shares of Common
Stock issuable upon exercise of the Warrants, (ii) any other shares of Common
Stock issued or issuable as a result of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events relating to the shares
described in clause (i) above, and (iii) the Warrants, in each case until such
time as (x) a registration statement covering such Registrable Securities has
been declared effective and such Registrable Securities have been transferred
pursuant to such effective registration statement, (y) such Registrable
Securities are transferred pursuant to Rule 144 under the Securities Act of
1933, as amended (the "Securities Act"), or such other similar law in effect in
any jurisdiction which governs a transfer of Registrable Securities without
registration (such laws governing the transfer of securities without
registration and the registration of securities for public sale being herein
referred to as "Applicable Securities Laws"), or (z) at such time as the
Registrable Securities may be sold pursuant to Rule 144(k) under the Securities
Act. In the event of any merger, reorganization, consolidation, recapitalization
or other change in corporate structure affecting the Common Stock, such
adjustment shall be made in the definition of "Registrable Securities" as is
appropriate in order to prevent any dilution or enlargement of the rights
granted pursuant to this Agreement. Any capitalized term used but not defined
herein shall have the meaning ascribed to such term in the Purchase Agreement.
2. Demand Registration.
(a) Notice. At any time after the earlier of (i) the effective date
of the IPO registration statement, or (ii) one year from the date hereof, any
record holder or holders of an aggregate of more than 33% of the Registrable
Securities (with Warrants being calculated on an as exercised basis) (the
"Requesting Holders") may request the registration of their shares of
Registrable Securities. In the event such a request is made, the Company shall
prepare and file with the Securities and Exchange Commission (the "SEC") a
registration statement under the Securities Act covering the shares of Common
Stock which are the subject of such request and shall use its best efforts to
cause such registration statement to become effective as promptly as practicable
after the date of such initial filing. In addition, upon the receipt of such
request, the Company shall promptly give written notice to all other record
holders of Registrable Securities that such registration is to be effected. The
Company shall include in such registration statement such Registrable Securities
for which it has received written requests by such other record holders within
thirty (30) days after the delivery of the Company's written notice to such
other record holders. The Company shall not be obligated to cause to become
effective more than two registration statements pursuant to which Registrable
Securities are sold under this Section 2(a).
(b) Limitations. At such time as the Registrable Securities may be
registered on Form S-2 or Form S-3, as the case may be (or any similar form or
forms promulgated by the SEC), the holders of Registrable Securities shall have
unlimited rights to request registration of their shares on Form S-2 or Form
S-3, as the case may be, or such similar form, provided that any such
registration of Registrable Securities have an anticipated aggregate offering
price (net of discounts and commissions) of at least $500,000. Registrations
effected on Form S-2 and Form S-3 shall not be counted as demand registrations
pursuant to Section 2(a).
(c) Registration Statement Form. Registrations under this Section 2
shall be on such appropriate registration form of the SEC as shall (i) be
selected by the Company and (ii) permit the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
specified by the Requesting Holders in their request for such registration.
(d) Effective Registration Statement. A registration requested
pursuant to this Section 2 shall not be deemed to have been effected:
(i) unless a registration statement with respect thereto has
become effective; or
(ii) as set forth in Section 2(g); or
(iii) if, after it has become effective, such registration is
interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental
agency or court for any reason.
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(e) Selection of Underwriters. If a requested registration pursuant
to this Section 2 involves an underwritten offering, the managing underwriter(s)
thereof shall be selected by the Requesting Holders and shall be reasonably
acceptable to the Company unless the Company has theretofore sold shares of
Common Stock in an underwritten offering, in which case the managing
underwriter(s) of a requested registration pursuant to this Section 2 shall be
selected by the Company and shall be reasonably acceptable to the Requesting
Holders.
(f) Priority in Requested Registrations. If a requested registration
pursuant to this Section 2 involves an underwritten offering, and the managing
underwriter(s) advises the Company in writing (with a copy provided to each
holder of Registrable Securities requesting registration) that, in its opinion,
the number of Registrable Securities and other securities requested to be
included in such registration including shares of Common Stock of holders who
have piggyback registration rights pursuant to other agreements with the Company
("Other Shares") exceeds the number which can be sold in such offering (within a
price range acceptable to the holders of a majority of the Registrable
Securities requested to be included in such registration), then the Company will
include in such registration prior to the inclusion of any Other Shares, the
number of Registrable Securities requested to be included in such registration
which can be sold in such offering within such price range, and such number
shall be allocated pro rata among all holders of Registrable Securities
requesting registration on the basis of the total number of shares beneficially
owned.
(g) Additional Demand Registration. Notwithstanding any other
provision of this Section 2, if, solely as a result of the operation of Section
2(f), the Company effects the registration of less than all of the Registrable
Securities requested to be registered pursuant to Section 2(a), the Requesting
Holders shall be entitled to request a registration pursuant to Section 2(a) at
any time during the period commencing six (6) months after the most recent
registration effected under Section 2 or Section 3. Any such registration shall
be requested, effected and, in all other respects, in accordance with the terms
of Section 2(a). In addition, the holders of the Registrable Securities will be
entitled to the benefits of Section 2. This provision shall apply successively
if any holder of Registrable Securities continues to hold Registrable Securities
solely as a result of Section 2(f).
3. "Piggyback" Registration.
(a) Notice. If at any time the Company shall determine to proceed
with the actual preparation and filing of a registration statement under the
Securities Act in connection with the proposed offer and sale of any of its
securities by it or any of its securityholders (other than a registration
statement on Form X-0, X-0 or other comparable form), the Company will give
prompt written notice (at least 15 business days before the proposed
registration) of its determination to all record holders of Registrable
Securities. Upon the written request of any holder of Registrable Securities
made within 10 business days after the receipt of any such notice (which request
shall specify the Registrable Securities intended to be disposed of by such
holder and the intended method of disposition thereof), the Company will use its
best efforts to effect
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the registration under the Securities Act of all such Registrable Securities, to
the extent required to permit the disposition (in accordance with the intended
methods thereof) of the Registrable Securities so to be registered; provided,
however, that if at any time after giving written notice of its intention to
register securities and before the effective date of the related registration
statement the Company determines for any reason not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to each holder of Registrable Securities and, (i)
in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses (as
defined hereafter) in connection therewith), without prejudicing the rights of
any holder(s) of Registrable Securities entitled to request that such
registration be effected as a registration under Section 2, and (ii) in the case
of a determination to delay registering, shall be permitted to delay registering
any Registrable Securities, for the same period as the delay in registering such
other securities.
(b) Underwritten Registration. If any such registration shall be
underwritten in whole or in part, the Company may require that the Registrable
Securities requested for inclusion be included in the underwriting on the same
terms and conditions as the securities otherwise being sold through the
underwriters. In the event that in the good faith judgment of the managing
underwriter of such public offering (on a firm commitment basis) the inclusion
of all of the Registrable Securities originally covered by a request for
registration would exceed the number of securities which can be sold by the
Company in such offering, then the Company will include in such registration, to
the extent of the number which the Company is so advised can be sold in such
offering, first, all securities proposed by the Company to be sold for its own
account, second, the Registrable Securities plus those shares of Common Stock
issued pursuant to the DayStar Note Purchase Agreements and those issued to the
Underwriter in the IPO, pro rata among all holders requesting registration on
the basis of the total number of shares beneficially owned by such holders and
third, Other Shares requested to be included in such registration pro rata among
all such holders of Other Shares requesting registration on the basis of the
total number of shares owned by such holders of Other Shares.
4. Holdback Agreements. A Purchaser whose Registrable Securities are
included in a registration statement as part of a firm commitment underwriting
of Common Stock shall agree not to effect any public sale or distribution of
Common Stock, including a sale pursuant to Rule 144 under the Securities Act or
Applicable Securities Laws or in reliance on any other exemption from
registration under the Securities Act or Applicable Securities Laws, during the
ninety (90) day period beginning on the effective date of such registration
statement (except as part of such registration), but only if and to the extent
requested in writing (with reasonable prior written notice) by the
underwriter(s) and only if and to the extent that all executive officers and
directors of the Company enter into similar agreements. Any such agreement shall
be in writing in a form satisfactory to a majority in interest of the Purchasers
participating in such registration. In addition, no Purchaser shall be required
to make any representation or warranty to or agreement with the Company or the
underwriters other than representations, warranties or agreements
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regarding such Purchaser, such Purchaser's Registrable Securities and such
Purchaser's intended method of distribution and any other representation
required by law.
5. Registration Procedure.
(a) If and whenever the Company is required pursuant to Sections 2
or 3 hereof to effect the registration of Registrable Securities under the
Securities Act, the Company will, as soon as practicable:
(i) prepare and file with the SEC a registration statement
with respect to such securities, and use its best
efforts to cause such registration statement to become
and remain effective as promptly as practicable for such
period as may be reasonably necessary to effect the sale
of such securities;
(ii) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus
contained therein as may be necessary to keep such
registration statement effective for such period as may
be reasonably necessary to effect the sale of such
securities, not to exceed twelve months;
(iii) furnish to the securityholders participating in such
registration and to the underwriters of the securities
being registered such number of copies of the
registration statement and each such amendment and
supplement thereto, all exhibits, the preliminary
prospectus and final prospectus and such other documents
as such securityholders may reasonably request in order
to facilitate the public offering of such securities;
(iv) use its best efforts to register or qualify the
securities covered by such registration statement under
such state securities or blue sky laws of such
jurisdictions as such participating holders may
reasonably request, use its best efforts to keep such
registration or qualification in effect for so long as
such registration statement remains in effect, and do
any and all other acts and things necessary or desirable
to enable such holders to consummate the sale of the
respective Registrable Securities owned by such holders,
except that the Company shall not for any purpose be
required to execute a general consent to service of
process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it would not but
for the requirements of this subsection (iv) be
obligated to be so qualified or to consent to general
service
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of process in any such jurisdiction except where
required under blue sky or state securities laws;
(v) notify the securityholders participating in such
registration, promptly after it shall receive notice
thereof, of the time when such registration statement
has become effective or a supplement to any prospectus
forming a part of such registration statement has been
filed;
(vi) notify such holders promptly of any request by the SEC
for the amending or supplementing of such registration
statement or prospectus or for additional information;
(vii) prepare and file with the SEC, any amendments or
supplements to such registration statement or prospectus
which is required under the Securities Act or the rules
and regulations thereunder in connection with the
distribution of Common Stock by such holder;
(viii) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered
with or approved by such other governmental agencies or
authorities as may be necessary to enable the holder(s)
thereof to consummate the disposition of such
Registrable Securities in the United States;
(ix) notify each holder of Registrable Securities covered by
such registration statement, when a prospectus relating
thereto is required to be delivered under the Securities
Act, upon discovery that, or upon the happening of any
event as a result of which, the prospectus includes 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 not misleading
in light of the circumstances under which they were
made, and, at the request of any such holder, promptly
prepare and file with the SEC and furnish to such holder
a reasonable number of copies of any supplement or
amendment as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances
under which they are made;
(x) in the event the offering is an underwritten offering,
use its best efforts to obtain a "cold comfort" letter
from the independent
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public accountants for the Company in customary form and
covering such matters of the type customarily covered by
such letters;
(xi) make generally available to the holders of Registrable
Securities an earnings statement (which need not be
audited) for the twelve months beginning after the
effective date of a registration statement as soon as
reasonably practicable after the end of such period,
which earnings statement shall satisfy Section 11(a) of
the Securities Act;
(xii) advise such holders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of
any stop order by the SEC suspending the effectiveness
of such registration statement or the initiation or
threatening of any proceeding for that purpose and
promptly use its best efforts to prevent the issuance of
any stop order or to obtain its withdrawal if such stop
order should be issued;
(xiii) make available to such holders drafts of the
registration statement, each prospectus or other
information document included therein or filed with the
SEC and each amendment or supplement thereto and make
available for inspection by such holders, any
underwriter participating in any disposition pursuant to
such registration statement, and any attorneys,
accountants or other agents retained by such holders or
such underwriter, all financial and other records,
pertinent corporate documents and properties of the
Company and cause the Company's officers, directors,
employees and independent accountants to supply all
information reasonably requested by such holders,
underwriters, attorneys, accountants or agents in
connection with such registration statement;
(xiv) use its best efforts to cause all such Registrable
Securities to be listed on or quoted on any securities
exchange or national automated quotation system on which
the Common Stock is then traded or quoted; and
(xv) provide and cause to be maintained a transfer agent and
registrar for all such Registrable Securities not later
than the effective date of such registration statement.
(b) The Company may require each Purchaser participating in a
registration hereunder to furnish the Company such information regarding such
Purchaser and the
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distribution of such Registrable Securities as the Company may from time to time
reasonably request in writing and as shall be required by law to effect such
registration.
(c) Notwithstanding anything contained in the Warrants or in this
Agreement, once during any twelve (12) month period after completion of the
Company's IPO and after the expiration of sixty (60) days after the lock-up
period applicable to the Registrable Securities, and for a period not to exceed
forty-five (45) days, the Company shall not be prevented from delaying a
registration statement covering the Registrable Securities pursuant to this
Agreement, at any time when the Company, in its good faith judgment, reasonably
believes that the filing thereof at the time requested, or the offering of
Registrable Securities pursuant thereto, would materially and adversely affect
(i) a bona fide pending or scheduled public offering of the Company's securities
pursuant to a letter of intent entered into prior to delivery of a notice by
Requesting Holders of registration rights under this Agreement or (ii) an
acquisition, merger, recapitalization, consolidation, reorganization or similar
transaction by or of the Company.
6. Expenses.
(a) All fees, costs and expenses of, and incidental to, the
registration of Registrable Securities in a public offering (as specified in
paragraph (b) below) in connection with a registration hereunder, regardless of
whether a registration becomes effective ("Registration Expenses") shall be
borne by the Company.
(b) Registration Expenses shall include, without limitation, all
registration and filing fees, including fees with respect to filings required to
be made with the SEC, the National Association of Securities Dealers, Inc. or
any other regulatory body having jurisdiction over the relevant registration,
and all legal fees and disbursements and other expenses of complying with state
securities or blue sky laws of any jurisdictions in which the securities to be
offered are to be registered and qualified, all word processing, duplicating,
printing, messenger, telephone and delivery expenses, and reasonable fees and
disbursements of counsel and accountants for the Company and one law firm acting
as counsel to the holders of the Registrable Securities.
7. Sales Without Registration.
The Company shall take all actions reasonably necessary to enable
the Purchasers to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such Rule may be amended from time to time, or (b)
any similar rule or regulation hereafter adopted by the SEC including, without
limiting the generality of the foregoing, filing on a timely basis all reports
required to be filed by the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). In the event the Company has gone public under the Applicable
Securities Laws of a jurisdiction other than the United States, then the Company
shall take all actions reasonably necessary to enable the Purchasers to sell
Registrable Securities without registration pursuant to exemptions provided
under such Applicable Securities Laws including, without limiting the generality
of the
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foregoing, the timely filing of reports. Upon the request of any Purchaser, the
Company will deliver to such Purchaser a written statement as to whether it has
complied with such requirements and shall provide such Purchaser with such
publicly filed documents of the Company as are reasonably requested by such
Purchaser in connection with such sale.
8. Indemnification; Contribution.
(a) Indemnification by the Company. In the event of any registration
of any of the Registrable Securities under the Securities Act or any other
Applicable Securities Laws pursuant to this Agreement, the Company will
indemnify and hold harmless each Purchaser participating in the registration
(each, a "Selling Stockholder"), its directors, stockholders, officers and
partners and each underwriter involved in such registration and each other
person, if any, who controls each Selling Stockholder or underwriter within the
meaning of the Securities Act or the Exchange Act or any other Applicable
Securities Laws against any losses, claims, damages or liabilities, joint or
several, to which each Selling Stockholder or its officers, directors,
stockholders or partners or underwriter or controlling person may become subject
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, any preliminary prospectus,
final prospectus or other information document contained in such registration
statement, or any amendment or supplement to such registration statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading. The Company will reimburse such Selling Stockholder, its
officers, directors, stockholders and partners and such underwriter and each
such controlling person for any legal or any other expenses reasonably incurred
by any of them as they are incurred in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable to any Selling Stockholder or its officers,
directors, stockholders or partners, or controlling persons in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or omission made in such registration statement,
preliminary prospectus, final prospectus or other information document, or any
such amendment or supplement thereto, in reliance upon and in conformity with
information furnished to the Company, in writing, by or on behalf of such
Selling Stockholder or its officers, directors, stockholders or partners, or
controlling persons, specifically for use in the preparation of such
registration statement, preliminary prospectus, final prospectus or other
information document or amendment or supplement thereto.
(b) Indemnification by the Selling Stockholders. In the event of any
registration of any of the Registrable Securities under the Securities Act or
any other Applicable Securities Laws pursuant to this Agreement, each Selling
Stockholder will indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed such registration statement, each
underwriter involved in such registration, each other Selling Stockholder and
their respective officers, directors, stockholders and partners and each person,
if any, who
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controls the Company or any such underwriter or Selling Stockholder within the
meaning of the Securities Act or the Exchange Act or any other Applicable
Securities Laws, against any losses, claims, damages or liabilities, to which
the Company, such directors and officers, such underwriter or Selling
Stockholder or its respective officers, directors, stockholders or partners or
controlling persons may become subject, 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 a material fact contained in
any registration statement under which such Registrable Securities were
registered, any preliminary prospectus, final prospectus or other information
document contained in such registration statement, or any amendment or
supplement to such registration statement, and will reimburse the Company, the
underwriters, Selling Stockholders and their respective officers, directors,
stockholders, partners and controlling persons for any legal or any other
expenses reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, damage, liability or action, if the statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of such Selling Stockholder or its
officers, directors, stockholders or partners or controlling persons,
specifically for use in connection with the preparation of such registration
statement, preliminary prospectus, final prospectus or other information
document or any such amendment or supplement thereto; provided, however, that
the obligation to indemnify will be several, not joint and several, among the
Selling Stockholders and the liability of each such Selling Stockholder will be
in proportion to and limited to the proceeds received by it from the sale of
Registrable Securities pursuant to such registration statement.
(c) Conduct of Indemnification Proceeding. Each party entitled to
indemnification under this Section 8 (the "Indemnified Party") shall give notice
to the party or parties required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom;
provided, however, that counsel for the Indemnifying Party, who shall conduct
the defense of such claim or litigation, shall be subject to approval by the
Indemnified Party, or a majority in interest of the Indemnified Parties if there
is more than one Indemnified Party (which approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Agreement unless such failure materially adversely
affects the ability of such Indemnifying Party to defend or settle such claim or
litigation. The Indemnified Party may participate in such defense at its own
expense; provided, however, that the Indemnifying Party shall pay such expense
if (i) representation of such Indemnified Party by counsel retained by the
Indemnifying Party would be inappropriate due to a conflict of interest between
the Indemnified Party and the Indemnifying Party or (ii) the Indemnified Party
is participating in such defense because the Indemnifying Party has failed
promptly to assume such defense and employ counsel. No Indemnifying Party, in
the defense of any such claim or litigation, shall except with the consent of
the Indemnified Party, 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
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respect of such claim or litigation, and no Indemnified Party shall consent to
entry of any judgment or settle such claim or litigation without the prior
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld.
(d) Contribution. If the indemnification provided for in this
Section 8 from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party and Indemnified Party in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations; provided, however, that the
maximum obligation of each Selling Stockholder for contribution relating to a
registration hereunder shall be limited to the proceeds received by it from the
sale of Registrable Securities pursuant to such registration; or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as shall be appropriate to reflect the relative benefits
received by the Indemnifying Party, on the one hand, and the Indemnified Party,
on the other hand, from the sale of the securities covered by such registration.
The relative fault of the Indemnifying Party, on the one hand, and the
Indemnified Party, on the other hand, 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 has been made by, or relates to information
supplied by, such party, and such party's relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The relative
benefits received by the Indemnifying Party, on the one hand, and the
Indemnified Party, on the other hand, shall be deemed to be in the same
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions, but before deducting expenses) received by the
Indemnifying Party bears to the total proceeds (net of underwriting discounts
and commissions, but before deducting expenses) received by the Indemnified
Party. 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 terms of Section 8(c) hereof, any reasonable 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 8(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 Securities Act or under the provisions of any Applicable Securities
Laws) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
If indemnification is available under this Section 8, the
Indemnifying Party shall indemnify each Indemnified Party to the full extent
provided in Sections 8(a) and (b) hereof
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without regard to the relative fault of said Indemnifying Party or Indemnified
Party or any other equitable consideration provided for in this Section 8(d).
(e) Certain Exceptions to Indemnification and Contribution.
Notwithstanding any contrary provision in this Section 8, neither the Company
nor any Selling Stockholder will be liable for indemnification or contribution
in any case to the extent that any untrue statement or omission attributable to
the Company or such Selling Stockholder was contained or made in a preliminary
prospectus and corrected in the final prospectus and any such loss, claim,
damage or liability suffered or incurred by an Indemnified Party resulted from
an action, claim or suit by any person who purchased shares from such
Indemnified Party and such Indemnified Party received a copy of the final
prospectus or final similar information document but failed to deliver or
provide a copy of the final prospectus or final similar information document to
such person at or prior to the confirmation of the sale of such shares.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company represents and warrants
to the holders of Registrable Securities that it has not previously entered into
any agreement granting any registration rights with respect to its securities to
any person, other than as set forth on Schedule 9(a) hereto. The Company
covenants that it will not grant any right of registration under the Securities
Act relating to any of its shares of capital stock or other securities to any
person other than pursuant to this Agreement, except to the underwriter of the
IPO and to the extent that the rights of the holders of such stock or securities
shall not conflict with the rights of the holder of Registrable Securities
hereunder, and, provided, further, that (i) such holder of such securities may
not participate in any demand registration under this Agreement except as
provided in Section 2; (ii) the holder of such securities may not participate in
any piggyback registration except as contemplated in Section 3(b); and (iii)
such securities may not be publicly offered or sold for the period specified in
Section 4 under the circumstances described in such Section. If subsequent to
the date hereof the Company grants to holders or prospective holders of its
securities registration rights which are more favorable than the terms or
provisions of this Agreement are to the holders of Registrable Securities, this
Agreement shall be deemed to be automatically amended (without the necessity of
any action on the part of the Company or the holders of Registrable Securities)
to grant to the holders of Registrable Securities such more favorable or
additional rights, in addition to those set forth herein. The provisions of the
immediately preceding sentence shall terminate upon repayment of the Notes and
the effective date of the IPO registration statement which includes all the
Registrable Securities.
(b) Parties in Interest. All covenants, agreements, representations,
warranties and undertakings contained in this Agreement by and on behalf of any
of the parties hereto shall bind and inure to the benefit of the respective
successors and permitted assigns of the parties hereto.
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(c) Assignment. Each holder of Registrable Securities shall have the
unrestricted right to assign this Agreement and to delegate all or any of its
rights hereunder to any transferee of its Registrable Securities. Except as
provided in this Section 9(c), no party hereto shall assign this Agreement or
delegate all or any of its obligations hereunder without the prior written
consent of the other parties hereto. The provisions of this Agreement which are
for the benefit of the parties hereto other than the Company shall also be for
the benefit of and enforceable by any subsequent holder of Registrable
Securities subject to the provisions respecting the minimum numbers or
percentages of shares of Registrable Securities required in order to be entitled
to certain rights, or take certain actions, contained herein.
(d) Entire Agreement; Amendments and Waivers. This Agreement
together with the Warrants and the other Transaction Documents constitute the
entire agreement among the parties with respect to the subject matter hereof,
and supersedes all prior agreements, written or oral, with respect hereto.
Changes in or additions to this Agreement may be made only upon written
agreement of the Company and holders of at least 66 2/3% of Registrable
Securities. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach, whether or not similar.
(e) Governing Law. This Agreement and the rights and obligations of
the parties hereunder are to be governed and construed in accordance with the
laws of the State of New York, without regard to the principles of conflicts of
laws thereof.
(f) Specific Performance. The parties hereto agree that money
damages would not be a sufficient remedy for a breach by the Company of the
provisions of this Agreement because of the difficulty of ascertaining the
amount of damage that would be suffered in connection therewith, that the
Purchasers would be irreparably damaged in the event any obligation of the
Company is not performed in accordance with its specific terms and that the
Purchasers shall be entitled to equitable relief (including injunction and
specific performance) in any action instituted in any court of the United States
or any state thereof having subject matter jurisdiction, as a remedy for any
breach or to prevent any breach of such provisions. Such remedies shall not be
deemed to be exclusive for a breach or anticipatory breach of this Agreement,
but shall be in addition to all other remedies available at law or equity.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(h) Headings. The headings of the sections of this Agreement are for
convenience only and will not by themselves determine the interpretation of this
Agreement.
(i) Notices. All notices, consents and other communications under
this Note shall be in writing and shall be deemed to have been duly given when
(a) delivered by hand, (b) sent by telex or telecopier (with receipt confirmed),
provided that a copy is mailed by registered
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mail, return receipt requested, or (c) when received by the addressee, if sent
by Express Mail, Federal Express or other express delivery service (receipt
requested), in each case to the appropriate addresses, telex numbers and
telecopier numbers set forth below (or to such other addresses, telex numbers
and telecopier numbers as a party may designate as to itself by notice to the
other parties complying as to delivery with this Section):
if to the Company:
QuietPower Systems, Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
if to the Purchaser, at the address set forth for such
Purchaser on Schedule A to the Purchase Agreement.
with a copy to:
Shereff, Friedman, Xxxxxxx & Xxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx Esq.
Telecopier No.: (000) 000-0000
(j) Invalid or Void Provisions. If any provision of this Agreement
is deemed invalid, illegal, or unenforceable in any jurisdiction, such provision
will be deemed amended to conform to applicable law so as to be valid, legal and
enforceable in such jurisdiction, and the validity, legality and enforceability
of such provision will not be affected or impaired thereby in any other
jurisdiction; if such provision cannot be amended without altering materially
the intention of the parties, it will be stricken and the remainder of this
Agreement will remain in full force and effect.
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(k) Expiration. The obligation of the Company to register the
Registrable Securities pursuant to the terms of this Agreement shall expire on
the earlier of (i) the date on which there are no longer any Registrable
Securities outstanding, or (ii) ten years from the effective date of the IPO
registration statement.
IN WITNESS WHEREOF, the undersigned have caused this Registration Rights
Agreement to be duly executed as of the date first above written.
QUIETPOWER SYSTEMS, INC.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: President
PURCHASERS:
QPS BRIDGE, LLC
By: Xxxxxxxx, Xxxxxxxx & Co., L.P., Manager
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: General Partner
REGENT CAPITAL PARTNERS, L.P.
By: Regent Capital Holdings, L.P.,
its general partner
By: Regent Capital Holdings, Inc.,
its general partner
By: /s/ J. Xxxxxx Xxxxxxx
---------------------------------------
Name: J. Xxxxxx Xxxxxxx
Title: Managing Director
ASSIGNEE:
XXXXXXXX, XXXXXXXX & CO., L.P., as
assignee of warrants from QPS Bridge, LLC
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: General Partner
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