EXHIBIT 10.2
ENVIROGEN, INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of April 10, 1997, among the
investors listed on Schedule I hereto (the "Investors") and Envirogen, Inc., a
Delaware corporation (the "Company").
R E C I T A L S
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WHEREAS, Warburg, Xxxxxx Ventures, L.P., a Delaware limited
partnership ("Warburg"), has agreed, pursuant to the terms of the Securities
Purchase Agreement, dated as of January 14, 1997, by and between Warburg and the
Company (the "Purchase Agreement"), to purchase 6,095,238 shares of the common
stock, par value $0.01 per share, of the Company (the "Common Stock") at the
aggregate cash purchase price of $15,999,999.75; and
WHEREAS, the Company has agreed, as a condition precedent to
Warburg's obligations under the Purchase Agreement, to xxxxx Xxxxxxx certain
registration rights; and
WHEREAS, pursuant to the Agreement and Plan of Merger, dated January
14, 1997 (the "Merger Agreement"), by and among the Company, Fluid Management,
Inc., a Wisconsin corporation ("Fluid Management"), and Xxxxxxx X. Xxxxx,
Xxxxxxx X. Xxxxxxxx, Xxxx X. Xxxx and Xxxxxxx X. Xxxxxxxxxxxx (Messrs. Smith,
Jacobson, Hawk and Xxxxxxxxxxxx collectively, the "Other Investors"), the Other
Investors shall receive, collectively, up to 4,190,477 shares of Common Stock in
connection with the transactions contemplated by the Merger Agreement; and
WHEREAS, the Company has agreed, as a condition precedent to Fluid
Management's and the Other Investors' obligations under the Merger Agreement, to
grant the Other Investors certain registration rights; and
WHEREAS, the Investors and the Company desire to define the
registration rights of the Investors on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the parties hereby agree as follows:
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1. DEFINITIONS
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As used in this Agreement, the following terms have the respective
meaning set forth below:
Commission: shall mean the Securities and Exchange Commission or any
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other federal agency at the time administering the Securities Act;
Exchange Act: shall mean the Securities Exchange Act of 1934, as
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amended;
Holder: shall mean any holder of Registrable Securities;
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Person: shall mean an individual, partnership, joint-stock company,
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corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;
register, registered and registration: shall mean to a registration
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effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean (A) shares of Common Stock
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acquired by Warburg pursuant to the Purchase Agreement and shares of Common
Stock acquired by the Other Investors pursuant to the Merger Agreement, and (B)
any common stock of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, the shares of Common Stock
referred to in clause (A);
Registration Expenses: shall mean all expenses incurred by the
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Company in compliance with Section 2 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, fees and expenses of one counsel for all the Holders in
an amount not to exceed $15,000 in connection with an underwritten transaction
or $5,000 in connection with a non-underwritten transaction, blue sky fees and
expenses and the expense of any special audits incident to or required by any
such registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company);
Security, Securities: shall have the meaning set forth in Section
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2(1) of the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as amended;
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and
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Selling Expenses: shall mean all underwriting discounts and selling
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commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than fees and expenses of
one counsel for all the Holders in an amount not to exceed $15,000 in connection
with an underwritten transaction or $5,000 in connection with a non-underwritten
transaction.
2. REGISTRATION RIGHTS
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(a) Shelf Registration.
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(i) As soon as practicable after the Closing Date, but in any
event within nine (9) months after the Closing Date, the Company shall file
with the Commission and cause to be declared effective a registration
statement pursuant to Rule 415 under the Securities Act (a "Shelf
Registration Statement") relating to the offer and sale of Registrable
Securities by the Holders thereof from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement.
(ii) The Company shall supplement or amend, if necessary, the
Shelf Registration Statement as required by the applicable registration
form or by the Securities Act or the rules and regulations promulgated
thereunder or as reasonably requested by the Holders of a majority of the
Registrable Securities (the "Majority Holders"), and the Company shall
furnish to the holders of the Registrable Securities to which the Shelf
Registration Statement relates copies of any such supplement or amendment
prior to its being used and/or filed with the Commission.
(b) Expenses of Registration. All Registration Expenses
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incurred in connection with any registration, qualification or compliance
pursuant to this Section 2 shall be borne by the Company, and all Selling
Expenses shall be borne by the Holders of the securities so registered pro rata
on the basis of the number of their shares so registered.
(c) Registration Procedures. In connection with the Shelf
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Registration Statement filed pursuant to this Section 2, the Company will keep
the Holders, as applicable, advised in writing as to the initiation of such
registration and as to the completion thereof. Subject to Section 2(g) hereof,
at its expense, the Company will, as expeditiously as possible:
(i) prepare and file with the SEC 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 and to comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered by
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such registration statement or as may be reasonably requested by the
Majority Holders, until such time (x) as all of such Registrable Securities
have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement or (y) as set forth in Section 2(h) hereof;
(ii) use its best efforts (x) to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or blue sky laws of such States of
the United States of America where an exemption is not available and as the
sellers of Registrable Securities covered by such registration statement
shall reasonably request, (y) to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and
(z) to take any other action which may be reasonably necessary or advisable
to enable such sellers to consummate the disposition in such jurisdictions
of the securities to be sold by such sellers, except that the Company shall
not for any such purpose be required to qualify generally to do business as
a foreign corporation in any jurisdiction wherein it would not but for the
requirements of this subdivision (ii) be obligated to be so qualified,
subject itself to taxation in any such jurisdiction or to consent to
general service of process in any such jurisdiction;
(iii) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other federal or state governmental agencies or authorities as may be
necessary in the opinion of counsel to the Company and counsel to the
seller or sellers of Registrable Securities to enable the seller or sellers
thereof to consummate the disposition of such Registrable Securities;
(iv) promptly notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, upon
discovery that, or upon the happening of any event as a result of which,
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
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 were made, and at the request of any such Holder promptly
prepare and furnish to it a reasonable number of copies of a supplement to
or an amendment of such prospectus 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
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make the statements therein not misleading in the light of the
circumstances under which they were made;
(v) furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters, (1) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the
Holders participating in such registration, addressed to the underwriters
and to the Holders participating in such registration and (2) a letter,
dated as of such date, from the independent certified public accountants of
the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the
Holders participating in such registration, addressed to the underwriters,
and if permitted by applicable accounting standards, to the Holders
participating in such registration; and
(vi) 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, an earnings
statement covering the period of at least twelve months, but not more than
eighteen months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 promulgated thereunder, and promptly furnish to each Holder of
Registrable Securities a copy of any amendment or supplement to such
registration statement or prospectus.
Notwithstanding the foregoing, if any such registration or comparable
statement refers to any Holder by name or otherwise as the holder of any
securities of the Company and in its sole and exclusive judgment such Holder is
or might be deemed to be a controlling person of the Company, such Holder shall
have the right to require the insertion therein of language, in form and
substance reasonably satisfactory to such Holder and the Company, to the effect
that the holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company.
(d) Indemnification.
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(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors and partners, and each person
controlling each of the Holders,
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with respect to the registration which has been effected pursuant to this
Section 2, and each underwriter, if any, and each person who controls any
underwriter, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any
prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any 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 by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each of the Holders, each
of its officers, directors and partners, and each person controlling each
of the Holders, each such underwriter and each person who controls any such
underwriter, for any reasonable legal and any other expenses incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any
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such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company by the Holders or
underwriter and stated to be specifically for use therein.
(ii) Each of the Holders severally will, if Registrable
Securities held by it are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers and each underwriter, if any,
of the Company's securities covered by such registration statement, each
person who controls the Company or such underwriter and each of their
officers, directors, and partners against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in such registration statement, prospectus, offering circular or other
document made by such Holder, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements by such Holder therein not misleading, and will
reimburse the Company and such directors, officers, partners, persons,
underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
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statement, prospectus, offering circular or other document in reliance upon
and in conformity with written information furnished to the Company by such
Holder and stated to be specifically for use therein; provided, however,
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that the obligations of each of the Holders hereunder shall be limited to
an amount equal to the net proceeds to such Holder of securities sold as
contemplated herein.
(iii) Each party entitled to indemnification under this Section
2(d) (the "Indemnified Party") shall give notice to the party 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
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that counsel for the Indemnifying Party, who shall conduct the defense of
such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld) and
the Indemnified Party may participate in such defense at such party's
expense (unless the Indemnified Party shall have reasonably concluded that
there may be a conflict of interest between the Indemnifying Party and the
Indemnified Party in such action, in which case the fees and expenses of
counsel shall be at the expense of the Indemnifying Party, provided that in
such event the Indemnifying Party shall not be responsible for the fees of
more than one counsel (plus one local counsel) to the Indemnified Parties),
and provided further that the failure of any Indemnified Party to give
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notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 2 unless the Indemnifying Party is
materially prejudiced thereby. No Indemnifying Party, in the defense of
any such claim or litigation shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the
claim in question as an Indemnifying Party may reasonably request in
writing and as shall be reasonably required in connection with the defense
of such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(d) is
held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or
expense referred to herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage or expense in such proportion as is appropriate to
reflect the relative fault
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of the Indemnifying Party on the one hand and of the Indemnified Party on
the other in connection with the statements or omissions which resulted in
such loss, liability, claim, damage or expense, as well as any other
relevant equitable considerations. The relative fault of the Indemnifying
Party and of the Indemnified Party shall be determined by reference to,
among other things, whether the untrue (or alleged untrue) statement of a
material fact or the omission (or alleged omission) to state a material
fact relates to information supplied by the Indemnifying Party or by the
Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten
public offering contemplated by this Agreement are in conflict with the
foregoing provisions, the provisions in such underwriting agreement shall
be controlling.
(vi) The foregoing indemnity agreement of the Company and the
Holders is subject to the condition that, insofar as they relate to any
loss, claim, liability or damage made in a preliminary prospectus but
eliminated or remedied in the amended prospectus on file with the
Commission at the time the registration statement in question becomes
effective or the amended prospectus filed with the Commission pursuant to
Rule 424(b) (the "Final Prospectus"), such indemnity agreement shall not
inure to the benefit of (i) any underwriter if a copy of the Final
Prospectus was furnished to the underwriter and was not furnished to the
person asserting the loss, liability, claim or damage at or prior to the
time such action is required by the Securities Act and (ii) any Holder if
the loss, claim, liability or damage relates to a transaction pursuant to
which shares of Common Stock were not distributed pursuant to an
underwritten offering and if a copy of the Final Prospectus was furnished
to the Holder and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required
by the Securities Act.
(e) Information by the Holders. Each of the Holders holding
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securities included in any registration shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Section 2.
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(f) Rule 144 Reporting.
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With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
(i) make and keep public information available as those terms
are understood and defined in Rule 144 under the Securities Act ("Rule
144");
(ii) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act; and
(iii) so long as the Holder owns any Registrable Securities,
furnish to the Holder upon request, a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed as the Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing the Holder to sell any such
securities without registration.
(g) Holdback Periods. Notwithstanding anything in this
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Agreement to the contrary if (i) the Company shall determine in good faith that
it would be significantly disadvantageous to the Company and its stockholders
for any such Shelf Registration Statement to be amended or supplemented, and
(ii) the need for such an amendment or supplement is not caused by a proposed
public offering of any securities of the Company by any of its securityholders
(other than an offering made pursuant to a registration on Form S-8), the
Company may defer such amending or supplementing of such Shelf Registration
Statement for not more than 60 days and in such event, upon appropriate notice
to the Holders, the Holders shall be required to discontinue disposition of any
Registrable Securities covered by such Shelf Registration Statement during such
period; provided, however, that this right may not be exercised by the Company
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more than once in any twelve-month period.
(h) Termination. The registration rights set forth in this
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Section 2 shall not be available to any Holder if, in the opinion of counsel to
the Company, all of the Registrable Securities then owned by such Holder could
be sold in any 90-day period pursuant to Rule 144 under the Securities Act
(without giving effect to the provisions of Rule 144(k)). Upon termination of
such registration rights in accordance with this Section 2(h), the obligations
of the Company to continue the effectiveness of the Shelf Registration Statement
shall terminate.
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3. MISCELLANEOUS
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(a) Directly or Indirectly. Where any provision in this
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Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.
(c) Section Headings. The headings of the sections and
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subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof.
(d) Notices.
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(i) All communications under this Agreement shall be in writing
and shall be delivered by hand or mailed by overnight courier or by
registered or certified mail, postage prepaid:
(A) if to the Company, to 0000 Xxxxxxxxxxxx Xxxx,
Xxxxxxxxxxxxx, XX 00000, Attention: Harch X. Xxxx, or at such other
address as it may have furnished in writing to the Investors;
(B) if to the Investors, at the addresses listed on
Schedule I hereto, or at such other addresses as may have been
furnished to the Company in writing.
(iii) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on
the first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of
such mailing.
(e) Reproduction of Documents. This Agreement and all documents
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relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the Investor
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and the Investors may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Investors in the regular course
of business) and that any
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enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
(f) Successors and Assigns. This Agreement shall inure to the
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benefit of and be binding upon the successors and assigns of each of the
parties.
(g) Entire Agreement; Amendment and Waiver. This Agreement
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constitutes the entire understanding of the parties hereto and supersedes all
prior understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and the Investors holding a majority of the then
outstanding Registrable Securities.
(h) Severability. In the event that any part or parts of this
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Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not effect the
remaining provisions of this Agreement which shall remain in full force and
effect.
(i) Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first set forth above.
ENVIROGEN, INC.
By: /s/ Xxxxxxxxx X. Xxxx
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Xxxxxxxxx X. Xxxx
President
INVESTORS:
WARBURG, XXXXXX VENTURES, L.P.
By: Warburg, Xxxxxx & Co.,
General Partner
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Partner
/s/ Xxxxxxx X. Xxxxx
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XXXXXXX X. XXXXX
/s/ Xxxxxxx X. Xxxxxxxx
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XXXXXXX X. XXXXXXXX
/s/ Xxxx X. Xxxx
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XXXX X. XXXX
/s/ Xxxxxxx X. Xxxxxxxxxxxx
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XXXXXXX X. XXXXXXXXXXXX
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SCHEDULE I
Name and Address
of Investor
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Warburg, Xxxxxx Ventures, L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
X00 X00000 Xxxxxxx X
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxxx
0000 X. 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxx X. Xxxx
X000 X0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxxxxxxx
000 X. Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
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