Exhibit 99.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of August
31, 2000, is made and entered into by and between CELERITY SYSTEMS, INC. , a
Delaware corporation (the "COMPANY"), and the Investor(s) Listed on the Schedule
of Investors. (the "INVESTOR").
WHEREAS, the Company and the Investor have entered into a Securities
Purchase Agreement, dated as of the date hereof (the " SECURITIES PURCHASE
AGREEMENT"), pursuant to which the Company may issue and sell, from time to
time, to the Investor $410,000 worth of the Company's Series A Preferred Stock
(the "Preferred Stock"), which will be converted into shares of the Company's
common stock, par value $.0001 per share (the "COMMON STOCK"); and
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investor's agreement to enter into the Securities Purchase Agreement, the
Company has agreed to provide the Investor with certain registration rights with
respect to the Company's Common Stock which the Investor(s) will receive upon
conversion of the Preferred Stock (the "Registrable Securities");
NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein and in the Securities
Purchase Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, intending to be legally bound
hereby, the parties hereto agree as follows (capitalized terms used herein and
not defined herein shall have the respective meanings ascribed to them in the
Securities Purchase Agreement):
ARTICLE I
REGISTRATION RIGHTS
Section 1.1 FORM X-0, XX-0, XX X-0 REGISTRATION STATEMENTS.
(a) FILING OF REGISTRATION STATEMENT. Subject to the terms and
conditions of this Agreement, the Company shall (i) prepare and, within sixty
(60) days following the date hereof, deliver to the Investor a draft of a
registration statement on Form X-0, XX-0, or S-3 under the Securities Act (the
"INITIAL REGISTRATION STATEMENT") for the registration for the resale by the
Investor of at least 3,000,000 Registrable Securities (the "INITIAL REGISTRABLE
SECURITIES") and accompanied or preceded by a questionnaire (a "SELLING
SHAREHOLDER QUESTIONNAIRE") of the type commonly used for offerings of this kind
and (ii) within fifteen (15) days after the Company has received comments, if
any, and a properly completed Selling Shareholder Questionnaire from the
Investor, file the Initial Registration Statement with the SEC (the "Filing
Deadline"). Thereafter, if the Company desires to issue and sell to the Investor
any Registrable Securities in addition to the Initial Registrable Securities,
the Company shall first file with the SEC a registration statement on Form X-0,
XX-0,
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xx X-0 under the Securities Act (the Initial Registration Statement and any
subsequent registration statement, each, a "REGISTRATION STATEMENT").
(b) EFFECTIVENESS OF THE INITIAL REGISTRATION STATEMENT. The Company
shall use its commercially reasonable efforts (i) to have the Initial
Registration Statement declared effective by the SEC by no later than one
hundred and ninety five (195) days after the filing of the Initial Registration
Statement (the "Registration Deadline") and (ii) to insure that the Initial
Registration Statement and any subsequent Registration Statement remains in
effect throughout the term of this Agreement as set forth in Section 4.2,
subject to the terms and conditions of this Agreement.
(c) FAILURE TO FILE OR OBTAIN EFFECTIVENESS OF THE INITIAL REGISTRATION
STATEMENT In the event that the Registration Statement is not filed by the
Company with the SEC by the Filing Deadline, then the Applicable Discount (as
defined in the Certificate of Designations) shall be reduced by (i) an
additional 2% for the first thirty (30) days.
In the event that the Registration Statement is not declared effective
by the SEC by the applicable Registration Deadline then the Conversion
Percentage to be used in determining the Conversion Price (as defined in the
Certificate of Designations, Preferences, and Rights filed by the Company on or
before the date hereof in connection herewith ("Certificate of
Designations")shall be reduced by (i) an additional 2% if the Registration
Statement is not declared effective by the SEC within thirty (30) days following
the Registration Deadline, or (ii) an additional 3% per month thereafter if the
Registration Statement is not declared effective by the SEC.
(d) FAILURE TO MAINTAIN EFFECTIVENESS OF A REGISTRATION STATEMENT.
Subject to Section 1.1(e) hereto, in the event the Company fails to maintain the
effectiveness of any Registration Statement (or the underlying prospectus)
throughout the term of this Agreement, including any temporary suspensions
permitted by Section 1.1(e), and the Investor holds any Registrable Securities
at any time during the period of such ineffectiveness (an "INEFFECTIVE PERIOD"),
the Company shall pay to the Investor in immediately available funds into an
account designated by the Investor an amount equal to one percent (1%) of the
aggregate Purchase Price of all of the Registrable Securities then held by the
Investor for each thirty (30) calendar day period (prorated for partial periods)
of such Ineffective Period. The payments required by this Section 1.1(d) shall
be made on the first Trading Day after the earliest to occur of (i) the
expiration of the Commitment Period, and (ii) the expiration of an Ineffective
Period (or if an Ineffective Period shall last more than thirty (30) calendar
days, the expiration of each thirty (30) calendar days of an Ineffective
Period).
(e) DEFERRAL OR SUSPENSION DURING A BLACKOUT PERIOD. If the
Company shall furnish to the Investor notice (a "BLACKOUT NOTICE") signed by the
Chief Executive Officer or Chief Financial Officer of the Company stating that
he has determined in good faith that it would be seriously detrimental to the
Company and its shareholders for the Initial Registration Statement to be filed
(or for any Registration Statement to remain in effect) and it is therefore
desirable to defer the filing of such Initial Registration Statement (or
temporarily suspend the effectiveness of any Registration Statement or use of
the related prospectus), the Company shall have the right (i)
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immediately to defer such filing for a period of not more than thirty (30) days
beyond the date by which such Initial Registration Statement was otherwise
required hereunder to be filed or (ii) suspend the effectiveness of any
Registration Statement for a period of not more than thirty (30) (any such
deferral or suspension period of up to thirty days, a "BLACKOUT PERIOD"). The
Investor acknowledges that it would be seriously detrimental to the Company and
its shareholders for such initial Registration Statement to be filed (or for any
Registration Statement to remain in effect) during a Blackout Period and
therefore essential to defer such filing (or suspend such effectiveness) during
such Blackout Period and agrees to cease any disposition of Registrable
Securities during such Blackout Period. The Company may not utilize any of its
rights under this Section 1.1(e) to defer the filing of a Registration Statement
(or suspend its effectiveness) more than twice in any twelve (12) month period.
Following such deferral or suspension, the Investor shall be entitled to such
additional number of shares of Common Stock as set forth in Section 2.7 of the
Investment Agreement and the payment required by Section 1.1(d).
(f) LIQUIDATED DAMAGES. The Company and the Investor hereto acknowledge
and agree that the sums payable under subsections 1(c) or 1(d) above shall
constitute liquidated damages and not penalties. The parties further acknowledge
that (i) the amount of loss or damages likely to be incurred is incapable or is
difficult to precisely estimate, (ii) the amounts specified in such subsections
bear a reasonable relationship to, and are not plainly or grossly
disproportionate to the probable loss likely to be incurred in connection with
any failure by the Company to obtain or maintain the effectiveness of a
Registration Statement, (iii) one of the reasons for the Company and the
Investor reaching an agreement as to such amounts was the uncertainty and cost
of litigation regarding the question of actual damages, and (iv) the Company and
the Investor are sophisticated business parties and have been represented by
sophisticated and able legal counsel and negotiated this Agreement at arm's
length.
ARTICLE II
REGISTRATION PROCEDURES
Section 2.1 FILINGS; INFORMATION. The Company will effect the
registration and sale of the Registrable Securities in accordance with the
intended methods of disposition thereof. Without limiting the foregoing, the
Company in each such case will do the following as expeditiously as possible,
but in no event later than the deadline, if any, prescribed therefore in this
Agreement:
(a) The Company shall (i) prepare and file with the SEC a
Registration Statement on Form X-0, XX-0, or S-3 (if use of such form is then
available to the Company pursuant to the rules of the SEC and, if not, on such
other form promulgated by the SEC for which the Company then qualifies, that
counsel for the Company shall deem appropriate and which form shall be available
for the sale of the Registrable Securities to be registered thereunder in
accordance with the provisions of this Agreement and in accordance with the
intended method of distribution of such Registrable Securities); (ii) use
commercially reasonable efforts to cause such filed Registration Statement to
become and remain effective (pursuant to Rule 415 under the Securities Act or
otherwise); (iii) prepare and file with the SEC such amendments and supplements
to such
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Registration Statement and the prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective for the time period
prescribed by Section 1.1(b); and (iv) comply with the provisions of the
Securities 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 Investor set forth in such Registration Statement.
(b) The Company shall file all necessary amendments and
supplements to any Registration Statement in order to effectuate the purpose of
this Agreement and the Investment Agreement.
(c) No later than five (5) days prior to filing any amendment
or supplement to the Initial Registration Statement or any subsequent
Registration Statement or prospectus, or any amendment or supplement thereto
(excluding, in each case, amendments deemed to result from the filing of
documents incorporated by reference therein), or such shorter period as is
reasonable under the circumstances, the Company shall deliver to the Investor
and one firm of counsel representing the Investor, in accordance with the notice
provisions of Section 4.8, copies of such Registration Statement as proposed to
be filed, together with exhibits thereto, which documents will be subject to
review by the Investor and such counsel, and thereafter deliver to the Investor
and such counsel, in accordance with the notice provisions of Section 4.8, such
number of copies of the Registration Statement, 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 or information as the Investor or counsel may reasonably request
in order to facilitate the disposition of the Registrable Securities.
(d) The Company shall deliver, in accordance with the notice
provisions of Section 4.8, to each seller of Registrable Securities covered by a
Registration Statement such number of conformed copies of such Registration
Statement and of each amendment and supplement thereto (in each case including
all exhibits and documents incorporated by reference), such number of copies of
the prospectus contained in any Registration Statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 promulgated under the Securities Act relating to such
seller's Registrable Securities, and such other documents, as such seller may
reasonably request to facilitate the disposition of its Registrable Securities.
(e) After the filing of a Registration Statement, the Company
shall promptly notify the Investor of any stop order issued or threatened by the
SEC in connection therewith and take all reasonable actions required to prevent
the entry of such stop order or to remove it if entered.
(f) The Company shall use its commercially reasonable efforts
to (i) register or qualify the Registrable Securities under such other
securities or blue sky laws of such jurisdictions in the United States as the
Investor may reasonably request in light of its intended plan of distribution
and (ii) cause the Registrable Securities to be registered with or approved by
such other governmental agencies or authorities in the United States as may be
necessary by virtue of the business and operations of the Company and do any and
all other acts and things that may be reasonably necessary or advisable to
enable the Investor to consummate the disposition of the
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Registrable Securities in light of its intended plan of distribution; provided,
however, that the Company will not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (f), subject itself to taxation in any such jurisdiction,
or consent or subject itself to general service of process in any such
jurisdiction.
(g) The Company shall immediately notify the Investor upon the
occurrence of any of the following events in respect of a Registration Statement
or related prospectus in respect of an offering of Registrable Securities: (i)
receipt of any request by the SEC or any other federal or state governmental
authority for additional information, amendments or supplements to such
Registration Statement or related prospectus; (ii) the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of such Registration Statement or notification of the
initiation of any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the happening of any event that makes any statement made in such
Registration Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in such Registration Statement, related
prospectus or documents so that, in the case of such Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, in the light of the circumstances under which they were
made, and that in the case of the related prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and (v) the
Company's reasonable determination that a post-effective amendment to such
Registration Statement would be appropriate, and the Company will promptly make
available to the Investor any such supplement or amendment to the related
prospectus.
(h) The Company shall enter into customary agreements and take
such other customary actions as are reasonably required in order to expedite or
facilitate the disposition by the Investor of such Registrable Securities
(whereupon the Investor may, at its option, require that any or all of the
representations, warranties and covenants of the Company also be made to and for
the benefit of the Investor).
(i) The Company shall make available to the Investor (and will
deliver to Investor's counsel), subject to restrictions imposed by the United
States federal government or any agency or instrumentality thereof, copies of
all correspondence between the SEC and the Company, its counsel or its auditors
and will also make available for inspection by the Investor and any attorney,
accountant or other professional retained by the Investor (collectively, the
"INSPECTORS"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "RECORDS") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers and employees to supply all
information reasonably requested by any Inspectors in connection with a
Registration Statement. Records that the Company determines, in good faith, to
be confidential and that it notifies the Inspectors are
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confidential shall not be disclosed by the Inspectors unless (i) the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in
any Registration Statement or (ii) the disclosure or release of such Records is
requested or required pursuant to oral questions, interrogatories, requests for
information or documents or a subpoena or other order from a court of competent
jurisdiction or other legal process; provided, however, that prior to any
disclosure or release pursuant to clause (ii), the Inspectors shall provide the
Company with prompt notice of any such request or requirement so that the
Company may seek an appropriate protective order or waive such Inspectors'
obligation not to disclose such Records; and, provided, further, that if failing
the entry of a protective order or the waiver by the Company permitting the
disclosure or release of such Records, the Inspectors, upon advice of counsel,
are compelled to disclose such Records, the Inspectors may disclose that portion
of the Records that counsel has advised the Inspectors that the Inspectors are
compelled to disclose. The Investor agrees that information obtained by it as a
result of such inspections (not including any information obtained from a third
party who, insofar as is known to the Investor after reasonable inquiry, is not
prohibited from providing such information by a contractual, legal or fiduciary
obligation to the Company) shall be deemed confidential and shall not be used by
it as the basis for any market transactions in the securities of the Company
unless and until such information has been made generally available to the
public. The Investor further agrees that it will, upon learning that disclosure
of such Records is sought in a court of competent jurisdiction, give notice to
the Company and allow the Company, at its expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential.
(j) The Company shall otherwise comply with all applicable
rules and regulations of the SEC, including, without limitation, compliance with
applicable reporting requirements under the Exchange Act.
(k) The Company may require the Investor to promptly furnish
in writing to the Company such information as may be legally required in
connection with such registration including, without limitation, all such
information as may be requested by the SEC or the NASD. The Investor agrees to
provide such information requested in connection with such registration within
five (5) calendar days after receiving such written request, or such shorter
period as is reasonable under the circumstances, and the Company shall not be
responsible for any delays in obtaining or maintaining the effectiveness of any
Registration Statement caused by the Investor's failure to timely provide such
information.
(l) The Company shall use its best efforts either to (i) cause
all the Registrable Securities covered by a Registration Statement to be listed
on each national securities exchange on which securities of the same class or
series issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, (ii)
to secure designation and quotation of all of the Registrable Securities covered
by the Registration Statement on the Nasdaq National Market System, (iii) if,
despite the Company's best efforts to satisfy the preceding clause (i) or (ii),
the Company is unsuccessful in satisfying the preceding clause (i) or (ii) to
secure the inclusion for quotation on the Bulletin for such Registrable
Securities or, (iv) if, despite the Company's best efforts to satisfy the
preceding clause (iii), the Company is unsuccessful in satisfying the preceding
clause (iii), to secure the inclusion for quotation on the over-the-counter
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market for such Registrable Securities, and, without limiting the generality of
the foregoing, in the case of clause (iii) or (iv), to arrange for at least two
market makers to register with the National Association of Securities Dealers,
Inc. ("NASD") as such with respect to such Registrable Securities. The Company
shall pay all fees and expenses in connection with satisfying its obligation
under this Section 3(i).
Section 2.2 REGISTRATION EXPENSES. In connection with each Registration
Statement, the Company shall pay all registration expenses incurred in
connection with the registration thereunder (the "REGISTRATION EXPENSES"),
including, without limitation: (a) all registration, filing, securities exchange
listing and fees required by the NASD, (b) all registration, filing,
qualification and other fees and expenses of compliance with securities or blue
sky laws (including reasonable fees and disbursements of counsel for the
Company), (c) all word processing, duplicating, printing, messenger and delivery
expenses, (d) the Company's internal expenses (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), and (e) reasonable fees and disbursements of counsel for the
Company and customary fees and expenses for independent certified public
accountants retained by the Company.
ARTICLE III
INDEMNIFICATION AND CONTRIBUTION
Section 3.1 INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless the Investor, its partners, Affiliates, officers,
directors, employees and duly authorized agents, and each Person or entity, if
any, who controls the Investor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, together with the partners,
Affiliates, officers, directors, employees and duly authorized agents of such
controlling Person or entity (collectively, the " CONTROLLING PERSONS"), from
and against any loss, claim, damage, liability, costs and expenses (including,
without limitation, reasonable attorneys' fees and disbursements and costs and
expenses of investigating and defending any such claim) (collectively,
"DAMAGES"), joint or several, and any action or proceeding in respect thereof to
which the Investor, its partners, Affiliates, officers, directors, employees and
duly authorized agents, and any Controlling Person, may become subject under the
Securities Act or otherwise, as incurred, insofar as such Damages (or actions or
proceedings 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, preliminary prospectus or prospectus relating to the
Registrable Securities or arises out of, or are based upon, 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 in light of the
circumstances under which they were made, except insofar as any such untrue
statement, alleged untrue statement, omission or alleged omission is made in
reliance upon and in conformity with written information furnished to the
Company by the Investor which is specifically intended by the Investor for use
in the preparation of any such Registration Statement, preliminary prospectus or
prospectus, and shall reimburse the Investor, its partners, Affiliates,
officers, directors, employees and duly authorized agents, and each such
Controlling Person, for any legal and other expenses reasonably incurred by the
Investor, its
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partners, Affiliates, officers, directors, employees and duly authorized agents,
or any such Controlling Person, as incurred, in investigating or defending or
preparing to defend against any such Damages or actions or proceedings;
provided, however, that the Company shall not be liable to the Investor to the
extent that any such Damages arise out of or are based upon an untrue statement
or omission made in any preliminary prospectus if (i) the Investor failed to
send or deliver a copy of the final prospectus delivered by the Company to the
Investor with or prior to the delivery of written confirmation of the sale by
the Investor to the Person asserting the claim from which such Damages arise,
and (ii) the final prospectus would have corrected such untrue statement or
alleged untrue statement or such omission or alleged omission.
(b) INDEMNIFICATION BY THE INVESTOR. The Investor agrees to
indemnify and hold harmless the Company, its Affiliates, officers, directors,
employees and duly authorized agents, and each Controlling Persons of the
Company, from and against any and all Damages, joint or several, and any action
or proceeding in respect thereof to which the Investor, its partners,
Affiliates, officers, directors, employees and duly authorized agents, and any
such Controlling Person, may become subject under the Securities Act or
otherwise, as incurred, insofar as such Damages (or actions or proceedings 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, preliminary prospectus or prospectus relating to the Registrable
Securities or arises out of, or are based upon, 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 in light of the circumstances under
which they were made,, but only to the extent that any such untrue statement,
alleged untrue statement, omission or alleged omission is made in reliance upon
and in conformity with written information furnished to the Company by the
Investor which is specifically intended for by the Investor for use in the
preparation of any such Registration Statement, preliminary prospectus or
prospectus, and shall reimburse the Company, its partners, Affiliates, officers,
directors, employees and duly authorized agents, and each such Controlling
Person, for any legal and other expenses reasonably incurred by the Investor,
its partners, Affiliates, officers, directors, employees and duly authorized
agents, or any such Controlling Person, as incurred, in investigating or
defending or preparing to defend against any such Damages or actions or
proceedings.
Section 3.2 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after
receipt by any person or entity in respect of which indemnity may be sought
pursuant to Section 3.1 (an "INDEMNIFIED PARTY") of notice of any claim or the
commencement of any action, the Indemnified Party shall, if a claim in respect
thereof is to be made against the person or entity against whom such indemnity
may be sought (the "INDEMNIFYING PARTY"), notify the Indemnifying Party in
writing of the claim or the commencement of such action. In the event an
Indemnified Party shall fail to give such notice as provided in this Section 3.2
and the Indemnifying Party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced by the
failure to give such notice, the indemnification provided for in Section 3.1
shall be reduced to the extent of any actual prejudice resulting from such
failure to so notify the Indemnifying Party; provided, however, that the failure
to notify the Indemnifying Party shall not relieve the
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Indemnifying Party from any liability that it may have to an Indemnified Party
otherwise than under Section 3.1. If any such claim or action shall be brought
against an Indemnified Party, and it shall notify the Indemnifying Party
thereof, the Indemnifying Party shall be entitled to participate therein, and,
to the extent that it wishes, jointly with any other similarly notified
Indemnifying Party, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. After notice from the Indemnifying Party
to the Indemnified Party of its election to assume the defense of such claim or
action, the Indemnifying Party shall not be liable to the Indemnified Party for
any legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Indemnified Party shall have the
right to employ separate counsel to represent the Indemnified Party and its
Controlling Persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, but the fees and expenses of such counsel shall be for the
account of such Indemnified Party, unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the reasonable judgment of the Indemnifying Party and the Indemnified
Party, representation of both parties by the same counsel would be inappropriate
due to actual or potential conflicts of interest between them, it being
understood, however, that the Indemnifying Party shall not, in connection with
any one such claim or action or separate but substantially similar or related
claims or actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for all Indemnified Parties, or for fees and expenses that are not
reasonable. No Indemnifying Party shall, without the prior written consent of
the Indemnified Party, effect any settlement of any claim or pending or
threatened proceeding in respect of which the Indemnified Party is or could have
been a party and indemnity is sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such claim or proceeding. Whether or not the
defense of any claim or action is assumed by the Indemnifying Party, such
Indemnifying Party will not be subject to any liability for any settlement made
without its consent, which consent will not be unreasonably withheld.
Section 3.3 OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding paragraphs of this Article III (with appropriate
modifications) shall be given by the Company with respect to any required
registration or other qualification of securities under any federal or state law
or regulation of any governmental authority other than the Securities Act. The
provisions of this Article III shall be in addition to any other rights to
indemnification, contribution or other remedies which an Indemnified Party may
have pursuant to law, equity, contract or otherwise.
Section 3.4 CONTRIBUTION. If the indemnification and reimbursement
obligations provided for in any section of this Article III is unavailable or
insufficient to hold harmless the Indemnified Parties in respect of any Damages
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 Damages as between the Company on the one
hand and the Investor on the other, in such proportion as is appropriate to
reflect the relative fault of the Company
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and of the Investor in connection with such statements or omissions, as well as
other equitable considerations. The relative fault of the Company on the one
hand and of the Investor on the other 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 such party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Investor agree that it would not be just and
equitable if contribution pursuant to this Section 3.4 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
Damages referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 3.4, the Investor shall in no event be required to contribute any amount
in excess of the amount by which the total price at which the Registrable
Securities of the Investor were sold to the public (less underwriting discounts
and commissions) exceeds the amount of any damages which the Investor has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
ARTICLE IV
MISCELLANEOUS
Section 4.1 NO OUTSTANDING REGISTRATION RIGHTS. The Company represents
and warrants to the Investor that there is not in effect on the date hereof any
agreement by the Company pursuant to which any holders of securities of the
Company have a right to cause the Company to register or qualify such securities
under the Securities Act or any securities or blue sky laws of any jurisdiction,
except as disclosed on Schedule 4.1.
Section 4.2 TERM. The obligations of the Company and the rights
provided to the holders of Registrable Securities hereunder shall terminate at
such time as the Registrable Securities theretofore issued have ceased to be
Registrable Securities in accordance with the definition thereof contained in
the Securities Purchase Agreement. Notwithstanding the foregoing, Section 1.1(c)
and (d), Article III, Section 4.8, and Section 4.9 shall survive the termination
of this Agreement.
Section 4.3 RULE 144. The Company will use its commercially reasonable
efforts to file in a timely manner information, documents and reports in
compliance with the Securities Act and the Exchange Act and will, at its
expense, promptly take such further action as holders of Registrable Securities
may reasonably request to enable such holders of Registrable Securities 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
("RULE 144"), as such Rule may be amended from time to time, or (b) any similar
rule or regulation hereafter adopted by the SEC. If at any time the
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Company is not required to file such reports, it will, at its expense, forthwith
upon the written request of any holder of Registrable Securities, make available
adequate current public information with respect to the Company within the
meaning of paragraph (c)(2) of Rule 144 or such other information as necessary
to permit sales pursuant to Rule 144. Upon the request of the Investor, the
Company will deliver to the Investor a written statement, signed by the
Company's principal executive or financial officer, as to whether it has
complied with such requirements.
Section 4.4 CERTIFICATE. The Company will, at its expense, forthwith
upon the request of any holder of Registrable Securities, deliver to such holder
a certificate, signed by the Company's principal financial officer, stating (a)
the Company's name, address and telephone number (including area code), (b) the
Company's Internal Revenue Service identification number, (c) the Company's SEC
file number, (d) the number of shares of each class of Stock outstanding as
shown by the most recent report or statement published by the Company, and (e)
whether the Company has filed the reports required to be filed under the
Exchange Act for a period of at least ninety (90) days prior to the date of such
certificate and in addition has filed the most recent annual report required to
be filed thereunder.
Section 4.5 AMENDMENT AND MODIFICATION. No provision of this Agreement
may be waived, unless such waiver is set forth in a writing executed by both
parties to this Agreement. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of the holders of a majority
of the then outstanding Registrable Securities. Notwithstanding the foregoing,
the waiver of any provision hereof with respect to a matter that relates
exclusively to the rights of holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and does not directly or
indirectly affect the rights of other holders of Registrable Securities may be
given by holders of at least a majority of the Registrable Securities being sold
by such holders; provided that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence. No course of dealing between or among any
Person having any interest in this Agreement will be deemed effective to modify,
amend or discharge any part of this Agreement or any rights or obligations of
any person under or by reason of this Agreement.
Section 4.6 SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement
and all of the provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns. The
Investor may assign its rights under this Agreement to any subsequent holder of
the Registrable Securities, provided that the Company shall have the right to
require any holder of Registrable Securities to execute a counterpart of this
Agreement as a condition to such holder's claim to any rights hereunder. This
Agreement, together with the Investment Agreement, sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.
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Section 4.7 SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that such severability shall be
ineffective if it materially changes the economic benefit of this Agreement to
any party.
Section 4.8 NOTICES. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (a) personally served,
(b) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (c) delivered by reputable air courier service with charges
prepaid, or (d) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice given in accordance herewith. Any notice or
other communication required or permitted to be given hereunder shall be deemed
effective (i) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (ii) on the second business day
following the date of mailing by express courier service or on the fifth
business day after deposited in the mail, in each case, fully prepaid, addressed
to such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be:
If to Company
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx, 00000
Attn: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Investor:
At Address listed on the Schedule of Buyers
Either party hereto may from time to time change its address
or facsimile number for notices under this Section 4.8 by giving at least ten
(10) days' prior written notice of such changed address or facsimile number to
the other party hereto.
Section 4.9 GOVERNING LAW, JURISDICTION. This Agreement shall be
governed by and interpreted in accordance with the laws of the State of New York
without regard to the principles of conflicts of law. The parties hereto hereby
submit to the exclusive jurisdiction of the United States Federal and state
courts located in New York, New York with respect to any dispute arising under
this Agreement, the agreements entered into in connection herewith or the
transactions contemplated hereby or thereby.
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Section 4.10 TITLE AND SUBTITLES. The titles and subtitles used in this
Agreement are used for the convenience of reference and are not to be considered
in construing or interpreting this Agreement.
Section 4.11 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which may be executed by less than all of the parties and
shall be deemed to be an original instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute one and the same instrument. This Agreement, once executed by a
party, may be delivered to the other parties hereto by facsimile transmission of
a copy of this Agreement bearing the signature of the parties so delivering this
Agreement.
Section 4.12 FURTHER ASSURANCES. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
Section 4.13 NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be executed by the undersigned, thereunto duly authorized,
as of the date first set forth above.
CELERITY SYSTEMS, INC.
By:____________________________________________
Name: Xxxxxxx X. Van Meter
Title: President and Chief Executive Officer
INVESTOR
By:____________________________________________
Name:
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