REGISTRATION RIGHTS AGREEMENT
Exhibit 10.5.
This
Registration Rights Agreement (“Agreement”) is
entered into as of January 3, 2008, among ISCO International, Inc., a Delaware
corporation with offices at 0000 Xxxxxxxxx Xxxxx, Xxx Xxxxx Xxxxxxx, Xxxxxxxx
00000 (the “Company”) and
Alexander Finance, L.P., an Illinois limited partnership (the “Lender”).
W
I T N E S S E T
H:
WHEREAS,
pursuant to the Amendment to and Consent and
Waiver Under Loan Documents (the “Amendment
Agreement”), dated on or about the date hereof, by and between the
Company, the Lender, Manchester Securities Corporation, and the Guarantors
(as
defined in the Amendment Agreement), the Company issued to Lender a new Amended
and Restated Note (as defined in the Amendment Agreement) (the “New Note”) evidencing
a loan made by the Lender to the Company under the Third Amended and Restated
Loan Agreement, dated as of November 10, 2004, as amended (the “Loan Agreement”);
and
WHEREAS,
the New Note provides that it will be convertible into shares (the “Conversion Shares”)
of the common stock, par value $0.001 per share (the “Common Stock”) of the
Company; and
NOW,
THEREFORE, in consideration of the mutual promises, representations, warranties,
covenants and conditions set forth in the Loan Agreement, Amendment Agreement
and this Agreement, the Company and the Lender agree as follows:
1. Certain
Definitions. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Amendment Agreement,
the
Loan Agreement, or the New Note. As used in this Agreement, the
following terms shall have the following respective meanings:
“Approval
Date” shall
mean the date on which both (i) the Company’s stockholders shall have
approved the issuance of the Conversion Shares and (ii) the American Stock
Exchange (“AMEX”) shall
have
approved the Conversion Shares for listing on AMEX.
“Commission”
or
“SEC”
shall
mean the
Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act.
“Holder”
and
“Holders”
shall
include the Lender and any transferee or transferees of Registrable Securities
and/or the New Note which have not been sold to the public to whom the
registration rights conferred by this Agreement have been transferred in
compliance with this Agreement, the Amendment Agreement, the Loan Agreement
and
the New Note.
“1934
Act” shall mean
the Securities Exchange Act of 1934, as amended.
The
terms
“register,”
“registered”
and “registration”
shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness
of
such registration statement.
“Registrable
Securities” shall mean: (i) the Conversion Shares (without
regard to any limitations on beneficial ownership contained in the New Note)
issued or issuable to each Holder (a) upon conversion of the New Note, (b)
upon
any distribution with respect to, any exchange for or any replacement of
the New
Note, or (c) upon any conversion or exchange of any securities issued in
connection with any such distribution, exchange or replacement; (ii) securities
issued or issuable upon any stock split, stock dividend, recapitalization
or
similar event with respect to the foregoing; and (iii) any other security
issued
as a dividend or other distribution with respect to, in exchange for or in
replacement of the securities referred to in the preceding clauses, except
that
any such Conversion Shares, the Initial Conversion Shares or other securities
shall cease to be Registrable Securities when (x) they have been sold to
the
public or (y) they may be sold by the Holder thereof under Rule
144(k).
“Registration
Expenses” shall mean all reasonable expenses to be incurred by the
Company in connection with each Holder’s registration rights under this
Agreement (such amount not to exceed $5,000 in the aggregate), including,
without limitation, all registration and filing fees, printing expenses,
fees
and disbursements of counsel for the Company, and blue sky fees and expenses,
reasonable fees and disbursements of counsel to Holders (using a single counsel
selected by a majority in interest of the Holders) for a review of the
Registration Statement and related documents, 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).
“Registration
Statement” shall have the meaning set forth in Section 2(a)
herein.
“Regulation
D” shall
mean Regulation D as promulgated pursuant to the Securities Act, and as
subsequently amended.
“Securities
Act” or
“Act”
shall
mean the Securities Act of 1933, as amended.
“Selling
Expenses”
shall mean all underwriting discounts, selling commissions and transfer
taxes
applicable to the sale of Registrable Securities and all fees and disbursements
of counsel for Holders not included within “Registration Expenses”.
2. Registration
Requirements. The Company shall use its best efforts to effect
the registration of the resale of the Registrable Securities (including,
without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under
the
Securities Act) as would permit or facilitate the resale of all the Registrable
Securities in the manner (including manner of sale) and in all states reasonably
requested by the Holder. Such best efforts by the Company shall
include, without limitation, the following:
(a) The
Company shall, as expeditiously as possible after the Approval
Date:
(i) But
in
any event within 30 days of the Approval Date, prepare and file a registration
statement with the Commission pursuant to Rule 415 under the Securities Act
on
Form S-3 under the Securities Act (or in the event that the Company is
ineligible to use such form, such other form as the Company is eligible to
use
under the Securities Act provided that such other form shall be converted
into
an S-3 as soon as Form S-3 becomes available to the Company) covering resales
by
the Holders as selling stockholders (not underwriters) of the Registrable
Securities and, to the extent practicable, no other securities (the “Registration
Statement”), which Registration Statement, to the extent allowable under
the Securities Act and the rules promulgated thereunder (including Rule 416),
shall state that such Registration Statement also covers the resale of such
indeterminate number of additional shares of Common Stock as may be issued
upon
conversion of the Amended and Restated Notes by reason of stock splits, stock
dividends or similar transactions. The number of shares of Common
Stock initially included in such Registration Statement shall be no less
than
7,500,000, unless the SEC instructs the Company that a lesser number of shares
of Common Stock will be permitted to be included in such Registration Statement,
in which case the Registration Statement shall include the number of shares
of
Common Stock permitted by the SEC. The Company shall, in accordance
with applicable SEC rules, regulations, interpretations and practices, amend
such Registration Statement or file additional Registration Statements to
cover
the number of additional shares of Common Stock that may be issued or issuable
pursuant to the terms of the New Note in the event that the number of shares
of
Common Stock initially registered is insufficient or reduced in accordance
with
applicable SEC rules, regulations, interpretations and
practices. Nothing in the preceding sentence will limit the Company’s
obligations to reserve shares of Common Stock pursuant to Section 3(d) of
the
New Note. Thereafter the Company shall use its reasonable best
efforts to cause such Registration Statement and other filings to be declared
effective as soon as possible, and in any event prior to 90 days (or, if
the SEC
elects to review the Registration Statement, 150 days) following the Approval
Date (the “Effectiveness
Deadline”). Without limiting the foregoing, the Company will
promptly respond to all SEC comments, inquiries and requests, and shall request
acceleration of effectiveness at the earliest possible date.
(ii) Prepare
and file with the SEC such amendments and supplements to such Registration
Statement and the prospectus used in connection with such Registration Statement
as may be necessary to comply with the provisions of the Act with respect
to the
disposition of all securities covered by such Registration Statement and
notify
the Holders of the filing and effectiveness of such Registration Statement
and
any amendments or supplements.
(iii) Furnish
to each Holder such numbers of copies of a current prospectus conforming
with
the requirements of the Act, copies of the Registration Statement, any amendment
or supplement thereto and any documents incorporated by reference therein
and
such other documents as such Holder may reasonably require in order to
facilitate the disposition of Registrable Securities owned by such
Holder.
(iv) Register
and qualify the securities covered by such Registration Statement under the
securities or “Blue Sky” laws of all domestic jurisdictions, to the extent
required; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file
a
general consent to service of process in any such states or
jurisdictions.
(v) Notify
each Holder immediately of the happening of any event (but not the substance
or
details of any such events unless specifically requested by a Holder) as
a
result of which the prospectus (including any supplements thereto or thereof)
included in such Registration Statement, as then in effect, includes an untrue
statement of material fact or omits to state a material fact required to
be
stated therein or necessary to make the statements therein not misleading
in
light of the circumstances then existing, and use its best efforts to promptly
update and/or correct such prospectus.
(vi) Notify
each Holder immediately of the issuance by the Commission or any state
securities commission or agency of any stop order suspending the effectiveness
of the Registration Statement or the threat or initiation of any proceedings
for
that purpose. The Company shall use its best efforts to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible time.
(vii) Permit
Holders and counsel to the Holders to review the Registration Statement and
all
amendments and supplements thereto within a reasonable period of time (but
not
less than two (2) full Trading Days (as defined in the Amended New Note))
prior
to each filing and will not request acceleration of the Registration Statement
without prior notice to such counsel.
(viii) List
the
Registrable Securities covered by such Registration Statement with all
securities exchange(s) and/or markets on which the Common Stock is then listed
and prepare and file any required filings with the Principal
Market.
(b) Set
forth
below in this Section 2(b) are (I) events that may arise that the Lender
considers will interfere with the full enjoyment of its rights under this
Agreement, the Loan Agreement, the Amendment Agreement and the New Note (the
“Interfering
Events”), and (II) certain remedies applicable in each of these
events.
Paragraphs
(i) through (iii) of this Section 2(b) describe the Interfering Events, provide
a remedy to the Lender if an Interfering Event occurs.
Paragraph
(iv) provides, interalia,
that the Lender
has the right to specific performance.
The
preceding paragraphs in this Section 2(b) are meant to serve only as an
introduction to this Section 2(b), are for convenience only, and are not
to be
considered in applying, construing or interpreting this Section
2(b).
(i) Delay
in
Effectiveness of Registration Statement.
(A) In
the
event that such Registration Statement has not been declared effective
by: (x) the Effectiveness Deadline if the SEC does not elect to
review the Registration Statement or (y) within 150 days of the Approval
Date,
if the SEC elects to review the Registration Statement, or the Company at
any
time fails to issue unlegended Registrable Securities to the extent required
by
Section 7 of the Amendment Agreement, then the Company shall pay each Holder
(other than (i) in the case of a Registration Statement not declared effective,
a Holder of Registrable Securities that the Company could exclude from
registration in accordance with Section 9 and (ii) in the case of a failure
to
issue unlegended certificates in accordance with the Amendment Agreement,
a
Holder that is not a party to, including as a permitted assignee bound to,
the
Amendment Agreement) a Monthly Delay Payment (as defined below) with respect
to
each successive 30-day period (or portion thereof appropriately prorated)
thereafter that effectiveness of the Registration Statement is delayed or
failure to issue such unlegended Registrable Securities persists.
(B) Subject
to subsection (C)(II) below, as used in this Agreement, a “Monthly Delay
Payment” shall be a cash payment equal to 1% of the amount equal to (x)
the conversion price of the New Notes multiplied by (y) the sum of the number
of
Conversion Shares that are Registrable Securities and held by the Holder
plus
the number of Conversion Shares issuable upon conversion of the New Note
held by
the Holder. Payment of the Monthly Delay Payments shall be due and
payable from the Company to such Holder on the later of (I) the end of the
applicable 30-day period or portion thereof and (II) 5 business days after
demand therefor. At the option of the Holder, Monthly Delay Payments
may be added to the outstanding Principal Amount of the New Note held by
it.
(C) Notwithstanding
the foregoing, (I) there shall be excluded from the calculation of the number
of
days that the Registration Statement has not been declared effective the
delays
which are solely attributable to delays in the Lender providing information
required for the Registration Statement or to the Lender not having otherwise
complied with its obligations hereunder; (II) the aggregate amount of Monthly
Delay Payments payable to a Holder pursuant to this Agreement shall not exceed
ten (10) times the amount of Monthly Delay Payment calculated for such Holder
pursuant to subsection (B) above; and (III) no Monthly Delay Payments shall
accrue as to any Registrable Securities from and after the date such security
is
no longer a Registrable Security.
(ii) No
Listing; Suspension of Class of Shares
(A) In
the
event that the Company fails, refuses or for any other reason is unable to
cause
the Registrable Securities covered by the Registration Statement to be listed
(subject to issuance) with the Principal Market (as defined in the New Note)
at
all times during the period (“Listing Period”) from
the date (“Effectiveness
Commencement
Date”) which is the earlier of the effectiveness of the Registration
Statement and the 90th
day
following the Approval Date (or the 150th
day if
the SEC elects to review the Registration Statement) until such time as the
registration period specified in Section 5 terminates, then the Holder shall
have available the remedy set forth in Section 4(a) of the New
Note.
(B) In
the
event that shares of Common Stock of the Company are not listed on the Principal
Markets at all times following the Approval Date, or are otherwise suspended
from trading and remain unlisted or suspended for 3 consecutive days, then
the
Holder shall have available the remedy set forth in Section 4(a) of the New
Note.
(iii) Blackout
Periods.
(A) In
the
event the Registration has become effective and, afterwards, any Holder’s
ability to sell Registrable Securities under the Registration Statement is
suspended for more than (i) 30 days in any 90-day period or (ii) 60 days
in any
calendar year (“Blackout Period”),
including without limitation by reason of any suspension or stop order with
respect to the Registration Statement or the fact that an event has occurred
as
a result of which the prospectus (including any supplements thereto) included
in
such Registration Statement then in effect includes an untrue statement of
material fact or omits to state a material fact required to be stated therein
or
necessary to make the statements therein not misleading in light of the
circumstances then existing, then the Company shall provide to each Holder
a
Monthly Delay Payment for each 30-day period or portion thereof (appropriately
prorated) from and after the expiration of the Blackout Period, on the terms
set
forth in Section 2(b)(i)(B) above.
(B) Notwithstanding
anything to the contrary herein, the Company may suspend the filing or
availability of a Registration Statement or prospectus or delay the disclosure
of any material non-public information or pending development concerning
the
Company for a specified period if the disclosure of such information or
development during such period would be materially detrimental, in the good
faith judgment of the Company’s general counsel and one or more executive
officers of the Company, to the Company (a “Grace Period”);
provided, however, that the Company shall promptly (i) notify the Holders
in
writing of the existence of such material non-public information or pending
development giving rise to a Grace Period (provided that the Company shall
not
disclose the content of such material non-public information or pending
development to the Holders) and the date on which the Grace Period will begin,
and (ii) notify the Holders in writing of the date on which the Grace Period
ends. No single Grace Period shall, without incurring any liability to pay
the
Monthly Delay Payments pursuant to Section 2(b)(i)(B), exceed twenty (20)
consecutive days and the aggregate duration of all Grace Periods shall not,
without incurring any liability to pay the Monthly Delay Payments pursuant
to
Section 2(b)(i)(B), exceed forty (40) days during any three hundred sixty-five
day period (each Grace Period complying with this Section 2(b)(iii)(B) being
an
“Allowable Grace
Period”). For purposes of determining the length of a Grace Period, the
Grace Period shall be deemed to begin on and include the date stated in the
notice referred to in clause (i) above as the beginning of such Grace Period
and
shall end on and include the earlier of (I) the date stated in the notice
referred to in clause (ii) above as the end of such Grace Period or, (II)
to the
extent considered appropriate by the Company in its sole discretion, such
earlier date as to which the Company may advise the Holders in writing after
the
Company’s provision of the notices described above; provided, however, that no
Grace Period shall be longer than an Allowable Grace Period without incurring
any liability to pay the Monthly Delay Payments pursuant to Section 2(b)(i)(B).
The Company agrees to use all reasonable efforts to ensure that the Holders
may
resume sales under the relevant Registration Statement as soon as such
suspension, in the sole discretion of the Company, is no longer necessary.
The
provisions of Sections 2(a)(iii) and 2(a)(v) of this Agreement shall not
be
applicable, and the Company shall not have any obligation to pay any Monthly
Delay Payments by reason of any delay pursuant to Section 2(b)(i) or Blackout
Period, during the period of any Allowable Grace Period.
(iv) Cumulative
Remedies. The Monthly Delay Payments provided for above are in
addition to and not in lieu or limitation of any other rights the Holders
may
have at law, in equity or under the terms of the New Note, the Amendment
Agreement, the Loan Agreement and this Agreement, including without limitation,
the right to monetary contract damages and specific performance; provided
that
(x) no holder of the New Note may collect default interest in addition to
Monthly Delay Payments and (y) no holder of the New Note may collect more
than
one Monthly Delay Payment with respect to the same 30-day period or portion
thereof. Each Holder shall be entitled to specific performance of any
and all obligations of the Company in connection with the registration rights
of
the Holders hereunder.
(c) The
Holders agree to cooperate as reasonably requested by the Company in connection
with the preparation and filing of the Registration Statement.
(d) If
the
Holder(s) intend to distribute the Registrable Securities by means of an
underwriting, the Holder(s) shall so advise the Company. Any such
underwriting may only be administered by nationally or regionally recognized
investment bankers reasonably satisfactory to the Company.
(e) The
Company shall enter into such customary agreements for secondary offerings
(including a customary underwriting agreement with the underwriter or
underwriters, if any) and take all such other reasonable actions reasonably
requested by the Holders in connection with any underwritten offering or
when
the SEC has required that the Holders be identified as underwriters in the
Registration Statement in order to expedite or facilitate the disposition
of
such Registrable Securities and in such connection:
(i) make
such
representations and warranties to the Holders and the underwriter or
underwriters, if any, in form, substance and scope as are customarily made
by
issuers to underwriters in secondary offerings;
(ii) cause
to
be delivered to the sellers of Registrable Securities and the underwriter
or
underwriters, if any, opinions of independent counsel to the Company, on
and
dated as of the effective day (or in the case of an underwritten offering,
dated
the date of delivery of any Registrable Securities sold pursuant thereto)
of the
Registration Statement, and within ninety (90) days following the end of
each
fiscal year thereafter, which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Holders and the
underwriter(s), if any, and their counsel and covering such matters that
are
customarily given to underwriters in underwritten offerings, addressed to
the
Holders and each underwriter, if any;
(iii) cause
to
be delivered, immediately prior to the effectiveness of the Registration
Statement (and, in the case of an underwritten offering, at the time of delivery
of any Registrable Securities sold pursuant thereto), and at the beginning
of
each fiscal year following a year during which the Company’s independent
certified public accountants shall have reviewed any of the Company’s books or
records, a “comfort” letter from the Company’s independent certified public
accountants addressed to each underwriter (including the Holders, if the
SEC has
required them to be identified as underwriters in the Registration Statement),
if any, to the extent requested by such underwriters, stating that such
accountants are independent public accountants within the meaning of the
Securities Act and the applicable published rules and regulations thereunder,
and otherwise in customary form and covering such financial and accounting
matters as are customarily covered by letters of the independent certified
public accountants delivered in connection with secondary offerings; such
accountants shall have undertaken in each such letter to update the same
during
each such fiscal year in which such books or records are being reviewed so
that
each such letter shall remain current, correct and complete throughout such
fiscal year; and each such letter and update thereof, if any, shall be
reasonably satisfactory to such underwriters;
(iv) if
an
underwriting agreement is entered into, the same shall include customary
indemnification and contribution provisions to and from the underwriters
and
procedures for secondary underwritten offerings; and
(v) deliver
such documents and certificates as may be reasonably requested by the Holders
of
the Registrable Securities being sold or the managing underwriter or
underwriters, if any, to evidence compliance with clause (i) above and with
any
customary conditions contained in the underwriting agreement, if
any.
(f) The
Company shall make available for inspection by the Holders, representative(s)
of
all the Holders together, any underwriter participating in any disposition
pursuant to a Registration Statement, and any attorney or accountant retained
by
any Holder or underwriter, all financial and other records customary for
purposes of the Holders’ due diligence examination of the Company and review of
any Registration Statement, all SEC Documents (as defined in the Purchase
Agreement) filed subsequent to the Approval Date, pertinent corporate documents
and properties of the Company, and cause the Company’s officers, directors and
employees to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with such
Registration Statement, provided that such parties agree to keep such
information confidential. Notwithstanding the foregoing, the
foregoing right shall not extend to any Holder (i) who is not a financial
investor or entity or (ii) who, itself or through any affiliate, has any
strategic business interest that would reasonably be expected to be in conflict
with any business of the Company or its subsidiaries.
(g) Subject
to Section 2(b) above and to clause (i) below, the Company may suspend the
use
of any prospectus used in connection with the Registration Statement only
in the
event, and for such period of time as, (i) such a suspension is required
by the
rules and regulations of the Commission or (ii) it is determined in good
faith
by the Board of Directors of the Company that because of valid business reasons
(not including the avoidance of the Company’s obligations hereunder), it is in
the best interests of the Company to suspend such use, and prior to suspending
such use in accordance with this clause (ii) the Company provides the Holders
with written notice of such suspension, which notice need not specify the
nature
of the event giving rise to such suspension. The Company will use
reasonable best efforts to cause such suspension to terminate at the earliest
possible date. This provision shall not affect the right of Holders
to receive Monthly Delay Payments pursuant to Section 2(b) above.
(h) The
Company shall file a Registration Statement with respect to any newly authorized
and/or reserved Registrable Securities consisting of Conversion Shares described
in clause (i) of the definition of Registrable Securities within five (5)
business days of any stockholders meeting authorizing same and shall use
its
best efforts to cause such Registration Statement to become effective within
sixty (60) days of such stockholders meeting. If the Holders become
entitled, pursuant to an event described in clause (ii) and (iii) of the
definition of Registrable Securities, to receive any securities in respect
of
Registrable Securities that were already included in a Registration Statement,
subsequent to the date such Registration Statement is declared effective,
and
the Company is unable under the securities laws to add such securities to
the
then effective Registration Statement, the Company shall promptly file, in
accordance with the procedures set forth herein, an additional Registration
Statement with respect to such newly Registrable Securities. The
Company shall use its best efforts to (i) cause any such additional Registration
Statement, when filed, to become effective under the Securities Act, and
(ii)
keep such additional Registration Statement effective during the period
described in Section 5 below and cause such Registration Statement to become
effective within 90 days of that date that the need to file the Registration
Statement arose. All of the registration rights and remedies under
this Agreement shall apply to the registration of the resale of such newly
reserved shares and such new Registrable Securities, including without
limitation the provisions providing for default payments contained
herein.
(i) The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and
the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the Securities Act,
as may
be necessary to keep such Registration Statement effective at all times during
the Registration Period (as defined below), and, during such period, comply
with
the provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by such Registration
Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 2(h)) by reason of the Company filing
a
report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under
the
1934 Act, the Company shall have incorporated such report by reference into
such
Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act report is
filed
which created the requirement for the Company to amend or supplement such
Registration Statement.
(j) Each
Holder agrees by its acquisition of the Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the
kind
described in Sections 2(a)(v) or 2(a)(vi), such Holder will forthwith
discontinue disposition of such Registrable Securities under the Registration
Statement until such Holder’s receipt of the copies of the supplemented
Prospectus and/or amended Registration Statement contemplated by Section
3(h),
or until it is advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus may be resumed, and, in
either
case, has received copies of any additional or supplemental filings that
are
incorporated or deemed to be incorporated by reference in such Prospectus
or
Registration Statement. The Company may provide appropriate stop
orders to enforce the provisions of this paragraph.
(k) If
requested by a Holder, the Company shall (i) as soon as practicable incorporate
in a prospectus supplement or post-effective amendment such information as
a
Holder reasonably requests to be included therein relating to the sale and
distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering; (ii)
as soon
as practicable make all required filings of such prospectus supplement or
post-effective amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment; and (iii) as soon
as
practicable, supplement or make amendments to any Registration Statement
if
reasonably requested by a Holder holding any Registrable
Securities.
3. Expenses
of
Registration. All Registration Expenses in connection with any
registration, qualification or compliance with registration pursuant to this
Agreement shall be borne by the Company, and all Selling Expenses of a Holder
shall be borne by such Holder.
4. Registration
on Form
S-3. The Company shall use its best efforts to remain
qualified for registration on Form S-3 or any comparable or successor form
or
forms, or in the event that the Company is ineligible to use such form, such
form as the Company is eligible to use under the Securities Act, provided
that
if such other form is used, the Company shall convert such other form to
a Form
S-3 as soon as the Company becomes so eligible, provided that the Company
shall
maintain the effectiveness of the Registration Statement then in effect until
such time as a Registration Statement or Form S-3 covering the Registrable
Securities has been declared effective by the SEC.
5. Registration
Period. In the case of the registration effected by the
Company pursuant to this Agreement, the Company shall keep such registration
effective until the earlier of (a) the date on which all the Holders have
completed the sales or distribution described in the Registration Statement
relating thereto or, (b) until such Registrable Securities may be sold by
the
Holders under Rule 144(k) (provided that the Company’s transfer agent has
accepted an instruction from the Company to such effect) (the “Registration
Period”). Subject to Section 8 below, this Agreement shall be
terminated automatically without further action by any party hereto upon
the
expiration of the Registration Period.
6. Indemnification.
(a) Company
Indemnity. The Company will indemnify and hold harmless each
Holder, each of its officers, directors, agents and partners, and each person
controlling of each of the foregoing, within the meaning of Section 15 of
the
Securities Act and the rules and regulations thereunder with respect to which
registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls, within
the meaning of Section 15 of the Securities Act and the rules and regulations
thereunder, 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 in light of the circumstances under
which
they were made, or any violation by the Company of the Securities Act or
any
state securities law or in either case, 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 Holder, each of its officers, directors, agents and
partners, and each person controlling each of the foregoing, each such
underwriter and each person who controls any such underwriter, for any legal
and
any other expenses reasonably 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 such case to a Holder to the extent that
any
such claim, loss, damage, liability or expense arises out of or is based
(i) on
any untrue statement or omission based upon written information furnished
to the
Company by such Holder or the underwriter (if any) therefor and stated to
be
specifically for use therein or (ii) the failure of a Holder to deliver at
or
prior to the written confirmation of sale, the most recent prospectus, as
amended or supplemented. The indemnity agreement contained in this
Section 6(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without
the
consent of the Company (which consent will not be unreasonably
withheld).
(b) Holder
Indemnity. Each Holder will, severally and not jointly, if
Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify
and
hold harmless the Company, each of its directors, officers, agents and partners,
and each underwriter, if any, of the Company’s securities covered by such a
registration statement, each person who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder, each other Holder (if any), and each of their officers,
directors and partners, and each person controlling of such other Holder(s)
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 such registration statement,
prospectus, offering circular or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein
or
necessary to make the statement therein not misleading in light of the
circumstances under which they were made, and will reimburse the Company
and
such other Holder(s) and their directors, officers and partners, underwriters
or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating and 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 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, and provided that the maximum amount for which such Holder shall
be
liable under this indemnity shall not exceed the net proceeds received by
such
Holder from the sale of the Registrable Securities pursuant to the registration
statement in question. The indemnity agreement contained in this
Section 6(b) shall not apply to amounts paid in settlement of any such claims,
losses, damages or liabilities if such settlement is effected without the
consent of such Holder (which consent shall not be unreasonably
withheld).
(c) Procedure. Each
party entitled to indemnification under this Section 6 (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 in any litigation resulting therefrom, provided
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 be unreasonably withheld), and
the
Indemnified Party may participate in such defense at its own expense, 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 Section 6 except to the extent that the Indemnifying Party is
materially and adversely affected by such failure to provide
notice. 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 non-privileged
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.
7. Contribution. If
the indemnification provided for in Section 6 herein is unavailable to the
Indemnified Parties in respect of any losses, claims, damages or liabilities
referred to herein (other than by reason of the exceptions provided therein),
then each such 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 or liabilities as between the
Company on the one hand and any Holder on the other, in such proportion as
is
appropriate to reflect the relative fault of the Company and of such Holder
in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and
of any Holder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder.
In
no
event shall the obligation of any Indemnifying Party to contribute under
this
Section 7 exceed the amount that such Indemnifying Party would have been
obligated to pay by way of indemnification if the indemnification provided
for
under Section 6(a) or 6(b) hereof had been available under the
circumstances.
The
Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by prorata
allocation (even
if the Holders or the underwriters were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraphs 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, no
Holder or underwriter shall be required to contribute any amount in excess
of
the amount by which (i) in the case of any Holder, the net proceeds received
by
such Holder from the sale of Registrable Securities pursuant to the registration
statement in question or (ii) in the case of an underwriter, the total price
at
which the Registrable Securities purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any damages
that such Holder or underwriter 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.
8. Survival. The
indemnity and contribution agreements contained in Sections 6 and 7 and the
representations and warranties of the Company referred to in Section 2(d)(i)
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, the Amendment Agreement, the Loan Agreement,
or
the New Note or any underwriting agreement, (ii) any investigation made by
or on
behalf of any Indemnified Party or by or on behalf of the Company, and (iii)
the
consummation of the sale or successive resales of the Registrable
Securities.
9. Information
by
Holders. Each Holder shall promptly furnish to the Company
such information regarding such Holder and the distribution and/or sale proposed
by such Holder as the Company may from time to time reasonably request in
writing in connection with any registration, qualification or compliance
referred to in this Agreement, and the Company may exclude from such
registration the Registrable Securities of any Holder who unreasonably fails
to
furnish such information within a reasonable time after receiving such
request. The intended method or methods of disposition and/or sale
(Plan of Distribution) of such securities as so provided by such Purchaser
shall
be included without alteration in the Registration Statement covering the
Registrable Securities and shall not be changed without written consent of
such
Holder. Each Holder agrees that, other than ordinary course brokerage
arrangements, in the event it enters into any arrangement with a broker dealer
for the sale of any Registrable Securities through a block trade, special
offering, exchange distribution or secondary distribution or a purchase by
a
broker or dealer, such Holder shall promptly deliver to the Company in writing
all applicable information required in order for the Company to be able to
timely file a supplement to the Prospectus pursuant to Rule 424(b) under
the
Securities Act, to the extent that such supplement is legally
required. Such information shall include a description of (i) the
name of such Holder and of the participating broker dealer(s), (ii) the number
of Registrable Securities involved, (iii) the price at which such Registrable
Securities were or are to be sold, and (iv) the commissions paid or to be
paid
or discounts or concessions allowed or to be allowed to such broker dealer(s),
where applicable.
10. Replacement
Certificates. The certificate(s) representing the Registrable
Securities held by any Purchaser (or then Holder) may be exchanged by such
Purchaser (or such Holder) at any time and from time to time for certificates
with different denominations representing an equal aggregate number of
Registerable Securities, as reasonably requested by such Purchaser (or such
Holder) upon surrendering the same. No service charge will be made
for such registration or exchange. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any certificates representing a Registrable Security and, in
the
case of loss, theft or destruction, of indemnity reasonably satisfactory
to it,
or upon surrender and cancellation of such certificate if mutilated, the
Company
will make and deliver a new certificate of like tenor and dated as of such
cancellation at no charge to the holder.
11. Transfer
or
Assignment. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the
Lenders by the Company under this Agreement to cause the Company to register
Registrable Securities may be transferred or assigned (in whole or in part)
to a
permitted transferee or assignee of the New Note or Registrable Securities,
and
all other rights granted to the Lender by the Company hereunder may be
transferred or assigned to any permitted transferee or assignee of the New
Note
or Registrable Securities; provided in each case that the Company must be
given
written notice by the Lender at the time of or within a reasonable time after
said transfer or assignment, stating the name and address of said transferee
or
assignee and identifying the securities with respect to which such registration
rights are being transferred or assigned; and provided further that the
transferee or assignee of such rights agrees in writing to be bound by the
registration provisions of this Agreement.
12. Reports
Under The 1934
Act.
With
a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Securities Act or any other similar rule or regulation of the SEC
that
may at any time permit the Holders to sell securities of the Company to the
public without registration (“Rule 144”), the
Company agrees to:
(a) make
and
keep public information available, as those terms are understood and defined
in
Rule 144;
(b) file
with
the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the 1934 Act so long as the Company
remains
subject to such requirements and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and
(c) furnish
to each Holder so long as such Holder owns Registrable Securities, promptly
upon
request, (i) a written statement by the Company, if true, that it has complied
with the reporting requirements of Rule 144, the Securities Act and the 1934
Act, (ii) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested to permit the Holders to
sell
such securities pursuant to Rule 144 without registration.
13. Miscellaneous.
(a) Remedies. The
Company and the Lender acknowledge and agree that irreparable damage would
occur
in the event that any of the provisions of this Agreement were not performed
in
accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction
or
injunctions to prevent or cure breaches of the provisions of this Agreement
and
to enforce specifically the terms and provisions hereof, this being in addition
to any other remedy to which any of them may be entitled by law or
equity.
(b) Jurisdiction. THE
PARTIES MUTUALLY IRREVOCABLY AND UNCONDITIONALLY AGREE (I) THAT ALL ACTIONS
OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF NEW
YORK,
NEW YORK COUNTY AND THAT THE PARTIES SHALL BE SUBJECT TO THE JURISDICTION
OF
SUCH COURTS, AND (II) THAT SERVICE OF PROCESS BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, SHALL CONSTITUTE PERSONAL SERVICE. NOTHING IN THIS SECTION
13(b) SHALL AFFECT OR LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW. THE COMPANY AND EACH PURCHASER WAIVES, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT
THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b).
(c) Notices. Any
notice or other communication required or permitted to be given hereunder
shall
be in writing by facsimile, electronic transmission, mail or personal delivery
and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be:
to
the
Company:
ISCO
International, Inc.
0000
Xxxxxxxxx Xxxxx
Xxx
Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention:: Xxxxx
Xxxxxxx
E-mail:
xxxxx.xxxxxxx@xxxxxxxx.xxx
with
a
copy to:
Xxxxxx
Xxxxxxxx LLP
000
Xxxxxx Xxxx
000
Xxxxxxx Xxxx
Xxxxxx,
Xxxxxxxxxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxxxxxxx, Esq.
E-mail:
XXXXXXXX@xxxxxxxxx.xxx
to
the
Lender:
Alexander
Finance, LP
0000
Xxxxxxx Xxxxxx
Xxxxxxxx,
Xxxxxxxx
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxxx
X. Xxxxxxxx
E-Mail:
xxxxxxxxx@xxxxx.xxx
with
a
copy to:
Xxxxxxxx
& Xxxxxx
00
X.
Xxxxxx Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxx
X. Xxxxxxxxx, Esq.
E-Mail:
xxxxxxx@xxxxxxxx.xxx
Any
party
hereto may from time to time change its address for notices by giving at least
five days’ written notice of such changed address to the other parties
hereto.
(d) Waivers. No
waiver by any party of any default with respect to any provision, condition
or
requirement of this Agreement shall be deemed to be a continuing waiver in
the
future or a waiver of any other provision, condition or requirement hereof,
nor
shall any delay or omission of any party to exercise any right hereunder
in any
manner impair the exercise of any such right accruing to it
thereafter.
(e) Execution
in
Counterpart. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement,
it
being understood that all parties need not sign the same
counterpart.
(f) Signatures. Facsimile
signatures shall be valid and binding on each party submitting the
same.
(g) Entire
Agreement;
Amendment. This Agreement, together with the Amendment
Agreement, the Loan Agreement, the New Note and the agreements and documents
contemplated hereby and thereby, contains the entire understanding and agreement
of the parties.
(h) Governing
Law. This Agreement and the validity and performance of the
terms hereof shall be governed by and construed in accordance with the laws
of
the State of New York applicable to contracts executed and to be performed
entirely within such state.
(i) Jury
Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY
JURY.
(j) Titles. The
titles used in this Agreement are used for convenience only and are not to
be
considered in construing or interpreting this Agreement.
(k) 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 rule of strict construction will be applied against any
party.
[Signature
Page Follows]
In
Witness Whereof, the
parties hereto have caused this Agreement to be duly executed as of the date
first above written.
ISCO
INTERNATIONAL, INC.
By:
/s/
Xxxxx
Xxxxxxx
Name:
Xxxxx Xxxxxxx
Title:
CFO
ALEXANDER
FINANCE, L.P.
By:
/s/
Xxxxxxxx X.
Xxxxxxxx
Name:
Xxxxxxxx X. Xxxxxxxx
Title:
President: Bun Partners, Inc.
Its:
General Partner
