REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
December 28, 2001, is entered into by and between ALTAIR INTERNATIONAL, INC., an
Ontario corporation (the "Company"), and Doral 18, LLC, a Cayman Islands limited
liability company (the "Buyer" or "Holder").
RECITALS
WHEREAS, in connection with the Note Termination and Issuance Agreement
dated as of even date herewith (the "Termination Agreement") among the parties
hereto and certain affiliates of the Company, the parties thereto have agreed,
among other things, that (i) the Company and its subsidiaries shall issue a
$2,000,000 Secured Term Note (the "New Note") that shall supersede and replace
the existing 10% Asset-backed Exchangeable Term Note in the original principal
amount of $7,000,000 dated December 15, 2000, as amended to date (the "Note"),
(ii) the Company shall execute the Warrant Amendment Agreement in the form
attached to the Termination Agreement as Exhibit E (the "Warrant Amendment"),
which document reprices all of the warrants described on Exhibit A hereto (the
"Existing Warrants") to $1.50 per share, (iii) the Company will issue to Buyer
an additional warrant to purchase 200,000 common shares of the Company ("Common
Shares") at $1.50 per share in the form attached to the Termination Agreement as
Exhibit C (the "Fixed Warrant") and (iv) the Company will issue to Buyer a
warrant to purchase up to 500,000 Common Shares at $.01 per share (which vests
as the market price of the Common Shares increases) in the form attached to the
Termination Agreement as Exhibit D (the "Conditional Warrant"); and
WHEREAS, in connection with the Termination Agreement, the Company and
Doral desire for the Company to file a new registration statement registering
under the Securities Act of 1933, as amended (the "1933 Act"), the Common Shares
issuable upon exercise of the exchange rights that accrue under the Note and the
Common Shares issuable upon exercise of the Fixed Warrant, the Conditional
Warrant and the Existing Warrants not covered by an existing registration
statement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Buyer hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
A. "Investor" means the Buyer, any permitted transferee or assignee
thereof to whom Buyer assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section 8
and any transferee or assignee thereof to whom a transferee or assignee assigns
its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 8.
B. "Issuance Date" shall mean the date the New Note is issued.
C. "Person" means a natural person, a partnership, corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a governmental agency or any
department, agency or political subdivision thereof.
1
D. "Register," "registered," and "registration" refer to a registration
effected by preparing and filing one or more Registration Statements (as defined
below) in compliance with the 1933 Act and pursuant to Rule 415 under the 1933
Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement(s) by the United States Securities and Exchange
Commission (the "SEC").
E. "Registrable Securities" means the maximum number of Common Shares
issuable in connection with the New Note (assuming no interest is redeemed with
cash and the applicable exchange rate is $.50 throughout the term of the New
Note) and the maximum number of Common Shares issuable upon exercise of the
Fixed Warrant, the Conditional Warrant, the Existing Warrants (to the extent not
registered under the Existing Registration Statement), and any shares of capital
stock issued or issuable with respect thereto as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or otherwise.
F. "Registration Statement" means a registration statement of the
Company filed under the 1933 Act, including a post-effective amendment to a
registration statement.
G. "Securities" shall mean the Registrable Securities and any Common
Shares issuable in connection with the Existing Warrants.
H. "New Warrants" shall mean the Fixed Warrant, the Conditional Warrant
and, to the extent the re-sale of the Common Shares issuable upon the exercise
thereof is not registered under the Existing Registration Statement, the
Existing Warrants.
2. Rule 424 Prospectus; No New Amendments. On of before January 7, 2001
(the "Supplement Deadline"), the Company shall prepare, deliver to Holder and
cause to be filed with the SEC a prospectus supplement pursuant to Rule 424
promulgated under the 1933 Act (the "Prospectus Supplement") replacing the
prospectus incorporated by reference into the Existing Registration Statement,
which Prospectus Supplement shall reflect the Warrant Amendment and the
termination of the Note. In addition, the Company hereby covenants and agrees
that, during the period commencing on the date after the Issuance Date and
continuing until the date that is 60 days after the Prospectus Supplement is
filed, the Company shall not enter into any agreement or take any other action
that would require the Company to file a post-effective amendment to the
Existing Registration Statement.
3. New Registration.
A. Mandatory Registration. The Company shall prepare, and, as soon as
practicable but in no event later than thirty (30) days after the Issuance Date
(the "Filing Deadline"), file with the SEC a Registration Statement or
Registration Statements (as is necessary) covering the resale of all of the
Registrable Securities (the "New Registration Statement"). In addition to the
Registrable Securities, the Company may, at its discretion, register under the
New Registration Statement the re-sale of any Common Shares that are outstanding
(or subject to a binding subscription agreement) as of the Issuance Date or
issuable upon the exercise of warrants that are outstanding (or subject to a
binding subscription agreement) as of the Issuance Date. The Company shall use
its best efforts to have the Registration Statement declared effective by the
SEC as soon as practicable.
B. Allocation of Registrable Securities; Registration of Additional
Securities. The initial number of Registrable Securities included in any
Registration Statement and each increase in the number of Registrable Securities
included therein shall be allocated pro rata among the Investors based on the
number of Registrable Securities held by each Investor at the time the New
Registration Statement covering such initial number of Registrable Securities or
increase thereof is declared effective by the SEC. In the event that an Investor
2
sells or otherwise transfers any of such Person's Registrable Securities, each
transferee shall be allocated a pro rata portion of the then remaining number of
Registrable Securities included in such Registration Statement for such
transferor. Any shares of Common Stock included in a Registration Statement and
which remain allocated to any Person which ceases to hold any Registrable
Securities shall be allocated to the remaining Investors, pro rata based on the
number of Registrable Securities then held by such Investors. In the event the
number of shares of Common Stock initially registered with respect to the New
Note is insufficient to cover all of the shares of Common Stock issuable upon
exercise of exchange rights that accrue under the New Note, the Company shall
(at any time the number of remaining registered shares with respect to the New
Note is less than 50,000) file a new registration statement registering the
additional shares and use reasonable efforts to cause such registration
statement to become effective as soon as possible.
C. Legal Counsel. The Buyer shall have the right to select one legal
counsel to review any Prospectus Supplement or Registration Statement filed
pursuant to Section 2 or 3 ("Legal Counsel"). The Company shall reasonably
cooperate with Legal Counsel in performing the Company's obligations under this
Agreement.
D. Form S-3. To the extent permitted by applicable laws and
regulations, the Company shall register the sale of the Registrable Securities
on Form S-3.
E. Related Obligations. With respect to the New Registration Statement
the Company shall have, and with respect to the Existing Registration Statement
the Company shall continue to have, the obligation to use its best efforts to
effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto, the Company shall
have the following obligations:
(i) The Company shall keep the Registration Statement effective
pursuant to Rule 415 at all times until the earlier of (A) the date as of which
the Investors may sell all of the Registrable Securities without restriction
pursuant to Rule 144(k) promulgated under the 1933 Act (or successor thereto) or
(B) the date on which the Investors shall have sold all the Registrable
Securities and (B) none of the Warrants is outstanding (the "Registration
Period"), which Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(ii) 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 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement 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 Securities Exchange Act of 1934, as amended (the "1934 Act"),
the Company 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 the Registration Statement.
(iii) The Company shall permit Legal Counsel to review and comment
upon a Registration Statement and all amendments and supplements thereto at
least two (2) days prior to the date the Company proposes to file such documents
with the SEC. The Company shall not submit a request for acceleration of the
3
effectiveness of a Registration Statement or any amendment or supplement thereto
without at least 24 hours prior notice to the Investor and its Legal Counsel.
The Company shall furnish to Legal Counsel, without charge to Investors, (i)
copies of any correspondence from the SEC or the staff of the SEC to the Company
or its representatives relating to any Registration Statement, (ii) promptly
after the same is prepared and filed with the SEC, one copy of any Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits and
(iii) upon the effectiveness of any Registration Statement, one copy of the
prospectus included in such Registration Statement and all amendments and
supplements thereto.
(iv) The Company shall furnish to each Investor whose Securities
are included in any Registration Statement, without charge, (i) promptly after
the same is prepared and filed with the SEC, at least one copy of such
Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits, (ii) upon the effectiveness of any Registration Statement, one
copy of the prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such
Investor may reasonably request) and (iii) such other documents, including
copies of any preliminary or final prospectus, as such Investor may reasonably
request from time to time in order to facilitate the disposition of the
Registrable Securities owned by such Investor.
(v) The Company shall (i) register and qualify the Securities
covered by a Registration Statement under such other securities or "blue sky"
laws of such jurisdictions as Legal Counsel or any Investor reasonably requests,
(ii) prepare and file in those jurisdictions, such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions.
(vi) The Company shall promptly notify Legal Counsel of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction or its receipt of
actual notice of the initiation or threatening of any proceeding for such
purpose.
(vii) As promptly as practicable after becoming aware of such event
(but in no event later than one business day thereafter), the Company shall
notify Legal Counsel and Buyer in writing of the happening of any event as a
result of which the prospectus included in a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and promptly prepare a supplement or amendment to such Registration
Statement to correct such untrue statement or omission, and deliver one (1) copy
of such supplement or amendment to Legal Counsel and each Investor (or such
other number of copies as Legal Counsel or Buyer may reasonably request). The
Company shall also promptly notify Legal Counsel and Buyer in writing (A) when a
prospectus or any prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective amendment has
become effective (notification of such effectiveness shall be delivered to Legal
Counsel and Buyer by facsimile on the same day of such effectiveness and by
overnight mail), (B) of any request by the SEC for amendments or supplements to
a Registration Statement or related prospectus or related information, and (C)
of the Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
(viii) The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Securities for sale in any jurisdiction and, if such an order or suspension is
4
issued, to obtain the withdrawal of such order or suspension at the earliest
possible moment and to notify Legal Counsel and Buyer who holds Securities being
sold of the issuance of such order and the resolution thereof or its receipt of
actual notice of the initiation or threat of any proceeding for such purpose.
(ix) Prior to the effective date of the New Registration Statement,
the Company shall make available for inspection by (A) any Investor, (B) Legal
Counsel and (C) one firm of accountants or other agents retained by the
Investors (collectively, the "Inspectors") all reasonably pertinent financial
and other records, and pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably deemed necessary
by each Inspector, and cause the Company's officers, directors and employees to
supply all information which any Inspector may reasonably request; provided,
however, that each Inspector shall hold in strict confidence and shall not make
any disclosure (except to an Investor) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (y) the release of such
Records is ordered pursuant to a final, non-appealable subpoena or order from a
court or government body of competent jurisdiction, or (z) the information in
such Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement of which the Inspector
has knowledge. Each Investor agrees that it shall, upon learning that disclosure
of such Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential.
(x) The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(A) disclosure of such information is necessary to comply with federal or state
securities laws, (B) the disclosure of such information is necessary to avoid or
correct a misstatement or omission in any Registration Statement, (C) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (D) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
(xi) The Company shall cause all the Registrable Securities covered
by a Registration Statement to be listed on each 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. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section.
(xii)The Company shall cooperate with the Investors who hold
Registrable Securities being offered to facilitate the timely preparation and
delivery of certificates representing the Securities to be offered pursuant to a
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the Investors may reasonably request and
registered in such names as the Investors may request.
(xiii) If requested by an Investor, the Company shall (A)
immediately incorporate in a prospectus supplement or post-effective amendment
such information as an Investor reasonably requests to be included therein
relating to the sale and distribution of Securities, including, without
limitation, information with respect to the number of Securities being offered
or sold, the purchase price being paid therefor and any other terms of the
offering of the Securities; (B) make all required filings of such prospectus
supplement or post-effective amendment as soon as notified of the matters to be
incorporated in such prospectus supplement, post-effective amendment or
Prospectus Supplement; and (C) supplement or make amendments to any Registration
Statement if reasonably requested by a Holder of such Securities.
5
(xiv) The Company shall make generally available to its security
Holders as soon as practicable, but not later than 90 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the 0000 Xxx) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement.
(xv) The Company shall otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC in connection with any
registration hereunder.
(xvi) Within two (2) business days after the Registration Statement
which includes the Securities is declared effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Securities (with copies to the Investors whose
Securities are included in such Registration Statement) confirmation that the
Registration Statement has been declared effective by the SEC.
(xvii) The Company shall maintain the listing of its Common Shares
on the Nasdaq National Market, the Nasdaq SmallCap Market or a national
securities exchange during the Registration Period.
(xviii) The Company shall maintain its status as a reporting
company required to file reports under Section 13 or Section 15(d) of the 1934
Act during the Registration Period.
4. Obligations Regarding Registration of Shares.
A. Provide Information. At least two business days prior to the first
anticipated filing date of the Prospectus Supplement, and least five (5)
business days prior to the first anticipated filing date of the New Registration
Statement, the Company shall notify each Investor in writing of the information
the Company requires from each such Investor if such Investor elects to have any
of such Investor's Securities included in such Registration Statement. It shall
be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Securities of a
particular Investor that such Investor shall furnish to the Company such
information regarding itself, the Securities held by it and the intended method
of disposition of the Securities held by it as shall be reasonably required to
effect the registration of such Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.
B. Cooperate. Each Investor, by such Investor's acceptance of the
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
Statement or prospectus supplement hereunder, unless such Investor has notified
the Company in writing of such Investor's election to exclude all of such
Investor's Securities from such Registration Statement.
C. Discontinue Selling. Each Investor agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 3(G)(vi) or the first sentence of Section 3(G)(vii), such Investor will
use its best efforts to immediately discontinue disposition of Securities
pursuant to any Registration Statement(s) covering such Securities until such
Investor's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(G)(vi) or the first sentence of Section 3(G)(vii).
Notwithstanding anything to the contrary, the Company shall cause its transfer
6
agent to deliver unlegended shares of Common Stock to a transferee of an
Investor in accordance with the terms of the Note and the Warrants in connection
with any sale of Securities with respect to which an Investor has entered into a
contract for sale (subject to the Investor's obligation to comply with the
prospectus delivery requirements of the 1933 Act in connection with such sale)
prior to the Investor's receipt of a notice from the Company of the happening of
any event of the kind described in Section 3(G)(vi) or the first sentence of
Section 3(G)(vi) and for which the Investor has not yet settled. Expenses of
Registration.
5. Indemnification.
A. Indemnification by Company. In the event any Securities are included
in a Registration Statement under this Agreement:
(i) To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Investor who holds such
Securities, the directors, officers, partners, employees, agents,
representatives of, and each person, if any, who controls any Investor within
the meaning of the 1933 Act or the 1934 Act (each, an "Indemnified Person"),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, attorneys' fees, amounts paid in settlement or expenses, joint
or several, (collectively, "Claims") incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the SEC, whether pending or threatened
("Indemnified Damages"), to which any of them may become subject insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (A) any untrue statement or alleged
untrue statement of a material fact in the Registration Statement or any
post-effective amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other "blue sky" laws of
any jurisdiction in which Securities are offered ("Blue Sky Filing"), or the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (B) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, (C) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Securities pursuant
to the Registration Statement or (D) any material violation of this Agreement
(the matters in the foregoing clauses (A) through (D) being, collectively,
"Violations").
(ii) The Company shall reimburse the Indemnified Persons, promptly
as such expenses are incurred and are due and payable, for any legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 5(A)(i) (A)
shall not apply to a Claim by an Indemnified Person arising out of or based upon
a Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company; (ii) shall not be available to the extent such Claim
is based on a failure of the Investor to deliver or to cause to be delivered the
prospectus or any amendment or supplement thereto made available by the Company;
and (iii) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Securities by the
Investors in compliance with this Agreement and applicable law.
7
B. Indemnification By Investors.
(i) In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 5(A)(i), the Company, each of its directors,
each of its officers who signs the Registration Statement, each Person, if any,
who controls the Company within the meaning of the 1933 Act or the 1934 Act
(collectively and together with an Indemnified Person, an "Indemnified Party"),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by such
Investor expressly for use in connection with such Registration Statement.
(ii) Such Investor will reimburse any legal or other expenses
reasonably incurred by any Indemnified Party in connection with investigating or
defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 5(B) and the agreement with respect to contribution
contained in Section 6 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Indemnified Party and shall survive the transfer of the
Securities by the Investors. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 5 with respect
to any prospectus shall not inure to the benefit of any Indemnified Party if the
untrue statement or omission of material fact contained in the prospectus was
corrected on a timely basis in the prospectus, as then amended or supplemented.
C. Mechanics of Indemnification.
(i) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 5 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 5,
deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. The Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its written consent, provided, however, that the
indemnifying party shall not unreasonably withhold, delay or condition its
8
consent. No indemnifying party shall, without the consent of the Indemnified
Party or Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party or
Indemnified Person of a release from all liability in respect to such claim or
litigation. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 5,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.
(ii) The indemnification required by this Section 5 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages
are incurred.
(iii) The indemnity agreements contained herein shall be in
addition to (A) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (B) any
liabilities the indemnifying party may be subject to pursuant to the law.
6. Contribution. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 5 to the fullest extent permitted by law; provided,
however, that: (i) no seller of Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any seller of Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Securities pursuant to the Registration Statement.
7. Reports Under the 1934 Act. With a view to making available to the
Investors the benefits of Rule 144 promulgated under the 1933 Act or any other
similar rule or regulation of the SEC that may at any time permit the Investors
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. timely file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act Investors
own Registrable Securities and the filing of such reports and other documents is
required for the applicable provisions of Rule 144; and
C. furnish to each Investor so long as such Investor owns Securities,
promptly upon request, (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the 1933 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 investors to sell
such securities pursuant to Rule 144 without registration.
8. Assignment of Registration Rights. The rights under this Agreement
shall be automatically assignable by the Investors to any transferee of all or
any portion of the Securities if the Investor agrees in writing with the
transferee or assignee to assign such rights and the Company is, within a
reasonable time after such transfer or assignment, furnished with written notice
of (A) the name and address of such transferee or assignee, and (B) the
securities with respect to which such registration rights are being transferred
or assigned, provided that further disposition of such securities by the
9
transferee or assignee shall be restricted under the 1933 Act and applicable
state securities laws, and the transferee or assignee shall be bound by all of
the provisions contained herein. Notwithstanding the foregoing, the rights under
this Agreement shall not be assignable if the value of Securities to be assigned
is less than $1,000,000 at the time of such assignment.
9. Amendment of Registration Rights. Provisions of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investors who then hold two-thirds (66-2/3%)
of the voting power of the Securities. Any amendment or waiver effected in
accordance with this Section 9 shall be binding upon each Investor and the
Company. No such amendment shall be effective to the extent that it applies to
less than all of the Holders of the Securities. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of
any provision of any of this Agreement unless the same consideration also is
offered to all of the parties to this Agreement.
10. Prohibitions on Future Registrations. Other than Registration
Statements the Company is required to file pursuant to this Agreement, the
Company shall not file any Registration Statement registering its Common Shares
or any other securities issued or issuable by the Company prior to the date that
is 90 days after the Issuance Date. Except as set forth in this Section 10, the
Company shall not be prohibited or limited from filing any Registration
Statements.
11. Miscellaneous.
A. Record Holder. A Person is deemed to be a Holder of Securities
whenever such Person owns or is deemed to own of record such Securities. If the
Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Securities, the Company shall act upon the
basis of instructions, notice or election received from the registered owner of
such Securities.
B. Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon actual receipt, when
delivered personally; (ii) upon actual receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
ALTAIR INTERNATIONAL, INC.
Xx. Xxxxxxx X. Xxxx
0000 Xxxxxxxx Xxx., Xxxxx 000
Xxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Xxxxxx Xxxxxxxxx
000 Xxxxx Xxxx Xxxx., Xxxxx 00
Xxxx, Xxxxxx 00000
Facsimile: (000) 000-0000
10
With a copy to:
Stoel Rives, LLP
000 Xxxxx Xxxx Xxxxxx - Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Equity Transfer Services
000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxx X0X 0X0
Attn: Xxxxx Xxxxxxxx
If to the Buyer:
Doral 18, LLC
C/O JE Xxxxxxx, LLC
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Telephone: (000)000-0000
Facsimile: (000)000-0000
Attention: Xxxxx X. Xxxxx
With a copy to:
Xxxxx X. Xxxxxxx, Esq. and Xxxxx X. Xxxxxxx, Esq.
Xxxxxxxx & Xxxxx
000 X. Xxxxx Xx. Xxxxx 0000
Xxxxxxx, XX 00000
(p) (000) 000-0000 and (000) 000-0000
(f) (000) 000-0000 and (000) 000-0000
or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party five days prior to the effectiveness of such change.
C. Waiver. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
D. Governing Law; Jurisdiction; Process. The corporate laws of the
Province of Ontario shall govern all issues concerning the relative rights of
the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of Illinois, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Illinois or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Illinois. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting within the City of Chicago, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.
11
E. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
F. Jury Trial. Each party hereby irrevocably waives any right it may
have, and agrees not to request, a jury trial for the adjudication of any
dispute hereunder or in connection herewith or arising out of this Agreement or
any transaction contemplated hereby.
G. Entire Agreement. This Agreement, the Termination Agreement and all
exhibits to the Termination Agreement constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and thereof. There are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement, the Termination
Agreement and all exhibits to the Termination Agreement supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
H. Assignment. Subject to the requirements of Section 8, this Agreement
shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.
I. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
J. Counterparts. This Agreement may be executed in identical
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. A facsimile copy of this Agreement or any
counterpart thereto shall be valid as an original.
K. 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.
J. Determinations. All consents and other determinations to be made by
the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by Investors holding a majority of the Securities,
determined as if all accrued exchange rights under the New Note then outstanding
and all of the Warrants issuable, have been exchanged into or exercised for
Securities without regard to any limitation on the exercise of exchange rights
under the New Note or the exercise of the Warrants.
K. 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.
L. Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
[intentionally left blank; signature page follows]
12
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed and delivered as of day and year first above
written.
COMPANY:
ALTAIR INTERNATIONAL, INC.
By:
-------------------------------------------------
Name:
-----------------------------------------------
Its:
------------------------------------------------
BUYER:
DORAL 18, LLC
By:
-------------------------------------------------
Name:
-----------------------------------------------
Its:
------------------------------------------------
13
EXHIBIT A
EXISTING WARRANTS
------------------ ------------------------- -------------------------
Name of Holder Date of Issuance Number of Warrants
------------------ ------------------------- -------------------------
Doral 18, LLC December 15, 2000 350,000
------------------ ------------------------- -------------------------
Doral 18, LLC June 7, 2001 150,000
------------------ ------------------------- -------------------------
Doral 18, LLC June 7, 2001 150,000
------------------ ------------------------- -------------------------
14
