Execution Copy 06/13/01
Exhibit 10.89
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REGISTRATION RIGHTS AGREEMENT
DATED: June 13, 2001
With reference to that certain Promissory Note of even date
herewith (the "Promissory Note") from Commodore Applied Technologies, Inc., a
Delaware corporation ("CXI") to The Shaar Fund, Ltd., a corporation ("Shaar"),
together with its permitted assigns, whereby Shaar loaned CXI the principal sum
of Five Hundred Thousand Dollars ($500,000.00) and that certain Warrant of even
date herewith (the "Warrant") issued by CXI to Shaar and in order to induce the
Shaar to make the loan evidenced by the Promissory Note, and for other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the meanings set forth below:
(i) "Commission" means the Securities and Exchange Commission.
(ii) "Registration Statement" means a registration statement
of CXI filed on an appropriate form under the Securities Act providing for the
registration of, and the sale on a continuous or delayed basis by the holders
of, all of the Registrable Securities pursuant to Rule 415 under the Securities
Act, including the Prospectus contained therein and forming a part thereof, any
amendments to such registration statement and supplements to such Prospectus,
and all exhibits to and other material incorporated by reference in such
registration statement and Prospectus.
(iii) "Restricted Security" means any share of Common Stock
issued or issuable in lieu of cash dividend payments on the Preferred Shares,
upon conversion or redemption of the Preferred Shares or exercise of the
Warrants except any such share that (i) has been registered pursuant to an
effective registration statement under the Securities Act and sold in a manner
contemplated by the prospectus included in such registration statement, (ii) has
been transferred in compliance with the resale provisions of Rule 144 under the
Securities Act (or any successor provision thereto) or is transferable pursuant
to paragraph (k) of Rule 144 under the Securities Act (or any successor
provision thereto), or (iii) otherwise has been transferred and a new share of
Common Stock not subject to transfer restrictions under the Securities Act has
been delivered by or on behalf of CXI .
2. Within sixty (60) days following receipt by CXI of notice
that (i) Shaar has exercised, in whole or in part, the Warrant, (ii) Milford
Capital & Management ("Milford") has exercised, in whole or in part the Milford
Warrant (as hereinafter defined), that certain warrant to acquire shares of
common stock of CXI of even date herewith issued to Milford (the "Milford
Warrant"), or (iii) any of their respective permitted assigns has exercised, in
whole or in part the Warrant or the Milford Warrant, CXI shall register under
the Securities Act of 1933, as amended (the "Securities Act"), all of the shares
of common stock issuable to Shaar and Milford and their permitted successors and
assigns, pursuant to the Warrant and the Milford Warrant. Such shares are
referred to hereinafter as the "Registrable Securities."
3. In connection with the registration of the Registrable Securities,
CXI shall:
(a) Promptly (i) prepare and file with the Commission such
amendments (including post-effective amendments) to the Registration Statement
and supplements to the Prospectus as may be necessary to keep the Registration
Statement continuously effective and in compliance with the provisions of the
Securities Act applicable thereto so as to permit the Prospectus forming part
thereof to be current and useable by Shaar for resales of the Registrable
Securities for a period of two years from the date on which the Registration
Statement is first declared effective by the Commission (the "Effective Time")
or such shorter period that will terminate when all the Registrable Securities
covered by the Registration Statement have been sold pursuant thereto in
accordance with the plan of distribution provided in the Prospectus, transferred
pursuant to Rule 144 under the Securities Act or otherwise transferred in a
manner that results in the delivery of new securities not subject to transfer
restrictions under the Securities Act (the "Registration Period") and (ii) take
all lawful action such that each of (A) the Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, not misleading and
(B) the Prospectus forming part of the Registration Statement, and any amendment
or supplement thereto, does not at any time during the Registration Period
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(b) As promptly as practicable after becoming aware of such
event, notify Shaar (or those through Shaar) who hold Registrable Securities
being sold (or, in the event of an underwritten offering, the managing
underwriters) of the issuance by the Commission of any stop order or other
suspension of the effectiveness of the Registration Statement at the earliest
possible time and take all lawful action to effect the withdrawal, recession or
removal of such stop order or other suspension;
(c) Maintain a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the effective date
of the Registration Statement;
(d) Cooperate with Shaar (or those through Shaar) who hold
Registrable Securities being offered to facilitate the timely preparation and
delivery of certificates for the Registrable Securities to be offered pursuant
to the registration statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts, as the case may be, as Shaar
reasonably may request and registered in such names as the Shaar may request;
and, within three business days after a registration statement which includes
Registrable Securities is declared effective by the Commission, deliver and
cause legal counsel selected by CXI to deliver to the transfer agent for the
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Registrable Securities (with copies to Shaar whose Registrable Securities are
included in such registration statement) an appropriate instruction and, to the
extent necessary, an opinion of such counsel;
(e) Take all such other lawful actions reasonably necessary to
expedite and facilitate the disposition by Shaar of their Registrable Securities
in accordance with the intended methods therefor provided in the Prospectus
which are customary under the circumstances;
4. (a) At any time that CXI proposes to file a Registration Statement,
either for its own account or for the account of a stockholder or stockholders,
other than one required by Section 1 hereof ("CXI Registration Statement") CXI
shall give Shaar written notice of its intention to do so and of the intended
method of sale (the "Registration Notice") within a reasonable time prior to the
anticipated filing date of CXI Registration Statement effecting such
registration (but in no event less than 10 days before the anticipated filing
date). Shaar may request inclusion of any Restricted Securities in such CXI
Registration Statement by delivering to CXI, within 10 business days after
receipt of the Registration Notice, a written notice (the "Piggyback Notice")
stating the number of Restricted Securities proposed to be included and that
such shares are to be included in any underwriting only on the same terms and
conditions as the shares of common stock otherwise being sold through
underwriters under such CXI Registration Statement. CXI shall use its best
efforts to cause all Restricted Securities specified in the Piggyback Notice to
be included in CXI Registration Statement and any related offering, all to the
extent requisite to permit the sale by Shaar of such Restricted Securities in
accordance with the method of sale applicable to the other shares of common
stock included in such CXI Registration Statement; provided, however, that if,
at any time after giving the Registration Notice and prior to the Effective Time
of CXI Registration Statement filed in connection with such registration, CXI
shall determine for any reason not to register or to delay registration of such
securities, CXI may, at its election, give written notice of such determination
to Shaar and, thereupon:
(i) in the case of a determination not to register, shall be
relieved of its obligation to register any Restricted Securities in
connection with such registration, and
(ii) in the case of a delay in registering, shall be permitted
to delay registering any Restricted Securities for the same period as
the delay in registering such other securities.
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(b) CXI's obligation to include Restricted Securities in CXI
Registration Statement pursuant to Section 2.3(a) shall be subject to the
following limitations:
(i) CXI shall not be obligated to include any Restricted
Securities in a registration statement filed on Form ▇-▇, ▇▇▇▇ ▇-▇ or
such other similar successor forms then in effect under the Securities
Act.
(ii) If CXI Registration Statement involves an underwritten
offering and the managing underwriter advises CXI in writing that, in
its opinion, the number of securities requested to be included in such
Registration Statement exceeds the number which can be sold in such
offering without adversely affecting the offering, CXI will include in
such Registration Statement the number of such Securities which CXI is
so advised can be sold in such offering without adversely affecting the
offering, determined as follows:
(A) first, the securities proposed by CXI to be sold
for it own account, and
(B) second, any Restricted Securities requested to be
included in such registration and any other securities of CXI
pro rata among the holders thereof requesting such
registration on the basis of the number of shares of such
securities requested to be included by such holders.
(c) Shaar may not include any of its Restricted Securities in the CXI
Registration Statement pursuant to this Agreement unless and until such Shaar
furnishes to CXI in writing, within 30 Business Days after receipt of a written
request therefor, such information specified in Item 507 of Regulation S-K under
the Securities Act and such other information as CXI may reasonably request for
use in connection with the Registration Statement or Prospectus or preliminary
Prospectus included therein and in any application to the NASD. Shaar agrees to
furnish promptly to CXI all information required to be disclosed in order to
make all information previously furnished to CXI by Shaar not materially
misleading.
(d) CXI covenants not to grant any such piggyback registration rights
that would permit any holder of Common Stock (except for Milford and its
permitted assigns) to have piggyback registration rights prior to, or on parity
with, those of Shaar .
5. Until a Registration Statement has become effective under
the Securities Act with respect to any Registrable Securities, each certificate
representing such Registrable Securities, and all certificates and instruments
issued in transfer thereof, shall be endorsed with the following restrictive
legend:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO
THE DISTRIBUTION THEREOF, AND NEITHER SUCH SHARES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, ASSIGNED OR PLEDGED, EXCEPT IF
REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE STATE BLUE SKY OR
SECURITIES LAWS OR EXEMPTIONS FROM SUCH REGISTRATION OR QUALIFICATION
REQUIREMENTS ARE AVAILABLE."
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At such time as any Registrable Securities cease to be Registrable Securities
pursuant to Section 1, CXI shall, upon the request of any holder with respect to
such securities, issue to such holder a replacement certificate without such
legend in exchange for any certificate bearing such legend.
6. If any of a Shaar's Registrable Securities are registered
hereunder, CXI shall furnish to such Stockholder, at CXI's expense, such number
of copies of the Registration Statement and each amendment and supplement
thereto, preliminary prospectus, final prospectus and such other documents as
Shaar may reasonably requests.
7. If any of Shaar's Registrable Securities are registered
hereunder, CXI shall promptly, at CXI's expense, use its reasonable efforts to
register or qualify the Registrable Securities covered by the Registration
Statement under such state securities or blue sky laws of such jurisdictions as
Shaar may reasonably request, except that CXI shall not for any purpose be
required to execute a general consent to service of process or to qualify to do
business as a foreign corporation in any jurisdiction where it is not so
qualified.
8. If Shaar's Registrable Securities are registered hereunder,
CXI shall notify Shaar, promptly after it shall receive notice thereof, of the
date and time when the Registration Statement and each post-effective amendment
thereto has become effective or a supplement to any prospectus forming a part of
the Registration Statement has been filed.
9. If Shaar's Registrable Securities are registered hereunder,
CXI shall advise Shaar, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the Securities Exchange
Commission (the "Commission") suspending the effectiveness of the Registration
Statement or the initiation or threatening of any proceeding for such purpose
and promptly use its best efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such stop order should be issued.
10. If Shaar's Registrable Securities are registered
hereunder, (a) CXI agrees to bear all Commission registration and filing fees,
printing and mailing expenses, NASD filing fees and expenses incurred by any
person or entity in connection therewith, fees, disbursements of counsel and
accountants for CXI and any underwriters, brokers and dealers and all expenses
and fees incident to an application for listing the shares of CXI Common Stock
on the American Stock Exchange, and (b) Shaar agrees to bear, pro rata (or as
they may otherwise agree), all fees and disbursements of counsel for Shaar and
any discounts, commissions and fees of any underwriters, brokers and dealers
with respect to the Registrable Securities sold in connection with such
registration.
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11. (a) CXI hereby agrees to indemnify and hold harmless
Shaar, its officers, directors, legal counsel and accountants and each person or
entity who controls Shaar within the meaning of the Securities Act, from and
against, and agrees to reimburse Shaar with respect to, any and all claims,
actions (actual or threatened), demands, losses, damages, liabilities, costs and
expenses to which Shaar may become subject under the Securities Act or
otherwise, insofar as such claims, actions, demands, losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
any prospectus contained therein, or any amendment or supplement thereto, or are
caused by the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that CXI shall not be liable in any such case to
the extent that any such claim, action, demand, loss, damage, liability, cost or
expense is caused by an untrue statement or alleged untrue statement or omission
or alleged omission so made in conformity with information furnished in writing
by Shaar for use in the preparation thereof.
(b) Shaar hereby agrees to indemnify and hold harmless
CXI, its officers, directors, legal counsel and accountants and each person or
entity who controls CXI within the meaning of the Securities Act, from and
against, and agrees to reimburse CXI, its officers, directors, legal counsel,
accountants and controlling persons or entities with respect to any and all
claims, actions, demands, losses, damages, liabilities, costs or expenses to
which CXI, its officers, directors, legal counsel, accountants or such
controlling persons or entities may become subject under the Securities Act or
otherwise, insofar as such claims, actions, demands, losses, damages,
liabilities, costs or expenses are caused by any untrue or alleged untrue
statement of any material fact contained in the Registration Statement, any
prospectus contained therein or any amendment or supplement thereto, or are
caused by the omission or the alleged omission to state therein a material
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, in each case
to the extent, but only to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in reliance upon
and in conformity with information furnished in writing by Shaar for use in the
preparation thereof. Notwithstanding the foregoing, in no event shall the
indemnification obligations contained in this subsection exceed the net proceeds
received by Shaar in the offering giving rise to such indemnification
obligation.
(c) If any claim shall be asserted against any person or
entity (an "Indemnified Person") for which such person or entity intends to seek
indemnification pursuant to Section 8(a) or (b) from the other party hereto (the
"Indemnifying Person"), as the case may be, such Indemnified Person shall give
prompt written notice to the Indemnifying Person of the nature of such claim,
but the failure to give such notice shall not relieve the Indemnifying Person of
its obligations under this Section 8 unless it has been prejudiced substantially
thereby. The Indemnifying Person shall have the right to conduct, at its
expense, through counsel of its own choosing, which counsel is approved by the
Indemnified Person (which approval may not be unreasonably withheld), the
defense of any such claim, and may compromise or settle such claims with the
prior consent of the Indemnified Person (which consent shall not be unreasonably
withheld); provided, that (i) if the Indemnifying Person does not elect to
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conduct the defense of any such claim, the Indemnified Person may undertake to
conduct the defense of such claim and the Indemnifying Person shall be
responsible for the fees and disbursements of the Indemnified Person's legal
counsel in connection with such defense and (ii) if the person or entity that is
not conducting the defense desires to join in such defense, it may elect to do
so at its own cost by retaining legal counsel acceptable to the person or entity
conducting the defense (which acceptance shall not be unreasonably withheld).
12. The rights and privileges of this Registration Rights
Agreement may inure to the benefit of other stockholders of CXI; provided, that
CXI's obligations to any one or more such stockholders shall be subject to their
execution of an addendum or joinder agreement substantially similar in form and
content to this Agreement.
13. THIS AGREEMENT SHALL BE CONSTRUED (BOTH AS TO VALIDITY AND
PERFORMANCE) AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WHOLLY
WITHIN SUCH JURISDICTION
14. The rights to have CXI register Registrable Securities
assigned to any permitted transferree thereof, pursuant to this Agreement shall
be automatically assigned by Shaar to any such permitted transferee of all or
any portion of such Registrable Securities (or all or any portion of any Warrant
of CXI which is convertible into such securities) only if: (a) Shaar agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to CXI within a reasonable time after such
assignment, (b) CXI is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to which such
registration rights are being transferred or assigned, (c) immediately following
such transfer or assignment, the securities so transferred or assigned to the
transferee or assignee constitute Restricted Securities, and (d) at or before
the time CXI received the written notice contemplated by clause (b) of this
sentence the transferee or assignee agrees in writing with CXI to be bound by
all of the provisions contained herein. Except to the extent so assigned, Shaar
shall retain all of its rights under this Agreement, including the right to have
CXI register all Registrable Securities (or all or any portion thereof
represented by the Warrant, retained by Shaar.
15. Subject to Section 14 above, this Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties hereto.
16. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto.
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IN WITNESS WHEREOF, this Agreement has been duly executed by or on
behalf of each party hereto on the date set forth above.
COMMODORE APPLIED TECHNOLOGIES, INC.
By: ____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President and Treasurer
THE SHAAR FUND, LTD
By: ____________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Managing Director
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 13th day of June, 2001, before me, a Notary Public in and for
the jurisdiction aforesaid, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, to me known,
who being by me duly sworn, did depose and say that he is the Vice President and
Treasurer of Commodore Applied Technologies, Inc., and that he is duly
authorized to execute same; and that he subscribed, swore to and acknowledged
the same in his capacity as such officer and as the authorized and binding act
and deed of said corporation.
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Notary Public
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