Registration Rights Agreement dated April 3, 2006 by and among Xethanol Corporation and the Investors. REGISTRATION RIGHTS AGREEMENT
Exhibit
1.2
Registration
Rights Agreement dated April 3, 2006 by and among Xethanol Corporation
and
the
Investors.
This
Registration Rights Agreement (this "Agreement")
is made
and entered into as of April 3, 2006, by and among Xethanol Corporation, a
Delaware corporation (the "Company"),
and
the investors signatory hereto (each a "Investor"
and
collectively, the "Investors").
This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of
the
date hereof among the Company and the Investors (the "Purchase
Agreement").
The
Company and the Investors hereby agree as follows:
1.
Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
Purchase Agreement will have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms have the respective
meanings set forth in this Section 1:
“Advice”
has
the
meaning set forth in Section 6(d).
"Effective
Date"
means,
as to a Registration Statement, the date on which such Registration Statement
is
first declared effective by the Commission.
“Effectiveness
Date”
means
(a) with respect to the initial Registration Statement required to be filed
under Section 2(a), the earlier of: (a)(i) the 90th
day
following the Closing Date; provided,
that,
if the Commission reviews and has written comments to the filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (a)(i) shall
be the 120th
day
following the Closing Date, and (ii) the fifth Trading Day following the date
on
which the Company is notified by the Commission that the initial Registration
Statement will not be reviewed or is no longer subject to further review and
comments; (b) with respect to any additional Registration Statements that may
be
required pursuant to Section 2(b), the earlier of (i) the 90th
day
following (x) if such Registration Statement is required because the Commission
shall have notified the Company in writing that certain Registrable Securities
were not eligible for inclusion on a previously filed Registration Statement,
the date or time on which the Commission shall indicate as being the first
date
or time that such Registrable Securities may then be included in a Registration
Statement, or (y) if such Registration Statement is required for a reason other
than as described in (x) above, the date on which the Company first knows,
or
reasonably should have known, that such additional Registration Statement(s)
is
required; provided,
that,
if the Commission reviews and has written comments to a Registration Statement
filed under Section 2(b) that would require the filing of a pre-effective
amendment thereto with the Commission, then the Effectiveness Date under this
clause (b)(i) for such Registration Statement shall be the 120th
day
following the date that the Company first knows, or reasonably should have
known, that such additional Registration Statement is required under such
Section, and (ii) the fifth Trading Day following the date on which the Company
is notified by the Commission that such additional Registration Statement will
not be reviewed or is no longer subject to further review and comments; and
(c)
with respect to a Registration Statement required to be filed under Section
2(c), the earlier of: (c)(i) the 90th
day
following the date on which the Company becomes eligible to utilize Form S-3
to
register the resale of Common Stock; provided,
that,
if the Commission reviews and has written comments to such filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (c)(i) shall
be the 120th
day
following the date on which the Company becomes eligible to utilize Form S-3
to
register the resale of Common Stock, and (ii) the fifth Trading Day following
the date on which the Company is notified by the Commission that the initial
Registration Statement will not be reviewed or is no longer subject to further
review and comments.
"Effectiveness
Period"
has the
meaning set forth in Section 2(a).
"Exchange
Act"
means
the Securities Exchange Act of 1934, as amended.
"Filing
Date"
means
(a) with respect to the initial Registration Statement required to be filed
under Section 2(a), the 30th
day
following the Closing Date; (b) with respect to any additional Registration
Statements that may be required pursuant to Section 2(b), the 30th
day
following (x) if such Registration Statement is required because the Commission
shall have notified the Company in writing that certain Registrable Securities
were not eligible for inclusion on a previously filed Registration Statement,
the date or time on which the Commission shall indicate as being the first
date
or time that such Registrable Securities may then be included in a Registration
Statement, or (y) if such Registration Statement is required for a reason other
than as described in (x) above, the date on which the Company first knows,
or
reasonably should have known, that such additional Registration Statement(s)
is
required; and (c) with respect to a Registration Statement required to be filed
under Section 2(c), the 30th
day
following the date on which the Company becomes eligible to utilize Form S-3
to
register the resale of Common Stock.
"Holder"
or
"Holders"
means
the holder or holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified
Party”
has the
meaning set forth in Section 5(c).
“Indemnifying
Party”
has the
meaning set forth in Section 5(c).
“Losses”
has the
meaning set forth in Section 5(a).
“New
York Courts”
means
the state and federal courts sitting in the City of New York, Borough of
Manhattan.
"Proceeding"
means an
action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced
or threatened.
“Prospectus”
means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Registrable
Securities”
means:
(i) the Shares, (ii) the Warrant Shares, (iii) any shares of Common Stock
issuable upon exercise of warrants issued to any placement agent as compensation
in connection with the financing that is the subject of the Purchase Agreement,
and (iv) any securities issued or issuable upon any stock split, dividend or
other distribution, recapitalization or similar event, or any conversion price
adjustment with respect to any of the securities referenced in (ii) or (iii)
above.
"Registration
Statement"
means
the initial registration statement required to be filed in accordance with
Section 2(a) and any additional registration statement(s) required to be filed
under Section 2(b) and 2(c), including (in each case) the Prospectus, amendments
and supplements to such registration statements or Prospectus, including pre-
and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference
therein.
"Rule
144"
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
"Rule
415"
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
"Rule
424"
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
"Securities
Act"
means
the Securities Act of 1933, as amended.
"Shares"
means
the shares of Common Stock issued or issuable to the Investors pursuant to
the
Purchase Agreement.
“Warrants”
means
the
Common Stock purchase warrants issued or issuable to the Investors pursuant
to
the Purchase Agreement and to any placement agent identified in Schedule
3.1(u)
to the
Purchase Agreement in accordance with the terms of the engagement or similar
agreements between the Company and any such agents.
"Warrant
Shares" means
the
shares of Common Stock issued or issuable upon exercise of the
Warrants.
2.
Registration.
(a) On
or
prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all Registrable
Securities not already covered by an existing and effective Registration
Statement for an offering to be made on a continuous basis pursuant to Rule
415,
on Form SB-2 (or on such other form appropriate for such purpose). Such
Registration Statement shall contain (except if otherwise required pursuant
to
written comments received from the Commission upon a review of such Registration
Statement) the "Plan of Distribution" attached hereto as Annex A. The Company
shall use its reasonable best efforts to cause such Registration Statement
to be
declared effective under the Securities Act as soon as possible but, in any
event, no later than its Effectiveness Date, and shall use its reasonable
best
efforts to keep the Registration Statement continuously effective under the
Securities Act until the date which is the earlier of (i) the date as of
which
the Holders may sell all of the Registrable Securities covered by such
Registration Statement pursuant to Rule 144(k) as determined by the counsel
to
the Company pursuant to a written opinion letter to such effect, addressed
and
reasonably acceptable to the Company's transfer agent and the affected Holders
or (ii) the date on which the Holders shall have sold all of the Registrable
Securities covered by such Registration Statement (the "Effectiveness
Period").
By
5:00 p.m. (New York City time) on the Effective Date, the Company shall file
with the Commission in accordance with Rule 424 under the Securities Act
the
final prospectus to be used in connection with sales pursuant to such
Registration Statement (whether or not such filing is technically required
under
such Rule).
(b) If
for
any reason the Commission does not permit all of the Registrable Securities
to
be included in the Registration Statement filed pursuant to Section 2(a),
or for
any other reason any outstanding Registrable Securities are not then covered
by
an effective Registration Statement, then the Company shall prepare and file
by
the Filing Date for such Registration Statement, an additional Registration
Statement covering the resale of all Registrable Securities not already covered
by an existing and effective Registration Statement for an offering to be
made
on a continuous basis pursuant to Rule 415, on Form SB-2 (or on such other
form
appropriate for such purpose). Each such Registration Statement shall contain
(except if otherwise required pursuant to written comments received from
the
Commission upon a review of such Registration Statement) the "Plan of
Distribution" attached hereto as Annex A. The Company shall use its reasonable
best efforts to cause each such Registration Statement to be declared effective
under the Securities Act as soon as possible but, in any event, by its
Effectiveness Date, and shall use its reasonable best efforts to keep such
Registration Statement continuously effective under the Securities Act during
the entire Effectiveness Period. By 5:00 p.m. (New York City time) on the
Effective Date of such Registration Statement, the Company shall file with
the
Commission in accordance with Rule 424 under the Securities Act the final
prospectus to be used in connection with sales pursuant to such Registration
Statement (whether or not such filing is technically required under such
Rule).
(c)
Promptly following any date on which the Company becomes eligible to use
a
registration statement on Form S-3 to register the Registrable Securities
for
resale, the Company shall file a registration statement on Form S-3 covering
the
Registrable Securities (or a post-effective amendment on Form S-3 to the
then
effective Registration Statement) and shall use its reasonable best efforts
to
cause such Registration Statement to be declared effective as soon as
possible thereafter, but in any event prior to the Effectiveness Date therefor.
Such Registration Statement shall contain (except if otherwise required pursuant
to written comments received from the Commission upon a review of such
Registration Statement) the "Plan of Distribution" attached hereto as Annex
A.
The Company shall use its reasonable best efforts to keep such Registration
Statement continuously effective under the Securities Act during the entire
Effectiveness Period. By 5:00 p.m. (New York City time) on the Effective
Date of
such Registration Statement, the Company shall file with the Commission in
accordance with Rule 424 under the Securities Act the final prospectus to
be
used in connection with sales pursuant to such Registration Statement (whether
or not such filing is technically required under such Rule).
(d)
Each
Holder agrees to furnish to the Company a completed Questionnaire in the
form
attached to this Agreement as Annex B (a “Selling
Holder Questionnaire”).
The
Company shall not be required to include the Registrable Securities of a
Holder
in a Registration Statement who fails to furnish to the Company a fully
completed Selling Holder Questionnaire at least five Trading Days prior to
the
Filing Date (subject to the requirements set forth in Section 3(a)). The
Holder
shall supplement such Selling Holder Questionnaire if the information contained
therein shall become incorrect at any time.
3.
Registration
Procedures.
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a)
Not
less than four Trading Days prior to the filing of a Registration Statement
or
any related Prospectus or any amendment or supplement thereto, the Company
shall
furnish to each Holder copies of the “Selling Stockholders” section of such
document, the “Plan of Distribution” and any risk factor contained in such
document that addresses specifically this transaction or the Selling
Stockholders, as proposed to be filed which documents will be subject to
the
review of such Holder. The Company shall not file a Registration Statement,
any
Prospectus or any amendments or supplements thereto in which the “Selling
Stockholder” section thereof differs from the disclosure received from a Holder
in its Selling Holder Questionnaire (as amended or supplemented).
(b)
(i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective as to the applicable Registrable Securities for its Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of
the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented
or
amended to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably possible to any comments received from the Commission with respect
to
each Registration Statement or any amendment thereto and, as promptly as
reasonably possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to such Registration
Statement that would not result in the disclosure to the Holders of material
and
non-public information concerning the Company; and (iv) comply in all material
respects with the provisions of the Securities Act and the Exchange Act with
respect to the Registration Statements and the disposition of all Registrable
Securities covered by each Registration Statement.
(c)
Notify the Holders as promptly as reasonably possible (and, in the case of
(i)(A) below, not less than three Trading Days prior to such filing and,
in the
case of (v) below, not less than three Trading Days prior to the financial
statements in any Registration Statement becoming ineligible for inclusion
therein) and (if requested by any such Person) confirm such notice in writing
no
later than one Trading Day following the day (i)(A) when a Prospectus or
any
Prospectus supplement or post-effective amendment to a Registration Statement
is
proposed to be filed; (B) when the Commission notifies the Company whether
there
will be a "review" of such Registration Statement and whenever the Commission
comments in writing on such Registration Statement (the Company shall provide
true and complete copies thereof and all written responses thereto to each
of
the Holders that pertain to the Holders as a Selling Stockholder or to the
Plan
of Distribution, but not information which the Company believes would constitute
material and non-public information); and (C) with respect to each Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other Federal or state governmental
authority for amendments or supplements to a Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation
of
any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible
for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein
by
reference untrue in any material respect or that requires any revisions to
such
Registration Statement, Prospectus or other documents so that, in the case
of
such Registration Statement or the Prospectus, as the case may be, it will
not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(d)
Use
its reasonable best efforts to avoid the issuance of, or, if issued, obtain
the
withdrawal of (i) any order suspending the effectiveness of a Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(e)
Furnish to each Holder, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto and all exhibits to the
extent
requested by such Person (including those previously furnished) promptly
after
the filing of such documents with the Commission.
(f)
Promptly deliver to each Holder, without charge, as many copies of each
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request. The
Company hereby consents to the use of such Prospectus and each amendment
or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus
and
any amendment or supplement thereto.
(g)
Prior
to any public offering of Registrable Securities, register or qualify such
Registrable Securities for offer and sale under the securities or Blue Sky
laws
of all jurisdictions within the United States, to keep each such registration
or
qualification (or exemption therefrom) effective during the Effectiveness
Period
and to do any and all other acts or things necessary or advisable to enable
the
disposition in such jurisdictions of the Registrable Securities covered by
the
Registration Statements.
(h)
Cooperate with the Holders to facilitate the timely preparation and delivery
of
certificates representing Registrable Securities to be delivered to a transferee
pursuant to the Registration Statements, which certificates shall be free,
to
the extent permitted by the Purchase Agreement, of all restrictive legends,
and
to enable such Registrable Securities to be in such denominations and registered
in such names as any such Holders may request.
(i)
Upon
the occurrence of any event contemplated by Section 3(c)(v), as promptly
as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed
to
be incorporated therein by reference, and file any other required document
so
that, as thereafter delivered, no Registration Statement nor any Prospectus
will
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,
in
light of the circumstances under which they were made, not
misleading.
4.
Expenses.
(a)
All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The
fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with any
Trading Market on which the Common Stock is then listed for trading, and
(B) in
compliance with applicable state securities or Blue Sky laws), (ii) printing
expenses (including, without limitation, expenses of printing certificates
for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for
the
Company, (v) Securities Act liability insurance, if the Company so desires
such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated
by
this Agreement. In addition, the Company shall be responsible for all of
its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation,
all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on
any
securities exchange as required hereunder.
(b)
The
Holders shall bear all underwriting discounts and selling commissions applicable
to the sale of Registrable Securities, all fees and disbursements of counsel
for
Holders and if the Holders engage a third party as an underwriter for the
purpose of distributing Registrable Securities on an underwritten basis,
the
fees and expenses of such underwriting and any additional expenses of an
accountant incurred in order to obtain a “Comfort Letter.”
5.
Holder
Underwritings.
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 investment bankers reasonably satisfactory to
the
Company.
6.
Indemnification.
(a)
Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, investment advisors, partners, members and
employees of each of them, each Person who controls any such Holder (within
the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act)
and the officers, directors, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and against
any
and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable costs of preparation and reasonable attorneys' fees)
and
expenses (collectively, "Losses"),
as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, any Prospectus
or
any form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or
alleged
omission of a material fact required to be stated therein or necessary to
make
the statements therein (in the case of any Prospectus or form of prospectus
or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (1) such
untrue statements or omissions are based solely upon information regarding
such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or
such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use
in
the Registration Statement, such Prospectus or such form of Prospectus or
in any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (2) in the case of an occurrence
of
an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder
of an outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior
to the
receipt by such Holder of an Advice or an amended or supplemented Prospectus,
but only if and to the extent that following the receipt of the Advice or
the
amended or supplemented Prospectus the misstatement or omission giving rise
to
such Loss would have been corrected. The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding of which
the
Company is aware in connection with the transactions contemplated by this
Agreement.
(b)
Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents
and
employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling Persons, to the fullest
extent
permitted by applicable law, from and against all Losses, as incurred, arising
solely out of or based solely upon: (x) such Holder's failure to comply with
the
prospectus delivery requirements of the Securities Act or (y) any untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent that, (1) such
untrue statements or omissions are based solely upon information regarding
such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or
such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use
in
the Registration Statement (it being understood that the Holder has approved
Annex A hereto for this purpose), such Prospectus or such form of Prospectus
or
in any amendment or supplement thereto or (2) in the case of an occurrence
of an
event of the type specified in Section 3(c)(ii)-(v), the use by such Holder
of
an outdated or defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the
receipt
by such Holder of an Advice or an amended or supplemented Prospectus, but
only
if and to the extent that following the receipt of the Advice or the amended
or
supplemented Prospectus the misstatement or omission giving rise to such
Loss
would have been corrected. In no event shall the liability of any selling
Holder
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving
rise
to such indemnification obligation.
(c)
Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified
Party"),
such
Indemnified Party shall promptly notify the Person from whom indemnity is
sought
(the "Indemnifying
Party")
in
writing, and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party
and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such
notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall
be
finally determined by a court of competent jurisdiction (which determination
is
not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying
Party.
An
Indemnified Party shall have the right to employ separate counsel in any
such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees
and
expenses; (2) the Indemnifying Party shall have failed promptly to assume
the
defense of such Proceeding and to employ counsel reasonably satisfactory
to such
Indemnified Party in any such Proceeding; or (3) the named parties to any
such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing
that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent
of the
Indemnified Party, effect any settlement of any pending Proceeding in respect
of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
All
fees
and expenses of the Indemnified Party (including reasonable fees and expenses
to
the extent incurred in connection with investigating or preparing to defend
such
Proceeding in a manner not inconsistent with this Section) shall be paid
to the
Indemnified Party, as incurred, within ten Trading Days of written notice
thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent
it is
finally judicially determined that such Indemnified Party is not entitled
to
indemnification hereunder).
(d)
Contribution. If a claim for indemnification under Section 5(a) or 5(b)
is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each 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, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions
that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall
be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates
to
information supplied by, such Indemnifying Party or Indemnified Party, and
the
parties' relative intent, knowledge, access to information and opportunity
to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include,
subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or
other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such
fees or
expenses if the indemnification provided for in this Section was available
to
such party in accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which
the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that
such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
7.
Miscellaneous.
(a)
Remedies. In the event of a breach by the Company or by a Holder, of any
of their obligations under this Agreement, each Holder or the Company, as
the
case may be, in addition to being entitled to exercise all rights granted
by law
and under this Agreement, including recovery of damages, will be entitled
to
specific performance of its rights under this Agreement. The Company and
each
Holder agree that monetary damages would not provide adequate compensation
for
any losses incurred by reason of a breach by it of any of the provisions
of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense
that
a remedy at law would be adequate.
(b)
No
Piggyback on Registrations. Except as and to the extent specified in
Schedule 3.1(v) to the Purchase Agreement, neither the Company nor any of
its
security holders (other than the Holders in such capacity pursuant hereto)
may
include securities of the Company in a Registration Statement other than
the
Registrable Securities, and the Company shall not during the Effectiveness
Period enter into any agreement providing any such right to any of its security
holders.
(c)
Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it
in
connection with sales of Registrable Securities pursuant to the Registration
Statement.
(d)
Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of
the
occurrence of any event of the kind described in Section 3(c), 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 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.
(e)
Piggy-Back Registrations. If at any time during the Effectiveness Period
there is not an effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under
the
Securities Act) or their then equivalents relating to equity securities to
be
issued solely in connection with any acquisition of any entity or business
or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice
of such
determination and, if within fifteen days after receipt of such notice, any
such
Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
holder requests to be registered, subject to customary underwriter cutbacks
applicable to all holders of registration rights.
(f)
Amendments and Waivers. The provisions of this Agreement, including the
provisions of this Section 6(f), may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not
be
given, unless the same shall be in writing and signed by the Company and
the
Holders of no less than a majority in interest of the then outstanding
Registrable Securities. Notwithstanding the foregoing, a waiver or consent
to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of certain Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of
at
least a majority of the Registrable Securities to which such waiver or consent
relates.
(g)
Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall
be
deemed given and effective on the earliest of (a) the date of transmission,
if
such notice or communication is delivered via facsimile (provided the sender
receives a machine-generated confirmation of successful transmission) at
the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section on a day that is not a Trading Day or later
than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice
is
required to be given. The address for such notices and communications shall
be
as follows:
If
to the
Company: Xethanol
Corporation
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇ ]
Attn:
Chief Financial
Officer
Facsimile:
(▇▇▇)
▇▇▇-▇▇▇▇
With
a
copy to: Boylan,
Brown, Code, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇)
▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Esq.
If
to a
Investor: To
the
address set forth under such Investor's name on the signature pages
hereto.
If
to any
other Person who is then the registered Holder:
To
the
address of such Holder as it appears in the stock transfer books of the
Company
or
such
other address as may be designated in writing hereafter, in the same manner,
by
such Person.
(h)
Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors and permitted assigns of each of the parties
and
shall inure to the benefit of each Holder. The Company may not assign its
rights
or obligations hereunder without the prior written consent of each Holder.
Each
Holder may assign their respective rights hereunder in the manner and to
the
Persons as permitted under the Purchase Agreement.
(i)
Execution and Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same
with
the same force and effect as if such facsimile signature were the original
thereof.
(j)
Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State
of New
York, without regard to the principles of conflicts of law thereof. Each
party
agrees that all Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective Affiliates, employees or agents)
will
be commenced in the New York Courts. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts 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 Proceeding, any claim that it is
not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each
party
hereto hereby irrevocably waives personal service of process and consents
to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for 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. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any Proceeding arising out of
or
relating to this Agreement or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of this Agreement,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its attorney’s fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.
(k)
Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
(l)
Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants
and
restrictions set forth herein shall remain in full force and effect and shall
in
no way be affected, impaired or invalidated, and the parties hereto shall
use
their reasonable efforts to find and employ an alternative means to achieve
the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared
to be
the intention of the parties that they would have executed the remaining
terms,
provisions, covenants and restrictions without including any of such that
may be
hereafter declared invalid, illegal, void or unenforceable.
(m)
Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(n)
Independent Nature of Investors' Obligations and Rights. The obligations
of each Investor under this Agreement are several and not joint with the
obligations of each other Investor, and no Investor shall be responsible
in any
way for the performance of the obligations of any other Investor under this
Agreement. Nothing contained herein or in any Transaction Document, and no
action taken by any Investor pursuant thereto, shall be deemed to constitute
the
Investors as a partnership, an association, a joint venture or any other
kind of
entity, or create a presumption that the Investors are in any way acting
in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement or any other Transaction Document. Each Investor
acknowledges that no other Investor will be acting as agent of such Investor
in
enforcing its rights under this Agreement. Each Investor shall be entitled
to
independently protect and enforce its rights, including without limitation
the
rights arising out of this Agreement, and it shall not be necessary for any
other Investor to be joined as an additional party in any Proceeding for
such
purpose. The Company acknowledges that each of the Investors has been provided
with the same Registration Rights Agreement for the purpose of closing a
transaction with multiple Investors and not because it was required or requested
to do so by any Investor.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES TO FOLLOW]
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
| XETHANOL CORPORATION | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES OF INVESTORS TO FOLLOW]
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
| NAME OF INVESTING ENTITY | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
| ADDRESS FOR NOTICE | ||
| c/o: ___________________________________________ | ||
| Street: _________________________________________ | ||
| City/State/Zip: ___________________________________ | ||
| Attention: ______________________________________ | ||
| Tel: ___________________________________________ | ||
| Fax: ___________________________________________ | ||
| Email: __________________________________________ | ||
Annex
A
Plan
of
Distribution
The
Selling Stockholders and any of their pledgees, donees, transferees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of Common Stock on any stock exchange, market or trading facility
on
which the shares are traded or in private transactions. These sales may be
at
fixed or negotiated prices. The Selling Stockholders may use any one or more
of
the following methods when selling shares:
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits Investors;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal
to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer
for its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
to
cover short sales made after the date that this Registration Statement
is
declared effective by the Commission;
|
|
·
|
broker-dealers
may agree with the Selling Stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
|
·
|
a
combination of any such methods of sale;
and
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus.
Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers
to
participate in sales. Broker-dealers may receive commissions or discounts
from
the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
Selling Stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved.
The
Selling Stockholders may from time to time pledge or grant a security interest
in some or all of the Shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties
may
offer and sell shares of Common Stock from time to time under this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
Upon
the
Company being notified in writing by a Selling Stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of Common
Stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement
to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Stockholder
and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such the shares of Common Stock were sold, (iv)the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference
in
this prospectus, and (vi) other facts material to the transaction. In addition,
upon the Company being notified in writing by a Selling Stockholder that
a donee
or pledgee intends to sell more than 500 shares of Common Stock, a supplement
to
this prospectus will be filed if then required in accordance with applicable
securities law.
The
Selling Stockholders also may transfer the shares of Common Stock in other
circumstances, in which case the transferees, pledgees or other successors
in
interest will be the selling beneficial owners for purposes of this
prospectus.
The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be "underwriters" within the meaning
of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of
the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Discounts, concessions, commissions and
similar selling expenses, if any, that can be attributed to the sale of
Securities will be paid by the Selling Stockholder and/or the purchasers.
Each
Selling Stockholder has represented and warranted to the Company that it
acquired the securities subject to this registration statement in the ordinary
course of such Selling Stockholder’s business and, at the time of its purchase
of such securities such Selling Stockholder had no agreements or understandings,
directly or indirectly, with any person to distribute any such securities.
The
Company has advised each Selling Stockholder that it may not use shares
registered on this Registration Statement to cover short sales of Common
Stock
made prior to the date on which this Registration Statement shall have been
declared effective by the Commission. If a Selling Stockholder uses this
prospectus for any sale of the Common Stock, it will be subject to the
prospectus delivery requirements of the Securities Act. The Selling Stockholders
will be responsible to comply with the applicable provisions of the Securities
Act and Exchange Act, and the rules and regulations thereunder promulgated,
including, without limitation, Regulation M, as applicable to such Selling
Stockholders in connection with resales of their respective shares under
this
Registration Statement.
The
Company is required to pay all fees and expenses incident to the registration
of
the shares, but the Company will not receive any proceeds from the sale of
the
Common Stock. The Company has agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.
Annex
B
XETHANOL
CORPORATION
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of common stock (the “Common
Stock”),
of
Xethanol Corporation (the “Company”)
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”)
a
Registration Statement for the registration and resale of the Registrable
Securities, in accordance with the terms of the Registration Rights Agreement,
dated as of April 3, 2006 (the “Registration
Rights Agreement”),
among
the Company and the Investors named therein. A copy of the Registration
Rights
Agreement is available from the Company upon request at the address set
forth
below. All capitalized terms used and not otherwise defined herein shall
have
the meanings ascribed thereto in the Registration Rights
Agreement.
The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
QUESTIONNAIRE
1. Name.
|
(a)
|
Full
Legal Name of Selling
Securityholder
|
|
|
|
(b)
|
Full
Legal Name of Registered Holder (if not the same as (a) above)
through
which Registrable Securities Listed in Item 3 below are
held:
|
|
|
|
(c)
|
Full
Legal Name of Natural Control Person (which means a natural
person who
directly or indirectly alone or with others has power to vote
or dispose
of the securities covered by the
questionnaire):
|
|
|
2.
Address for Notices to Selling Securityholder:
| Telephone: | |
|
Fax:
|
|
| Contact Person: | |
|
|
|
3.
Beneficial Ownership of Registrable Securities:
|
Type
and Principal Amount of Registrable Securities beneficially
owned:
|
4.
Broker-Dealer Status:
|
(a)
|
Are
you a broker-dealer?
|
Yes
o
No
o
|
Note:
|
If
yes, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
|
(b)
|
Are
you an affiliate of a
broker-dealer?
|
Yes
o
No
o
|
(c)
|
If
you are an affiliate of a broker-dealer, do you certify that
you bought
the Registrable Securities in the ordinary course of business,
and at the
time of the purchase of the Registrable Securities to be resold,
you had
no agreements or understandings, directly or indirectly, with
any person
to distribute the Registrable
Securities?
|
Yes
o
No
o
|
Note:
|
If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
5.
Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.
Except
as set forth below in this Item 5, the undersigned is not the beneficial
or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
|
Type
and Amount of Other Securities beneficially owned by the Selling
Securityholder:
|
6.
Relationships with the Company:
Except
as set forth below, neither the undersigned nor any of its affiliates,
officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had
any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.
|
State
any exceptions here:
|
The
undersigned agrees to promptly notify the Company of any inaccuracies or
changes
in the information provided herein that may occur subsequent to the date
hereof
and prior to the Effective Date for the Registration Statement.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion
of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the
Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice
and Questionnaire to be executed and delivered either in person or by its
duly
authorized agent.
| Dated: _____________________________ | Beneficial Owner: __________________________________________________________________ | |
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:
[
]