EXHIBIT 3(XV)
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is entered into as of __________, 1999
by and among Enviro-Clean of America, Inc., a Nevada corporation (the
"Company"), and the new investors who execute a counterpart of this Agreement
(the "Investors"):
WHEREAS, effective as of the date hereof, the Company is entering into an
offering of units ("Offering"), each unit containing 100 shares of Series B
Cumulative Convertible Stock ("Series B Stock") and 1,000 Common Stock Purchase
Warrants ("Warrants") (collectively, the "Units"); and
WHEREAS, pursuant to the terms of the Offering, it is a condition of the
obligations of the Investors and the Company that they enter into a registration
rights agreement providing for certain rights to the Investors relative to the
registration of certain shares of the Company's common stock, par value $.001
per share (the "Common Stock") reserved for issuance under shares of the
Company's Series B Stock and Warrants:
NOW, THEREFORE, the parties hereto in consideration of the mutual promises
contained herein and intending to be legally bound do hereby agree as follows:
1. Piggy-back Registration.
(a) So long as the Investors are the holders of any shares of Common
Stock received upon the conversion of the Series B Stock or the exercise of the
Warrants (such shares of Common Stock being referred to herein as the
"Registrable Securities"), if the Company shall register any of its securities
for sale pursuant to any appropriate registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), the Company shall be required to
offer to such Investors the opportunity to register any or all the Registrable
Securities, without cost to the Investors thereof. In connection with these
piggy-back registration rights, the Company shall give all of the Investors
notice by certified mail at least thirty (30) business days prior to the filing
of such Registration Statement under the Act. The Investors shall then have
twenty-five (25) days to elect to include all or a portion of its Registrable
Securities for sale in the Registration Statement.
(b) The registration requirement shall not apply to a Registration
Statement filed by the Company pursuant to Form S-8 or S-4 or any successor form
or forms with the sole and express purpose of registering shares in connection
with acquisition transactions or for employees or for stock incentive plans, or
any other inappropriate form.
(c) If the registration statement as to which the Company gives notice
to the Investors under Paragraph 1(a), above, is to be a registered public
offering involving an underwriter, these registration rights shall be subject to
the underwriter's discretion. To the extent the underwriter elects to exclude
any Registrable Securities from any registration statement, the number of shares
to be registered will be allocated among the holders of Series B Stock and
Warrants requesting registration on a pro rata basis in accordance with their
relative holdings. In the event any Registrable Securities are so excluded, the
Series B Stock and
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Warrant holders "piggy-back" registration rights shall be exercisable with
respect to the Company's next registration statement. Any subsequent
registration statements underwritten shall be subject to the same limitations in
the discretion of any underwriter.
(d) This Agreement shall terminate with respect to any Investor and
his Registrable Securities upon the earliest of (i) the first such instance as
such Investor ceases to own any Registrable Securities or such Investor
beneficially owns (as contemplated by the Securities Exchange Act) less than 1%
of the issued and outstanding Common Stock, and (ii) with respect to Investors
that beneficially own (as contemplated by the Securities Exchange Act) less than
5% of the issued and outstanding Common Stock (other than with respect to any
such Investor that is an affiliate (as contemplated by the Exchange Act) of the
Company), the second anniversary (or if the holding period for non-affiliates
contemplated by Rule 144(d)(1) under the Securities Act is amended, such amount
of time) of the date such Investor purchased the last Registrable Security that
such Investor purchased from the Company. Notwithstanding the foregoing, the
Company's and Investors' rights, duties and obligations under Section 6 of this
agreement shall survive the termination of this Agreement.
2. Covenants of the Company.
In the case of registration effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep each Investor advised in
writing as to the initiation, progress, and declaration of effectiveness of each
registration and as to the completion thereof. At its expense, the Company
will:
(a) Keep such registration effective until the earliest to occur of
(i) the date upon which the Investor or Investors have completed the
distribution described in the registration statement relating thereto or (ii)
the date the Company receives a Rule 144 Opinion. In the case of any
registration of Registrable Securities on Form S-3 which are intended to be
offered on a continuous or delayed basis, applicable rules under the Securities
Act governing the obligation to file a post-effective amendment, permit, in lieu
of filing a post-effective amendment which (1) includes any prospectus required
by Section 10(a)(3) of the Securities Act, or (2) reflects facts or events
representing a material or fundamental change in the information set forth in
the registration statement, the incorporation by reference of information
required to be included in (1) and (2) above to be contained in periodic reports
filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act') in the registration statement; and
(b) Furnish such number of prospectuses and other documents incident
thereto as an Investor from time to time may reasonably request; and
(c) Furnish the Investors with copies of all correspondence with the
Commission; and
(d) In connection with any underwritten offering, the Company and the
Investors will enter into any underwriting agreement reasonably necessary to
effect the offer and sale of Registrable Securities, provided such agreement
contains customary underwriting provisions.
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3. Blue Sky Registration.
(a) In the event that the Company registers the Registrable
Securities, the Company will register or qualify the Registrable Securities
covered by any registration statement under the Securities Act and under such
securities or blue sky laws in such jurisdictions within the United States as
the Investors may reasonably request; provided, however, that the Company
reserves the right, in its sole discretion, not to register or qualify such
shares of Common Stock in any jurisdiction in which such shares of Common Stock
do not satisfy the requirements of such jurisdiction, or in which such
registration would submit the Company to consent to service of process in any
state in which it would not otherwise be subject to such service of process.
(b) The Company shall (i) advise the Investors promptly after
obtaining knowledge thereof, and, if requested by the Investors, confirm such
advice in writing, of the issuance by the Commission or any state securities
commission of any stop order suspending the qualification or exemption from
qualification of the Registrable Securities for offer or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by the
Commission or by any state securities commission or other regulatory authority,
(ii) use its best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption from qualification of the Registrable
Securities under any state securities or Blue Sky laws, and (iii) if at any time
the Commission or any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of the Registrable Securities under any such laws, use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
4. Deregistration.
In the event the Investors have not sold all of the Registrable
Securities included in the registration statement prior to the second
anniversary of the effective date of such registration statement, the Investors
hereby agree that the Company may deregister by post-effective amendment any
Registrable Securities covered by the registration statement but not sold on or
prior to such date.
5. Post-Effective Amendments.
The Company agrees that it will notify the Investors of the filing and
effective date of each such post-effective amendment.
6. Indemnification.
(a) By the Company:
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The Company will indemnify each Investor with respect to whom
registration has been effected hereunder against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering statement, notification or the like incident to any
such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
the Company of the Securities
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Act or any rule or regulation thereunder applicable to the Company and relating
to action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each such
Investor, each of its officers, directors and partners, and each person
controlling such Investor, each such underwriter and each person who controls
any such underwriter, for any legal and any other expenses reasonably incurred
in connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by such Investor or underwriter and stated
to be specifically for use therein.
(b) By the Investors:
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Each Investor will, if Registrable Securities or other securities
held by him are included in the securities as to which such registration,
qualification, or compliance is being effected, indemnify the Company, each of
its directors and officers and each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of the Securities Act and the
rules and regulations thereunder, each other such Investor and each of their
officers, directors, and partners, and each person controlling such Investor,
for a period of one (1) year from the effective date of such registration
statement, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering, circular or other document, or an), omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company and such Investors, directors, officers, partners,
persons, underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Investor
and stated to be specifically for use therein; provided, however, that the
obligations of such Investors hereunder shall be limited to an amount equal to
the proceeds to each such Investor of securities sold pursuant to a registration
statement required by this Registration Rights Agreement.
(c) Notice of Indemnity and Defense:
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Each party entitled to indemnification under this Paragraph 6 (the
"Indemnified Party") shall give notice to the party requiring to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as
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provided herein shall not relieve the Indemnified Party of its obligations under
this Registration Rights Agreement. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
7. Miscellaneous Provisions.
(a) Amendment and Modification. Subject to applicable law, this
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Agreement may only be amended, modified and supplemented by written agreement of
a majority of the Series B Stock and Warrant holders and the Company.
(b) Waiver of Compliance. Any failure of the Investors or the Company
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to comply with any obligation, covenant, agreement or condition herein may be
expressly waived in writing by the Investors or the Company, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as waiver of, or estoppel with respect
to, any subsequent or other failure.
(c) Notices. All notices, requests, demands and other communications
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required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or mailed, certified or registered mail
with postage prepaid:
If to the Company, to: Enviro-Clean of America, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chairman/CEO
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to:) Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Investors, to the address and facsimile number of each
Investor as set forth on Exhibit A of this Registration Rights
Agreement, or to such other person or address as the Investor
shall furnish to the Company in writing.
(d) Assignment. This Agreement and all of the provisions hereof shall
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be binding upon and inure to the benefit of the parties hereto and their
respective successors and
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permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto without
the prior written consent of the other parties, except by operation of law and
except that the Company may assign its rights and its obligations under this
Agreement to any successor to the business of the Company.
(e) Governing Law. This Agreement and the legal relations among the
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parties hereto shall be governed by and construed in accordance with the laws of
the State of New York without regard to its conflicts of law doctrine.
(f) Counterparts. This Agreement may be executed simultaneously in two
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or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(g) Headings. The headings used in this Agreement are inserted for
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convenience only and shall not constitute a part hereof or affect in any way the
meaning or interpretation of this Agreement.
(h) Third Parties. Except as specifically set forth or referred to
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herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or corporation other than the parties hereto
and their permitted successors or assigns, any rights or remedies under or by
reason of this Agreement.
(i) Severability. Should any provision of this Agreement be held by a
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court or arbitration panel of competent jurisdiction to be enforceable only if
modified, such holding shall not affect the validity of the remainder of this
Agreement, the balance of which shall continue to be binding, upon the parties
hereto with any such modification to become a part hereof and treated as though
originally set forth in this Agreement. The parties further agree that any such
court or arbitration panel is expressly authorized to modify any such
unenforceable provision of this Agreement in lieu of severing such unenforceable
provision from this Agreement in its entirety, whether by rewriting the
offending provision, deleting any or all of the offending provision, adding
additional language to this Agreement, or by making such other modifications as
it deems warranted to carry out the intent and agreement of the parties as
embodied herein to the maximum extent permitted by law. The parties expressly
agree that this Agreement as modified by the court or the arbitration panel
shall be binding upon and enforceable against each of them. In any event, should
one or more of the provisions of this Agreement be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and if such provision or provisions
are not modified as provided above, this Agreement shall be construed as if such
invalid, illegal or unenforceable provisions had never been set forth herein.
IN WITNESS WHEREOF, the parties have caused this agreement to be duly
executed and delivered as of the day and year first above written.
(Signature Page Follows)
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[COMPANY SIGNATURE PAGE TO
REGISTRATION RIGHTS AGREEMENT]
ENVIRO-CLEAN OF AMERICA, INC.
BY:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
President
[INVESTORS SIGNATURE PAGES FOLLOW]
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[INVESTOR SIGNATURE PAGE TO
REGISTRATION RIGHTS AGREEMENT]
The Investors:
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Name of Investor if Entity or Signature if
Individual
By:
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Title:
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Please type or print name
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