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Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made by and
between the undersigned (the "Shareholder") and ENVIRONMENTAL SAFEGUARDS, INC.,
a Texas corporation (the "Company").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Subscription Agreement (the
"Subscription Agreement") the Shareholder has purchased __________ shares (the
"Shares") of common stock of the Company, par value $.001 per share (the
"Common Stock") in the Offering of Shares of Common Stock (the "Offering") made
by the Company as described in the Confidential Private Placement Memorandum
dated September 18, 1996 (the "Memorandum");
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. The Registration. Commencing six months after the Termination Date
(as defined in the Memorandum) of the Offering and continuing for a period of
two years from the Termination Date, subject to the Shareholder and the
purchasers in the Offering holding, at the time of exercise of their rights,
Shares of Common Stock which represent in the aggregate a minimum of 10,000
shares (the "Registration Shares") (such number as determined without
adjustment for stock dividends, reclassifications, splits and reverse splits
occurring after the date of the closing of the Offering), upon the written
request of the Shareholder and such purchasers in the Offering requesting that
the Company effect the registration under the Securities Act of 1933, as
amended (the "Securities Act") of all or a specified portion of the
Registration Shares, the Company will use its best efforts to file a
registration statement (the "Registration Statement") under the Securities Act
with the Securities and Exchange Commission (the "Commission"). The Company
shall promptly give written notice of such requested registration to all
holders of record of shares of Common Stock, which were purchased or issued in
connection with the Offering. The Registration Statement will include the
Registration Shares, all other shares for which written notice was given by the
Company which are requested to be included by the holders thereof by written
notice to the Company within thirty (30) days of the giving of written notice
by the Company and may include shares of Common Stock other than the foregoing,
either for the Company's account or for the account of other selling
shareholders. The Company will use reasonable efforts to cause the Registration
Statement to become effective and to keep the Registration Statement current
for a period of two years after the Termination Date of the Offering. The
Company shall not be obligated to effect more than one registration on behalf
of Shareholder and purchasers in the Offering under this section.
Notwithstanding the foregoing, if the Company is engaged in negotiations in
respect of an acquisition or financing transaction and, in the good faith
judgment of the Board of Directors such transaction would be adversely affected
by the filing of the Registration Statement, the Company
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shall be entitled to postpone the filing of such registration statement until
such transaction would not be adversely affected by such filing but, in any
event, for a period not to exceed six months.
2. Registration Procedures.
(a) In performing its obligations under Section 1 to
register the Shares, the Company will, subject to
the limitations provided herein, as expeditiously as
possible:
(i) prepare and file with the Commission the
Registration Statement and use its
commercially reasonable best efforts to cause
such registration to become and remain
effective for the term specified herein;
(ii) prepare and file with the Commission such
amendments and supplements to the Registration
Statement and the Prospectus used in
connection therewith as may be necessary to
keep the Registration Statement effective in
accordance with the terms of the Agreement and
to comply with the provisions of the
Securities Act with respect to the disposition
of all shares covered by the Registration
Statement;
(ii) furnish to the Shareholder one conformed copy
of the Registration Statement and of each such
amendment and supplement thereto (in each case
including all exhibits), one copy of the
Prospectus (including each preliminary
prospectus and any summary prospectus) and any
other Prospectus filed under Rule 424 under
the Securities Act, and such other documents,
as the Shareholder may reasonably request;
(iv) use its reasonable efforts to (a) register or
qualify the Shares under such other securities
or blue sky laws of such jurisdictions as the
Shareholder shall reasonably request, (b) keep
such registration or qualification in effect
for so long as each of the Registration
Statement remain in effect, and (c) take any
other action which may be reasonably necessary
or advisable to enable the Shareholder to
consummate the disposition of the Shares in
such jurisdictions, except that the Company
shall not for any such purpose be required to
qualify generally to do business as a foreign
corporation in any jurisdiction wherein it
would not but for the requirements of this
subdivision (iv) be obligated to be so
qualified, to consent to general service of
process in any such jurisdiction, or to take
any
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such action which would impose unreasonable
expense on the Company;
(v) furnish to the Shareholder a copy of an
opinion of counsel for the Company rendered to
the underwriter, if one is engaged, dated the
effective date of each of the Registration
Statement (and, if such registration includes
an underwritten public offering, dated the
date of the closing under the underwriting
agreement), covering substantially the same
matters with respect to each registration
statement and prospectus as are customarily
covered in opinions of issuer's counsel
delivered to the underwriters in underwritten
public offerings of securities;
(vi) notify the Shareholder at any time when a
Prospectus relating to the Shares is required
to be delivered under the Securities Act, upon
discovery that, or upon the happening of any
event as a result of which, the Prospectus
included in the Registration Statement, as
then in effect, includes an untrue statement
of a material fact or omits to state any
material fact required to be stated therein or
necessary to make the statements therein not
misleading in the light of the circumstances
under which they were made, and prepare and
furnish to the Shareholder one copy of a
supplement to or an amendment of such
Prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such
securities, such Prospectus shall not 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 not misleading in the light of the
circumstances under which they were made;
(vii) otherwise use reasonable efforts to comply with
all applicable rules and regulations of the
Commission;
(viii) provide and cause to be maintained a transfer
agent for the Common Stock from and after a
date not later than the effective date of the
Registration Statement;
(ix) properly notify any securities exchange on
which any of the Company's Common Stock is
listed of the registration of any of the
Shares, and use its best efforts to satisfy
all prerequisites and regulations of any such
exchange relating to the trading of such
Shares on such exchange;
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(x) if requested by the Shareholder, promptly
incorporate in a prospectus supplement or
post-effective amendment such information as
the Shareholder reasonably requests to be
included therein with respect to the number of
Shares being sold by the Shareholder and the
Shareholder's plan of distribution and
promptly make all required filings of such
prospectus supplement or post-effective
amendment;
(xi) as promptly as practicable after filing with
the Commission of any document which is
incorporated by reference in a prospectus
contained in a registration statement, deliver
a copy of such document to the Shareholder;
(xii) cooperate with the Shareholder to facilitate
the timely preparation and delivery of
certificates (not bearing any restrictive
legends) representing Shares to be sold under
the Registration Statement, in such
denominations and registered in such names as
the Shareholder may reasonably request; and
(xiii) make available for inspection by the
Shareholder, and any one attorney, accountant
or other agent retained by one or more holders
of Shares (the "Inspector"), all financial and
other records, pertinent corporate documents
and properties of the Company (collectively,
the "Records"), as shall be reasonably
necessary to enable them to exercise their due
diligence responsibility, and cause the
Company's officers, directors and employees to
supply all information reasonably requested by
any such Inspector in connection with such
registration statement; provided that records
which the Company determines, in good faith,
to be confidential and which it notifies the
Inspector are confidential shall not be
disclosed by the Inspector unless (i) the
disclosure of such Records is necessary to
avoid or correct a misstatement or omission in
the Registration Statement or (ii) the release
of such Records is ordered pursuant to a
subpoena or other order from a court of
competent jurisdiction; provided, further, the
Shareholder agrees that it will, upon learning
that disclosure of such Records is sought in a
court of competent jurisdiction, give notice
to the Company and allow the Company, at its
expense, to undertake appropriate action and
to prevent disclosure of the Records deemed
confidential.
(b) All expenses incident to the Company's performance of its
obligations under this Agreement, including without
limitation, all registration and filing fees, fees and
expenses of compliance with securities and Blue Sky laws,
printing expenses,
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fees and disbursements of the Company's counsel,
independent certified public accountants, and other
persons retained by the Company (all such expenses being
herein called "Registration Expenses") will be borne by
the Company. The Shareholder shall be responsible for all
selling fees, expenses, discounts and commissions
relating to the Shares and for the fees and expenses of
counsel and other persons engaged by the Shareholder.
3. Obligations of Shareholder.
(a) The Shareholder agrees that it will offer and sell Shares
in compliance with all applicable state and federal
securities laws. Specifically, without limitation, the
Shareholder agrees as follows:
(i) The Shareholder agrees not to use any prospectus
(as that term is defined under the Securities
Act) for the purpose of offering or selling the
Shares to the public except for the Prospectus,
as the same may be supplemented and amended from
time to time.
(ii) Neither the Shareholder nor any affiliate of the
Shareholder shall engage in any practice which
would violate Rule 10b-6 promulgated under the
Securities Exchange Act of 1934 ("Exchange Act").
(iii) Neither the Shareholder nor any affiliate of the
Shareholder shall solicit purchases of Common
Stock to facilitate the distribution of Shares in
violation of Rule 10b-2 promulgated under the
Exchange Act.
(iv) Neither the Shareholder nor any affiliate of the
Shareholder shall effect any stabilizing
transactions to facilitate the offer and sale of
Shares to the public in violation of Rule 10b-7
promulgated under the Exchange Act.
(b) The Shareholder agrees to promptly notify the Company as
and when any Shares are sold and when the Shareholder
elects to terminate all further offers and sales of
Shares pursuant to the Registration Statement. The
Shareholder acknowledges that any Shares which have not
been sold within two years after the Termination Date of
the Offering or any earlier termination of the
distribution of the Shares will be removed from
registration by means of a post-effective amendment to
the Registration Statement.
(c) It shall be a condition precedent to the obligations of
the Company to take any action with respect to
registering the Shares that the Shareholder furnish the
Company in writing such information regarding the
Shareholder, the Shares and other securities of the
Company held by the Shareholder, and the distribution of
such Shares as the Company may from time to time
reasonably request in
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writing. If the Shareholder refuses to provide the
Company with any of such information on the grounds that
it is not necessary to include such information in the
Registration Statement, the Company may exclude the
Shareholder's Shares from the Registration Statement if
the Company provides the Shareholder with an opinion of
counsel to the effect that such information must be
included in the Registration Statement and the
Shareholder thereafter continues to withhold such
information.
The Shareholder agrees that upon receipt of any
notice from the Company of the happening of any event of
the kind described in Section 2(a)(vi), the Shareholder
will forthwith discontinue the Shareholder's disposition
of Shares pursuant to the Registration Statement until
the Shareholder's receipt of the copies of the
supplemented or amended prospectus contemplated by
Section 2(a)(vi) and, if so directed by the Company, will
deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such
Shareholder's possession, of the Prospectus current at
the time of receipt of such notice.
4. Public Offering by the Company. Notwithstanding the registration
rights granted to the Shareholder under this Agreement, in the event the
Company files a registration statement for an underwritten public offering of
Common Stock (a "Company Offering") within two years of the Termination Date of
the Offering and while the Registration Statement covering the Registration
Shares is effective, then upon the request of the Company's underwriter in such
Company Offering, the Shareholder agrees to enter into an agreement pursuant to
which the Shareholder will be prohibited from transferring the Shares for such
period of time, not to exceed 90 days after completion of the Company Offering,
as the Company's underwriter may request. The Company may enter stop transfer
orders with its transfer agent in order to effect this prohibition. In the
event the Company makes a Company Offering and the Company's underwriter
imposes transfer restrictions on the sale of Shares, the period during which
the Registration Statement will be kept current shall not be extended beyond
the maximum two-year period from the Termination Date of the Offering as
provided in Section 1.
5. Restrictions on Transfer. The Shareholder agrees that it will not
sell, exchange, pledge or otherwise transfer any Shares except in transactions
(i) made pursuant to the Registration Statement, or (ii) which are exempt from
all registration requirements of the Securities Act (or conducted pursuant to
Rule 144 thereunder) and all applicable state securities laws, and for which
the Company is provided with an opinion of counsel to the Shareholder and other
evidence as may be reasonably satisfactory to the Company to the effect that
such transfer will not be in violation of the Securities Act and all applicable
state securities laws.
6. Indemnification.
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(a) Indemnification by the Company. To the extent permitted
by law, the Company will, and hereby does, indemnify and
hold harmless the Shareholder, its directors and
officers, each other natural person, corporation,
business trust, association, company, partnership, joint
venture and other entity (each, a "Person") who
participates as an underwriter in the offering or sale of
such securities and each other Person, if any, who
controls the Shareholder or any such underwriter within
the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to
which the Shareholder or any such director or officer or
underwriter or controlling Person may become subject
under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material
fact contained in any registration statement under which
such securities were registered under the Securities Act,
any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or
supplement thereto, or 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, and the Company will reimburse the
Shareholder and each such director, officer, underwriter
and controlling person for any legal or any other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim,
liability, action or proceeding; provided that --------
the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus,
amendment or supplement in reliance upon written
information furnished to the Company by the Shareholder
expressly for use in the preparation thereof. Such
indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of
the Shareholder or any such director, officer,
underwriter or controlling person and shall survive the
transfer of Shares by the Shareholder.
(b) Indemnification by the Shareholder. To the extent
permitted by law, the Shareholder will, and hereby does,
indemnify and hold harmless (in the same manner and to
the same extent as set forth in subdivision (a) of this
Section 6) each underwriter, each Person who controls
such underwriter within the meaning of the Securities
Act, the Company, each director of the Company, each
officer of the Company and each other Person, if any, who
controls the Company within the meaning of the Securities
Act, with respect to any statement or alleged statement
in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment
or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in
reliance upon written
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information furnished to the Company by the Shareholder
expressly for use in the preparation of such registration
statement, preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement, and with
respect to any violation by the Shareholder of the
Securities Act or the Exchange Act.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any
action or proceeding involving a claim referred to in the
preceding subdivisions of this Section 6, such
indemnified party will, if a claim in respect thereof is
to be made against an indemnifying party, give written
notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to
give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding
subdivisions of this Section 6, except to the extent that
the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is
brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying
parties actually exists in respect of such claim, the
indemnifying party shall be entitled to participate in
and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that
it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying
party to such indemnified party of its election to assume
the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other
expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall,
without the consent of the 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.
(d) Other Indemnification. Indemnification similar to that
specified in the preceding subdivisions of this Section 6
(with appropriate modifications) shall be given by the
Company and the Shareholder with respect to any required
registration or other qualification of securities under
any Federal or state law or regulation of any
governmental authority other than the Securities Act.
(e) Indemnification Payments. The indemnification required by
this Section 6 shall be made by periodic payments of the
amount thereof during the course of the investigation or
defense, as and when bills are received or expense, loss,
damage or liability is incurred.
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7. Notices. All notices required or permitted herein must be in writing
and shall be deemed to have been duly given the first business day following
the date of service if served personally, on the first business day following
the date of actual receipt if delivered by telecopier, telex or other similar
communication to the party or parties to whom notice is to be given, or on the
third business day after mailing if mailed to the party or parties to whom
notice is to be given by registered or certified mail, return receipt
requested, postage prepaid, to the Shareholder at the address set forth in the
Subscription Agreement, and to the Company at the address set forth below, or
to such other addresses as either party hereto may designate to the other by
notice from time to time for this purpose.
ENVIRONMENTAL SAFEGUARDS, INC.
0000 Xxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Telecopier No: (000) 000-0000
With a copy to:
Xxxxxxx, Xxxxx & Xxxxxxxxx
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
8. Entire Agreement. This Agreement contains and constitutes the entire
agreement between and among the parties with respect to the matters set forth
herein and supersedes all prior agreements and understandings between the
parties hereto relating to the subject matter hereof. There are no agreements,
understandings, restrictions, warranties or representations among the parties
relating to the subject matter hereof other than those set forth or referred to
herein. This instrument is not intended to have any legal effect whatsoever, or
to be a legally binding agreement or any evidence thereof, until it has been
signed by all parties hereto.
9. Binding Effect. This Agreement shall be binding on and enforceable by
the Shareholder and by the Company and its successors. No transferee of Shares
shall acquire any rights under this Agreement except with the written consent
of the Company, which may be withheld for any reason. In the event the Company
is a party to a merger or consolidation in a transaction in which the Shares
are converted into equity securities of another entity, then the Company shall
cause such other entity to assume the Company's obligations under this
Agreement such that this Agreement shall apply to the equity securities
received by the Shareholder in exchange for the Shares, unless such equity
securities are, upon receipt and without further action by the Shareholder,
readily salable without registration under the Securities Act.
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10. Construction. This Agreement shall be construed, enforced and
governed in accordance with the laws of the State of Texas. All pronouns and
any variations thereof shall be deemed to refer to the masculine, feminine or
neuter gender thereof or to the plurals of each, as the identity of the person
or persons or the context may require. The descriptive headings contained in
this Agreement are for reference purposes only and are not intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision contained herein.
11. Invalidity. If any provision contained in this Agreement shall for
any reason be held to be invalid, illegal, void or unenforceable in any
respect, such provisions shall be deemed modified so as to constitute a
provision conforming as nearly as possible to such invalid, illegal, void or
unenforceable provisions while still remaining valid and enforceable, and the
remaining terms or provisions contained herein shall not be affected thereby.
12. Counterparts. This Agreement may be executed in any number of
Counterparts and by the parties hereto in separate 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.
13. Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless agreed to in writing by both
the Company and the Shareholder.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates shown below.
SHAREHOLDER: /s/ HOLDER
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Date
COMPANY: ENVIRONMENTAL SAFEGUARDS, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, President
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Date
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