EXHIBIT 4.10
REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (the "Agreement") is made by and between
RINECO RECYCLING, LLC (the "Warrant Holder") and ENVIRONMENTAL SAFEGUARDS, Inc.,
a Nevada corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company has issued to the Warrant Holder 1,500,000 warrants
(the "Warrants"), each of which represents the right to purchase from the
Company one (1) share of its common stock, $.001 par value (the "Common Stock")
at an exercise price of $.01 per share expiring April 30, 2005, pursuant to that
certain Warrant to Purchase Shares of Common Stock of Environmental Safeguards,
Inc. of even date herewith.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby acknowledged, the parties agree as follows:
1. The Registration. Prior to May 1, 2003, the Company will file a
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Registration Statement ("Registration Statement") pursuant to the Securities Act
of 1933, as amended (the "Securities Act") to register the resale of the shares
of common stock underlying the Warrants (the "Registration Shares") with the
Securities and Exchange Commission (the "Commission"). The Company will use
reasonable efforts to cause the Registration Statement to become effective and
to keep the Registration Statement current until the earlier of (i) April 30,
2006 or (ii) the sale of all of the Registration Shares held by the Warrant
Holder (the "Termination Date"). The Company shall not be obligated to effect
more than one registration on behalf of the Warrant Holder 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 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 60 days.
2. Registration Procedures.
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(a) In performing its obligations under Section 1 to register the
Registration 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 if 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;
(iii) furnish to the Warrant Holder 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 Warrant
Holder may reasonably request;
(iv) use its reasonable efforts to (a) register or qualify
the Registration Shares under such other securities or
blue sky laws of such jurisdictions as the Warrant
Holder shall reasonably request, (b) keep such
registration or qualification in effect for so long as
the Registration Statement remains in effect, and (c)
take any other action which may be reasonably necessary
or advisable to enable the Warrant Holder to consummate
the disposition of the Registration Shares in
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, or to
take any such action which would impose unreasonable
expense on the Company;
(v) notify the Warrant Holder at any time when a Prospectus
relating to the Registration 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 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 Warrant Holder one copy of 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
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required to be stated therein or necessary to make the
statements therein not misleading in the light of
circumstances under which they were made;
(vi) otherwise use reasonable efforts to comply with all
applicable rules and regulations of the Commission;
(vii) 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;
(viii) properly notify any securities exchange on which any of
the Company's Common Stock is listed of the registration
of any of the Registration Shares, and use its best
efforts to satisfy all prerequisites and regulations of
any such exchange relating to the trading of such
Registration Shares on such exchange;
(ix) if requested by the Warrant Holder, promptly incorporate
in a prospectus supplement or post-effective amendment
such information as the Warrant Holder reasonably
requests to be included therein with respect to the
number of Registration Shares being sold by the Warrant
Holder's plan of distribution and promptly make all
required filings of such prospectus supplement or
post-effective amendment;
(x) 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
Warrant Holder;
(xi) cooperate with the Warrant Holder to facilitate the
timely preparation and delivery of certificates (not
bearing any restrictive legends) representing
Registration Shares to be sold under the Registration
Statement, in such denominations and registered in such
names as the Warrant Holder may reasonably request; and
(xii) make available for inspection by the Warrant Holder, and
any one attorney, accountant or other agent retained by
the Warrant Holder of the Registration 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
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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 Warrant Holder
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, 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 Warrant Holder shall be
responsible for all discounts and commissions relating to the
Registration Shares and for the fees and expenses of counsel and
other persons engaged by the Warrant Holder.
3. Obligations of Warrant Holder.
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(a) The Warrant Holder agrees that it will offer and sell the
Registration Shares in compliance with all applicable state and
federal securities laws. Specifically, without limitation, the
Warrant Holder agrees not to use any prospectus (as that term is
defined under the Securities Act) for the purpose of offering or
selling the Registration Shares to the public except for the
Prospectus, as the same may be supplemented and amended from time
to time.
(b) The Warrant Holder agrees to promptly notify the Company as and
when any Registration Shares are sold and when the Warrant Holder
elects to terminate all further offers and sales of Registration
Shares pursuant to the Registration Statement. The Warrant Holder
acknowledges that any Registration Shares which have not been
sold within the Termination Date or any earlier termination of
the distribution of the Registration 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
Registration Shares that the Warrant Holder furnish the Company
in writing such information regarding the Warrant Holder,
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the Registration Shares and other securities of the Company held
by Warrant Holder, and the distribution of such Registration
Shares as the Company may from time to time reasonably request in
writing. If the Warrant Holder refuses to provide the Company
with any of such information in the Registration Statement, the
Company may exclude the Warrant Holder's Registration Shares from
the Registration Statement if the Company provides the Warrant
Holder with an opinion of counsel to the effect that such
information must be included in the Registration Statement and
the Warrant Holder thereafter continues to withhold such
information.
(d) The Warrant Holder agrees that upon receipt of any notice from
the Company of the happening of any event of the kind described
in Section 2(a)(v), the Warrant Holder will forthwith discontinue
the Warrant Holder's disposition of the Registration Shares
pursuant to the Registration Statement until the Warrant Holder's
receipt of the copies of the supplemented or amended prospectus
contemplated by Section 2(a)(v) 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 Warrant
Holder's possession, of the Prospectus which was current at the
time of receipt of such notice.
4. Public Offering by the Company. Notwithstanding the registration
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rights granted to the Warrant Holder under this Agreement, in the event Company
files a registration statement for an underwritten public offering of Common
Stock (a "Company Offering") while the Registration Statement covering the
Registration Shares is effective, then upon the request of the Company's
underwriter in such Company Offering, the Warrant Holder agrees to enter into an
agreement pursuant to which the Warrant Holder will be prohibited from
transferring the Registration Shares for such period from time to 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 Registration Shares, the period during which the
Registration Statement will be kept current shall be extended for such like
period of time.
5. Restrictions on Transfer. The Warrant Holder agrees that it will
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not sell, exchange, pledge or otherwise transfer any Registration Shares except
in transactions (i) made pursuant to the Registration Statement or (ii) pursuant
to Rule 144 of the Securities Act and all applicable state securities laws, and
for which the Company is provided with an opinion of counsel of the Warrant
Holder 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.
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6. Indemnification.
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(a) Indemnification by the Company. To the extent permitted by law,
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the Company will, and hereby does, indemnify and hold harmless
the Warrant Holder, 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 Warrant Holder or any such underwriter within the
meaning of 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 Warrant Holder 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
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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 of 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 Warrant Holder 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 Warrant Holder or any such director, officer,
underwriter or controlling person and shall survive the transfer
of Registration Shares by the Warrant Holder.
(b) Indemnification by the Warrant Holder. To the extent permitted by
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law, the Warrant Holder 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
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therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission
was made in reliance upon written information furnished to the
Company by the Warrant Holder 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 Warrant
Holder of the Securities Act of the Exchange Act.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
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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 indemnified party is actually
prejudiced by such failure to give notice. In case any such
action is brought against as 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
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in the preceding subdivisions of this Section 6 (with appropriate
modifications) shall be given by the Company and the Warrant
Holder 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
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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. Reporting Requirements Under the Exchange Act. At all times when
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it is legally required to do so, the Company shall use its best efforts to keep
effective its registration under Section 12 of the Exchange Act and shall use
its best efforts to timely file such information, documents and reports as the
Commission may require or prescribe under the Section 13 of the Exchange Act.
8. Notices. All notices required or permitted herein must be in
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writing and shall be deemed to have been duly given the first business day
following the date of service if served personally or by overnight air courier
guaranteeing next day delivery, on the first business day following the date of
actual receipt of delivered by telecopier, telex, or other similar communication
to the party or parties to whom notice is to be given by registered or certified
mail, return receipt requested, postage prepaid, to the Warrant Holder 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, Xxx. 000
Xxxxxxx, Xxxxx 00000
Attn: Xxx Xxxxxxx
Telecopier No: (000) 000-0000
With a copy to:
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Xxxxxxx, Xxxxx & Xxxxxxxxx
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Telecopier No: (000)000-0000
9. Entire Agreement. This agreement contains and constitutes the entire
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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 agreements,
understandings, restrictions, warranties or representatives 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 legally binding agreement ort any evidence thereof, until it has been
signed by all parties hereto.
10. Binding Effect. This Agreement shall be binding on and enforceable
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by the Warrant Holder and by the Company and its successors. No transferee of
Registration 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 Registration 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 Warrant
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Holder in exchange for the Registration Shares, unless such equity securities
are, upon receipt and without further action by the Warrant Holder, readily
salable without registration under the Securities Act.
11. Construction. This Agreement shall be construed, enforced and governed
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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 the
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
provisions contained herein.
12. Invalidity. If any provision contained in this Agreement shall
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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.
13. Counterparts. This agreement may be executed in any number of
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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.
14. Amendments and Waivers. The provisions of this Agreement may
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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 Warrant Holder.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates shown below.
WARRANT HOLDER: RINECO RECYCLING, LLC
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: V.P. of Admin & CFO
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Date: 3-20-03
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COMPANY: ENVIRONMENTAL SAFEGUARDS, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, President
Date: March 20, 2003
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