REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as of the
31st day of December, 1997, by and between METALCLAD CORPORATION, a
Delaware corporation, on the one hand, and SUNDIAL INTERNATIONAL FUND
LIMITED, a Jersey (Channel Islands) corporation, and ULTRA PACIFIC
HOLDINGS, S.A., a Liechtenstein corporation, on the other hand. In
consideration of the mutual covenants set forth herein, the parties agree
as follows:
1. Certain Definitions
As used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Commission" shall mean the Securities and Exchange
Commission.
(b) "Common Stock" shall mean the Common Stock, par value $.1O,
of the Company
(c) "Company" shall mean METALCLAD CORPORATION, a Delaware
corporation.
(d) "Conversion Shares" shall mean the shares of Common Stock
issuable by the Company on conversion of the Notes.
(e) "Demand Registration" shall mean a registration of
Registrable Shares requested by a Holder or Holders under Section 3 (a)
below.
(f) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar successor federal statute and the rules
and regulations of the Commission promulgated thereunder.
(g) "Holder" shall mean the record holder of any of the
Registrable Shares on the Company s books.
(h) "Note" or "Notes" shall mean any of the Zero Coupon Secured
Notes issued by the Company pursuant to the terms of the Purchase
Agreement.
(i) "Person" shall mean any individual, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other political subdivision
thereof.
(j) "Piggyback Registration" shall mean a registration of
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Registrable Shares requested by a Holder or Holders under Section 4 (a)
below.
(k) "Purchase Agreement" shall mean the Purchase Agreement dated
December 31, 1997 between the Company, on the one hand, and SUNDIAL and
ULTRA, on the other hand.
(l) "Registrable Shares" shall mean the Conversion Shares and
the Warrant Shares and any shares of Common Stock of the Company issued as
a dividend or other distribution with respect to, in exchange for or in
replacement of Registrable Shares; provided, however, that Registrable
Shares shall not include any shares which (i) have been previously
registered and sold in a public distribution or previously sold pursuant
to Rule 144, or (ii) do not constitute more than 2% of the total
outstanding shares of Common Stock and in the opinion of counsel to the
Company, determined to be available for sale by their current Holder to
the public in "broker s transactions" or transactions directly with a
market maker (as those terms are used in Rule 144), pursuant to Rule 144
or otherwise, in a single transaction exempt from the registration and
prospectus delivery requirements of the Securities Act so that all
transfer restrictions and restrictive legends (not relating to a buyer
being an affiliate of the Company) with respect to that Act are or may be
removed upon the consummation of such sale.
(m) The terms "register," "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and the applicable rules
and regulations thereunder, and the declaration or ordering of the
effectiveness of such registration statement.
(n) "Registration Expenses" shall mean all expenses incurred in
effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for the Company,
blue sky fees and expenses, and expenses of any regular or special audits
incident to or required by any such registration, but shall not include
Selling Expenses. "Registration Expenses" shall include the reasonable
fees and expenses of one special counsel (who is reasonably acceptable to
the Company) for all participating Holders. Registration Expenses shall
exclude the compensation of regular employees of the Company which shall
be paid in any event by the Company.
(o) "Regulation 5" shall mean Regulation S as promulgated by the
Commission under the Securities Act, as such Regulation may be amended
from time to time, or any similar or successor regulation or provision
then in force that may be promulgated by the Commission.
(p) "Rule 144" shall mean Rule 144 as promulgated by the
Commission under the Securities Act, as such Rule may be amended from time
to time, or any similar successor rule or provision then in force that may
be promulgated by the Commission.
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(q) "Rule 145" shall mean Rule 145 as promulgated by the
Commission under the Securities Act, as such Rule may be amended from time
to time, or any similar successor rule or provision then in force that may
be promulgated by the Commission.
(r) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar successor federal statute, and the rules and
regulations promulgated by the Commission thereunder.
(s) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Shares and,
except as included in the definition of "Registration Expenses," all fees
and disbursements of counsel for any Holder.
(t) "SUNDIAL" shall mean SUNDIAL INTERNATIONAL FUND LIMITED, a
Jersey (Channel Islands) corporation.
(u) "ULTRA" shall mean ULTRA PACIFIC HOLDINGS, S.A., a
Liechtenstein corporation.
2. Conditions Upon Which Registration Rights Are Triggered.
If the Commission or any other agency of the government of the
United States abolishes, modifies or otherwise changes the terms of
Regulation S or Rule 144 so as to (i) extend the holding period under
Regulation S to a period greater than 40 days, or (ii) extend the holding
period under Rule 144 to greater than one year, the Purchasers adversely
affected thereby shall have the right to one Demand Registration and two
Piggyback Registrations in accordance with the terms and conditions set
forth in this Agreement.
3. Requested Registration
(a) Request for Registration. If the conditions set forth in
Section 2 above apply and the Company shall receive from a Holder or
Holders, at any time or times not later than five years after the date of
this Agreement, a written request that the Company effect a registration
with respect to at least 200,000 of the Registrable Shares (such number to
be appropriately adjusted for any stock dividends, combinations or similar
transactions with respect to such shares), the Company will promptly give
written notice of the proposed registration to all other Holders. The
Company will then, as soon as practicable, use its best efforts to effect
such registration (including, without limitation, filing post-effective
amendments, appropriate qualifications under applicable blue sky or other
state securities laws, and appropriate compliance with the Securities Act)
as would permit or facilitate the sale and distribution of all or such
portion of the Registrable Shares as are specified in such request,
together with all or such portion of the Registrable Shares of each Holder
joining in such request as are specified in a written notification
received by the Company within 20 days after such written notice from the
Company is given to such Holder in accordance with Section 14(c).
(b) Limitations on Registration Obligation. The Company will not
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be obligated to effect, or to take any action to effect, a Demand
Registration pursuant to this Section 3:
(i) If pursuant to a Demand Registration a registration
statement has been declared effective within the prior 12-month period;
(ii) After the Company has initiated a Demand Registration
pursuant to this Section 3 (counting for these purposes only (A)
registrations which have been declared or ordered effective and pursuant
to which securities have been sold, and (B) registrations which have been
withdrawn by the Holders as to which the Holders have not elected to bear
the Registration Expenses pursuant to Section 5 and would, absent such
election, have been required to bear such expenses);
(iii) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except as
may be required by the Securities Act;
(iv) During the period starting with the date 60 days prior
to the Company s good faith estimate of the date of filing of, and ending
on a date 180 days after the effective date of, a Company-initiated
registration (other than a registration of securities in a Rule 145
transaction or with respect to an employee benefit plan), provided that
the Company is actively employing in good faith all reasonable efforts to
cause the registration to become effective; or
(v) If the requesting Holder(s) proposed to dispose of
Registrable Shares which may be immediately registered on Form S-3
pursuant to a request made under Section 6.
(c) Company s Right to Defer Registration. Subject to clauses
(i) through (v) of Section 3(b), the Company shall file a registration
statement covering the Registrable Shares requested to be registered under
Section 3(a) as soon as practicable after receipt of the request of the
requesting Holder(s); provided, however, that if, (i) in the good faith
judgment of the Board of Directors of the Company, such registration would
be seriously detrimental to the Company and the Board of Directors of the
Company concludes, as a result, that it is essential to defer the filing
of such registration statement at such time, and (ii) the Company shall
furnish to all the Holders a certificate signed by the President of the
Company stating such facts, then the Company shall have the right to defer
such filing for the period during which such disclosure would be seriously
detrimental, provided that (except as permitted in Section 3(b)(iv) above)
the Company may not defer the filing for a period of more than 90 days
after receipt of the request of the requesting Holder(s) and, provided
further, that the Company shall not defer its obligation in this manner
more than once in any 12-month period.
(d) Other Included Securities. A registration statement filed
pursuant to the request of a Holder or Holders under Section 3(a) may,
subject to the provisions of Sections 3(e), include securities of the
Company held by other persons who have been granted registration rights by
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the Company and may include securities of the Company being sold for the
account of the Company.
(e) Underwritten Offering. If a Demand Registration pursuant to
this Section 3 is for a registered public offering involving an
underwriting, the Company shall so advise the Holders as part of the
notice given pursuant to Section 3(a). In such event, the right of any
Holder to registration pursuant to this Section 3 shall be conditioned
upon such Holder s participation in the underwriting arrangements required
by this Section 3(e), and the inclusion of such Holders Registrable Shares
in the underwriting to the extent requested shall be limited as provided
below. The Company shall (together with all Holders and other persons
proposing to distribute their securities through such underwriting) enter
into an underwriting agreement in customary form with the representative
of the underwriter(s) selected for such underwriting by the Holders who
hold a majority of the Registrable Shares held by all the Holders with
respect to that underwriting, provided that the underwriter(s) shall be
reasonably acceptable to the Company. Notwithstanding any other provision
of this Section 3, if the representative of the underwriter(s) advises the
Company and the Holders in writing that marketing factors require a
limitation on the number of shares to be underwritten, the representative
may (subject to the limitations set forth below) limit the number of
Registrable Shares and other securities to be included in the
underwriting. The Company shall so advise all participating Holders and
the number of shares that may be included in the registration and
underwriting shall be allocated: first to the Registrable Shares, with the
allocation among Registrable Shares held by Holders who have requested
inclusion in the registration in proportion, as nearly as practicable, to
the respective amounts of Registrable Shares held by such Holders and
properly requested to be included at the time of filing the registration
statement; second, to shares being sold for the account of the Company;
and then, to shares being sold for the account of other Persons. Any
Registrable Shares so excluded from the underwriting by reason of the
representative s marketing limitation shall be withdrawn from such
registration. To facilitate the allocation of shares in accordance with
the above provisions, the Company or the representative of the
underwriter(s) may round the number of registered shares allocated to any
Holder or other shareholder to the nearest 100 shares. If a Holder who has
requested inclusion in an underwritten Demand Registration as provided
above does not agree to the terms of the underwriting, that Holder s
shares may be excluded from the underwriting by written notice from the
Company or the representative of the underwriter(s) and the shares so
excluded shall be withdrawn from the registration. If shares are so
excluded from the underwriting because of a failure to agree to its terms
and the number of Registrable Shares to be included in the underwriting
was previously reduced as a result of marketing factors pursuant to this
Section 3(e), then, with the permission of the representative of the
underwriter(s) the Company shall offer to all Holders who have retained
rights to include Registrable Shares in the underwriting the right to
include additional Registrable Shares in an aggregate amount equal to the
number of shares so excluded. The registration of such additional
Registrable Shares shall be allocated among the Holders requesting the
additional inclusion pro rata in accordance with the numbers of their
Registrable Shares which are otherwise to be included in the registration.
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4. Participation Registration
(a) Registration Right. If the conditions set forth in Section 2
above apply and, after the date of this Agreement, the Company shall
determine to register any of its securities either for its own account or
the account of a security holder or holders (other than pursuant to
Section 3 or 6), except for a registration relating solely to employee
benefit plans, a registration relating solely to a Rule 145 transaction, a
registration on any registration form that would not permit secondary
sales of Registrable Shares or a registration filed more than five years
after the date of this Agreement, the Company will, in two such instances:
(i) Promptly give to each Holder written notice thereof;
(ii) Use its best efforts to include in such registration
(and any related qualification under blue sky laws or other compliance),
except as set forth in Section 4(b) below, and in any underwriting
involved therein, all the Registrable Shares specified in a written
request or requests made by any Holder within 15 days after the written
notice from the Company described in clause (i) above is given to that
Holder. Such written request may specify all or a part of a Holder s
Registrable Shares.
(b) Underwritten Offering. If the registration of which the
Company gives notice under Section 4(a) is for a registered public
offering involving an underwriting, the Company shall so advise the
Holders as a part of the written notice given pursuant to Section 4(a)(i).
In such event, the right of any Holder to registration pursuant to this
Section 4 shall be conditioned upon such Holder s participation in such
underwriting and the inclusion of such Holder s Registrable Shares in the
underwriting to the extent provided herein. All Holders proposing to
distribute their securities through the underwriting shall (together with
the Company and any other persons proposing to distribute their securities
through the underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter(s) selected by
the Company. Notwithstanding any other provision of this Section 4, if the
representative of the underwriter(s) advises the Company in writing that
marketing factors require a limitation on the number of shares to be
underwritten, the representative may (subject to the limitations set forth
below) limit the number of Registrable Shares to be included in the
registration and underwriting; provided that the value of the included
Registrable Shares shall be at least 20% of the total value of the
securities included in the registration. The Company shall so advise all
Holders requesting to participate in the registration and the number of
shares that may be included in the registration and underwriting shall be
allocated: first, to the Company for securities being sold for its own
account; second, among Registrable Shares held by all Holders who have
requested inclusion in the registration in proportion, as nearly as
practicable, to the respective amounts of Registrable Shares held by such
Holders and properly requested to be included at the time of filing the
registration statement; and then to shares being sold for the accounts of
other Persons. Any Registrable Shares so excluded from the underwriting by
reason of the representative s limitation shall be withdrawn from such
registration. To facilitate the allocation of shares in accordance with
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the above provisions, the Company or the representative of underwriter(s)
may round the number of shares allocated to any Holder or other
shareholder to the nearest 100 shares. If a Holder who has requested
inclusion in the registration does not agree to the terms of the
underwriting, that Holder s shares may be excluded from the underwriting
by written notice from the Company or the representative of the
underwriter(s) and the shares so excluded shall be withdrawn from the
registration. If shares are so excluded from the underwriting because of a
failure to agree to its terms and the number of shares of Registrable
Shares to be included in the underwriting was previously reduced as a
result of marketing factors pursuant to this Section 4(b), then, with the
permission of the representative of the underwriter(s) the Company shall
offer to all Holders who have retained rights to include Registrable
Shares in the underwriting the right to include additional Registrable
Shares in an aggregate amount equal to the number of shares so excluded.
The registration of such additional Registrable Shares shall be allocated
among the Holders requesting the additional inclusion pro rata in
accordance with the numbers of their Registrable Shares which are
otherwise to be included in the registration.
(c)
Right to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section
4 prior to the registration s effectiveness, whether or not any Holder has
elected under this Section 4 to include shares in the registration.
5. Expenses of Registration
All Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to Sections 3 and 4
shall be borne by the Company. All Registration Expenses incurred in
connection with the registration of Registrable Shares under Section 6
shall be borne by the Holders participating in the registration pro rata
on the basis of the numbers of Registrable Shares so registered on their
behalf, provided that, if other shares are included in the registration,
the Registration Expenses shall be reasonably allocated among the Holders,
the Company and other participating shareholders based on the numbers of
their shares that are registered. A Holder or Holders may elect to bear
without reimbursement by the Company the Registration Expenses for a
Demand Registration proceeding begun by them pursuant to Section 3 and
subsequently withdrawn by them. In such a case, the registration
proceeding shall not be counted for purposes of Section 3(b)(ii). If a
withdrawal of a Demand Registration by a Holder is based upon material
adverse information relating to the Company that is different from the
information known or available (upon request from the Company or
otherwise) to the Holder requesting the registration at the time of a
request for registration under Section 3, such registration shall not be
treated as a counted registration for purposes of Section 3(b)(i), even
though the requesting Holder does not bear the Registration Expenses for
the registration. All Selling Expenses relating to shares of Holders
registered under Sections 3, 4 and 6 shall be borne by such Holders pro
rata on the basis of the numbers of shares so registered on their behalf.
6. Registration on Form S-3
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(a) If the Company has qualified for the use of Form S-3 under
the Securities Act (which for purposes of this Section 6 shall be deemed
to include any comparable or successor form or forms), in addition to the
rights contained in the foregoing provisions of this Agreement, the
Holders shall have the right to request registrations of their Registrable
Shares on Form S-3. Such requests must be in writing and must state the
number of shares of Registrable Shares to be disposed of and the intended
methods of disposition of such shares by the requesting Holder or Holders.
The Company shall not be obligated to effect any such registration: (i) if
the Holders propose to sell less than 200,000 Registrable Shares; or (ii)
if the Company shall furnish the certification described in Section 3(c)
(but subject to the limitations set forth therein); or (iii) after the
Company has previously effected one such registration in any 12-month
period; or (iv) if the request is made more than five years after the date
of this Agreement.
(b) If a request complying with the requirements of Section 6(a)
is delivered to the Company, the Company shall use its best efforts to
cause the Registrable Shares requested to be included in the registration
to be registered on Form S-3 and to cause such Registrable Shares to be
registered or qualified under applicable blue sky laws in such
jurisdictions as the requesting Holders may reasonably request. The
substantive provisions of Sections 3(a)(i), 3(a)(ii), and 3(c) shall apply
to such registration. If the registration is for an underwritten offering,
the substantive provisions of Section 3(e) shall also apply to such
registration.
7. Registration Procedures
In the case of each registration of Registrable Shares effected by
the Company pursuant to this Agreement, the Company will keep each
participating Holder advised in writing as to the initiation of the
registration and as to the completion thereof. The Company will use its
best efforts to:
(a) Keep the registration effective for a period of 90 days or
until the participating Holder or Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs; provided, however, that (i) such 90-day period shall be extended
for a period of time equal to the period the Holder refrains from selling
any securities included in such registration at the request of an
underwriter of the securities of the Company; and (ii) in the case of any
registration of Registrable Shares on Form S-3 which are intended to be
offered on a continuous or delayed basis, such 90-day period shall be
extended, if necessary, to keep the registration statement effective until
all such Registrable Shares are sold, provided that Rule 145, or any
successor rule under the Securities Act, permits an offering on a
continuous or delayed basis, and provided further that applicable rules
under the Securities Act governing the obligation to file a post-effective
amendment permit, in lieu of filing a post-effective amendment that (A)
includes any prospectus required by Section 10(a)(3) of the Securities Act
or (B) reflects facts or events representing a material or fundamental
change in the information set forth in the registration statement, the
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incorporation by reference of information required to be included in (A)
and (B) above to be contained in periodic reports filed pursuant to
Section 13 or 15(d) of the Exchange Act in the registration statement;
(b) Prepare and file with the Commission such amendments and
supplements to the registration statement and the prospectus used in
connection with the registration statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition
of all securities covered by the registration statement;
(c) Furnish such number of prospectuses and other documents
incident thereto, including any amendment of or supplement to the
prospectus, as a participating Holder from time to time may reasonably
request;
(d) Notify each seller of Registrable Shares covered by the
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of 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 a material fact required to be stated therein or
necessary to make the statements therein not misleading or incomplete in
the light of the circumstances then existing, and at the request of any
such seller prepare and furnish to the seller a reasonable number of
copies of a supplement to or an amendment of the prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
shares, the 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 or incomplete in
the light of the circumstances then existing;
(e) Cause all Registrable Shares registered pursuant to the
provisions of this Agreement to be listed on each securities exchange on
which similar securities issued by the Company are then listed;
(f) Provide a transfer agent and registrar for all Registrable
Shares registered pursuant to such registration statement and a CUSIP
number for all such Registrable Shares, in each case not later than the
effective date of the registration; and
(g) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission.
8. Indemnification
(a) The Company will indemnify each Holder, each of its
officers, directors and partners, legal counsel and accountants and each
person who controls such Holder within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification, or
compliance has been effected pursuant to this Agreement, and each
underwriter, if any, and each person who controls within the meaning of
Section 15 of the Securities Act any underwriter, against all expenses,
claims, losses, damages and liabilities (or actions, proceedings or
settlements in respect thereof) arising out of or based on any untrue
9
statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular, or other document (including any
related registration 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 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 Holder, each of
its officers, directors, partners, legal counsel and accountants, and each
person controlling such Holder, 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 or
settling 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 actual or alleged untrue statement or omission that is made in
reliance upon and in conformity with written information furnished to the
Company by such Holder, controlling person or underwriter and stated to be
specifically for use therein. It is agreed that the indemnity agreement
contained in this Section 8(a) shall not apply to amounts paid in
settlement of any such loss claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent
has not been unreasonably withheld).
(b) Each Holder will, if Registrable Shares held by such Holder
are included in the securities to which such registration, qualification
or compliance is being effected, indemnify the Company, each of its
directors, officers, partners, legal counsel and accountants, 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 Section 15 of the Securities Act, each
other such Holder and other stockholder, each of their officers, directors
and partners, and each person controlling such Holder or other
stockholder, 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 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 will reimburse the Company and such
Holders, other stockholders, directors, officers, partners, legal counsel,
accountants, 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 Holder and stated to be specifically for
use therein. The obligations of such Holder under this Section 8(b) shall
not apply to amounts paid in settlement of any such claims, losses,
damages or liabilities (or actions in respect thereof) if such settlement
10
is effected without the consent of such Holder (which consent shall not be
unreasonably withheld).
(c) Each party entitled to indemnification under this Section 8
(the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim 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 unreasonably be withheld), and
provided further that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest, and provided
further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 8, to the extent such failure is not
materially prejudicial. The Indemnified Party may participate in such
defense at such party s expense. 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 that 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 defense of
such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 8 is
held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or
expense referred to herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage or expense in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party on the one hand,
and of the Indemnified Party on the other, in connection with the
statements or omissions that resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations.
The relative fault of the Indemnifying Party and of the Indemnified Party
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the Indemnifying
Party or by the Indemnified Party and the and Parties relative intent,
knowledge, information opportunity to correct or prevent such statement or
omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with an underwritten
public offering of securities registered under this Agreement are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
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9. Information by Holder
Each Holder of Registrable Shares shall furnish to the Company such
information regarding such Holder and the distribution proposed by such
Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement.
10. Limitations on Registration of Issues of Securities
From and after the date of this Agreement, the Company shall not,
without the prior written consent of the Purchasers, enter into any
agreement with any holder or prospective holder of any securities of the
Company giving such holder or prospective holder any registration rights
the terms of which are more favorable than the registration rights granted
to the Holders hereunder.
With a view to making available the benefits of certain rules and
regulations of the Commission that may permit the sale of the Registrable
Shares to the public without registration, the Company agrees to use its
best efforts to:
(a) Make and keep public information regarding the Company
available as those terms are understood and defined in Rule 144 under the
Securities Act;
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act;
(c) So long as a Holder owns any Registrable Shares, furnish to
the Holder forthwith upon written request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144,
the Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company filed with the Commission, and such
other reports and documents of the Company and information in its
possession as a Holder may reasonably request in availing itself of any
rule or regulation of the Commission allowing a Holder to sell any such
securities without registration.
12. Transfer or Assignment of Registration Rights
The rights to cause the Company to register securities granted to a
Holder by the Company under this Agreement may be transferred or assigned
by the Holder only to a transferee or assignee of not less than 200,000
shares of Registrable Shares (subject to appropriate adjustments for stock
splits, stock dividends, reverse stock splits and the like), provided that
the Company is given written notice at the time of or within a reasonable
time after the transfer or assignment stating the name and address of the
transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned, and
provided further that before or concurrently with his or her exercise of
any such rights the transferee or assignee of such rights assumes in a
writing given to the Company the obligations of such Holder under this
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Agreement.
13. Delay of Registration
No Holder shall have any right to take any action to restrain, enjoin
or otherwise delay any registration as the result of any controversy that
might arise with respect to the interpretation or implementation of this
Agreement.
14. Miscellaneous
(a) No Inconsistent Agreements. The Company shall not, on or
after the date of this Agreement, enter into any agreement with respect to
its securities which is inconsistent with the rights granted to the
Holders of the Registrable Shares in this Agreement or otherwise conflicts
with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless by a written instrument signed by an
officer of the Company and by the Holders of at least a majority of the
then outstanding Registrable Shares. Notwithstanding the foregoing: (i) in
no event shall the obligations of any Holder under this Agreement be
materially increased without the written consent of that Holder; and (ii)
a waiver or consent to depart from the provisions of this Agreement with
respect to a matter which relates exclusively to the rights of Holders of
Registrable Shares whose securities are being sold pursuant to a
registration statement and which does not directly or indirectly affect
the rights of Holders of Registrable Shares whose securities are not being
sold pursuant to the registration statement, may be given by either (A)
Holders of at least a majority of the then outstanding Registrable Shares
or (B) Holders of a majority of the Registrable Shares being sold by such
Holders; provided, however, that the provisions of this sentence may not
be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing and sent by hand delivery,
registered first-class mail, courier, telex or telecopier: (i) if to a
Holder of Registrable Shares, to the most current address of the Holder on
the books of the Company; and (ii) if to the Company, to the attention of
its President at the address of its principal executive office. All such
notices and communications shall be deemed to have been given: when
delivered at the proper address, if personally delivered or delivered by
courier; five business days after being deposited in the mail, postage
prepaid, if mailed by registered first-class mail; and when answered back,
if telexed, telecopied or sent by similar facsimile transmission.
(d) Successors and Assigns. Subject to Sections 8 and 12, this
Agreement shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties.
(e) Counterparts. This Agreement may be executed in any number
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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.
(f) Headings and Section References. The headings in this
Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof. Unless otherwise indicated, each
reference to a Section shall refer to a Section of this Agreement.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, as applied
to contracts made and performed in California, without regard to
principles of conflict of laws.
(h) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, 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 best 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.
(i) Entire Agreement. This Agreement is intended by the parties
as a complete and final expression of their agreement with respect of the
subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such
subject matter.
(j) Attorneys Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party shall be entitled to
recover reasonable attorneys fees in addition to its costs and expenses
and any other available remedy.
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This Agreement has been executed as of the date set forth in the
first paragraph above.
The Company:
METALCLAD CORPORATION
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
The Purchasers:
SUNDIAL INTERNATIONAL FUND LIMITED
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Its Duly Authorized Agent
ULTRA PACIFIC HOLDINGS, S.A.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Its Duly Authorized Agent
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