Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of the 13 day of September, 2004, between the person
whose name appears below (the "INVESTOR"), and Environmental Solutions Worldwide
Inc., a Florida corporation having its principal executive office at 000 Xxxx
Xxxxxx, Xxxxxxx, XX 00000 (the "COMPANY").
WHEREAS, the Company has issued and sold certain (1) Debentures and (2)
Warrants convertible or exercisable, as the case may be, in each case into
shares of Common Stock of the Company, par value $0.001 (the "COMMON STOCK"),
pursuant to a Securities Subscription Agreement, dated as of September 13, 2004
(the "SUBSCRIPTION AGREEMENT"), between the Investor and the Company.
WHEREAS, the Company desires to grant to the Investor the registration
rights set forth herein with respect to the shares of Common Stock issuable upon
conversion of the Debentures and the shares of Common Stock issuable upon
exercise of the Warrants;
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. REGISTRABLE SECURITIES. As used herein the term "REGISTRABLE SECURITY" means
any shares of Common Stock (i) issued or issuable in connection with the
exercise or conversion, as applicable, of any Warrants or Debentures issued to
the Investor and (ii) issued or issuable with respect to the securities referred
to in clause (ii) above by virtue of any stock split, combination, stock
dividend, merger, consolidation or other similar event; PROVIDED, HOWEVER, that
with respect to any particular Registrable Security, such security shall cease
to be a Registrable Security when, as of the date of determination, (i) it has
been effectively registered under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and disposed of pursuant thereto, or (ii) registration under
the Securities Act is no longer required by the Investor for the distribution or
disposition of all of the Registrable Securities beneficially owned by such
Investor. The term "REGISTRABLE SECURITIES" means any and/or all of the
securities falling within the foregoing definition of a "Registrable Security."
2. REGISTRATION. The Company agrees to use its best efforts to file a
registration statement (a "REGISTRATION STATEMENT") with the Securities and
Exchange Commission (the "COMMISSION") within 120 days of the closing date of
the transactions contemplated by the Subscription Agreement in order to register
the resale of the Registrable Securities under the Securities Act. Once
effective, the Company will be required to maintain the effectiveness of the
Registration Statement until the earlier of (i) the date that all of the
Registrable Securities have been sold, or (ii) the date that the Company
receives an opinion of counsel to the Investor that all of the Registrable
Securities may be freely distributed, sold or otherwise disposed of without
registration under the Securities Act pursuant to Rule 144(k) (or any similar
provision then in force) promulgated under the Securities Act.
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3. COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION.
The Company covenants and agrees as follows:
(a) In connection with any registration filed pursuant hereto, the Company shall
use its best efforts to cause the Registration Statement to become effective as
promptly as possible. Following the effective date of a Registration Statement,
the Company shall, upon the request of the Investor, forthwith supply such
reasonable number of copies of the Registration Statement (including, without
limitation, the exhibits and schedules thereto), preliminary prospectus and
prospectus meeting the requirements of the Securities Act (including, without
limitation, any and all amendments or supplements thereto), and other documents
necessary or incidental to the public offering of the Registrable Securities, as
shall be reasonably requested by the Investor to permit the Investor to sell,
distribute or otherwise dispose of the Investor's Registrable Securities. The
obligations of the Company hereunder with respect to the Investor's beneficially
owned Registrable Securities are subject to the Investor's furnishing to the
Company such appropriate information concerning the Investor, the Investor's
Registrable Securities and the terms of the Investor's offering of such
Registrable Securities as the Company may reasonably request in writing.
(b) The Company shall provide the Investor, any underwriter participating in any
disposition pursuant to a Registration Statement, and any attorney, accountant
or other agent retained by the Investor or underwriter (each, an "INSPECTOR"
and, collectively, the "INSPECTORS"), the opportunity to review and comment
(including reviewing and commenting on relevant documents and agreements) in the
preparation of such Registration Statement, each prospectus included therein or
filed with the Commission and each amendment or supplement thereto.
(c) For a reasonable period prior to the filing of any Registration Statement
pursuant to this Agreement, the Company shall make available for inspection at
the Company's offices and copying by the Inspectors such financial and other
information and books and records, pertinent corporate documents and properties
of the Company and its subsidiaries and cause the officers, directors,
employees, counsel and independent certified public accountants of the Company
and its subsidiaries to respond to such inquiries and to supply all information
reasonably requested by any such Inspector in connection with such Registration
Statement, as shall be reasonably necessary, in the judgment of the respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
(d) The Company shall promptly notify in writing the Investor, the sales or
placement agent, if any, therefor and the managing underwriter of the securities
being sold, (i) when such Registration Statement or the prospectus included
therein or any prospectus amendment or supplement or post-effective amendment
has been filed, and, with respect to any such Registration Statement or any
post-effective amendment, when the same has become effective, (ii) when the
Commission notifies the Company whether there will be a "review" of such
Registration Statement, (iii) of any comments (oral or written) by the
Commission and by the blue sky or securities commissioner or regulator of any
state with respect thereto or (iv) of any request by the Commission for any
amendments or supplements to such Registration Statement or the prospectus or
for additional information.
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(e) The Company shall promptly notify in writing the Investor, the sales or
placement agent, if any, therefor and the managing underwriter of the securities
being sold pursuant to any Registration Statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act upon
discovery that, or upon the happening of any event as a result of which, any
prospectus included in such Registration Statement (or amendment or supplement
thereto) contains 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 light of the circumstances under which they were made,
and the Company shall promptly prepare a supplement or amendment to such
prospectus and file it with the Commission promptly following notice of the
occurrence of such event to the Investor, the sales or placement agent and the
managing underwriter so that after delivery of such prospectus, as so amended or
supplemented, to the purchasers of such Registrable Securities, such prospectus,
as so amended or supplemented, shall not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made.
(f) The Company shall promptly notify in writing the Investor, the sales or
placement agent, if any, therefor and the managing underwriter of the securities
being sold of the issuance by the Commission of (i) any stop order issued or
threatened to be issued by the Commission or (ii) any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and the Company agrees to use its
commercially reasonable efforts to (x) prevent the issuance of any such stop
order, and in the event of such issuance, to obtain the withdrawal of any such
stop order and (y) obtain the withdrawal of any order suspending or preventing
the use of any related prospectus or suspending the qualification of any
Registrable Securities included in such Registration Statement for sale in any
jurisdiction at the earliest practicable date.
(g) The Company shall prepare and file with the Commission such amendments,
including post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective for the
applicable time period required hereunder and, if applicable, file any
Registration Statements pursuant to Rule 462(b) (or any similar provision then
in force) under the Securities Act; cause the related prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) promulgated
under the Securities Act; and comply with the provisions of the Securities Act
and the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement as
so amended or in such prospectus as so supplemented. If the Investor so
requests, to request acceleration of effectiveness of the Registration Statement
from the Commission and any post-effective amendments thereto, if any are filed.
If the Company wishes to further amend the Registration Statement prior to
requesting acceleration, it shall have five (5) days to so amend prior to
requesting acceleration.
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(h) The Company shall pay all costs, fees and expenses in connection with all
Registration Statements filed pursuant to Section 2 hereof including, without
limitation, the Company's legal and accounting fees, printing expenses, and blue
sky fees and expenses; PROVIDED, HOWEVER, that the Investor shall be solely
responsible for the fees of any counsel retained by the Investor in connection
with such registration and any transfer taxes or underwriting discounts,
commissions or fees applicable to the Registrable Securities sold by the
Investor pursuant thereto.
(i) The Company will take all necessary action which may be required in
qualifying or registering the Registrable Securities included in a Registration
Statement for offering and sale under the securities or blue sky laws of such
states as are reasonably requested by the Investors of such securities;
PROVIDED, that the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction.
(j) The Company shall cooperate with the Investor to facilitate the timely
preparation and delivery of certificates representing the securities to be sold
pursuant to the Registration Statement free of any restrictive legends and in
such denominations and registered in such names as the Investor may request a
reasonable period of time prior to sales of the securities pursuant to such
Registration Statement.
(k) The Company agrees generally to cooperate with Investors in effecting
compliant resale of the Registrable Securities, including comfort and other
customary broker agreements and documentations and certificates
4. ADDITIONAL TERMS.
(a) To the extent permitted by law, the Company will indemnify and hold harmless
the Investor, its agents, trustees and beneficiaries, partners or officers,
directors and shareholders of the Investor, legal counsel and accountants for
the Investor, and each person who controls the Investor within the meaning of
the Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or any state securities laws, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "VIOLATION"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such Registration Statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the 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 (iii) any Violation or alleged
Violation by the Company of the Securities Act, the Exchange Act, any state
securities laws or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities laws; and the Company will reimburse
the indemnified party under this Section 4(a), for any reasonable legal or other
expenses reasonably incurred by it in connection with investigating or defending
any such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
indemnity described herein shall not apply any loss, claim, damage, liability or
action to the extent that it arises out of or is based upon a Violation that
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by the Investor; PROVIDED
FURTHER, HOWEVER, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of the Investor, from whom
the person asserting any such losses, claims, damages or liabilities purchased
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shares in the offering, if a copy of the prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Investor to such person,
if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the shares to such person, and if the prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability.
(b) To the extent permitted by law, the Investor will severally, and not
jointly, indemnify and hold harmless the Company, each of its directors, each of
its officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act and legal counsel and accountants for the Company, against any losses,
claims, damages or liabilities to which any of the foregoing persons may become
subject, under the Securities Act, the Exchange Act or any state securities
laws, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information specifically furnished by the
Investor expressly for use in connection with such registration which consists
solely of the information specified in Section 4(d); and the Investor will
reimburse any person intended to be indemnified pursuant to the foregoing, for
any legal or other expenses reasonably incurred by such person in connection
with investigating or defending any such loss, claim, damage, liability or
action; PROVIDED, HOWEVER, that the indemnity obligation of the Investor
hereunder shall not in any event exceed the net proceeds received by the
Investor from the offering giving rise to such liability.
(c) Promptly after receipt by an indemnified party of notice of the commencement
of any action (including any governmental action), such indemnified party will,
if a claim in respect thereof is to be made against any indemnifying party shall
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel reasonably
satisfactory to each party; PROVIDED, HOWEVER, that an indemnified party
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party, but
the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
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than under this paragraph. After notice from an indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of this paragraph for any legal or other expense subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation, unless (i) the indemnified party shall
have employed counsel in accordance with the first sentence of this paragraph or
(ii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent; PROVIDED, HOWEVER, that the
indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
or other compromise 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. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the indemnified party with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made.
(d) The Investor confirms, and the Company acknowledges, that the information to
appear in the table in the section entitled "Principal and Selling Shareholders"
or equivalently named section in the Registration Statement under the headings
"Name of Beneficial Owner," "Shares Beneficially Owned Prior to Offering -
Number of Shares," "Maximum Number of Shares Offered in this Offering," or
equivalently named headings in the Registration Statement and in the footnote
related to such information pertaining to the Investor constitute the only
information concerning the Investor that will be furnished in writing to the
Company by or on behalf of the Investor for inclusion in the Registration
Statement.
(e) If the indemnification provided for above 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 parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding any other provision of this
Section, the Investor shall not be required to contribute any amount in excess
of the amount by which the net proceeds received by such Investor from the sale
of the shares of the Common Stock issued upon conversion of the Debenture or
sale of the shares of Common Stock issued upon exercise of the Warrants, in each
case pursuant to a Registration Statement exceeds the amount of damages which
the Investor has otherwise been required to pay be reason of such untrue or
alleged untrue statement or alleged omission. The obligation of the Investor
obliged to make contribution pursuant to this Section shall be several and not
joint.
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(f) Neither the filing of a Registration Statement by the Company pursuant to
this Agreement nor the making of any request for prospectuses by the Investor
shall impose upon the Investor any obligation to sell the Investor's
beneficially owned Registrable Securities.
(g) The Investor, upon receipt of notice from the Company that an event has
occurred which requires a Post-Effective Amendment to the Registration Statement
or a supplement to the prospectus included therein, shall promptly discontinue
the sale of Registrable Securities until the Investor receives a copy of a
supplemented or amended prospectus from the Company, which the Company shall
provide as soon as practicable after such notice.
(h) If the Company fails to keep the Registration Statement referred to above
continuously effective during the requisite period, then the Company shall,
promptly upon the request of the Investor, use its best efforts to update the
Registration Statement or file a new registration statement covering the
Registrable Securities remaining unsold, subject to the terms and provisions
hereof.
(i) The Investor agrees to provide the Company with any information or
undertakings reasonably requested by the Company in order for the Company to
include any appropriate information concerning the Issuer in the Registration
Statement or in order to promote compliance by the Company or the Issuers with
the Securities Act.
(j) With a view to making available to the Investor the benefits of Rule 144 and
Rule 144A promulgated under the Securities Act and other rules and regulations
of the Commission that may at any time permit the Investor to sell securities of
the Company to the public without registration, the Company covenants that it
shall use commercially reasonable efforts to (i) file in a timely manner all
reports and other documents required to be filed by it under the Securities Act
and the Exchange Act and the rules and regulations adopted by the Commission
thereunder and (ii) take such further action as the Investor may reasonably
request (including providing any information necessary to comply with Rule 144
and Rule 144A, if available with respect to resales of the Registrable
Securities under the Securities Act), at all times, all to the extent required
from time to time to enable the Investor to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (x) Rule 144 and Rule 144A (if available with respect to resales of
the Registrable Securities) under the Securities Act, as such rules may be
amended from time to time, or (y) any other rules or regulations now existing or
hereafter adopted by the Commission
5. GOVERNING LAW. This Agreement shall be deemed to have been made and delivered
in the State of New York and shall be governed as to validity, interpretation,
construction, effect and in all other respects by the internal substantive laws
of the State of New York, without giving effect to the choice of law rules
thereof.
6. AMENDMENT. This Agreement may only be amended by a written instrument
executed by the Company and the Investor.
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7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties, oral and written, with
respect to the subject matter hereof.
8. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
9. NOTICES. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed duly given when delivered by hand or
mailed by registered or certified mail, postage prepaid, return receipt
requested, as set forth in the Securities Purchase Agreement.
10. BINDING EFFECT; BENEFITS. The Investor may assign his, her or its rights
hereunder as set forth in the Warrant. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective heirs, legal
representatives and successors. Nothing herein contained, express or implied, is
intended to confer upon any person other than the parties hereto and their
respective heirs, legal representatives and successors, any rights or remedies
under or by reason of this Agreement.
11. TRANSFER OF REGISTRATION RIGHTS. The rights of the Investor under this
Agreement may be transferred or assigned in connection with a transfer of
Registrable Securities to any transferee or assignee. Notwithstanding the
foregoing, such rights may only be transferred or assigned if all of the
following additional conditions are satisfied: (a) such transfer or assignment
is effected in accordance with applicable securities laws; (b) such transferee
or assignee agrees in writing to become subject to the terms of this Agreement;
and (c) the Company is given written notice by the Investor of such transfer or
assignment, stating the name and address of the transferee or assignee and
identifying the Registrable Securities with respect to which such rights are
being transferred or assigned.
12. HEADINGS. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
13. SEVERABILITY. Any provision of this Agreement which is held by a court of
competent jurisdiction to be prohibited or unenforceable in any jurisdiction(s)
shall be, as to such jurisdiction(s), ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto as of the date first above written.
ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.
By:___________________________________
Name: ____________________________________
Its: _____________________________________
INVESTOR:
By: _________________________________
Name:
Title:
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Annex A
Plan of Distribution
The Selling Stockholders and any of their pledgees, donees,
transferees, assignees and successors-in-interest may, from time to time, sell
any or all of their shares of Common Stock on any stock exchange, market or
trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. The Selling Stockholders may
use any one or more of the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits Investors;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o to cover short sales made after the date that this Registration
Statement is declared effective by the Commission;
o broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the Shares owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell shares of Common Stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 amending the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.
Upon the Company being notified in writing by a Selling Stockholder
that any material arrangement has been entered into with a broker-dealer for the
sale of Common Stock through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a
supplement to this prospectus will be filed, if required, pursuant to Rule
424(b) under the Securities Act, disclosing (i) the name of each such Selling
Stockholder and of the participating broker-dealer(s), (ii) the number of shares
involved, (iii) the price at which such shares of Common Stock were sold, (iv)
the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this prospectus, and (vi) other facts material to the transaction.
In addition, upon the Company being notified in writing by a Selling Stockholder
that a donee or pledge intends to sell more than 500 shares of Common Stock, a
supplement to this prospectus will be filed if then required in accordance with
applicable securities law.
The Selling Stockholders also may transfer the shares of Common Stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, that can be attributed to the
sale of Securities will be paid by the Selling Stockholder and/or the
purchasers. Each Selling Stockholder has represented and warranted to the
Company that it acquired the securities subject to this registration statement
in the ordinary course of such Selling Stockholder's business and, at the time
of its purchase of such securities such Selling Stockholder had no agreements or
understandings, directly or indirectly, with any person to distribute any such
securities.
If a Selling Stockholder uses this prospectus for any sale of the
Common Stock, it will be subject to the prospectus delivery requirements of the
Securities Act. The Selling Stockholders will be responsible to comply with the
applicable provisions of the Securities Act and Exchange Act, and the rules and
regulations thereunder promulgated, including, without limitation, Regulation M,
as applicable to such Selling Stockholders in connection with resales of their
respective shares under this Registration Statement.
The Company is required to pay all fees and expenses incident to the
registration of the shares, but the Company will not receive any proceeds from
the sale of the Common Stock. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act. If the Selling Stockholders use this
prospectus for any sale of the Common Stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
Annex B
ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.
SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial owner of common stock (the "COMMON STOCK"), of
Environmental Solutions Worldwide, Inc. (the "COMPANY") understands that the
Company has filed or intends to file with the Securities and Exchange Commission
(the "COMMISSION") a Registration Statement for the registration and resale of
the Registrable Securities, in accordance with the terms of the Registration
Rights Agreement, dated as of August [ ], 2004 (the "REGISTRATION RIGHTS
AGREEMENT"), among the Company and the Investors named therein. A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below. All capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.
The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
QUESTIONNAIRE
1. NAME.
(a) Full Legal Name of Selling Securityholder
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(b) Full Legal Name of Registered Holder (if not the same as (a)
above) through which Registrable Securities Listed in Item 3
below are held:
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(c) Full Legal Name of Natural Control Person (which means a
natural person who directly you indirectly alone or with
others has power to vote or dispose of the securities covered
by the questionnaire):
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2. ADDRESS FOR NOTICES TO SELLING SECURITYHOLDER:
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Telephone:
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Fax:
Contact Person:
3. BENEFICIAL OWNERSHIP OF REGISTRABLE SECURITIES:
(a) Type and Number of Registrable Securities beneficially owned:
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4. BROKER-DEALER STATUS:
(a) Are you a broker-dealer?
Yes [ ] No [ ]
Note: If yes, the Commission's staff has indicated that you should
be identified as an underwriter in the Registration Statement.
(b) Are you an affiliate of a broker-dealer?
Yes [ ] No [ ]
(c) If you are an affiliate of a broker-dealer, do you certify
that you bought the Registrable Securities in the ordinary
course of business, and at the time of the purchase of the
Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to
distribute the Registrable Securities?
Yes [ ] No [ ]
Note: If no, the Commission's staff has indicated that you should be
identified as an underwriter in the Registration Statement.
5. BENEFICIAL OWNERSHIP OF OTHER SECURITIES OF THE COMPANY OWNED BY THE SELLING
SECURITYHOLDER.
EXCEPT AS SET FORTH BELOW IN THIS ITEM 5, THE UNDERSIGNED IS NOT THE
BENEFICIAL OR REGISTERED OWNER OF ANY SECURITIES OF THE COMPANY OTHER THAN
THE REGISTRABLE SECURITIES LISTED ABOVE IN ITEM 3.
(a) Type and Amount of Other Securities beneficially owned by the
Selling Securityholder:
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6. RELATIONSHIPS WITH THE COMPANY:
EXCEPT AS SET FORTH BELOW, NEITHER THE UNDERSIGNED NOR ANY OF ITS
AFFILIATES, OFFICERS, DIRECTORS OR PRINCIPAL EQUITY HOLDERS (OWNERS OF
5% OF MORE OF THE EQUITY SECURITIES OF THE UNDERSIGNED) HAS HELD ANY
POSITION OR OFFICE OR HAS HAD ANY OTHER MATERIAL RELATIONSHIP WITH THE
COMPANY (OR ITS PREDECESSORS OR AFFILIATES) DURING THE PAST THREE
YEARS.
State any exceptions here:
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The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the Effective Date for the Registration Statement.
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
Dated: Beneficial Owner:
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By:
-----------------------------------
Name:
Title:
PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL,
TO: XXXXXXX & XXXXXXXXX
ATTN: XXXXXX X. XXXXXXX
000 XXXXX XXX
XXX XXXX, XX 00000
(T) 212-750-9700
(F) 212-750-8297
