EXHIBIT 4.13
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................... 2
1.1 Definitions........................................... 2
ARTICLE 2 REGISTRATION RIGHTS........................................... 3
2.1 Securities Subject to this Agreement........................... 3
2.2 Shelf Registration ........................................... 4
2.3 Piggyback Registration......................................... 6
2.4 Registration Procedures........................................ 7
2.5 Preparation: Reasonable Investigation......................... 12
2.6 Certain Rights of Holders..................................... 12
2.7 Registration Expenses......................................... 12
2.8 Indemnification; Contribution ................................ 13
2.9 Participation in Underwritten Registrations.......... 16
2.10 Selection of Underwriters............................ 16
ARTICLE 3 RULE 144A.................................................... 17
ARTICLE 4 MISCELLANEOUS................................................ 17
4.1 Entire Agreement..................................... 17
4.2 Successors and Assigns............................... 17
4.3 Notices.............................................. 17
4.4 Headings............................................. 18
4.5 Counterparts......................................... 18
4.6 Applicable Law; Resolution of Disputes............... 18
4.7 Specific Enforcement................................. 19
4.8 Amendment and Waivers................................ 19
4.9 Attorney Fees........................................ 19
REGISTRATION RIGHTS AGREEMENT
DATED AS OF
___________, 1998
AMONG
ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
AND
THE PURCHASERS LISTED ON THE SIGNATURE PAGE OF THIS
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is dated as of
_________, 1998 between ENVIRONMENTAL REMEDIATION HOLDING CORPORATION, a
Colorado corporation (the "Company") and each of the Purchasers of the Company's
8.0% Convertible Notes due August 4, 2000 (the "Notes") pursuant to that certain
Securities Purchase Agreement, dated of even date herewith (the "Securities
Purchase Agreement"), whose names are set forth at the end of this Agreement
(individually, a "Purchaser" and collectively, the "Purchasers").
RECITALS
WHEREAS, it is a condition precedent to the obligations of each Purchaser under
the Securities Purchase Agreement that the Company grant registration rights to
the holders of the Company's Notes, and
WHEREAS, in connection with resales by the Purchasers of the Company's Common
Stock upon or after conversion of the Notes, the Company and the Purchasers now
desire to enter into this Agreement in order to facilitate such resales.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein and for other good and valuable consideration, the adequacy and receipt
of which is hereby acknowledged, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms, as used herein, have the
following meanings.
"Board" means the Board of Directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other day on which
banks in New York, New York are authorized by law to close.
"Closing Date" shall mean the Closing Date of the Securities Purchase Agreement.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, par value $0.0001 per share, of the
Company.
"Company" means Environmental Remediation Holding Corporation, a Colorado
corporation.
"Company Registration Statement" means the Registration Statement of the Company
relating to the registration for sale of shares of the Company's Common Stock
contemplated by Section 2.3, including the Prospectus as defined below.
"Effective Time" means the date of effectiveness of any Registration Statement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holders" has the meaning given to it in Section 2.1(b) hereof.
"NASD" means the National Association of Securities Dealers, Inc.
"Note(s)" means the individual or collective reference to any one or more of the
8.0% Convertible Notes of the Company due __________, 2000, in $____________
aggregate principal amount.
"Person" means an individual, corporation, partnership, association, trust or
other entity or organization, including a government or political subdivision or
an agency or instrumentality thereof.
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"Prospectus" means the prospectus included in any Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
"Registration Statements" means the Company Registration Statement on Form S-1
or any other appropriate registration form and the Shelf Registration Statement.
"Restricted Securities" means any Securities until (i) a registration statement
covering such Securities has been declared effective by the Commission and such
Securities have been disposed of pursuant to such effective registration
statement, (ii) such Securities are sold under circumstances in which all the
applicable conditions of Rule 144 (or any similar provisions then in force)
under the Securities Act are met, or such Securities may be sold pursuant to
Rule 144(k) (or any similar provision then in force) under the Securities Act,
and are freely tradable after such sale by the transferee, (iii) such Securities
are otherwise transferred, the Company has delivered a new certificate or other
evidence of ownership for such Securities not bearing a legend restricting
further transfer and such Securities may be resold, without registration under
the Securities Act, or (iv) such Securities shall have ceased to be outstanding.
"Securities" means the shares of the Company's Common Stock issuable upon
conversion of the Notes or upon exercise of the Warrants.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" means the registration statement of the Company
relating to the shelf registration for resale of Restricted Securities
contemplated by Section 2.2 herein, including the Prospectus included therein,
all amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.
"Securities Purchase Agreement" has the meaning given to it in the recitals to
this Agreement.
As used in this Agreement, words in the singular include the plural, and in the
plural include the singular.
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ARTICLE 2
REGISTRATION RIGHTS
2.1 Securities Subject to this Agreement.
(a) The Securities entitled to the benefits of this Agreement are the Restricted
Securities, but only for so long as they remain Restricted Securities.
(b) A Person is deemed to be a holder of Restricted Securities (each, a
"Holder") whenever such Person is the registered holder of such Restricted
Securities on the Company's books and records.
2.2 Shelf Registration.
(a) The Company shall:
(i) as expeditiously as practicable, but no later than 15 calendar days
from the Closing Date, amend its Shelf Registration Statement on Form S-1 filed
with the Commission on January 8, 1998 pursuant to Rule 415 under the Securities
Act, which Shelf Registration Statement shall provide for resale of all
Restricted Securities the Holders of which shall have provided to the Company
the information required pursuant to Section 2.2(c) herein; and
(ii) use its best efforts to cause such Shelf Registration Statement to
be declared effective by the Commission as soon as possible but within 60
calendar days after the Closing Date.
(iii) if the Company is advised by the SEC that a Registration
Statement filed hereunder is subject to a "no-review" and such Registration
Statement is not declared effective within ten (10) business days thereafter (an
"Acceleration Date") or, irrespective of the SEC review, a Registration
Statement is not declared effective by 60 calendar days after the Closing Date
(the "Target Date"), the Company shall pay Holder as liquidated damages an
amount equal to .0986% of the total principal sum of the Notes for the first
thirty (30) day period following the earlier of the Acceleration Date or Target
Date as applicable and .1844% per day thereafter, until such time as the
registration statement is declared effective. The payment set forth above shall
be pro-rated daily as to any period of less than thirty (30) days. Such payment
shall be made to the Holder by cashier's check or wire transfer in immediately
available funds to such account as shall be designated in writing by the Holder.
The
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foregoing amount shall be paid irrespective of the amount of Restricted
Securities then held by Holder.
(iv) if, following effectiveness of a registration, either the
effectiveness of the registration statement is suspended or a current Prospectus
meeting the requirements of Section 10 of the Securities Act is not available
for delivery by the Holder for any reason (either referred to herein as a
"suspension"), the Company shall thereupon pay to Holder as liquidated damages
an amount equal to two percent (2%) of the total principal sum of the Notes
previously purchased by Holder for each thirty (30) day period of the
suspension. The payment set forth above shall be pro-rated daily as to periods
of less than thirty (30) days. Such payment shall be made to the Holder by
cashier's check or wire transfer in immediately available funds to such account
as shall be designated in writing by the Holder, and shall be paid irrespective
of the amount of Restricted Securities held by Holder on or after the date
following the suspension.
(v) any amount payable pursuant to the foregoing provisions of this
Subsection (a) shall be delivered on or before the third (3rd) business day
following the end of the calendar month in which such payment obligation arose.
(vi) Subsections (a)(iii) and (a)(iv) are in addition to the provisions
of Section 4.7 hereof.
(b) In connection with the Shelf Registration Statement, the Company shall
comply with all the provisions of Section 2.4 below and shall use its best
efforts to effect such registration to permit the sale of the Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the Company
pursuant to Section 2.2. (c)). Subject to Section 2.2(d) the Company shall use
its best efforts to keep such Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
2.2(d) to the extent necessary to ensure that it is available for resales of
Restricted Securities by the Holders of Restricted Securities, and to ensure
that it conforms with the requirements of this Agreement, the Securities Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period of twenty four (24) months from the Closing Date or such
longer period as required by Section 2.2(d) or such shorter period that will
terminate when all the Securities covered by the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement or otherwise cease
to be Restricted Securities. Upon the occurrence of
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any event that would cause any Shelf Registration Statement or the Prospectus
contained therein (i) to contain a material misstatement or omission or (ii) not
to be effective and usable for sale or resale of Restricted Securities during
the period required by this Agreement, the Company shall file promptly an
appropriate amendment to such Shelf Registration Statement or the related
Prospectus or any document incorporated therein by reference, in the case of
clause (i), correcting any such misstatement or omission, and, in the case of
either clause (i) or (ii), use its best efforts to cause such amendment to be
declared effective and such Registration Statement and the related Prospectus to
become usable for its intended purpose(s) as soon as practicable thereafter.
(c) No Holder of Restricted Securities may include any of its Restricted
Securities in the Shelf Registration Statement pursuant to this Agreement unless
and until such Holder furnishes to the Company in writing, within 10 Business
Days after receipt of a written request therefor, such information specified in
Item 507 of Regulation S-K under the Securities Act or such other information as
the Company may reasonably request for use in connection with the Shelf
Registration Statement or Prospectus or preliminary Prospectus included therein
and in any application to the NASD. Each Holder as to which the Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
(d) Notwithstanding anything to the contrary contained herein, if (x) the Board
determines in good faith that the registration and distribution of Restricted
Securities (or the use of such Shelf Registration Statement or the Prospectus
contained therein) would interfere with any proposed or pending material
corporate transaction involving the Company or any of its subsidiaries or would
require premature disclosure thereof or would require the Company to disclose
information that the Company has not otherwise made public and that the Company
reasonably determines is in the best interests of the Company not to disclose at
such time, and (y) the Company notifies the Holders in writing not later than
three (3) days following such determination (such notice a "Blackout Notice"),
the Company may (A) postpone the filing of such Shelf Registration Statement or
(B) allow such Shelf Registration Statement to fail to be effective and usable
or elect that such Shelf Registration Statement not be usable for a reasonable
period of time, but not in excess of 30 days (a "Blackout Period"); provided,
however, that the aggregate number of days included in all Blackout Periods
shall not exceed 90 during any
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consecutive 12 months and shall not exceed 150 during the period specified in
Section 2.2(b); and provided further, that such period referred to in Section
2.2(b) during which the Shelf Registration Statement is required to be effective
and usable shall be extended by the aggregate number of days during which the
Shelf Registration Statement was not effective or usable pursuant to the
foregoing provisions.
(e) In the event the number of shares available under a Registration Statement
filed pursuant to this Agreement is insufficient to cover all of the Registrable
Securities, the Company shall amend the Registration Statement, or file a new
Registration Statement (on the short form available therefor, if applicable), or
both, so as to cover all of the Registrable Securities, in each case, as soon as
practicable, but in any event within fifteen (15) days after the necessity
therefor arises (based on the market price of the Common Stock and other
relevant factors on which the Company reasonably elects to rely). The Company
shall use its best reasonable efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the
filing thereof. For purposes of the foregoing provision, the number of shares
available under a Registration Statement shall be deemed "insufficient to cover
all of the Registrable Securities" if at any time the number of Registrable
Securities issued or issuable upon conversion of the Notes is greater than the
quotient determined by dividing (i) the number of shares of Common Stock
available for resale under such Registration Statement by (ii) 2.0; provided
that in the case of the initial registration of the Registrable Securities
pursuant to Section 2(a), the Company shall be required to register at least
__________________ shares of Common Stock for resale. For purposes of the
calculation set forth in the foregoing sentence, any restrictions on the
convertibility of the Notes shall be disregarded and such calculation shall
assume that the Notes are then convertible into shares of Common Stock at the
then prevailing Conversion Price (as defined in the Notes).
2.3 Piggyback Registration.
(a) At any time that the Company proposes to file a Company Registration
Statement, either for its own account or for the account of a stockholder or
stockholders, the Company shall give the Holders written notice of its intention
to do so and of the intended method of sale (the "Registration Notice") within a
reasonable time prior to the anticipated filing date of the Company Registration
Statement effecting such Company Registration. Each holder may request inclusion
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of any Restricted Securities in such Company Registration by delivering to the
Company, within ten (10) Business Days after receipt of the Registration Notice,
a written notice (the "Piggyback Notice") stating the number of Restricted
Securities proposed to be included and that such shares are to be included in
any underwriting only on the same terms and conditions as the shares of Common
Stock otherwise being sold through underwriters under such Company Registration
Statement. The Company shall use its best efforts to cause all Restricted
Securities specified in the Piggyback Notice to be included in the Company
Registration Statement and any related offering, all to the extent requisite to
permit the sale by the Holders of such Restricted Securities in accordance with
the method of sale applicable to the other shares of Common Stock included in
such Company Registration Statement; provided however, that if, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the Company Registration Statement filed in
connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may, at
its election, give written notice of such determination of each Holder of
Restricted Securities and, thereupon:
(i) in the ease of determination not to register, shall be relieved of
its obligation to register any Restricted Securities in connection with such
registration, and
(ii) in the case of a delay in registering, shall be permitted to delay
registering any Restricted Securities for the same period as the delay in
registering such other securities.
(b) The Company's obligation to include Restricted Securities in a Company
Registration Statement pursuant to Section 2.3(a) shall be subject to the
following limitations:
(i) The Company may elect, at its sole option and for any reason, not
to register Holder's Restricted Securities; provided however, that this right is
limited to one (1) time and relative to one (1) particular Company Registration
Statement.
(ii) The Company shall not be obligated to include any Restricted
Securities in a registration statement filed on Form S-4, Form S-8 or such other
similar successor forms then in effect under the Securities Act.
(iii) If a Company Registration Statement involves an underwritten
offering and the managing underwriter advises the Company
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in writing that in its opinion, the number of securities requested to be
included in such Company Registration Statement exceeds the number which can be
sold in such offering without adversely affecting the offering, the Company will
include in such Company Registration Statement the number of such Securities
which the Company is so advised can be sold in such offering without adversely
affecting the offering, determined as follows:
(A) first, the securities proposed by the Company to be sold
for it own account, and
(B) second, any Restricted Securities requested to be included
in such registration and any other securities of the Company in accordance with
the priorities, if and then existing among the holders of such securities pro
rata among the holders thereof requesting such registration on the basis of the
number of shares of such securities requested to be included by such holders.
(iii) The Company shall not be obligated to include Restricted
Securities in more than two (2) Company Registration Statement(s).
(c) No Holder of Restricted Securities may include any of its Restricted
Securities in the Company Registration Statement pursuant to this Agreement
unless and until such Holder furnishes to the Company in writing, within 10
business days after receipt of a written request therefor, such information
specified in Item 507 of Regulation S-K under the Securities Act or such other
information as the Company may reasonably request for use in connection with the
Company Registration Statement or Prospectus or preliminary Prospectus included
therein and in any application to the NASD. Each Holder as to which the Company
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make all
information previously furnished to the Company by such Holder not materially
misleading.
2.4 Registration Procedures.
In connection with any Registration Statement and any Prospectus required by
this Agreement to permit the sale or resale of Restricted Securities, the
Company shall:
(a) prepare and file with the Commission such amendments and post-effective
amendments to such Registration Statement as may be necessary to keep such
Registration Statement effective:
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(i) if such Registration Statement is a Company Registration Statement,
until the earlier of such time as all of such securities have been disposed of
in accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such Company Registration Statement; or
(ii) if such Registration Statement is a Shelf Registration Statement,
for the applicable period set forth in Section 2.2(b) herein;
cause the Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Securities
Act, and to comply fully with the applicable provisions of Rules 424 and 430A,
as applicable, under the Securities Act in a timely manner; and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement or the
Prospectus;
(b) respond to comments made by the SEC with respect to a Registration Statement
filed pursuant to this Agreement promptly, and use its best efforts to respond
in not more than thirty (30) days after the date of the comment letter, and
prepare and file with the SEC such amendments and supplements to such
Registration Statement and the Prospectus used in connection with such
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 such
Registration Statement and immediately notify the holders of the Notes of the
filing and effectiveness of such Registration Statement and any amendments or
supplements;
(c) promptly (and in respect of events covered by clause (i) hereof, on the same
day as the Company shall receive notice of effectiveness) advise the Holders
covered by such Registration Statement and, if requested by such Persons, to
confirm such advice in writing,
(i) when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and when the same has become effective,
(ii) of any request by the Commission for post-effective amendments to
such Registration Statement or post-effective amendments to such Registration
Statement or post-effective amendments or
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supplements to the prospectus or for additional information relating thereto,
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of any such Registration Statement under the Securities Act or
of the suspension by any state securities commission of the qualification of the
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, and
(iv) of the existence of any fact or the happening of any event that
makes any statement of a material fact made in any such Registration Statement
the related Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in any such Registration Statement or the related
Prospectus in order to make the statements therein not misleading.
If at any time the Commission shall issue any stop order suspending the
effectiveness of such Registration Statement, or any state securities commission
or other regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Restricted Securities under state
securities or Blue Sky laws, the Company shall use its reasonable efforts to
obtain the withdrawal or lifting of such order at the earliest possible time;
(c) promptly furnish to each Holder of Restricted securities covered by any
Registration Statement, and each underwriter, if any, without charge, at least
one conformed copy of any Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents incorporated
by reference therein and all exhibits (including exhibits incorporated therein
by reference) and such other documents as such Holder may reasonably request;
(d) deliver to each Holder covered by any Registration Statement, and each
underwriter, if any, without charge, as many copies of the Prospectus (including
each preliminary prospectus) and any amendment or supplement thereto as such
person reasonably may request.
(e) enter into such customary agreements and take all such other reasonable
action in connection therewith (including those reasonably requested by the
selling Holders or the underwriter(s), if any) required in order to expedite or
facilitate the disposition of such Restricted Securities pursuant to such
Registration Statement,
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including, but not limited to, dispositions pursuant to an underwritten
registration, and in such connection:
(i) make such representations and warranties to the selling Holders and
underwriter(s), if any, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings (whether or not sales of
securities pursuant to such Registration Statement are to be to an
underwriter(s)) and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company (which counsel and
opinions, in form and substance, shall be reasonably satisfactory to the selling
Holders and the underwriter(s), if any, and their respective counsel) addressed
to each selling Holder and underwriter, if any, covering the matters customarily
covered in opinions requested in underwritten offerings (whether or not sales of
securities pursuant to such Registration Statement are to be made to an
underwriter(s)) and dated the date of effectiveness of any Registration
Statement (and, in the case of any underwritten sale of securities pursuant to
such Registration Statement, each closing date of sales to the underwriter(s)
pursuant thereto);
(iii) use reasonable efforts to obtain comfort letters dated the date
of effectiveness of any Registration Statement (and, in the case of any
underwritten sale of securities pursuant to such Registration Statement, each
closing date of sales to the underwriter(s) pursuant thereto) from the
independent certified public accountants of the Company addressed to each
selling Holder and underwriter, if any, such letters to be in customary form and
covering matters of the type customarily covered in comfort letters in
connection with underwritten offerings (whether or not sales of securities
pursuant to such Registration Statement are to be made to an underwriter(s));
(iv) provide for the indemnification provisions and procedures of
Section 2.6 hereof with respect to selling Holders and the underwriter(s), if
any; and
(v) deliver such documents and certificates as may be reasonably
requested by the selling Holders or the underwriter(s), if any, and which are
customarily delivered in underwritten offerings (whether of not sales of
securities pursuant to such Registration Statement are to be made to an
underwriter(s), with such documents and certificates to be dated the date of
effectiveness of any Registration Statement.
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The actions required by clauses (i) through (v) above shall be done at each
closing under such underwriting or similar agreement, as and to the extent
required thereunder, and if at any time the representations and warranties of
the Company contemplated in clause (i) above cease to be true and correct, the
Company shall so advise the underwriter(s), if any, and each selling Holder
promptly, and, if requested by such Person, shall confirm such advice in
writing;
(f) prior to any public offering of Restricted Securities, cooperate with the
selling Holders, the underwriter(s), if any, and their respective counsel in
connection with the registration and qualification of the Restricted Securities
under the securities or Blue Sky laws of such U.S. jurisdictions as the selling
Holders or underwriters), if any, may reasonably request in writing by the time
any Registration Statement is declared effective by the Commission, and do any
and all other acts or filings necessary or advisable to enable disposition in
such U.S. jurisdictions of the Restricted Securities covered by any Registration
Statement and to file such consents to service of process or other documents as
may be necessary in order to effect such registration or qualification;
provided, however, that the Company shall not be required to register or qualify
as a foreign corporation in any jurisdiction where it is not then so qualified
or as a dealer in securities in any jurisdiction where it would not otherwise be
required to register or qualify but for this Section 2.4, or to take any action
that would subject it to the service of process in suits or to taxation, in any
jurisdiction where it is not then so subject;
(g) in connection with any sale of Restricted Securities that will result in
such securities no longer being Restricted Securities, cooperate with the
selling Holders and the underwriter(s), if any, to facilitate the prompt
preparation and delivery of certificates representing Restricted Securities to
be sold and not bearing any restrictive legends; and enable such Restricted
Securities to be in such denominations and registered in such names as the
Holders or the underwriter(s), if any, may request at least two (2) Business
Days prior to any sale of Restricted Securities made by such underwriters;
(h) use its best efforts to cause the disposition of the Restricted Securities
covered by any Registration Statement to be registered with or approved by such
other U.S. governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof or the underwriter(s), if any, to consummate the
disposition of such Restricted Securities, subject to the proviso contained in
Section 2.4(f);
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(i) if any fact or event contemplated by Section 2.4(b) shall exist or have
occurred, prepare a supplement or post-effective amendment to any Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of Restricted Securities, the Prospectus will not contain an
untrue statement of a material fact or omit to state any material fact necessary
to make the statement therein not misleading;
(j) cooperate and assist in the performance of any due diligence investigation
by any underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD, and use its reasonable efforts to cause any Registration Statement to
become effective and approved by such U.S. governmental agencies or authorities
as may be necessary to enable the Holders selling Restricted Securities to
consummate the disposition of such Restricted Securities;
(k) otherwise use its reasonable efforts to comply with all applicable rules and
regulations of the Commission, and make generally available to its security
holders with regard to such Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158 (which need
not be audited) for the twelve-month period (i) commencing at the end of any
fiscal quarter in which Restricted Securities are sold to the underwriter in a
firm or best efforts underwritten offering or (ii) if not sold to an underwriter
in such an offering, beginning with the first month of the Company's first
fiscal quarter commencing after the effective date of any Registration
Statement;
(1) provide a CUSIP number for all Restricted Securities not later than the
effective date of any Registration Statement;
(m) use its best efforts to list, not later than the effective date of such
Registration Statement, all Restricted Securities covered by such Registration
Statement on the American Stock Exchange or any other trading market on which
any Common Stock of the Company are then admitted for trading, and
(n) provide promptly to each Holder covered by any Registration Statement upon
request each document filed with the Commission pursuant to the requirements of
Section 12 and Section 14 of the Exchange Act.
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Each Holder agrees by acquisition of a Restricted Security that, upon receipt of
any notice from the Company of the existence of any fact of the kind described
in Section 2.4(c)(iv), or the commencement of the Black Out Period, such Holder
will forthwith discontinue disposition of Restricted Securities pursuant to any
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus, or until it is advised in writing, in
accordance with the notice provisions of Section 5.3 herein (the "Advice"), by
the Company that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental fillings that are incorporated by
reference in the Prospectus. In the event the Company shall give any such
notice, the time period regarding the effectiveness of the Shelf Registration
Statement set forth in Section 2.2(b) shall be extended by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 2.4(c)(iv) or the commencement of the Black Out Period to
and including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus or shall have received (in accordance with the notice provisions of
Section 4.3) the Advice.
2.5 Preparation: Reasonable Investigation.
In connection with preparation and filing of each Registration Statement under
the Securities Act, the Company will give the Holders of Restricted Securities
registered under such Registration Statement, their underwriter, if any, and
their respective counsel and accountants, the opportunity to participate in the
preparation of such Registration Statement, each prospectus included therein or
filed with the Commission, and each amendment thereof or supplement thereto, and
will give each to them access to its books and records and such opportunities to
discuss the business, finances and accounts of the Company and its subsidiaries
with its officers, directors and the independent public accountants who have
certified its financial statements as shall be necessary, in the opinion of such
Holders and such underwriters' respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
2.6 Certain Rights of Holders.
The Company will not file any registration statement under the Securities Act
which refers to any Holder of Restricted Securities by name or otherwise without
the prior approval of such Holder, which consent shall not be unreasonably
withheld or delayed.
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2.7 Registration Expenses.
(a) All expenses incident to the Company's performance of or compliance with
this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses (including filings made with the NASD
and reasonable counsel fees in connection therewith); (ii) all reasonable fees
and expenses of compliance with federal securities and state Blue Sky or
securities laws (including all reasonable fees and expenses of one counsel to
the underwriter(s) in any underwriting) in connection with compliance with state
Blue Sky or securities laws for up to 40 states; (iii) all expenses of printing,
messenger and delivery services and telephone calls; (iv) all fees and
disbursements of counsel for the Company; and (v) all fees and disbursements of
independent certified public accountants of the Company (including the expenses
of any special audit and comfort letters required by or incident to such
performance), but excluding from this paragraph, fees and expenses of counsel to
the underwriter(s), if any, unless otherwise set forth herein.
(b) In addition, in connection with the filing of the Shelf Registration
Statement required to be filed by this Agreement, the Company will reimburse the
Holders of the Restricted Securities being registered pursuant to any Shelf
Registration Statement for the reasonable fees and disbursements of not more
than one counsel to review such Registration Statement.
(c) Notwithstanding the foregoing, the Company will not be responsible for any
underwriting discounts, commissions or fees attributable to the sale of
Restricted Securities or any legal fees or disbursements (other than any such
fees or disbursements relating to Blue Sky compliance or otherwise as set for
the under Section 2.7(a)) incurred by any underwriter(s) in any underwritten
offering if the underwriter(s) participates in such underwritten offering at the
request of the Holders of Restricted Securities, or any transfer taxes that may
be imposed in connection with a sale or transfer of Restricted Securities.
(d) The Company shall in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
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2.8 Indemnification, Contribution.
(a) The Company agrees to indemnify and hold harmless
(i) each Holder covered by any Registration Statement,
(ii) each other Person who participates as an underwriter in the
offering or sale of such securities,
(iii) each person, if any, who controls (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) any such Holder or
underwriter (any of the persons referred to in this clause (iii) being
hereinafter referred to as a ("controlling person") and
(iv) the respective officers, directors, partners, employees,
representatives and agents of any such Holder or underwriter or any controlling
person (any person referred to in clause (i), (ii), (iii) or (iv) may
hereinafter be referred to as an "indemnified Person"),
to the fullest extent lawful from and against any and all losses, claims,
damages, liabilities, judgments or expenses, joint or several (or actions or
proceedings, whether commenced or threatened, in respect thereof) (collectively,
"Claims"), to which such indemnified Person may become subject under either
Section 15 of the Securities Act or Section 20 of the Exchange Act or otherwise,
insofar as such Claims wise out of or are based upon, or are caused by any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (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, or
a violation by the Company of the Securities Act or any state securities law, or
any rule or regulation promulgated under the Securities Act or any state
securities law, or any other law applicable to the Company relating to any such
registration or qualification, except insofar as such losses, claims, damages,
liabilities, judgments or expenses of any such indemnified Person; (x) are
caused by any such untrue statement or omission or alleged untrue statement or
omission that is based upon information relating to such indemnified Person
furnished in writing to the Company by or on behalf of any of such indemnified
Person expressly for use therein; (y) with respect to the preliminary
Prospectus, result from the fact that such Holder sold Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the Prospectus, as amended or
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supplemented, if the Company shall have previously furnished copies hereof to
such Holder in accordance with this Agreement and said Prospectus, as amended or
supplemented, would have corrected such untrue statement or omission; or (z) as
a result of the use by an indemnified Person of any Prospectus when, upon
receipt of a Black Out Notice or a notice from the Company of the existence of
any fact of the kind described in Section 2.4(b)(iv), the indemnified Person or
the related Holder was not permitted to do so. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
any indemnified Person and shall survive the transfer of such securities by such
Holder.
In case any action shall be brought or asserted against any of the indemnified
Persons with respect to which indemnity may be sought against the Company, such
indemnified Person shall promptly notify the Company and the Company shall
assume the defense thereof Such indemnified Person shall have the night to
employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified Person unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Company, (ii) the Company shall have
failed to assume the defense and employ counsel or (iii) the named parties to
any such action (including any implied parties) include both the indemnified
Person and the Company and the indemnified Person shall-have been advised in
writing by its counsel that there may be one or more legal defenses available to
it which are different from or additional to those available to the Company (in
which case the Company shall not have the right to assume the defense of such
action on behalf of the indemnified Person), it being understood, however, that
the Company shall not, in connection with such action or similar or related
actions or proceedings arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all the indemnified Persons, which firm shall be (x) designated by such
indemnified Persons and (y) reasonably satisfactory to the Company. The Company
shall not be liable for any settlement of any such action or proceeding effected
without the Company's prior written consent, which consent shall not be withheld
unreasonably, and the Company agrees to indemnify and hold harmless any
indemnified Person from and against any loss, claim, damage, liability, judgment
or expense by reason of any settlement of any action effected with the written
consent of the Company. The Company shall not, without the prior written consent
of each indemnified Person, settle or compromise or consent to the entry of
judgment on or otherwise seek to terminate any
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pending or threatened action claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
indemnified Person is a party thereto), unless such settlement, compromise,
consent or termination includes an unconditional release of each indemnified
Person from all liability arising out of such action, claim litigation or
proceeding.
(b) Each Holder of Restricted Securities covered by any Registration Statement
agrees, severally and not jointly, to indemnify and hold harmless the Company
and its directors, officers and any person controlling (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company,
and the respective officers, directors, partners, employees, representatives and
agents of each person, to the same extent as the foregoing indemnity from the
Company to each of the indemnified Persons, but only (i) with respect to actions
based on information relating to such Holder furnished in writing by or on
behalf of such Holder expressly for use in any Registration Statement or
Prospectus, and (ii) to the extent of the gross proceeds, if any, received by
such Purchaser from the sale or other disposition of his or its Restricted
Securities covered by such Registration Statement. In case any action or
proceeding shall be brought against the Company or its directors or officers or
any such controlling person in respect of which indemnity may be sought against
a Holder of Restricted Securities covered by any Registration Statement, such
Holder shall have the rights and duties given the Company in Section 2.8(a)
(except that the Holder may but shall not be required to assume the defense
thereof), and the Company or its directors or officers or such controlling
person shall have the rights and duties given to each Holder by Section 2.8(a).
(c) If the indemnification provided for in this Section 2.8 is unavailable to an
indemnified party under Section 2.7(a) or (b) (other than by reason of
exceptions provided in those Sections) in respect of any losses, claims,
damages, liabilities, judgments or expenses referred to therein, then each
applicable indemnifying party (in the case of the Holders severally and not
jointly), in lieu of indemnifying such indemnified party, shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims damages, liabilities, judgments of expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holder on the other hand from sale of Restricted Securities or (ii)
if such allocation provided by clause (i) above is not permitted by applicable
law, in such
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proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and such
Holder in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities, judgments or expenses, as well as any
other relevant equitable considerations. The relative fault of the Company on
the one hand and of such Holder on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by such Holder and the parties
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid to a party as a result of
the losses, claims, damages, liabilities judgments and expenses referred to
above shall be deemed to include, subject to the limitations set forth in the
second paragraph of Section 2.8(a), any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim.
The Company and each Holder of Restricted Securities covered by any Registration
Statement agree that it would not be just and equitable if contribution pursuant
to this Section 2.8(c) were determined by pro rata allocation (even if the
Holders were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to in the immediately preceding paragraph. Notwithstanding the
provisions of this Section 2.8(c) no Holder (and none of its related indemnified
Persons) shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the dollar amount of proceeds received by such Holder
upon the sale of the Restricted Securities exceeds the amount of any damages
which such Holder has otherwise been required to pay by reason of such untrue
statement or omission or alleged 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.
The indemnity and contribution provisions contained in this Section 2.8 are in
addition to any liability which the indemnifying person may otherwise have to
the indemnified persons referred to above.
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2.9 Participation in Underwritten Registrations.
No Holder may participate in any underwritten registration hereunder unless such
Holder (a) agrees to sell such Holder's Restricted Securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
underwriting arrangements.
2.10 Selection of Underwriters.
The Holders of Restricted Securities covered by any Registration Statement who
desire to do so may sell such Restricted Securities in an underwritten offering.
In any such underwritten offering, the investment banker or investment bankers
and manager or managers that will administer the offering will be selected by
the Holders of a majority of the Restricted Securities included in such offering
if such registration is pursuant to the Shelf Registration Statement, and by the
Company if such registration is pursuant to a Company Registration Statement;
provided, however, that such investment bankers and managers must be reasonably
satisfactory to the Company or the Holders, respectively. Such investment
bankers and managers are referred to herein as the "underwriters".
ARTICLE 3
RULE 144A
The Company hereby agrees with each Holder of Restricted Securities, for so long
as any of the Restricted Securities remain outstanding and continue to be
"restricted securities" within the meaning of Rule 144 under the Act, and during
any period in which the Company is not subject to Section 13 or 15(d) of the
Exchange Act, to make available to the Holders of Restricted Securities in
connection with any sale thereof, and to any prospective purchaser of Common
Stock from such Holders of Restricted Securities or beneficial owner, the
information required by Rule 144A(d)(4) under the Act in order to permit resales
of such Restricted Securities pursuant to Rule 144A.
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ARTICLE 4
MISCELLANEOUS
4.1 Entire Agreement.
This Agreement, together with the Securities Purchase Agreement and the
Certificate of Determination, constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreement and understandings, both oral and written, between the parties with
respect to the subject matter hereof.
4.2 Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties, including without limitation and without the
need for an express assignment, subsequent Holders of Restricted Securities;
provided, however, that this Agreement shall not inure to the benefit of or be
binding upon a successor or assign of a Holder unless and to the extent such
successor or assign acquired Restricted Securities from such Holder at a time
when such Holder could not transfer such Restricted Securities pursuant to any
Registration Statement or pursuant to Rule 144 under the Securities Act as
contemplated by clause (ii) of the definition of Restricted Securities.
4.3. Notices.
All notices and other communications given or made pursuant hereto or pursuant
to any other agreement among the parties, unless otherwise specified, shall be
in writing and shall be deemed to have been duly given or made if sent by
telecopy (with confirmation in writing), delivered personally or by overnight
courier or sent by registered or certified mail (postage prepaid, return receipt
requested) to the parties at the telecopy number, if any, or address set forth
below or at such other addresses as shall be furnished by the parties by like
notice. Notices sent by telecopier shall be effective when receipt is
acknowledged, notices delivered personally or by overnight courier shall be
effective upon receipt and notices sent by registered or certified mail shall be
effective three days after mailing:
If to a Holder: to such Holder at the address set forth on
the records of the Company pursuant to the
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Securities Purchase Agreement. In addition
copies of all such notices or other
communications shall be concurrently
delivered by the Person giving the same to
each person who has been identified to the
Company by such Holder as a Person who is
to receive copies of such notice.
If to the Company: at the address set forth in the Securities
Purchase Agreement.
with copies to: Stephen A. Weiss, Esq.
Greenberg Traurig Hoffman Lipoff Rosen &
Quentel
Met Life Building
200 Park Avenue
New York, New York 10166
Telephone Number: (212) 801-9200
Fax: (212) 801-6400
-and-
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, Florida 33480
Attention: Donald F. Mintmire, Esq.
Telephone Number: (561) 832-5696
Fax: (561) 659-5371
4.4 Headings.
The headings contained in this Agreement are for convenience only and shall not
affect the meaning or interpretation of this Agreement.
4.5 Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall be deemed to
be one and the same instrument.
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4.6 Applicable Law; Resolution of Disputes.
(a) This Agreement shall be governed by and construed in accordance with the
internal laws of the state of New York, without giving effect to the choice law
provisions.
(b) Any dispute regarding the interpretation or application of this Agreement
which cannot be settled among the parties shall be resolved in New York, New
York final and binding arbitration in accordance with the then obtaining rules
of the American Arbitration Association. There shall be appointed three
arbitrators, one of whom shall be selected by the Company, the second by the
Purchasers and the third by mutual agreement of the parties or by the American
Arbitration Association. The decision of the arbitrators shall be final and upon
all of the Purchasers and the Company and may be enforced by the prevailing
party or parties in any court of competent jurisdiction. Each party shall bear
their own costs of the arbitration and shall share equally the costs of the
arbitrators.
4.7 Specific Enforcement.
Each party hereto acknowledges that the remedies at law of the other parties for
a breach or threatened breach of this Agreement would be inadequate, and, in
recognition of this fact, any party to this Agreement, without posting any bond,
and in addition to all other remedies which may be available, shall be entitled
to obtain equitable relief in the form of specific performance, a temporary
restraining order, a temporary to permanent injunction or any other equitable
remedy which may then be available.
4.8 Amendment and Waivers.
The provision of this Agreement may not be amended modified or supplemented and
waivers or consents to or departures from the provisions hereof may not be given
unless the Company has obtained the written consent of Holders of a majority of
the Restricted Securities.
4.9 Attorney Fees.
Purchasers shall be entitled to recover from the Company the reasonable
attorneys' fees and expenses (and the reasonable costs of investigation)
incurred by such Purchaser in connection with enforcement by such Purchaser of
any obligation of the Company hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
ENVIRONMENTAL REMEDIATION HOLDING
CORPORATION
By: ________________________
Name: Sam Bass
Its: Chairman of the Board
THE PURCHASERS:
By:___________________________________________
Name:
Its:
Address:
By:___________________________________________
Name:
Its:
Address:
By:___________________________________________
Name:
Its:
Address:
By:___________________________________________
Name:
Its:
Address:
By:___________________________________________
Name:
Its:
Address:
25