REFINERY SCIENCE CORP. REGISTRATION RIGHTS AGREEMENT
EXHIBIT
4.2
This
Registration Rights Agreement (this “Agreement”),
made
and entered into this ____ day of ___________, 2006 (the “Effective
Date”)
by and
among Refinery Science Corp., a Texas corporation (the “Company”),
and
undersigned purchaser of securities from the Company (the “Investor”),
WITNESSETH
:
WHEREAS,
the Company will be offering a minimum of _________ (________) and a maximum
of
____________ (__________) shares (each a “Share”,
and
collectively, the “Shares”)
of its
common stock, no par value per share, at a price of Five Dollars ($5.000) per
Share, pursuant to the registration exemption provided by Section 4(2) of the
Securities Act (as defined in Section 1 hereof) and Rule 506 of Regulation
D, promulgated thereunder, and certain Blue Sky exemptions (the “Offering”);
and
WHEREAS,
the undersigned desires to purchase Shares from the Company pursuant to the
Offering and have certain registration rights for such Shares.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and other good and valuable consideration, the receipt and adequacy
of
which is hereby acknowledged, the parties, intending to be legally bound, hereby
agree as follows:
1. Certain
Definitions.
The
following terms shall have the following respective
meanings:
“Commission”
shall
mean the Securities and Exchange Commission or any other federal agency at
the
time administering the Securities Act.
“Exchange
Act”
shall
mean the U.S. federal Securities Exchange Act of 1934, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at any particular
time.
“Other
Shareholders”
shall
mean persons, other than Investor, who, by virtue of agreements with the Company
are entitled to include their securities in a registration effected pursuant
to
this Agreement.
The
terms
“register,”
“registered”
and
“registration”
refer
to the effectiveness of a registration statement prepared and filed in
compliance with the Securities Act.
“Registrable
Securities” shall
mean Shares, together with any capital stock of the Company issued with respect
to the foregoing upon any stock split, stock dividend, recapitalization or
similar event, that have not previously been sold by Investor pursuant to a
registration statement or Commission Rule 144 or otherwise transferred to a
third party without the benefit of assignment of rights under this Agreement
pursuant to Section 6 hereof.
“Registration
Expenses”
shall
mean all expenses incurred by the Company in complying with Section 2 hereof,
including, without limitation: all registration and filing fees; printing
expenses; fees and disbursements of counsel for the Company; state “blue sky”
fees and expenses; and accountants’ expenses, including without limitation any
special audits incident to or required by any such registration.
“Securities
Act”
shall
mean the U.S. federal Securities Act of 1933, as amended, or any similar federal
statute and the rules and regulations of the Commission thereunder, all as
the
same shall be in effect at any particular time.
“Selling
Expenses”
shall
mean all underwriting discounts, selling commissions and transfer taxes
applicable to the sale of Registrable Securities and any other securities of
the
Company being sold in the same registration as the Registrable Securities by
Other Shareholders.
“Blackout
Period”
shall
mean, with respect to a Form SB-2 registration, a period not in excess of sixty
(60) calendar days during which the Company, in the good faith judgment of
its
Board of Directors, determines (because of the existence of, or in anticipation
of, any acquisition, financing activity, or other transaction involving the
Company, or the unavailability for reasons beyond the Company’s control of any
required financial statements, disclosure of information which is in its best
interest not to publicly disclose, or any other event or condition of similar
significance to the Company) that the registration and distribution of the
Registrable Securities to be covered by such SB-2 Registration, if any, would
be
detrimental to the Company or its shareholders.
2. Form
SB-2 Registration.
The
Company shall file a shelf registration statement on Form SB-2 (or any successor
form to SB-2 or Form S-1) relating to the resale by the Investor of all of
the
Investors’ Registrable Securities before the later of (A) December 1, 2006, or
(B) fifteen (15) business days after the Company’s auditors complete their audit
report and audited financial statements in a form such that the Company may
file
such audit report and audited financial statements with a Form SB-2 (any
successor Form to Form SB-2 or Form S-1); provided,
however,
that
the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 2 or keep such registration
effective pursuant to Section 4: (i) in any particular jurisdiction in which
the
Company would be required thereby to qualify to do business as a foreign
corporation or as a dealer in securities under the securities or blue sky laws
of such jurisdiction or to execute a general consent to service of process
in
effecting such registration, qualification or compliance; or (ii) during any
Blackout Period.
3. Expenses
of Registration.
All
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2 of this Agreement shall be
borne by the Company, and all Selling Expenses shall be borne by the Investor
pro rata
on
the
basis of the number of its shares so registered as compared to the total amount
of shares included in the registration for resale by the Investor and the Other
Shareholders combined.
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4. Effectiveness.
Except
as
provided in Section 2 and in the next sentence, the Company shall keep effective
any registration or qualification contemplated by Section 2 and shall from
time
to time amend or supplement each applicable registration statement, preliminary
prospectus, final prospectus, application, document and communication for such
period of time as shall be required to permit the Investor to complete the
offer
and sale of the Registrable Securities covered thereby. The Company shall in
no
event be required to keep any such registration or qualification in effect
for a
period longer than one year from the date the registration statement is declared
effective by the Commission; provided,
however,
that,
if the Company is required to keep any such registration or qualification in
effect with respect to securities other than the Registrable Securities beyond
such period, then the Company shall keep such registration or qualification
in
effect as it relates to the Registrable Securities for so long as such
registration or qualification remains in effect in respect of such other
securities.
5. Registration
Statements.
(a) In
the
event of a registration pursuant to the provisions of Section 2, the Company
shall furnish to the Investor prior to filing any registration statement or
amendment or supplement thereto a copy of same and shall furnish to the Investor
such number of copies of the registration statement and of each amendment and
supplement thereto (in each case, upon request, including all exhibits), such
reasonable number of copies of each prospectus contained in such registration
statement and each supplement or amendment thereto (including each preliminary
prospectus), all of which shall conform to the requirements of the Securities
Act and the rules and regulations thereunder, and such other documents, as
the
Investor may reasonably request to facilitate the disposition of the Registrable
Securities included in such registration.
(b) The
Company shall notify the Investor promptly when any such registration statement
has become effective or a supplement to any prospectus forming a part of such
registration statement has been filed.
(c) At
any
time when a prospectus included in a registration statement covering Registrable
Securities is required to be delivered under the Securities Act in connection
with a sale, the Company shall notify the Investor of the happening of any
event
a result of which would cause such prospectus to include 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 the light of
the
circumstances then existing, and at the reasonable request of the Investor
promptly prepare, file with the Commission, use its best efforts to have
declared effective, and furnish to it such number of copies of a supplement
to
or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, or file such documents and reports under the Exchange Act that are
incorporated by reference after the initial filing of the registration statement
as may be necessary to accomplish the foregoing.
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(d) The
Investor shall not effect sales of shares covered by any registration statement
pursuant to such registration statement during a Blackout Period or (until
further notice) after receipt of telegraphic, facsimile or other written notice
from the Company to suspend sales to permit the Company to correct or update
a
registration statement or prospectus.
(e) The
person seeking to include Registrable Securities under this Agreement in any
registration shall furnish to the Company such information regarding such person
and the distribution proposed by such person as the Company may request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to in Section 2.
(f) Prior
to
any public offering of Registrable Securities under a registration statement
declared effective by the Commission, the Company shall use its commercially
reasonable efforts to register or qualify or cooperate with the Investor in
connection with the registration or qualification of such Registrable Securities
for offer and sale under the securities or blue sky laws of such jurisdictions
within the United States requested by the Investor and do any and all other
reasonable acts or things necessary or advisable to enable the distribution
in
such jurisdictions of the Registrable Securities covered by the registration
statement.
(g) The
Company shall cause all Registrable Securities covered by a registration
statement to be listed on each securities exchange, interdealer quotation system
or other market on which similar securities issued by the Company are then
listed or traded.
6. Transfer
of Registration Rights.
The
rights of the Investor to cause the Company to register securities granted
under
Section 2 of this Agreement may not be assigned to any transferee or assignee
of
Registrable Securities or to any other person without the prior written consent
of the Company, and then only if such person assumes in writing the obligations
of the Investor with respect to such securities under this
Agreement.
7. Exchange
Act Reporting.
The
Company agrees that until all the Registrable Securities have been sold under
a
registration statement or pursuant to Rule 144 under the Securities Act, during
such time the Company has a reporting obligation under Section 15(d) or Section
12 of the Exchange Act, it shall use its best efforts to keep current in filing
all reports, statements, and other materials required to be filed with the
Commission to permit the Investor to sell such securities under the registration
or under Rule 144.
8. Indemnification.
(a) If
any
action is brought against the Investor in connection with any registration
statement filed pursuant to this Agreement, the Company shall indemnify and
hold
harmless the Investor or any underwriter employed by the Investor against any
losses, claims, damages, or liabilities, joint or several, to which the Investor
or such underwriter may become subject under the Securities Act, the Exchange
Act, state securities, or blue sky laws or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of
or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in such registration statement under which any Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contain in such registration statement, or any amendment or
supplement to such registration statement, or arise out of or are based upon
the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company will reimburse the Investor or such underwriter for any legal or any
other expenses reasonably incurred by the Investor or such underwriter in
connection with investigation or defending any such loss, claim, damage,
liability, or action; provided, however, that the Company will not be liable
in
any such case to the extent that any such loss, claim, damage, or liability
arises out of or is based upon any untrue statement or omission made in such
registration statement, preliminary prospectus or prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Company, in writing, by or on behalf of the Investor or such
underwriter specifically for use in the preparation thereof.
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(b) If
any
action is brought against the Company in connection with any registration
statement filed pursuant to this Agreement, the Investor shall indemnify and
hold harmless the Company, each of its directors and officers and each
underwriter (if any) and each person, if any, who controls the Company or any
such underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages, or liabilities, joint or several, to which
the Company, such directors and officers, underwriter, or controlling person
may
become subject under the Securities Act, Exchange Act, state securities, or
blue
sky laws or otherwise, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement under which any Shares were registered under the
Securities Act, any preliminary prospectus or final prospectus contained in
such
registration statement, or any amendment or supplement to such registration
statement, or arise out of or are based upon any omission or alleged omission
to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, if the statement or omission was made in
reliance upon and in conformity with information relating to the Investor
furnished in writing to the Company by or on behalf of the Investor specifically
for use in connection with the preparation of such registration statement,
prospectus, amendment, or supplement.
(c) Each
party entitled to indemnification under this Agreement (the “Indemnified
Party”)
shall
give notice to the party required to provide indemnification (the “Indemnifying
Party”)
promptly after such Indemnified Party has actual knowledge of any claim as
to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom; provided,
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or litigation, shall be approved by the Indemnified Party (whose approval
shall not be unreasonably withheld); and provided, further, that the failure
of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement except to the extent
that the Indemnifying Party is adversely affected by such failure. The
Indemnified Party may participate in such defense at such party’s expense;
provided,
however,
that
the Indemnifying Party shall pay such expense 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 the
Indemnified Party and any other party represented by such counsel in such
proceeding; provided further that in no event shall the Indemnifying Party
be
required to pay the expenses of more than one law firm per jurisdiction as
counsel for the Indemnified Party. No Indemnifying Party will, except with
the
consent of the Indemnified Party, consent to an entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof
the
giving by the claimant or plaintiff to such Indemnified Party of a release
from
all liability in respect of such claim or litigation.
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(d) If
the
indemnification provided for in this Section 8 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any
loss,
liability, claim, damage or expense referred to herein, 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 as is appropriate to reflect (i) the
proportionate relative fault of the Indemnifying Party on the one hand and
the
Indemnified Party on the other (determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission
relates to information supplied by the Indemnifying Party or the Indemnified
Party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission), or (ii)
if
the allocation provided by clause (i) above is not permitted by applicable
law
or provides a lesser sum to the Indemnified Party than the amount hereinafter
calculated, not only the proportionate relative fault of the Indemnifying Party
and the Indemnified Party, but also the relative benefits received by the
Indemnifying Party on the one hand and the Indemnified Party on the other,
as
well as any other relevant equitable considerations. No Indemnified Party guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Indemnifying Party
who was not guilty of such fraudulent misrepresentation.
9. Termination
of Registration Rights.
The
Company’s obligations pursuant to this Agreement (other than pursuant to
Sections 3, 8, 9 and 10 shall terminate as to the Investor on the earliest
of
(i) such date when all of the Registrable Securities of the Investor have been
sold under the registration statement or transferred without consent to
assignment of rights under this Agreement, or (ii) such date when the
restrictive legend on the Registrable Securities may be removed pursuant to
Rule
144(k) under the Securities Act (or any successor) and the Investor is entitled
to rely on Rule 144(k), or (iii) such time as all Registrable Securities of
the
Investor may, in the opinion of counsel to the Company, currently be sold under
Rule 144 during any 90-day period.
10. Miscellaneous.
(a) Agreements
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, unless such amendment, modification or
supplement is in writing and signed by the parties hereto.
(c)
Notices.
All
communications or deliveries by the terms hereof required or permitted to be
given by one party to this Agreement to another shall be given in writing by
personal delivery (which personal delivery may be effected by depositing the
communication in question with a responsible courier service for delivery
(courier charges fully prepaid) to the addressee thereof), by registered or
certified mail (postage fully prepaid) mailed from anywhere within Canada or
the
U.S., or by telecopier, delivered, addressed or telecopied to such other party
as follows:
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to
the
Investor:
__________________________
_________________
_________________
_________________
Attn:
____________
Fax
No:
(___) ___-____
to
the
Company:
Refinery
Science Corp.
0000
X,
Xxxxxxx Xxxxxx, Xxxxx 000
Xx
Xxxx,
Xxxxx
Attn:
Xxxxx Xxxxxxx, President
Fax
No.:
(____) _____________
or
at
such other address and/or telecopier number as may be given by any party hereto
to the other by notice in writing from time to time and such communications
shall be deemed to have been received, in the case of sending by personal
delivery, upon delivery, in the case of transmittal by telecopier, upon the
completion of the transmission by telecopier or, in the case of sending by
registered or certified mail, four days following the day of the mailing
thereof; provided that if any such communication shall have been mailed and
if
regular mail service shall be interrupted by strikes or other irregularities,
such communication shall be deemed to have been received four days following
the
resumption of normal mail service.
(d) 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 the Registrable Shares,
subject to the terms hereof, including the provisions of Section 6.
(e) Counterparts.
This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and
the
same agreement.
(f)
Headings.
The
headings in this Agreement are for convenience of references only and shall
not
limit or otherwise affect the meaning hereof.
(g)
Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without reference to its conflicts of law provisions.
(h)
Severability.
In the
event that any one or more of the provisions contained herein, or the
application hereof in any circumstance is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any other provisions
contained herein shall not be affected or impaired thereby.
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(i)
Entire
Agreement.
This
Agreement is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of this agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises warranties or undertakings, other
than those set forth or referred to herein, concerning the registration rights
granted by the Company pursuant to this Agreement.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the
date first written above.
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