Exhibit 10.13
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (as supplemented, the "Subscription
Agreement") made as of the ___ day of _________ 20 , between ENVIRONMENTAL
SOLUTIONS WORLDWIDE, INC., a Florida corporation with its principal offices at
000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx, 00000, (the "Company"), and the
undersigned (the "Subscriber").
W I T N E S S E T H:
WHEREAS, the Company desires to issue Units, with each Unit
comprised of one (1) share (collectively, the "Shares") of restricted common
stock, par value $0.001 per share (the `Common Stock"), of the Company and one
(1) warrant exercisable in even lots for a period of three (3) years from the
date of the original Closing under the Private Placement, (i.e. two (2) warrants
being exercisable at a collective exercise price of $0.30 for one share
(collectively, the "Warrant Shares") of Common Stock of the Company
(collectively, the "Warrants" and, collectively with the Shares, the Warrants
and the Warrant Shares, the "Units") under the terms and conditions hereinafter
set forth, and the Subscriber desires to acquire that number of Units set forth
on the signature page hereof;
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND
PROMISES AND OTHER GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, IT IS MUTUALLY AGREED
AS FOLLOWS:
I. SUBSCRIPTION FOR UNITS AND REPRESENTATION BY SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for and agrees to purchase from the Company such
number of Units as is set forth upon the signature page hereof at a price equal
to $0.17 per Unit and the Company agrees to sell such Units to the Subscriber
for said purchase price. Per the terms of the accompanying Escrow Agreement, the
purchase price is payable by wire, certified check or bank check payable or by
check subject to clearance payable to "Xxxxxxx & Xxxxxxxxx, Special Escrow
Account" contemporaneously with the execution and delivery of this Subscription
Agreement. The Shares and Warrant(s) will be delivered by the Company to the
Subscriber at the address provided in the Subscription Agreement within ten (10)
business days following closing of the applicable traunch by the Company.
1.2 The Subscriber hereby acknowledges (i) receipt of the Private
Placement Memorandum and any attachments or amendments thereto, including the
Company's periodic filings with the Securities and Exchange Commission (the
"SEC"), (ii) an investment in the Securities is highly speculative and should
only be undertaken by persons who can afford to lose their entire investment,
(iii) the Shares and the Warrant Shares are not registered, with the result that
investors may not be able to liquidate their investment, (iv) that the Company
must obtain additional financing and investment capital in order to proceed with
its business plan, and (v) that the Company presently has limited business
operations.
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1.3 The Subscriber represents that it is an "accredited investor" as
such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act"), as indicated by the responses to
the Confidential Purchaser Questionnaire, and that Subscriber is able to bear
the economic risk of this investment.
1.4 The Subscriber acknowledges that it has prior investment
experience, including investment in non-listed and non-registered securities, or
has employed the services of an investment advisor, attorney or accountant to
read all of the documents furnished or made available by the Company both to it
and to all other prospective investors in the Units and to evaluate the merits
and risks of such an investment on its behalf and that Subscriber recognizes the
highly speculative nature of this investment.
1.5 The Subscriber hereby represents that it has been furnished by the
Company during the course of this transaction with all information regarding the
Company which it has requested or desired to know; that all documents which
could be reasonably provided have been made available for inspection and review;
that Subscriber has been afforded the opportunity to ask questions of and
receive answers from duly authorized officers or other representatives of the
Company concerning the terms and conditions of the offering, and any additional
information which Subscriber requested.
1.6 The Subscriber hereby acknowledges that this offering of Units have
not been reviewed by the SEC any "blue-sky" agency or any foreign securities
agency as it is intended to be a non-public offering pursuant to Section 4(2) of
the Act. The Subscriber represents that it is not an underwriter and that the
Units are being purchased for its own account, for investment and not for
distribution or resale to others.
1.7 The Subscriber understands that the Units have not been registered
under the Act by reason of a claimed exemption under the provision of the Act
which depends, in part, upon Subscriber investment intention and related
representations, warranties and agreement made herein. In this connection, the
Subscriber understands that it is the position of the SEC that the statutory
basis for such exemption would not be present if the representation of
Subscriber merely meant that the present intention of Subscriber was to hold
such securities for a short period, for a deferred sale, for a market rise, or
for any other fixed period. The Subscriber realizes that, in the view of the
SEC, a purchase now with an intent to resell would represent a purchase with an
intent inconsistent with his representation to the Company, and the SEC might
not regard such a sale or disposition as deferred sale for which the exemption
is not available.
1.8 The Subscriber understands that there is no public market for the
Units and the Warrants. The Units, the Shares, the Warrants and the Warrant
Shares are not registered and that there is not public market for the Warrants
and that no public market for the Warrants is expected to ever develop. Further,
the Subscriber understands that the Units and the securities underlying the
Units may not be transferred, encumbered, sold, hypothecated, or otherwise
disposed of, if such disposition will violate any federal and/or state
securities acts.
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1.9 The Subscriber consents to the placement of a legend on any
certificate or other document evidencing the Shares, stating that it has not
been registered under the Act and setting forth or referring to restriction on
transferability and sale thereof substantially as follows:
The securities evidenced hereby have not been registered under
the Securities Act of 1933, as amended, nor any other
applicable securities act (the "Acts"), and may not be sold,
transferred, assigned, or otherwise distributed, unless there
is an effective registration statement under such Acts
covering such securities or the Company receives an opinion of
counsel for the holder of these securities (concurred on by
counsel for the Company) stating that such sale, transfer,
assignment or distribution is exempt from or in compliance
with the registration and prospectus delivery or requirements
of such Acts.
The Subscriber is aware that the Company will make a
notation in its appropriate records with respect to the restrictions on the
transferability of such Units.
1.10 The Subscriber agrees that to the extent any federal and/or state
securities laws shall require, the Subscriber agrees that any shares of Common
Stock acquired pursuant to this Agreement shall be without preference as to
assets.
1.11 Except as set forth in Section III hereof, the Company is not
required to register or seek exemption form registration under any federal
securities act, state securities act, or any foreign securities act respecting
the offer and issuance of the securities. Subject to Section III hereof, the
Company will undertake to use its best efforts to file on a timely basis such
reports and information as required under the Exchange Act of 1934, as amended.
1.12 Subscriber acknowledges that if it is a resident of Florida,
Subscriber has the privilege of declaring this transaction null and void
provided Subscriber communicates such intention to the Company in writing within
three (3) days of the tender of consideration.
1.13 The Subscriber understands that the Company will review this
Subscription Agreement and the financial standing of the Subscriber; and it is
further agreed that the Company reserves the unrestricted right to reject or
limit any subscription and to close the offering at any time.
1.14 The Subscriber hereby represents that the address of the
Subscriber furnished at the end of this Subscription Agreement is the
undersigned's principal residence if Subscriber is an individual or its
principal business address if it is a corporation or other entity.
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II. REPRESENTATIONS BY, AND COVENANTS OF, THE COMPANY
The Company represents, warrants and, where applicable, covenants to
the Subscriber that:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the state of Florida, and has the corporate
power to conduct the business which it presently and proposes to conduct.
(b) The execution, delivery and performance of this Subscription
Agreement by the Company has been duly approved by the Board of Directors of the
Company, and all other actions required to authorize and effect the offer and
sale of the Units have been duly taken and approved.
(c) Upon issuance, the Shares and, upon exercise of the Warrants in
whole or in part, the Warrant Shares will be validly issued, fully paid and
non-assessable by the Company.
(d) Other than disclosed in the Company's periodic filings which make
and form a part of the Private Placement Memorandum and Risk Factors set forth
in the Private Placement Memorandum, the Company knows of no other pending or
threatened legal or governmental proceedings, which could materially adversely
affect the proposed business, property, financial conditions or operations of
the Company.
(e) The Company is not in violation of or default under, nor will the
execution and delivery of the Subscription Agreement, and the incidence of the
obligations herein set forth and the consummation of the transaction herein
contemplated, result in a material violation of, or constitute a material
default under, the certificate of incorporation or by-laws, in the performance
or observance of any material obligations, agreement, covenant or condition
contained in any bond, debenture, mortgage, loan agreement, lease, joint venture
or other agreement or instrument, mortgage, loan agreement, lease, joint venture
or other agreement or instrument to which the Company is a party of by which it
or any of its properties may be bound or in violation of any material order,
rule, regulation, writ, injunction, or decree of any domestic government,
governmental instrumentality or court.
III. REGISTRATION RIGHTS
3.1 The Company agrees to use its best efforts to file a registration
statement under the Securities Act of 1933, as amended, on the appropriate form
within ninety (90) days of the completion of the final closing as set forth in
the Private Placement Memorandum. Notwithstanding the foregoing, Subscriber
acknowledges and agrees that in the event that the pending claim asserted by the
SEC against the Company, Xxxxx Xxxxx the Company's chairman and other
individuals (see Risk Factors in Private Placement Memorandum and the Company's
periodic reports annexed to and made a part of the Private Placement Memorandum)
is outstanding, the filing and review of any registration may be delayed,
consequently the effectiveness of a registration statement may be delayed (see
"Risk Factors").
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IV. MISCELLANEOUS
4.1 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, or delivered by hand against written receipt therefor,
addressed to the Company at its office, 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx,
00000, attn Xxxx X. Xxxxxxx, Xx., President and to the Subscriber at the address
indicated on the last page of the Subscription Agreement. Notices shall be
deemed to have been given on the date of mailing, except notices of change of
address, which shall be deemed to have been given when received.
4.2 This Subscription Agreement shall not be changed, modified or
amended except by a writing signed by the parties to be charged, and this
Subscription Agreement may not be discharged except by performance in accordance
with its terms or by a writing signed by the party to be charged.
4.3 This Subscription Agreement shall be binding upon and inure to the
benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. The Subscriber has had been provided
and has reviewed all terms of the Private Placement Memorandum and all
supporting exhibits.
4.4 Upon the execution and delivery of this Subscription Agreement by
the Subscriber, this Subscription Agreement shall become a binding obligation of
the Subscriber with respect to the purchase of Units as herein provided;
subject, however, to the right hereby reserved by the Company to enter into the
same agreements with other Subscribers and to add and/or delete other persons as
Subscribers.
4.5 Notwithstanding the place where this Subscription Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with and governed
by the Laws of the State of New York. The parties hereby agree that any dispute
which may arise between them arising out of or in connection with this
Subscription Agreement shall be adjudicated before a court located in New York
City and they hereby submit to the exclusive jurisdiction of the courts of the
State of New York located in New York, New York and of the federal courts in the
Southern District of New York with respect to any action or legal proceeding
commenced by any party, and irrevocably waive any objection they may or
hereafter may have respecting the venue of any such action or proceeding brought
in such a court or respecting the fact that such court is an inconvenient forum,
relating to or arising out of this Subscription Agreement or any acts or
omissions relating to the sale of the Securities hereunder, and consent to the
service of process in any such action or legal proceeding by means of registered
or certified mail, return receipt requested, in care of the address set forth
below or such other address as the undersigned shall furnish in writing to the
other.
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4.6 The parties hereby waive trial by jury in any action or proceeding
involving, directly or indirectly, any matter (whether sounding in tort,
contract, fraud or otherwise) in any way arising out of or in connection with
this Subscription Agreement or the Units issued hereunder.
4.7 In order to discourage frivolous claims, the parties agree that
unless a claimant in any proceeding succeeds in establishing his claim and
recovering a judgment against another party (regardless of whether claimant
succeeds against one of the other parties to the action), then the other party
shall be entitled to recover all of its/their legal costs and expenses relating
to such proceeding and/or incurred in preparation therefor.
4.8 The holding of any provision of this Subscription Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Subscription Agreement, which shall remain in full
force and effect.
4.9 It is agreed that a waiver by either party of a breach of any
provision of this Subscription Agreement shall not operate, or be construed, as
a waiver of any subsequent breach by that same party.
4.10 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.
4.11 This agreement may be executed in one or more counterparts each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have set their hands and seals on the
day, month and year first above written.
Dated:
----------------------------- ------------------------------
Name of Subscriber Signature of Subscriber
(please print)
------------------------------
Signature of Subscriber
------------------------------
Address of Subscriber Social Security or Taxpayer ID
SUBSCRIPTION ACCEPTED:
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
By: AMOUNT OF SUBSCRIPTION:
---------------------------- ---------------
NUMBER OF UNITS:
---------------
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000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Re: Environmental Solutions Worldwide, Inc. ("ESW"
or the "Company") private placement offering (the
"Placement") of shares (the "Shares") of ESW's
Common Stock and warrants (the "Warrants")
exercisable for shares of ESW's Common Stock (the
"Warrant Shares" and together with the Shares and
the Warrants, a "Unit")
Dear Subscriber:
We wish to welcome you (the "Subscriber") as a Unit holder of our
Company. The purpose of this letter (the "Letter") is to provide an enhanced
explanation of the terms and conditions of your subscription of Units. None of
the material terms of your purchase of Units have changed or been affected. In
some instances, the within representations, warranties and covenants will
augment and be an elaboration to the private placement term sheet contained in
the Private Placement Memorandum, as amended and/or supplemented (the "Private
Placement Memorandum"), and your subscription Agreement (the "Subscription
Agreement") with the Company.
We are pleased to further advise that in addition to the added
provisions contained herein, two affiliated note holders that aggregate $400,000
(our chairman Xxxxx Xxxxx and myself) have determined to exchange their notes
for Units in support of the Company and its future prospects. Therefore, there
will be a minimum of $800,000 (inclusive of the $400,000 note conversion)
received by the Company prior to closing the first traunch of the offering as
opposed to the previously announced $500,000.
Supplementing our placement materials and the Subscription Agreement,
the Company makes the following additional representations, warranties and
covenants to each Subscriber:
1. Since December 31, 2001 and except as described in the Private Placement
Memorandum or the Company's filings with the Securities and Exchange
Commission (the "SEC") (such filings, the "SEC Reports"): (i) the
Company and its subsidiaries have not incurred any material liabilities
or obligations, indirect, or contingent, or entered into any material
oral or written agreement or other transaction which is not in the
ordinary course of business or which could reasonably be expected to
result in a material reduction in the future earnings or prospects of
the Company and its subsidiaries; (ii) each of the Company and its
subsidiaries have not sustained any material loss or interference with
its businesses or properties from fire, flood, windstorm, accident or
other calamity not covered by insurance; (iii) except as described in
the Private Placement Memorandum or the SEC Reports, the Company and its
subsidiaries have not paid or declared any dividends or other
distributions with respect to its capital stock and neither the Company
nor any of its subsidiaries is in default in the payment of principal or
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interest on any outstanding debt obligations; (iv) there has not been
any change in the capital stock of the Company or any of its
subsidiaries other than the sale of the Units hereunder, shares or
options issued pursuant to stock option plans or purchase plans approved
by the Company's Board of Directors and repurchases of shares or options
pursuant to repurchase plans already approved by the Company's Board of
Directors, or indebtedness material to the Company or any of its
subsidiaries (other than in the ordinary course of business); and (v)
there has not been any other event or change that would have,
individually or in the aggregate, a material adverse effect on the
condition (financial or otherwise), earnings, properties business or
prospects or results of operations of the Company (a "Material Adverse
Effect").
2. All information set forth in the Private Placement Memorandum is true
and correct in all material respects and, taken together with this
Letter, the Company has not omitted to state any material fact necessary
in order to make the statements made herein or therein, in light of the
circumstances under which they were made, not misleading. No event or
circumstance, including claim or litigation proceeding, whether actual
or threatened, has occurred or exists with respect to the Company or its
business or properties or financial condition which has not been
publicly disclosed or which has not been disclosed to the Subscriber.
3. The consolidated financial statements of the Company and the related
notes contained in the SEC Reports present fairly, in accordance with
generally accepted accounting principles, the consolidated financial
position of the Company and its subsidiaries as of the dates indicated,
and the results of their operations, cash flows and the changes in
shareholders' equity for the periods therein specified, subject, in the
case of unaudited financial statements for interim periods, to normal
year-end audit adjustments. Such consolidated financial statements
(including the related notes) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods therein specified, except that unaudited
financial statements may not contain all footnotes required by generally
accepted accounting principles. The Company has fully complied with the
Xxxxxxxx-Xxxxx Act of 2002.
4. Neither the Company nor any of its subsidiaries has taken, directly or
indirectly any action which was designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Units, the Shares, the Warrant and
the Warrant Shares.
5. The Company has taken no action which would give rise to any claim by
any person for brokerage commissions, finders' fees or similar payments
by Subscriber relating to this Letter, the Subscription Agreement or the
transactions contemplated hereby or thereby.
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6. The Company is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Florida and is qualified to
transact business and is in good standing as a foreign company in every
jurisdiction in which its ownership, leasing, licensing, or use of
property or assets or the conduct of its business makes such
qualification necessary, except in such jurisdictions where the failure
to be so qualified or in good standing would not have a Material Adverse
Effect. The Company has all required power and authority to own its
property and to carry on its business as now conducted and proposed to
be conducted.
7. The Company has all requisite power and authority to execute, deliver,
and perform the representations contained in this Letter and to issue
the Units to the Subscriber. All necessary corporate proceedings of the
Company have been duly taken to authorize the execution, and delivery,
of this Letter and to authorize the issuance and sale of the Units. This
Letter has been duly authorized, executed, and delivered by the Company.
8. Except as to filings which may be required under applicable state
securities regulations, no consent, authorization, approval, order,
license, certificate, or permit of or from, or declaration or filing
with, any federal, state, local, or other governmental authority or of
any court or other tribunal is required by the Company in connection
with the transactions contemplated hereby. No consent of any party to
any contract, agreement, instrument, lease, license, arrangement, or
understanding to which the Company is a party, or by which any of its
properties or assets is bound, is required for the execution, delivery,
or performance by the Company of the representations contained in this
Letter and the execution, delivery, and performance of this Letter by
the Company will not violate, result in a breach of, conflict with, or
entitle any party to terminate or call a default under any such
contract, agreement, instrument, lease, license, arrangement, or
understanding, or violate or result in a breach of any term of the
Certificate of Incorporation or the By-laws of the Company, or violate,
result in a breach of, or conflict with any law, rule, regulation,
order, judgment, or decree binding on the Company or to which any of its
operations, business, properties, or assets is subject.
9. Neither the nature of the business of the Company nor the execution,
delivery or performance of representations under this Letter, or any
related documents by the Company, nor the compliance with its obligation
hereunder or there under, nor the consummation of the transactions
contemplated hereby, nor the issuance, sale or delivery of the Shares,
and upon exercise of the Warrants, the Warrant Shares, will:
(i) Violate or conflict with any provisions of the Company's
Certificate of Incorporation or By-laws;
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(ii) Violate or conflict with any applicable laws, except where such
violation would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect;
(iii) Violate, be in conflict with, or constitute a breach or default
(or any event which, with the passage of time or notice or both,
would become a default under), or permit the termination of, or
require the consent of any person or entity under, result in the
creation or imposition of any lien or other encumbrance upon any
property of the Company under, result in the loss by the Company or
modification in any manner adverse to the Company of any right or
benefit under, or give to any other person or entity any right of
termination, amendment, acceleration, repurchase or repayment,
increased payments or cancellation under, any mortgage indenture,
note, debenture, agreement, lease, license, permit, franchise or
other instrument or obligation, whether written or oral, to which
the Company is a party or by which their properties may be bound or
affected except as would not, individually or in the aggregate,
reasonable be expected to have a Material Adverse Effect; or
(iv) The Company is not in default under the Certificate of
Incorporation or the By-laws of the Company or any applicable
judgments or orders, except where such default would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
10. Subject in part to the truth and accuracy of the Subscriber's
representations set forth in the Subscription Agreement, the offer, sale
and issuance of the Units as contemplated by this Letter are exempt from
the registration of any applicable state and federal securities laws,
and neither the Company nor any authorized agent acting on its behalf
will take any action hereafter that would cause the loss of such
exemption. The foregoing representation applies only to federal and
state laws. The Company expresses no opinion with respect to foreign
law.
11. To the Company's knowledge, the Company owns, or has the right to use,
all patents, trademarks, service marks, trade names, copyrights,
licenses, trade secrets or other proprietary rights necessary to its
business as now conducted without conflicting with or infringing upon
the right or claimed right of any person under or with respect to any of
the foregoing. Except for hardware and software licenses entered into in
the ordinary course of business, the Company is not bound by or a party
to any options, licenses or agreements of any kind with respect to
patents, trademarks, service marks, trade names, copyrights, licenses,
trade secrets or other proprietary rights of any other person or entity.
The Company has not received any communications alleging that the
Company has violated the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of any
other person or entity. The Company is not aware of any violation by a
third party of any of the Company's patents, trade marks, service marks,
trade names, copyrights, trade secrets or other proprietary rights.
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12. To the best of the Company's directors and executive officers knowledge
and except as stated in the Private Placement Memorandum and Risk
Factors annexed hereto, there is no action, suit, proceeding or
investigation pending or threatened in writing, against the Company or
any of its officers, which, either in any single case or in the
aggregate, would result in any Material Adverse Effect or in any
material impairment of the right or ability of the Company to carry on
its business as now conducted or as proposed to be conducted, or in any
material liability on the part of the Company, and none which questions
the validity of this Letter. Except as set forth in the SEC Reports, no
director, officer or affiliate of the Company or a related party thereto
is a party to any material transaction, arrangement or agreement with
the Company with the exception of (i) an action pending in the United
States District Court for the District of Columbia titled Securities and
Exchange Commission v. Environmental Solutions Worldwide, Inc et al. and
(ii) an action pending in the United States District Court for the
Eastern District of Pennsylvania titled Xxxxxx Xxxxxxxx et xx x.
Environmental Solutions Worldwide, Inc.. (See Form 10 KSB and 10QSB
Legal proceedings and Private Placement Memorandum and Risk Factors).
The Company is not a party or subject to any writ, order, decree or
judgment, except a possible final judgment and injunction by the
Securities and Exchange Commission against the Company, a director and
former officers and or directors. There is no such action, suit,
proceeding or investigation by the Company currently pending or which
the Company intends to initiate.
13. Notwithstanding the foregoing, the Company's newly appointed Chief
Executive Officer and Vice Chairman has lent the Company $200,000 which
will be converted into Units concurrently with the initial closing of
the sale of the Units.
14. All information relating to or concerning the Company set forth in this
Letter, the Subscription Agreement, the Private Placement Memorandum and
the SEC Reports, taken as a whole, is true and correct in all material
respects and the Company has not omitted to state any material fact
necessary in order to make the statements made herein or therein, in
light of the circumstances under which they were made, not misleading.
15. Neither the Company nor any director, officer, agent, or other person
acting on behalf of the Company has, in the course of his or its actions
for or on behalf of the Company violated any provision of the United
States Foreign Corrupt Practices Act of 1977, as amended or the
regulations there under.
16. All of the issued and outstanding shares of capital stock of the Company
and each of its subsidiaries have been duly authorized and are validly
issued, fully paid and non-assessable. The Shares are duly authorized
and reserved for issuance, and, upon issuance in accordance with the
terms hereof, will be validly issued, fully paid, non-assessable and
free and clear from all liens, claims and encumbrances, will not be
subject to any preemptive rights or other similar rights of shareholders
of the Company and the Subscriber will acquire good and marketable title
to the Shares, free and clear of all liens, claims and encumbrances. The
holders of the Shares will not, upon issuance, be subject to personal
liability to contribute to the assets or liabilities of the Company in
their capacity as holders of such shares. No personal liability attaches
to the registered holders of the Common Stock by reason of their being
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registered holders thereof. The Board of Directors of the Company has
approved the issuance of Shares pursuant to the terms hereof. Upon
issue, the Subscriber will acquire good and marketable title to the
Warrants, free and clear of all liens, claims and encumbrances. The
Warrant Shares are duly authorized and reserved for issuance. Upon
exercise of the Warrants, in whole or, from time to time, in part, and
upon payment of the exercise price therefor, in accordance with the
terms of the Warrants, the Subscriber will acquire good and marketable
title to the Warrant Shares, free and clear from all liens, claims and
encumbrances, will not be subject to any preemptive rights or other
similar rights of shareholders of the Company and the Warrant Shares
will be validly issued, fully paid and non-assessable. The Board of
Directors of the Company has approved the issuance of the Warrants and
the Warrant Shares pursuant to the terms hereof.
17. The Company will cooperate with Subscriber and Subscriber's counsel in
connection with the registration and qualification of the Units for sale
and the determination of their eligibility for investment under the laws
of such states in the United States as Subscriber shall designate and
shall continue such qualifications in effect so long as required for the
resale of the Shares, the Warrant and/or the Warrant Shares, provided
that the Company will not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
such state.
18. The Company shall use all of the net proceeds from the sale of all Units
for general corporate purposes. Notwithstanding the foregoing, up to
$80,000 may be used for repayment of a short-term loan made by a
director and executive officer to the Company.
19. The Company shall not take any action to cause the release of any monies
from the Escrow Account (as hereinafter defined) until the Company has
received net proceeds into the escrow account (the "Escrow Account")
established with Xxxxxxx & Xxxxxxxxx (the "Escrow Agent") pursuant to
the terms of the Escrow Agreement (the "Escrow Agreement"), among the
Company, the Subscriber and Xxxxxxx & Xxxxxxxxx of a minimum of an
aggregate of $800,000, inclusive of proceeds already received by the
Company pursuant to short term loans previously advanced by Messrs.
Odner and Xxxxxxx, in the aggregate amount of $400,000 which are being
converted on a concurrent basis with the closing of the offer and sale
of the Units into Units on the same terms as the Units are being offered
and sold to the Subscriber, from the Subscriber and the Other Purchasers
(as hereinafter defined) from the sale of Units to such Other Purchasers
and the Subscriber.
20. So long as the Subscriber (and its permitted transferees and assigns)
remain a registered owner of any of the Units, the Company shall timely
file all reports required to be filed with the SEC pursuant to the
Securities Exchange Act, as amended (the "Exchange Act") and the Company
shall not terminate its status as an issuer required to file reports
under the Exchange Act even if the Exchange Act or the rules and
regulations thereunder would permit such termination.
12
21. The Company is simultaneously, with the execution of the Subscription
Agreements and delivery of this Letter, entering into one or more
subscription agreements with other purchasers of Units (the "Other
Purchasers") and delivering other letters to the Other Purchasers, in
each case, with substantially the same terms and conditions as this
Letter and the Subscription Agreement; and no Other Purchaser is
subscribing for any securities of the Company on the Closing Date (as
hereinafter defined) with terms and conditions (other than the purchase
price per Unit which shall be no less than $.17 per Unit and the
exercise price of the Warrants which shall be exactly the same)
substantially different from the terms and conditions of this Letter and
the Subscription Agreement.
22. Subscriber has or will have received a certificate, dated the closing
date of the transactions contemplated by the Placement (the "Closing
Date"), of the President or any Vice President and a principal financial
or accounting officer of the Company in which such officers, to the best
of their knowledge after reasonable investigation, shall state that (i)
that the representations and warranties of the Company set forth herein
and in the Subscription Agreement are true and correct as of the date
hereof for those representations and warranties that already are
qualified by a materiality standard and true and correct in all material
respects as of the date of the Subscription Agreement for those
representations and warranties that are not so qualified and (ii) that
the Company has complied in all material respects with all agreements
and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the closing date.
23. With this closing letter and on or before the Closing Date, Subscriber
will receive the following items, unless otherwise noted, dated the
closing date:
(i) Resolutions of the Company's Board of Directors (and to the extent
necessary, of the shareholders of the Company), approving and
authorizing the execution, delivery and performance of the
Subscription Agreement, the Escrow Agreement, the Warrant
Agreement, the Registration Rights Letter dated the date hereof
(the "Registration Rights Letter"), and this Letter and any other
documents, instruments and certificates required to be executed by
each party thereto in connection therewith and approving and
authorizing the execution, delivery and payment of the Units,
certified as of the closing date by the Secretary of the Company,
as applicable, as being in full force and effect without
modification or amendment;
(ii) Signature and incumbency certificates of the officers of the
Company executing the Subscription Agreement, the Registration
Rights Letter, this Letter, the Warrant and the Escrow Agreement;
(iii) Executed copies of the Subscription Agreement, the Registration
Rights Letter, this Letter, the Escrow Agreement and executed
certificates representing the Shares and the executed Warrant (it
being understood that the Units will be delivered within five (5)
business days of the release of purchase price for the Units from
escrow by the Company in accordance with the terms of the Escrow
Agreement).
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24. On the Closing Date, the Company shall have performed in all material
respects all agreements which this Letter, the Subscription Agreement,
the Registration Rights Letter and the Escrow Agreement provides shall
be performed on or before the Closing Date (except as otherwise
consented to in writing by Subscriber).
25. On the Closing Date, no event shall have occurred and be continuing or
would result from the consummation of the transactions contemplated by
this Letter, the Registration Rights Letter, the Escrow Agreement and
the Subscription Agreement which would constitute a Material Adverse
Effect.
26. On the Closing Date, no order, judgment or decree of any court,
arbitrator or governmental authority shall enjoin or restrain Subscriber
from purchasing the Units or consummating the transactions contemplated
by this Letter, the Registration Rights Letter, the Subscription
Agreement and the Escrow Agreement and there shall not be existing, or
to the knowledge of the Company threatened, any action, suit,
proceeding, governmental investigation or arbitration against or
affecting the Company or any of its subsidiaries which would reasonably
be expected to result in such an order, judgment or decree.
27. If within six months from the Closing Date the Company enters into or
closes another financing or other transaction (which for securities law
purposes would be integrable with the offer and sale of the Units) on
terms and conditions more favorable to another purchaser than this
Letter, the Subscription Agreement, the Warrant Agreement and the
Registration Rights Letter (in each case, such determination to be made
by the Subscriber), then the terms and conditions of this offering of
Units shall be adjusted to reflect the more favorable terms to such
purchaser (including the issuance of additional Units or other
securities of the Company if the purchase price per Unit or similar
security is less than $.17 per Unit). The foregoing shall apply to
successive financings or successive other transactions within six months
of the Closing Date.
28. Except as may be required by applicable law or regulation, the Company
shall not use, directly or indirectly, the Subscriber's name or the name
of any of its affiliates in any advertisement, announcement, press
release or other similar communication unless it has received the prior
written consent of the Subscriber for the specific use contemplated or
as otherwise required by applicable law or regulation.
29. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail,
return receipt requested, or delivered by hand against written receipt
therefor, addressed to the Company at its office, 000 Xxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxxx, 00000, attn Xxxx X. Xxxxxxx, Xx., President and
to the Subscriber at the address indicated on the last page of the
Subscription Agreement. Notices shall be deemed to have been given on
the date of mailing, except notices of change of address, which shall be
deemed to have been given when received.
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30. Upon the execution and delivery of this letter by the Company, this
letter shall become a binding obligation of the Company enforceable by
the Subscriber in accordance with its terms. This Letter shall also be
binding upon and inure to the benefit of the Company's and Subscriber's
respective heirs, legal representatives, successors and assigns.
31. All covenants, agreements, representations and warranties made by the
Company and the Subscriber herein, the Subscription Agreement and in the
certificates for the Shares, the Warrant and, upon exercise of the
Warrant, the Warrant Shares delivered pursuant hereto and the
Subscription Agreement shall survive the execution of this letter, the
Subscription Agreement, the delivery to the Subscriber of the Units
being purchased and the payment therefor.
32. The terms and provisions hereof shall be construed in accordance with
and governed by the laws of the State of New York.
33. Subscriber may in its discretion waive compliance with any conditions
set forth herein, whether in respect of the closing date or otherwise.
34. By delivery of his Letter, Section 1.11 of the Subscription Agreement
shall be deemed to be amended to delete the first sentence thereof.
Should you have any questions concerning the foregoing or the Company in
general, please do not hesitate to contact me at any time. Once again I wish to
thank you for your interest and support of ESW.
Sincerely,
Environmental Solutions Worldwide, Inc.
By: Xxxx X. Xxxxxxx, Xx.
---------------------
President and CEO
15
Environmental Solutions Worldwide Inc.
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Re: Environmental Solutions Worldwide, Inc. ("ESW"
or the "Company") private placement offering (the
"Placement") of Units (the "Units") consisting of
shares (the "Shares") of ESW's common stock (the
"Common Stock") and warrants (the "Warrants")
exercisable for shares of ESW's Common Stock (the
"Warrant Shares") - Registration Rights Dear
Subscriber:
The purpose of this letter is to provide to you (the "Subscriber") an
enhanced explanation of the registration rights associated with your
subscription of ESW Units. None of the material terms of your purchase of Units
have changed or been affected. The within will augment and is to serve as an
elaboration to the private placement term sheet contained in the Private
Placement Memorandum, as amended and/or supplemented (the "Private Placement
Memorandum"), and your subscription agreement (the "Subscription Agreement")
with the Company.
1. The Company agrees to use its best efforts to file a registration
statement (the "Registration Statement") for the Shares, the Warrant
Shares and all shares of ESW's Common Stock, $.001 par value (the
"Common Stock"), beneficially owned by the Subscriber and all shares of
Common Stock issuable to the Subscriber upon exercise or conversion of
warrants or other convertible securities of the Company beneficially
owned by the Subscriber within one hundred twenty (120) days of the
Company's closing of the Placement. The Registration Statement shall be
on such appropriate form that the Company is then eligible to file for
the registration and resale of the Shares, the Warrant Shares and any
Common Stock beneficially owned by the Subscriber. The Company shall use
its best efforts to cause the Registration Statement to be declared
effective under the Securities Act of 1933, as amended (the "Act"), as
promptly as possible after the filing thereof, and shall use its best
efforts to keep such Registration Statement continuously effective under
the Act until the earlier of (i) sale of all of the securities
registered thereunder or (ii) the date on which all of the securities
registered thereunder may be resold by the Subscriber without
registration by reason of rule 144(k) under the Act (the "Registration
Period"). Capitalized terms not otherwise defined herein shall have the
meanings otherwise ascribed thereto in the Subscription Agreement and
related Warrant Agreement.
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2. At any time when a prospectus relating to the sale of securities of the
Company (including the Shares and the Warrant Shares) by the Subscriber
is required to be delivered under the Act, the Company will promptly
notify the Subscriber of the happening of any event, upon the
notification or awareness of such event by an executive officer of the
Company, as a result of which the prospectus included in such
Registration Statement, as then in effect, includes an untrue statement
of material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing.
3. The Company shall use its best efforts to cause the Registration
Statement and the related prospectus and any amendment or supplement
thereto, as of the effective date of the Registration Statement,
amendment or supplement, (i) to comply in all material respects with the
applicable requirements of the Act and the rules and regulations of the
Securities and Exchange Commission (the "SEC") and (ii) not to contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
4. In connection with any registration contemplated by this letter, the
following shall apply:
(a) The Company shall (i) furnish the Subscriber, a reasonable time
prior to the filing thereof with the SEC, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to the
prospectus included therein and, the Company shall use its best efforts
to reflect in each such document, when so filed with the SEC, such
comments as the Subscriber reasonably may propose and (ii) include the
names of the holders, who propose to sell the securities of the Company
pursuant to the Registration Statement, as selling security holders.
(b) The Company shall give written notice to the Subscriber and the
selling securityholders selling securities of the Company within the
coverage of the Registration Statement (which notice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the
use of the prospectus until the requisite changes have been made):
17
(i) when the Registration Statement or any amendment thereto has been
filed with the SEC and when the Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the SEC for amendments or supplements to the
Registration Statement or the prospectus included therein or for
additional information;
(iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation
of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of
the Shares, Warrant Shares and any shares of Common Stock for sale in
any jurisdiction or the initiation or threatening of any proceeding
for such purpose; and
(v) of the happening of any event that requires the Company to make
changes in the Registration Statement or the prospectus in order that
the Registration Statement or the prospectus do not contain an untrue
statement of a material fact nor omit to state a material fact
required to be stated therein or necessary to make the statements
therein (in the case of the prospectus, in light of the circumstances
under which they were made) not misleading, which written notice need
not provide any detail as to the nature of such event.
(c) The Company shall make every commercially reasonable effort to
obtain the withdrawal at the earliest possible time, of any order
suspending the effectiveness of the Registration Statement.
(d) The Company shall furnish to each selling securityholder selling
securities of the Company included within the coverage of the
Registration Statement, without charge, at least one copy of the
Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the selling
securityholder so requests in writing, all exhibits thereto
(including those, if any, incorporated by reference).
(e) The Company shall, during the Registration Period, deliver to
each selling securityholder of securities included within the
coverage of such Registration Statement, without charge, as many
copies of the prospectus (including each preliminary prospectus)
included in the Registration Statement and any amendment or
supplement thereto as such
18
person may reasonably request. The Company consents to the use of the
prospectus or any amendment or supplement thereto by each of the
selling securityholders in connection with the offering and sale of
the securities covered by the prospectus, or any amendment or
supplement thereto, included in the Registration Statement.
(f) Prior to any public offering of the securities pursuant to the
Registration Statement, the Company shall use its best efforts to
register or otherwise qualify or cooperate with the selling
securityholders of the securities included therein and their
respective counsel in connection with the registration or
qualification of the securities for offer and sale under the
securities or "blue sky" laws of such states of the United States as
any selling securityholders reasonably requests in writing and do any
and all other acts or things necessary or advisable to enable the
offer and sale in such jurisdictions of the securities covered by
such Registration Statement; provided, however, that the Company
shall not be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified; or (ii) take any
action which would subject it to general service of process or to
taxation in any jurisdiction where it is not then so subject.
(g) The Company shall cooperate with the selling securityholders 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 selling securityholders may
request a reasonable period of time prior to sales of the securities
pursuant to such Registration Statement.
(h) The Company will use its best efforts to comply with all rules
and regulations of the SEC to the extent and so long as they are
applicable to the Registration Statement to enable the selling
securityholders to resell their securities in accordance with the
Subscription Agreement.
(i) The Company shall use its commercially reasonable efforts to take
all other steps necessary to effect the registration of the
securities covered by the Registration Statement contemplated hereby.
5. Notwithstanding the foregoing, Subscriber acknowledges and agrees that
in the event that the pending claim asserted by the SEC against the
Company, Xxxxx Xxxxx the Company's chairman and other individuals (see
Risk Factors in Private Placement Memorandum and the Company's periodic
reports annexed to and made a part of the Private Placement Memorandum)
is outstanding, the filing and review of any registration may be
delayed, consequently the filing and effectiveness of a registration may
be delayed beyond the control of the Company.
6. With a view to making available to the Subscriber the benefits of Rule
144 promulgated under the Act, the Company agrees that it will use its
best efforts to maintain registration of its Common Stock under Section
19
12 or 15 of the Securities Exchange Act of 1934, as amended (the "1934
Act") and to file with the SEC in a timely manner all reports and other
documents required to be filed by an issuer of securities registered
under the 1934 Act so as to maintain the availability of Rule 144
promulgated under the Act. Upon the request of any record owner, the
Company will deliver to such owner a written statement as to whether it
has complied with the reporting requirements of Rule 144 promulgated
under the Act.
7. To the extent permitted by law, the Company will indemnify and hold
harmless each Subscriber, its agents, trustees and beneficiaries,
partners or officers, directors and stockholders of each Subscriber,
legal counsel and accountants for each Subscriber, and each person who
controls such Subscriber within the meaning of the Act or the 1934 Act,
against any losses, claims, damages or liabilities (joint or several) to
which they may become subject under the Act, the 1934 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 Act, the 1934 Act,
any state securities laws or any rule or regulation promulgated under
the Act, the 1934 Act or any state securities laws; and the Company will
reimburse each such Subscriber, for any reasonable legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity described herein shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the written consent of the
Company, nor shall the Company be liable in any such case for any such
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 any such Subscriber; provided
further, however, that the foregoing indemnity agreement with respect to
any preliminary prospectus shall not inure to the benefit of any
Subscriber, from whom the person asserting any such losses, claims,
damages or liabilities purchased 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 Subscriber 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.
To the extent permitted by law, each selling Subscriber 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
20
meaning of the Act, legal counsel and accountants for the Company, any
underwriter, any other Subscriber selling securities in such
registration statement and any controlling person of any such
underwriter or other Subscriber, against any losses, claims, damages or
liabilities to which any of the foregoing persons may become subject,
under the Act, the 1934 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 such Subscriber expressly for use in connection with such
registration; and each such Subscriber 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 agreement contained herein
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the
written consent of the Subscriber (which consent shall not be
unreasonably withheld) and provided further that the indemnity
obligation of the Subscriber hereunder shall not in any event exceed the
proceeds from any offering of any sale effected thereby under such
registration statement.
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 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.
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
21
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 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 Subscriber shall not be required to
contribute any amount in excess of the amount by which the net proceeds
received by such Subscriber from the sale of the Shares or the Warrant
Shares pursuant to a Registration Statement exceeds the amount of
damages which such Subscriber have otherwise been required to pay be
reason of such untrue or alleged untrue statement or alleged omission.
The obligation of any Subscriber obliged to make contribution pursuant
to this Section shall be several and not joint.
The obligations of the Company and Subscribers under this Section shall
survive the completion of any offering in a registration statement. The
obligations of the Subscribers under this Section shall survive the
transfer by the seller of the securities of the Company being
registered.
8. The Company shall bear all fees and expenses incurred by it in
connection with the performance of its obligations under this Letter
whether or not a Registration Statement is filed or becomes effective.
9. In connection with any Registration Statement, the participating selling
securityholders shall be responsible for the payment of any and all
underwriters' and brokers' and dealers' discounts, selling commissions,
any applicable stock transfer taxes and all fees and disbursements of
counsel, accountants or other advisors for any selling shareholder and
any other fees and expenses not covered by the preceding sentence.
10. In addition to the foregoing, the Company agrees generally to cooperate
with Subscribers in effecting compliant resale of shares, including
comfort and other customary broker agreements and documentations and
certificates.
11. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail,
return receipt requested, or delivered by hand against written receipt
therefore addressed to the Company at its office, 000 Xxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxxx 00000, attention, President and to the Subscriber
at the address indicated on the last page of the Subscription Agreement.
12. All covenants, agreements, representations and warranties made by the
Company and the Subscriber herein, the Subscription Agreement and in the
certificates for the Shares, the Warrant and the upon exercise of the
Warrant, the Warrant Shares, shall survive the execution of this Letter,
the Subscription Agreement, the delivery to the Subscriber of the Units
being purchased and the payment therefore.
13. This Letter is intended to supplement as applicable, the Private
Placement Memorandum, the Subscription Agreement, the Warrant Agreement
and such other applicable documents delivered in connection with the
subscription for the Units.
14. Upon the execution and delivery of this Letter by the Company, the terms
of this Letter shall become binding obligations of the Company
enforceable by the Subscriber (and any transferee thereof) in accordance
with its terms.
15. The terms and provisions hereof shall be construed in accordance with
and governed by the laws of the State of New York.
16. This Letter shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, representatives,
transferees, successors and assigns.
Should you have any questions concerning the rights outlined above, please do
not hesitate to contact me. Once again I wish to thank you for your support of
ESW.
Sincerely,
Environmental Solutions Worldwide, Inc.
By: Xxxx X. Xxxxxxx, Xx.
--------------------
President and CEO
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