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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Imperial Petroleum Recovery Corporation
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(Name of Issuer)
Common Stock, $.001 par value
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(Title of Class of Securities)
453079 10 5
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(CUSIP Number)
Gerald J. Laporte, Esq.
Hogan & Hartson L.L.P., 555 Thirteenth Street, N.W., Washington, DC 20004
Telephone: (202) 637-6528
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 11, 1997
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(Date of Event that Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box. / /
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 17 Pages
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Page 2 of 17 Pages
CUSIP No. 453079 10 5 SCHEDULE 13D
(1) Names and I.R.S. Identification Numbers of Reporting Person
Maya LLC
(2) Check the Appropriate Box if a Member of a Group (a) / /
(b) / /
(3) SEC Use Only
(4) Source of Funds
PF
(5) Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) / /
(6) Citizenship or Place of Organization
Nevada
(7) Sole Voting Power
Number of 6,000,000
Shares
Beneficially (8) Shared Voting Power
Owned By 0
Each
Reporting (9) Sole Dispositive Power
Person 6,000,000
With
(10) Shared Dispositive Power
0
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,000,000
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares / /
(13) Percent of Class Represented by Amount in Row (11)
35.1%
(14) Type of Reporting Person
OO
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Page 3 of 17 Pages
CUSIP No. 453079 10 5 SCHEDULE 13D
(1) Names and I.R.S. Identification Numbers of Reporting Person
Rex H. Lewis
(2) Check the Appropriate Box if a Member of a Group (a) / /
(b) / /
(3) SEC Use Only
(4) Source of Funds
PF
(5) Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) / /
(6) Citizenship or Place of Organization
U.S.A.
(7) Sole Voting Power
Number of 6,000,000
Shares
Beneficially (8) Shared Voting Power
Owned By 0
Each
Reporting (9) Sole Dispositive Power
Person 6,000,000
With
(10) Shared Dispositive Power
0
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,000,000
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares / /
(13) Percent of Class Represented by Amount in Row (11)
35.1%
(14) Type of Reporting Person
IN
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Item 1. Security and Issuer
This Schedule 13D relates to shares of the Common Stock, $.001 par
value, of Imperial Petroleum Recovery Corporation, Inc., a Nevada corporation
("Imperial" or the "Company"), the principal executive offices of which are
located at 15311 Vantage Parkway West, Suite 160, Houston, Texas 77032.
Item 2. Identity and Background
This Schedule 13D is filed on behalf of Maya LLC, a Nevada limited
liability company ("Maya"). Maya is a personal investment holding company. The
principal business and office address of Maya is 2325 Renaissance Drive, Las
Vegas, Nevada 89119. Rex H. Lewis, whose business address is the same as that of
Maya, is the majority beneficial owner and managing member of Maya. Mr. Lewis is
an investor with interests in various businesses, including homebuilding,
equipment leasing and grocery retailing.
During the last five years, neither Mr. Lewis nor Maya has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), and has not been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction, as a result of which he to it was
or is subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
Maya acquired beneficial ownership of the shares of Imperial that it
owns with personal funds.
Item 5. Interest in Securities of Issuer
Maya (and through Maya, Mr. Lewis) is the beneficial owner of 6,000,000
shares of Common Stock in the Company, 2,500,000 of which are issued and
outstanding and 3,500,000 of which Maya has the right to acquire by exercising a
Warrant issued by the Company as of December 11, 1997. The Warrant is
exercisable for $1.00 per share and expires on December 11, 2001. At the same
time as Maya purchased the Warrant from the Company, it also purchased 500,000
shares of the Company's Common Stock in a private placement. The 500,000 shares
of Common Stock purchased and the shares underlying the Warrant are entitled to
registration rights under a Registration Rights Agreement dated as of December
11, 1997. The total purchase price for the Warrant and the Common Stock was
$400,000 cash.
The 6,000,000 shares beneficially owned by Maya represent approximately
35.1% of the 13,601,421 outstanding shares of Common Stock of the Company if the
3,500,000 shares underlying the Warrant are deemed to be outstanding for
purposes of calculating such percentage. Maya (and through Maya, Mr. Lewis) has
sole power to vote or direct the vote of, and sole power to dispose or direct
the disposition of such shares.
No person other than Maya (and through Maya, Mr. Lewis) has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, such shares.
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Item 7. Material to be Filed as Exhibits
Exhibit 1. Warrant dated as of December 11, 1997
Exhibit 2. Registration Rights Agreement dated as of December 11, 1997
* * * * * * *
After reasonable inquiry, and to the best of its knowledge, the
undersigned certifies that the information set forth in this Amendment No. 1 to
Schedule 13D is true, complete and correct.
Maya LLC
December 22, 1997 By: /s/ Rex H. Lewis
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Date Rex H. Lewis
Managing Member
Page 6 of 17 Pages
Exhibit 1
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING THE WARRANT OR AN
APPLICABLE EXEMPTION FROM REGISTRATION.
IMPERIAL PETROLEUM RECOVERY CORPORATION
Warrant for the Purchase of Shares of Common Stock
FOR VALUE RECEIVED, IMPERIAL PETROLEUM RECOVERY CORPORATION, a Nevada
corporation (the "Company"), hereby certifies that Maya LLC (a Nevada limited
liability company), or its permitted assigns, is entitled to purchase from the
Company 3,500,000 fully paid and nonassessable shares of the common stock, $.001
par value, of the Company for an aggregate purchase price of $3,500,000
(computed on the basis of $1.00 per share), as such number of shares and per
share price may be adjusted as hereinafter provided. (Hereinafter, (i) said
common stock, together with any other equity securities that may be issued by
the Company with respect thereto or in substitution therefor, is referred to as
the "Common Stock"; (ii) the shares of the Common Stock purchasable hereunder
are referred to as the "Warrant Shares"; (iii) the aggregate purchase price
payable hereunder for the Warrant Shares is referred to as the "Aggregate
Warrant Price"; (iv) the price payable hereunder for each of the Warrant Shares
is referred to as the "Per Share Warrant Price"; (v) this Warrant and all
warrants hereafter issued in exchange or substitution for this Warrant are
referred to as the "Warrants"; and (vi) the holder of this Warrant is referred
to as the "Holder.
1. Exercise of Warrant. This Warrant may be exercised, in whole at any
time or in part from time to time, commencing on December 11, 1997 and ending at
5:00 p.m., Houston, Texas time then current, on December 11, 2001 (or on the
next business day, if the Company is closed for business on that date), by
surrendering this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in Subsection 9(a) hereof, together with
proper payment of the Aggregate Warrant Price, or the proportionate part thereof
if this Warrant is exercised in part. Payment for Warrant Shares shall be made
by certified or official bank check payable to the order of the Company. If this
Warrant is exercised in part, it must be exercised for a minimum of 25,000
Warrant Shares and for whole shares of Common Stock, and the Holder is entitled
to receive a new Warrant covering the number of Warrant Shares in respect of
which this Warrant has not been exercised and setting forth the proportionate
part of the Aggregate Warrant Price applicable to such Warrant Shares. Upon such
surrender of this Warrant, the Company will (a) issue a certificate or
certificates in the name of the Holder for the largest number of whole shares of
the Common Stock to which the Holder shall be entitled and, if this Warrant is
exercised in whole, in lieu of any fractional shares of the Common Stock to
which the Holder shall be entitled, cash equal to the fair value of such
fractional share (determined in such reasonable manner as the Board of Directors
of the Company shall determine), and (b) deliver any other securities and
property receivable upon the exercise of this Warrant, or the appropriate
proportionate part thereof if this Warrant is exercised in part, pursuant to the
provisions of this Warrant.
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2. Reservation of Warrant Shares. The Company agrees that, until the
expiration of this Warrant, the Company will at all times have authorized and in
reserve, and will keep available, solely for issuance and delivery upon the
exercise of this Warrant, the shares of the Common Stock and other securities
and property as from time to time shall be receivable upon the exercise of this
Warrant, free and clear of all restrictions on sale or transfer and free and
clear of all preemptive rights.
3. Protection Against Dilution.
(a) If, at any time or from time to time after the date of this Warrant,
the Company shall distribute to the holders of Common Stock (i) securities other
than shares of the Common Stock, or (ii) property other than cash, without
payment therefor, with respect to Common Stock, then, and in each such case, the
Holder, upon the exercise of this Warrant, shall be entitled to receive the
securities and property that the Holder would hold on the date of such exercise
if, on the date of this Warrant, the Holder had been the holder of record of the
number of shares of Common Stock subscribed for upon such exercise and, during
the period from the date of this Warrant to and including the date of such
exercise, had retained such shares and the securities and property receivable by
the Holder during such period. Notice of each such distribution shall be
forthwith given to the Holder.
(b) In case the Company shall hereafter (i) pay a dividend in shares of
Common Stock or make a distribution on its capital stock in shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares, or (iv) issue by reclassification of its Common Stock
any shares of capital stock of the Company, the Per Share Warrant Price in
effect immediately before such action shall be adjusted so that the Holder of
any Warrant surrendered for exercise immediately thereafter would be entitled to
receive the number of shares of Common Stock or other capital stock of the
Company that the Holder would have owned immediately following such action had
such Warrant been exercised immediately before such action. An adjustment made
pursuant to this Subsection 3(b) becomes effective immediately after the record
date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination,
or reclassification. If, as a result of an adjustment made pursuant to this
Subsection 3(b), the holder of any Warrant thereafter surrendered for exercise
becomes entitled to receive shares of two or more classes of capital stock or
shares of Common Stock and other capital stock of the Company, the Board of
Directors (whose determination shall be conclusive on this issue and shall be
described in the certificate required to be delivered to the Holder of this
Warrant promptly after such adjustment under Subsection 3(g)) shall determine
the allocation of the adjusted Per Share Warrant Price between or among shares
of such classes of capital stock or shares of Common Stock and other capital
stock.
(c) In case the Company shall sell or issue shares of Common Stock, or
rights, options, warrants, or convertible or exchangeable securities containing
the right to subscribe for or purchase shares of Common Stock at a price per
share of Common Stock (determined, in the case of such rights, options,
warrants, or convertible or exchangeable securities, by dividing (X) the total
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amount receivable by the Company in consideration of the sale and issuance of
such rights, options, warrants, or convertible or exchangeable securities, plus
the total consideration payable to the Company upon exercise, conversion, or
exchange thereof, by (Y) the total number of shares of Common Stock covered by
such rights, options, warrants, or convertible or exchangeable securities) that
is lower than the Per Share Warrant Price, then the Per Share Warrant Price
shall be adjusted so that it shall equal the price per share of Common Stock at
which such Common Stock or other securities were sold or issued. Such adjustment
shall be made successively whenever such a sale or issuance occurs.
The number of Warrant Shares shall also be adjusted and shall be that
number determined by multiplying the number of shares of Common Stock issuable
upon exercise immediately before the adjustment by a fraction, the numerator of
which shall be the Per Share Warrant Price in effect immediately before the
adjustment and the denominator of which shall be the Per Share Warrant Price as
so adjusted. For the purposes of adjustments, the shares of Common Stock which
the holder of any such rights, options, warrants, or convertible or exchangeable
securities shall be entitled to subscribe for or purchase shall be deemed to be
issued and outstanding as of the date of the sale or issuance of the rights,
warrants, or convertible or exchangeable securities and the consideration
received by the Company therefor shall be deemed to be the consideration
received by the Company for such rights, options, warrants, or convertible or
exchangeable securities, plus the consideration or premiums stated in such
rights, options, warrants or convertible or exchangeable securities to be paid
for the shares of Common Stock covered thereby. In case the Company shall sell
or issue shares of Common Stock or rights, options, warrants, or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock for a consideration consisting, in whole or in part, of property
other than cash or its equivalent, then in determining the "price per share of
Common Stock" and the "consideration received by the Company," the Board of
Directors of the Company shall determine, in good faith, the fair value of said
property.
(d) No adjustment in the Per Share Warrant Price or number of Warrant
Shares shall be required in the case of the sale or issuance by the Company of
(i) shares of Common Stock upon the exercise of stock options granted or to be
granted by the Company from time to time to directors, employees or consultants
for bona fide services rendered or (ii) the Common Stock issuable upon the
exercise of this Warrant or other warrants.
(e) In case of any consolidation or merger to which the Company is a
party other than a merger or consolidation in which the Company is the
continuing corporation, or in case of any sale or conveyance to another entity
of the property of the Company as an entirety or substantially as an entirety,
or in the case of any statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of a third
corporation into the Company), the Holder shall have the right thereafter to
convert this Warrant into the kind and amount of securities, cash, or other
property that the Holder would have owned or have been entitled to receive
immediately after such consolidation, merger, statutory exchange, sale, or
conveyance had such Warrant been exercised immediately before the effective date
of such consolidation, merger, statutory exchange, sale, or conveyance and in
any such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Subsection 3(e) with respect to
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Page 9 of 17 Pages
the rights and interests thereafter of the Holder to the end that the provisions
set forth in this Section 3 shall thereafter correspondingly be made applicable,
as nearly as may reasonably be, in relation to any securities or property
thereafter deliverable on the exercise of this Warrant. The above provisions of
this Subsection 3(e) shall similarly apply to successive consolidations,
mergers, statutory exchanges, sales, or conveyances. Notice of any such
consolidation, merger, statutory exchange, sale, or conveyance shall be given to
the Holder not less than 30 days before such event. A sale of all or
substantially all of the assets of the Company for a consideration consisting
primarily of securities shall be deemed a consolidation or merger for the
foregoing purposes.
(f) No adjustment in the Per Share Warrant Price shall be required
unless the adjustment would require an increase or decrease of at least $0.05
per share of Common Stock; provided, however, that any adjustments which by
reason of this Subsection 3(f) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment, and provided
further, however, that adjustments shall be required and made in accordance with
the provisions of this Section 3 (other than this Subsection 3(f)) not later
than such time as may be required in order to preserve the tax-free nature of a
distribution to the Holder. All calculations under this Section 3 shall be made
to the nearest cent or to the nearest 1/100th of a share, as the case may be.
Anything in this Section 3 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Per Share Warrant Price, in addition to
those required by this Section 3, as it in its discretion shall deem to be
advisable in order that any stock dividend, subdivision of shares, or
distribution of rights to purchase stock or securities convertible or
exchangeable for stock hereafter made by the Company to its shareholders shall
not be taxable.
(g) Whenever the Per Share Warrant Price or number of Warrant Shares is
adjusted as provided in this Section 3 and upon any modification of the rights
of a Holder of Warrants in accordance with this Section 3, the Company shall
promptly deliver to the Holder a certificate setting forth the Per Share Warrant
Price and the number of Warrant Shares after such adjustment or the effect of
such modification, a brief statement of the facts requiring such adjustment or
modification, and the manner of computing the same. If the Holder disagrees with
the contents of the certificate, the Holder may require the Company to deliver a
certificate of a firm of independent public accountants of recognized standing
selected by the Board of Directors (which may be the regular auditors of the
Company) recomputing the Per Share Purchase Price and the number of Warrant
Shares after the adjustment or the effect of the modification and a brief
statement of the firm's manner of recomputing the same. The firm's recomputation
shall be binding upon the Company and the Holder. One-half of the cost of
obtaining the second certificate shall be borne by the Company and the other
half shall be borne ratably by the Holder and any holders of securities of the
Company that benefit from requiring the second certificate, if such holders are
contractually obligated to contribute to such cost.
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4. Fully Paid Stock; Taxes. The shares of Common Stock represented by
each and every certificate for Warrant Shares delivered on the exercise of this
Warrant shall, at the time of such delivery, be duly authorized, validly issued,
fully paid, and nonassessable, and the Company shall take all such actions as
may be necessary to assure that the par value or stated value, if any, per share
of the Common Stock is at all times equal to or less than the then Per Share
Warrant Price. The Company further covenants and agrees that it will pay, when
due and payable, any and all federal and state stamp, original issue, or similar
taxes that may be payable in respect of the issue of any Warrant Share or
certificate therefor.
5. Provision of Information. For such period as this Warrant is
exercisable, the Company will furnish to the Holder,
(a) contemporaneously with its delivery to holders of the Common Stock,
a copy of each report or other communication delivered to holders of the Common
Stock; and
(b) promptly upon the filing thereof, a copy of each Form 15 (or a
successor form) that the Company files with the U.S. Securities and Exchange
Commission.
6. Transferability. This Warrant is transferable or assignable by the
Holder, but is so transferable and assignable only upon the books that the
Company shall cause to be maintained for the purpose and only if the transfer or
assignment is deemed to be in accordance with all applicable securities laws in
the reasonable judgment of the Company. The Company may treat the registered
holder of this Warrant as he, she, or it appears on the Company's books at any
time as the Holder for all purposes. The Company shall permit any Holder of a
Warrant or the duly authorized attorney of the Holder, upon written request
during ordinary business hours, to inspect and copy or make extracts from its
books showing the registered holders of Warrants.
7. Loss, etc., of Warrant. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen, or destroyed,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver to the Holder a new Warrant of like date, tenor, and
denomination.
8. Warrant Holder Not Shareholder. Except as otherwise provided herein,
this Warrant does not confer upon the Holder any right to vote or to consent to
or receive notice as a shareholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a shareholder, before
the exercise hereof.
9. Communications. No notice, or other communication under this Warrant
shall be effective unless, but any notice or other communication shall be
effective and shall be deemed to have been given or delivered if and when, the
same is in writing and is physically delivered or mailed by first-class mail,
postage prepaid, addressed to:
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(a) the Company at 1531 Vantage Parkway West, Suite 160,
Houston, Texas 77032, or such other address as the Company has
designated in writing to the Holder, or
(b) the Holder at 2325 Renaissance Drive, Las Vegas,
Nevada 89119, or such other address as the Holder has designated in
writing to the Company.
10. Headings. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
11. Applicable Law. This Warrant shall be governed by and construed in
accordance with the law of the State of Nevada, without giving effect to the
principles of conflicts of law thereof.
IN WITNESS WHEREOF, IMPERIAL PETROLEUM RECOVERY CORPORATION has caused
this Warrant to be signed by its Vice President as of the 11th day of December
1997.
IMPERIAL PETROLEUM RECOVERY
CORPORATION
By: /s/ C. Brent Kartchner
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C. Brent Kartchner
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SUBSCRIPTION
The undersigned, ________________________________, pursuant to the
provisions of the foregoing Warrant, hereby agrees to subscribe for and purchase
______________ shares of the Common Stock of IMPERIAL PETROLEUM RECOVERY
CORPORATION covered by said Warrant and makes payment therefor in full at the
price per share provided by said Warrant.
Dated: Signature:
Address:
ASSIGNMENT
FOR VALUE RECEIVED, ____________________________________ hereby sells,
assigns, and transfers unto _______________________________ the foregoing
Warrant and all rights evidenced thereby, and does irrevocably constitute and
appoint _________________________, attorney, to transfer said Warrant on the
books of IMPERIAL PETROLEUM RECOVERY CORPORATION.
Dated: Signature:
Address:
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, __________________________________ hereby sells and
transfers unto _________________________ the right to purchase ______________
________ shares of the Common Stock of IMPERIAL PETROLEUM RECOVERY CORPORATION
granted by the foregoing Warrant, and a proportionate part of said Warrant and
the rights evidenced thereby, and does irrevocably constitute and appoint
___________________________, attorney, to transfer that part of said Warrant on
the books of IMPERIAL PETROLEUM RECOVERY CORPORATION.
Dated: Signature:
Address:
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Exhibit 2
Registration Rights Agreement
This Registration Rights Agreement (the Agreement) is made and entered
into as of December 11, 1997 by and between Imperial Petroleum Recovery
Corporation, a Nevada corporation (the Company), and Maya LLC, a Nevada limited
liability company (the Holder).
This Agreement is made in connection with the private sale of 500,000
shares of the Company's common stock, $.001 par value per share (together with
any other equity securities that may be issued by the Company with respect to or
in substitution for such common stock, the Common Stock) and a Warrant to
purchase up to 3,500,000 shares of the Common Stock (the Warrant) pursuant to a
Subscription Agreement between the Company and the Holder effective as of
December 11, 1997 (the Subscription Agreement). To induce the Holder to enter
into the Subscription Agreement, the Company has agreed to provide the Holder
with the registration rights set forth in this Agreement. The execution and
delivery of this Agreement are conditions of the closing under the Subscription
Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Registration under the Securities Act of 1933.
(a) If before the earlier of December 11, 2003 and the date on which 85%
or more of the aggregate of the 500,000 shares of Common Stock purchased under
the Subscription Agreement and the 3,500,000 shares of Common Stock purchasable
under the Warrant (together with the 500,000 shares of Common Stock purchased
under the Subscription Agreement, the Registrable Shares) may be sold without
regard to the volume limitations in Rule 144(e) under the Securities Act of
1933, as amended (the Securities Act), or any successor provision, the Holder
requests that the Company file a registration statement under the Securities Act
covering the public offer and sale of the Registrable Shares, the Company will
(i) promptly notify all the holders of Registrable Shares that such registration
statement will be filed and that all Registrable Shares will be included in the
registration statement at each such holder's request if such request is received
within 30 days of the notice to the holder, (ii) cause such registration
statement to cover all Registrable Shares which it has been so requested to
include, (iii) use its commercially reasonable efforts to cause such
registration statement to become effective as soon as practicable, and (iv) take
all other action necessary under any federal or state law or regulation of any
governmental authority to permit all Registrable Shares that it has been so
requested to include in such registration statement to be sold or otherwise
disposed of, and will maintain compliance with each such federal and state law
and regulation for 180 days or for the period necessary for the requesting
holders to effect their proposed sales or other dispositions, whichever is
shorter. The Company shall be required to effect a registration pursuant to this
Subsection 1(a) with respect to the Registrable Shares on one occasion only.
(b) If at any time the Holder or any holder of Registrable Shares agrees
to bear the out-of-pocket costs to the Company solely attributable to the
registration of Registrable Shares of the Holder or holder, such Holder or
holders shall notify the company and the Company will (i) promptly prepare and
file a registration statement under the Securities Act and include therein all
Registrable Shares requested by the Holder or holder to be so included, (ii) use
its commercially reasonable efforts to cause such registration statement to
become effective as soon as practicable, (iii) take all other action necessary
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Page 14 of 17 Pages
under any federal or state law or regulation of any governmental authority to
permit all Registrable Shares included in the registration statement to be sold
or otherwise disposed of, and (iv) maintain compliance with each such federal
and state law and regulation for the period necessary for the Holder or holder
to effect its proposed sale or other disposition.
(c) The Company shall not be obligated, however, to take any actions
pursuant to Subsection 1(a) or Subsection 1(b):
(i) In any particular jurisdiction (A) in which the Company
would be required to execute a general consent to service of process in
effecting registration, qualification, or compliance unless the Company is
already subject to general service in such jurisdiction and except as may be
required by the Securities Act or (B) which refuses to qualify the shares of the
Common Stock after the Company has duly applied for such qualification and has
taken all commercially reasonable steps necessa effect such qualification.
(ii) During the period starting with the date 60 days before the
Company's estimated date of filing of, and ending on the date 90 days
immediately following the effective date of, any registration statement
pertaining to securities of the Company (other than a registration on Form S-4
or S-8 or successor forms) if the Company is actively employing in good faith
all commercially reasonable efforts to cause such registration statement to
become effective and the Company's estimate of the date of filing the
registration statement is made in good faith.
(iii) If the Company furnishes to the requesting Holder or
holders or their representative a certificate signed by its President stating
that in the good faith judgment of the Board of Directors it would be seriously
detrimental to the Company or its stockholders for a registration statement to
be filed in the near future, in which case the Company's obligation to take any
actions pursuant to Subsection 1(a) or Subsection 1(b) shall be deferred for a
period not to exceed 90 days from the date of receipt of the written request
from the Holder or holders.
(iv) If the Company determines that compliance with the request
for registration will not permit the use of regular audited year-end financial
statements with supplemental short period financial statements. In such a case,
however, the Company may only postpone a registration under Subsection 1(a) or
Subsection 1(b) for the period of time, not exceeding 90 days, that will permit
their use, unless the Holder or holders proposing to distribute shares agree to
bear the costs of any special audits.
(d) Notwithstanding anything herein to the contrary, if the holders
proposing to distribute their Registrable Shares desire a registration requested
pursuant to Subsection 1(a) or 1(b) to involve an underwriting, such holders
shall so advise the Company as part of the notice given pursuant to Subsection
1(a) or 1(b) and shall have the right to select the underwriter or underwriters,
which choice shall be subject to the approval by the Company.
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Page 15 of 17 Pages
(e) The Company shall (together with all holders proposing to distribute
their Registrable Shares through such underwriting) enter into an underwriting
agreement in customary form with any managing underwriter selected for such
underwriting pursuant to Subsection 1(d). Notwithstanding any other provision of
this Section 1, if the managing underwriter advises the holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Company will so advise all holders of Registrable Shares
and the number of Registrable Shares that may be included in the registration
and underwriting will be allocated among all holders thereof in proportion as
nearly as practicable to the respective amounts of Registrable Shares requested
to be included by such holders at the time of filing the registration statement.
No Registrable Shares excluded from the underwriting by reason of the
underwriter's marketing limitation are required to be included in such
registration, and the Registrable Shares so excluded will no longer be entitled
to be registered on demand of the holders thereof under the terms of Subsection
1(a). To facilitate the allocation of shares in accordance with the above
provisions, the Company or the underwriters may round the number of shares
allocated to any holder to the nearest 100 shares. If any holder of Registrable
Shares disapproves of the terms of the underwriting, such person may elect to
withdraw therefrom by written notice to the Company.
(f) If at any time and from time to time within two years after the last
purchase of Registrable Shares under the Warrant, the Board of Directors of the
Company authorizes the filing of a registration statement under the Securities
Act (otherwise than under Subsection 1(a) or Subsection 1(b) hereof and other
than a registration statement on Form S-4 or Form S-8 or other form that may not
be used by the holders to distribute their Registrable Shares) in connection
with the proposed offer of any of its equity securities by it or any of its
security holders, the Company will (i) promptly notify the Holder of this
Warrant and each holder of Registrable Shares that such registration statement
will be filed and that Registrable Shares will, at such holder's request within
20 days of the giving of notice to the holder, be included in such registration
statement, (ii) include in the securities covered by such registration statement
all Registrable Shares that it has been so requested to include, (iii) use its
commercially reasonable efforts to cause such registration statement to become
effective as soon as practicable, and (iv) take all other action necessary under
any federal or state law or regulation of any governmental authority to permit
all Registrable Shares that it has been requested to include in such
registration statement to be sold or otherwise disposed of, and will maintain
compliance with each such federal and state law and regulation for the period
necessary for such holders to effect the proposed sale or other disposition, but
shall not be required to maintain such compliance for longer than 90 days. If
the registration of which the Company gives notice is for a registered public
offering involving an underwriting, the Company shall so advise the holders. In
such event, the right of any holder to registration shall be conditioned upon
such holder's participation in such underwriting and the inclusion of such
holder's Registrable Shares in the underwriting to the extent provided herein.
All holders proposing to distribute their securities through such underwriting
shall enter into an underwriting agreement in customary form with the managing
underwriter selected for such underwriting by the Company. Notwithstanding any
other provision herein, if the managing underwriter determines that marketing
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<PAGE>
Page 16 of 17 Pages
factors require a limitation of the number of shares to be underwritten, the
managing underwriter may limit such Registrable Shares to be included in such
registration, it being understood that the shares proposed to be sold by the
Company and such security holders in such underwriting shall be given priority
and shall not be subject to any such limitation applicable to Registrable
Shares. The Company shall so advise all holders of Registrable Shares proposing
to distribute securities through such underwriting, and the number of
Registrable Shares that may be included in the registration and underwriting
shall be allocated among all such holders in proportion, as nearly as
practicable, to the respective amount of Registrable Shares proposed be
distributed by each such holder.
(g) Whenever the Company is required pursuant to the provisions of this
Section 1 to include shares in a registration statement, the Company is required
to (i) furnish each holder of Registrable Shares included in the registration
statement and each underwriter with such copies of the prospectus, including any
preliminary prospectus, conforming to the Securities Act (and such other
documents as each such holder or each such underwriter may reasonably request)
in order to facilitate the sale or distribution of the shares, (ii) use its best
efforts to register or qualify such Registrable Shares under the law (to the
extent applicable) of such jurisdictions as such holders and each underwriter of
shares being sold by such holders shall reasonably request, and (iii) take such
other actions as may be reasonably necessary or advisable to enable such holders
and such underwriters to consummate the sale or distribution in such
jurisdictions in which such holders shall have reasonably requested that the
shares be sold.
(h) The Company shall pay all expenses incurred in connection with any
registration or other action pursuant to the provisions of Subsection 1(a) or
Subsection 1(f), other than (i) underwriting discounts and applicable transfer
taxes relating to the Registrable Shares and (ii) fees and expenses of counsel,
accountants, advisers, and other persons separately retained by the holders of
Registrable Shares included in the registration statement.
(i) The Company will agree to indemnify the holders of Registrable
Shares that are included in each registration statement filed pursuant to this
Section 1 and such holders will agree to indemnify the Company and any
underwriters, to the extent customary.
(j) The Holder shall have no right to take any action to restrain,
enjoin, or otherwise delay any registration as a result of any controversy that
might arise with respect to the interpretation or implementation of this Section
1.
(k) The holders of Registrable Shares included in any registration
shall, as a condition precedent to the Company's obligation to register such
securities, furnish to the Company such information regarding themselves, the
shares of Common Stock held by them, and the distribution proposed by such
holders as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification, or compliance
referred to in this Agreement. At the request of the Company, each holder who is
including any Registrable Shares in the registration shall deposit in escrow
with an escrow agent chosen by the Company those Registrable Shares that such
Holder proposes to sell, accompanied by an irrevocable power of attorney
authorizing the escrow agent to, without limitation, sell such Registrable
Shares to the underwriter upon the effectiveness of the registration statement.
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Page 17 of 17 Pages
2. Transferability. This Agreement is transferable or assignable by the
Holder in whole, but not in part.
3. Communications. No notice, or other communication under this
Agreement shall be effective unless, but any notice or other communication shall
be effective and shall be deemed to have been given or delivered if and when,
the same is in writing and is physically delivered or mailed by first-class
mail, postage prepaid, addressed to:
(a) the Company at 1531 Vantage Parkway West, Suite 160,
Houston, Texas 77032, or such other address as the Company has designated in
writing to the Holder, or
(b) the Holder at 2325 Renaissance Drive, Las Vegas,
Nevada 89119, or such other address as the Holder has designated in writing to
the Company.
4. Headings. The headings of this Agreement have been inserted as a
matter of convenience and shall not affect the construction hereof.
5. Applicable Law. This Agreement shall be governed by and construed in
accordance with the law of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
IN WITNESS WHEREOF, the parties have caused this Warrant to be signed as
of the 11th day of December 1997.
IMPERIAL PETROLEUM RECOVERY
CORPORATION
By: /s/ C. Brent Kartchner
---------------------------
C. Brent Kartchner
Vice President
MAYA LLC
By: /s/ Rex H. Lewis
----------------------------
Rex H. Lewis
Managing Member
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