usdry_8ka-ex1005.htm


    Exhibit
10.5


     

    REGISTRATION RIGHTS
AGREEMENT

     

    This
Registration Rights Agreement (this "Agreement") is entered into as of June 21,
2008, by and among U.S. DRY
CLEANING CORPORATION, a Delaware corporation (the "Company"), and ROBINSON CORP., a Hawaii
corporation ("Robinson").

     

    A.           This
Agreement is being entered into pursuant to that certain Purchase and Sale
Agreement dated May 31, 2008 ("PSA"), by and among Company, Robinson, THURSTON JOHN ROBINSON and THERESA PAULETTE WINN
("Owners"), and ENIVEL,
INC., a Hawaii corporation ("Buyer").

     

    B.           Pursuant
to the terms of the PSA, and on the Effective Date, Robinson shall receive the
Shares and the parties desire to provide Robinson with the registration rights
related to the Shares as described herein.

     

    NOW
THEREFORE, in consideration of the mutual agreements and covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     

    1.            Definitions. As used
herein:

     

    1.1 The
term "Holder" means the Robinson having the right to acquire Registrable Shares
or any assignee thereof in accordance with Sections 2.8 and 3
hereof.

     

    1.2 The
term "Initial Public Offering" means the closing of an initial underwritten
public offering pursuant to an effective registration statement under the
Securities Act (as defined below), covering the offer and sale of securities to
the general public for the account of the Company.

     

    1.3 The
term "Ownership Percentage" means and includes, with respect to each Holder of
Registrable Shares requesting inclusion of Registrable Shares in a Secondary
Offering, the number of Registrable Shares held by such Holder divided by the
aggregate of (i) all Registrable Shares held by all Holders requesting
registration in such offering and (ii) the total number of all other securities
entitled to registration pursuant to any agreement with the Company approved by
the Board of Directors and held by others participating in the Secondary
Offering.

     

    1.4 The
terms "register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act and the applicable rules and regulations thereunder, and the
declaration or ordering of the effectiveness of such registration
statement.

     

    1.5 For
the purposes hereof, the term "Registrable Shares" means and includes (i) the
Shares and (ii) any common stock of the Company issued, or issuable as a result
of a stock split, dividend or other distribution with respect to or in exchange
for or in replacement of the Shares, excluding in all cases, however, any
Registrable Shares sold by a person in a transaction in which his or her rights
under Section 2 are not assigned, provided that any particular shares of the
Shares shall cease to be Registrable Shares when: (i) a registration statement
with respect to the sale of such securities shall have become effective under
the Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) they shall have been distributed to the
public pursuant to Rule 144 (or any successor provision) under the Securities
Act, (iii) they shall have been otherwise transferred, new certificates for them
shall have been delivered by the Company and subsequent disposition of them
shall not require registration or qualification of them under the Securities Act
or any similar state law then in force, or (iv) they shall have ceased to be
outstanding.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.6  The
term "Securities Act" means the Securities Act of 1933, as amended.

     

    1.7 The
term "Secondary Offering" means and includes the closing of a public offering
pursuant to an effective registration statement under the Securities Act,
covering the offer and sale of securities to the general public for the account
of the Company following the Initial Public Offering.

     

    2.    Registration
Rights.

     

    2.1 "Piggy
Back" Registration. If at any time after the Initial Public Offering the
Company shall determine to register under the Securities Act any of its common
stock (other than a registration relating solely to the sale of securities to
participants in a Company employee benefits plan, a registration on any faint
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of the Registrable
Shares or a registration in which the only common stock being registered is
common stock issuable upon conversion of debt securities which are also being
registered), it shall send to each Holder written notice of such determination
and, if within twenty (20) days after receipt of such notice, such Holder shall
so request in writing, the Company shall use its best efforts to include in such
registration statement all or any part of the Registrable Shares that such
Holder requests to be registered. If the shares being sold by the Company under
such registration are to be underwritten, the Registrable Shares shall be
included in such underwriting. Notwithstanding the foregoing, if, in connection
with any Secondary Offering involving an underwriting of common stock to be
issued by the Company, the managing underwriter shall impose a limitation on the
number of shares of common stock included in any such registration statement
because, in such underwriter's judgment, such limitation is necessary based on
market conditions, the Company may exclude, to the extent so advised by the
managing underwriter, the Registrable Shares from the underwriting; provided,
however, that if the underwriters do not entirely exclude the Registrable Shares
from the underwriting, the Company shall be obligated to include in such
registration statement, with respect to the requesting Holder, an amount of
Registrable Shares equal to the product of (i) the number of Registrable Shares
that remain available for registration after the underwriter's cut back and (ii)
such Holder's Ownership Percentage. No such reduction shall be made with respect
to securities being offered by the Company for its own account if the offering
is pursuant to a demand of any stockholder of the Company exercising
registration rights. If any Holder disapproves of the terms of any underwriting
referred to in this section, he may elect to withdraw therefrom by written
notice to the Company and the underwriter at least three (3) days prior to the
effectiveness of the registration statement filed in connection with such
proposed Secondary Offering. At any time prior to the effectiveness of such
registration statement, the Company may withdraw the entire registration,
including the registration of any Registrable Shares, if the Company's Board of
Directors determines that it is in the Company's best interest to do so and
promptly provides notice of such withdrawal to the Holders. The Company may
require each Holder selling Registrable Shares to furnish Company such
information and documents regarding the Holder and the distribution of such
securities as may be required to be disclosed in the Registration Statement by
the rules and regulations under the Securities Act or under any other applicable
securities or blue sky laws of the applicable jurisdictions.

     

     

    
      
        
        

      

      
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    2.2    Effectiveness.

     

    (a)            The
Company will use its best efforts to maintain the effectiveness for up to three
(3) months of any registration statement pursuant to which any of the
Registrable Shares are being offered; provided, however, that such three-month
period shall be extended for a period of time equal to the period the Holder
refrains from selling any securities included in such registration at the
request of an underwriter of common stock (or other securities) of the
Company.

     

    (b)            The
Company will from time to time amend or supplement such registration statement
and the prospectus contained therein as and to the extent necessary to comply
with the Securities Act and any applicable state securities statute or
regulation.

     

    (c) Each
Holder selling Registrable Shares agrees that, upon receipt of any notice from
Company of the happening of any event of the kind described in Section 2.6(c),
such Holder will
immediately discontinue disposition of Registrable Shares pursuant to the
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 2.6(c), and, if so
directed by Company, each such Holder will deliver to Company (at Company's
expense) all copies, other than permanent file copies then in such Holder's
possession, of the prospectus covering such Registrable Shares current at the
time of receipt of such notice.

     

    2.3    Indemnification.

     

    (a) Indemnification
of Holders. In the event that the Company registers any of the
Registrable Shares under the Securities Act, the Company will indemnify and hold
harmless each Holder and each underwriter of the Registrable Shares so
registered (including any broker or dealer through which such shares may be
sold) and each person, if any, who controls such Holder or any such underwriter
within the meaning of Section 15 of the Securities Act from and against any and
all losses, claims, damages, expenses or liabilities (or any action in respect
thereof), joint or several, to which they or any of them become subject under
the Securities Act or under any other statute or at common law or otherwise,
and, except as hereinafter provided, will reimburse each such Holder, each such
underwriter and each such controlling person, if any, for any legal or other
expenses reasonably incurred by them or any of them, as such expenses are
incurred, in connection with investigating or defending any actions whether or
not resulting in any liability, insofar as such losses, claims, damages,
expenses, liabilities or actions arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement, in any preliminary or amended preliminary prospectus or
in the prospectus (or the registration statement or prospectus as from time to
time amended or supplemented by the Company); (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; or (iii) any
violation by the Company of the Securities Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), a state securities law or any rule or
regulation under the Securities Act, the Exchange Act or any state securities
law; provided, however, that the indemnity contained in this Section 2.3(a) will
not apply where such untrue statement or omission was made in such registration
statement, preliminary or amended, preliminary prospectus or prospectus in
reliance upon and in conformity with information furnished in writing to the
Company in connection therewith by such Holder of Registrable Shares, any such
underwriter or any such controlling person expressly for use therein or arises
from such Holder's breach of its obligations under this Agreement. Promptly
after receipt by any Holder of Registrable Shares, any underwriter or any
controlling person of notice of the commencement of any action in respect of
which indemnity may be sought against the Company, such Holder of Registrable
Shares, or such underwriter or such controlling person, as the case may be, will
notify the Company in writing of the commencement thereof, and, subject to the
provisions hereinafter stated, the Company shall assume the defense of such
action (including the employment of counsel, who shall be counsel reasonably
satisfactory to such Holder of Registrable Shares, such underwriter or such
controlling person, as the case may be), and the payment of expenses insofar as
such action shall relate to any alleged liability in respect of which indemnity
may be sought against the Company. Such Holder of Registrable Shares, any such
underwriter or any such controlling person shall have the right to employ
separate counsel in any such action and to participate in the defense thereof in
the event the representation of such Holder, underwriter or controlling person
by counsel retained by or on the behalf of the Company would be inappropriate
due to conflicts of interest between any such person and any other party
represented by such counsel in such proceeding or action, in which case the
Company shall pay, as incurred, the reasonable fees and expenses of such
separate counsel. The Company shall not be liable to indemnify any person under
this Section 2.3(a) for any settlement of any such action effected without the
Company's consent (which consent shall not be unreasonably withheld). The
Company shall not, except with the approval of each party being indemnified
under this Section 2.3(a) (which approval will not be unreasonably withheld),
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to the parties being so indemnified of a release from all liability in respect
to such claim or litigation.

     

    
      
        
        

      

      
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    (b) Indemnification of
Company.  In  the
event that the Company registers any of the Registrable Shares under the
Securities Act, each Holder of the Registrable Shares so registered will
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the registration statement, each underwriter of the
Registrable Shares so registered (including any broker or dealer through which
any of such shares may be sold) and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act and all other
Holders and their respective officers, directors and controlling persons from
and against any and all losses, claims, damages, expenses or liabilities (or any
action in respect thereof), joint or several, to which they or any of them may
become subject under the Securities Act or under any other statute or at common
law or otherwise, and, except as hereinafter provided, will reimburse the
Company and each such director, officer, underwriter or controlling person for
any legal or other expenses reasonably incurred by them or any of them, as such
expenses are incurred, in connection with investigating or defending any actions
whether or not resulting in any liability, insofar as such losses, claims,
damages, expenses, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
registration statement, in any preliminary or amended preliminary prospectus or
in the prospectus (or the registration statement or prospectus as from time to
time amended or supplemented) or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, but only
insofar as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company in connection
with the registration of the Registrable Shares by such Holder, expressly for
use therein; provided, however, that such Holder's obligations hereunder shall
be limited to an amount equal to the proceeds to such Holder of the Registrable
Shares sold in such registration. Promptly after receipt of notice of the
commencement of any action in respect of which indemnity may be sought against
such Holder of Registrable Shares, the Company will notify such Holder of
Registrable Shares in writing of the commencement thereof, and such Holder of
Registrable Shares shall, subject to the provisions hereinafter stated, assume
the defense of such action (including the employment of counsel, who shall be
counsel reasonably satisfactory to the Company) and the payment of expenses
insofar as such action shall relate to the alleged liability in respect of which
indemnity may be sought against such Holder of Registrable Shares. The Company
and each such director, officer, underwriter or controlling person shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof in the event the representation of the Company, any of its
officers or directors or any underwriter or controlling person by counsel
retained by or on the behalf of such Holder would be inappropriate due to
conflicts of interest between any such person and any other party represented by
such counsel in such proceeding or action, in which case such Holder shall pay,
as incurred, the reasonable fees and expenses of such separate counsel. Such
Holder shall not be liable to indemnify any person for any settlement of any
such action effected without such Holder's consent (which consent shall not be
unreasonably withheld). Such Holder shall not, except with the approval of the
person being indemnified (which approval shall not be unreasonably withheld),
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to the party being so indemnified of a release from all liability in respect to
such claim or litigation.

     

     

    
      
        
        

      

      
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    2.4 Contribution. If the
indemnification provided for in Section 2.3 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 therein, then the indemnifying
party, in lieu of indemnifying such indemnified party hereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the statements
or omissions that resulted in such loss, liability, claim, damage, or expense as
well as any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission.

     

    2.5 Exchange
Act Registration. With a view to making available to the Holders the
benefits of Rule 144 promulgated under the Act and any other rule or regulation
of the Securities Exchange Commission (the "SEC") that may at any time permit a
Holder to sell securities of the Company to the public without registration, the
Company agrees to:

     

    (a)           make
and keep public information available, as those terms are understood and defined
in SEC Rule 144, at all times after ninety (90) days after the effective date of
the first registration statement filed by the Company for the offering of its
securities to the general public;

     

    (b)           file
on a timely basis with the Securities and Exchange Commission all information
that the Commission may require under either of Section 13 or Section 15(d) of
the Exchange Act and, so long as it is required to file such information, take
all action that may be required as a condition to the availability of Rule 144
under the Securities Act (or any successor exemptive rule hereinafter in effect)
with respect to the Company's common stock; and

     

     

    
      
        
        

      

      
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    (c) furnish
to any Holder forthwith upon request (i) a written statement by the Company as
to its compliance with the reporting requirements of Rule 144, (ii) a copy of
the most recent annual or quarterly report of the Company as filed with the
Securities and Exchange Commission, and (iii) any other reports and documents
that a Holder may reasonably request in order to avail itself of any rule or
regulation of the Securities and Exchange Commission allowing a Holder to sell
any such Registrable Shares without registration.

     

    2.6  Further Obligations of the Company.
Whenever the
Company is required
hereunder to register Registrable Shares, it agrees that it shall also do the
following:

     

    (a)            Furnish
to each selling Holder such copies of each preliminary and final prospectus and
any other documents that such Holder may reasonably request to facilitate the
public offering of its Registrable Shares;

     

    (b)            Use
its best efforts to register or qualify the Registrable Shares to be registered
pursuant to this Agreement under the applicable securities or "blue sky" laws of
such jurisdictions as any selling Holder may reasonably request; provided,
however, that the Company shall not be obligated to qualify to do business in
any jurisdiction where it is not then so qualified or to take any action that
would subject it to the service of process in suits other than those arising out
of the offer or sale of the securities covered by the registration statement in
any jurisdiction where it is not then so subject;

     

    (e)
Notify each Holder of Registrable Shares covered by such registration statement
at any time when a prospectus relating thereto is required to be delivered under
the Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing;

    


     2.7 
 Exchange Act
Registration. With a view to making available to the Holders the benefits
of Rule 144 promulgated under the Act and any other rule or regulation of the
Securities Exchange Commission (the "SEC") that may at any time permit a Holder
to sell securities of the Company to the public without registration, the
Company agrees to:

     

    (a)            make
and keep public information available, as those terms are understood and defined
in SEC Rule 144, at all times after ninety (90) days after the effective date of
the first registration statement filed by the Company for the offering of its
securities to the general public;

     

    (b)            file
on a timely basis with the Securities and Exchange Commission all information
that the Commission may require under either of Section 13 or Section 15(d) of
the Exchange Act and, so long as it is required to file such information, take
all action that may be required as a condition to the availability of Rule 144
under the Securities Act (or any successor exemptive rule hereinafter in effect)
with respect to the Company's common stock; and

     

     

    
      
        
        

      

      
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    (c)
furnish to any Holder forthwith upon request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144, (ii) a
copy of the most recent annual or quarterly report of the Company as filed with
the Securities and Exchange Commission, and (iii) any other reports and
documents that a Holder may reasonably request in order to avail itself of any
rule or regulation of the Securities and Exchange Commission allowing a Holder
to sell any such Registrable Shares without registration.

     

    2.6  Further Obligations of the Company.
Whenever the Company is required
hereunder to register Registrable Shares, it agrees that it shall also do the
following:

     

    (a)            Furnish
to each selling Holder such copies of each preliminary and final prospectus and
any other documents that such Holder may reasonably request to facilitate the
public offering of its Registrable Shares;

     

    (b)            Use
its best efforts to register or qualify the Registrable Shares to be registered
pursuant to this Agreement under the applicable securities or "blue sky" laws of
such jurisdictions as any selling Holder may reasonably request; provided,
however, that the Company shall not be obligated to qualify to do business in
any jurisdiction where it is not then so qualified or to take any action
that would subject it to the service of process in suits other than those
arising out of the offer or sale of the securities covered by the registration
statement in any jurisdiction where it is not then so subject;

     

    (c)
Notify each Holder of Registrable Shares covered by such registration statement
at any time when a prospectus relating thereto is required to be delivered under
the Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to
state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing; printing, legal and accounting expenses, Securities and Exchange
Commission filing fees and "blue sky" fees and expenses; provided, however, that
the Company shall have no obligation to pay or otherwise bear (i) any portion of
the fees or disbursements of more than one counsel for the Holders in connection
with the registration of their Registrable Shares, which in no event shall
exceed a reasonable fee, (ii) any portion of the underwriter's commissions or
discounts attributable to the Registrable Shares being offered and sold by the
Holders of Registrable Shares, or (iii) any of such expenses if the payment of
such expenses by the Company is prohibited by the laws of a state in which such
offering is qualified and only to the extent so prohibited.

     

    2.8 Transfer
of Registration Rights. The registration rights of a Holder of
Registrable Shares under this Agreement may be transferred as set forth below
(provided (1) the transfer accompanies the transfer of the underlying Stock, (2)
the transferee is bound by the terms of this Agreement and (3) the Company is
given written notice prior to such transfer) to any other transferee of the
Registrable Shares.

     

    2.9 Market
Stand-Off Agreement. No Holder shall, to the extent requested by any
managing underwriter of the Company, sell or otherwise transfer or dispose of
(other than in a private disposition in a transaction exempt from registration
to a donee who agree to be similarly bound or in a disposition pursuant to Rule
144) any Registrable Shares during a period (the "Stand-Off Period") beginning
ten (10) days prior to and ending 180 days following the effective date of a
registration statement of any Secondary Offering (or such shorter period as the
Company or managing underwriter may authorize), and except in each case, for
securities sold as part of the offering covered by such registration statement
in accordance with the provisions of this Agreement. In order to enforce the
foregoing covenant, the Company may impose stock transfer restrictions with
respect to the Registrable Shares of each Holder until the end of the Stand-Off
Period. Notwithstanding the foregoing, the obligations described in this Section
2.9 shall not apply to a registration relating solely to employee benefit plans
on Form S-1 or Form S-8 or similar forms which may be promulgated in the future,
or a registration relating solely to an SEC Rule 145 transaction on Form
S-4 or similar forms which may be promulgated in the future.

     

    
      
        
        

      

      
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    2.10
Termination
of Registration Rights. The obligations of the Company to register any
Holder's Registrable Shares pursuant to this Section 2 shall terminate five (5)
years after the Company's Initial Public Offering or, with respect to any
Holder, at such time as all of the Registrable Securities of such Holder may be
sold within a three month period under Securities and Exchange Commission
Rule 144.

     

    3.            Assignability.
Subject to the restrictions on transfer set forth in Section 2.8, this
Agreement shall be binding upon and inure to the benefit of the respective
heirs, successors and assigns of the parties hereto.

     

    4.            Law.
In all respects, including all matters of construction, validity and
performance, this Agreement and the rights and obligations arising hereunder
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware applicable to contracts made and performed in such state,
without regard to principles thereof regarding conflicts of laws. Robinson
irrevocably consents to the exclusive jurisdiction of any court located in
California for any suit or other action Robinson brings against the Company
hereunder and the Company irrevocably consents to the exclusive jurisdiction of
any court located in Hawaii for any printing, legal and accounting expenses,
Securities and Exchange Commission filing fees and "blue sky" fees and expenses;
provided, however, that the Company shall have no obligation to pay or otherwise
bear (i) any portion of the fees or disbursements of more than one counsel for
the Holders in connection with the registration of their Registrable Shares,
which in no event shall exceed a reasonable fee, (ii) any portion of the
underwriter's commissions or discounts attributable to the Registrable Shares
being offered and sold by the Holders of Registrable Shares, or (iii) any of
such expenses if the payment of such expenses by the Company is prohibited by
the laws of a state in which such offering is qualified and only to the extent
so prohibited.

     

    8. Severability. In case any
provision of this Agreement shall be invalid, illegal, or unenforceable, it
shall, to the extent practicable, be modified so as to make it valid, legal and
enforceable and to retain as nearly as practicable the intent of the parties;
and the validity, legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.

     

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    IN
WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be executed as of the date first above written.

     

     

    
      


       

      U.S.
DRY CLEANING


       

       

      By:

      Name:

      Title:

       

      


       

      ROBINSON
CORP.  CORPORATION

    

     

     

    By:

    Name:

    Title:

     

     

     

     

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