Document:

ex10.2

  
 Exhibit 10.2 
 

 

 REGISTRATION RIGHTS AGREEMENT
 

 This Registration Rights Agreement ("Agreement"), dated February27, 2012, is made by and between ENTEST BIOMEDICAL, INC. a Nevada corporation ("Company"), and SOUTHRIDGE PARTNERS II, LP, a Delaware limited partnership (the "Investor").
 

 RECITALS
 

 WHEREAS, upon the terms and subject to the conditions of the Equity Purchase Agreement ("Purchase Agreement"), between the Investor and the Company, the Company has agreed to issue and sell to the Investor shares (the "Put Shares") of its common stock, par value $0.001 per share (the "Common Stock") from time to time for an aggregate investment price of up to Ten Million Dollars ($10,000,000) (the "Registerable Securities"); and
 

 WHEREAS, to induce the Investor to execute and deliver the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, "Securities Act"), and applicable state securities laws with respect to the Registerable Securities;
 

 NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:
 

 1.
 Definitions.
 

 (a)
 As used in this Agreement, the following terms shall have the following meaning:
 

 (i)
 "Subscription Date" means the date of this Agreement.
 

 (ii)
 "Investor" has the meaning set forth in the preamble to this Agreement.
 

 (iii)
 "Register," "registered" and "registration" refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a delayed or continuous basis ("Rule 415"), and the declaration or ordering of effectiveness of such Registration Statement by the United States Securities and Exchange Commission (the "SEC").
 

 (iv)
 "Registerable Securities" will have the same meaning as set forth in the Purchase Agreement.
 

 (v)
 "Registration Statement" means the Company’s registration statement on Form S-1, or any similar registration statement of the Company filed with SEC under the Securities Act with respect to the Registerable Securities.
 

 

 
 
 (vi)
 "EDGAR" means the SEC's Electronic Data Gathering, Analysis and Retrieval System.  
 

 (b)
 Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement.
 

 2.
 [RESERVED]
 

 3.
 Obligation of the Company.  In connection with the registration of the Registerable Securities, the Company shall do each of the following:
 

 (a)
 Prepare promptly and file with the SEC within  ninety (90)  days after the date hereof, a Registration Statement with respect to not less than the maximum allowable under Rule 415 of Registerable Securities, and thereafter use all commercially reasonable efforts to cause such Registration Statement relating to the Registerable Securities to become effective within five (5) business days after notice from the Securities and Exchange Commission that such Registration Statement may be declared effective, and keep the Registration Statement effective at all times until the earliest of (i) the date that is three months after the completion of the last Closing Date under the Purchase Agreement, (ii) the date when the Investor may sell all Registerable Securities under Rule 144 without volume limitations, or (iii) the date the Investor no longer owns any of the Registerable Securities (collectively, the "Registration Period"), which Registration Statement (including any amendments or supplements, thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
 

 (b)
 Prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective at all times during the Registration Period, and to comply with the provisions of the Securities Act with respect to the disposition of all Registerable Securities of the Company covered by the Registration Statement until the expiration of the Registration Period.
 

 (c)
 With respect to the Registerable Securities, permit counsel designated by Investor to review the Registration Statement and all amendments and supplements thereto a reasonable period of time (but not less than two (2) business days) prior to their filing with the SEC, and not file any document in a form to which such counsel reasonably objects.
 

 (d) 
  As promptly as practicable after becoming aware of the following facts, the Company shall notify Investor and Investor’s legal counsel identified to the Company and (if requested by any such person) confirm such notice in writing no later than one (1) business day thereafter (i): (A) when a prospectus or any prospectus supplement or post-effective amendment to the Registration Statement is filed; (B) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registerable Securities or the initiation of any proceedings for that purpose; and (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification or 
 

 
 exemption from qualification of any of the Registerable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose.
 

 (e)
 Unless available to the Investor without charge through EDGAR, the SEC's website or the Company's website, furnish to Investor,  promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one (1) copy of the Registration Statement, each preliminary prospectus and the prospectus, and each amendment or supplement thereto;
 

 (f)
 Use all commercially reasonable  efforts to (i) register and/or qualify the Registerable Securities covered by the Registration Statement under such other securities or blue sky laws of such jurisdictions as the Investor may reasonably request and in which significant volumes of shares of Common Stock are traded, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof at all times during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualification in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registerable Securities for sale in such jurisdictions: provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (A) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (B) subject itself to general taxation in any such jurisdiction, (C) file a general consent to service of process in any such jurisdiction, (D) provide any undertakings that cause more than nominal expense or burden to the Company or (E) make any change in its charter or by-laws or any then existing contracts, which in each case the Board of Directors of the Company determines to be contrary to the best interests of the Company and its stockholders;
 

 (g)
 As promptly as practicable after becoming aware of such event, notify the Investor of the happening of any event of which the Company has knowledge, as a result of which the prospectus included in the Registration Statement, as then in effect, includes any 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, in the light of the circumstances under which they were made, not misleading ("Registration Default"), and promptly prepare a supplement or amendment to the Registration Statement or other appropriate filing with the SEC to correct such untrue statement or omission, and take any other commercially reasonable steps to cure the Registration Default, and, unless available to the Investor without charge through EDGAR, the SEC's website or the Company's website, deliver a number of copies of such supplement or amendment to the Investor as the Investor may reasonably request.  
 

 (h)
 [INTENTIONALLY OMITTED];
 

 (i)
 Use its commercially reasonable efforts, if eligible, either to (i) cause all the Registerable Securities covered by the Registration Statement to be listed on a national securities exchange and on each additional national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registerable Securities is then permitted under the rules of such exchange, or (ii) secure designation of all the Registerable Securities covered by the Registration Statement as a National Association of Securities Dealers Automated Quotations System ("Nasdaq”) security within the meaning of 
 

 
 Rule 11Aa2-1 of the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the quotation of the Registerable Securities on the Nasdaq Capital Market; or if, despite the Company’s commercially reasonable efforts to satisfy the preceding clause (i) or (ii), the Company is unsuccessful in doing so, to use its commercially reasonable efforts to secure authorization of the Financial Industry Regulatory Authority (“FINRA”) and quotation for such Registerable Securities on the over-the-counter bulletin board and, without limiting the generality of the foregoing; 
 

 (j)
 Provide a transfer agent for the Registerable Securities not later than the Subscription Date under the Purchase Agreement;
 

 (k)
 Cooperate with the Investor to facilitate the timely preparation and delivery of certificates for the Registerable Securities to be offered pursuant to the Registration Statement and enable such certificates for the Registerable Securities to be in such denominations or amounts as the case may be, as the Investor may reasonably request and registration in such names as the Investor may request; and, within five (5) business days after a Registration Statement which includes Registerable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registerable Securities (with copies to the Investor) an appropriate instruction and opinion of such counsel, if so required by the Company’s transfer agent; and
 

 (l)
 Take all other commercially reasonable actions necessary to expedite and facilitate distribution to the Investor of the Registerable Securities pursuant to the Registration Statement.
 

 4.
 Obligations of the Investor.  In connection with the registration of the Registerable Securities, the Investor shall have the following obligations;
 

 (a)
 It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registerable Securities of the Investor that the Investor shall timely furnish to the Company such information regarding itself, the Registerable Securities held by it, and the intended method of disposition of the Registerable Securities held by it, as shall be reasonably required to effect the registration of such Registerable Securities and shall timely execute such documents in connection with such registration as the Company may reasonably request.
  
 (b)
 The Investor by such Investor’s acceptance of the Registerable Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statement hereunder; and
 

 (c)
 The Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(d)(ii) or (iii) or 3(g) above, the Investor will immediately discontinue disposition of Registerable Securities pursuant to the Registration Statement covering such Registerable Securities until the Investor receives the copies of the supplemented or amended prospectus contemplated by Section 3(d)(ii) or (iii) or 3(g) and, if so directed by the Company, the Investor shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all 
 

 
 copies in the Investor’s possession, of the prospectus covering such Registerable Securities current at the time of receipt of such notice.
 

 5.
 Expenses of Registration.
 All reasonable expenses incurred in connection with registrations, filings or qualifications pursuant to Section 3, including, without limitation, all registration, listing, and qualifications fees, printers and accounting fees, the fees and disbursements of counsel for the Company shall be borne by the Company.  
 

 6.
 Indemnification.
 After Registerable Securities are included in a Registration Statement under this Agreement:
 

 (a)
 To the extent permitted by law, the Company will indemnify and hold harmless, the Investor, the directors, if any, of such Investor, the officers, if any, of such Investor, each person, if any, who controls the Investor within the meaning of the Securities Act or the Exchange Act (each, an "Indemnified Person"), against any losses, claims, damages, liabilities or expenses (joint or several) incurred (collectively, "Claims") to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or 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, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law (the matters in the foregoing clauses (i) through (iii) being collectively referred to as  "Violations").  Subject to Section 6(b) hereof, the Company shall reimburse the Investor, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.   Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a) shall not (i) apply to any Claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(b) hereof; (ii) with respect to any preliminary prospectus, inure to the benefit of any such person from whom the person asserting any such Claim purchased the Registerable Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, if such prospectus was timely made available by the Company pursuant to Section 3(b) hereof; (iii) be available to the extent such Claim is based on a failure of the Investor to deliver or cause to be delivered the prospectus made available by the Company; or (iv) apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the  Company, which consent shall not be unreasonably withheld.  The Investor will 
 

 
 indemnify the Company, its officers, directors and agents (including legal counsel) against any claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company, by or on behalf of the Investor, expressly for use in connection with the preparation of the Registration Statement, subject to such limitations and conditions set forth in the previous sentence.  
 

 (b)
 Promptly after receipt by an Indemnified Person under this Section 6 of notice of the commencement of any action (including any governmental action), such Indemnified Person shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, 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 control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person, as the case may be; provided, however, that an Indemnified Person shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person and any other party represented by such counsel in such proceeding.  In such event, the Company shall pay for only one separate legal counsel for the Investor selected by the Investor.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.  The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.
 

 7.
 Contribution.
 To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that (a) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6; (b) no seller of Registerable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registerable Securities who was not guilty of such fraudulent misrepresentation; and (c) contribution by any seller of Registerable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registerable Securities.
 

 8.
 Reports under Exchange Act.  With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration ("Rule 144"), the Company agrees to use its commercially reasonable efforts to:
 

 (a)
 make and keep public information available, as those terms are understood and defined in Rule 144;
 

 

 
 
 (b)
 file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act for so long as the Company remains subject to such requirements, and the filing of such reports is required for sales under Rule 144;
 

 (c)
 furnish to the Investor so long as the Investor owns Registerable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) unless available to the Investor without charge through EDGAR, the SEC's website or the Company's website, a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration; and 
 

 (d) 
 at the request of any Investor of Registerable Securities, give its Transfer Agent instructions (supported by an opinion of Company counsel, if required or requested by the Transfer Agent) to the effect that, upon the Transfer Agent’s receipt from such Investor of:
 

 (i) a certificate (a “Rule 144 Certificate”) certifying (A) that such Investor has held the shares of Registerable Securities which the Investor proposes to sell (the “Securities Being Sold”) for a period of not less than (1) year and (B) as to such other matters as may be appropriate in accordance with Rule 144 under the Securities Act, and 
 

 (ii) an opinion of counsel acceptable to the Company (for which purposes it is agreed that the initial Investor’s counsel shall be deemed acceptable if such opinion is not given by Company counsel) that, based on the Rule 144 Certificate, Securities Being Sold  may be sold pursuant to the provisions of Rule 144, even in the absence of an effective Registration Statement, 
 

 the Transfer Agent is to effect the transfer of the Securities Being Sold and issue to the buyer(s) or transferee(s) thereof one or more stock certificates representing the transferred Securities Being Sold without any restrictive legend and without recording any restrictions on the transferability of such shares on the Transfer Agent’s  books and records (except to the extent any such legend or restriction results from facts other than the identity of the Investor, as the seller or transferor thereof, or the status, including any relevant legends or restrictions, of the shares of the Securities Being Sold while held by the Investor).   If the Transfer Agent requires any additional documentation at the time of the transfer, the Company shall deliver or cause to be delivered all such reasonable additional documentation as may be necessary to effectuate the issuance of an unlegended certificate.
 

 9.
 Miscellaneous.
 

 (a)
 Registered Owners.  A person or entity is deemed to be a holder of Registerable Securities whenever such person or entity owns of record such Registerable Securities.  If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registerable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registerable Securities.
 

 

 
 
 (b)
 Rights Cumulative; Waivers.  The rights of each of the parties under this Agreement are cumulative.  The rights of each of the parties hereunder shall not be capable of being waived or varied other than by an express waiver or variation in writing.  Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right.  Any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right.  No act or course of conduct or negotiation on the part of any party shall in any way preclude such party from exercising any such right or constitute a suspension or any variation of any such right.
 

 (c)
 Benefit; Successors Bound.  This Agreement and the terms, covenants, conditions, provisions, obligations, undertakings, rights, and benefits hereof, shall be binding upon, and shall inure to the benefit of, the undersigned parties and their successors.
 

 (d)
 Entire Agreement.  This Agreement contains the entire agreement between the parties with respect to the subject matter hereof.  There are no promises, agreements, conditions, undertakings, understandings, warranties, covenants or representations, oral or written, express or implied, between them with respect to this Agreement or the matters described in this Agreement, except as set forth in this Agreement and in the other documentation relating to the transactions contemplated by this Agreement.  Any such negotiations, promises, or understandings shall not be used to interpret or constitute this Agreement.
 

 (e)
 Amendment.  Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investor.  Any amendment or waiver affected in accordance with this Section 9 shall be binding upon the Company.
 

 (f)
 Severability.  Each part of this Agreement is intended to be severable.  In the event that any provision of this Agreement is found by any court or other authority of competent jurisdiction to be illegal or unenforceable, such provision shall be severed or modified to the extent necessary to render it enforceable and as so severed or modified, this Agreement shall continue in full force and effect.
 

 (g)
 Notices.  Notices required or permitted to be given hereunder shall be in writing and shall be deemed to be sufficiently given when personally delivered (by hand, by courier, by telephone line facsimile transmission, receipt confirmed, email or other means) or sent by certified mail, return receipt requested, properly addressed and with proper postage pre-paid (i) if to the Company, at its executive office and (ii) if to the Investor, at the address set forth under its name in the Purchase Agreement, with a copy to its designated attorney, or at such other address as each such party furnishes by notice given in accordance with this Section 9(g), and shall be effective, when personally delivered, upon receipt and, when so sent by certified mail, five (5) business days after deposit with the United States Postal Service.
 

 (h)
 Governing Law.   This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles of conflicts of law. Each of the Company and Investor hereby submit to the exclusive jurisdiction of the United States Federal and state courts located in New York with respect to any dispute arising 
 

 
 under this Agreement, the agreements entered into in connection herewith or the transactions contemplated hereby or thereby.       
 

 (i)
 Consents.  The person signing this Agreement on behalf of each party hereby represents and warrants that he has the necessary power, consent and authority to execute and deliver this Agreement on behalf of that party.
 

 (j)
 Further Assurances.  In addition to the instruments and documents to be made, executed and delivered pursuant to this Agreement, the parties hereto agree to make, execute and deliver or cause to be made, executed and delivered, to the requesting party such other instruments and to take such other actions as the requesting party may reasonably require to carry out the terms of this Agreement and the transactions contemplated hereby.
 

 (k)
 Section Headings.  The Section headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
 

 (l)
 Construction.  Unless the context otherwise requires, when used herein, the singular shall be deemed to include the plural, the plural shall be deemed to include each of the singular, and pronouns of one or no gender shall be deemed to include the equivalent pronoun of the other or no gender.
 

 (m)
 Execution in Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement.  This Agreement, once executed by a party, may be delivered to the other party hereto by email of a .pdf or telephone line facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.  A facsimile transmission or email of a .pdf of this signed Agreement shall be legal and binding on all parties hereto.
 

 

 

 

 

 

 

 [SIGNATURES ON FOLLOWING PAGE]
 

 

 

 

 

 

 
 [SIGNATURE PAGE]
 

 

 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.
 

 	 	
	  
	 COMPANY:

	  
	  

	  
	 ENTEST BIOMEDICAL, INC.

	  
	  

	  
	 By: /s/ David R. Koos

	  
	 David R. Koos, Chairman and CEO

 

 	 	
	  
	 INVESTOR:

	  
	  

	  
	 SOUTHRIDGE PARTNERS II, LP

	  
	  

	  
	 By: /s/ Stephen Hicks

	  
	 Name: Stephen Hicks

	  
	 Title:HCCI Ex. 10.26

HERITAGE - CRYSTAL CLEAN, INC.
OMNIBUS INCENTIVE PLAN OF 2008
AMENDED AND RESTATED STOCK OPTION GRANT

This letter hereby amends and restates the stock option grant notice and agreement (the “Agreement”) previously provided to you on March 17, 2008 (the “Grant Date”).  The agreement has been amended to change the terms relating to the expiration date of vested options as a result of death or permanent disability.  This amendment and restatement of the Agreement does not grant any additional options or awards.   

To: John Lucks (referred to herein as “Grantee” or “you”)

                                                                                                                                                                                                                                                                                                                                                                         
Heritage - Crystal Clean, Inc. (the “Company”) has granted you a stock option Award (this “Award”), effective March 17, 2008.  This Award is subject to the terms of this Stock Option Grant Notice and Agreement, as amended and restated, and is made under the Heritage - Crystal Clean, Inc. Omnibus Incentive Plan of 2008 (the "Plan") which is incorporated into this Agreement by reference.  Any capitalized terms used herein that are otherwise undefined shall have the same meaning provided in the Plan. 

1.Acceptance of Terms and Conditions.  By accepting this Award, you agree to be bound by the terms and conditions herein, the Plan and any and all conditions established by the Company in connection with Awards issued under the Plan, and understand that this Award does not confer any legal or equitable right (other than those rights constituting the Award itself) against the Company or any Subsidiary directly or indirectly, or give rise to any cause of action at law or in equity against the Company.

2.Exercise Right.  Your Award is to purchase, on the terms and conditions set forth below, the following number of shares (the “Option Shares”) of the Company's common stock, par value $.01 per share (the “Common Stock”) at the exercise price specified below (the “Exercise Price”).  

	
		
	Number of Option Shares
	Exercise Price Per Option Share

	127,264
	$11.50

3.Option Type.  This Award is comprised of non-qualified stock options and is intended to conform in all respects with the Plan.  Copies of the Plan and the Participation Guide/Prospectus for the Plan (the “Plan Prospectus”) are incorporated herein by reference, and are available from the Company's Compensation Committee.  This Award is not intended to qualify as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

4.Expiration Date.  The Option Shares granted herein expire on the tenth anniversary of the Grant Date (the “Expiration Date”)

5.Vesting.  This Award may be exercised only to the extent it has vested.  Subject to Paragraph 8 below, and provided that, for each of the below-stated anniversary dates on which you continue to be employed by the Company or any of its Subsidiaries (collectively, the “HCCI Companies”), you will vest in the below-stated percentage of the total number Option Shares awarded under this Agreement until you are 100% vested in your Award:
	
		
	Date
	Vested % of Option Shares Awarded

	March 17, 2008
	100%

	 
	 

6.Death, or Total Disability.  In the event that you cease active employment with the HCCI Companies because of your death or permanent and total disability (as defined under the appropriate disability 

benefit plan if applicable), no additional Option Shares shall vest after the date of death or the date you are determined to be permanently and totally disabled, and the last date on which any vested Option Shares may be exercised is the Expiration Date.

7.Retirement.  The retirement provisions described in this Paragraph apply solely to this Agreement.  If you cease active employment with the HCCI Companies after attaining age 62 or older and completing at least 10 years of service with the HCCI Companies, irrespective of whether you become a member of the Board of Directors of the Company, no additional shares shall vest, and the last date on which any vested Option Shares may be exercised is the six-month anniversary of your retirement date (or the Expiration Date, if earlier).
8.Other Terminations of Employment and Change in Control.

a.     Involuntary Termination With Severance.  If your employment with the Company is terminated by the Company without Cause (a “Severance Event Termination”), then no additional shares shall vest, and the last date on which vested Option Shares may be exercised is the six month anniversary of the date of termination (or the Expiration Date, if earlier). 

b.    Non-Severance Event Termination.  If your employment is terminated by the Company and your employment is terminated for Cause then all vested and unvested Option Shares are forfeited on the date of termination and may not be exercised.  Any financial gain realized from exercising all or a portion of this Award before your employment is terminated for Cause shall not be forfeited except as pursuant to Section 10.  “Cause” shall mean any one or more of the following: (1) any willful failure to perform your required duties and responsibilities, (2) any act of fraud, embezzlement or material dishonesty in connection with your performance of duties, which has had or will have a detrimental effect on the Company, (3) your conviction for or plea of nolo contendere to a felony, or (4) any willful misconduct resulting in a material financial loss or liability to the Company or material damage to the reputation of the Company.  

c.    Voluntary Termination.  If you voluntarily terminate your employment with the Company, other than as described in Paragraph 7 above, then all unvested Option Shares are forfeited on the date of termination, and the last date on which vested Option Shares may be exercised is the three month anniversary of the date of termination (or the Expiration Date, if earlier).

d.    Change in Control.  In the event of a Change of Control as defined in the Plan, all then outstanding Option Shares shall become vested and exercisable.

9.Exercise.  This Award may be exercised in whole or in part for the number of Option Shares designated by you on either a paper form specified by the Company or via electronic instructions to the Company's designated agent.  Any such exercise of this Award shall be accompanied by full payment of the Exercise Price for such number of Option Shares.  Payment of the Exercise Price may be made in one of the following forms:

a.    in cash;

b.    by surrendering previously acquired shares of Common Stock having a Fair Market Value at the time of exercise equal to the Exercise Price;

c.    by certifying ownership of shares of Common Stock having a Fair Market Value at the time of exercise equal to the Exercise Price in exchange for a reduction in the number of shares of Common Stock issuable upon the exercise of the Award; or

d.    to the extent permitted by applicable law, by delivery of irrevocable instructions to a broker to (1) promptly deliver to the Company the amount of sale proceeds from the Stock Option shares or loan proceeds to pay the Exercise Price and any withholding taxes due to the Company, and (2) deliver to you the balance of the Stock Option proceeds in the form of cash or shares of Common Stock (as you select).

In connection with any payment of the Exercise Price by surrender or attesting to the ownership of shares of Common Stock, proof acceptable to the Company shall be submitted substantiating the shares owned.  The value of previously acquired shares submitted (directly or by attestation) in payment for the Option Shares purchased upon exercise shall be equal to the aggregate fair market value (as defined in the Plan) of such previously acquired shares on the date of the exercise.  Option Shares will be considered finally exercised on the date on which your payment of the Exercise Price has been received by the Company.  The exercise of any portion of this Award will be considered your acceptance of all terms and conditions specified in this Agreement.  You are personally responsible for the payment of all taxes related to the exercise.

10.Forfeiture.  Notwithstanding anything contained in this Agreement to the contrary, if, while employed with or providing services to the Company and continuing for the lesser of 12 months after termination of your service for any reason or the longest period permitted by applicable law, you engage in any activity inimical, contrary or harmful to the interests of the Company or any Subsidiary (referred to herein as “wrongful conduct”), including but not limited to: (1) competing, directly or indirectly (either as owner, employee or agent), with any of the businesses of the Company, (2) violating the Company's business standards and practices, (3) soliciting any present or future employees or customers of the Company to terminate such employment or business relationship(s) with the Company, (4) disclosing or misusing any confidential information regarding the Company, (5) participating in any activity not approved by the Board of Directors which could reasonably be foreseen as contributing to or resulting in a Change of Control of the Company (as defined in the Plan) or (6) disparaging or criticizing the Company or any of its Subsidiaries, orally or in writing, unless such disparaging or criticizing comments are (A) made to the Company's officers or members of its Board of Directors and are intended to address a perceived problem requiring the attention of the individual(s) to whom such comments are made, or (B) otherwise protected by a law that prohibits retaliation against an individual making such comments, then (i) this Award, to the extent it remains unexercised, shall terminate automatically on the date on which you first engaged in such wrongful conduct and (ii) you shall pay to the Company in cash any financial gain you realized from exercising all or a portion of this Award within the 24-month period immediately preceding such wrongful conduct; provided, however, that such restrictions shall only apply to the extent not inconsistent with the terms of your Non-Competition and Non-Disclosure Agreement.  If this Section 10 conflicts with the terms of your Non-Competition and Non-Disclosure Agreement, the terms of your Non-Competition and Non-Disclosure Agreement shall control.  For purposes of this Paragraph 10, financial gain shall equal, on each date of exercise during the 24-month period immediately preceding such wrongful conduct, the difference between the fair market value of the Common Stock on the date of exercise and the Exercise Price, multiplied by the number of shares of Common Stock purchased pursuant to that exercise (without reduction for any shares of Common Stock surrendered or attested to) reduced by any taxes paid in countries other than the United States to acquire and or exercise and which taxes are not otherwise eligible for refund from the taxing authorities.  By accepting this Award, you consent to and authorize the Company to deduct from any amounts payable by the Company to you, any amounts you owe to the Company under this Paragraph 10.

11.Adjustments.  If the number of outstanding shares of Company Common Stock is changed as a result of a stock split or the like without additional consideration to the Company, the number of Option Shares subject to this Award and the Exercise Price shall be adjusted to correspond to the change in the outstanding shares of Common Stock.

12.Rights as a Stockholder.  You will have no rights as a stockholder with respect to any Option Shares until and unless ownership of such Option Shares has been transferred to you.

13.Public Offer Waiver.  By voluntarily accepting this Award, you acknowledge and understand that your rights under the Plan are offered to you strictly as an employee of the HCCI Companies and that this Award is not an offer of securities made to the general public.

14.Transferability of Option Shares.  You may not offer, sell or otherwise dispose of any Common Stock covered by the Option Shares in a way which would: (i) require the Company to file any registration statement with the Securities and Exchange Commission (or any similar filing under state law or the laws of any other country) or to amend or supplement any such filing or (ii) violate or cause the Company to violate the 

Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, any other state or federal law, or the laws of any other country.  The Company reserves the right to place restrictions on Common Stock received by you pursuant to this Award.

15.Conformity with the Plan.  This Award is intended to conform in all respects with, and is subject to all applicable provisions of the Plan.  Inconsistencies between this Agreement, the Plan, or Plan Prospectus shall be resolved in accordance with the terms of the Plan.  By your acceptance of this Agreement, you agree to be bound by all of the terms of this Agreement, the Plan, and the Plan Prospectus.

16.Interpretations.  Any dispute, disagreement or question which arises under, or as a result of, or in any way relates to the interpretation, construction or application of the Plan, this Agreement, or the Plan Prospectus will be determined and resolved by the Committee or its authorized delegate.  Such determination or resolution by the Committee or its authorized delegate will be final, binding and conclusive for all purposes.

17.No Rights to Continued Employment.  By voluntarily acknowledging and accepting this Award, you acknowledge and understand that this Award shall not form part of any contract of employment between you and any of the HCCI Companies.  Nothing in the Agreement, the Plan Prospectus, or the Plan confers on any Grantee any right to continue in the employ of the HCCI Companies or in any way affects the HCCI Companies' right to terminate the Grantee's employment without prior notice at any time or for any reason.  You further acknowledge that this grant is for future services to the HCCI Companies and is not under any circumstances to be considered compensation for past services.

18.Consent to Transfer Personal Data.  By accepting this Award, you voluntarily acknowledge and consent to the collection, use, processing and transfer of personal data as described in this Paragraph.  You are not obliged to consent to such collection, use, processing and transfer of personal data.  The Company holds certain personal information about you, that may include your name, home address and telephone number, fax number, email address, family size, marital status, sex, beneficiary information, emergency contacts, passport / visa information, age, language skills, drivers license information, date of birth, birth certificate, social security number or other employee identification number, nationality, C.V. (or resume), wage history, employment references, job title, employment or severance contract, current wage and benefit information, personal bank account number, tax related information, plan or benefit enrollment forms and elections, option or benefit statements, any shares of stock or directorships in the Company, details of all options or any other entitlements to shares of stock awarded, canceled, purchased, vested, unvested or outstanding in the Grantee's favor, for the purpose of managing and administering the Plan (“Data”).  The Company and/or its Subsidiaries will transfer Data amongst themselves as necessary for the purpose of implementation, administration and management of your participation in the Plan, and the Company may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan.  These recipients may be located throughout the world, including the United States.  You authorize them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of stock on your behalf to a broker or other third party with whom you may elect to deposit any shares of stock acquired pursuant to the Plan.  You may, at any time, review Data, require any necessary amendments to it or withdraw the consents herein in writing by contacting the Company.

19.Miscellaneous.  

a.Modification.  The grant of this Award is documented by the records of the Committee or its delegate which shall be the final determinant of the number of shares granted and the conditions of this Agreement.  The Committee may amend or modify this Award in any manner to the extent that the Committee would have had the authority under the Plan initially to grant such Award, provided that no such amendment or modification shall impair your rights under this Agreement without your consent.  Except as in accordance with the two immediately preceding sentences and Paragraph 20, this Agreement may be amended, modified or supplemented only by an instrument in writing signed by both parties hereto.

b.Governing Law.  This Agreement and any controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the General Corporation Law of the State of Delaware as to matters within the scope thereof.  All other matters shall be governed by and construed in accordance with the internal laws of Illinois without regard to any state's conflict of law principles.  Any legal action related to this Plan shall be brought only in a federal or state court located in Illinois.

c.Successors and Assigns.  Except as otherwise provided herein, this Agreement will bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether so expressed or not.

d.Waiver.  The failure of the Company to enforce at any time any provision of this Award shall in no way be construed to be a waiver of such provision or any other provision hereof.

e.Severability.  Whenever feasible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

f.Impact Upon Termination of Employment.  By voluntarily acknowledging and accepting this Award, you agree that no benefits accruing under the Plan will be reflected in any severance or indemnity payments that the Company may make or be required to make to you in the future, regardless of the jurisdiction in which you may be located.

20.Amendment.  By accepting this Award, you agree that the granting of the Award is at the discretion of the Committee and that acceptance of this Award is no guarantee that future Awards will be granted under the Plan.  Notwithstanding anything in this Agreement, the Plan Prospectus, or the Plan or to the contrary, this Award may be amended by the Company without the consent of the Grantee, including but not limited to modifications to any of the rights granted to the Grantee under this Agreement, at such time and in such manner as the Company may consider necessary or desirable to reflect changes in law.  The Grantee understands that the Company may amend, resubmit, alter, change, suspend cancel, or discontinue the Plan at any time without limitation.

21.Plan Documents.  The Plan and Plan Prospectus are available by contacting the Chief Accounting Officer, Ellie Chaves, at (847)836-5670.

GRANTEE                        HERITAGE-CRYSTAL CLEAN, INC.

By:                             By: ________________________________
Print Name: John Lucks                Print Name: Joe Chalhoub                                        
Title: President & CEO

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