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Exhibit 10.154
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement ("Agreement") is made as of the 15th day
of February, 2000 by and between MYCOGEN CORPORATION, a California corporation
("Mycogen"), and ECOGEN INC., a Delaware corporation ("Ecogen"). Ecogen and
Mycogen are collectively referred to herein as the "Parties".
RECITALS
WHEREAS, Mycogen is receiving 1,351,351 shares of the common stock, one
cent ($.01) par value, of Ecogen as part of the consideration for the sale of
certain assets of Mycogen to Ecogen pursuant to the terms and conditions of that
certain Asset Purchase and License Agreement dated as of February 15, 2000 (the
"Asset Purchase Agreement"), by and between Ecogen and Mycogen; and
WHEREAS, it is a condition precedent to the obligations of the Parties
under the Asset Purchase Agreement that the Parties shall have entered into this
agreement;
NOW THEREFORE, in consideration of the premises, mutual promises,
representations, warranties, covenants and agreements contained herein, and in
the Asset Purchase Agreement, and intending to be legally bound thereby, the
parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
specified below:
"Accredited Investors" has the meaning set forth in Rule 501 of
Regulation D under the Securities Act, as the same may be amended from time to
time.
"Affiliate" with respect to a specified Person is another Person that
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the specified Person. For
purposes of this definition, the term "control" (including the terms "controlled
by" and "under common control with") means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agreement" means this Stockholders' Agreement, as the same may be
amended from time to time.
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"Asset Purchase Agreement" has the meaning set forth in the Recitals
hereto.
"Business Day" means any day of the week except Saturday, Sunday and
any legal holiday observed by a national banking association or one of the
parties.
"Closing" means the closing of the transactions contemplated by the
Asset Purchase Agreement.
"Closing Value" has the meaning set forth in Section 6.1 hereof.
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the shares of common stock, par value $.01 of
Ecogen.
"Control Securities" means securities of Ecogen, other than Restricted
Securities, owned by a Holder at the time such Holder would be deemed to be an
Affiliate of Ecogen.
"Ecogen" means Ecogen Inc., a Delaware corporation.
"Ecogen Securities" has the meaning set forth in Section 2.1 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Hereto," "hereunder," "herein," "hereof" and the like mean and refer
to this Agreement as a whole and not merely to the specific article, section,
paragraph or clause in which the respective word appears.
"Holder" means Mycogen and, subject to Section 4.8 hereof, any
subsequent holder of outstanding shares of the Common Stock purchased under the
terms of this Agreement.
"Issuable Maximum" has the meaning set forth in Section 6.1 hereof.
"Monsanto Agreement" means that certain Investment Agreement made as of
January 24, 1996, by and between Ecogen and Monsanto Company, a Delaware
corporation.
"Other Selling Stockholders" has the meaning set forth in Section
4.1(c) hereof.
"Person" means a corporation, association, partnership, limited
liability company, individual, trust, unincorporated organization, a government
agency or political subdivision thereof, or any other entity.
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"Preliminary Prospectus" means a preliminary prospectus as contemplated
by Rule 430 or 430A under the Securities Act included at any time in a
Registration Statement.
"Pre-Offering Percentage" has the meaning set forth in Section 2.1
hereof.
"Prospectus" means (i) a prospectus as first filed with the Commission
pursuant to Rule 424(b) under the Securities Act or, (ii) if no such filing is
required, the form of final prospectus included in a Registration Statement at
the effective date thereof or (iii) if a Term Sheet or Abbreviated Term Sheet
(as such terms are defined in Rule 434(b) and 434(c), respectively, under the
Securities Act) is filed with the Commission pursuant to Rule 424(b)(7) under
the Securities Act, the Term Sheet or Abbreviated Term Sheet and the last
Preliminary Prospectus filed with the Commission prior to the time the
Registration Statement became effective, taken together (including, in each
case, the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act), together with any supplement to any of the
foregoing.
"Register", "Registered" and "Registration", whether or not
capitalized, mean and refer to a registration effected by preparing and filing a
Registration Statement in compliance with the Securities Act and applicable
rules and regulations thereunder, and the declaration or ordering of the
effectiveness of such Registration Statement.
"Registration Statement" means any registration statement of Ecogen
filed under the Securities Act which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the Prospectus relating
thereto and all amendments and supplements to such registration statement,
including post-effective amendments, all exhibits and all material incorporated
or deemed to be incorporated by reference in such registration statement.
"Registrable Securities" means the Shares and all such other securities
of Ecogen issued to Mycogen pursuant to stock splits, stock dividends, and
similar distributions in respect of the Shares, whether held by Mycogen or by
any subsequent Holder of such securities.
"Registration Expenses" means all expenses incurred by Ecogen in
compliance with Article IV, including, without limitation, all registration
fees, qualification fees, filing fees, advertising and road show expenses
(excluding advertising and road show expenses incurred by a Holder), printing
expenses, escrow fees, fees and disbursements of counsel for Ecogen, blue sky
fees and expenses, and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees of
Ecogen, which shall be paid in any event by Ecogen).
"Requesting Holder" means a Holder requesting any registration pursuant
to Section 4.1 hereof.
"Restricted Securities" means the securities of Ecogen acquired by a
Holder from Ecogen or an Affiliate of Ecogen otherwise than pursuant to a public
offering.
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"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Selling Expenses" means all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities.
"Shareholder Approval" has the meaning set forth in Article VI hereof.
"Shares" means the shares of Common Stock of Ecogen issued to Mycogen
pursuant to the Asset Purchase Agreement or this Agreement.
"13D Group" means any group of persons formed for the purpose of
acquiring, holding, voting or disposing of securities that would be required
under Section 13(d) of the Exchange Act and the related rules and regulations
(as now in effect, and based on present legal interpretations) to file a
statement on Schedule 13D or 13G with the Commission as a "person" within the
meaning of Section 13(d)(3) of the Exchange Act if the group beneficially owned
Ecogen Securities representing more than five percent (5%) of the total combined
voting power of all Ecogen Securities then issued and outstanding.
ARTICLE II
RIGHT OF FIRST REFUSAL
2.1 Right of First Refusal. If on or prior to the third (3rd)
anniversary of the Closing, Ecogen agrees to sell shares of its Common Stock or
other voting securities ("Ecogen Securities") in a private or public offering
other than (i) Ecogen Securities issued to Ecogen employees or directors
pursuant to Ecogen's stock option plans or issued in connection with any stock
options, warrants or other rights in existence as of the date of this Agreement,
(ii) upon the conversion or exchange of convertible or exchangeable securities
outstanding as of the date of this Agreement, (iii) an equity investment in
Ecogen by the other party to, or partner in, any license agreement, research and
development agreement, distribution agreement, joint-venture or other similar
corporate alliance, provided that such equity investment is made as a condition
to Ecogen's good faith agreement to enter into such license agreement, research
and development agreement, distribution agreement, joint-venture or other
similar corporate alliance, (iv) in connection with a merger or acquisition, or
(v) to any underwriter, placement agent or financial advisor in connection with
any financing or other transaction by Ecogen, and provided Mycogen still owns
all of the Shares at the time of such private or public offering, Mycogen shall
have the right, but not the obligation, to acquire upon the same terms and
conditions applicable to such private or public offering all or any portion of
such Ecogen Securities sufficient for Mycogen to maintain after the offering the
same percentage of ownership of issued and outstanding Ecogen Securities that
Mycogen possessed immediately prior to the offering (the "Pre-Offering
Percentage").
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2.2 Private Offering. With respect to a private offering, Ecogen shall
no later than five (5) Business Days after the execution of any agreement
entered into in connection with such private offering notify Mycogen in writing
of the proposed offering (a "Notice") which Notice shall include the description
of the securities proposed to be issued by Ecogen and specify the number, price
and payment and other terms, together with any letter of intent and the final
contract, if available. Mycogen shall have ten (10) Business Days from the date
of receipt of Ecogen's notice in which to advise Ecogen whether Mycogen elects
to exercise its rights under Section 2.1. If Mycogen does not respond, or if
Mycogen indicates that it will not exercise its rights, Mycogen shall be
considered irrevocably to have waived its rights under Section 2.1 with respect
to the private offering. If Mycogen timely advises Ecogen that Mycogen will
exercise its rights under Section 2.1, Mycogen shall have the right to acquire
all or any portion of the necessary amount of the Ecogen Securities to maintain
Mycogen's Pre-Offering Percentage at the price and upon the terms (other than
any registration rights which are on terms different than those granted
hereunder) specified in the Notice. Closing shall be in accordance with the
terms of the private offering agreement; provided, however, that if such
agreement provides for the payment of consideration other than cash, Mycogen
shall have the right to purchase its Pre-Offering Percentage of shares for the
cash equivalent amount of such other consideration. Mycogen shall make such
investment representations to Ecogen and shall provide Ecogen with such other
documentation at closing as is reasonably required by Ecogen to comply with
applicable securities laws. The cash equivalent amount referred to above shall
be determined by an independent third party reasonably agreed to by Mycogen and
Ecogen (the costs and expenses of which shall be paid by Ecogen).
2.3 Public Offering. With respect to a public offering, Ecogen shall
notify Mycogen no later than five (5) Business Days after Ecogen has entered
into a letter of intent with its underwriters, and shall provide Mycogen with a
copy of any letter of intent with its underwriters. Mycogen shall have ten (10)
Business Days from the date of receipt of Ecogen's notice in which to advise
Ecogen whether Mycogen elects to exercise its rights under Section 2.1. If
Mycogen does not respond or if Mycogen indicates that it will not exercise its
rights, Mycogen shall be considered irrevocably to have waived its rights under
Section 2.1 with respect to the public offering. If Mycogen timely advises
Ecogen that Mycogen desires to retain its rights under Section 2.1, then when
Ecogen files a registration statement containing a preliminary prospectus with
the Commission, Ecogen shall provide Mycogen with copies of the preliminary
prospectus and all subsequent amendments. Mycogen shall have ten (10) Business
Days from its receipt of the preliminary prospectus in which to exercise its
rights under Section 2.1 by making an offer to acquire all or any portion of the
necessary amount of Ecogen Securities to maintain Mycogen's Pre-Offering
Percentage based on the price and the other terms contained in the final
prospectus, except that the price to be paid by Mycogen shall be net of any
underwriting discount and selling commissions. No such offer to buy shall be
accepted prior to the time that the registration statement becomes effective.
The registration statement shall indicate that Mycogen has anti-dilution rights
to purchase Ecogen Securities on the terms offered to the public.
2.4 Limitations. Notwithstanding the preceding provisions of this
Article II, Ecogen shall not be required to issue any fractional shares as a
result of Mycogen's exercise of its rights under Section 2.1. Ecogen shall not
be required to transfer any Ecogen Securities to Mycogen
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under this Article II, if to do so would result in the violation of any
applicable law, rule or regulation.
ARTICLE III
LIMITATION ON TRANSFER
3.1 Limitation on Transfer. Prior to the third (3rd) anniversary of the
Closing, Mycogen shall not directly or indirectly offer for sale, or transfer,
any of the Shares. Notwithstanding the foregoing, Mycogen may sell Shares
without limitation in the following situations:
(a) sales or transfers to Affiliates of Mycogen;
(b) private placements of Shares with Accredited Investors;
(c) if any of the following events occurs:
(i) a tender or exchange offer is made by any Person or 13D
Group (other than an Affiliate of or Person acting in concert
with Mycogen) to acquire Ecogen Securities and/or other
securities of Ecogen that, if added to the Ecogen Securities
and other securities of Ecogen already owned by that Person or
13D Group, would represent more than forty percent (40%) of
the total combined voting power or profit and loss
participation of all Ecogen Securities and other securities of
Ecogen issued and outstanding;
(ii) there is public disclosure that Ecogen Securities and/or
other securities of Ecogen representing more than forty
percent (40%) of the total combined voting power or profit and
loss participation of all Ecogen Securities and other
securities of Ecogen issued and outstanding have been acquired
or are proposed to be acquired by any Person or 13D Group
(other than an Affiliate of or Person acting in concert with
Mycogen);
(iii) any Person or 13D Group (other than an Affiliate of or
Person acting in concert with Mycogen) shall beneficially own
Ecogen Securities representing more than forty percent (40%)
of the total combined voting power of all issued and
outstanding Ecogen Securities;
(iv) at any election or series of elections, persons not
proposed for nomination or nominated by the management of
Ecogen are elected as directors of Ecogen, and together
constitute fifty percent (50%) or more of Ecogen's Board of
Directors; or
(v) any Person or 13D Group (other than an Affiliate of or
Person acting in concert with Mycogen) solicits or receives
valid proxies for the election of
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Ecogen's Board of Directors representing an aggregate of forty
percent (40%) or more of the total combined voting power of
all Ecogen Securities issued and outstanding.
or;
(d) with the prior approval of Ecogen, which will not unreasonably be
withheld.
3.2 Further Condition. No sale or transfer of Shares pursuant to this Section
3.1, except for transfers pursuant to Section 3.1(c), shall be effective unless
the transferee agrees to be bound by the limitations on transfer contained in
this Section 3.1.
ARTICLE IV
REGISTRATION RIGHTS
4.1 Requested Registration.
(a) Request for Registration. Subject to Article III, Holders of
Registrable Securities shall have the right to request (with such requests in
writing and stating the number of shares of Registrable Securities to be
disposed of and the intended method of disposition of shares by such Holders) up
to three (3) registrations on Form S-3 at Ecogen's expense and an unlimited
number of additional registrations on Form S-3 at the selling Holder's expense,
provided that (i) a request for registration is made by Holders of at least
fifty percent (50%) of the aggregate Registrable Securities held on such date;
and (ii) the requests for additional registrations are made by Holders of at
least twenty percent (20%) of the Registrable Securities, and (iii) such
Registrable Securities have an aggregate offering price of at least $1,000,000
or represent all of the Registrable Securities of the Holders held on such date,
and Ecogen shall promptly comply with any such request, subject only to the
following:
(i) Ecogen shall not be required to effect a registration
pursuant to this Section 4.1 prior to the first anniversary of
the Closing unless Mycogen otherwise has a right pursuant to
Section 3.1 (c) hereunder to sell Registrable Securities
before such date.
(ii) Ecogen shall not be required to effect a registration
pursuant to this Section 4.1 within one hundred eighty (180)
days after the effective date of the last such registration
pursuant to this Section 4.1.
(iii) Ecogen shall not be required to effect a registration in
any particular jurisdiction in which Ecogen would be required
to execute a general consent to service of process in
effecting such registration, qualification or compliance,
unless Ecogen is already subject to service in such
jurisdiction and except as may be required by the Securities
Act or applicable rules or regulations thereunder.
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(iv) Ecogen shall not be required to effect a registration for
a period of not more than ninety (90) days immediately
following the delivery of a certificate signed by the
President of Ecogen to the Requesting Holders stating that, in
the good-faith judgment of the Board of Directors of Ecogen,
it would be seriously detrimental to Ecogen and its
shareholders for a Registration Statement to be filed on or
before the date filing would otherwise be required hereunder;
provided, however, that Ecogen may not utilize this right more
than once in any twelve (12) month period and Ecogen may not
exercise this right based on the fact that Ecogen has recently
registered any of its securities for the account of another
security holder or holders exercising their respective demand
registration rights.
If Ecogen cannot qualify for registration on Form S-3, then Ecogen
shall effect any registration required or requested by the Holder on Form S-1,
or such other appropriate form, in which event this Section 4.1 shall apply in
all respects as if the words "Form S-3" were replaced by the words "Form S-1" or
the appropriate designation for such other form.
(b) Notice of Inclusion. Ecogen shall give written notice to all
Holders of Registrable Securities of the receipt of a request for registration
pursuant to this Section 4.1 and shall provide a reasonable opportunity for
other Holders to participate in the registration; provided, however, that, if
the registration is for an underwritten offering, then the terms of Section
4.1(c) hereof shall apply to all participants in such offering. Subject to the
foregoing, Ecogen shall use its best efforts to effect promptly the registration
of all shares of Registrable Securities on Form S-3 to the extent requested by
the Holder or Holders thereof for purposes of disposition.
(c) Underwriting. If the Requesting Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
then they shall so advise Ecogen as a part of their request made pursuant to
this Section 4.1 and Ecogen shall include such information in the written notice
referred to in Section 4.1(b) hereof. The right of any Holder to registration
pursuant to this Section 4.1 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent requested and to the
extent provided herein.
Ecogen shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters of
recognized national standing, selected for such underwriting by a majority in
interest of the Requesting Holders and reasonably acceptable to Ecogen.
Notwithstanding any other provision of this Section 4.1, if the representative
advises the Requesting Holders in writing that marketing factors require a
limitation on the number of shares to be underwritten, then the Requesting
Holders shall so advise all Holders, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated first among all Holders thereof in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders at the time of filing the Registration Statement. No Registrable
Securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration.
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If any Holder of Registrable Securities disapproves of the terms of the
underwriting, then such person may elect to withdraw therefrom by written notice
to Ecogen, the underwriter and the Requesting Holders. The Registrable
Securities and/or other securities so withdrawn shall also be withdrawn from
registration; provided, however, that, if, by the withdrawal of such Registrable
Securities, a greater number of Registrable Securities held by other Holders may
be included in such registration (up to the maximum of any limitation imposed by
the underwriters), then Ecogen shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the same proportion used to determine the underwriter
limitation in this Section 4.1(c).
If the underwriter has not limited the number of Registrable Securities
to be underwritten, then Ecogen and its executive officers, and such other
Persons as are determined by the Board of Directors, their successors, and their
assigns ("Other Selling Stockholders"), may include securities for their own
account in such registration if the underwriter so agrees and if the number of
Registrable Securities held by the Holders that would otherwise have been
included in such registration and underwriting will not thereby be limited for
any reason, including but not limited to the price for which the Registrable
Securities will be sold. To the extent that the underwriter wishes to limit the
number of shares to be included in the registration on behalf of Ecogen and the
Other Selling Stockholders, the shares of common stock to be registered held by
the Other Selling Stockholders shall be excluded from such offering prior to
excluding any shares held by Ecogen and those held by Ecogen shall be excluded
prior to excluding any Registrable Securities held by the Holders.
4.2 Ecogen Registration.
(a) Notice and Inclusion. Subject to Article III, if, at any time after
the Closing until the tenth (10th) anniversary of the Closing, Ecogen shall
determine to register any of its securities for its own account, other than a
registration relating solely to employee benefit plans, or a registration
relating solely to a Commission Rule 145 transaction, Ecogen shall:
(i) promptly give to each Holder written notice thereof (which
shall include a list of the jurisdictions in which Ecogen
intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all Registrable Securities
specified in a written request or requests, within ten (10)
Business Days after receipt of the written notice from Ecogen,
by any Holder or Holders.
(b) Underwriting. If the registration of which Ecogen gives notice is
for a registered public offering by Ecogen of its securities through an
underwriting, then Ecogen shall so advise the Holders as a part of the written
notice given pursuant to Section 4.2(a)(i) hereof. In such event, the right of
any Holder to registration pursuant to this Section 4.2 shall be conditioned
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upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with Ecogen, and all the Other Selling Stockholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for underwriting by Ecogen. Notwithstanding any other provision of this
Section 4.2, if the underwriter determines that marketing factors require a
limitation on the number of shares to be underwritten, then the underwriter may
exclude from such registration and underwriting some or all of the Registrable
Securities held by the Holders or the stock held by Other Selling Stockholders
in accordance with this Section 4.2(b). Ecogen shall so advise all Holders and
all Other Selling Stockholders distributing their securities through such
underwriting, and (i) as to the first registration in which Holders are entitled
to participate pursuant to this Section 4.2, the number of Registrable
Securities and other securities that may be included in the registration and
underwriting shall be allocated among all Holders thereof on the basis that
shares held by all the Other Selling Stockholders who are not Holders shall
first be excluded to the extent required and, if further exclusion is necessary,
shares held by the selling Holders shall then be excluded; provided, however,
that, as among the respective Other Selling Stockholders as a group on the one
hand and the Holders as a group on the other hand suffering such exclusion, the
exclusion shall be in proportion, as nearly as practicable, to the amount of
securities entitled to inclusion in such registration held by each of the Other
Selling Stockholders as a group and each of the Holders at the time of filing
the Registration Statement; and (ii) as to all subsequent registrations, the
number of shares of Registrable Securities and other securities that may be
included in the registration and underwriting shall be allocated among all Other
Selling Stockholders and the Holders in proportion, as nearly as practicable, to
the respective amounts of securities entitled to inclusion in such registration
held by all such Other Selling Stockholders and Holders at the time of filing
the Registration Statement. For purposes of the apportionment provisions in
clause (i) above, for any selling Holder that is a partnership or corporation,
the partners, retired partners, and shareholders of such Holder, the estate and
family members of such partners and retired partners, and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "selling
Holder," and any pro rata reduction with respect to such selling Holder shall be
based upon the aggregate number of shares carrying registration rights owned by
all entities and individuals included in such "selling Holder," as defined in
this sentence. If any Other Selling Stockholder or Holder disapproves of the
terms of any such underwriting, he may elect to withdraw therefrom by written
notice to Ecogen and the underwriter. Any securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration. Notwithstanding the
foregoing, the registration rights of the Holders pursuant to this Section 4.2
shall be subject to the registration rights of Monsanto Company and "Holders"
(as defined in the Monsanto Agreement) under Section 7.2 of the Monsanto
Agreement.
4.3 Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Article IV shall be borne by Ecogen; provided, however, that the Registration
Expenses for the fourth and all subsequent registrations under Section 4.1(a)
hereof requested by the Holders shall be borne by the Requesting Holders pro
rata on the basis of the number of their shares so registered. All Selling
Expenses relating to the securities registered by Holders and, if applicable,
Other Selling Stockholders, and fees and
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disbursements of counsel, shall be borne by the Holders or the Other Selling
Stockholders, as the case may be, of such securities pro rata on the basis of
the number of their shares so registered.
4.4 Registration Procedures.
(a) Ecogen shall use its best efforts to register or qualify the
Registrable Securities covered by a Registration Statement under such other
securities or blue sky laws of such United States jurisdictions as Holder shall
reasonably request and do any and all acts and things which may be necessary or
desirable to enable Holder to consummate the public sale or other disposition in
such jurisdictions; provided, however, that Ecogen shall not be required in
connection therewith or as a condition thereto to qualify to do business or file
a general consent to service of process in any such jurisdictions.
(b) Ecogen represents and warrants that, on the date of its
effectiveness, the Registration Statement will comply in all material respects
with the applicable requirements of the Securities Act and the rules thereunder,
including without limitation Rule 415; on the date of its effectiveness, the
Registration Statement will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein not misleading; provided, however,
that no representation is made by Ecogen with respect to information relative to
any Holder; and the Prospectus will not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that no representation is made by Ecogen with
respect to information relative to any Holder.
(c) If, at any time or times while the Registration Statement is
effective, Ecogen notifies Holder that a development has occurred or is pending
which, based upon consultation with Ecogen's legal counsel, Ecogen reasonably
believes may cause the then current Prospectus not to be in compliance with
applicable securities laws, then Holder shall refrain from delivering the
Prospectus and from making any offers or sales of Registrable Securities
requiring the delivery of the Prospectus until such time as Ecogen either
notifies Holder that the Prospectus complies with such laws or delivers an
amended Prospectus in replacement of the deficient Prospectus. Ecogen shall use
its reasonable best efforts to minimize the time during which Holder must so
refrain, and no more than one (1) such period of refrain shall be imposed during
any period of one hundred eighty (180) days.
(d) At least two (2) Business Days prior to the initial filing of the
Registration Statement or Prospectus and no fewer than two (2) Business Days
prior to the filing of any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), Ecogen shall furnish each selling Holder, its legal counsel and the
managing underwriter, if any, copies of all such documents proposed to be filed,
which documents (other than those incorporated or deemed to be incorporated by
reference) shall be subject to review of such Holder, its legal counsel and such
underwriters, if any, and Ecogen shall cause its officers and directors and the
independent certified public accountants to Ecogen to respond to such inquiries
as shall be necessary, in the opinion of
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respective counsel to Ecogen and any such underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act. Ecogen shall not file
any such Registration Statement or Prospectus or any amendments or supplements
thereto to which a selling Holder, its legal counsel, or the managing
underwriters, if any, shall reasonably object on a timely basis (i.e., within
two (2) Business Days of receipt thereof).
(e) Ecogen shall promptly notify each selling Holder when the
Registration Statement is declared effective; notify Holder of any stop-order or
similar proceeding by the Commission or any state securities authority; and
furnish such number of Prospectuses, Prospectus supplements and other documents
incident thereto as Holder from time to time may reasonably request.
(f) In the event of any breach by Ecogen of the provisions of Section
4.1, 4.2, 4.3 or 4.4, the parties agree that each Holder will suffer irreparable
harm. Accordingly, the parties agree that the provisions of Sections 4.1, 4.2,
4.3 and 4.4 are specifically enforceable by each Holder and that each Holder
shall be entitled to temporary and permanent injunctive relief against Ecogen
and the other rights and remedies to which each Holder may be entitled to at
law, in equity or under this Agreement for any such breach.
4.5 Indemnification.
(a) Indemnification by Ecogen. Ecogen shall indemnify each Holder with
respect to which registration, qualification or compliance has been effected
pursuant to this Article IV, each of its officers, directors, employees, agents
and partners, each Person controlling such Holder within the meaning of Section
15 of the Securities Act, each underwriter, if any, and each Person who controls
any underwriter within the meaning of Section 15 of the Securities Act, against
all expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any such
Registration Statement, Prospectus, offering circular or other document or any
amendment or supplement thereto or incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by Ecogen of the
Securities Act or any rule or regulation thereunder applicable to Ecogen and
relating to action or inaction required of Ecogen in connection with any such
registration, qualification or compliance. Ecogen shall reimburse each such
Holder, each of its officers, directors, employees, agents and partners, and
each Person controlling such Holder, each such underwriter and each Person who
controls any such underwriter for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
expense, claim, loss, damage, liability or action; provided, however, that
Ecogen shall not be liable in any such case to the extent that any such claim,
loss, damage, liability, action or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to Ecogen by
an instrument duly executed by such Holder or underwriter and stated to be
specifically for use therein.
(b) Indemnification by the Holders. To the extent set forth in the
second sentence of
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this Section 4.5(b), each Holder shall, if Registrable Securities or other
securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify Ecogen,
each of its directors, officers, employees and agents, each underwriter, if any,
of Registrable Securities covered by such a Registration Statement, each Person
who controls Ecogen or such underwriter within the meaning of Section 15 of the
Securities Act, each other such Holder, each of such other Holder's officers,
directors, employees, agents and partners, and each Person controlling such
Holder within the meaning of Section 15 of the Securities Act against all
expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact made by the Holder
and contained in any such Registration Statement, Prospectus, offering circular
or other document, or any amendment or supplement thereto or incident to any
such registration, qualification or compliance or based on any omission (or
alleged omission) to state therein a material fact required to be made by the
Holder and stated therein or necessary to make the statements therein not
misleading or any violation by Ecogen of any rule or regulation promulgated
under the Securities Act applicable to Ecogen in connection with such
registration, qualification or compliance as a result of any statement (or based
on any omission to state or alleged omission) required to be made by such
Holder. Each such Holder shall reimburse Ecogen, such other Holders, directors,
officers, employees, agents, partners, Persons, underwriters and control Persons
for any legal or any other expenses reasonably incurred in connection with
investigating, preparing or defending any such expense, claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such Registration Statement, Prospectus, offering circular
or other document or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished by the Holder to Ecogen by an
instrument duly executed by such Holder and stated to be specifically for use
therein; provided, however, that the obligations of such Holders hereunder shall
be limited to an amount equal to the proceeds to each such Holder of Registrable
Securities sold as contemplated herein in connection with the particular
registration, qualification or compliance involved.
(c) Notice. Each party entitled to indemnification under this Section
4.5 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, however, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and that the Indemnified
Party may participate in such defense at its own expense; and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Section
4.5 unless such failure is materially detrimental to the Indemnifying Party. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a
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release from all liability in respect to such claim or litigation.
4.6 Information by Holder. Each Holder or Holders of Registrable
Securities in any registration shall furnish to Ecogen such information
regarding such Holder or Holders and the distribution proposed by such Holder or
Holders as Ecogen may reasonably request in writing but only to the extent as
shall be required in connection with any registration, qualification or
compliance referred to in this Article IV.
4.7 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
Restricted Securities or Control Securities to the public without registration,
Ecogen agrees to:
(a) Use its best efforts to make and keep public information available
as those terms are understood and defined in Rule 144 under the Securities Act;
(b) Use its best efforts to file with the Commission in a timely manner
all reports and other documents required of Ecogen under the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements);
(c) For so long as a Holder owns any Restricted Securities or Control
Securities, furnish to the Holder forthwith upon request (i) a written statement
by Ecogen as to its compliance with the reporting requirements of Rule 144 and
of the Securities Act and the Exchange Act, (ii) a copy of the most recent
annual or quarterly report of Ecogen, and (iii) such other reports and documents
so filed as such Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration; and
(d) When any Holder qualifies under Rule 144 for the unrestricted right
of sale under Rule 144, Ecogen shall, upon written request of such Holder (such
request to include sufficient detail as to establish how the Holder so qualifies
under Rule 144) and an opinion of counsel satisfactory to Ecogen, promptly
remove any restrictive legend that may have been placed on any Restricted or
Control Securities and issue Ecogen Securities free of such restrictive or other
legends.
4.8 Transfer of Registration Rights. Mycogen may transfer the rights to
cause Ecogen to register the Registrable Securities under Sections 4.1 and 4.2
hereof to an aggregate of no more than eight Holders and each such Holder may
transfer or assign such rights to a transferee or assignee in connection with
the transfer or assignment of not less than all of the shares of the Registrable
Securities held by such Holder; provided, however, that Ecogen shall be entitled
to notice of any such transfer of registration rights within thirty (30) days of
the date such transfer is effected.
4.9 Limitations on Subsequent Registration Rights. No owner or
prospective owner of Ecogen Securities or other securities of Ecogen shall have
any registration rights that are inconsistent with the provisions of this
Agreement. Ecogen shall not, without the prior written
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consent of the Holders (which consent shall not be unreasonably withheld) of not
less than sixty-six and two-thirds percent (66-2/3%) of the Registrable
Securities then held by Holders, enter into any agreement with any owner or
prospective owner of any Ecogen Securities or other securities of Ecogen that
would allow such owner or prospective owner to include such securities in any
registration filed under this Article IV if such inclusion would adversely
affect the rights of any Holder.
4.10 "Market Stand-off" Agreement. Each Holder hereby agrees that, to
the extent requested by Ecogen and an underwriter of a sale of Ecogen Securities
or other securities of Ecogen for the account of Ecogen and not for the account
of a security holder or holders exercising their respective demand registration
rights, it shall not sell or otherwise transfer or dispose of (other than to
transferees who agree to be similarly bound) any Registrable Securities during
the ninety (90) day period following the effective date of a registration
statement of Ecogen filed under the Securities Act; provided, however, that all
officers and directors of Ecogen, all Other Selling Stockholders and all other
Persons with registration rights (whether or not pursuant to this Agreement)
shall enter into similar agreements. To enforce the foregoing covenant, Ecogen
may impose stop-transfer instructions with respect to the Registrable Securities
of each Holder (and the shares or securities of every other Person subject to
the foregoing restriction) until the end of such ninety (90) day period.
4.11 Termination of Registration Rights. The registration rights
granted pursuant to Section 4.1 shall terminate as to each Holder on the tenth
anniversary of the Closing.
ARTICLE V
STOCK LEGEND
5.1 Stock Legend. Subject to Section 4.7(d) hereof, certificates
representing the Purchased Shares shall bear the following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under any state
securities law and may not be sold or offered for sale in the absence of an
effective registration statement under such act and applicable state securities
laws or an opinion of counsel satisfactory to the Company that such registration
is not required. The securities represented by this certificate are further
subject to certain resale restrictions and entitled to the benefits set forth in
a Stockholders' Agreement dated as of February __, 2000 between Ecogen Inc., a
Delaware corporation, and Mycogen Corporation, a California corporation (the
"Agreement"). A copy of the Agreement and all amendments thereto is on file in
the office of the Secretary of the Company."
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ARTICLE VI
MARKET PRICE PROTECTION
6.1 Market Price Protection. In the event Mycogen notifies Ecogen of
its intent to sell (a "Proposed Sale") Shares on or prior to the date which is
180 days after the third (3rd) anniversary of the Closing and, at the time of
delivery of notice to Ecogen of such Proposed Sale (the "Notice Date") the
Common Stock has a per share market value less than the per share price used to
determine the number of Shares received by Mycogen at Closing in accordance with
the Asset Purchase Agreement (after adjustment for all subsequent stock
dividends or similar recapitalizations) (the "Closing Value"), Ecogen shall
issue to Mycogen such additional Shares (the "Additional Shares") as shall be
necessary to increase the aggregate market value of the Shares proposed to be
sold by Mycogen to an amount equal to the Closing Value times the number of
Shares proposed to be sold; provided however, that if a Proposed Sale is not
consummated within 180 days of the Notice Date, Mycogen shall return to Ecogen
all of the Additional Shares issued to Mycogen in accordance with this sentence.
Provided, further however, that Ecogen shall not, while its Common Stock is
listed for trading on the NASDAQ National Market or the NASDAQ Small Cap Market,
issue to Mycogen an aggregate number of Additional Shares that, when added to
the number of Shares issued at the Closing, would equal or exceed 20% of the
number of shares of Common Stock issued and outstanding immediately prior to the
Closing (the "Issuable Maximum") unless Ecogen shall have (a) obtained the
approval of shareholders of Ecogen entitled to vote thereon ("Shareholder
Approval"), if any, as may be required by the rules and regulations of the
NASDAQ Stock Market (or successor thereto) applicable to approve the issuance of
shares in excess of the Issuable Maximum, or (b) obtained an exemption from any
applicable requirement for Shareholder Approval from the NASDAQ Stock Market. In
the event that such Shareholder Approval or the exemption from any requirement
from the NASDAQ Stock Market is not requested and received by Ecogen within 180
days of notice of the Proposed Sale, Ecogen shall issue a promissory note to
Mycogen (i) having a principal amount equal to the aggregate market value of
those shares Ecogen is not able to issue due to the Shareholder Approval
requirement of the NASDAQ Stock Market (or its successor), (ii) maturing on the
date which is 180 days following the 6th anniversary of the Closing, and (iii)
with interest payable on the last business day of each calendar quarter at the
prime rate in effect at Citibank, N.A., New York, on the last business day of
the preceding calendar quarter. Notwithstanding the foregoing, Ecogen shall have
no obligation to issue additional Shares to Mycogen pursuant to this Section 6.1
in connection with a proposed transfer or sale of Shares by Mycogen prior to the
third (3rd) anniversary of the Closing as permitted under Section 3.1(c).
ARTICLE VII
MISCELLANEOUS
7.1 Assignment. Except as set forth in Section 4.8, this Agreement
shall not be assigned by either party without the written consent of the other
party. Notwithstanding the
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foregoing, either party may assign this Agreement, without such consent, to the
purchaser of all its assets, or of all the assets of its business to which this
Agreement relates, and Mycogen, in addition to its rights under Section 4.8, may
assign this Agreement or its rights hereunder to any Affiliate.
7.2 Notice. All notices, communications and demands required or
permitted to be given or made hereunder or pursuant hereto shall be in writing
and shall be effective when delivered in person or transmitted by telegram or
facsimile (confirmed by mail), addressed as follows:
If to Mycogen:
Mycogen Corporation
c/o Dow AgroSciences LLC
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
If to any other Holder, at such address and telecopy number as such
Holder shall have furnished Ecogen in writing.
If to Ecogen:
Ecogen Inc.
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Either party may change the address designated by notice given by such
party. The parties agree to acknowledge in writing the receipt of any such
notice delivered in person.
7.3 Governing Law. This Agreement is deemed to have been entered into
in the State of Indiana, and its interpretation, construction, and the remedies
for its enforcement or breach are to be applied pursuant to and in accordance
with the laws of the State of Indiana (without regarding to the conflict of laws
principles thereof).
7.4 Validity of Agreement. If any provision of this Agreement is,
becomes, or is deemed invalid or unenforceable in any jurisdiction, such
provision shall be deemed amended to
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conform to applicable law so as to be valid, legal and enforceable in such
jurisdiction so deeming. The validity, legality and enforceability of such
provision shall not in any way be affected or impaired thereby in any other
jurisdiction. If such provision cannot be so amended without materially altering
the intention of the parties, it shall be stricken in the jurisdiction so
deeming, and the remainder of this Agreement shall remain in full force and
effect.
7.5 Waiver. No waiver of any right under this Agreement shall be deemed
effective unless contained in a writing signed by the party charged with such
waiver, and no waiver of any right arising from any breach or failure to perform
shall be deemed to be a waiver of any such future right or of any other right
arising under this Agreement.
7.6 Entire Agreement. This Agreement sets forth and constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof, and supersedes any and all prior agreements, understandings, promises
and representations made by either party to the other concerning the subject
matter hereof and the terms applicable hereto.
7.7 Headings and References; Incorporation of Schedules. The headings
contained in this Agreement are inserted for convenience of reference only and
shall not be a part, control or affect the meaning hereof. All references herein
to Articles and Sections are to the Articles and Sections of this Agreement.
7.8 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but which together shall constitute
one and the same instrument.
7.9 No Presumption Against Drafter, Qualifications on Schedules. The
parties to this Agreement have jointly participated in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumptions or burdens of proof shall arise favoring any
party by virtue of the authorship of any of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereunto have executed this Agreement
as to be effective as of the date first written above.
MYCOGEN CORPORATION ECOGEN INC.
By: By:
----------------------------- -----------------------------------
A. Xxxxxxx Xxxxxxx Xxxxx X. Xxxxxx, Xx.
President Chairman and
Chief Executive Officer
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