EXHIBIT C
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
----------------- , 1998, by and among Planet Polymer Technologies, Inc., a
California corporation, with headquarters located at 0000 Xxxxxxxx Xxxx Xxxxxx,
Xxxxx X, Xxx Xxxxx, Xxxxxxxxxx 00000 (the "Company"), and the undersigned buyer
("Buyer").
WHEREAS:
A. In connection with the Stock Purchase Agreement of even date
herewith entered into between the Company and the Buyer (the "Stock Purchase
Agreement"), the Company has agreed, upon the terms and subject to the
conditions of the Stock Purchase Agreement to issue and sell to the Buyers (i)
shares (the "Shares") of the Company's common stock, no par value (the "Common
Stock"), and (ii) warrants (the "Warrants"), which are exercisable for shares of
the Company's common stock, no par value (such shares issued upon exercise of
the Warrants to be referred to herein as the "Warrant Shares"); and
B. To induce the Buyers to execute and deliver the Stock 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, the "1933 Act"), and
applicable state securities laws:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and Buyer
hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
a. "business day" means any day on which banks are not
required or authorized to close in New York City, New York.
b. "Investor" means Buyer and any permitted transferee or
assignee thereof to whom the Buyer assigns this Agreement and who
agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof.
c. "Register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement
or Statements in compliance with the 1933 Act and pursuant to Rule 415
under the 1933 Act or any successor rule providing for offering
securities on a 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").
d. "Registrable Securities" means the Shares and the Warrant
Shares and any shares of Common Stock issued in respect of the Shares
or Warrant Shares as a result of any stock split, stock dividend,
recapitalization or similar event, including without limitation the
issuance of shares of common stock in satisfaction of the undersigned's
rights of first refusal under Section 5 of the Stock Purchase
Agreement.
e. "Registration Statement" or "Registration Statements" means
a registration statement or statements of the Company filed under the
1933 Act.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Stock Purchase Agreement.
2. REGISTRATION.
a. MANDATORY REGISTRATION. The Company shall use its best
efforts to prepare, and, on or before April 1, 1999 (such date of
filing, the "Initial Filing Date"), file with the SEC a Registration
Statement or Registration Statements (as is necessary) on Form S-3 (or,
if such form is unavailable for such a registration, on such other form
as is available for such a registration), covering the resale of the
amount of Registrable Securities identified below, which Registration
Statement(s), to the extent allowable under the 1933 Act and the rules
promulgated thereunder (including Rule 416), shall state that such
Registration Statement(s) also covers such indeterminate number of
additional shares of Common Stock as may become issuable (i) upon
conversion of the Shares or exercise of the Warrants to prevent
dilution resulting from stock splits, stock dividends or similar
transactions, (ii) by reason of changes in the exercise price of the
Warrants in accordance with the terms thereof, and (iii) by reason of
the exercise by Buyer of its right of first refusal as set forth in
Section 5 of the Stock Purchase Agreement. The number of shares of
Common Stock initially included in such Registration Statement(s) shall
be no less than 3,000,000 shares of Common Stock that are issuable upon
the Initial Filing Date and the exercise of Warrants in accordance with
their terms. The Company shall use its best efforts to have such
Registration Statement(s) declared effective by the SEC within ninety
(90) days after the filing of the Registration Statement. The Company
further undertakes to take all steps necessary to ensure that a
Registration Statement is or Registration Statements are effective
during the Registration Period (as defined below) with respect to all
Registrable Securities and the resale thereof at all times during the
Registration Period. Any Registration Statement(s) referred to in this
Section 2(a) (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided to
and approved by Buyer and its legal counsel prior to the Company's
filing or other submission (such approval not to be unreasonably
withheld)
and the Company will not file any document in a form to which such
counsel reasonably objects.
b. PIGGY-BACK REGISTRATIONS. If at any time prior to the
expiration of the Registration Period (as hereinafter defined) the
Company determines to file with the SEC a Registration Statement
relating to an offering for its own account or the account of others
under the 1933 Act of any of its Common Stock (other than on Form S-4
or Form S-8 or their then-equivalents relating to equity securities to
be issued solely in connection with any acquisition of any entity or
business or equity securities issuable in connection with employee
stock option or other employee benefit plans), the Company shall send
to each Investor who is entitled to registration rights under Section
2(a) written notice of such determination. If within twenty (20) days
after receipt of such notice, such Investor shall so request in
writing, the Company shall include in such Registration Statement all
or any part of the Registrable Securities such Investor requests to be
registered, except that if, in connection with any underwritten public
offering for the account of the Company, the managing underwriter(s)
thereof shall impose a limitation on the number of shares of Common
Stock which may be included in the Registration Statement because, in
such underwriter(s)' reasonable good faith judgment, marketing or other
factors dictate such limitation is necessary to facilitate public
distribution, then the Company shall be obligated to include in such
Registration Statement only such limited portion of the Registrable
Securities with respect to which such Investor has requested inclusion
hereunder as may be determined by such managing underwriter(s);
provided that no portion of the Common Stock which the Company is
offering for its own account shall be excluded; provided, further that
the Company shall be entitled to exclude Registrable Securities to the
extent necessary to avoid breaching obligations existing prior to the
date hereof to other stockholders of the Company. Any exclusion of
Registrable Securities shall be made pro rata among the Investors
seeking to include Registrable Securities, in proportion to the number
of Registrable Securities sought to be included by such Investors;
provided, however, that the Company shall not exclude any Registrable
Securities unless the Company has first excluded all outstanding
securities, the holders of which are not entitled to pro rata inclusion
of such securities in such Registration Statement or are not entitled
to pro rata inclusion with the Registrable Securities; and provided
further, however, that, after giving effect to the immediately
preceding proviso, any exclusion of Registrable Securities shall be
made pro rata with holders of other securities having the right to
include such securities in the Registration Statement other than
holders of securities entitled to inclusion of their securities in such
Registration Statement by reason of demand or similar registration
rights or whose registration rights existed prior to the date hereof.
No right to registration of Registrable Securities under this Section
2(b) shall be construed to limit any registration required under
Section 2(a) hereof.
c. ELIGIBILITY FOR FORM S-3. The Company represents and
warrants that it meets the requirements for the use of Form S-3 for
registration of the sale by the Buyers
and any other Investor of the Registrable Securities and the Company
shall use its best efforts to file all reports required to be filed by
the Company with the SEC in a timely manner so as to maintain such
eligibility for the use of Form S-3. In the event that Form S-3 is not
available for sale by the Investors of the Registrable Securities, the
Company shall register the sale on another appropriate form.
3. RELATED OBLIGATIONS.
a. The Company shall use its best efforts to cause the
Registration Statement(s) relating to Registrable Securities referred
to in Section 2(a) to become effective as soon as possible after such
filing, and keep the Registration Statement(s) effective pursuant to
Rule 415 at all times until the earlier of (i) the date as of which the
Investors may sell all of the Registrable Securities without
restriction pursuant to Rule 144(k) promulgated under the 1933 Act (or
successor thereto), or (ii) the date on which (A) the Investors shall
have sold all the Registrable Securities and (B) none of the Warrants
is outstanding (the "Registration Period"), which Registration
Statement(s) (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 light
of the circumstances in which they were made, not misleading.
b. In the event that the Registration Statement referred to in
Section 2(a) has not been declared effective by the 90th day following
the Initial Filing Date for failure by the Company to exercise its best
efforts in pursuing such registration, for each successive 30 day
period thereafter and until such Registration Statement is declared
effective, the Company agrees to pay to each Buyer, as liquidated
damages and not as a penalty, an amount equal to three percent (3%) of
the aggregate original purchase price of the Shares purchased by such
Buyer, payable in cash commencing on the 120th day following the
Initial Filing Date and on every 30th day thereafter (or sooner, as
provided in the next sentence) (any such payment referred to as an
"Additional Payment"). On the date that such Registration Statement is
declared effective, the Company shall pay to each Buyer all Additional
Payments due to such Buyer, in cash, pro rata according to the number
of days since the last Additional Payment (or, if no Additional Payment
has been paid, since the 90th day following the Initial Closing Date).
c. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement(s) referred to in Section 2(a) and the related
prospectus(es) used in connection with such Registration Statement(s)
as may be necessary to keep the Registration Statement(s) effective at
all times during the Registration Period, and, during such period, and
the Company and the Investors shall comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities
of the Company covered by such Registration Statement(s) until such
time as all such Registrable Securities shall have
been disposed of in accordance with the intended methods of disposition
by the seller or sellers thereof as set forth in such Registration
Statement(s).
d. The Company shall furnish to each Investor whose
Registrable Securities are included in the Registration Statement(s)
referred to in Sections 2(a) and 2(b) (i) promptly after the same as
prepared and publicly distributed, filed with the SEC, or received by
the Company, one copy of such Registration Statement and any amendment
thereto, and (ii) such number of copies of a prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and
such other documents as such Investor may reasonably request in order
to facilitate the disposition of the Registrable Securities owned by
such Investor pursuant to such Registration Statement(s).
e. The Company shall use its best efforts to (i) register and
qualify the Registrable Securities covered by the Registration
Statement(s) referred to in Section 2(a) under such other securities or
"blue sky" laws of such jurisdictions in the United States as the
Investors who hold a majority of the Registrable Securities being
offered in connection therewith reasonably request, (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 during the
Registration Period, (iii) take such other actions as may be necessary
to maintain such registrations and qualifications in effect at all
times during the Registration Period, and (iv) take all other actions
reasonably necessary or advisable to qualify the Registrable 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(e), (b) subject
itself to general taxation in any such jurisdiction, (c) file a general
consent to service of process in any such jurisdiction, or (d) make any
change in its charter or bylaws, 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. The Company shall
promptly notify each Investor who holds Registrable Securities of the
receipt by the Company of any notification with respect to the
suspension of such registration or qualification of any of the
Registrable Securities for sale under the securities or "blue sky" laws
of any jurisdiction in the United States or its receipt of actual
notice of the initiation or threatening of any proceeding for such
purpose.
f. As promptly as practicable after becoming aware of such
event, the Company shall notify each Investor of the happening of any
event, of which the Company has knowledge, as a result of which the
prospectus included in a Registration Statement, as then in effect,
includes an untrue statement of material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare and
file a supplement or amendment to the Registration Statement to correct
such untrue statement or omission, and deliver at least one copy and
such number of additional copies of such supplement or amendment to
each Investor as such Investor may reasonably request. The Company
shall also, within five (5) days after its release, provide to each
Investor (other than Buyer and its affiliates, whose rights to receive
financial and related information concerning the Company are set forth
in the Stock Purchase Agreement and Warrant) a copy of the Company's
Annual Report and Form 10-KSB and quarterly report on Form 10-QSB, as
filed with the SEC.
g. The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify
each Investor who holds Registrable Securities being sold (and, in the
event of an underwritten offering, the managing underwriters) of the
issuance of such order and the resolution thereof or its receipt of
actual notice of the initiation or threat of any proceeding for such
purpose.
h. The Company shall furnish, on the date that Registrable
Securities are delivered to an underwriter, if any, for sale in
connection with a Registration Statement referred to in Section 2(b) if
and only if required by an underwriter, a letter, dated such date, from
the Company's independent certified public accountants in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering
("Accountant's Comfort Letter"), addressed to the underwriters, and the
Investors, and (ii) an opinion, dated as of such date, of counsel
representing the Company for purposes of such Registration Statement,
in form, scope and substance as is customarily given in an underwritten
public offering, addressed to the underwriters and the Investors. If,
in the opinion of counsel to any Investor, such Investor could
reasonably be deemed to be an underwriter (as defined in the 0000 Xxx)
in connection with its resale of the securities under Section 2(a)
hereof, such Investor may require that the Company deliver to the
Investor an Accountant's Comfort Letter addressed to such Investor;
provided, however, that any request by an Investor for such an
Accountant's Comfort Letter may be made not more than once during any
given six month period, and the Company shall not be required to expend
in excess of $10,000 in accountant fees in respect of any such comfort
letter.
i. To the extent reasonably required to satisfy their
obligations, if any, as sellers of Common Stock, the Company shall make
available for inspection by (i) any Investor, and (ii) one firm of
attorneys and one firm of accountants or other agents retained by the
Investors (collectively, the "Inspectors") all pertinent financial and
other records, and pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably deemed
necessary by each Inspector to enable each Inspector to exercise its
due diligence responsibility, if any, and cause the Company's officers,
directors and employees to supply all such information which any
Inspector may reasonably request; provided, however, that each
Inspector shall hold in strict confidence and shall not make any
disclosure (except to an Investor) or use of any Record or other
information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so
notified, unless (a) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in any Registration
Statement, (b) the release of such Records is, in the opinion of
counsel of recognized status, required by law, regulation or
administrative authority or such release is ordered pursuant to a
final, non-appealable subpoena or order from a court or government body
of competent jurisdiction, or (c) the information in such Records has
been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company shall not be
required to disclose any confidential information in such Records to
any Inspector until and unless such Inspector shall have entered into
confidentiality agreements (in form and substance satisfactory to the
Company) with the Company with respect thereto, substantially in form
and substance reasonably requested by the Company. Each Investor agrees
that it shall, upon learning that disclosure of such Records is sought
in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the
Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein shall be deemed to limit the Investor's
ability to sell Registrable Securities in a manner which is otherwise
consistent with applicable laws and regulations.
j. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the
Company unless (i) disclosure of such information is necessary to
comply with federal or state securities laws, (ii) the disclosure of
such information is necessary to avoid or correct a misstatement or
omission in any Registration Statement, (iii) the release of such
information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this
or any other agreement. The Company agrees that it shall, upon learning
that disclosure of such information concerning an Investor is sought in
or by a court or governmental body of competent jurisdiction or through
other means, give prompt notice to such Investor and allow such
Investor, at the Investor"s expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, such
information.
k. The Company shall use its best efforts either to (i) cause
all the Registrable Securities covered by a Registration Statement to
be listed on each 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 Registrable Securities is then permitted under
the rules of such exchange, or (ii) secure designation and quotation of
all the Registrable Securities covered by the Registration Statement on
the Nasdaq SmallCap Market system and, without limiting the generality
of the foregoing, to arrange for at least two market makers to register
with the National Association of Securities Dealers, Inc. ("NASD") as
such with respect to such Registrable Securities.
l. The Company shall cooperate with the Investors who hold
Registrable Securities being offered to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities sold pursuant to a
Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the managing
underwriter or underwriters, if any, or, if there is no managing
underwriter or underwriters, the Investors may reasonably request and
registered in such names as the managing underwriter or underwriters,
if any, or the Investors may request. Not later than the date on which
any Registration Statement registering the resale of Registrable
Securities is declared effective, the Company shall deliver to its
transfer agent instructions authorizing the removal of any legends on
the Registrable Securities upon the sale thereof pursuant to such
Registration Statement, accompanied by any reasonably required opinion
of counsel, to permit sales thereof in a timely fashion that complies
with applicable securities laws and then mandated securities settlement
procedures for regular way market transactions.
m. The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investors of
Registrable Securities pursuant to a Registration Statement.
n. The Company and the Investors shall otherwise use its best
efforts to comply with all applicable rules and regulations of the SEC
in connection with any registration hereunder.
4. OTHER OBLIGATIONS.
a. At least five (5) business days prior to the first
anticipated filing date of the Registration Statement referred to in
Section 2, the Company shall notify each Investor of the information
the Company requires from each such Investor if such Investor elects to
have any of such Investor's Registrable Securities included in the
Registration Statement. It shall be a condition precedent to the
obligations of the Company to complete any registration pursuant to
this Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company
such information regarding itself, the Registrable Securities held by
it and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration
of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably
request.
b. Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as
reasonably requested by the Company in connection with the preparation
and filing of the Registration Statement(s) hereunder, unless such
Investor has notified the Company in writing of such Investor's
election to exclude all of such Investor's Registerable Securities from
the Registration Statement.
c. Each Investor agrees that, upon receipt of any notice from
the Company or the happening of any event of the kind described in
Section 3(f), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the applicable Registration
Statement(s) covering such Registrable Securities until such Investor's
receipt of copies of the supplemented or amended prospectus
contemplated by Section 3(f), and, if so directed by the Company, such
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 such Investor's possession, of the prospectus covering
such Registrable Securities current at the time of receipt of such
notice.
d. No Investor may participate in any underwritten
registration hereunder unless such Investor (i) agrees to sell such
Investor's Registrable Securities on the basis provided in any
underwriting arrangements established by the Company, (ii) completes
and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under
the terms of such underwriting arrangements, and (iii) agrees to pay
its pro rata share of all underwriting discounts and commissions.
5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
commissions and fees and disbursements of Investors' counsel, accountants,
investment bankers or other advisors or agents, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, and fees and disbursements of counsel for
the Company shall be borne by the Company.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
a. To the extent permitted by law, the Company will indemnify,
hold harmless and defend each Investor who holds such Registrable
Securities, the partners, directors, officers, employees and agents of,
and each person who controls, any Investor within the meaning of the
1933 Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), if any, and any underwriter (as defined in the 0000 Xxx) for the
Investors, and the partners, directors, officers, employees and agents
of, and each person, if any, who controls, any such underwriter within
the meaning of the 1933 Act or the 1934 Act (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities, attorneys'
fees and expenses, amounts paid in settlement or expenses
(collectively, "Claims") to which any of them may become subject
insofar as such Claims (or actions or proceedings in respect thereof,
whether or not commenced or threatened by
or before the date the Registration Statement is declared effective and
whether or not an Indemnified Person is party thereto) arise out of or
are based upon: (i) any untrue statement or alleged untrue statement of
a material fact in a Registration Statement or in any filing made in
connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable
Securities are offered ("Blue Sky Filing"), or the omission or alleged
omission to state a material fact therein required to be stated or
necessary to make the statements therein, in light of the circumstances
in which such statements were made, not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus if used prior to the effective date of such
Registration Statement, 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 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 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement (the matters in the
foregoing clauses (i) through (iii) being, collectively, "Violations").
Subject to the restrictions set forth in Section 6(d) with respect to
the number of legal counsel, the Company shall reimburse the
Indemnified Persons promptly as such expenses are incurred and are due
and payable, for any 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): (i) shall not
apply to a Claim 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 any Indemnified Person expressly for use in
connection with the preparation of the Registration Statement, any
related prospectus or any such amendment thereof or supplement thereto,
if such Registration Statement or prospectus was timely made available
by the Company pursuant to Section 3(d) hereof; (ii) with respect to
any preliminary prospectus, shall not inure to the benefit of any such
person from whom the person asserting any such Claim purchased the
Registrable 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 on a timely basis in the prospectus, as then amended or
supplemented, if such prospectus was timely made available by the
Company pursuant to Section 3(d) hereof; (iii) shall not be available
to the extent such Claim is based on a failure of the Investor to
deliver or cause to be delivered a preliminary or final prospectus made
available on a timely basis by the Company; and (iv) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected
without prior written consent of the Company, which consent shall not
be unreasonably withheld or delayed. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to indemnify, hold
harmless and defend, to the same extent and in the same manner as is
set forth in Section 6(a), the Company, each of its directors, each of
its officers who signs the Registration Statement, each person, if any,
who controls the Company within the meaning of the 1933 Act or the 1934
Act, any underwriter and any other stockholder selling securities
pursuant to the Registration Statement or any of its directors or
officers or any person who controls such stockholder or underwriter
within the meaning of the 1933 Act or the 1934 Act (collectively and
together with an Indemnified Person, an "Indemnified Party"), against
any Claim to which any of them may become subject, under the 1933 Act,
the 1934 Act or otherwise, insofar as such Claims arise out of or are
based upon any Violation, in each case to the extent (and only to the
extent) that such violation occurs in reliance upon and in conformity
with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and
such Investor will reimburse any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such
Claim; provided, however, that the indemnity agreement contained in
this Section 6(b) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent
of such Investor, which consent shall not be unreasonably withheld;
provided, further, however, that the Investor shall be liable under
this Section 6(b) for only that amount of Claims as does not exceed the
net proceeds to such Investor as a result of the sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the
transfer of the Registrable Securities by the Investors pursuant to
Section 9. Notwithstanding anything to the contrary contained herein,
the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of
any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected on a timely
basis in the related final prospectus, as then amended or supplemented.
c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of
any action (including any governmental action), such Indemnified Person
or Indemnified Party shall, if a Claim in respect thereof is 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 assume control of the
defense thereof with counsel reasonably satisfactory to the Indemnified
Person or the Indemnified Party, as the case may be; provided, however,
that an Indemnified Person or Indemnified Party, as the case may be,
shall have the right to employ its own counsel in any such action, but
the fees, expenses and other charges of such counsel will be at the
expense of such Indemnified Person or Indemnified Party unless (1) the
employment of counsel by the Indemnified Person or Indemnified Party
has been authorized in writing by the indemnifying party, (2) the
Indemnified Person or Indemnified Party has reasonably concluded (based
on advice
of counsel) that there may be legal defenses available to it or any
other Indemnified Person or Indemnified Parties that are different from
or in addition to those available to the indemnifying party, (3) a
conflict or potential conflict exists (based on advice of counsel to
the Indemnified Person or Indemnified Party) between the Indemnified
Person or Indemnified Party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of
such action on behalf of the Indemnified Person or Indemnified Party)
or (4) the indemnifying party has not in fact employed counsel to
assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel
will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in
such jurisdiction at any one time for all such Indemnified Persons or
Indemnified Party or parties. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written
consent (which consent will not be unreasonably withheld). 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 or
Indemnified Party 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 Claims are incurred or bills therefor
are received and are due and payable.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, each indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 in such proportions as shall be appropriate to reflect all
equitable principles, including without limitation the relative benefits
received by the relevant parties; provided, however, that (i) 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, (ii) no seller
of Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
the Company or any seller of Registrable Securities who was not guilty of
fraudulent misrepresentation, and (iii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investors the benefits of Rule
144 promulgated under the 1933 Act or any other similar rule or regulation of
the SEC that may at any time permit the investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to
use its best efforts to:
a. make and keep public information available as those
terms are used in paragraph (a) of Rule 144;
b. file with the SEC in a timely manner all reports and other
documents required of the Company under Section 13 or 15(d) of the 1934
Act so long as the Company remains subject to such requirements (it
being understood that nothing herein shall limit the Company's
obligations under Section 4(c) of the Stock Purchase Agreement).
c. furnish to each Investor so long as such Investor owns
Registrable Securities promptly upon request, (i) a written statement
by the Company that it has complied with the reporting requirements
referred to in Section 8(b) above, (ii) 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.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights to have the Company register Registrable Securities pursuant
to this Agreement shall be assignable by the Investors to any transferee of all
or any portion of Registrable Securities if: (i) the Investor agrees in writing
with the transferee or assignee to assign the related rights and obligations,
and a copy of such agreement is furnished to the Company within a reasonable
time after such assignment, (ii) the Company is, within a reasonable time after
such transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee, and (b) the securities with respect to
which such registration rights are being transferred or assigned, (iii)
immediately following such transfer or assignment the further disposition of
such securities by the transferee or assignee is restricted under the 1933 Act
and applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein and to reimburse the Company for any expenses
that may be incurred by the Company as a result of such assignment and transfer
that would not otherwise have been incurred by the Company, including any costs
associated with the amendment of any Registration Statement or prospectus, (v)
such transfer shall have been made in accordance with the applicable
requirements of the
Stock Purchase Agreement, and (vi) such transferee shall be an "accredited
investor" as that term defined in Rule 501 of Regulation D promulgated under the
1933 Act.
10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions 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 Investors who hold two-thirds of the Registrable Securities. Any amendment
or waiver effected in accordance with this Section 10 shall be binding upon each
Investor and the Company. Notwithstanding the foregoing: (i) no amendment or
waiver of this Agreement with respect to shares of Common Stock which have been
previously sold under a Registration Statement contemplated by this Agreement
shall be effective with respect to the holder of such shares who participated in
such registration unless consented to this writing by such holder; and (ii) no
amendment or waiver which adversely affects any holder of Registrable Securities
in a manner which does not adversely affect the other holders of Registrable
Securities shall be effective with respect to such holder unless consented to in
writing by such holder.
11. MISCELLANEOUS.
a. A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more persons or entities
with respect to the same Registrable Securities, the Company shall act
upon the basis of instructions, notice or election received from the
registered owner of such Registrable Securities.
b. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by registered or certified mail,
return receipt requested, or delivered personally or by courier and
shall be effective three days after being place in the mail if mailed,
or upon receipt, if delivered personally or by courier or facsimile
(with a copy by U.S. mail), in each case properly addressed to the
party to receive such notice. The addresses for such communications
shall be:
If to the Company:
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxx X
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone: 000 000-0000
Facsimile: 000 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
With Copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxx Godward, LLP
0000 Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
If to the Buyer:
Agway Holdings Inc.
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
Telephone: 000 000-0000
Facsimile: 000 000-0000
Attention: Xxxxx X. X'Xxxxx, V.P.
With a copy to: Xxxxx X. Xxxxx, Esq., General Counsel
Each party shall provide notice to the other party of any
change in address in the manner provided herein.
c. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof.
d. 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 conflict of laws. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of
the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other
jurisdiction.
e. This Agreement and the Stock Purchase Agreement (together
with the Schedules and Exhibits thereto), the Warrant and the other
agreements and instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein
and therein and, except as specifically set forth herein or therein,
neither the Company nor Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by an instrument in
writing signed by the party to be charged with enforcement.
f. Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the
permitted successors and assigns of each of the parties hereto.
g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
h. This Agreement may be executed in two or more identical
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
facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
i. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
Dated:
AGWAY HOLDINGS INC.
By: /s/
------------------------
NAME:
TITLE :
ACCEPTED AND AGREED:
PLANET POLYMER TECHNOLOGIES, INC.
By: /s/
-----------------------
NAME:
TITLE:
