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EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
January 26, 1998, by and between Rentech, Inc., a corporation organized
under the laws of the State of Colorado, U.S.A., with headquarters
located at 0000 00xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (the
"Company"), and the buyer set forth on the execution page hereof (the
"Buyer").
RECITALS
A. In connection with the Securities Purchase Agreement by and
between the parties of even date herewith (the "Securities Purchase
Agreement"), the Company has agreed, upon the terms and subject to the
conditions of the Securities Purchase Agreement, to issue and sell to the
Buyer (i) a number of shares of the Company's Series 1998-A Convertible
Preferred Stock of Rentech, Inc. (the "Series A Shares") and (ii) a
warrant to purchase a number of shares of the Company's Series 1998-B
Convertible Preferred Stock of Rentech, Inc. (the "Series B Shares").
The Series A Shares and the Series B Shares (collectively, the "Preferred
Shares") are each convertible in accordance with the terms of the
Articles of Amendment (as defined in the Securities Purchase Agreement)
into common stock of the Company, $.01 par value per share ("Common
Stock"). The Common Stock into which the Preferred Shares are
convertible may be referred to herein as the "Conversion Shares." In
accordance with the terms of the Articles of Amendment, shares of Common
Stock may be issued in payment of dividends ("Dividend Shares").
B. The Buyer has agreed to purchase and pay for the Series A Shares
as provided in the Securities Purchase Agreement. Upon such purchase,
the Company will issue its certificate representing the Series A Shares
purchased by the Buyer.
C. Upon purchase of the Series A Shares by the Buyer, the Company
has agreed to issue its warrant authorizing the Buyer to purchase the
Series B Shares (the "Warrant for Purchase of Series 1998-B Shares") upon
the terms, conditions and provisions of the Securities Purchase Agreement
and the form of warrant attached to the Securities Purchase Agreement as
Exhibit E.
D. To induce the Buyer to execute and deliver the Securities
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.
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AGREEMENTS
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by all parties
hereto, the Company and the Buyer hereby agree as follows:
1. DEFINITIONS.
a. As used in this Agreement, the following terms shall have the
following meanings:
i. "Investor" or "Investors" means the Buyer and any permitted
transferee(s) or assignee(s) 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.
ii. "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").
iii. "Registrable Securities" means the Conversion Shares and the
Dividend Shares (if any), underlying the certificate representing the
Series A Shares and the Warrant for Purchase of 1998-Series B Shares and
any shares of capital stock issued or issuable, from time to time (with
any adjustments) on or in exchange for or otherwise with respect to
either of the foregoing (including without limitation any shares issued
pursuant to Section 2(b) hereinafter).
iv. "Registration Statement" or "Registration Statements" means a
registration statement or statements of the Company filed under the 0000
Xxx.
b. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Securities Purchase
Agreement.
2. REGISTRATION.
a. Mandatory Registration. (i) The Company shall use its best
efforts to prepare, and, on or before the date that is thirty (30) days
after the date of the First Closing, file with the SEC a Registration
Statement or Registration Statements (as 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 of all of the Registrable
Securities) (any of which may contain a combined prospectus with other
registrations by the Company), covering the resale of all of the
Registrable Securities, which Registration Statement(s), to the extent
allowable under the 1933 Act and the rules promulgated thereunder
(including without limitation Rule 416), shall state that such
Registration Statement(s) also covers such indeterminate number of
additional shares (the "Indeterminate Shares") of Common Stock as may
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become issuable upon conversion of the Preferred Shares to prevent
dilution resulting from stock splits, stock dividends or similar
transactions.
(ii) To the extent the Indeterminate Shares for any reason can not
be registered under the Registration Statement(s) required under Section
2(a)(i) above, then with respect to such Indeterminate Shares, the
Company shall use its best efforts to prepare, and, on or before the date
that is fifteen (15) days after the Indeterminate Shares become issuable,
file with the SEC a Registration Statement or Registration Statements (as
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
of all of the Indeterminate Shares) (any of which may contain a combined
prospectus with other registrations by the Company), covering the resale
of all of the Indeterminate Shares.
A copy of the Registration Statement(s) (and each amendment or
supplement thereto, and each request for acceleration of effectiveness
thereof) shall be provided to (and subject to the approval of the Buyer,
which approval shall not be unreasonably withheld or denied) the Buyer
and its counsel prior to its filing or other submission.
b. Liquidated Damages. The Company shall use its best efforts to
obtain effectiveness of the Registration Statement as soon as
practicable. If (i) the Registration Statement(s) covering the
Registrable Securities required to be filed by the Company pursuant to
Section 2(a) hereof is not declared effective by the SEC within one
hundred twenty (120) days after the date of the First Closing (other than
by reason of any act or failure to act in a timely manner by the Investor
or its counsel) (the "Registration Deadline") or if, after the
Registration Statement has been declared effective by the SEC, sales
cannot be made pursuant to the Registration Statement (by reason of stop
order, the Company's failure to update the Registration Statement, or any
other reason outside the control of the Investor), or (ii) the Common
Stock is not listed or included for quotation on the National Association
of Securities Dealers Automated Quotation system Small Cap Market
("NASDAQ Small Cap"), or another United States national exchange; then in
either case (in either case, a "Delay") the Company will make payments to
the Investors, as liquidated damages and in such amounts and at such
times as shall be determined pursuant to this Section 2(b) as relief and
as the sole remedy for the damages to the Investor by reason of any such
delay in or reduction of its ability to sell the Registrable Securities
(which remedy shall be exclusive of any other remedies available at law
or in equity), an amount to be determined as follows. The Company shall
pay to the Investor an amount equal to the purchase price for the Series
A Shares purchased at the First Closing (including, without limitation,
any Preferred Shares that have been converted into Conversion Shares then
held by such Investors) (the "Aggregate Share Price") multiplied by: (i)
if the Delay is equal to or less than one calendar month after the
Registration Deadline, one hundredth (.01); (ii) if the Delay is equal to
or less than two calendar months after the Registration Deadline, for the
period after the first calendar month and up to the end of the second
calendar month, two hundredths (.02); and (iii) if the Delay is greater
than two calendar months after the Registration Deadline, for the period
after the end of the second calendar month after the Registration
Deadline until the end of the Delay, two and one-half hundredths (.025),
PAGE 4
times the sum of: (i) the number of months (prorated for partial months)
beginning the day after the Registration Deadline and ending on the date
the Registration Statement is declared effective by the SEC, provided,
however, that there shall be excluded from such period any delays which
are solely attributable to changes required by the Investor in the
Registration Statement with respect to information relating to the
Investor, including, without limitation, changes to the plan of
distribution, or to the failure of the Investor to conduct its review of
the registration statement pursuant to Section 2(a) above in a reasonably
prompt manner; (ii) the number of months (prorated for partial months)
that sales cannot be made pursuant to the Registration Statement after
the Registration Statement has been declared effective; and (iii) the
number of months (prorated for partial months) that the Common Stock is
not listed or included for quotation on the NASDAQ Small Cap or another
United States national exchange after the Registration Statement has been
declared effective.
For example, if the Registration Statement becomes effective two
months after the end of the Registration Deadline, the Company would pay
US$10,000 for the first month, and $20,000 for the second month, for each
US$1,000,000 of Aggregate Share Price (and thereafter would continue to
pay US$25,000 per month for each US$1,000,000 of Aggregate Share Price
until the Registration Statement becomes effective).
Such amounts shall be paid in cash or, at the Investor's option such
amounts may be convertible into Common Stock at the "Conversion Price"
for the Series B Shares, as defined in the Series B Articles of
Amendment. Any shares of Common Stock issued upon conversion of such
amounts shall be Registrable Securities. If the Investor desires to
convert the amounts due hereunder into Registrable Securities it shall so
notify the Company in writing within two (2) business days of the date on
which such amounts are first payable in cash and such amounts shall be so
convertible (pursuant to the mechanics set forth in the Articles of
Amendment), beginning on the last day upon which the cash amount would
otherwise be due in accordance with the following sentence. Payments of
cash pursuant hereto shall be made within five (5) days after the end of
each period that gives rise to such obligation, provided that, if any
such period extends for more than thirty (30) days, interim payments
shall be made for the full amount owed up to the date of such interim
payment at the end of each thirty (30) day period.
c. Piggy-Back Registrations. If at any time prior to the
expiration of the Registration Period (as hereinafter defined) the
Company shall 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 equity securities (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 stock option or other employee
benefit plans) the Company shall send to the Investor written notice of
such determination and, if within twenty (20) days after receipt of such
notice, such Investor shall so request in writing, the Company, to the
extent permitted by law, 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)
PAGE 5
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 only such limited portion of the Registrable
Securities with respect to which such Investor has requested inclusion
hereunder will be included in the Registration Statement; provided that
no portion of the equity securities 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
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 registration rights or whose registration
rights existed prior to the date hereof. No right of the Investor to
registration of Registrable Securities under this Section 2(c) shall be
construed to limit any registration required under Section 2(a) hereof.
If an offering in connection with which an Investor is entitled to
registration under this Section 2(c) is an underwritten offering, then
each Investor whose Registrable Securities are included in such
Registration Statement shall, unless otherwise agreed by the Company,
offer and sell such Registrable Securities in an underwritten offering
using the same underwriter or underwriters and, subject to the provisions
of this Agreement, on the same terms and conditions as other shares of
Common Stock included in such underwritten offering.
Notwithstanding anything herein to the contrary, if the Registrable
Securities are included in and registered under the Form S-3 No.
333-35571, filed with the SEC on September 12, 1997 (the "Form S-3"),
then to the extent of such inclusion and registration, no Registration
Statement need be filed with respect to such Registrable Securities
included in and registered under the Form S-3, and this Registration
Rights Agreement shall be void with respect to such Registrable
Securities included in and registered under the Form S-3. Therefore, if
all of the Registrable Securities are included in and registered under
the Form S-3, no Registration Statement need be filed hereunder.
d. 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 Buyer of the Registrable Securities and the Company
shall 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 registration of the
Registrable Securities, the Company shall register the securities on
another appropriate form.
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3. RELATED OBLIGATIONS. In connection with the registration of the
Registrable Securities, the Company shall have the following obligations:
a. The Company shall use its best efforts to cause such
Registration Statement(s) relating to Registrable Securities to become
effective as soon as possible after such filing, but in no event later
than the Registration Deadline, and keep the Registration Statement(s)
effective pursuant to Rule 415 at all times until the earlier of (i) the
date on which all of the Registrable Securities have been sold (and no
further Registrable Securities may be issued in the future), (ii) the
date as of which the Investors may immediately sell all of the
Registrable Securities without restriction pursuant to Rule 144
promulgated under the 1933 Act (or successor thereto) or otherwise, or
(iii) the date on which none of the Preferred Shares 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. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the Registration
Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period, and, during such
period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by the
Registration Statement. In the event the number of shares available
under a Registration Statement filed pursuant to this Agreement is
insufficient to cover all of the Registrable Securities issued or
issuable upon conversion of the Preferred Shares, the Company shall amend
the Registration Statement, or file a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover
all of the Registrable Securities, in each case, as soon as practicable,
but in any event within fifteen (15) days after the need therefor arises
(based on the market price of the Common Stock and other relevant factors
on which the Company reasonably elects to rely). The Company shall use
its best efforts to cause such amendment and/or new Registration
Statement to become effective as soon as practicable following the filing
thereof.
c. The Company shall furnish to each Investor whose Registrable
Securities are included in the Registration Statement(s) promptly after
the same is prepared and publicly distributed, filed with the SEC, or
received by the Company, (i) one copy of the Registration Statement and
any amendment thereto, each preliminary prospectus and prospectus and
each amendment or supplement thereto in each case relating to such
Registration Statement (other than any portion thereof which contains
information for which the Company has sought confidential treatment) and,
in the case of the Registration Statement referred to in Section 2(a),
each letter written by or on behalf of the Company to the SEC or the
staff of the SEC, and each item of correspondence from the SEC or the
staff of the SEC, in each case relating to such Registration Statement;
and (ii) such number of copies of a prospectus, including a preliminary
prospectus, and all amendments and supplements thereto and such other
PAGE 7
documents as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned (or to be owned) by
such Investor.
d. The Company shall use reasonable efforts to (i) register and
qualify the Registrable Securities covered by the Registration
Statement(s) under such other securities or "blue sky" laws of such
jurisdictions in the United States as each Investor who holds (or has the
right to hold) Registrable Securities being offered reasonably requests,
(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(d), (b)
subject itself to general taxation in any such jurisdiction, (c) file a
general consent to service of process in any such jurisdiction, (d)
provide any undertakings that cause more than nominal expense or burden
to the Company, or (e) make any change in its charter or 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.
e. 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 a material fact or omission 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 a supplement or
amendment to the Registration Statement to correct such untrue statement
or omission, and deliver such number of copies of such supplement or
amendment to each Investor as such Investor may reasonably request.
f. 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 (or, in the event of an
underwritten offering, the managing underwriters) of the issuance of such
order and the resolution thereof.
[Intentionally omitted.]
h. At the request of the Investor, but no more than three (3) times
in any one ninety (90) day period, the Company shall furnish, on the date
of effectiveness of the Registration Statement and thereafter from time
to time on such dates as the Investor may reasonably request an opinion,
dated as of such requested 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
Company's transfer agent and/or to the Investors. Such opinion shall be
substantially as set forth in Exhibit I attached hereto.
PAGE 8
i. The Company shall make available for inspection by (i) any
Investor, (ii) any underwriter participating in any disposition pursuant
to a Registration Statement, (iii) one firm of attorneys and one firm of
accountants or other agents retained by the Investors, and (iv) one firm
of attorneys retained by all such underwriters (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, and
cause the Company's officers, directors and employees to supply all
information which any Inspector may reasonably request for purposes of
such due diligence; 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 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 reasonably
satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 3(i). 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.
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 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 to be offered pursuant to a Registration Statement
and enable such certificates to be in such denominations or amounts, as the
case may be, the Investors may reasonably request and registered in such
PAGE 9
names as 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 (at its expense) to its
transfer agent instructions, accompanied by any required opinion of counsel,
that permit sales of unlegended securities in a timely fashion that complies
with then mandated securities settlement procedures for regular way market
transactions.
l. Upon the First Closing and upon each Additional Closing, the
Company shall promptly secure the listing of the Registrable Securities
then underlying the Preferred Shares purchased by the Buyer upon each
national securities exchange or automated quotation system, if any, upon
which shares of Common Stock are then listed (subject to official notice
of issuance) and shall maintain, so long as any other shares of Common
Stock shall be so listed, such listing of shares of Registrable
Securities from time to time issued under the terms of this Agreement and
the Registration Rights Agreement. The Company shall at all times comply
in all respects with the Company's reporting, filing and other
obligations under the by-laws or rules of the National Association of
Securities Dealers and the NASDAQ SmallCap Market (and such other
national exchange on which the Common Stock may be listed, as
applicable).
m. The Company shall provide a transfer agent and registrar, which
may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.
n. The Company shall comply with all applicable laws relating to a
Registration Statement and offering and sale of securities and all
applicable rules and regulations of governmental authorities in
connection therewith (including without limitation the 1933 Act and the
Securities Exchange Act of 1934, as amended, and all the rules and
regulations promulgated by the SEC).
o. 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.
4. OTHER OBLIGATIONS. In connection with the registration of the
Registrable Securities, the Investors shall have the following
obligations:
a. At least fifteen (15) days prior to the first anticipated filing
date of the Registration Statement, 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 the
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.
PAGE 10
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 Registrable Securities from the Registration Statement.
c. In the event Investors holding a majority of the Registrable
Securities being registered determine to engage the services of an
underwriter, each Investor agrees to enter into and perform such
Investor's obligations under an underwriting agreement, in usual and
customary form, including, without limitation, customary indemnification
and contribution obligations, with the managing underwriter of such
offering and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of the Registrable Securities,
unless such Investor notifies the Company in writing of such Investor's
election to exclude all of such Investor's Registrable Securities from
the Registration Statement(s).
d. Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
3(e) or 3(f), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement(s) covering
such Registrable Securities until such Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(e) or
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.
e. 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 approved by the Investors entitled hereunder to approve such
arrangements, (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 and any expenses incurred by the Company pursuant to
Section 5 below.
5. EXPENSES OF REGISTRATION. The Company agrees to pay all
reasonable expenses, other than underwriting discounts and commissions,
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. If
Investors who hold a majority of Registrable Securities undertake to
resell the Registrable Securities in an underwritten public offering, the
Company will reasonably cooperate as is customarily required in an
underwritten public offering. The Investors who participate in such a
public offering shall pay all expenses incurred in connection with such
registration, whether incurred by them or the Company, including without
limitation, underwriting discounts and commissions, all registration,
listing and qualification fees, printing charges, and fees and
disbursements of accountants and counsel for the Company.
PAGE 11
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 directors, officers 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 directors and the officers 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 or expenses (joint or
several) (collectively, together with actions, proceedings or inquiries
by any regulatory or self regulatory organization, whether commenced or
threatened, in respect thereof, "Claims") to which any of them may become
subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material
fact in a Registration Statement or the omission or alleged omission to
state a material fact therein required to be stated or necessary to make
the statements therein not misleading, (ii) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus 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 Investors and each such
underwriter or controlling person, promptly as such expenses are incurred
and are due and payable, for any legal fees or other expenses reasonably
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 or underwriter for such Indemnified
Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) 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 the material fact
contained in the preliminary prospectus was corrected in the prospectus,
as then amended or supplemented, if such prospectus was timely made
available by the Company pursuant to Section 3(c) hereof; (iii) shall
not be available to the extent such Claim is based on a failure of the
PAGE 12
Investor to deliver or to cause to be delivered the prospectus made
available by the Company or the failure of the Investor to comply with
federal or state law relating to the offering or sale of the Registrable
Securities; and (iv) shall not apply to amounts paid in settlement of
any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld.
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 Claim arises out of or is 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 or to the extent such
Claim is based upon any violation or alleged violation by the Investor of
the 1933 Act, 1934 Act or any other law; 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
a Claim 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 prospectus, as then amended or
supplemented.
c. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in any distribution, to the same
extent as provided above, with respect to information such persons so
furnished in writing by such persons expressly for inclusion in the
Registration Statement.
PAGE 13
d. 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 to be made
against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense
thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that an Indemnified Person or Indemnified Party shall
have the right to retain its own counsel with the fees and expenses to be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of
the Indemnified Person or Indemnified Party and the indemnifying party
would be inappropriate due to actual or potential differing interests
between such Indemnified Person or Indemnified Party and any other party
represented by such counsel in such proceeding. The Company shall pay
reasonable fees for only one separate legal counsel for the Investors,
and such legal counsel shall be selected by the Investors holding a
majority in interest of the Registrable Securities included in the
Registration Statement to which the Claim relates; provided, that the
Company shall have the right to approve the selection of counsel and
legal fees and expenses of such firm shall be reasonable. 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 expense, loss, damage or liability is incurred and is
due and payable.
7. CONTRIBUTION. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying
party agrees to make the maximum contribution with respect to any amounts
for which it would otherwise be liable under Section 6 to the fullest
extent permitted by law; provided, however, that (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 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:
a. make and keep public information available, as those terms are
understood and defined in Rule 144;
PAGE 14
b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and 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 Securities Purchase Agreement) and the filing
of such reports and other documents is required for the applicable
provisions of Rule 144; and
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 of Rule
144, the 1933 Act and the 1934 Act, (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 Investor 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 automatically 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 such rights, 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, (v) such transfer shall have
been made in accordance with the applicable requirements of the
Securities Purchase Agreement, (vi) such transferee shall submit
evidence reasonably satisfactory to the Company that the Transferee is an
"accredited investor" as that term is defined in Rule 501 of Regulation D
promulgated under the 1933 Act; and (vii) in the event the assignment
occurs subsequent to the date of effectiveness of the Registration
Statement required to be filed pursuant to Section 2(a), the transferee
agrees to pay all reasonable expenses of amending or supplementing such
Registration Statement to reflect such assignment. Notwithstanding
anything herein to the contrary, no assignment of the rights represented
by this Agreement shall be effective unless in compliance with any
applicable securities laws of any applicable jurisdiction.
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 a
majority of the Registrable Securities. Any amendment or waiver effected
in accordance with this Section 10 shall be binding upon each Investor
and the Company.
PAGE 15
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 five days after being placed in the mail, if mailed, or upon
receipt, if delivered personally or by courier or facsimile, in each case
properly addressed to the party to receive such notice. The addresses
for such communications shall be:
If to the Company: Rentech, Inc.
0000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: 000.000.0000
Facsimile: 303.298.8010
Attention: Xx. Xxxxx X. Xxxxxxx,
Vice President & CFO
If to the Buyer, at the address on the signature page of the
Securities Purchase Agreement. Each party shall provide written notice
to the other party of any change in address.
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 Delaware 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. The Company irrevocably consents to the jurisdiction of
the state and federal courts of the state of Delaware in any suit or
proceeding arising out of or based on this Agreement and irrevocably
agrees that all claims in respect of such suit or proceeding may be
determined in such courts. The Company irrevocably waives the defense of
inconvenient forum to the maintenance of such suit or proceeding.
Service of process in any civil action relating to or arising out of this
Agreement (including also all Exhibits or Addenda hereto) or the
transaction(s) contemplated herein may be accomplished in any manner
provided by law.
e. This Agreement, the Escrow Agreement, the Articles of Amendment
, the Warrant to Purchase Series 1998-B Shares, and the Securities
Purchase Agreement (including all exhibits and addenda thereto)
constitute the entire agreement between the parties hereto with respect
PAGE 16
to the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or
referred to herein and therein. This Agreement and the other agreements
previously identified supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and
thereof.
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 the signature page of this Agreement bearing
the signature of the party so delivering this Agreement to the Escrow
Agent, with the original executed Agreement to be delivered to the Escrow
Agent via overnight delivery.
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.
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY:
RENTECH, INC.
By: (signature)
-------------------------------------
Xxxxx X. Xxxxxxx, Vice President
& CFO
BUYER:
-------------------------------------
By:
-------------------------------------
(Signature of authorized
representative of Buyer)
-------------------------------------
(Print name and title)
