INVESTOR RIGHTS AGREEMENT
EXHIBIT 4.3
THIS
INVESTOR RIGHTS AGREEMENT (the “Agreement”)
is entered into as of June 4, 2008, by and among ECO2 PLASTICS, INC., a
Delaware corporation (the “Company”),
and the investors signatory hereto (each an “Investor”
and collectively, the “Investors”),
who are holders of the Company’s Series A Preferred Stock (the “Series A
Stock”), the Company’s Series B-1 Preferred Stock (the “Series B-1
Preferred Stock”) and the Company’s Series B-2 Preferred Stock (the
“Series B-2
Preferred Stock” and, together with the Series B-1 Preferred Stock, the
“Series B
Stock”). Capitalized terms used but not defined elsewhere
herein are defined in the Subscription Agreement (as defined
below).
RECITALS
WHEREAS,
the Company has entered into a Securities Subscription Agreement, dated as of
the date hereof (the “Subscription
Agreement”), with certain of the Investors (the “Series B
Investors”) pursuant to which the Company (i) has sold to the Series B
Investors, and the Series B Investors have purchased from the Company, shares of
Series B-1 Preferred Stock, and (ii) contemplates selling to certain of the
Series B Investors, and certain of the Series B Investors may elect to purchase
from the Company, shares of the Company’s Series B-2 Preferred Stock, each of
which is convertible into shares of the Company’s common stock (the “Common
Stock”).
WHEREAS,
the Company has entered into a Securities Subscription Agreement, dated as of
June 4, 2008 (the “Series A
Subscription Agreement”), with certain of the Investors (the “Series A
Investors”) pursuant to which the Company has sold to the Series A
Investors, and the Series A Investors have purchased from the Company, shares of
Series A Stock, which is convertible into shares of Common Stock.
WHEREAS,
as a condition to each of the Series B Investors’ obligations under the
Subscription Agreement, the Company and the Investors will enter into this
Agreement for the purpose of granting certain registration and other rights to
the Investors, as well as imposing certain restrictions on the ability of the
Investors to transfer their shares of Series B Stock or Series A Stock
(together, the “Shares”),
as applicable, or the shares of Common Stock issued or issuable upon conversion
thereof (the “Conversion
Shares” and, together with the Shares, the “Securities”).
NOW,
THEREFORE, in consideration of the covenants and promises set forth herein, and
for other good and valuable consideration, intending to be legally bound hereby
the parties agree as follows:
SECTION
1. Registration
Procedures.
1.1. The
Company shall, subject to receipt of necessary information from the Investors,
prepare and file with the Securities and Exchange Commission (the “SEC”),
upon written notice of holders of at least 40% of the then outstanding
Registrable Securities (as defined below) (the “Demand
Notice”), on or after the date that is 90 days after the date of this
Agreement (the “Initial Filing
Date”), a registration statement on Form S-1 (or Form S-3, should
the Company become eligible to use such form) (the “Initial
Registration Statement”) to enable the resale of (A) the Conversion
Shares and (B) the shares of Common Stock issuable pursuant to the warrants
issued to each of Xxxxxx Living Trust, dated 12-10-96 and Xxxxx-Xxxxx 1997 Trust
pursuant to Section 4(h) of the Subscription Agreement, in each case, together
with any shares of capital stock issued or issuable, from time to time, upon any
reclassification, share combination, share subdivision, stock split, share
dividend or similar transaction or event or otherwise as a distribution on, in
exchange for or with respect to any of the foregoing, in each case held at the
relevant time by an Investor (collectively the “Registrable
Securities”),
by the Investors from time to time through the National Association of
Securities Dealers OTC Bulletin Board, or other applicable exchange or in
privately-negotiated transactions; provided, however, that in the
event that publicly-available written guidance, rules of general applicability
of the SEC staff, or written comments, requirements or request of the SEC staff
to the Company in connection with the review of any registration statement (the
“SEC
Guidance”) does not permit the Initial Registration Statement to include
all Registrable Securities of each Investor (provided that, the
Company shall use reasonable best efforts to advocate with the SEC for the
registration of all or the maximum number of the Registrable Securities
permitted by SEC Guidance), then the Company will use reasonable best efforts to
file such additional registration statements (the “Subsequent
Registration Statements” and, together with the Initial Registration
Statements, the “Registration
Statements”) at the earliest practicable date on which the Company is
permitted by SEC Guidance to file such additional Registration Statements
related to the Registrable Securities (the “Subsequent Filing
Dates” and, together with the Initial Filing Date, the “Filing
Dates”). If any SEC Guidance sets forth a limitation pursuant
to Rule 415 of the Securities Act of 1933, as amended (together with the rules
and regulations of the SEC promulgated thereunder, the “Securities
Act”) or any other applicable regulation on the number of Registrable
Securities to be registered on a particular Registration Statement, the number
of Registrable Securities to be registered on such Registration Statement will
be reduced on a pro rata basis based on the total number of unregistered
Conversion Shares held by such Investors.
1.2. The
Company shall cause (A) the Initial Registration Statement to become
effective as soon as practicable after the Initial Registration Statement is
filed by the Company, but in any event no later than 4:00 p.m. Eastern Time on
the 90th day
after the Initial Filing Date; (B) any Subsequent Registration Statements, as
amended, which may be required to be filed hereunder pursuant to Section 1.1 to
become effective under the Securities Act as soon as practicable but in any
event no later than 4:00 p.m. Eastern Time on the 90th day
after such Subsequent Filing Date (each, its “Required
Effective Date”).
1.3. The
Company shall cause any prospectus used in connection with any Registration
Statement (a “Prospectus”)
to be filed with the SEC pursuant to Rule 424(b) under the Securities Act as
soon as practicable but in any event no later than 5:30 p.m. Eastern Time the
next business day following the date such Registration Statement is declared
effective by the SEC.
1.4. The
Company shall prepare and file with the SEC such amendments and supplements to
the Registration Statements and any Prospectus used in connection therewith as
may be necessary to keep such Registration Statements current and effective and
as may be reasonably requested by an Investor in order to incorporate
information concerning such Investor or such Investor’s intended method of
distribution for a period not exceeding, with respect to each Investor’s
Registrable Securities, the earlier of (A) the second anniversary of each
Required Effective Date, (B) the date on which such Investor (together with
its Affiliates (as defined below)) beneficially owns less than 1% of the then
outstanding shares of Common Stock (assuming for these purposes the conversion
of all outstanding Shares into Common Stock at the then applicable conversion
price), or (C) such time as all Registrable Securities purchased by such
Investor pursuant to this offering have been sold pursuant to a registration
statement.
1.5. The
Company shall, so long as any Registration Statement is effective covering the
resale of Registrable Securities owned by the Investors, furnish via
electronic mail or regular mail to each Investor with respect to the
Registrable Securities registered under such Registration Statement (and to each
underwriter, if any, of such Registrable Securities) such number of copies of
such Registration Statement, Prospectuses and Preliminary Prospectuses in
conformity with the requirements of the Securities Act and such other documents
as such Investor may reasonably request, in order to facilitate the public
sale or other disposition of all or any of the Registrable Securities by
such Investor.
1.6. The
Company shall file documents required of the Company for normal blue sky
clearance in states specified in writing by the Investors; provided, however, that the
Company shall not be required to qualify to do business or consent to service of
process in any jurisdiction in which it is not now so qualified or has not so
consented.
1.7. The
Company shall furnish to each Investor via electronic mail or regular mail, two
(2) business days after the date that any Registration Statement becomes
effective, (A) a letter, dated such date, of outside counsel representing the
Company (and reasonably acceptable to such Investor) addressed to such Investor,
confirming the effectiveness of such Registration Statement and, to the
knowledge of such counsel, the absence of any stop order, and (B) in the case of
firmly underwritten offering, an opinion addressed to such Investor, dated such
date, of such outside counsel, in such reasonable and customary form and
substance as is required to be given to the underwriters.
1.8. The
Company shall provide to each Investor and its representatives, if requested,
the opportunity to conduct a reasonable inquiry of the Company’s financial and
other records during normal business hours and make available its officers,
directors and employees for questions regarding information which such Investor
may reasonably request in order to fulfill any due diligence obligation on its
part, provided,
that in the case of this Section 1.8, the Company shall not be required to
provide, and shall not provide, any Investor with material, non-public
information unless such Investor agrees to receive such information and enters
into a written confidentiality agreement with the Company.
1.9. The
Company shall, not less than three (3) trading days prior to the filing of a
Registration Statement and not less than two (2) trading days prior to the
filing of any related Prospectus or any amendment or supplement thereto
(including any document that would be incorporated or deemed to be incorporated
therein by reference) or, in the case of comments made by the staff of the
SEC and the Company’s responses thereto, within a reasonable period of time
following the receipt thereof by the Company, furnish to each Investor via
electronic mail or regular mail copies of all such documents proposed to be
filed or copies of such correspondence from and to the SEC relating to such
Registration Statement, as the case may be, which documents (other than those
incorporated or deemed to be incorporated by reference) will be subject to the
review of such Investor. The Company shall reflect in each such
document when so filed with the SEC such comments relating to such Investor as
such Investor may reasonably propose; provided, however, that such
comments from such Investor must be received by the Company no later than one
(1) trading day prior to the filing of such document with the
SEC. Notwithstanding any other provision of this Agreement, the
Company will have no obligation to deliver or make available to any Investor any
Registration Statement or Prospectus containing any material, nonpublic
information unless such Investor specifically consents in advance to receive
such material, nonpublic information in writing and such Investor has executed
an agreement to keep such material, nonpublic information confidential and
refrain from trading in any Company security for so long as such information
remains material, nonpublic information.
1.10. If a
Demand Notice delivered in accordance with Section 1.1 specifies that the sale
of the Registrable Securities is intended to be conducted through an
underwritten offering, the holders of a majority of Registrable Securities
included in such Demand Notice shall have the right to select the managing
underwriter or underwriters to administer the offering; provided, however, that such managing
underwriter or underwriters shall be reasonably acceptable to the
Company. The holders of Registrable Securities included in such
Demand Notice and the Company shall enter into an underwriting agreement in such
customary form as shall have been negotiated and agreed to by the Company with
the underwriter or underwriters selected for such underwriting.
1.11. Notwithstanding
any other provision of this Section 1, if the managing underwriter or
underwriters of a proposed underwritten offering of the Registrable Securities
advise the Board of Directors of the Company that in its or their opinion, the
number of Registrable Securities requested to be included in the Registration
Statement and all other securities proposed to be sold in the offering
contemplated thereby exceeds the number which can be sold in such underwritten
offering in light of market conditions, the Registrable Securities and such
other securities to be included in such underwritten Registration Statement
shall be allocated, (i) first, up to the total number of securities the holders
of Registrable Securities have requested to be included in such Registration
Statement (pro rata based upon the number of securities that each of them shall
have requested to be included in such offering), (ii) second, and only if all
the Registrable Securities referred to in clause (i) have been included, up to
the total number of securities that other holders of piggyback registration
rights have requested to be included in such Registration Statement (pro rata
based upon the number of securities that each of them shall have requested to be
included in such Registration Statement) and (iii) third, and only if all the
securities referred to in clause (ii) have been included, the number of
securities that the Company and other holders have proposed to include in such
Registration Statement that, in the opinion of the managing underwriter or
underwriters can be sold without having such adverse effect. To
facilitate the allocation of shares in accordance with the above provisions, the
Company or the managing underwriters may round the number of shares allocated to
any holder to the nearest 100 shares. If any holder of Registrable
Securities disapproves of the terms of any such underwriting, such holder of
Registrable Securities may elect to withdraw therefrom by written notice to the
Company and the managing underwriter or underwriters. Any securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
1.12. In the
event any holder of Registrable Securities requests to participate in a
Registration Statement pursuant to this Section 1 in connection with a
distribution of Registrable Securities to its partners or members, the
Registration Statement shall in the event such distribution and subsequent
resale is permitted by applicable law provide for resale by such partners or
members, if requested by such holder of Registrable Securities.
1.13. The
Investors shall have the right to have any registration initiated by them under
Section 1.1 terminated or withdrawn prior to the effectiveness
thereof. If the Investors cause a registration to be terminated or
withdrawn in accordance with this Section 1.13, they shall again be entitled to
exercise their demand rights pursuant to Section 1.1.
1.14. Until
such date as the Registrable Securities have been (A) registered under the Act
and disposed of in accordance with an effective Registration Statement relating
thereto; (B) publicly sold pursuant to Rule 144; or (C) transferred in a
transaction pursuant to which the registration rights are not also assigned in
accordance with Section 13 hereof, the Company shall be obligated to take
all necessary actions set forth in this Section 1 to effect such registration,
qualification, and compliance with respect to the Registrable Securities at the
request of holders of Registrable Securities; provided that holders
of Registrable Securities may not deliver more than one Demand Notice to the
Company in any consecutive six (6) month period.
1.15. The
Company shall use all commercially reasonable efforts to prevent the issuance of
any stop order or other order suspending the effectiveness of the Registration
Statements and, if such an order is issued, to obtain the withdrawal thereof at
the earliest possible time and to notify each Investor of the issuance of such
order and the resolution thereof.
1.16. With a
view to making available to the Investors the benefits of Rule 144 (or its
successor rule) and any other rule or regulation of the SEC that may at any time
permit the Investors to sell Registrable Securities to the public without
registration, the Company covenants and agrees to: (A) make and keep public
information available, as those terms are understood and defined in Rule 144,
until the earlier of (1) six months after such date as all of the
Investors’ Registrable Securities may be resold pursuant to Rule 144 or any
other rule of similar effect or (2) such date as all of the
Investors’ Registrable Securities shall have been resold; (B) file
with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and under the Securities Exchange Act of 1934,
as amended (the “Exchange
Act”); and (C) furnish to any Investor upon request, as long as
such Investor owns any Registrable Securities, (1) a written statement
by the Company that it has complied with the reporting requirements of the
Securities Act and the Exchange Act, (2) a copy of the Company’s most
recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and
(3) such other information as may be reasonably requested in order to avail
such Investor of any rule or regulation of the SEC that permits the selling
of any such Registrable Securities without registration.
It shall
be a condition precedent to the obligations of the Company to take any action
pursuant to this Section 1 that such Investor shall furnish to the Company such
information required by the SEC as shall be required to effect and keep
effective the registration of the Registrable Securities.
The
Company will not offer, sell, contract to sell, pledge, or otherwise dispose of,
(or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the
Company or any affiliate of the Company or any person acting on behalf of
the Company or any affiliate of the Company) directly or indirectly, including
the filing (or participation in the filing) of a registration statement with the
SEC in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act, any other shares of Common Stock or any
securities convertible into, or exercisable, or exchangeable for, shares of
Common Stock; or publicly announce an intention to effect any such transaction,
until sixty (60) days after the date hereof; provided, however, that the
Company may issue and sell Common Stock pursuant to any employee stock option
plan, stock ownership plan or dividend reinvestment plan of the Company or
pursuant to any employee or consultant compensation agreement of the Company in
effect as of the date hereof, may file an updated Form S-8 registration
statement and the Company may issue Common Stock issuable upon the conversion of
securities or the exercise of warrants outstanding as of the date
hereof.
The
Company understands that each Investor disclaims being an underwriter, but any
Investor being deemed an underwriter by the SEC shall not relieve the Company of
any obligations it has hereunder; provided, however, that if the
Company receives notification from the SEC that any Investor is deemed an
underwriter, then such Investor shall provide such further information or take
such further action as may be required to allow any Registration Statement to
become effective for the Registrable Securities held by such
Investor.
SECTION
2. Company
Registration.
2.1. If at any
time or from time to time until the fourth anniversary of the date of this
Agreement, the Company shall determine to file a registration statement for an
underwritten public offering of its equity securities (for the avoidance of
doubt, the following will not apply to any registration statement filed on a
Form X-0, Xxxx X-0 or any successor forms), the Company will: (A) promptly give
to each holder of Registrable Securities written notice thereof; and
(B) subject to Section 2.2 below, include in such registration (and any
related qualification under blue sky laws or other compliance) all the
Registrable Securities specified in a written request or requests made within 7
days after receipt of such written notice from the Company by any holder of
Registrable Securities.
2.2. The right
of any holder of Registrable Securities to registration pursuant to this Section
2 shall be conditioned upon such holder’s participation in such underwriting and
the inclusion of Registrable Securities in the underwriting to the extent
provided herein. Each holder of Registrable Securities proposing to
distribute its securities through such underwriting shall (together with the
Company and the other holders distributing their securities through such
underwriting) enter into and perform such holder’s obligations under an
underwriting agreement with the managing underwriter selected for such
underwriting by the Company or by the stockholders of the Company who have the
right to select the underwriters (such underwriting agreement to be in the form
negotiated by the Company or such stockholders, as the case may
be). Notwithstanding any other provision of this Section 2, if the
managing underwriter or underwriters of a proposed underwritten offering with
respect to which holders of Registrable Securities have exercised their
piggyback registration rights advise the Board of Directors of the Company that
in its or their opinion the number of Registrable Securities requested to be
included in the offering thereby and all other securities proposed to be sold in
the offering exceeds the number which can be sold in such underwritten offering
in light of market conditions, the Registrable Securities and such other
securities to be included in such underwritten offering shall be allocated, (i)
first, up to the total number of securities that the Company has requested to be
included in such registration; provided that the
number of Registrable Securities to be included in such offering shall be
no less than thirty percent (30%) of the total number of securities proposed to
be distributed through such offering (allocated among the holders of Registrable
Securities pro rata based upon the number of Registrable Securities held by all
such holders of Registrable Securities), (ii) second, and only if all the
securities referred to in clause (i) have been included, up to the total number
of securities that the holders of Registrable Securities and the holders of
other securities having the contractual right to inclusion of their securities
in the offering have requested to be included in such offering (pro rata based
upon the number of Registrable Securities and other securities entitled to
registration rights held by all such holders of Registrable Securities and other
securities having such contractual right), and (iii) third, and only if all the
securities referred to in clause (ii) have been included, all other securities
proposed to be included in such offering that, in the opinion of the managing
underwriter or underwriters can be sold without having such adverse
effect. To facilitate the allocation of shares in accordance with the
above provisions, the Company or the managing underwriters may round the number
of shares allocated to any holder of Registrable Securities or other holder to
the nearest 100 shares. If any holder of Registrable Securities
disapproves of the terms of any such underwriting, such holder may elect to
withdraw therefrom by written notice to the Company and the managing underwriter
or underwriters. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
2.3. The
Company or the holders of securities who have caused a registration statement to
be filed as contemplated by this Section 2, as the case may be, shall have the
right to have any registration initiated by it or them under this Section 2
terminated or withdrawn prior to the effectiveness thereof, whether or not any
holder of Registrable Securities has elected to include securities in such
registration; provided, however, that such
holder of Registrable Securities shall again be entitled to exercise its demand
rights pursuant to this Section 2.
SECTION
3. Transfer of Registrable
Securities After Registration; Suspension.
3.1. Each
Investor agrees that it will not effect any Disposition of the Registrable
Securities or its right to purchase the Registrable Securities that would
constitute a sale within the meaning of the Securities Act or pursuant to any
applicable state securities or Blue Sky laws of any state, except (A) as
contemplated in any Registration Statement covering the Registrable Securities
that has been declared effective, (B) pursuant to the requirements of Rule 144
(in which case such Investor will provide the Company with reasonable evidence
of such Investor’s compliance therewith) or (C) pursuant to a written opinion of
legal counsel reasonably satisfactory to the Company and addressed to the
Company to the effect that registration under Section 5 of the Securities Act is
not required in connection with the proposed transfer; whereupon the holder of
such securities shall be entitled to transfer such securities.
3.2. Except in
the event that Section 3.3 applies, the Company shall: (A) if deemed
necessary by the Company, prepare and file from time to time with the SEC a
post-effective amendment to the Registration Statements or a supplement to the
related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that such
Registration Statement will not contain an 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 not misleading, and so that, as thereafter delivered
to purchasers of the Registrable Securities being sold thereunder, such
Prospectus will not contain an 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 under which they were made,
not misleading; (B) upon request by any Investor, provide such Investor
copies of any documents filed pursuant to Section 3.2(A); and (C) inform
each Investor that the Company has complied with its obligations in Section
3.2(A) (or that, if the Company has filed a post-effective amendment to a
Registration Statement which has not yet been declared effective, the Company
will notify the Investors to that effect, will use its reasonable efforts to
secure the effectiveness of such post-effective amendment as promptly as
possible and will promptly notify the Investors pursuant to Section 3.2(A)
hereof when the amendment has become effective).
3.3. Subject
to Section 3.4, in the event of: (A) any request by the SEC or any other
federal or state governmental authority during the period of effectiveness of
any Registration Statement for amendments or supplements to a Registration
Statement or related Prospectus or for additional information; (B) the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose; (C) the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation of any proceeding for such purpose; or
(D) any event or circumstance which necessitates the making of any changes
in any Registration Statement or Prospectus, or any document incorporated or
deemed to be incorporated therein by reference, so that, in the case of such
Registration Statement, it will not contain any untrue statement of a material
fact or any omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
such Prospectus, it will not contain any untrue statement of a material fact or
any omission to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; then the Company shall deliver a certificate in
writing to the Investors (the “Suspension
Notice”) to the effect of the foregoing and, upon receipt of such
Suspension Notice, the Investors will refrain from selling any Registrable
Securities pursuant to the Registration Statement (a “Suspension”)
until the Investors’ receipt of copies of a supplemented or amended Prospectus
prepared and filed by the Company, or until it is advised in writing by the
Company that the current Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in any such Prospectus. In the event of any Suspension,
the Company will use its reasonable efforts to cause the use of a Prospectus so
suspended to be resumed as soon as reasonably practicable within 20 business
days after delivery of a Suspension Notice to the Investors. In
addition to and without limiting any other remedies (including, without
limitation, at law or at equity) available to the Investors, the Investors shall
be entitled to specific performance in the event that the Company fails to
comply with the provisions of this Section 3.3.
3.4. Notwithstanding
the foregoing sections of this Section 3, the Investors shall not be prohibited
from selling Registrable Securities under a Registration Statement as a result
of Suspensions on more than two (2) occasions of not more than thirty (30) days
each in any twelve (12) month period (the “Permitted
Suspension Period”) unless, in the good faith judgment of the Company’s
Board of Directors, upon advice of counsel, the sale of Registrable Securities
under such Registration Statement in reliance on this Section 3.4 would be
reasonably likely to cause a violation of the Securities Act or the Exchange
Act.
3.5. Provided
that a Suspension is not then in effect, any Investor may sell Registrable
Securities under the Registration Statements, provided that the Investor is
selling its Registrable Securities in accordance with such Registration
Statement, the Securities Act, applicable state securities laws and, to the
extent the exemption from prospectus delivery requirements in Rule 172
under the Securities Act is not available, satisfies the requirement of
delivering a current prospectus in connection with any proposed transfer or sale
of the Registrable Securities.
SECTION
4. Information
Available. So long as any
Registration Statement is effective covering the resale of Registrable
Securities owned by the Investors, the Company will furnish to the
Investors via electronic mail or regular mail:
4.1. as soon
as practicable after it is available, one copy of (A) its Annual Report to
Stockholders (which Annual Report shall contain financial statements audited in
accordance with generally accepted accounting principles by a national firm of
certified public accountants) and (B) if not included in substance in the
Annual Report to Stockholders, its Annual Report on Form 10-K (the foregoing, in
each case, excluding exhibits);
4.2. upon the
reasonable request of any Investor, all exhibits excluded by the parenthetical
to Section 4.1(B) as filed with the SEC and all other information that is made
available to stockholders; and upon the reasonable request of any Investor, an
adequate number of copies of Prospectuses to supply to any other party requiring
such Prospectuses; and the Company, upon the reasonable request of any Investor,
will meet with such Investor or a representative thereof at the Company’s
headquarters to discuss all information relevant for disclosure in such
Registration Statement covering the Registrable Securities and will otherwise
cooperate with any Investor conducting an investigation for the purpose of
reducing or eliminating such Investor’s exposure to liability under the
Securities Act, including the reasonable production of information at the
Company’s headquarters; provided that the
Company shall not be required to disclose any confidential information to or
meet at its headquarters with any Investor until and unless such Investor shall
have entered into a confidentiality agreement in form and substance reasonably
satisfactory to the Company with the Company with respect thereto.
SECTION
5. Expenses of
Registration. The Company shall bear all expenses in
connection with the procedures in Section 1 and Section 2 and the
registration of the Registrable Securities pursuant to the Registration
Statements.
SECTION
6. Aggregation of Shares. All
shares of Registrable Securities held or acquired by Affiliates (as defined
below) of a holder of Registrable Securities shall be aggregated for the purpose
of determining the availability of or discharge of any rights under this
Agreement. In addition, a holder of Registrable Securities and its Affiliates
may allocate among themselves any rights available under this Agreement, in any
manner they shall determine in their discretion. Any such group of
Affiliates may designate in writing one person to serve as representative of
such group for the purposes of exercising any rights or undertaking any
obligations of such group hereunder, and the Company shall be entitled to rely
on such designated representative for such purposes. For a holder of
Registrable Securities that is an investment entity and is a partnership,
corporation or limited liability company, the term “Affiliate”
shall include, (A) all Associated Entities (as defined below) of such holder,
and (B) all stockholders, all current or former constituent limited or general
partners, and all stockholders, current or former members of such holder and any
Associated Entities of such holder. The term “Associated
Entity” shall include any entity that is (X) a direct or indirect
subsidiary or parent of a holder of Registrable Securities or (Y) with respect
to a holder of Registrable Securities that is a limited liability company or a
limited liability partnership, (i) the manager, managing member, general partner
or management company of such holder or (ii) a fund or entity managed by the
same manager, managing member, general partner or management company or by an
entity controlling, controlled by, or under common control with such manager,
managing member, general partner or management company. For a holder
of Registrable Securities that is an individual, the term “Affiliate”
shall also include all family members of such holder, which shall include such
holder’s children, stepchildren, grandchildren, parents, stepparents,
grandparents, spouse, siblings, mothers-in-law, fathers-in-law, sons-in-law,
daughters-in-law, brothers-in-law and sisters-in-law (including adoptive
relationships) as well as any estate-planning related trusts for the benefit of
such holder and/or any of the foregoing persons. The status of a
holder of Registrable Securities as an Affiliate under this Agreement shall not
be deemed to be an admission that such holder is an “affiliate” for any SEC
purposes.
SECTION
7. Pre-Emptive Rights.
From the date hereof until the third anniversary of the date hereof, each
Investor holding at least 5,000,000 shares of Common Stock or Securities of the
Company, subject to appropriate adjustment for all stock splits, dividends,
recapitalizations and the like (each, a “Major
Holder”), shall have the rights contained in this Section
7. The Company shall not directly or indirectly, offer, sell or grant
any option to purchase (or announce any offer, sale, grant or any option to
purchase or other disposition of) any securities (any such offer, sale, grant,
disposition or announcement being referred to as a “Subsequent
Placement”) unless the Company shall have first complied with this
Section 7.
7.1. The
Company shall deliver, at least ten (10) business days prior to the closing of a
Subsequent Placement, to each Investor who is a Major Holder of the Company (an
“Eligible
Purchaser”), a written notice (the “Offer
Notice”) of any proposed or intended issuance or sale or exchange (the
“Subsequent
Offer”) of the securities being offered (the “Offered
Securities”) in a Subsequent Placement, which Offer Notice shall (A)
identify and describe the Offered Securities, (B) describe the price or pricing
mechanism and other terms upon which they are to be issued, sold or exchanged,
and the number or amount of the Offered Securities to be issued, sold or
exchanged, and (C) offer to issue and sell to or exchange with each Eligible
Purchaser that portion of the Offered Securities that represents such Eligible
Purchaser’s pro rata percentage of the number of shares of Common Stock then
outstanding (assuming for these purposes the conversion of all outstanding
Shares into Common Stock at the then applicable conversion price) (the “Pro Rata
Amount”).
7.2. To accept
a Subsequent Offer, in whole or in part, such Eligible Purchaser must deliver a
written notice to the Company prior to the end of the 10th business day after
such Eligible Purchaser’s receipt of the Offer Notice (the “Offer
Period”), setting forth the portion of such Eligible Purchaser’s Pro Rata
Amount that such Eligible Purchaser elects to purchase (in either case, the
“Notice of
Acceptance”).
7.3. In
connection with any Subsequent Placement, the Company shall distribute to the
Eligible Purchasers, other than any Eligible Purchaser that has indicated to the
Company it is not interested in participating in the Subsequent Offer or that
has not prior to the end of the Offer Period delivered a Notice of Acceptance
pursuant to Section 7.2 above, all agreements and other documents to be
executed by the purchasers in the Subsequent Placement, at substantially the
same time such items are distributed to the purchasers in the Subsequent
Placement other than the Eligible Purchasers. If any Eligible
Purchaser shall have failed to execute and deliver any such agreement or other
document in the form so distributed by the such time as may be reasonably
requested by the Company in connection with the Subsequent Placement, then such
Eligible Purchaser shall not have a right to participate in such Subsequent
Placement and all securities which such Eligible Purchaser would have been
eligible to purchase in the Subsequent Placement shall be treated as Refused
Securities (as defined below) with respect thereto.
7.4. The
Company shall have ninety (90) days from the expiration of the Offer Period
above to offer, issue, sell or exchange all or any part of such Offered
Securities as to which a Notice of Acceptance has not been given by the Eligible
Purchasers (the “Refused
Securities”), but only upon terms and conditions (including, without
limitation, the total amount of the financing, unit prices and interest rates)
that are not materially more favorable to the acquiring person or persons or
materially less favorable to the Company than those set forth in the Offer
Notice, except for such changes which may, in the reasonable judgment of the
Company, be necessary or appropriate on account of changes in market conditions,
provided that
if the Company makes such changes, it will use reasonable commercial efforts to
consult with the Eligible Purchasers and to provide them the opportunity to
participate in the financing as modified by such changes.
7.5. Upon the
closing of the issuance, sale or exchange of all or less than all of the Refused
Securities, the Eligible Purchasers shall acquire from the Company, and the
Company shall issue to the Eligible Purchasers, the number or amount of Offered
Securities specified in the Notices of Acceptance, upon the terms and conditions
specified in the Subsequent Offer, subject to the terms and conditions contained
in this Section 7.
7.6. The
restrictions and other provisions contained in this Section 7 shall not apply to
the issuance of any securities issued or issuable: (A) to any employee, officer,
director or consultant in connection with any plan or other compensatory
arrangement approved by the Board of Directors or the compensation committee of
the Board of Directors of the Company; (B) upon the exercise of any warrants
outstanding as of the date hereof; (C) to financial institutions, equipment
lessors, brokers or similar persons in connection with commercial credit
arrangements, equipment financings, commercial property lease transactions or
similar non-equity transactions; (D) in connection with bona fide acquisition,
merger or similar transaction; or (E) to an entity as a component of any
business relationship with such entity primarily for the purpose of (1) joint
venture, technology licensing or development activities, (2) distribution,
supply or manufacture of the Company’s products or services or (3) any other
arrangements that are primarily for purposes other than raising equity
capital. For the avoidance of doubt, the restrictions and other
provisions contained in this Section 7 shall apply to the issuance of any
securities issued or issuable in any underwritten public offering.
SECTION
8. Market Standoff
Agreement. Each Investor agrees that if so requested by the
Company or any representative of the underwriters (the “Managing
Underwriter”) in connection with any registration of the offering of any
securities of the Company under the Securities Act, such Investor shall
not, directly or indirectly, offer, sell, pledge, contract to sell, enter into
any hedge or swap transaction with respect to, grant any option to purchase,
sell short, grant a security interest in or otherwise dispose of or transfer or
enter into any transaction which is designed to, or might reasonably be expected
to, result in the disposition of (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) any Securities or
other securities of the Company (other than securities to be sold in such
registration) for a period specified by the Managing Underwriter not to exceed
90 days (or 180 days if holders of 40% of the then outstanding Registrable
Securities have agreed to such longer period) (the “Market Standoff
Period”) following the effective date of a registration statement of the
Company filed under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period and these restrictions
shall be binding on any transferee of such shares. Notwithstanding
the foregoing, the Market Standoff Period may be extended for up to such number
of additional days (not to exceed 18 more days) as is deemed necessary by the
Company or the Managing Underwriter in good faith upon the advice of counsel to
continue coverage by research analysts in accordance with NASD Rule 2711 or any
successor rule.
SECTION
9. Indemnification.
9.1. For
purposes of this Section 9 only:
(A) the
term “Prospectus”
shall mean the prospectus and any amendment or supplement thereto in the form
first filed with the SEC pursuant to Rule 424(b) promulgated under the
Securities Act or, if no Rule 424(b) filing is required, filed as part of the
Registration Statement at the time of effectiveness, as supplemented or amended
from time to time;
(B) the
term “Registration
Statement” shall include any final prospectus, exhibit, supplement or
amendment included in or relating to a Registration Statement; and
(C) the
term “Indemnified
Party” shall mean each Investor and any officer, director, shareholder,
partner, member, employee, agent, trustee or affiliate of each Investor and each
Person, if any, who controls, is controlled by or is under common control with
any Investor within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act.
9.2. The
Company agrees to indemnify and hold harmless each Indemnified Party against any
losses, claims, damages, liabilities or expenses, joint or several, to which
such Indemnified Party may become subject under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in a Registration
Statement or Prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or arise out of or are based in whole or
in part on any inaccuracy in the representations and warranties of the Company
contained in the Subscription Agreement, or arise out of the Company’s failure
to provide written notice of a Suspension, or any failure of the Company to
perform its obligations hereunder, and will reimburse each Indemnified Party for
any legal and other expenses reasonably incurred as such expenses are reasonably
incurred by such Indemnified Party in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based upon (i) an
untrue statement or alleged untrue statement or omission or alleged omission
made in a Registration Statement or Prospectus in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Indemnified Party expressly for use therein, (ii) the failure of such
Indemnified Party to comply with the covenants and agreements contained in this
Agreement respecting sale of the Registrable Securities, (iii) the
inaccuracy of any representations made by such Indemnified Party in the
Subscription Agreement.
9.3. Each
Investor will severally, and not jointly, indemnify and hold harmless the other
Investors and the Company, each of its directors, each of its officers who
signed a Registration Statement and each Person, if any, who controls the
Company within the meaning of the Securities Act, against any losses, claims,
damages, liabilities or expenses to which the Company, each of its directors,
each of its officers who signed a Registration Statement or controlling Person
may become subject, under the Securities Act, the Exchange Act, or any other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Investor) insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon (i) any failure by such Investor to
comply with the agreements contained in Section 3 above respecting the sale of
the Registrable Securities unless such failure by such Investor is directly
caused by the Company’s failure to provide written notice of a Suspension to
such Investor, (ii) the inaccuracy of any representation made by such
Investor in the Subscription Agreement or (iii) any untrue or alleged
untrue statement of any material fact contained in a Registration Statement or
the Prospectus, or the omission or alleged omission to state therein 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, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in a
Registration Statement or Prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Investor
expressly for use therein, and will reimburse the Company, each of its
directors, each of its officers who signed a Registration Statement or
controlling Person for any legal and other expense reasonably incurred, as such
expenses are reasonably incurred by the Company, each of its directors, each of
its officers who signed a Registration Statement or controlling Person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided, however, that the
aggregate liability of any Investor under this Section 9 shall not exceed
the net proceeds received by such Investor upon the sale of the Registrable
Securities included in the Registration Statement or Prospectus giving rise to
such indemnification obligation. No Investor shall be liable for the
indemnification obligations of any other Investor.
9.4. Promptly
after receipt by an indemnified party under this Section 9 of notice of the
threat or commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this
Section 9, promptly notify the indemnifying party in writing thereof, but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party hereunder or otherwise to
the extent it is not prejudiced as a result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with all other indemnifying parties similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt
of notice from the indemnifying party to such indemnified party of its election
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 9 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed such counsel in connection
with the assumption of legal defenses in accordance with the proviso to the
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel,
reasonably satisfactory to the indemnifying party, representing the indemnified
parties who are parties to such action) or (ii) the indemnified party shall
not have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of action, in each of which cases the reasonable fees and expenses
of counsel shall be at the expense of the indemnifying party. No
indemnifying party, in the defense of any claim covered by this Section 9,
shall, except with the prior written consent of the indemnified party, which
consent shall not be unreasonably conditioned, withheld or delayed, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such
claim. An indemnified party shall not consent to entry of any
judgment or enter into any settlement without the prior written consent of the
indemnifying party.
9.5. If the
indemnification provided for in this Section 9 is unavailable to or insufficient
to hold harmless an indemnified party under Section 9.2 or Section 9.3 in
respect of any losses, claims, damages, liabilities or expenses (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Investors on the other in connection with
the statements or omissions or other matters which resulted in such losses,
claims, damages, liabilities or expenses (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, in the case of an
untrue statement, whether the untrue statement relates to information supplied
by the Company on the one hand or an Investor on the other and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement. The Company and the Investors agree
that it would not be just and equitable if contribution pursuant to this Section
9.5 were determined by pro rata allocation (even if the Investors were treated
as one entity for such purpose) or by any other method of allocation which does
not take into account the equitable considerations referred to above in this
Section 9.5. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses (or actions in
respect thereof) referred to above in Section 9.5 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim; provided, however, that the
aggregate liability of any Investor under this Section 9 shall not exceed
the net proceeds received by such Investor upon the sale of the Registrable
Securities included in the Registration Statement or Prospectus giving rise to
such contribution obligation. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Investors’ obligations in this Section 9.5 to
contribute are several in proportion to their sales of Registrable Securities to
which such loss relates and not joint.
SECTION
10. Information
Rights. Each Major Holder shall receive via regular or
electronic mail (i) Annual Reports on Form 10-K, or audited annual financials,
no later than 90 days, or 105 days should the Company file an extension on Form
12b-25, following each fiscal year end, and (ii) Quarterly Reports on Form 10-Q,
or unaudited quarterly financials prepared in accordance with GAAP consistently
applied, no later than 45 days, or 50 days should the Company file an extension
on Form 12b-25, following each quarter end.
SECTION
11. Board
Representation. Pursuant to the Company’s certificate of
incorporation and related certificate of designations of Series B Stock,
holders of Series B Stock have the right to elect three directors to the
Company’s Board of Directors, who shall initially be Xxxxx Xxxxx, Xxx Xxxxxx and
a representative designated by funds associated with Trident Capital (the
“Investor
Designees”), with Xxx Xxxxxx as Chairman of the Board of
Directors. Three existing members of the Board of Directors shall
have resigned from the Board of Directors, leaving four prior members and the
Investor Designees on the Board of Directors. In addition, one of the
four prior members of the Board of Directors shall resign at such time as
requested by holders of a majority of the outstanding shares of Series B Stock
to permit election of a new seventh member of the Board of Directors approved by
a majority of the remainder of the Board of Directors. Each Investor
Designee shall be entitled to serve on any committee of the Board of Directors.
Xxxx XxXxxxxxxxxx, if not a member of the Board of Directors, shall be provided
board observer status following his resignation from the Board of Directors, in
which he may attend meetings of the Board of Directors, except in executive
session.
SECTION
12. Limitations on Subsequent
Registration Rights. From and after the date hereof, the
Company shall not enter into any agreement granting any holder or prospective
holder of any securities of the Company registration rights with respect to such
securities that conflict with, dilute or impair the rights granted to the
holders of Registrable Securities herein, without the consent of holders of at
least a majority of the Registrable Securities.
SECTION
13. Transfer of Registration
Rights. The rights to cause the Company to register securities
granted to a holder of Registrable Securities under this Agreement may be
assigned by such holder only to a transferee or assignee of not less than
five million (5,000,000) shares of the Registrable Securities (as
appropriately adjusted for stock splits, stock dividends, reorganizations and
the like) then outstanding, provided that the
Company is given prior written notice of such assignment, stating the name and
address of the transferee or assignee and identifying the securities with
respect to which such registration rights are being assigned, and, provided, further, that the
assignee of such rights assumes in writing the obligations of such holder of
Registrable Securities under this Agreement. Notwithstanding the
foregoing, no such minimum share assignment requirement shall be necessary for
an assignment by a holder of Registrable Securities to an Affiliate of such
holder.
SECTION
14. Prior
Agreements. This Agreement supersedes and replaces agreements
with holders of Common Stock (or other securities or warrants convertible into
shares of Common Stock) granting such holders registration rights, among other
things (the “Prior
Agreements”) in their entirety, and the Prior Agreements are hereby
void and of no further force or effect. By execution of this
Agreement, each Investor which is a party to a Prior Agreement expressly waives
any registration right, right of first refusal, participation right or similar
right granted to such Investor pursuant to the Prior Agreements.
SECTION
15. Miscellaneous.
15.1. Notices. All
communications hereunder shall be in writing and shall be hand delivered, mailed
by first-class mail, couriered by next-day air courier or by facsimile and
confirmed in writing (i) if to the Company, at the addresses set forth
below, or (ii) if to an Investor, to the address set forth for such party
on the signature page hereto, with a copy to Xxxxxx &Watkins LLP, 000 Xxxxx
Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxx,
Esq.
If to the
Company:
ECO2
Plastics, Inc.
000
Xxxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief
Executive Officer
Telephone:
000-000-0000
Facsimile: 000-000-0000
with a
copy to:
The Xxxx
Law Group, PLLC
000 Xxxxx
Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxxxx 00000
Attn: Xxxxx
Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
All
such notices and communications shall be deemed to have been duly
given: (i) when delivered by hand, if personally delivered;
(ii) five business days after being deposited in the mail, postage prepaid,
if mailed certified mail, return receipt requested; (iii) one business day
after being timely delivered to a next-day air courier guaranteeing overnight
delivery; (iv) the date of transmission if sent via facsimile to the
facsimile number as set forth in this Section or the signature page hereof prior
to 5:00 pm in the time zone of the recipient on a business day, with
confirmation of successful transmission or (v) the business day following
the date of transmission if sent via facsimile at a facsimile number set forth
in this Section or on the signature page hereof after 5:00 p.m. in the time zone
of the recipient or on a date that is not a business day. Change of a
party’s address or facsimile number may be designated hereunder by giving notice
to all of the other parties hereto in accordance with this Section.
15.2. Successors and
Assigns. This Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Any purported assignment or delegation in violation of this
Agreement shall be null and void ab initio.
15.3. Amendment and
Waiver.
(a) Except
as otherwise expressly provided herein, this Agreement may be amended or
modified only upon the written consent of (i) the Company and (ii) the holders
of at least a majority of the then outstanding shares of Series B Stock, voting
together as a single class on an as-converted basis and including any Common
Stock issued upon conversion thereof; provided, however, that no
amendment of this Agreement shall materially and adversely affect the rights of
an Investor in a manner that materially and disproportionately discriminates
against such Investor in relation to the other Investors without such Investor's
written consent.
(b) Except
as otherwise expressly provided, the obligations of the Company and the rights
of the Investors under this Agreement may be waived only with the written
consent of (i) the Company and (ii) the holders of at least a majority of the
then outstanding shares of Series B Stock voting together as a single class on
an as-converted basis and including any Common Stock issued upon conversion
thereof; provided, however, that no
waiver of this Agreement shall materially and adversely affect the rights of an
Investor in a manner that materially and disproportionately discriminates
against such Investor in relation to the other Investors without such Investor’s
written consent.
(c) For
the purposes of determining the number of Investors entitled to vote or exercise
any rights hereunder, the Company shall be entitled to rely solely on the list
of record holders of its stock as maintained by or on behalf of the
Company.
15.4. Entire Agreement; No Third
Party Beneficiary. This Agreement, together with the other
Transaction Documents (as defined in the Subscription Agreement), constitutes
the entire agreement among the parties hereto and supersedes all prior
agreements, understandings and arrangements, oral or written, among the parties
hereto with respect to the subject matter hereof and thereof. This
Agreement is not intended to confer upon any Person not a party hereto (or their
successors and permitted assigns) any rights or remedies hereunder.
15.5. Severability. If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired
thereby.
15.6. APPLICABLE
LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND
THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO
PROVISIONS RELATING TO CONFLICTS OF LAW TO THE EXTENT THE APPLICATION OF THE
LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. THE PARTIES
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ACTIONS, SUITS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE BROUGHT ONLY IN STATE OR
FEDERAL COURTS LOCATED IN THE CITY OF SAN FRANCISCO, CALIFORNIA AND HEREBY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR SUCH
PURPOSE.
15.7. Counterparts. This
Agreement may be executed in two or more counterparts and may be delivered by
facsimile transmission, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
15.8. Rights of
Holders. Each party to this Agreement shall have the absolute
right to exercise or refrain from exercising any right or rights that such party
may have by reason of this Agreement, including, without limitation, the right
to consent to the waiver or modification of any obligation under this Agreement,
and such party shall not incur any liability to any other party or other holder
of any securities of the Company as a result of exercising or refraining from
exercising any such right or rights.
[Signature Pages
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IN
WITNESS WHEREOF, the parties have executed this Investor Rights Agreement as of
the date first above written.
ECO2
PLASTICS, INC.
By:
Name: Xxxxxx X.
Xxxxxxxx
Title: Chief
Executive Officer
INVESTORS:
Trident
Capital Fund-VI, L.P.
Trident
Capital Fund-VI Principals Fund, L.L.C.
Executed
by the undersigned as an authorized signatory of the General Partner of Trident
Capital Fund-VI, L.P. and of the Managing Member of Trident Capital Fund-VI
Principals Fund, L.L.C.
(signature)
(print name)
INVESTORS:
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By: _________________________________
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Name: _________________________________
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Title: _________________________________
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