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Exhibit 99.3
FORM OF
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated the __ day of
January, 1999, between __________, having an address of _______________________
(the "Holder") and Healthy Planet Products, Inc., a Delaware corporation having
its principal place of business at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx
00000 (the "Company").
WHEREAS, simultaneously with the execution and delivery of
this Agreement, the Holder is being issued ______ warrants ("Warrants")
entitling the Holders to purchase an aggregate of _______ shares ("Warrant
Shares") of Common Stock until January __, 2004 at an exercise price of $[ .00]
per share. The Shares and Warrants are collectively referred to herein as the
"Securities."
WHEREAS, the Company desires to grant to the Holders the
registration rights set forth herein with respect to the Shares and the Warrant
Shares (collectively the "Registrable Shares").
NOW, THEREFORE, the parties hereto mutually agree as follows:
SECTION 1. RESTRICTIONS ON TRANSFER. The Holder agrees that
prior to making any disposition of any of the Shares, Warrants or Warrant
Shares, the Holder shall give written notice to the Company describing briefly
the manner in which any such proposed disposition is to be made and no such
disposition shall be made if the Company has notified the Holder that, in the
opinion of counsel reasonably satisfactory to the Holder, a registration
statement or other notification or post-effective amendment thereto (hereinafter
collectively referred to as a "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act") is required with respect to such
disposition and no such Registration Statement is then in effect with respect
thereto.
SECTION 2. REGISTRATION RIGHTS. (a) The Company shall be
obligated to the Holder to file a Registration Statement only as follows:
(i) Whenever, during the period commencing upon the
date hereof and continuing until January __, 2004, the Company proposes
to file with the Securities and Exchange Commission (the "Commission")
a Registration Statement (other than a Form S-4 or S-8, or an S-3 used
in conjunction with an S-8 (which S-3 is filed solely to facilitate
resales by affiliates of the Company of shares issued under employee
stock incentive plans), or comparable registration statements), it
shall, at least 30 days prior to such filing, give written notice of
such proposed filing to the Holder at the Holder's address appearing on
the records of the Company, and shall offer to include and shall
include in such filing all or a portion of the Registrable Shares upon
receipt by the Company, not less than 10
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days prior to the proposed filing date, of a request therefor, subject
to the right of the managing underwriter, in any such offering that is
underwritten, to limit or eliminate entirely the number of securities
that may be included in such offering on a pro rata basis with any
other person on whose behalf securities are being registered.
(ii) In addition to any Registration Statement
pursuant to subparagraph (i) above, the Company will, as promptly as
practicable (but in any event within 60 days) after receipt of written
notice, at any time commencing on the first anniversary of the date
hereof and continuing until January __, 2004, prepare and file at the
written request of the persons holding not less than 50% of the
Registrable Shares (the "Demand Holders"), a registration statement
with the Commission and appropriate state securities authorities
sufficient to permit the public offering of the Registrable Shares
which are held and issuable to such Demand Holders, and will use its
best efforts, at its own expense, through its officers, directors,
auditors and counsel, in all matters necessary or advisable, to cause
such registration statement to become effective as promptly as
practicable following filing thereof; provided, however, that the
Company shall be obligated to file only one registration statement
under this subparagraph (ii), shall only be required to file such
registration statement on Form S-3 or any successor "short form"
registration statement, and shall only be required to file such
registration statement if the Market Value (as hereinafter defined) of
the Registrable Shares to be registered is not less than $1,500,000 on
the date on which the notice requesting registration is sent by the
Demand Holders. "Market Value" for purposes hereof shall be determined
by multiplying the number of Registrable Shares to be registered by (i)
if the Common Stock is traded on a national securities exchange or on
the Nasdaq Stock Market, the average for the 30 consecutive trading
days immediately preceding the date of the notice of the daily per
share closing prices of the Common Stock on the principal securities
exchange on which the Common Stock is listed or on Nasdaq, as the case
may be, or (ii) if the Common Stock is traded in the over-the-counter
market and not on any national securities exchange or on the Nasdaq
Stock Market, the average of the mean between the per share closing bid
and asked prices of the Common Stock on the 30 consecutive trading days
immediately preceding the date of the notice, as reported by Nasdaq or
an equivalent generally accepted reporting service. Promptly upon
receipt of such notice, the Company will begin to prepare the necessary
Registration Statement. Within 10 days after receiving notice hereunder
from the Demand Holders, the Company shall give notice to the other
holders of the Registrable Shares and offer to include in the
Registration Statement such other Registrable Shares.
(b) All fees, disbursements and out-of-pocket expenses and
costs incurred by the Company in connection with the preparation and filing of
any Registration Statement under Section 2(a) and in complying with applicable
securities and Blue Sky laws (including, without limitation, all attorneys'
fees) shall be borne by the Company. The Holder shall bear the cost of
underwriting discounts and commissions, if any, applicable to the Registrable
Shares being registered and the fees and expenses of its counsel. The Company
shall use its best efforts to qualify any of the securities for sale in such
states as such Holder reasonably designates and shall furnish indemnification in
the manner provided in Section 3 hereof. However, the Company shall
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not be required to qualify in any state which will require an escrow or other
restriction relating to the Company and/or the sellers. The Company at its
expense will supply the Holder with copies of such Registration Statement and
the prospectus or offering circular included therein and other related documents
in such quantities as may be reasonably requested by the Holder.
(c) The Company shall not be required by this Section 2 to
include any Registrable Shares in any Registration Statement which is to be
filed if, in the opinion of counsel for both the Holder and the Company (or,
should they not agree, in the opinion of another counsel experienced in
securities law matters acceptable to counsel for the Holder and the Company) the
proposed offering or other transfer as to which such registration is requested
is exempt from applicable federal and state securities laws and would result in
all purchasers or transferees obtaining securities which are not "restricted
securities", as defined in Rule 144 under the Securities Act.
(d) The Company agrees that until all Registrable Shares have
been sold under a Registration Statement or pursuant to Rule 144 under the
Securities Act, it will keep current in filing all materials required to be
filed with the Commission in order to permit the holders thereof to sell the
Registrable Shares under such Rule 144.
(e) No provision contained herein shall preclude the Company
from selling securities pursuant to any Registration Statement in which it is
required to include Registrable Shares pursuant to this Section 2.
SECTION 3. INDEMNIFICATION.
(a) In the event of the filing of any Registration Statement
with respect to Registrable Shares pursuant to Section 2 hereof, the Company
agrees to indemnify and hold harmless the Holder and each person, if any, who
controls the Holder within the meaning of the Securities Act ("Distributing
Holders") against any losses, claims, damages or liabilities, joint or several
(which shall, for all purposes of this Agreement, include, but not be limited
to, all costs of defense and investigation and all attorneys' fees), to which
the Distributing Holders may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such Registration
Statement, or any related preliminary prospectus, final prospectus, offering
circular, notification or amendment or supplement thereto, 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 not
misleading; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement, preliminary prospectus,
final prospectus, offering circular, notification or amendment or supplement
thereto in reliance upon, and in conformity with, written information furnished
to the Company by the Distributing Holders, specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
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(b) Each Distributing Holder agrees that it will indemnify and
hold harmless the Company, and each person, if any, who controls the Company
within the meaning of the Securities Act, against any losses, claims, damages or
liabilities (which shall, for all purposes of this Agreement, include, but not
be limited to, all costs of defense and investigation and all attorneys' fees)
to which the Company or any such controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in a
Registration Statement requested by such Distributing Holder, or any related
preliminary prospectus, final prospectus, offering circular, notification or
amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that such untrue statement or alleged untrue statement
or omission or alleged omission was made in such Registration Statement,
preliminary prospectus, final prospectus, offering circular, notification or
amendment or supplement thereto in reliance upon, and in conformity with,
written information furnished to the Company by such Distributing Holder,
specifically for use in the preparation thereof and, provided further, that the
indemnity agreement contained in this Section 3(b) shall not inure to the
benefit of the Company with respect to any person asserting such loss, claim,
damage or liability who purchased the Registrable Shares which are the subject
thereof if the Company failed to send or give (in violation of the Securities
Act or the rules and regulations promulgated thereunder) a copy of the
prospectus contained in such Registration Statement to such person at or prior
to the written confirmation to such person of the sale of such Registrable
Shares, where the Company was obligated to do so under the Securities Act or the
rules and regulations promulgated thereunder. This indemnity agreement will be
in addition to any liability which the Distributing Holders may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 3 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 3, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than as to the particular item as to which indemnification is then
being sought solely pursuant to this Section 3. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
in, and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, assume the defense thereof, subject to the provisions
herein stated and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under this Section 3 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation, unless
the indemnifying party shall not pursue the action to its final conclusion. The
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel reasonably
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satisfactory to the indemnified party; provided that if the indemnified party is
the Distributing Holder, the fees and expenses of such counsel shall be at the
expense of the indemnifying party if (i) the employment of such counsel has been
specifically authorized in writing by the indemnifying party or (ii) the named
parties to any such action (including any impleaded parties) include both the
Distributing Holder and the indemnifying party and the Distributing Holder shall
have been advised by such counsel that there may be one or more legal defenses
available to the indemnifying party different from or in conflict with any legal
defenses which may be available to the Distributing Holder (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the Distributing Holder, it being understood, however, that the
indemnifying party shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable only for the reasonable
fees and expenses of one separate firm of attorneys for the Distributing Holder,
which firm shall be designated in writing by the Distributing Holder). No
settlement of any action against an indemnified party shall be made without the
prior written consent of the indemnified party, which consent shall not be
unreasonably withheld.
SECTION 4. CONTRIBUTION. In order to provide for just and
equitable contribution under the Securities Act in any case in which (i) the
Distributing Holder makes a claim for indemnification pursuant to Section 3
hereof but is judicially determined (by the entry of a final judgment or decree
by a court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that the express provisions of
Section 3 hereof provide for indemnification in such case or (ii) contribution
under the Securities Act may be required on the part of any Distributing Holder,
then the Company and the applicable Distributing Holder shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(which shall, for all purposes of this Agreement, include, but not be limited
to, all costs of defense and investigation and all attorneys' fees), in either
such case (after contribution from others) on the basis of relative fault as
well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the applicable Distributing Holder, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Distributing Holder
agree that it would not be just and equitable if contribution pursuant to this
Section 4 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 4. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this Section 4 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. 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.
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SECTION 5. NOTICES. Any notice pursuant to this Agreement by
the Company or by the Holder shall be in writing and shall be deemed to have
been duly given if delivered by hand or if mailed by certified mail, return
receipt requested, postage prepaid, addressed as follows:
(a) If to the Holder, to his address set forth on the first
page of this Agreement.
(b) If to the Company, to the address set forth on the first
page of this Agreement, with a copy to Camhy Xxxxxxxxx & Xxxxx LLP, 0000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X.
Xxxxxxx, Esq.
or to such other address as any such party may designate by notice to the other
party. Notices shall be deemed given at the time they are delivered personally
or three days after they are mailed in the manner set forth above.
SECTION 6. ASSIGNMENT. This Agreement is binding upon and
inures to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns. This Agreement cannot be assigned, amended or
modified by the parties hereto, except by written agreement executed by the
parties.
SECTION 7. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 8. HEADINGS. The headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of California applicable
to contracts made and to be performed entirely within such State, without regard
to its principles of conflicts of laws.
SECTION 10. SEVERABILITY. If any provision of this Agreement
shall for any reason be held invalid or unenforceable, such invalidity or
unenforceablity shall not affect any other provision hereof and this Agreement
shall be construed as if such invalid or unenforceable provision had never been
contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, on the day and year first above written.
Attest: HEALTHY PLANET PRODUCTS, INC.
By:___________________________ By:___________________________
Name: Name:
Title: Title:
HOLDER
_______________________________
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