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EXHIBIT 10.2
AGREEMENT TO PROVIDE
REGISTRATION AND SUBSCRIPTION RIGHTS
THIS RIGHTS AGREEMENT ("Rights Agreement"), effective as of the first day of
July, 1999 (the "Effective Date") is made by Xxxxxxx Xxxx ("Xxxx") with and for
the benefit of The Polymer Technology Group Incorporated ("PTG"), a California
corporation, with its principal office at 0000 Xxxxxxx Xx., Xxxxxxxx, XX 00000.
RECITALS
WHEREAS, Sass is the majority and controlling shareholder of National
Applied Science, Inc. ("NAS") and mHL Development Company ("mHL"), each Oregon
corporations with a principal office at 00000 XX 00xx Xxxxxx, Xxxxxxxx, XX
00000:
WHEREAS, NAS and mHL are affiliated companies which are entering into a
Product Development and Supply Agreement with PTG effective as of the Effective
Date (the "Development Agreement") under which, among other things, PTG is to
receive certain warrants for the common stock of NAS and mHL (the "Warrants"):
WHEREAS, Sass represents that he does not presently enjoy Registration
Rights or Subscription Rights, as defined below, with respect to any shares of
NAS or mHL;
WHEREAS, PTG desires, as a condition to entering into the Development
Agreement, to obtain the right to have Registration Rights and Subscription
Rights with respect to stock acquired under the Warrants or to be issued by NAS
or mHL proportional on a share basis to those which may hereafter be obtained by
Sass; and
WHEREAS, Sass desires that PTG enter into the Development Agreement with
NAS and mHL and is therefore willing to undertake the obligations under this
Rights Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the
consideration recited therein, the parties agree as follows:
RIGHTS AGREEMENT
1. Registration Rights. If at any time NAS or mHL or any affiliate of either
grants to Sass any Registration Rights, as defined below, with respect to any
common stock of NAS or mHL, Sass shall assign to PTG, or shall cause the company
granting such
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rights to grant or provide to PTG, Registration Rights with respect to shares
acquired or to be acquired by PTG upon the exercise of any of the Warrants on
the same terms and conditions as are enjoyed by Sass or any successor of Sass
with respect to that class of shares such that PTG shall enjoy such Registration
Rights as to the same proportion of its shares as Sass or such successor enjoys
with respect to his shares. "Registration Rights" shall mean and include the
right to have filed and made effective with respect to the shares in question
any registration statement under the Securities Act of 1933 and any registration
or filing under the "Blue Sky Laws" of any state, and shall include so-called
"demand" and "Piggy-back" registration rights. Registration Rights shall be
deemed to be granted if any person or entity is given any contractual right to
enjoy Registration Rights presently or in the future or if any such registration
of filling is in fact done or made.
2. Subscriptions Rights. If at any time NAS or mHL or any affiliate of either
grants to any person or entity any Subscription Rights, as defined below, with
respect to any class of stock of NAS or mHL, Sass shall assign to PTG, or shall
cause the company granting such rights to grant or provide to PTG, Subscription
Rights with respect to shares acquired or to be acquired by PTG upon the
exercise of any of the Warrants on the same terms and conditions as are enjoyed
by Sass or any successor of Sass with respect to that class of shares such that
PTG shall enjoy such Subscription Rights as to the same proportion of its shares
as Sass or such successor enjoys with respect to his shares. "Subscription
Rights" shall mean and include the right to purchase or acquire shares that are
being newly issued by the Company in question. PTG's rights granted hereunder
shall be such that PTG shall have the opportunity to maintain the same
proportion between shares acquired or subject to acquisition under the Warrants
(whether or not vested) and the aggregate number of shares owned by Sass and any
successor of Sass. Subscription Rights shall be deemed to be granted if any
person or entity is given any contractual right to acquire any shares presently
or in the future or if any such shares are in fact issued. Subscription Rights
shall include, without limitation, so-called "preemptive rights." Shares
acquired by PTG hereunder shall be subject to the Stock Transfer Restriction
Rights Agreement executed by PTG with respect to the securities of the issuer in
question. PTG shall have a reasonable time, not less than thirty days after
notice, to decide whether to exercise Subscription Rights.
3. Governing Law. This Rights Agreement shall be governed by the laws of the
State of Oregon without regard to conflicts of law principles.
4. Complete Agreement, Modification, Waiver. This Rights Agreement is intended
as the complete, final and exclusive statement of the terms of the agreement
between the parties with regard to the subject matter hereof, and supersedes any
and all agreements between them relating to the subject matter hereof, except
for the specific agreements referred to above. No modification, change, or
amendment to this Rights Agreement, nor any waiver of any rights in respect
hereto, shall be effective unless in
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writing signed by the party to be charged. The waiver of any breach or default
hereunder shall not constitute the waiver of any subsequent breach or default.
5. Notice. Any notice or report required or permitted by this Rights Agreement
shall be deemed given if delivered personally or if sent by either party to the
other by registered or certified mail, postage prepaid, or internationally
recognized courier, for overnight delivery, or by electronic transmission (e.g.
E-mail, facsimile). If by personal delivery or by courier, delivery shall be
effective on receipt. If by electronic transmission, delivery shall be effective
on the day after transmission. If by mail, delivery shall be effective on the
third business day after mailing.
6. Assignment. Neither party shall assign this Rights Agreement or any rights
hereunder without the prior written consent of the other party, except as
expressly permitted hereby. Subject to the foregoing, this Rights Agreement
shall bind and inure to the benefit of the parties and their respective
successors and assigns. PTG shall be entitled to assign its interest in this
Rights Agreement in connection with any permitted assignment of the Development
Agreement or the Warrants. For purposes of this Rights Agreement Sass shall be
deemed to own and hold all shares of stock in which he or any member of his
family holds any beneficial interest or which he directly or indirectly
controls. In the event Sass may lose voting control of either NAS or mHL, he
shall, prior thereto, cause the company in question to assume his obligations
hereunder.
7. Severability. In the event any provision of this Rights Agreement is found to
be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of any of the remaining provisions shall not in any way be
affected or impaired thereby.
8. Arbitration. Any dispute arising under or relating to this Rights Agreement
shall be decided by binding arbitration as follows. The parties shall use all
reasonable efforts to resolve the dispute through direct discussions within 30
days of written notice that there is such a dispute. If no settlement is reached
as a result of the discussions, the matter shall be finally settled by
arbitration conducted expeditiously by a single arbitrator in accordance with
the applicable rules of the American Arbitration Association. No arbitrator may
serve who has had at any time a material personal or financial relationship with
any participant to the dispute or any Affiliate of any such participant. The
place of arbitration shall be San Francisco, California. The arbitrator is not
empowered to modify the terms of this Rights Agreement. The arbitrator shall
apportion costs between the parties in his or her discretion and may award
attorneys' fees to the prevailing party. The dispute resolution proceedings
contemplated by this provision shall be as confidential and private as permitted
by law. To that end, the parties shall not disclose the existence, content or
results of any proceedings conducted in accordance with this provision, and
materials submitted in connection with such proceedings shall not be admissible
in any other proceeding; provided, however, that this confidentiality provision
shall not prevent a petition to vacate or enforce an arbitral award, and shall
not bar disclosures required by law. The parties agree that any
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decision or, award resulting from proceedings in accordance with this dispute
resolution provision shall have no preclusive effect in any other matter
involving third parties. Notwithstanding the foregoing, if the enforcement of
any right under this Rights Agreement is possible only through recourse to the
equitable remedies provided by a court, due to the immediacy or nature of the
remedy sought (for example, a preliminary injunction or a temporary restraining
order), then either party may pursue such equitable remedies in a court of
competent jurisdiction if otherwise permissible by law pending submission of the
matter to arbitration.
9. Attorneys' Fees. If any arbitration or other action is brought to enforce or
interpret this Rights Agreement, the prevailing party shall be entitled to
recover its costs of suit and attorneys' fees, including any incurred on appeal.
IN WITNESS WHEREOF, the parties hereby execute this Rights Agreement as of the
day and year indicated above.
XXXXXXX XXXX THE POLYMER TECHNOLOGY
GROUP INCORPORATED
/s/ XXXXXXX X. XXXX By /s/ XXXXXX X. XXXX
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Title President/CEO
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