-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T7edVjGkpfqP39UImBweJE9IqnGPTOx28F2G7pO6oK7LMI734h2T1bdQ/5DwionP mEs4gLmhMTa2aehXd/MPJQ== 0000021175-96-000001.txt : 19960307 0000021175-96-000001.hdr.sgml : 19960307 ACCESSION NUMBER: 0000021175-96-000001 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19960306 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CYANOTECH CORP CENTRAL INDEX KEY: 0000768408 STANDARD INDUSTRIAL CLASSIFICATION: MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833] IRS NUMBER: 911206026 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-38427 FILM NUMBER: 96531858 BUSINESS ADDRESS: STREET 1: 73-4460 QUEEN KAAHUMANU HWY STREET 2: SUITE 102 CITY: KAILUA KONA STATE: HI ZIP: 96740 BUSINESS PHONE: 8083261353 MAIL ADDRESS: STREET 1: 73-4460 QUEEN KAAHUMANU HWY STREET 2: SUITE 102 CITY: KAILUA-KONA STATE: HI ZIP: 96740 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CNA FINANCIAL CORP CENTRAL INDEX KEY: 0000021175 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 366169860 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: CNA PLZ CITY: CHICAGO STATE: IL ZIP: 60685 BUSINESS PHONE: 3128225000 MAIL ADDRESS: STREET 1: CNA PLAZA CITY: CHICAGO STATE: IL ZIP: 60685 SC 13D/A 1 SCHEDUELE 13D AMENDMENT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Cyanotech Corporation - ---------------------------------------------------------------------------- (Name of Issuer) Common Stock - ----------------------------------------------------------------------------- (Title of Class of Securities) 232437103 - ----------------------------------------------------------------------------- (CUSIP Number) Donald M. Lowry CNA Financial Corporation CNA Plaza, Chicago, Illinois 60685 (312)822-5158 - ----------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) February 28, 1996 - ----------------------------------------------------------------------------- (Date of Event which Required Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box . ---- Check the following box if a fee is being paid with the statement . ------ The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - ----------------------------------------------------------------------------- CUSIP No. 232437103 - ----------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON LOEWS CORPORATION I.R.S. Identification No. 13-2646102 - ----------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ / (b)/ X / - ----------------------------------------------------------------------------- 3 SEC USE ONLY - ----------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ----------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / N/A - ----------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ----------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 ------------------------------------------------------------ 8 SHARED VOTING POWER NUMBER OF 183,486 shares of Common Stock directly; 3,408,641 SHARES shares of Common Stock assuming conversion of Series A and C BENEFICIALLY Preferred Stock (See Item 5) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON ------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 183,486 shares of Common Stock directly; 3,408,641 shares of Common Stock assuming conversion of Series A and C Preferred Stock (See Item 5) - ----------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 183,486 shares of Common Stock directly; 3,408,641 shares of Common Stock assuming conversion of Series A and C Preferred Stock (See Item 5) - ----------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / - ----------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.0%, 27.8% assuming conversion of Series A and C Preferred Stock (See Item 5) - ----------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON HC - ----------------------------------------------------------------------------- SCHEDULE 13D - ----------------------------------------------------------------------------- CUSIP No. 232437103 - ----------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON CNA FINANCIAL CORPORATION I.R.S. Identification No. 36-6169860 - ----------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ / (b)/ X / - ----------------------------------------------------------------------------- 3 SEC USE ONLY - ----------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ----------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / N/A - ----------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ----------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 --------------------------------------------------------------- 8 SHARED VOTING POWER NUMBER OF 183,486 shares of Common Stock directly; 3,408,641 SHARES shares of Common Stock assuming conversion of Series A and C BENEFICIALLY Preferred Stock (See Item 5) OWNED BY --------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON --------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 183,486 shares of Common Stock directly; 3,408,641 shares of Common Stock assuming conversion of Series A and C Preferred Stock (See Item 5) - ----------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 183,486 shares of Common Stock directly; 3,408,641 shares of Common Stock assuming conversion of Series C Preferred Stock (See Item 5) - ----------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / - ----------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.0%, 27.8% assuming conversion of Series C Preferred Stock (See Item 5) - ----------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON HC - ----------------------------------------------------------------------------- SCHEDULE 13D - ----------------------------------------------------------------------------- CUSIP No. 232437103 - ----------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The Continental Corporation I.R.S. Identification No. 13-2610607 - ----------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / X / - ----------------------------------------------------------------------------- 3 SEC USE ONLY - ----------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ----------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / N/A - ----------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York - ----------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 ------------------------------------------------------------- 8 SHARED VOTING POWER NUMBER OF 183,486 shares of Common Stock directly; 3,408,641 SHARES shares of Common Stock assuming conversion of Series A and C BENEFICIALLY Preferred Stock (See Item 5) OWNED BY ------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 0 PERSON ------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 183,486 shares of Common Stock directly; 3,408,641 shares of Common Stock assuming conversion of Series A and C Preferred Stock (See Item 5) - ----------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 183,486 shares of Common Stock directly; 3,408,641 shares of Common Stock assuming conversion of Series A and C Preferred Stock (See Item 5) - ----------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES/ / - ----------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.0%, 27.8% assuming conversion of Series C Preferred Stock (See Item 5) - ----------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON HC - ----------------------------------------------------------------------------- SCHEDULE 13D - ----------------------------------------------------------------------------- CUSIP No. 232437103 - ----------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Firemen's Insurance Company of Newark, New Jersey I.R.S. Identification No. 22-1721950 - ----------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ / (b)/ X / - ----------------------------------------------------------------------------- 3 SEC USE ONLY - ----------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ----------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / N/A - ----------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New Jersey - ----------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 0 SHARES ------------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 3,225,155 shares of Common Stock assuming conversion of EACH Series A and C Preferred Stock (See Item 5) REPORTING ------------------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 0 ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 3,225,155 shares of Common Stock assuming conversion of Series A and C Preferred Stock (See Item 5) - ----------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,225,155 shares of Common Stock assuming conversion of Series A and C Preferred Stock (See Item 5) - ----------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES/ / - ----------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 26.3% - ----------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IC - ----------------------------------------------------------------------------- SCHEDULE 13D - ----------------------------------------------------------------------------- CUSIP No. 232437103 - ----------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON National-Ben Franklin Insurance Company of Illinois I.R.S. Identification No. 13-2611663 - ----------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / X / - ----------------------------------------------------------------------------- 3 SEC USE ONLY - ----------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ----------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / N/A - ----------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Illinois - ----------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 0 SHARES ------------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 183,486 shares of Common Stock EACH ------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 0 WITH ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 183,486 shares of Common Stock - ----------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 183,486 shares of Common Stock - ----------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES/ / - ----------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.0% - ----------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IC - ----------------------------------------------------------------------------- SCHEDULE 13D relating to CYANOTECH CORPORATION Item 4. Purpose of Transaction. ---------------------- The Shares were, and are, included in the investment portfolio of Firemen's and National-Ben. Except as otherwise stated in this Item 4, neither Loews, CNA, Continental, Firemen's nor National-Ben has any plans or proposals with respect to the Issuer that relate or that could result in any of the transactions specified in clauses (a) through (j) of Item 4 of Schedule 13D, although CNA, Continental, Firemen's and National-Ben (jointly, the "Insurance Companies") expect that each of them will review their respective positions from time to time and may make changes. In addition, the Insurance Companies expect that each of them will from time to time review their respective investment positions in the Issuer and may, depending upon market conditions or other factors existing at the time of such review, increase or decrease their respective positions. In this connection, the Insurance Companies have recently given active consideration to disposing of some or all of the 183,486 Shares held directly by National-Ben. From time to time, executives in CNA's investment portfolio operation have had discussions with senior executives of the Issuer. Among other things such individuals have discussed with the Issuer, the Issuer's financial structure and working capital needs. Item 5. Interest in Securities of the Issuer. ------------------------------------ (a)(i) National-Ben is the beneficial owner of 183,486 Shares, representing approximately 2.0% of the total number of Shares outstanding, as calculated in the manner set forth in Regulation 13D-G.* (ii) Firemen's beneficially owns 1,250,000 shares of the Series C Preferred Stock, which are convertible into 250,000 Shares. Assuming conversion of all of the Series A Preferred Stock, Fireman's beneficially would own 2.7% of the total number of Shares outstanding, as calculated in the manner set forth in Regulation 13D-G.* (ii) Firemen's beneficially owns 595,031 shares of the Series C Preferred Stock, which are convertible into 2,975,155 Shares. Assuming conversion of all of the Series C Preferred Stock, Firemen's beneficially would own 24.0% of the total number of Shares outstanding, as calculated in the manner set forth in Regulation 13D-G.* (iii) Continental owns 100% of the outstanding common stock of both National- Ben and Firemen's, and therefore, may be deemed to be the beneficial owner of the 3,408,641 Shares beneficially owned by National-Ben and Firemen's, or 27.8% of the total number of Shares outstanding, as calculated in the manner set forth in Regulation 13D-G.* (iv) CNA owns 100% of the outstanding common stock of Continental and therefore, may be deemed to be the beneficial owner of the 3,408,641 Shares beneficially owned by Continental, or 27.8% of the total number of Shares outstanding, as calculated in the manner set forth in Regulation 13D-G.* (v) Loews owns 84% of the outstanding common stock of CNA and therefore, may be deemed to be the beneficial owner of the 3,408,641 Shares benenficially owned by CNA, or 27.8% of the total number of Shares outstanding, as calculated in the manner set forth in Regulation 13D-G.* To the best of the respective knowledge of Loews, CNA, Continental, Firemen's and National-Ben, no director or executive officer of Loews, CNA, Continental, Firemen's or National-Ben beneficially owns any Shares. - ------------------- * Based on the number of Shares outstanding on June 22, 1995 as reported by the Issuer. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. ------------------------------------------------------------- To the best knowledge of Loews, CNA, Continental, Fireman's and National-Ben, the only contract, arrangement, understanding or relationship (legal or otherwise) with any person with respect to any securities of the Issuer, including, but not limited to those types enumerated in Item 6 of Schedule 13D except for 1) a Stockholders Agreement dated as of May 17, 1993 by and among Gerald R. Cysewski, Firemen's (as successor in interest to Continental), National-Ben, Gerald A. Sherlock, Eva R. Reichl and the Issuer (the "Stockholders Agreement") which was previously filed as an Exhibit and 2) Cyanotech Corporation Preferred Stock Conversion and Registration Rights Agreement. The Stockholders Agreement, in pertinent part, (a) limits the number of directors to six, (b) permits Eva R. Reichl to nominate one director and (c) requires the parties to the Stockholder Agreement to vote for such director. The Cyanotech Corporation Preferred Stock Conversion and Registration Rights Agreement, in pertinent part, reinstates the convertibility feature of the Series A Preferred Stock and requires such conversion upon an initial public offering of Shares, so long as the initial public offering occurs by September 30, 1996. Item 7. Material to Be Filed as Exhibits. -------------------------------- The following items are filed as Exhibits to this Schedule 13D: Exhibit 4 - The Cyanotech Corporation Preferred Stock Conversion and Registration Rights Agreement SIGNATURE --------- The undersigned certifies that after reasonable inquiry and to the best of his knowledge and belief, the information set forth in this Statement is true, complete and correct. CNA FINANCIAL CORPORATION ------------------------- (Registrant) BY:/S/ Donald M. Lowry ---------------------- Donald M. Lowry Senior Vice President, Secretary and General Counsel Dated: March 6, 1996 EX-99 2 THE CYANOTECH CORP. PREF. STOCK CONV. CYANOTECH CORPORATION PREFERRED STOCK CONVERSION AND REGISTRATION RIGHTS AGREEMENT THIS PREFERRED STOCK CONVERSION AND REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of February 20, 1996, by and between Cyanotech Corporation, a Nevada corporation (the "Company"), and Firemen's Insurance Company of Newark, New Jersey, a New Jersey insurance company ("Firemen's Insurance"). National-Ben Franklin Co. of Illinois, and Illinois corporation ("National-Ben"), has executed this Agreement for purposes of Article IV hereof only. WHEREAS, Firemen's Insurance holds 1,250,000 shares (the "Series A Shares") of the Company's 12% Cumulative, Convertible Preferred Shares - Series A, par vale $.001 per share, constituting all the shares of such series of the Company currently issued and outstanding; WHEREAS, Firemen's Insurance purchased the Series A Shares pursuant to the Venture Capital Unit Purchase Agreement dated as of April 18, 1985 between The Continental Corporation (the successor in interest to Firemen's Insurance) and the Company (the "Series A Agreement"); WHEREAS, Firemen's Insurance holds 595,031 shares (the "Series C Shares") of the Company's 8% Cumulative, Convertible Preferred Shares - Series C, par value $.001 per share; WHEREAS, the 1,250,000 outstanding Series A Shares were convertible by their terms into 250,000 shares of the Company's common stock, par value $.005 per share (all shares of the Company's common stock referred to herein as the "Common Stock"), until February 28, 1995; WHEREAS, the Company is contemplating an underwritten public offering of its Common Stock (the "Contemplated Public Offering"), registered under the Securities Act of 1933, as amended (the "Securities Act"), which Contemplated Public Offering is expected to occur in late March or early April 1996; WHEREAS, the underwriters of the Contemplated Public Offering have advised the Company that for marketing reasons, among other factors, the success of the Contemplated Public Offering is partially dependent, among other factors, upon agreement of Firemen's Insurance to convert the outstanding Series A Shares into Common Stock of the Company; WHEREAS, Firemen's Insurance will benefit from the success of the Contemplated Public Offering; WHEREAS, Firemen's Insurance desires to convert, and the Company desires Firemen's Insurance to convert, the Series A Shares into shares of Common Stock, on the terms and subject to the terms set forth herein; and WHEREAS, to further induce Firemen's Insurance to convert the Series A Shares and the Series C Shares, the Company has agreed to grant certain "piggy-back" registration rights to Firemen's Insurance with respect to its resale of the shares of Common Stock issuable on conversion of the Series A Shares and the Series C Shares. NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS: ARTICLE I Conversion of Series A Shares ----------------------------- 1.1 Conversion of Series A Shares. Subject to the terms and ------------------------------ conditions of this Agreement, Firemen's Insurance shall convert the Series A Shares into 250,000 shares of Common Stock (subject to appropriate adjustment for stock splits, stock dividends, combinations, other recapitalizations and similar events) which conversion ratio has been determined in accordance with the independent valuation attached hereto as Exhibit A and the Company shall issue to Firemen's Insurance 250,000 shares of Common Stock in respect thereof (subject to appropriate adjustment for stock splits, stock dividends, combinations, other recapitalizations and similar events). The aggregate 250,000 shares of Common Stock to be issued to Firemen's Insurance shall herein be referred to as the "Common Shares." 1.2 Termination of Rights Under Other Agreements. All rights --------------------------------------------- of Firemen's Insurance to cause the Company to register the resale of any of the Company's securities existing prior to the date hereof under the Securities Act or any state securities laws shall terminate as of the date hereof. All rights of Firemen's Insurance under the Series A Agreement, and any other agreement to which the Company and Firemen's Insurance is a party relating to the Series A Shares and the Common Stock issuable upon conversion thereof shall terminate as of the date hereof. All rights of Firemen's Insurance incident to ownership of Series A Shares, including, without limitation, the ability of the holders of the Series A Shares to elect one director of the Company, shall terminate as of the Closing (as defined below). 1.3 Closing. The conversion of the Series A Shares and the ------- issuance of the Common Shares in respect thereof shall take place at such time and place as the closing of the Contemplated Public Offering (which time and place are designated as the "Closing"). At the Closing, Firemen's Insurance shall deliver to the Company the certificates representing the Series A Shares and the Company shall deliver to Firemen's Insurance certificates representing the Common Shares as set forth in Section 1.1 hereof. This Agreement shall terminate in its entirety and be of no further force and effect, and any rights terminated pursuant to Section 1.2 shall be reinstated, if the Closing does not occur by September 30, 1996, or such later date as all parties hereto shall agree. ARTICLE II Representations and Warranties of Firemen's Insurance ----------------------------------------------------- Firemen's Insurance hereby represents and warrants to the company that: 2.1 Title to Stock. Firemen's Insurance has good and valid --------------- title to the Series A Shares held by it, free and clear of any lien, pledge, security interest, or other encumbrance with full right and power to convert such shares as set forth herein. 2.2 Authorization. This Agreement constitutes a valid and ------------- legally binding obligation, enforceable in accordance with its terms, subject to bankruptcy and other laws of general application affecting the right and remedies of creditors, and rules of law governing specific performance, injunctive relief, or other equitable remedies. 2.3 Restricted Securities. Firemen's Insurance understands ---------------------- that the Common Shares are characterized as "restricted securities" under the federal securities laws inasmuch as they were initially acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations, such securities may be resold without registration under the Securities Act, only in certain limited circumstances. In this connection, Firemen's Insurance represents that it is familiar with Securities and Exchange Commission ("SEC") Rule 144 as presently in effect and it understands the resale limitations imposed thereby and by the Securities Act. Firemen's Insurance understands that it may be deemed an "affiliate" of the Company as that term is defined in Rule 144. 2.4 Disclosure of Information. Firemen's Insurance believes ------------------------- that it has received all the information that it consider necessary or appropriate for deciding whether to enter into the transactions contemplated by this Agreement and to acquire the Common Shares. Firemen's Insurance has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the Common Shares. The Company has not made any representations to Firemen's Insurance regarding the Company, its business, prospects, financial condition, or any other matter. 2.5 Legends. It is understood that the certificates evidencing ------- the Common Shares, when reissued in the name of Firemen's Insurance, may bear the following legend, or a legend substantially similar to such legend: "These securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledge or hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or an opinion of counsel satisfactory to the Company that such registration is not required or unless sold pursuant to Rule 144 of such Act." ARTICLE III Registration Rights ------------------- The Company covenants and agrees as follows: 3.1 Definitions. For purposes of this Article III: ----------- (a) The term "register," "registered," and "registration" refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act and the declaration or ordering of effectiveness of such registration statement or document; (b) The term "Registrable Securities" means (1) the Common Shares issued to Firemen's Insurance pursuant to this Agreement, (2) the shares of Common Stock of the Company issuable or issued upon conversion of the Series C Shares, and (3) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right, or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such Common Shares or such Common Stock, excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which his/her rights under this Article III are not assigned; (c) The number of shares of "Registrable Securities then outstanding" shall be determined by the number of shares of Common Stock outstanding which are, and the number of shares of Common Stock issuable pursuant to then exercisable or convertible securities which are, Registrable Securities; (d) The term "Holder" means any person owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 3.10 hereof; and (e) The term "Form S-3" means such form under the Securities Act as in effect on the date hereof or any comparable or successor form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC. 3.2 Company Registration. If (but without any obligation to do -------------------- so under this Agreement), at any time after the closing of the Contemplated Public Offering, the Company proposes to register any of its stock or other securities under the Securities Act in connection with the public offering of such securities solely for cash (other than a registration relating solely to the sale of securities to participants in a Company stock plan, or a registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities), the Company shall, at such time, give each Holder written notice of such registration at least 20 days prior to the proposed date to file any registration statement. Upon the written request of each Holder given within twenty (20) days after mailing of such notice by the Company in accordance with Section 4.5, the Company shall, subject to the provisions of Section 3.6, cause to be registered under the Securities Act all of the Registrable Securities that each such Holder has requested to be registered. 3.3 Obligations of the Company. Whenever required under this -------------------------- Article III to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible: (a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its reasonable best efforts to cause such registration statement to become effective and to remain effective for a period of not less than 90 days or such shorter period which will terminate when all Registrable Securities covered by such registration statement have been sold. (b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act and other applicable laws and regulations with respect to the disposition of all securities covered by such registration statement. (c) Furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus including all supplements thereto, in conformity with the requirements of the Securities Act, and such other documents as they may reasonable request in order to facilitate the disposition of Registrable Securities owned by them. (d) Use its reasonable best efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to quality to do business or to file a general consent to service of process in any such states or jurisdictions. (e) Use its reasonable best efforts to list for quotation on the National Association of Securities Dealers Automated Quotation System ("Nasdaq") (or such other national exchange or national quotation system on which the Company's Common Stock is then listed) such Registrable Securities. (f) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement. In addition, all shares registered shall be distributed substantially in accordance with the plan of distribution as set forth in the registration statement. (g) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and notice of any stop order issued or threatened by the SEC and to take all reasonable actions to prevent the entry of such stop order or to remove it if it is entered. (h) If any Registrable Securities are offered for sale, on the date that the Registrable Securities are delivered to the underwriters, if any, and if such Registrable Securities are not being sold through underwriters, then on the date the registration statement becomes effective, the Company shall furnish the Holder with (A) a signed opinion, dated as of the date of such delivery, of the legal counsel of the Company addressed to the underwriters, if any, and if such Registrable Securities are not being sold through underwriters, then to the Holder covering such matters as are customarily addressed in opinions rendered to underwriters on such transactions, and (B) a letter, dated as of the date of such delivery of the Company independent public accountants addressed to the underwriters, and if such Registrable Securities are not being sold through underwriters, then to the Holder and, if such accountants refuse to deliver such letter to the Holder, then to the Company (x) stating that they are independent certified public accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements and other financial data of the Company included in the registration statement or the prospectus, or any amendment or supplement thereto, comply as to form in all material respects with the applicable accounting requirements of the Securities Act, and (y) covering such other financial matters (including information as to the period ending not more then five (5) business days prior to the date of such letter) with respect to the registration in respect of which such letter is being given as the Holder may reasonably request and as would be customary in such a transaction. 3.4 Furnish information. It shall be a condition precedent to ------------------- the obligations of the Company to take any action pursuant to this Article III with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required by law or otherwise to effect the registration of such Holder's Registrable Securities. 3.5 Expenses of Company Registration. The Company shall bear --------------------------------- and pay all expenses incurred in connection with any registration, filing, of qualification of Registrable Securities with respect to the registrations pursuant to Section 3.2 for each Holder (which right may be assigned as provided in Section 3.10), including (without limitation) all registration, filing, and qualification fees, printer's and accounting fees relating thereto, and fees and disbursements of counsel for the Company, but excluding the fees and disbursements of legal counsel for the selling Holders if separate legal counsel is employed and underwriting discounts and commissions relating to Registrable Securities. 3.6 (a) Underwriting Requirements. In connection with any -------------------------- offering involving an underwriting of shares of the Company's capital stock, the Company shall not be required under Section 3.2 to include any of the Holders' securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then subject to the terms set forth below only in such quantity as will not in the opinion of the underwriters jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters reasonably believe compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters believe will not jeopardize the success of the offering (the securities so included to be apportioned pro-rata among the selling stockholders according to the total amount of securities entitled to be included therein owned by each selling stockholder or in such other proportions as shall mutually be agreed to by such selling stockholders), provided, however, that the amount of Registrable Securities and other securities excluded from the offering may not be reduced to less than forty percent (40%) of such offering; and further provided, however that Firemen's Insurance will be entitled to include in each public offering, if it shall so elect, no fewer than 507,000 shares of Registrable Securities (subject to appropriate adjustment for stock splits, stock dividends, combinations, other recapitalizations and similar events). For purposes of the parenthetical in the preceding sentence concerning apportionment, for any selling stockholder which is a Holder of Registrable Securities and which is a partnership or corporation, the partners, retired partners and stockholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single "selling stockholder," and any pro-rata reduction with respect to such "selling stockholder" shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such "selling stockholder," as defined in this sentence. (b) Withdrawal Rights. Each Holder shall be permitted to ------------------ withdraw up to 507,000 shares (subject to appropriate adjustment for stock splits, stock dividends, combinations, other recapitalizations and similar events) of such Holder's Registrable Securities included in a registration at any time prior to the effective date of such registration. In addition, to the extent the number of Registrable Securities being sold by the Holder is greater than 507,000 shares (subject to appropriate adjustment for stock splits, stock dividends, combinations, other recapitalizations and similar events) the Holder can withdraw any such portion above 507,000 shares if, on the date of such withdrawal, the last reported sale price of the Company's Common Stock on Nasdaq (or such other national exchange or national quotation system on which the Company's Common Stock is then listed) was less than 85% of the proposed maximum offering price per share listed on the "Calculation of Registration Fee" section on the cover of the registration statement filed with the respect to the Registrable Securities. 3.7 Delay of Registration. No Holder shall have any right to ---------------------- obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Article III. This Section 3.7 shall not affect any remedies at law available to the Holder for breaches of Section 3.6(a)( by the Company. 3.8 Indemnification and Contribution. In the event any -------------------------------- Registrable Securities are included in a registration statement under this Article III: (a) To the extent permitted by law, the company will indemnify and hold harmless each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act or the 1934 Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions, or violations (collectively a "Violation"): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be state therein, or necessary to make the statements therein not misleading, or (iii any violation or alleged violation by the Company of the Securities Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the Securities Act or the 1934 Act or any state securities law; and the Company will pay to each such Holder, underwriter, or controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, -------- ------- that the indemnity agreement contained in this subsection 3.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter, or controlling person. (b) To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject under the Securities Act or the 1934 Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this subsection 3.8(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained -------- ------- in this subsection 3.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld. (c) Promptly after receipt by an indemnified party under this Section 3.8 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 3.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party -------- ------- (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain separate counsel in each jurisdiction where separate representation would be appropriate in the judgment of the indemnified party, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party to the extent of such prejudice of any liability to the indemnified party under this Section 3.8, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 3.8. (d) No indemnifying party, in the defense of any claim arising out of a Violation shall, except with the consent of each indemnified party, 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 or litigation and, in the event the terms of such judgment or settlement include any term other than the payment by the indemnifying party of money damages, the indemnifying party shall not so consent or enter into such a settlement without the consent of each indemnified party (which will not be unreasonably withheld) whether or not the terms thereof include such a release. (e) Contribution. If for any reason the indemnity provided for ------------ in this Section 3.8 is unavailable to, or is insufficient to hold harmless, an indemnified party, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, or provides a lesser sum to the indemnified party than the amount hereinafter calculated, in such proportion as is appropriate to reflect not only the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other but also the relative fault of the indemnifying party and the indemnified party as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parities shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties; and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 3.8(d), any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 3.8(e) 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 the immediately preceding paragraph. 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 or entity who was not guilty of such fraudulent misrepresentation. (f) The obligations of the Company and Holders under this Section 3.8 shall survive the completion of any offering of Registrable Securities in a registration statement under this Article III, and otherwise. 3.9 Reports Under Securities Exchange Act of 1934. With a view --------------------------------------------- to making available to the Holders the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees and covenants to: (a) make and keep public information available, as those terms are understood and defined in SEC Rule 144; (b) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the 1934 Act; (c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144, the Securities Act and the 1934 Act, or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company with the SEC or any securities exchange, and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form; and (d) provide the Holder with prompt notice of any failure by the Company to comply with the requirements of Rule 144. 3.10 Assignment of Registration Rights. The rights to cause ---------------------------------- the Company to register Registrable Securities pursuant to this Article III may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such securities who, after such assignment or transfer, holds (i) at least 1% of the Registrable Securities then outstanding (subject to appropriate adjustment for stock splits, stock dividends, combinations, other recapitalizations and similar events), or (ii) all of the shares or Registrable Securities initially issued to such Holder, provided that, within a reasonable time after such transfer, the Company is furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; and provided, further, that such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and/or not otherwise eligible for sale under Rule 144(k) of the Securities Act or similar exemption. For the purpose of determining the number of shares of Registrable Securities held by a transferee or assignee, the holdings of transferees and assignees of a partnership who are partners or retired partner of such partnership (including spouses and ancestors, lineal descendants, and siblings of such partners or spouses who acquire Registrable Securities by gift, will, or intestate succession) shall be aggregated together and with the partnership; provided that all assignees and transferees who would not qualify individually for assignment of registration rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action under this Article III. 3.11 Amendment of Registration Rights. Any provision of this --------------------------------- Article III may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holders of a majority of the Registrable Securities then outstanding. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each Holder of any Registrable Securities then outstanding, each future holder of al such Registrable Securities and the Company. 3.12 Termination of Registration Rights. No Holder ------------------------------------- shall be entitled to exercise any right provided for in this Article III after February 3, 2005. ARTICLE IV Miscellaneous ------------- 4.1 Market Stand-Off. Firemen's Insurance and National-Ben ----------------- hereby covenant that they will not, except for the conversion of the Series A Shares contemplated by this Agreement, without the prior written consent of Van Kasper & Company (or such other investment bank that serves as the lead managing underwriter in the company's Contemplated Public Offering, which person is referred to herein as the "Lead Managing Underwriter"), offer, sell, or otherwise dispose of, directly or indirectly, any shares of the Company's Common Stock, or any securities convertible into or exercisable or exchangeable for, or any rights to purchase or acquire, Common Stock owned by it (otherwise than as a bona fide gift or gifts, provided the donee or donees thereof agree in writing to be bound by the terms of this Section 4.1) for the period beginning on the date hereof and ending on the date one hundred and twenty (120) days after the date of the closing of the Contemplated Public Offering. If requested by the Lead Managing Underwriter, Firemen's Insurance and National-Ben each agree to execute an agreement similar to that set forth in this Section 4.1 addressed to the Lead Managing Underwriter. The Company shall be expressly entitled to enforce the provisions of this Section 4.1 on behalf of the Lead Managing Underwriter. This Section 4.1 shall be effective only upon the execution of a similar provision by American Cyanamid Company. 4.2 Survival of Warranties. The warranties, representations, ---------------------- and covenants of Firemen's Insurance, National-Ben and the Company contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of Firemen's Insurance or the Company. 4.3 Successors and Assigns. Except as otherwise provided ------------------------ herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 4.4 Expenses. Except as otherwise provided in Article III -------- hereof, irrespective of whether the Closing is effected, each party shall pay its own costs and expenses that such party incurs with respect to the negotiation, execution, delivery, and performance of this Agreement. 4.5 Notices. Unless otherwise provided, any notice required or ------- permitted under this Agreement shall be given in writing and shall be deemed effectively given upon personal delivery to the party to be notified or three days after deposit with the United States Post Office, by registered or certified mail, postage prepaid and addressed to the party to be notified at the address indicated for such party on the signature page hereof, or by facsimile confirmed by such certified or registered mail or at such other address as such party may designate by ten (10) days' advance written notice to the other parties. 4.6 Governing Law. This Agreement shall be governed by and -------------- construed under the laws of the State of Nevada. 4.7 Titles and Subtitle. The titles and subtitles used in this ------------------- Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 4.8 Entire Agreement Amendments and Waivers. This writing, ------------------------------------------ together with any exhibits annexed hereto, constitutes the entire Agreement of the parties with respect to the subject matter hereof and shall supersede all prior understandings and writings with respect thereto. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of all the parties hereto. 4.9 Counterparts. This Agreement may be executed in two or ------------ more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 4.10 Severability. If one or more provisions of this Agreement ------------ are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. Cyanotech Corporation By: S/GERALD R CYSEWSKI _________________________________ Name: GERALD R. CYSEWSKI Title: PRESIDENT AND CEO Address: 73-4460 Queen Kaahumanu Hwy., Suite 102 Kailua-Kona, HI 96740 Firemen's Insurance Company of Newark, New Jersey By: S/ RICHARD W. DUBBERKE _________________________________ Name: RICHARD W. DUBBERKE Title: VICE PRESIDENT Address: CNA Plaza Chicago, IL 60685 For purposes of Article IV only: National-Ben Franklin Co. of Illinois By: S/RICHARD W. DUBBERKE _________________________________ Name: RICHARD W. DUBBERKE Title: VICE PRESIDENT Address: CNA Plaza Chicago, IL 60685 -----END PRIVACY-ENHANCED MESSAGE-----