EXHIBIT D TO SERIES B PREFERRED STOCK PURCHASE AGREEMENT REGISTRATION RIGHTS AGREEMENT
EXHIBIT
D
TO
SERIES
B PREFERRED STOCK PURCHASE AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT, is entered into as of May
3, 2005, by and
between MIRAVANT
MEDICAL TECHNOLOGIES, a
Delaware corporation (the “Company”), with
headquarters located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and
SCORPION
CAPITAL PARTNERS, LP, ALBA LTD. and ALERT INVESTMENTS
LIMITED (the
“Purchasers”).
Capitalized terms used herein are used as defined in Section 1 of this
Agreement.
RECITALS
A. In
connection with the Series B Preferred Stock Purchase Agreement dated as of May
3, 2005 between the Purchasers and the Company (the “Purchase
Agreement”), the
Company has agreed, upon the terms and subject to the conditions of said
Purchase Agreement, to issue and sell to the Purchasers, and the Purchasers have
agreed to purchase from the Company, up to Eight Million Dollars ($8,000,000) of
the Company’s Series B Preferred Stock ("Preferred Stock") and related
Warrants.
B. To induce
the Purchasers to execute and deliver the Purchase Agreement, the Company has
agreed to provide certain registration rights under the Securities Act of 1933,
as amended (the “Securities
Act”), with
respect to the shares of Common Stock issuable upon conversion of the Preferred
Stock and issuable upon exercise of the Warrants (collectively, the
“Registrable
Shares”).
AGREEMENTS
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Purchasers hereby agree as
follows:
1. Definitions.
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
(a) “Common
Stock” means
the Company’s common stock, par value $0.01 per share.
(b) “Holders” are
stockholders of the Company who, by virtue of agreements with the Company, are
entitled to include their securities in certain Registration Statements filed by
the Company.
(c) “Purchasers” means
the Purchasers and any transferee or assignee of the Purchasers who agree to
become bound by the provisions of this Agreement in accordance with Section 9
hereof.
(d) “Registrable
Securities” means
the Registrable Shares, together with any shares of Common Stock or other
securities which may be issued as a dividend or other distribution or in
exchange for Registrable Shares and any additional shares of Common Stock, which
may be issued to Purchasers in accordance with antidilution rights available to
the Purchasers.
(e) “Registration
Period” means
the period between the date of this Agreement and the earliest of (i) the
date on which all of the Registrable Securities (including all shares of Common
Stock into which the Warrants are exercisable) have been sold in transactions
where the transferee is not subject to securities law resale restrictions (or is
subject to securities law resale restrictions solely because it is an
“affiliate” of the Company under the Securities Act and the Rules promulgated
thereunder), or (ii) the date on which the Registrable Securities (in the
opinion of Purchasers' or the Company’s counsel) may be immediately sold without
registration and free of restrictions on transfer.
(f) “Registration
Statement” means a
registration statement of the Company filed with the Securities and Exchange
Commission (the “SEC”) under
the Securities Act.
(g) The terms
“register,” “registered,” and “registration” refer to a registration effected by
preparing and filing a Registration Statement in compliance with the Securities
Act and applicable rules and regulations thereunder and pursuant to
Rule 415 under the Securities Act, and the declaration or ordering of
effectiveness of such Registration Statement by the SEC.
2. Registration.
(a) Required
Registration.
Pursuant to the terms of this Section
2(a), and
upon the earlier of (i) sixty (60) days of a demand by Purchasers holding a
majority of the issued and outstanding Preferred Stock, or (ii) thirty (30) days
following approval of the Proposal, the Company shall prepare promptly and file
a Registration Statement with the SEC, registering the Registrable Securities
for resale. To the extent allowable under the Securities Act and the Rules
promulgated thereunder (including Rule 416), the Registration Statement shall
include such indeterminate number of additional shares of Common Stock as may
become issuable upon conversion of the Preferred Stock and exercise of the
Warrants (A) to prevent dilution resulting from stock splits, stock dividends or
similar transactions, or (B) by reason of changes in the exercise price of the
Warrants in accordance with the terms thereof. The Registration Statement (and
each amendment or supplement thereto) shall be provided to, and subject to the
reasonable approval of, the Purchasers and their counsel prior to its filing or
other submission. The Company shall use its best efforts to cause such
Registration Statement to be declared effective by the SEC as soon as
practicable following the filing thereof, but in any event no later than the
ninetieth (90th) day following the filing of the Registration Statement. A
registration shall not count as a required registration for purposes of this
Section
2(a) until
(x) the Registration Statement filed in connection with such required
registration has become effective, and (ii) each of the Purchasers is able to
register and offer for sale all of their Registrable Securities.
(b) Payments
by the Company. If any
Registration Statement (or any amendment or supplement to any Registration
Statement) required to be filed pursuant to Section
2(a) or
2(c) hereof
has not been filed by the Company with the SEC prior to the earlier of (i) sixty
(60) days of a demand by Purchasers holding a majority of the issued and
outstanding Preferred Stock, or (ii) thirty (30) days following approval of the
Proposal, in the case of the filing under Section
2(a) (the
“Initial
Filing Deadline”), or
the sixtieth (60th) day following the applicable Registration Trigger Date (as
defined in Section
2(c) below),
in the case of a filing under Section
2(c) (a
“Subsequent
Filing Deadline”), or if
the Company shall not have caused the Registration Statement to be declared
effective by the SEC not later than the one hundred and twentieth (120th) day
following the date hereof (the "Initial
Effectiveness Deadline"), or
after a Registration Statement is first declared effective by the SEC, it ceases
for any reason to remain continuously effective as to all Registrable Securities
for which it is required to be effective, for in any such cases ten Business
Days (which need not be consecutive days) in the aggregate during any 12-month
period (each such day being a "Non-Effective
Day"), then
the Company shall make payments to each Purchaser in such amounts and at such
times as shall be determined pursuant to this Section
2(b) as
partial relief for the damages to the Purchasers by reason of any such delay in
or reduction of their ability to sell the Registrable Securities (which remedy
shall not be exclusive of any other remedies available at law or in equity). The
Company shall pay to each Purchaser an amount equal to the product of (i) the
aggregate purchase price of the Preferred Stock then outstanding and held by
such Purchaser (including, for this purpose, the liquidated preference of any
Preferred Stock that have been converted into shares of Common Stock then held
by such Purchaser as if such Preferred Stock had not been so converted),
multiplied by (ii) one hundredth (.01), for each 30 day period (or portion
thereof) (A) after the Initial Filing Deadline and prior to the date the
Registration Statement is filed with the SEC pursuant to Section
2(a), or (B)
after any Subsequent Filing Deadline and prior to the date the respective
Registration Statement (or amendment or supplement to any previous Registration
Statement) is filed with the SEC pursuant to Section
2(c), or (C)
if the Registration Statement is not declared effective by the Initial
Effectiveness Deadline, until such effectiveness occurs, or (D) containing a
Non-Effective Day; provided,
however, that,
for purpose of calculating the payment amount owed to any given Purchasers,
there shall be excluded from each such period any delays which are solely
attributable to changes required by such Purchaser in the Registration Statement
with respect to information relating to such Purchaser, including, without
limitation, changes to the plan of distribution (other than any corrections of
Company mistakes with respect to information previously provided by such
Purchaser). All such amounts required to be paid hereunder shall be paid in cash
within five days after demand therefor by Purchasers.
(c) Piggy-Back
Registrations. To the
extent permitted under the Company's existing registration rights agreements,
if, at any time and from time to time prior to the expiration of the
Registration Period (a “Registration
Trigger Date”), the
Company shall file with the SEC a Registration Statement relating to an offering
for its own account or the account of others under the Securities Act of any of
its equity securities (other than on Form S-4 or Form S-8 or their then
equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans), the Company shall
send to each Purchaser written notice of such filing, and if, within fifteen
(15) days after the date of such notice, such Purchaser shall so request in
writing, the Company shall include in such Registration Statement all or any
part of the Registrable Securities such Purchaser requests to be registered.
Notwithstanding the foregoing, in the event that, in connection with any
underwritten public offering, the managing underwriter(s) thereof shall impose a
limitation on the number of shares of Common Stock which may be included in the
Registration Statement because, in such underwriter(s)’ judgment, marketing or
other factors dictate such limitation is necessary to facilitate public
distribution, then the Company shall be obligated to include in such
Registration Statement only such limited portion of the Registrable Securities
with respect to which such Purchaser has requested inclusion hereunder as the
underwriter shall permit; provided,
however, that
(i) the Company shall not exclude any Registrable Securities unless the Company
has first excluded all outstanding securities, the holders of which are not
contractually entitled to inclusion of such securities in such Registration
Statement or are not contractually entitled to pro rata inclusion with the
Registrable Securities, (ii) after giving effect to the immediately preceding
proviso, any such exclusion of Registrable Securities shall be made pro rata
among the Purchasers seeking to include Registrable Securities and the holders
of other securities having the contractual right to inclusion of their
securities in such Registration Statement by reason of required registration
rights, in proportion to the number of Registrable Securities or other
securities, as applicable, sought to be included by each such Purchaser or other
holder, and (iii) no such reduction shall reduce the amount of Registrable
Securities included in the registration below fifty (50%) of the total amount of
securities included in such registration. No right to registration of
Registrable Securities under this Section
2(c) shall be
construed to limit any registration required under Section
2(a) hereof.
If an offering in connection with which a Purchaser is entitled to registration
under this Section
2(c) is an
underwritten offering, then each Purchaser whose Registrable Securities are
included in such Registration Statement shall, unless otherwise agreed by the
Company, offer and sell such Registrable Securities in an underwritten offering
using the same underwriter or underwriters and, subject to the provisions of
this Agreement, on the same terms and conditions as other shares of Common Stock
included in such underwritten offering. The Purchasers shall be entitled to
unlimited piggyback registrations during the Registration Period.
3. Additional
Obligations of the Company. In
connection with the registration of the Registrable Securities, the Company
shall have the following additional obligations:
(a) The
Company shall keep the Registration Statement required by Section 2(a) hereof
effective pursuant to Rule 415 under the Securities Act at all times during
the Registration Period as defined in Section 1(e)
above.
(b) The
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) filed by the Company shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading. The Company shall prepare
and file with the SEC such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to keep the Registration
Statement effective at all times during the Registration Period, and, during
such period, shall comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities of the Company covered by the
Registration Statement until such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition by
the sellers thereof as set forth in the Registration Statement. In the event the
number of shares of Common Stock included in a Registration Statement filed
pursuant to this Agreement is insufficient to cover all of the Registrable
Securities, the Company shall amend, if permissible, the Registration Statement
and/or file a new Registration Statement so as to cover all of the Registrable
Securities as soon as practicable, but in no event more than twenty (20)
business days after the Company first determines (or reasonably should have
determined) the need therefor. The Company shall use its commercially reasonable
efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof.
(c) The
Company shall furnish to each Purchaser whose Registrable Securities are
included in the Registration Statement (i) promptly after the same is
prepared and publicly distributed, filed with the SEC or received by the
Company, one copy of the Registration Statement and any amendment thereto; each
preliminary prospectus and final prospectus and each amendment or supplement
thereto; and, in the case of the Registration Statement required under
Section 2(a) above,
each letter written by or on behalf of the Company to the SEC and each item of
correspondence from the SEC, in each case relating to such Registration
Statement (other than any portion of any item thereof which contains information
for which the Company has sought confidential treatment); and (ii) such
number of copies of a prospectus, including a preliminary prospectus, and all
amendments and supplements thereto, and such other documents as such Purchaser
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Purchaser.
(d) The
Company shall use its commercially reasonable best efforts to (i) register
and qualify the Registrable Securities covered by the Registration Statement
under such other securities or blue sky laws of such jurisdictions as the
Purchasers reasonably request, (ii) prepare and file in those jurisdictions
such amendments (including post-effective amendments) and supplements to such
registrations as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary
to maintain such registrations and qualifications in effect at all times during
the Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions. Notwithstanding the foregoing provision, the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d),
(ii) subject itself to general taxation in any such jurisdiction,
(iii) file a general consent to service of process in any such
jurisdiction, (iv) provide any undertakings that cause more than nominal
expense or burden to the Company, or (v) make any change in its charter or
bylaws, which in each case the Board of Directors of the Company determines to
be contrary to the best interests of the Company and its
stockholders.
(e) The
Company shall notify each Purchaser who holds Registrable Securities being sold
pursuant to a Registration Statement of the happening of any event of which the
Company has knowledge as a result of which the prospectus included in the
Registration Statement as then in effect includes an 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, in light of the circumstances under
which they were made, not misleading (a “Suspension
Event”). The
Company shall make such notification as promptly as practicable after the
Company becomes aware of such Suspension Event, shall promptly, but in all
events within five (5) business days, use its commercially reasonable best
efforts to prepare a supplement or amendment to the Registration Statement to
correct such untrue statement or omission, and shall deliver a number of copies
of such supplement or amendment to each Purchaser as such Purchaser may
reasonably request. Notwithstanding the foregoing provision, the Company shall
not be required to maintain the effectiveness of the Registration Statement or
to amend or supplement the Registration Statement for a period (a “Delay
Period”)
expiring upon the later to occur of (i) the date on which the Company is
able to comply with its disclosure obligations and SEC requirements related
thereto, or (iii) thirty (30) days after the occurrence of the
Suspension Event.
(f) The
Company shall use its commercially reasonable efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement
and, if such an order is issued, shall use its commercially reasonable best
efforts to obtain the withdrawal of such order at the earliest possible time and
to notify each Purchaser who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance of
such order and the resolution thereof.
(g) The
Company shall permit a single firm of counsel designated by the Purchasers who
holds a majority in interest of the Registrable Securities being sold pursuant
to such registration to review the Registration Statement and all amendments and
supplements thereto (as well as all requests for acceleration or effectiveness
thereof) a reasonable period of time prior to their filing with the SEC, and
shall not file any document in a form to which such counsel reasonably
objects.
(h) At the
request of any Purchaser who holds Registrable Securities being sold pursuant to
such registration, the Company shall furnish on the date that Registrable
Securities are delivered to an underwriter for sale in connection with the
Registration Statement (i) a letter, dated such date, from the Company’s
independent certified public accountants in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the Purchasers; and (ii) an
opinion, dated such date, from counsel representing the Company for purposes of
such Registration Statement, in form and substance as is customarily given in an
underwritten public offering, addressed to the underwriters and
Purchasers.
(i) The
Company shall make available for inspection by any Purchaser whose Registrable
Securities are being sold pursuant to such registration, any underwriter
participating in any disposition pursuant to the Registration Statement, and any
attorney, accountant or other agent retained by any such Purchaser or
underwriter (collectively, the “Inspectors”), all
pertinent financial and other records, pertinent corporate documents and
properties of the Company (collectively, the “Records”), as
shall be reasonably necessary to enable each Inspector to exercise its due
diligence responsibility, and cause the Company’s officers, directors and
employees to supply all information which any Inspector may reasonably request
for purposes of such due diligence; provided,
however, that
each Inspector shall hold in confidence and shall not make any disclosure
(except to a Purchaser) of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court or government body of competent
jurisdiction, or such release is reasonably necessary in connection with
litigation or other legal process or (iii) the information in such Records
has been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company shall not be required to
disclose any confidential information in such Records to any Inspector until and
unless such Inspector shall have entered into confidentiality agreements (in
form and substance satisfactory to the Company) with the Company with respect
thereto, substantially in the form of this Section 3(j). Each
Purchaser agrees that it shall, upon learning that disclosure of such Records is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company, at
the Company’s expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, the Records deemed confidential. Nothing
herein shall be deemed to limit the Purchasers' ability to sell Registrable
Securities in a manner which is otherwise consistent with applicable laws and
regulations.
(j) The
Company shall hold in confidence and shall not make any disclosure of
information concerning the Purchasers provided to the Company pursuant hereto
unless (i) disclosure of such information is necessary to comply with
federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered pursuant to a
subpoena or other order from a court or governmental body of competent
jurisdiction, or such release is reasonably necessary in connection with
litigation or other legal process or (iv) such information has been made
generally available to the public other than by disclosure in violation of this
or any other agreement. The Company agrees that it shall, upon learning that
disclosure of such information concerning the Purchasers is sought in or by a
court or governmental body of competent jurisdiction or through other means,
give prompt notice to the Purchasers and allow the Purchasers, at their expense,
to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.
(k) The
Company shall provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the effective date of the
Registration Statement.
(l) The
Company shall cooperate with the Purchasers who hold Registrable Securities
being sold and the managing underwriter or underwriters, if any, to facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legends) representing Registrable Securities to be sold pursuant to the
Registration Statement and enable such certificates to be in such denominations
or amounts as the case may be, and registered in such names as the managing
underwriter or underwriters, if any, or the Purchasers may reasonably request;
and, within three (3) business days after a Registration Statement which
includes Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel selected by the Company to deliver,
to the transfer agent for the Registrable Securities (with copies to the
Purchasers whose Registrable Securities are included in such Registration
Statement) instructions to the transfer agent to issue new stock certificates
without a legend and an opinion of such counsel that the Registrable Shares have
been registered.
(m) The
Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by the Purchasers of the Registrable Securities pursuant
to the Registration Statement.
(n) At the
request of any Purchaser, the Company shall promptly prepare and file with the
SEC such amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement to conform to written
information supplied to the Company by such Purchaser for such
purpose.
(o) In the
case of an underwritten offering, enter into such customary agreements
(including underwriting agreements in customary form) and take all such other
actions as the Purchasers of a majority of the Registrable Shares being sold or
the underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Shares;
(p) The
Company shall comply with all applicable laws related to a Registration
Statement and offering and sale of securities and all applicable rules and
regulations of governmental authorities in connection therewith.
4. Obligations
of the Purchasers. In
connection with the registration of the Registrable Securities, the Purchasers
shall have the following obligations:
(a) The
Purchasers agree to furnish to the Company such information regarding itself,
the number of Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably
required by rules of the SEC to effect the registration of the Registrable
Securities. The information so provided by any given Purchaser shall be included
without material alteration in the Registration Statement and shall not be
modified without such Purchaser’s written consent. At least twenty (20)
business days prior to the first anticipated filing date of the Registration
Statement, the Company shall notify the Purchasers of the information the
Company requires from each Purchaser (the “Requested
Information”) if
such Purchaser elects to have any of such Purchaser’s Registrable Securities
included in the Registration Statement.
(b) The
Purchasers, by the Purchasers' acceptance of the Registrable Securities, agrees
to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of the Registration Statement
hereunder, unless any given Purchaser has notified the Company in writing of
such Purchasers' election to exclude all of such Purchaser’s Registrable
Securities from the Registration Statement.
(c) The
Purchasers agree that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(f) or
3(g), the
Purchasers will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Purchaser’s’ receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(f) or
3(g) and, if
so directed by the Company, such Purchaser shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies, other than file copies, in such Purchaser’s possession,
of the prospectus covering such Registrable Securities current at the time of
receipt of such notice.
5. Expenses
of Registration. All
expenses, other than underwriting discounts and commissions, incurred in
connection with registrations, filings or qualifications pursuant to
Sections 2 and
3,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company, and the reasonable fees and disbursements of one counsel selected
by the Purchasers pursuant to Section 3(e) hereof,
shall be borne by the Company.
6. Indemnification. In the
event any Registrable Securities are included in a Registration Statement under
this Agreement:
(a) To the
extent permitted by law, the Company will indemnify and hold harmless each
Purchaser who holds such Registrable Securities, the directors, if any, of such
Purchaser, the officers, if any, of such Purchaser, each person, if any, who
controls any Purchaser within the meaning of the Securities Act or the Exchange
Act, any underwriter (as defined in the Securities Act) for the Purchasers, the
directors, if any, of such underwriter and the officers, if any, of such
underwriter, and each person, if any, who controls any such underwriter within
the meaning of the Securities Act or the Exchange Act (each, an “Indemnified
Person”),
against any losses, claims, damages, expenses or liabilities (joint or several)
(collectively “Claims”) to
which any of them become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included therein:
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any post-effective amendment thereof
or 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,
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus if used prior to the effective date of
such Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading, or
(iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act or any state securities law or any rule or regulation (the
matters in the foregoing clauses (i) through
(iii) being,
collectively, “Violations”).
Subject to the restrictions set forth in Section 6(c) with
respect to the number of legal counsel, the Company shall reimburse the
Purchasers and each such underwriter or controlling person, promptly as such
expenses are incurred and are due and payable, for any legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a):
(A) shall not apply to a Claim arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information furnished in
writing to the Company by any Indemnified Person or underwriter for such
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, if
such prospectus was timely made available by the Company pursuant to
Section 3(c) hereof;
(B) with respect to any preliminary prospectus shall not inure to the
benefit of any such person from whom the person asserting any such Claim
purchased the Registrable Securities that are the subject thereof (or to the
benefit of any person controlling such person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
in the prospectus, as then amended or supplemented, if a prospectus was timely
made available by the Company pursuant to Section 3(c) hereof;
and (C) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Persons and shall survive the transfer of the Registrable Securities
by the Purchasers pursuant to Section 9.
(b) In
connection with any Registration Statement in which a Purchaser is
participating, each such Purchaser, severally and not jointly, agrees to
indemnify and hold harmless, to the same extent and in the same manner set forth
in Section 6(a), the
Company, each of its directors, each of its officers who signs the Registration
Statement, each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act, any underwriter and any other
stockholder selling securities pursuant to the Registration Statement or any of
its directors or officers or any person who controls such stockholder or
underwriter within the meaning of the Securities Act or the Exchange Act
(collectively and together with an Indemnified Person, an “Indemnified
Party”),
against any Claim to which any of them may become subject, under the Securities
Act, the Exchange Act or otherwise, insofar as such Claim arises out of or is
based upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Purchaser expressly for use in
connection with such Registration Statement, and such Purchaser will promptly
reimburse any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such Claim; provided,
however, that
the indemnity agreement contained in this Section 6(b) shall
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Purchaser, which consent
shall not be unreasonably withheld; provided
further,
however, that
the Purchasers shall be liable under this Section 6(b) for only
that amount of a Claim as does not exceed the net proceeds to such Purchaser as
a result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Purchasers pursuant to
Section 9.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.
(c) Promptly
after receipt by an Indemnified Person or Indemnified Party under this
Section 6 of
notice of the commencement of any action (including any governmental action),
such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to made against any indemnifying party under this Section 6, deliver
to the indemnifying party a written notice of the commencement thereof and this
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying parties; provided,
however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and
other party represented by such counsel in such proceeding. The Company shall
pay for only one separate legal counsel for the Purchasers; such legal counsel
shall be selected by the Purchasers holding a majority in interest of the
Registrable Securities. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except
to the extent that the indemnifying party is prejudiced in its ability to defend
such action. The indemnification required by this Section 6
shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable. The provisions of this Section 6 shall
survive the termination of this Agreement.
7. Contribution. If the
indemnification provided for in Section 6 herein
is unavailable to the Indemnified Parties in respect of any losses, claims,
damages or liabilities referred to herein (other than by reason of the
exceptions provided therein), then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities as between the Company on the one hand and any Purchaser on the
other, in such proportion as is appropriate to reflect the relative fault of the
Company and of such Purchaser in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of the Company on
the one hand and of any Purchaser on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by such Purchaser.
In no
event shall the obligation of any Indemnifying Party to contribute under this
Section 7 exceed
the amount that such Indemnifying Party would have been obligated to pay by way
of indemnification if the indemnification provided for under Section 6(a) or
6(b) hereof
had been available under the circumstances.
The
Company and the Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Purchasers or the underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraphs. The amount paid or payable by an
Indemnified Party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraphs shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
section, no Purchaser or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any Purchaser, the net
proceeds received by such Purchaser from the sale of Registrable Securities or
(ii) in the case of an underwriter, the total price at which the
Registrable Securities purchased by it and distributed to the public were
offered to the public exceeds, in any such case, the amount of any damages that
such Purchaser or underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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.
8. Public
Information. With a
view to making available to the Purchasers the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of
the SEC that may at any time permit the Purchasers to sell securities of the
Company to the public without registration (“Rule 144”), the
Company agrees to:
(a) File with
the SEC in a timely manner and make and keep available all reports and other
documents required of the Company under the Exchange Act so long as the Company
remains subject to such requirements and the filing and availability of such
reports and other documents is required for the applicable provisions of
Rule 144; and
(b) Furnish
to the Purchasers so long as the Purchasers hold Registrable Securities,
promptly upon request, (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144 and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested to permit the
Purchasers to sell such securities pursuant to Rule 144 without
registration.
9. Assignment
of Registration Rights. The
rights to have the Company register Registrable Securities pursuant to this
Agreement shall be automatically assigned by the Purchasers to transferees or
assignees of all or any portion of such securities or Warrants exercisable into
Registrable Securities only if (i) the Purchasers agree in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment,
(ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being transferred or assigned, (iii) following such
transfer or assignment the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and applicable
state securities laws, (iv) at or before the time the Company received the
written notice contemplated by clause (ii) of this sentence, the transferee
or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein, (v) such transfer shall have been made in
accordance with the applicable requirements of the Purchase Agreement, and
(vi) such transferee shall be an “accredited investor” as that term is
defined in Rule 501 of Regulation D promulgated under the Securities
Act.
10. Amendment
of Registration Rights.
Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and Purchasers
holding a majority of the Registrable Securities then outstanding. Any such
amendment or waiver effected in accordance with this paragraph shall be binding
upon each holder of Registrable Securities (including securities into which such
securities have been converted or exchanged or for which such securities have
been exercised) and each future holder of all such securities. Each Purchaser
acknowledges that by the operation of this paragraph, the holders of a majority
of the Registrable Securities then outstanding will have the right and power to
diminish or eliminate all rights of Purchasers under this
Agreement.
11. Miscellaneous.
(a) Conflicting
Instructions. A
person or entity is deemed to be a holder of Registrable Securities whenever
such person or entity owns of record such Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two or more persons
or entities with respect to the same Registrable Securities, the Company shall
act upon the basis of instructions, notice or election received from the
registered owner of such Registrable Securities.
(b) Notices. Any
notices required or permitted to be given under the terms of this Agreement
shall be sent by certified or registered mail (with return receipt requested) or
delivered personally or by courier (including a nationally recognized overnight
delivery service) or by facsimile transmission. Any notice so given shall be
deemed effective upon receipt if delivered personally, by U.S. Mail or by
courier or facsimile transmission, in each case addressed to a party at the
following address or such other address as each such party furnishes to the
other in accordance with this Section 12(b),
and:
if
to the Company:
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
with
copy to:
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Hampton, LLP
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
If
to the Purchasers:
Scorpion
Capital Partners, L.P.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Alba
Ltd.
___________________________
___________________________
___________________________
Alert
Investments Limited
___________________________
___________________________
___________________________
with
a copy to:
Liner
Yankelevitz Sunshine & Regenstreif LLP
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
(c) Waiver. Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.
(d) 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 in the
State of California.
(e) Severability. In the
event that any provision of this Agreement is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
(f) Entire
Agreement. This
Agreement and the Purchase Agreement (including all schedules and exhibits
thereto) constitute the entire agreement among the parties hereto with respect
to the subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or therein. This
Agreement supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof.
(g) Successors
and Assigns. Subject
to the requirements of Section 9 hereof,
this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties hereto.
(h) Use of
Pronouns. All
pronouns and any variations thereof refer to the masculine, feminine or neuter,
singular or plural, as the context may require.
(i) Headings. The
headings and subheadings in the Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
(j) Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same agreement.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission, and facsimile signatures shall be binding on
the parties hereto.
(k) Further
Acts. Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
(l) Remedies. No
provision of this Agreement providing for any remedy to the Purchasers shall
limit any remedy which would otherwise be available to the Purchasers at law or
in equity. Nothing in this Agreement shall limit any rights a Purchasers may
have with any applicable federal or state securities laws with respect to the
investment contemplated hereby. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to a Purchaser.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Agreement will be inadequate and agrees, in the event of
a breach or threatened breach by the Company of the provisions of this
Agreement, that a Purchaser shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring
immediate compliance, without the necessity of showing economic loss and without
any bond or other security being required.
(signature
page immediately follows)
IN
WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to
be duly executed as of the date first above written.
COMPANY:
By:
Name: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
Title: Chief
Financial Officer
PURCHASERS:
SCORPION
CAPITAL PARTNERS, LP
By:
SCORPION
GP, LLC, its general partner
By:
___________________________
Name: ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Title:
Managing Partner
ALBA
LTD.
By:_____________________________________
Name:
Title:
ALERT
INVESTMENTS LIMITED
By:_____________________________________
Name:
Title: