Exhibit 99.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
July 25, 2002, by and among Boston Life Sciences, Inc., a Delaware corporation
(the "Company"), the Holders listed on Schedule 1 hereof (the "Initial Holders")
and any Holder hereafter becoming a party hereto in accordance with the
provisions hereof
W I T N E S S E T H:
WHEREAS, the Initial Holders are purchasing 10% Convertible Senior
Secured Promissory Notes (the "Notes") and Warrants (the "Warrants") pursuant to
the terms and conditions of a certain Securities Purchase Agreement of even date
herewith (the "SP Agreement") and in connection therewith are entitled to
receive registration rights with respect to the Conversion Securities (as
defined in the SP Agreement) and Warrant Securities (as defined in the SP
Agreement) on the terms set forth in this Agreement for the benefit of the
Initial Holders.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein and other good and valuable
consideration the mutual receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Defined Terms. As used in this Agreement the following terms
have the following meanings.
"Affiliate" means, as to any specified Person, any other
Person that, directly or indirectly through one or more intermediaries
or otherwise, controls, is controlled by or is under common control
with the specified Person. This definition uses "control" to mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person (whether through
ownership of capital stock of that Person, by contract or otherwise).
"Blue Sky Laws" has the meaning Section 5(f) specifies.
"Claims" has the meaning Section 11(a) specifies.
"Common Stock" means the common stock, par value $.01 per
share, of the Company.
"Conversion Securities" has the meaning ascribed to it in the
SP Agreement.
"Demand Registration" has the meaning Section 3(a) specifies.
"Eligible Offering" has the meaning Section 4(a) specifies.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor thereto and the rules and regulations
thereunder.
"Exempt Offering" means any offering by the Company of shares
of Common Stock (i) in connection with or pursuant to any benefit,
compensation, incentive or savings plan or program in which any of the
officers, directors, employees or independent contractors of the
Company or any of its subsidiaries participate, (ii) as consideration
in any business combination or other acquisition transaction, (iii) as
the securities into or for which other equity or debt securities are
convertible or exchangeable, or as the securities that may be acquired
by the exercise of options, warrants or other rights or (iv) made only
to existing holders of securities issued by the Company.
"Holder" means at any time any Person then owning Registrable
Shares and having the rights and obligations of a Holder and which (i)
is an Initial Holder, (ii) has been assigned those rights and
obligations pursuant to Section 10(a) or (iii) has become a Holder
pursuant to Section 10(b).
"Indemnified Party" has the meaning Section 11(b) specifies.
"Initial Holders" has the meaning the preamble hereto
specifies.
"Inspector" has the meaning Section 5(e) specifies.
"Lockup Period" has the meaning Section 8 specifies.
"Person" means any natural person, sole proprietorship,
corporation, partnership, limited liability company, business trust,
unincorporated organization or association, estate or trust or other
entity.
"Preliminary Prospectus" means, as applied to any registration
statement the Company files under the Securities Act to register shares
of Common Stock for its public offering of those shares (other than in
an Exempt Offering), the prospectus that registration statement
includes which is labeled "subject to completion" and is first used in
"roadshow" presentations by the Company to potential investors in
connection with that offering.
"Proceeding" has the meaning Section 11(b) specifies.
"Records" has the meaning Section 5(e) specifies.
"Registrable Shares" means all shares of Conversion Securities
acquired upon conversion of the Note, all shares of Warrant Securities
acquired upon exercise of the Warrant and any securities of the Company
issued or issuable with respect to Conversion Securities or Warrant
Securities by way of conversion, exchange, dividend or stock split or
combination. For purposes of this Agreement, a share of Registrable
Shares will cease to be Registrable Shares when (i) a registration
statement covering that share has been filed and become effective under
the Securities Act and its Holder distributes it by means of that
effective registration statement or (ii) its Holder distributes it
pursuant to Rule 144 or (iii) such securities become freely saleable
under Rule 144(k).
"Registration Notice" has the meaning Section 4(b) specifies.
"Related Party" means, as to any specified Person, any other
Person who is an officer, director or agent of the specified Person or
who controls the specified Person within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act.
"Requesting Holder" has the meaning Section 4(d) specifies.
"Request Notice" has the meaning Section 4(c) specifies.
"Rule 144" means Rule 144 (or any similar or successor
provision) under the Securities Act.
"SEC" means the Securities and Exchange Commission and any
successor thereto as the agency administering the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
and any successor thereto and the rules and regulations thereunder.
"Sellers' Registration Statement" means a registration
statement filed by the Company under the Securities Act to register
Registrable Shares for resale by Holders pursuant to the exercise of
the registration rights provided for under Section 3 or 4.
"Selling Holder" has the meaning Section 5(c) specifies.
"Warrant Securities" has the meaning ascribed to it in the SP
Agreement.
2. Other Definitional Provisions.
(a) This Agreement uses the words "herein," "hereof," "hereto" and
"hereunder" and words of similar import to refer to this Agreement as a whole
and not to any provision of this Agreement.
(b) Whenever the context so requires, the singular number includes
the plural and vice versa, and a reference to one gender includes the other
genders.
(c) The word "including" (and, with correlative meaning, the word
"include") means including without limiting the generality of any description
preceding that word, and the verbs "shall" and "will" are used interchangeably
and have the same meaning.
(d) The term "underwriter," as used herein, does not include any
Holder.
(e) Terms that are capitalized in this Agreement but not otherwise
defined, shall have the meanings ascribed to them in the SP Agreement and in the
Note.
3. Demand Registration.
(a) Following the date that is thirty (30) days after the date
hereof (the "Commencement Date"), the Holders collectively shall have the right
to request registration (a
"Demand Registration") under the Securities Act of such Holder's Registrable
Shares pursuant to this Section 3 upon the terms and subject to the terms,
conditions and limitations set forth herein.
(b) At any time during the period beginning on the Commencement Date
and ending on the fifth anniversary of the Commencement Date (the "Expiration
Date"), a Holder or Holders holding in the aggregate at least twenty percent
(20%) of the Registrable Shares may request, in writing, that the Company effect
the registration of Registrable Shares owned by such Holder or Holders on any
form available therefor under the Securities Act. If the Holders initiating the
registration intend to distribute the Registrable Shares by means of an
underwriting, they shall so advise the Company in their request. In the event
such registration is underwritten, the right of any Holder to participate in
such registration shall be conditioned on such Holder's participation in such
underwriting. Upon receipt of any such request, the Company shall promptly give
written notice of such proposed registration to all other Holders. Such other
Holders shall have the right, by giving written notice to the Company within
thirty (30) days after the Company provides its notice pursuant to the
provisions set forth in Section 12(b) hereof, to elect to have included in such
registration such of their Registrable Shares as such Holders may request in
such notice of election.
(c) Notwithstanding the preference of any Holder as to the method of
distribution of any Registrable Shares that may be set forth in a request for
registration pursuant to Section 3(b) (a "Demand Notice") or in a response to a
notification by the Company of receipt of such a request (a "Company Notice"),
selling Holders holding in the aggregate more than 50% of the Registrable Shares
requested to be included in a Demand Registration may, in their sole discretion,
determine that the sale of Registrable Shares pursuant to such Demand
Registration be pursuant to a firm commitment underwriting, the managing
underwriter of which shall be a nationally recognized investment banking firm
selected by such selling Holders and approved by the Company, which approval
shall not unreasonably be withheld or delayed. If the lead managing underwriter
of any such underwritten public offering determines in good faith that the
aggregate number of Registrable Shares to be offered exceeds the number of
shares that could be sold without having an adverse effect on such offering
(including the price at which the Registrable Shares may be sold), then the
number of shares to be offered shall be reduced or limited in the following
manner: (i) first, shares, other than Registrable Shares, requested to be
included in such registration by shareholders will be excluded, (ii) second,
shares that the Company desires to include in such registration will be
excluded, and (iii) third, the number of Registrable Shares to be offered shall
be reduced or limited in proportion to the respective numbers of Registrable
Shares requested to be included by such selling Holders to the extent necessary
to reduce the total number of shares to be included in such offering to the
amount recommended by such lead managing underwriter. The Company shall enter
into the same underwriting agreement as the selling Holders, containing
representations, warranties, indemnities, and agreements reasonably acceptable
to the Company and not substantially different from those customarily made by an
issuer in underwriting agreements with respect to secondary distributions.
(d) The Company shall be entitled to postpone, for a reasonable period
of time not in excess of 90 days after its receipt of a Demand Notice, the
filing or effectiveness of any Registration Statement, if (i) at any time prior
to the filing or effectiveness of such Registration Statement the Company
determines, in its reasonable business judgment, that such registration
and offering would materially interfere with or otherwise materially adversely
affect any material planned financing, acquisition, corporate reorganization, or
other transaction or development involving the Company and (ii) the Company
gives the selling Holders written notice of such postponement; provided however,
that a postponement pursuant to this Section 3(d) shall be authorized only once
during any twelve month period. In the event of such postponement, the Company
shall file such Registration Statement as soon as practicable after it shall
determine, in its reasonable business judgment, that such registration and
offering will not interfere with the matters described in the first sentence of
this Section 3(d). If the Company shall postpone the filing of any Registration
Statement, selling Holders holding in the aggregate more than 50% of the
Registrable Shares requested to be included in such Registration Statement shall
have the right to withdraw their request for such registration by giving written
notice to the Company within 15 days of the notice of postponement. Such
withdrawal request shall be deemed to apply to all selling Holders who hold
Registrable Shares that had been requested to be included in such Registration
Statement. In the event that the selling Holders withdraw their request in the
foregoing manner, such request shall not be counted for purposes of determining
the number of registrations to which Holders are entitled pursuant to clauses
(i) and (ii) of Section 3(f).
(e) Each selling Holder may, before any underwriting agreement relating
to such selling Holder's Registrable Shares is signed or before any Registration
Statement becomes effective, withdraw his or its Registrable Shares from
inclusion therein, should the terms of sale not be satisfactory to such selling
Holder. If selling Holders holding in the aggregate more than 50% of the
Registrable Shares requested to be included in such Registration Statement so
withdraw, however, such registration shall be deemed to have occurred for the
purposes of clauses (i) and (ii) of Section 3(f), unless the selling Holders pay
(pro rata, in proportion to the number of Registrable Shares requested to be
included or in such other proportions as they may agree among themselves) within
20 days after any such withdrawal, all of the out-of-pocket expenses of the
Company incurred in connection with such registration.
(f) The Company shall not be required to effect a registration pursuant
to this Section 3 in any of the following circumstances:
(i) the Company has previously filed two (2)
registrations pursuant to this Section 3, and such registrations have been
declared effective;
(ii) the Company has previously filed a registration
statement pursuant to this Section 3 within the twelve month period preceding
the receipt of a Demand Notice, and such registration has been declared
effective and no stop order has been issued by the SEC which remains in effect
with respect thereto;
(iii) during the period starting with the date of
filing of, and ending on the date ninety (90) days following the effective date
of, a registration statement in which Holders had the right to participate
pursuant to Section 4, including a registration statement in which the
underwriters reduced the Holders' participation pursuant to Section 4(e);
(iv) if within thirty (30) days after receipt of a
Demand Notice, the Company gives notice to the Holders of the Company's
intention to make an offering described in clause (iii) of this Section 3(f)
within ninety (90) days; or
(v) the total number of Registrable Shares requested
to be registered is less than 40% of the number of Registrable Shares
outstanding; or
(vi) the anticipated net aggregate offering price of
the Registrable Shares is less than $1,000,000.
4. Piggyback Registration Rights.
(a) If at any time or from time to time the Company proposes to
register any shares of Common Stock under the Securities Act for its own account
other than pursuant to an Exempt Offering, in the United States of those shares
for cash (each such public offering, other than an Exempt Offering, being an
"Eligible Offering"), then, at each of those times, each then Holder will,
subject to the terms and conditions hereof, be entitled to have such number of
that Holder's Registrable Shares as that Holder may request in accordance with
Section 4(c) registered under the Securities Act for disposition by means of the
registration statement relating to that Eligible Offering.
(b) In the case of each Eligible Offering, the Company will deliver to
each then Holder a written notice of that offering (a "Registration Notice") at
least 20 days prior to its filing with the SEC of the registration statement, or
the amendment thereto, which includes the Preliminary Prospectus for that
offering. The Company will briefly describe in each Registration Notice the
Eligible Offering to which that notice relates and inform the addressee that it
has 15 days within which to request to include any or all of its Registrable
Shares in the registration statement for that offering.
(c) Any Holder desiring to participate in any Eligible Offering must
deliver to the Company within 15 days after the Holder receives the Registration
Notice for that offering a written notice to that effect (a "Request Notice")
which specifies the number of the Holder's Registrable Shares the Holder desires
to have registered under the Securities Act for inclusion in that offering. Any
Holder that does not deliver a Request Notice for an Eligible Offering within
that 15-day period will be deemed to have waived its right to participate in
that offering unless the Company agrees otherwise in writing.
(d) Any holder that delivers a Request Notice relating to an Eligible
Offering on a timely basis, or as otherwise agreed by the Company, pursuant to
Section 4(c) (each such Holder being a "Requesting Holder") will be entitled to
offer and sell up to the number of its Registrable Shares specified in its
Request Notice in that offering on the terms and conditions on which the Company
offers and sells shares of Common Stock in that offering if the Requesting
Holder complies with the applicable provisions of Sections 5, 6 and 11;
provided, however, that: (i) the Company may reserve to itself the right to be
the exclusive grantor of any underwriter's over allotment option; and (ii) the
number of Registrable Shares any Requesting Holder will be entitled to offer and
sell will be subject to reduction as Section 4(e) provides.
(e) The Company will have the right to determine the aggregate size of
each Eligible Offering and to limit the number of Registrable Shares to be
included in that offering without reducing the number of shares, if any, of
Common Stock to be offered by the Company in that offering, as follows: (i) if
the lead managing underwriter selected by the Company for an Eligible
Offering (or, if that offering will not be underwritten, a qualified independent
underwriter (as defined in Rule 2720 of the NASD Conduct Rules) serving as
financial advisor to the Company) determines that marketing factors render
necessary or advisable a limitation on the number of Registrable Shares to be
included in that offering, the Company will be required to include in that
offering only such number of Registrable Shares, if any, as that lead managing
underwriter (or financial advisor, as the case may be) believes will not
jeopardize the success of the primary offering by the Company; and (ii) if the
Company limits the number of Registrable Shares that Requesting Holders may
include in any Eligible Offering pursuant to clause (i), but does not exclude
all such Registrable Shares from that offering, the maximum number of
Registrable Shares to be included in that offering on behalf of each of those
Requesting Holders will be the product of (A) the number of Registrable Shares
that Requesting Holder has specified in its Request Notice relating to that
offering multiplied by (B) the fraction the numerator of which is the number of
Registrable Shares that Requesting Holder has specified in its Request Notice
relating to that offering and the denominator of which is the aggregate number
of Registrable Shares all those Requesting Holders have specified in their
Request Notices relating to that offering. Notwithstanding the foregoing, any
Registrable Shares of Requesting Holders not included in such registration
statement by virtue of the foregoing shall be included in such registration
statement for a delayed offering to commence for a period of ninety (90) days
after the expiration of any Lockup Period required by this Agreement, unless the
lead managing underwriter advises the Company that such inclusion in a delayed
offering materially and adversely would affect the success of the primary
offering by the Company.
(f) In connection with each Eligible Offering, the Company, in its sole
discretion, will determine whether to proceed with or terminate or postpone that
offering and to select any underwriter or underwriters to administer that
offering.
5. Registration Procedures.
Whenever the Company must register Registrable Shares pursuant to a
Demand Registration in accordance with Section 3 or include Registrable Shares
in a registration statement relating to an Eligible Offering in accordance with
Section 4, it will, subject to the applicable terms and conditions hereof:
(a) cause those shares to be registered under the Securities Act by
means of a Sellers' Registration Statement as soon as practicable, in either the
original filing thereof or in a pre-effective amendment to a previously filed
registration statement;
(b) prior to the first to occur of (i) the sale by the Holders thereof,
by means of the Sellers' Registration Statement after it becomes effective under
the Securities Act, of all the Registrable Shares covered by the Sellers'
Registration Statement when it becomes effective under the Securities Act and
the elapse of the period in which a dealer is required by the Securities Act to
deliver a prospectus in connection with its offer and sale of any of those
shares and (ii) the withdrawal by the Company of the Sellers' Registration
Statement pursuant to Securities Act Rule 477, prepare and file with the SEC
under the Securities Act such amendments (including post-effective amendments)
to the Sellers' Registration Statement and supplements to the related prospectus
as are necessary (A) to reflect the plan of distribution contemplated by the
Sellers' Registration Statement and (B) so that (1) neither the Sellers'
Registration Statement nor that prospectus contains 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 and (2) both the
Sellers' Registration Statement and that prospectus comply in all material
respects with all other applicable legal requirements;
(c) provide to each Holder named as a selling stockholder in the
Sellers' Registration Statement in accordance with such Holder's exercise of its
registration rights under this Agreement (each a "Selling Holder") such number
of prospectuses (including preliminary prospectuses) and other documents
incident to the offering and sale of that Selling Holder's Registrable Shares by
means of the Sellers' Registration Statement as that Selling Holder may from
time to time reasonably request;
(d) prior to the time the Sellers' Registration Statement or any
post-effective amendment thereto becomes effective under the Securities Act,
provide an opportunity to review and comment with respect to that document to
one counsel selected by Selling Holders holding a majority of the Registrable
Shares covered by that document and reasonably satisfactory to the Company;
(e) provide to each Selling Holder, any managing underwriter
participating in the distribution of the Registrable Shares covered by the
Sellers' Registration Statement and any accountant, lawyer or other professional
retained by that Selling Holder or managing underwriter (each an "Inspector")
reasonable access to appropriate officers and employees of the Company to ask
questions and obtain information reasonably requested by that Inspector in
connection with that Sellers' Registration Statement; provided, however, that in
connection with any such access or request, each Selling Holder will and will
cause each of its representative Inspectors to, and the Company may require each
other Inspector to, (i) cooperate to the extent reasonably practicable to
minimize any disruption in the operation by the Company of its business, (ii)
keep confidential all records, documents and information the Company advises are
confidential or of a proprietary nature (collectively, the "Records") and (iii)
not use the information it obtains from the Records as a basis for any market
transactions in the securities of the Company unless and until that information
is in the public domain or otherwise becomes publicly available;
(f) use its good-faith efforts to register and qualify the Registrable
Shares covered by the Sellers' Registration Statement under the applicable
securities or "blue sky" laws (collectively, "Blue Sky Laws") of such
jurisdictions as any Selling Holder may reasonably request, provided that it
will not be required to (i) qualify generally to do business in any jurisdiction
where it otherwise would not be required to qualify but for this Section 5(f),
(ii) subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction;
(g) notify each Selling Holder promptly (i) when it is informed that
the Sellers' Registration Statement or any post-effective amendment thereto
becomes effective under the Securities Act, (ii) of any request by the SEC for
an amendment to the Sellers' Registration Statement or a supplement to any
related prospectus, (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Sellers' Registration Statement or any order
preventing or suspending the use of any related prospectus or the initiation or
threat by the SEC of any proceeding for any of those purposes, (iv) of the
suspension of the qualification of any
Registrable Shares covered by the Sellers' Registration Statement for sale in
any jurisdiction or the initiation or threat of any proceeding for that purpose
and (v) of any determination by it that any event has occurred or fact exists
which makes untrue any statement of a material fact included in the Sellers'
Registration Statement or any related then current prospectus or which requires
the making of a change in the Sellers' Registration Statement or that prospectus
in order that the same will not contain any untrue statement of a material fact
or omit to state a material fact required to be contained therein or necessary
to make the statements therein not misleading;
(h) if any order is issued which (i) suspends the effectiveness of the
Sellers' Registration Statement, (ii) suspends or prevents the use of any
related then current prospectus or (iii) suspends the qualification of any
Registrable Shares covered by the Sellers' Registration Statement for sale in
any jurisdiction, use commercially reasonable efforts to obtain the withdrawal
of that order;
(i) if the Eligible Offering to which the Sellers' Registration
Statement relates is being underwritten by underwriters, (i) enter into
agreements customary at the time (including an underwriting or purchase
agreement in then-customary form) as those underwriters reasonably may request
in order to facilitate the disposition of the Registrable Shares in that
offering, (ii) use reasonable diligence to obtain an opinion of legal counsel
(who may be its general counsel) covering such matters as are then customarily
covered by opinions addressed to those underwriters by an issuer's counsel and
(iii) use reasonable diligence to obtain a "comfort" letter or letters from its
independent public accountants in their customary form and covering such matters
of the type then customarily covered by "comfort" letters as those underwriters
reasonably may request; and
(j) otherwise use its good-faith efforts to comply with all applicable
rules and regulations of the SEC and make available to its security holders, as
soon as reasonably practicable, an earnings statement that (i) covers a period
of at least 12 months beginning within three months after the effective date of
the Sellers' Registration Statement and (ii) satisfies the provisions of Section
11(a) of the Securities Act.
(k) if at any time after a Sellers' Registration Statement has become
effective the Company is engaged in any activity the public disclosure of which
the Company determines, in its reasonable business judgment, would be
detrimental to the Company, then the Company may direct that use of the
prospectus contained in the Sellers' Registration Statement be suspended. The
Company will notify all selling Holders of the suspension, and each selling
Holder will immediately discontinue any sales of Registrable Shares pursuant to
such registration statement until such selling Holder has received copies of a
supplemented or amended prospectus or until such selling Holder is advised in
writing by the Company that the then-current prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such prospectus. The Company will use its
commercially reasonable efforts to terminate any such suspension and reinstate
the ability of all selling Holders to use the prospectus contained in the
Sellers' Registration Statement, as amended or supplemented, as the case may be,
as soon as is practicable. The Company may not exercise the rights provided by
this Section 5(k) to effect a suspension for more than 60 days (90 days if such
event causing the suspension relates to a potential acquisition or merger) in
the aggregate during any twelve month period.
6. Underwriting Arrangements. No Holder will be permitted to
participate in any registration hereunder of securities being underwritten and
offered for resale by underwriters unless the Holder (i) agrees to sell the
Holder's Registrable Shares on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve those
arrangements, (ii) enters into a written agreement with the managing underwriter
or the representative of the underwriters in such form and containing such
provisions as are then customary in the securities business for such an
arrangement between those underwriters and issuers of the Company's size and
investment stature and (iii) completes and executes all questionnaires, powers
of attorney, indemnities and other documents, and obtains such spousal or other
consents, as are reasonably required under the terms of those arrangements and
this Agreement. If a Selling Holder disapproves of the proposed terms of any
such underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter, delivered not less than 10 days before the
Sellers' Registration Statement is declared effective under the Securities Act
(the "Reporting Date").
7. Rule 144 Reporting. The Company will:
(i) make and keep public information available (as
those terms are understood and defined in Rule 144) at all times from and after
90 days following the Reporting Date;
(ii) use its good-faith efforts to file with the SEC
in a timely manner all reports and other documents Section 13 or 15(d) of the
Exchange Act, as applicable, requires it to file with the SEC; and
(iii) so long as a Holder owns Registrable Shares,
deliver to the Holder, on the Holder's request, a written statement as to
whether it is in compliance with the requirements referred to in clauses (i) and
(ii) above (if it is then subject to those requirements).
8. Market Standoff. Each Holder agrees, to the extent permitted by
applicable law, that, for so long as the Holder holds Registrable Shares, the
Holder will not, except as Sections 3 and 4 permit, sell, transfer or otherwise
dispose of in a public transaction (including through put or short-sale
arrangements) shares of Common Stock in the period (i) beginning 10 days prior
to the effectiveness under the Securities Act of any registration statement
covering shares of Common Stock being publicly offered in an Eligible Offering
or in an Exempt Offering of the type specified in clause (iii) of the definition
of Exempt Offering and (ii) ending 90 days following the date of that
effectiveness (each such period being a "Lockup Period"). The Company will
provide each Holder written notice of any Lockup Period.
9. Registration Expenses.
(a) Except as Section 9(b) provides, the Company will pay or otherwise
bear all the expense attributable to the registration of Registrable Shares
under the Securities Act for sale pursuant to Section 3 or 4, including all the
following: (i) registration and filing fees payable under the Securities Act or
Blue Sky Laws; (ii) fees and expenses incurred in complying with Blue Sky Laws,
including the reasonable fees and disbursements of counsel incurred in that
connection; (iii) printing expenses; (iv) messenger and delivery expenses; (v)
the Company's
internal expenses, including the salaries and expenses of its employees; (vi)
fees and expenses attributable to the listing of the Registrable Shares on each
securities exchange (including, for this purpose, the Nasdaq National Market) on
which the Common Stock is then listed or included at the Company's initiation;
(vii) registrar and transfer agents' fees; (viii) fees and disbursements of the
Company's counsel and independent certified public accountants; (ix) securities
act liability insurance premiums (if the Company elects to obtain that
insurance); and (x) fees and expenses of any special experts or other Persons
the Company retains in connection with its compliance with this Agreement.
(b) Each Selling Holder will pay or otherwise bear all underwriting
commissions and discounts and transfer taxes attributable to that Selling
Holder's sale or other disposition of Registrable Shares, and each Holder will
pay or otherwise bear (i) the fees and expenses of that Holder's counsel and any
other special experts or Persons that Holder retains in connection with any
Seller's Registration Statement or the sale or other disposition of that
Holder's Registrable Shares and (ii) that Holder's internal expenses, including
the salaries and expenses of that Holder's employees.
10. Transfers and Additional Grants of Registration Rights.
(a) A holder may not transfer the registration rights this Agreement
affords the Holder to any other Person except as follows: (i) a Holder who is a
natural person may transfer those rights to a member of his immediate family
(including his parents) or a trust for the benefit of one or more members of his
immediate family; (ii) a Holder that is a corporation may transfer its rights to
its sole shareholder; (iii) a Holder that is a partnership or limited liability
company may transfer those rights to its partners or members, as the case may
be; (iv) a Holder may transfer those rights to any other Holder and (v) a Holder
may transfer those rights in conjunction with a transfer of the SP Agreement,
the Notes or the Warrants in accordance with the terms of the SP Agreement;
provided, that any such transfer will be permitted only if (a) such rights are
transferred to the transferee thereof together with a permitted transfer of
Notes or Conversion Securities and (b) the transferee executes an addendum to
this Agreement, in a form satisfactory to the Company, in which that transferee
agrees to comply with and otherwise be bound by all the terms and conditions
hereof.
(b) The Company will, without the consent of any Holder, extend the
registration rights this Agreement provides to the Persons who become holders of
Common Stock as a result of distributions thereof made by a Holder that is a
partnership to its partners, or by a Holder that is a limited liability company
to its members or by a Holder that is a corporation to its sole shareholder, and
the Company may, without the consent of any Holder, extend the registration
rights this Agreement provides to additional Persons who become holders of
equity securities of the Company after the date hereof, in each case by entering
into one more addenda to this Agreement with those Persons pursuant to which,
for all purposes hereof, those Persons will become Holders. Nothing herein will
limit or otherwise restrict the ability or right of the Company to grant to any
Person any registration or similar rights in the future respecting shares of
Common Stock or any other securities the Company may issue, whether pursuant to
the provisions of this Section 10 or otherwise.
11. Indemnification: Contribution.
(a) Indemnification by the Company. The Company will, to the extent
applicable law permits, indemnify each Selling Holder who sells Registrable
Shares by means of a Sellers' Registration Statement and each of that Selling
Holder's Related Parties against, and hold each of those Persons harmless from
and in respect of, any and all claims, damages, losses, liabilities and expenses
(including reasonable legal expenses) whatsoever (collectively, "Claims") that
arise from or are based on any untrue statement or alleged untrue statement of a
material fact contained in that Sellers' Registration Statement or any
prospectus (including any preliminary prospectus) forming a part thereof, or any
amendment thereof or supplement thereto, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances under
which they were made, except insofar as those Claims arise out of or are based
on any such untrue statement or omission or allegation thereof based on
information furnished in writing to the Company by or on behalf of that Selling
Holder expressly for use therein. In connection with any underwritten offering
of shares of Registrable Shares, the Company will indemnify and hold harmless
each participating underwriter and each of that underwriter's Related Parties on
either (i) substantially the same basis on which it will indemnify each Selling
Holder and that Selling Holder's Related Parties pursuant to this Section 11(a)
or (ii) such other basis as underwriters customarily obtain from issuers at the
time of that offering. Notwithstanding the foregoing, the Company's obligations
to indemnify and hold harmless pursuant to this Section 11(a) with respect to
any Claim (or action or proceeding in respect thereof) that arises from or is
based on any untrue or alleged untrue statement contained in, or any omission or
alleged omission from, any preliminary prospectus will not inure to the benefit
of any Selling Holder or underwriter or its Related Parties if it is determined
that (i) a copy of the prospectus used to confirm the sale of Registrable Shares
to the Person asserting that claim was not sent or given to that Person at or
prior to the written confirmation of that sale, (ii) the untrue statement or
alleged untrue statement or the omission or alleged omission was corrected by
that prospectus and (iii) it was the responsibility of that Selling Holder or
that underwriter (or any dealer acquiring those shares directly or indirectly
from that underwriter) to send or give that prospectus to that Person.
(b) Conduct of Indemnification Proceedings. Each Person claiming
indemnification from the Company pursuant to this Section 11 (an "Indemnified
Party") will, promptly after that Indemnified Party becomes aware of any
assertion or commencement of any action or proceeding against that Indemnified
Party in respect of which indemnity may be sought from the Company (a
"Proceeding"), promptly notify the Company in writing of the Proceeding,
provided, that an Indemnified Party's failure to so notify the Company will not
relieve the Company from any liability it may have to that Indemnified Party
otherwise than pursuant to the provisions of this Section 11. If any Proceeding
is brought against any Indemnified Party and that Indemnified Party duly
notifies the Company thereof (i) the Company will have the right, at its
expense, to assume the defense thereof, including the employment of counsel; and
(ii) the Indemnified Party will have the right to employ separate counsel in the
Proceeding and participate in the defense thereof, but the Indemnified Party
will pay the fees and expenses of that separate counsel unless (A) the Company
has agreed in writing to pay those fees and expenses or (B) the named parties to
the Proceeding (including any impleaded parties) include both the Indemnified
Party and the Company, and counsel advises the Indemnified Party in writing that
one or more legal defenses may be available to the Indemnified Party which is or
are
different from or additional to those available to the Company (in which case,
if the Indemnified Party notifies the Company in writing that the Indemnified
Party elects to employ separate counsel at the expense of the Company, the
Company will not have the right to assume the defense of the Proceeding on
behalf of the Indemnified Party; it being understood, however, that the Company
will not, in connection with any one Proceeding or separate but substantially
similar or related Proceedings in the same jurisdiction and arising out of the
same general allegations or circumstances, be liable for the fees and expenses
of more than one separate law firm (together with appropriate local counsel) at
any time for all Indemnified Parties). The Company will not be liable for any
settlement of any Proceeding which any Indemnified Party effects without the
Company's written consent.
(c) Indemnification by Selling Holders. Each Selling Holder will, to
the extent applicable law permits, indemnify the Company and each of its Related
Parties against, and hold each of those Persons harmless from and in respect of,
Claims to the same extent as the indemnity from the Company to that Selling
Holder in Section 11(a), but only with respect to information that is furnished
by or on behalf of that Selling Holder expressly for use in a Sellers'
Registration Statement or any prospectus (including any preliminary prospectus)
forming a part thereof, or any amendment thereof or supplement thereto. If any
action or proceeding is brought against the Company or any of its Related
Parties in respect of which any of those Persons may seek indemnity from a
Selling Holder pursuant to this Section 11(c), that Selling Holder will have the
rights and duties given to the Company, and each of those Persons will have the
rights and duties given to that Selling Holder and that Selling Holder's Related
Parties, by Section 11(b). Each Selling Holder also will, to the extent
applicable law permits, indemnify and hold harmless the underwriters of the
shares of Registrable Shares offered by that Selling Holder on substantially the
same basis on which the Company will indemnify and hold harmless those Persons
pursuant to Section 11(a).
(d) Contribution. If the indemnification this Section 11 provides for
is unavailable to any party intended to be indemnified pursuant to this Section
11 in respect of any Claims referred to herein, the parties who would have
indemnified that party in the contemplation of this Section 11 will, in lieu of
providing that indemnification, contribute to the amount paid or payable by that
party as a result of those Claims, as follows:
(i) as between the Company and the Selling Holders,
on the one hand, and the underwriters of shares of Registrable Shares, on the
other hand, (A) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Holders and by those
underwriters from the offering of those shares or, if that allocation is not
permitted by applicable law, (B) in such proportion as is appropriate to reflect
not only those relative benefits, but also the relative faults of the Company
and the Selling Holders and of those underwriters in connection with the
statements or omissions that resulted in those Claims, as well as any other
relevant equitable considerations; and
(ii) as between the Company, on the one hand, and
each Selling Holder, on the other hand, in such proportion as is appropriate to
reflect the relative faults of the Company and of that Selling Holder in
connection with those statements or omissions, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling Holders, on the
one hand, and the underwriters participating in the underwritten offering of
shares of Registrable Shares, on the other hand, will be deemed to be in the
same proportion as the total proceeds from that offering (including shares of
Common Stock, if any, being offered by the Company), net of underwriting
discounts and commissions, but before deducting expenses, bear to the total
amount of underwriting discounts and commissions received by those underwriters
in that offering, while (i) relative faults of the Company and the Selling
Holders and of those underwriters will be determined by reference to, among
other facts, whether the statements or omissions that resulted in the Claims in
respect of which contribution is being made are or relate to information
supplied by the Company and the Selling Holders or by those underwriters and
(ii) the relative faults of the Company and of the Selling Holders will be
determined by reference to, among other facts, (A) whether those statements or
omissions are or relate to information supplied by the Company or by the Selling
Holders and (B) those Persons' relative intent, knowledge, access to information
and opportunity to correct those statements or omissions or prevent them from
being made. The Company and the Selling Holders agree it would not be just or
equitable if contribution pursuant to this Section 11(d) were to be determined
by pro rata allocation (even if the underwriters, if any, were to be treated as
one entity for this purpose) or by any other allocation method that does not
take into account the equitable considerations referred to in this Section
11(d).
(e) Limitations on Contribution. No underwriter will be required to
contribute to the Company or the Selling Holders, pursuant to Section 11(d) or
otherwise, any amount in excess of the amount by which (i) the total price at
which the Registrable Shares underwritten by it and distributed to the public
were offered to the public exceeds (ii) the amount of any damages it otherwise
has been required to pay by reason of the statements or omissions that resulted
in the Claims in respect of which contribution is being made, and no Selling
Holder will be required to contribute to the Company or any underwriter,
pursuant to Section 11(d) or otherwise, any amount in excess of the amount by
which (i) the total price at which that Selling Holder's Registrable Shares were
offered to the public exceeds (ii) the amount of any damages that Selling Holder
otherwise has been required to pay by reason of those statements or omissions.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. If indemnification is
available under this Section 11, the indemnifying parties will indemnify each
indemnified party to the full extent Sections 11(a) and (c) provide without
regard to the relative fault of any Person or any other equitable consideration
referred to in Section 11(d).
12. Miscellaneous.
(a) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of Holders of at least 67%
of the Registrable Shares then held by Holders.
(b) Notices. All notices and other communications required or permitted
to be given by any provision of this Agreement shall be in writing and mailed
(certified or registered mail, postage prepaid, return receipt requested) or
sent by hand or overnight courier, by facsimile transmission (with
acknowledgment received), or by electronic mail (with acknowledgment
received), charges prepaid and addressed to the intended recipient as follows,
or to such other address or number as may be specified from time to time by like
notice to the parties:
If to the Company:
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Executive Officer
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
If to a Holder, to the address set forth for such Stockholder on
Schedule 1 to this Agreement.
Any party may from time to time specify a different address for notices by like
notice to the other parties. All notices and other communications given in
accordance with the provisions of this Agreement shall be deemed to have been
given and received (i) four (4) Business Days after the same are sent by
certified or registered mail, postage prepaid, return receipt requested, (ii)
when delivered by hand or transmitted by facsimile or electronic mail (with
acknowledgment received and, in the case of facsimile or electronic mail only, a
copy of such notice is sent no later than the next Business Day by a reliable
overnight courier service, with acknowledgment of receipt) or (iii) one (1)
Business Day after the same are sent by a reliable overnight courier service,
with acknowledgment of receipt.
(c) Successors and Assigns. This Agreement will inure to the benefit of
and be binding on the heirs, executors, administrators, successors and assigns
of each of the parties hereto.
(d) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed will be deemed to be an original and all of which taken
together will constitute one and the same agreement.
(e) Headings and References. The headings in this Agreement are for
convenience of reference only and will not limit or otherwise affect the meaning
hereof References herein to "Sections" are to Sections of this Agreement unless
otherwise indicated.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY WITHIN THAT STATE.
(g) Severability. If any one or more of the provisions herein, or the
application thereof in any circumstances, is invalid, illegal or unenforceable
in any respect for any reason, the validity, legality and enforceability of that
provision in every other respect and of the remaining provisions contained
herein will not be in any way impaired thereby, it being intended by each party
hereto that all the rights and privileges of all parties hereto will be
enforceable to the fullest extent permitted by law.
(h) Entire Agreement; Termination. The parties hereto intend that this
Agreement will be considered for all purposes as the final expression, and a
complete and exclusive statement, of their mutual agreement and understanding in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties to this Agreement with
respect to that subject matter.
Rest of Page Intentionally Left Blank
Signature Page Follows
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agree of the date first above written.
BOSTON LIFE SCIENCES, INC.
By: /s/ S. Xxxxx Xxxxxxx
------------------------------
Name: S. Xxxxx Xxxxxxx
Title: Chief Executive Officer
XXXXXXX & XXXXXX VALUE PARTNERS, L.P.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: General Partner
[Signature Page to Registration Rights Agreement]
SCHEDULE 1
Holder
(name and address)
Xxxxxxx & Xxxxxx Value Partners, L.P.
00 Xxxxxxxx
Xxx Xxxx, XX 00000
