REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
January 7, 2000, is entered into by and among Generex Biotechnology Corp., a
Delaware corporation, with headquarters located at 00 Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxx, Xxxxxx X0X 0X0 (the "Company"), and the undersigned buyers
(each, a "Buyer" and collectively, the "Buyers").
WHEREAS:
A. In connection with the Securities Purchase Agreement by and among the
parties dated as of January 6, 2000 (the "Securities Purchase Agreement"),
the Company has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, (i) to issue and sell to the Buyers 470,590
shares of the Company's Common Stock, par value $.001 per share (the "Common
Shares") and (ii) to issue Warrants (the "Warrants") which will be
exercisable to purchase 352,943 shares of Common Stock (the "Warrant
Shares"); and
B. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"),
and applicable state securities laws.
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
Buyers hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
a. "Investor" means a Buyer, any transferee or assignee thereof to whom
a Buyer assigns its rights under this Agreement and who agrees to become
bound by the provisions of this Agreement in accordance with Section 9 and
any transferee or assignee thereof to whom a transferee or assignee assigns
its rights under this Agreement and who agrees to become bound by the
provisions of this Agreement in accordance with Section 9.
b. "Person" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.
c. "Register," "registered," and "registration" refer to a registration
effected by preparing and filing one or more Registration Statements (as
defined below) in compliance with the 1933 Act and pursuant to Rule 415 under
the 1933 Act or any successor rule
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providing for offering securities on a continuous basis ("Rule 415"), and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the United States Securities and Exchange Commission (the "SEC").
d. "Registrable Securities" means the Common Shares purchased pursuant
to the Securities Purchase Agreement and the Warrant Shares issued or
issuable upon exercise of the Warrants and any shares of capital stock issued
or issuable with respect to the Common Shares, Warrants or Warrant Shares as
a result of any stock split, stock dividend, recapitalization, exchange,
anti-dilution rights or similar event or otherwise, without regard to any
limitation on exercise of the Warrants.
e. "Registration Statement" means a registration statement of the
Company filed under the 1933 Act and pursuant to Rule 415.
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.
2. REGISTRATION.
a. Mandatory Registration. The Company shall prepare, and, as soon as
practicable but in no event later than sixty (60) calendar days after the
date hereof, file with the SEC a Registration Statement or Registration
Statements (as is necessary) on Form S-3 (or if such form is unavailable,
such other form as is available for registration) covering the resale of all
of the Registrable Securities. The initial Registration Statement prepared
pursuant hereto shall register for resale at least that number of Company
common stock shares equal to the number of Registrable Securities as of the
date immediately preceding the date the Registration Statement is initially
filed with the SEC, subject to adjustment as provided in Section 3(b). The
Company shall use its best efforts to have the Registration Statement
declared effective by the SEC as soon as practicable, but in no event later
than one-hundred twenty (120) calendar days after the date hereof.
b. Piggy-Back Registrations. If at any time prior to the expiration of
the Registration Period (as defined in Section 3(a)) the Company proposes to
file with the SEC a Registration Statement relating to an offering for its
own account or the account of others under the 1933 Act of any of its
securities (other than on Form S-4 or Form S-8 (or their equivalents at such
time) relating to 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 promptly send to each Investor written notice of the Company's
intention to file a Registration Statement and of such Investor's rights
under this Section 2(b) and, if within twenty (20) days after receipt of such
notice, such Investor shall so request in writing, the Company shall include
in such Registration Statement all or any part of the Registrable Securities
such Investor requests to be registered, subject to the priorities set forth
in Section 2(b) below. No right to registration of Registrable Securities
under this Section 2(b) shall be construed to limit any registration required
under Section 2(a). The obligations of the Company under this Section 2(b)
may be waived by the Buyers. If an offering in connection with which an
Investor is entitled to registration under this Section 2(b) is an
underwritten offering, then each Investor 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
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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 Company common stock included in such underwritten offering. If a
registration pursuant to this Section 2(b) is to be an underwritten public
offering and the managing underwriter(s) advise the Company in writing, that
in their reasonable good faith opinion, marketing or other factors dictate
that a limitation on the number of shares of Company common stock which may
be included in the Registration Statement is necessary to facilitate and not
adversely affect the proposed offering, then the Company shall include in
such registration: (1) first, all securities the Company proposes to sell for
its own account, (2) second, up to the full number of securities proposed to
be registered for the account of the holders of securities entitled to
inclusion of their securities in the Registration Statement by reason of
demand registration rights, and (3) third, the securities requested to be
registered by the Investors and other holders of securities entitled to
participate in the registration, as of the date hereof, drawn from them pro
rata based on the number each has requested to be included in such
registration.
c. Allocation of Registrable Securities. The initial number of
Registrable Securities included in any Registration Statement and each
increase in the number of Registrable Securities included therein shall be
allocated pro rata among the Investors based on the number of Registrable
Securities held, or which could be held, by each Investor at the time the
Registration Statement covering such initial number of Registrable Securities
or increase thereof is declared effective by the SEC. In the event that an
Investor sells or otherwise transfers any of such Person's Registrable
Securities, each transferee shall be allocated a pro rata portion of the then
remaining number of Registrable Securities included in such Registration
Statement for such transferor. Any Common Shares included in a Registration
Statement and which remain allocated to any Person which ceases to hold any
Registrable Securities shall be allocated to the remaining Investors, pro
rata based on the number of Registrable Securities then held by such
Investors.
d. Legal Counsel. Subject to Section 5 hereof, the Buyers shall have the
right to select one legal counsel to review and oversee any offering pursuant
to this Section 2 ("Legal Counsel"), which shall be Xxxxxx Xxxxxx Xxxxx or
such other counsel as thereafter designated by the holders of a majority of
Registrable Securities. The Company shall reasonably cooperate with Legal
Counsel in performing the Company's obligations under this Agreement.
e. [Reserved.]
f. Rule 416. The Company and the Investors each acknowledge that each
Registration Statement prepared in accordance hereunder shall include an
indeterminate number of Registrable Securities pursuant to Rule 416 under the
1933 Act so as to cover any and all Registrable Securities which may become
issuable (i) to prevent dilution resulting from stock splits, stock dividends
or similar transactions and (ii) if permitted by law, by reason of the
anti-dilution provisions contained in the Securities Purchase Agreement and
the Warrants in accordance with the terms thereof (collectively, the "Rule
416 Securities"). In this regard, the Company agrees to use all reasonable
efforts to ensure that the maximum number of Registrable
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Securities which may be registered pursuant to Rule 416 under the 1933
Act are covered by each Registration Statement and, absent guidance from the
SEC or other definitive authority to the contrary, the Company shall use all
reasonable efforts to affirmatively support and to not take any position
adverse to the position that each Registration Statement filed hereunder
covers all of the Rule 416 Securities. If the Company determines that the
Registration Statement filed hereunder does not cover all of the Rule 416
Securities, the Company shall immediately (i) provide to each Investor
written evidence setting forth the basis for the Company's position and the
authority therefor and (ii) prepare and file an amendment to such
Registration Statement or a new Registration Statement in accordance with
Section 2(Guarantor).
g. Sufficient Number of Shares Registered. In the event the number of
shares available under a Registration Statement filed pursuant to Section
2(a) is insufficient to cover all of the Registrable Securities or an
Investor's allocated portion of the Registrable Securities pursuant to
Section 2(c) (a "Deficit Failure"), the Company shall amend the Registration
Statement, or file a new Registration Statement (on the short form available
therefor, if applicable), or both, so as to cover at least one hundred
percent (100%) of such Registrable Securities in each case, as soon as
practicable, but in any event not later than fifteen (15) days after the
necessity therefor arises. The Company shall use it best efforts to cause
such amendment and/or new Registration Statement to become effective as soon
as practicable following the filing thereof. For purposes of the foregoing
provision, the number of shares available under a Registration Statement
shall be deemed "insufficient to cover all of the Registrable Securities" if
at any time the number of Registrable Securities is greater than the number
of shares of Company common stock available for resale under such
Registration Statement.
3. RELATED OBLIGATIONS.
Whenever an Investor has requested that any Registrable Securities be
registered pursuant to Section 2(b) or at such time as the Company is
obligated to file a Registration Statement with the SEC pursuant to Section
2(a) or 2(Guarantor), the Company will use its best efforts to effect the
registration of the Registrable Securities in accordance with the intended
method of disposition thereof and, pursuant thereto, the Company shall have
the following obligations:
a. The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the Registrable Securities (on or
prior to the sixtieth (60th) calendar day after the date hereof for the
registration of Registrable Securities pursuant to Section 2(a)) and use its
best efforts to cause such Registration Statement relating to the Registrable
Securities to become effective as soon as possible after such filing (but in
no event later than one-hundred twenty (120) calendar days after the date
hereof for the registration of Registrable Securities pursuant to Section
2(a)), and keep such Registration Statement effective pursuant to Rule 415 at
all times until the earlier of (i) the second (2nd) annual anniversary of the
date of this Agreement or (ii) the date on which the Investors shall have
sold all the Registrable Securities (the "Registration Period"), which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) 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
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make the statements therein, in light of the circumstances in which they
were made, not misleading.
b. The Company shall 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 such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the 1933 Act, as may be necessary to keep such Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in such Registration Statement.
c. The Company shall permit Legal Counsel to review and comment upon a
Registration Statement and all amendments and supplements thereto at least
seven (7) days prior to their filing with the SEC, and not file any document
in a form to which Legal Counsel reasonably objects. The Company shall not
submit a request for acceleration of the effectiveness of a Registration
Statement or any amendment or supplement thereto without the prior approval
of Legal Counsel, which consent shall not be unreasonably withheld. The
Company shall furnish to Legal Counsel, without charge, (i) any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement, (ii) promptly after
the same is prepared and filed with the SEC, one copy of any Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
and (iii) upon the effectiveness of any Registration Statement, one copy of
the prospectus included in such Registration Statement and all amendments and
supplements thereto.
d. The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without charge, (i)
promptly after the same is prepared and filed with the SEC, at least one copy
of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits, (ii) upon the effectiveness of any Registration
Statement, ten (10) copies of the prospectus included in such Registration
Statement and all amendments and supplements thereto (or such other number of
copies as such Investor may reasonably request) and (iii) such other
documents, including copies of any preliminary or final prospectus, as such
Investor may reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities owned by such Investor.
e. The Company shall use reasonable efforts to (i) register and qualify
the Registrable Securities covered by a Registration Statement under such
other securities or "blue sky" laws of such jurisdictions in the United
States as Legal Counsel or any Investor reasonably requests, (ii) prepare and
file in those jurisdictions, such amendments (including post-effective
amendments) and supplements to such registrations and qualifications 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; provided, however, that the
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Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject
itself to general taxation in any such jurisdiction, or (z) file a general
consent to service of process in any such jurisdiction. The Company shall
promptly notify Legal Counsel and each Investor who holds Registrable
Securities of the receipt by the Company of any notification with respect to
the suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or "blue sky" laws of any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose.
f. In the event Investors who hold a majority of the Registrable
Securities being offered in the offering select underwriters for the
offering, the Company shall enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriters of such offering.
g. As promptly as practicable after becoming aware of such event, the
Company shall notify Legal Counsel and each Investor in writing of the
happening of any event as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission 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, and promptly
prepare a supplement or amendment to such Registration Statement to correct
such untrue statement or omission, and deliver ten (10) copies of such
supplement or amendment to Legal Counsel and each Investor (or such other
number of copies as Legal Counsel or such Investor may reasonably request).
The Company shall also promptly notify Legal Counsel and each Investor in
writing (i) when a prospectus or any prospectus supplement or post-effective
amendment has been filed, and when a Registration Statement or any
post-effective amendment has become effective (notification of such
effectiveness shall be delivered to Legal Counsel and each Investor by
facsimile on the same day of such effectiveness and by overnight mail), (ii)
of any request by the SEC for amendments or supplements to a Registration
Statement or related prospectus or related information, and (iii) of the
Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
h. The Company shall use its best efforts to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration Statement,
or the suspension of the qualification of any of the Registrable Securities
for sale in any jurisdiction and, if such an order or suspension is issued,
to obtain the withdrawal of such order or suspension at the earliest possible
moment and to notify Legal Counsel and each Investor who holds Registrable
Securities being sold (and, in the event of an underwritten offering, the
managing underwriters) of the issuance of such order and the resolution
thereof or its receipt of actual notice of the initiation or threat of any
proceeding for such purpose.
i. At the request of any Investor, the Company shall furnish to such
Investor, on the date of the effectiveness of the Registration Statement and
thereafter from time to time on such dates as an Investor may reasonably
request (i) if required by an underwriter, a letter, dated
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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 underwriters, and (ii) an opinion, dated as of such date, of counsel
representing the Company for purposes of such Registration Statement, in
form, scope and substance as is customarily given in an underwritten public
offering, addressed to the underwriters and the Investors.
j. The Company shall make available for inspection by (i) any Investor,
(ii) Legal Counsel, (iii) any underwriter participating in any disposition
pursuant to a Registration Statement, (iv) one firm of accountants or other
agents retained by the Investors, and (v) one firm of attorneys retained by
such underwriters (collectively, the "Inspectors") all pertinent financial
and other records, and pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably deemed
necessary by each Inspector, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably
request; provided, however, that each Inspector shall hold in strict
confidence and shall not make any disclosure (except to an Investor) or use
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 (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is
otherwise required under the 1933 Act, (b) the release of such Records is
ordered pursuant to a final, non-appealable subpoena or order from a court or
government body of competent jurisdiction, or (c) 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 of which the Inspector
has knowledge. Each Investor 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 its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, the
Records deemed confidential.
k. The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company 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 final, non-appealable order from a court or governmental body of
competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this
Agreement or any other agreement of which the Company has knowledge. The
Company agrees that it shall, upon learning that disclosure of such
information concerning an Investor is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt written
notice to such Investor and allow such Investor, at the Investor's expense,
to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.
l. The Company shall use its best efforts either to (i) cause all the
Registrable Securities covered by a Registration Statement to be listed on
each securities exchange on which securities of the same class or series
issued by the Company are then listed, if
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any, if the listing of such Registrable Securities is then permitted under the
rules of such exchange, or (ii) secure designation and quotation of all
the Registrable Securities covered by the Registration Statement on the
Nasdaq Stock Market. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section 3(l).
m. [Reserved.]
n. The Company shall provide a transfer agent and registrar of all such
Registrable Securities not later than the effective date of such Registration
Statement.
o. If requested by the managing underwriters or an Investor, the Company
shall (i) immediately incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters and
the Investors agree should be included therein relating to the sale and
distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being sold
to such underwriters, the purchase price being paid therefor by such
underwriters and any other terms of the underwritten (or best efforts
underwritten) offering of the Registrable Securities to be sold in such
offering; (ii) make all required filings of such prospectus supplement or
post-effective amendment as soon as notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(iii) supplement or make amendments to any Registration Statement if
requested by a shareholder or any underwriter of such Registrable Securities.
p. [Reserved.]
q. [Reserved.]
r. The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any
registration hereunder and the Company shall use its best efforts to file
with the SEC in a timely manner all reports and documents required of the
Company under the 1933 Act and the 1934 Act (as defined in Section 6(a)).
s. Within two (2) business days after the Registration Statement which
includes the Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities (with copies
to the Investors whose Registrable Securities are included in such
Registration Statement) confirmation that the Registration Statement has been
declared effective by the SEC in the form attached hereto as Exhibit A.
t. [Reserved.]
u. The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investors of Registrable
Securities pursuant to a Registration Statement.
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v. Notwithstanding anything to the contrary contained in this Agreement,
the Registration Statement shall register only the Registrable Securities.
4. OBLIGATIONS OF THE INVESTORS.
a. At least seven (7) days prior to the first anticipated filing date of
the Registration Statement, the Company shall notify each Investor in writing
of the information the Company requires from each such Investor if such
Investor elects to have any of such Investor's Registrable Securities
included in such Registration Statement. It shall be a condition precedent to
the obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
that such Investor shall furnish to the Company such information regarding
itself and the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company
may reasonably request.
b. Each Investor by such Investor's 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 any Registration
Statement hereunder, unless such Investor has notified the Company in writing
of such Investor's election to exclude all of such Investor's Registrable
Securities from such Registration Statement.
c. In the event any Investor elects to participate in an underwritten
public offering pursuant to Section 2, each such Investor agrees to enter
into and perform such Investor's obligations under an underwriting agreement,
in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing underwriter
of such offering and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of the Registrable
Securities.
5. EXPENSES OF REGISTRATION.
All reasonable 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, and fees and disbursements of counsel for the Company and, in the event
the Company fails to comply with the reasonable requests of Legal Counsel
made pursuant to Section 3(c) of this Agreement, the fees and disbursements
of Legal Counsel, shall be paid by the Company.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
a. To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend each Investor who holds such
Registrable Securities, the directors, officers, partners, employees, agents,
representatives of, and each Person, if any, who
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controls any Investor within the meaning of the 1933 Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and any underwriter
(as defined in the 0000 Xxx) for the Investors, and the directors and
officers of, and each Person, if any, who controls, any such underwriter
within the meaning of the 1933 Act or the 1934 Act (each, an "Indemnified
Person"), subject to Section 6(d) below, against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, attorneys' fees,
amounts paid in settlement or expenses, joint or several, (collectively,
"Indemnified Damages") incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from
the foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether or
not an indemnified party is or may be a party thereto ("Claims"), to which
any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of or are based upon: (i) any untrue statement or alleged untrue statement of
a material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any jurisdiction in
which Registrable Securities are offered ("Blue Sky Filing"), or the omission
or alleged omission to state 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, (iii) any violation or alleged violation by the Company of the
1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the
offer or sale of the Registrable Securities pursuant to a Registration
Statement or (iv) any material violation of this Agreement (the matters in
the foregoing clauses (i) through (iv) being, collectively, "Violations").
The Company shall reimburse the Investors 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): (i) shall not apply to a Claim by an
Indemnified Person 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 such 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(d);
(ii) 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 such
prospectus was timely made available by the Company pursuant to Section 3(d),
and the Indemnified Person was promptly advised in writing not to use the
incorrect prospectus prior to the use giving rise to a violation and such
Indemnified Person, notwithstanding such advice, used it; (iii) shall not be
available to the extent such Claim is based on a failure of the Investor to
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deliver properly or to cause to be delivered properly the prospectus made
available by the Company, if such prospectus was timely made available by the
Company pursuant to Section 3(d); and (iv) 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 Person and shall
survive the transfer of the Registrable Securities by the Investors pursuant
to Section 9.
b. In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly
indemnify, hold harmless and defend, to the same extent and in the same
manner as is 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 1933 Act or the 1934
Act (collectively and together with an Indemnified Person, an "Indemnified
Party"), against any Claim or Indemnified Damages to which any Indemnified
Party may become subject, under the 1933 Act, the 1934 Act or otherwise,
insofar as such Claim or Indemnified Damages arise out of or are based upon
(i) 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 Investor expressly for use in
connection with such Registration Statement, and (ii) any Violation, in each
case to the extent and only to the extent that such Violation occurs as a
result of the failure of an Investor to deliver properly or to cause to be
delivered properly the prospectus made available by the Company, if such
prospectus was timely made available by the Company pursuant to Section 3(d);
and, subject to Section 6(d), such Investor will 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) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of
such Investor, which consent shall not be unreasonably withheld; provided,
further, however, that the Investor shall be liable under this Section 6(b)
for only that amount of a Claim or Indemnified Damages as does not exceed the
net proceeds to such Investor 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 Investors 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. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in any distribution, to the same extent
as provided above, with respect to information such persons so furnished in
writing expressly for inclusion in the Registration Statement.
d. Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action or
proceeding (including any
11
governmental action or proceeding) involving a Claim, such Indemnified
Person or Indemnified Party shall, if a Claim in respect thereof is to be
made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; 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 any other party represented by such counsel in such proceeding. The
Company shall pay reasonable fees for only one separate legal counsel for the
Investors, and such legal counsel shall be selected by the Investors holding
a majority in interest of the Registrable Securities included in the
Registration Statement to which the Claim relates. The Indemnified Party or
Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the Indemnified Party or Indemnified
Person which relates to such action or claim. The indemnifying party shall
keep the Indemnified Party or Indemnified Person fully apprized at all times
as to the status of the defense or any settlement negotiations with respect
thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its written consent, provided,
however, that the indemnifying party shall not unreasonably withhold, delay
or condition its consent. No indemnifying party shall, without the consent of
the Indemnified Party or Indemnified Person, consent to entry of any judgment
or enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such claim or litigation. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of
the Indemnified Party or Indemnified Person with respect to all third
parties, firms or corporations relating to the matter for which
indemnification has been made. 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.
e. 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 and when bills are received or Indemnified
Damages are incurred.
f. The indemnity agreements contained herein shall be in addition to (i)
any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.
7. CONTRIBUTION.
12
To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; provided,
however, that: (i) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall
be entitled to contribution from any seller of Registrable Securities who was
not guilty of fraudulent misrepresentation; and (ii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount
of proceeds received by such seller from the sale of such Registrable
Securities.
8. LIQUIDATED DAMAGES.
a. The Company agrees that an Investor will suffer damages if the
Company violates any provision of or fails to fulfill its obligations
pursuant to Sections 2(a), 2(b), 2(Guarantor), 3(a), 3(b), 3(e), 3(h), 3(l)
and 3(v) of this Agreement (a "Registration Default") and that it would not
be possible to ascertain the extent of such damages. Accordingly, in the
event of such Registration Default, the Company hereby agrees to pay
liquidated damages ("Liquidated Damages") to such Investor following the
occurrence of such Registration Default in an amount determined by
multiplying (i) $.085] per Common Share then held by such Investor by (ii)
the percentage derived by dividing (A) the actual number of days elapsed from
the first day of the date that an uncured Registration Default occurred or
the end of the prior 30-day period, as applicable, to the day all
Registration Defaults have been completely cured, by (B) 30. Liquidated
Damages shall be paid in cash, or at the Investor's option, in the number of
shares of Company common stock equal to the quotient of (v) the dollar amount
of the Liquidated Damages due on the Payment Date (as defined below) divided
by (w) the closing bid price of the Company's common stock (as quoted in the
Principal Market (as defined in the Securities Purchase Agreement) or the
market or exchange where the Company's common stock is then traded) as of the
first day that an uncured Registration Default occurred; provided, however,
that if the Company timely files a Registration Statement covering the resale
of the Registrable Securities pursuant to Sections 2(a) and 3(a) of this
Agreement and the Company utilizes its best efforts to cause such
Registration Statement to become effective but such Registration Statement
has not become effective as required by Sections 2(a) and 3(a) of this
Agreement, then during the first 30-day period immediately following the
occurrence of such Registration Default caused by such failure of the
Registration Statement to become effective as required pursuant to Sections
2(a) and 3(a) of this Agreement, the Company shall pay Liquidated Damages to
such Investor in an amount determined by multiplying (i) $ .0425 per Common
Share then held by such Investor by (ii) the percentage derived by dividing
(A) the actual number of days elapsed from the first day of the date such
Registration Default occurred to the day such Registration Default has been
completely cured, by (B) 30. Liquidated Damages shall be paid, in cash, or at
the Investor's option, in the number of shares of Company common stock as
determined by this Section 8. The Liquidated Damages payable pursuant hereto
shall be payable within five (5) business days from the end of the 30-day
period commencing on the first 30-day period in which the Registration
Default occurs (each, a "Payment Date"). In the event the Investor elects to
receive the Liquidated Damages amount in shares of Company common stock, such
shares shall also be
13
considered Registrable Securities and shall have the registration rights
set forth in this Agreement.
b. Notwithstanding anything to the contrary in Section 8(a) above:
(i) the Company shall have the right to pay Liquidated Damages in
cash irrespective of any Investor's election to receive shares of
Company Common Stock in settlement thereof if the closing bid price of the
Company's Common Stock as determined under clause (w) above is less than
$4.25 per share.
(ii) in the event of a Registration Default under Section
2(Guarantor), Liquidated Damages shall be payable in an amount
determined by multiplying (A) the amount of Liquidated Damages as calculated
by Section 8(a) above, by (B) a fraction, the numerator of which fraction
shall be the total number of Common Shares held by the Investor or which the
Investor is entitled to receive and which have not been registered under the
Registration Statement, and the denominator of which fraction shall be the
total number of Common Shares held by the Investor and which the Investor is
entitled to receive.
(iii) no Registration Default shall be deemed to have occurred
hereunder:
(A) (1) under Section 2(Guarantor) if the Deficit Failure is the
result of a merger or other reorganization requiring the amendment of
the Registration Statement involving the restatement or filing of additional
or restated financial statements, provided, however, that the Company
diligently proceeds and utilizes its best efforts to satisfy its obligations
under Section 3(b) and Section 2(Guarantor) of this Agreement, or (2) in the
event that, pursuant to Section 2(Guarantor) of this Agreement, the Company
has reserved and registered for resale the initial 470,590 Common Shares
purchased by the Buyers pursuant to the Securities Purchase Agreement, under
Section 2 (Guarantor) if the Deficit Failure is the result of a failure to
register a number of Common Shares which represent 5% or less of the
additional number of Common Shares issued to such Investor pursuant to this
Agreement or the Securities Purchase Agreement in excess of such initial
470,590 Common Shares purchased by the Buyers, provided, however, that the
Company diligently proceeds and utilizes its best efforts to satisfy its
obligations under Section 2(Guarantor) of this Agreement.
(B) under Section 3(a) or Section 3(b) for failing to keep the
Registration Statement "effective at all times" if such failure is due to a
merger or other acquisition or reorganization, a recapitalization involving
the filing of new or restating of previously filed financial statements, or
other material corporate developments involving any entity or business
engaged in the same industry or business of the Company, provided, however,
that the Company proceeds diligently and utilizes its best efforts to satisfy
its obligations under Section 3(a) or Section 3(b) of this Agreement.
(C) under Section 3(h) in respect of any suspension of
effectiveness or withdrawal of the Registration Statement, or stop order
relating thereto, or suspension of sales under the Registration Statement
pending the filing and effectiveness of a post-effective amendment to the
Registration Statement that is made necessary by a merger or other
acquisition
14
or reorganization, a recapitalization involving the filing of new
or restating of previously filed financial statements, or other material
corporate developments involving any entity or business engaged in the same
industry or business of the Company, provided, however, that the Company
proceeds diligently and utilizes its best efforts to satisfy its obligations
under Section 3(h) of this Agreement.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights under this Agreement shall be automatically assignable by the
Investors to any transferee of all or any portion of Registrable Securities
if: (i) the Investor agrees 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 (a) the name and address of such transferee or assignee, and (b)
the securities with respect to which such registration rights are being
transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act and applicable state securities
laws; provided, however, that the transferee or assignee may subsequently
transfer or assign all or any portion of the Registrable Securities if an
exemption from registration under the 1933 Act is applicable to such transfer
or assignment; (iv) at or before the time the Company receives 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; and (v) such transfer shall have been made in
accordance with the applicable requirements of the Securities Purchase
Agreement.
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 Investors who then hold two-thirds [ ] of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 10 shall be
binding upon each Investor and the Company. No such amendment shall be
effective to the extent that it applies to less than all of the holders of
the Registrable Securities. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of
any of this Agreement unless the same consideration also is offered to all of
the parties to this Agreement.
11. MISCELLANEOUS.
a. A Person is deemed to be a holder of Registrable Securities whenever
such Person owns or is deemed to own of record such Registrable Securities.
If the Company receives conflicting instructions, notices or elections from
two or more Persons 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. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing
and will be deemed
15
to have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one business day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
If to the Company:
Generex Biotechnology Corp.
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxx X0X 0X0
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: E. Xxxx Xxxxx
With a copy to:
Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Telephone: (000)000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Chicco, Esq.
If to Legal Counsel:
Xxxxxx Xxxxxx Xxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
If to a Buyer, to it at the address and facsimile number set forth on the
Schedule of Buyers attached hereto, with copies to such Buyer's
representatives as set forth on the Schedule of Buyers, or at such other
address and/or facsimile number and/or to the attention of such other person
as the recipient party has specified by written notice given to each other
party five days prior to the effectiveness of such change.
c. 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. This Agreement shall be governed by and construed in all respects by
the internal laws of the State of Illinois (except for the proper application
of the United States federal securities laws), without giving effect to any
choice of law or conflict of law provision or rule
16
(whether of the State of Illinois or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of Illinois. Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting the City of Chicago, for
the adjudication of any dispute hereunder. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
e. This Agreement, the Securities Purchase Agreement and the Warrants
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
and therein. This Agreement, the Securities Purchase Agreement and the
Warrants supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
f. Subject to the requirements of Section 9, this Agreement shall inure
to the benefit of and be binding upon the permitted successors and assigns of
each of the parties hereto.
g. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in identical 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 of a copy of
this Agreement bearing the signature of the party so delivering this
Agreement.
i. 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.
j. All consents and other determinations to be made by the Investors
pursuant to this Agreement shall be made, unless otherwise specified in this
Agreement, by Investors holding a majority of the Registrable Securities.
k. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent and no rules of strict
construction will be applied against any party.
l. This Agreement is intended for the benefit of the parties hereto and
their respective permitted successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person.
[Signature Page Follows]
17
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY: BUYERS:
GENEREX BIOTECHNOLOGY CORP. CRANSHIRE CAPITAL, L.P.
By: /s/ Xxxx X. Xxxxxxx By: Downsview Capital, Incorporated,
---------------------------- the General Partner
Name: Xxxx X. Xxxxxxx
-------------------------
Title: President By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxxx Xxxxx
Title: President
KEYWAY INVESTMENTS LTD.
By: /s/ Xxxx Xxxxx
---------------------------------
Name: Xxxx Xxxxx
Title: Director
XXXXXX XXXX XXXXXXX
/s/ Xxxxxx Xxxx Xxxxxxx
------------------------------------
XXXXX XXXX
/s/ Xxxxx Xxxx
------------------------------------
THE DOTCOM FUND, LLC
By: /s/ Xxxx Xxxx
---------------------------------
Name: Xxxx Xxxx
Title: Manager
LIONHART INVESTMENTS LTD.
By: /s/ Xxxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxxx Xxxxx
Title: Director
18
SCHEDULE 1. LIST OF BUYERS
Investor's
Representatives'
Investor's Address Purchase Number of Number of Address and Facsimile
Investor Name and Facsimile Number Price Common Shares Warrant Shares Number
------------------------- ---------------------------- -------- ------------- -------------- ---------------------
Cranshire Capital, L.P. 000 Xxxxxx Xxxx, Xxxxx 0000 $450,000 105,883 79,413 Xxxxxx Xxxxxx Zavis
Xxxxxxxxxx, Xxxxxxxx 00000 000 X. Xxxxxx Xxxxxx
Attn: Xxxxxxxx Xxxxx Chicago, Illinois
(p) 847/562-9030 60661-3693
(f) 847/562-9031 Attention: Xxxxxxx X.
Xxxxxxx, Esq.
(p) 312/ 902-5521
(f) 312/ 577-8763
Keyway Investments Ltd. 00 Xxxxx Xxxxxxxx $450,000 105,883 79,413
Xxxxxxx, Xxxx xx Xxx
Xxxxxx Xxxxxxx
0X0 0XX
Attn: Xxxxxx Xxxxxx
(p) 011-44-171-323-2131
(f) 011-44-171-323-0773
Xxxxxx Xxxx Xxxxxxx 000 Xxxxxxxx Xxxx $250,000 58,824 44,118
Xxxxxxxx Xxxx, XX 00000
(p) 000-000-0000
Xxxxx Xxxx 0000 Xxxxxxxxx Xxxx $250,000 58,824 44,118
Xxxxxxxxxx, XX 00000
(p) 000-000-0000
(f) 000-000-0000
The dotCom Fund, LLC 000 Xxxxxx Xxxx $200,000 47,059 35,294
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxx
(p) 847-509-2290
(f) 000-000-0000
19
Investor's
Representatives'
Investor's Address Purchase Number of Number of Address and Facsimile
Investor Name and Facsimile Number Price Common Shares Warrant Shares Number
------------------------- ---------------------------- -------- ------------- -------------- ---------------------
Lionhart Investments Ltd. 00 Xxxx Xxxx $400,000 94,117 70,587
Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxx
XX000XX
Xxxxxx Xxxxxxx
Attn: Xxxxx Xxxxx
(p) 011-44-181-947-6934
(f) 011-44-181-971-0212
20
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attn:
Re: GENEREX BIOTECHNOLOGY CORP.
Ladies and Gentlemen:
We are counsel to Generex Biotechnology Corp., a Delaware corporation
(the "Company"), and have represented the Company in connection with that
certain Securities Purchase Agreement (the "Purchase Agreement") entered into
by and among the Company and the buyers named therein (collectively, the
"Holders") pursuant to which the Company issued to the Holders shares of its
Common Stock, par value $.001 per share, (the "Common Shares") and the
Warrants (the "Warrants"). Pursuant to the Purchase Agreement, the Company
also has entered into a Registration Rights Agreement with the Holders (the
"Registration Rights Agreement") pursuant to which the Company agreed, among
other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement), including the Common Shares, under the
Securities Act of 1933, as amended (the "1933 Act"). In connection with the
Company's obligations under the Registration Rights Agreement, on
__________________, the Company filed a Registration Statement on Form S-3
(File No. _____________) (the "Registration Statement") with the Securities
and Exchange Commission (the "SEC") relating to the Registrable Securities
which names each of the Holders as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER
TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no
knowledge, after telephonic inquiry of a member of the SEC's staff, that any
stop order suspending its effectiveness has been issued or that any
proceedings for that purpose are pending before, or threatened by, the SEC
and the Registrable Securities are available for resale under the 1933 Act
pursuant to the Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
By:
cc: [LIST NAMES OF HOLDERS]
21
