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EXHIBIT 10.6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of August 22, 1997 by and between SALIVA DIAGNOSTIC SYSTEMS,
INC., a Delaware corporation (the "Company"), and XXXXX XXXXXX (the
"Investor").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Common Stock Subscription Agreement
dated the date hereof (the "Subscription Agreement"), the Investor acquired
shares of Common Stock of the Company, par value $.01 per share (the "Common
Stock" or the "Shares"); and
WHEREAS, the Company has agreed to register the Shares; and
WHEREAS, as used herein, "Registrable Securities" shall mean the
shares of Common Stock (including the Additional Shares, as defined in the
Subscription Agreement) issued or issuable by the Company under the
Subscription Agreement or issuable upon any stock split, stock dividend,
recapitalization or the like, which have not been previously sold pursuant to a
registration statement or Rule 144 promulgated under the Securities Act of
1933, as amended (the "Securities Act").
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties agree as follows:
1. REGISTRATION UPON CLOSING.
(a) Subject to the terms and conditions hereof, within thirty (30)
days after the closing of the transactions contemplated by the Subscription
Agreement (the "Closing Date"), the Company shall, at the Company's cost and
expense (other than the underwriting discounts and brokerage commissions, if
any, payable in respect of the Registrable Securities sold by the Investor),
prepare and file with the Securities and Exchange Commission (the "Commission")
a registration statement, or an amendment to an existing registration
statement, on Form S-3 (if the same is available), with respect to all of the
Registrable Securities and will use its best efforts to cause such registration
statement to become effective as soon as possible. If Form S-3 is not
available to the Company for such registration statement, the Company shall
file the registration statement on an appropriate alternative form.
(b) Except as set forth below, the Company shall keep effective
the registration statement contemplated by this Section 1 and shall from time
to time amend or supplement such registration statement, for a period of not
less than two (2) years (although such period may be reduced to one year
provided that all of the Shares may be sold at one time under rule 144(k) under
the Exchange Act), as extended by any period of time during which the
registration
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statement is not effective pursuant to Section 1(c) below, unless all of the
Registrable Securities set forth in such registration statement have
theretofore been sold.
(c) The Company may terminate or suspend the effectiveness of any
registration statement to be filed pursuant to Section 1(a) one time for a
period of not more than 30 days if the Company shall deliver to each Investor a
certificate signed by the President or Chief Financial Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company it would (i) be seriously detrimental to the business of the Company
for such registration statement to be effected or remain effective at such
time, (ii) interfere with any proposed or pending material corporate
transaction involving the Company or any of its subsidiaries, or (iii) result
in any premature disclosure thereof.
2. THE COMPANY COVENANTS.
(a) The Company shall furnish to the Investor such number of
copies of a prospectus in conformity with the requirements of the Securities
Act, and such other documents as may reasonably be requested in order to
facilitate the disposition of the Registrable Securities owned by the Investor.
(b) The Company shall use all reasonable efforts to cause the
Registrable Securities so registered to be registered or qualified for sale
under the securities or blue sky laws of such jurisdictions as the Investor may
reasonably request; provided, however, that the Company shall not be required
to qualify to do business in any state by reason of this Section 2(b) in which
it is not otherwise required to qualify to do business.
(c) The Company shall notify the Investor promptly when such
registration statement has become effective or a supplement to any prospectus
forming a part of such registration statement has been filed.
(d) The Company shall advise the Investor, promptly after it shall
receive notice or obtain knowledge, of the issuance of any stop order by the
Commission suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for that purpose, and promptly use
all reasonable efforts to prevent the issuance of any stop order or to obtain
its withdrawal if such stop order shall be issued.
(e) The Company shall promptly notify the Investor, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event of which it has knowledge as a
result of which the prospectus included in such registration statement, as then
in effect, would include an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and at the reasonable request of each Investor prepare and furnish to
them such number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the offerees
and purchasers of such Registrable Securities or securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or
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necessary to make the statements therein not misleading in the light of the
circumstances under which they were made.
(f) The Company shall pay all expenses incurred by the Company in
complying with Section 1 hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company and one counsel for the
Investor (the amount of counsel fees for the Investor relating to such
registration shall be up to $10,000), blue sky fees and expenses, and the
expense of any special audits incident to or required by any such registration,
but excluding all underwriting discounts and brokerage commissions, if any,
payable in respect of the Registrable Securities sold by the Investor.
3. INDEMNIFICATION.
(a) Subject to the conditions set forth below, the Company agrees
to indemnify and hold harmless the Investor, its officers, directors, partners,
employees, agents, and counsel, and each person, if any, who controls any such
person within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act") from
and against any and all loss, liability, charge, claim, damage, and expense
whatsoever (which shall include, for all purposes of this Section 3, but not be
limited to, reasonable attorneys' fees and any and all reasonable expenses
whatsoever incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever), arising out of,
based upon, or in connection with any untrue statement or alleged untrue
statement of a material fact contained (A) in any registration statement,
preliminary prospectus, or final prospectus (as from time to time amended and
supplemented) or any amendment or supplement thereto, relating to the sale of
any of the Registrable Securities or (B) in any application or other document
or communication (in this Section 3 collectively called an "application")
executed by or on behalf of the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
register or qualify any of the Registrable Securities under the securities or
blue sky laws thereof or filed with the Commission or any securities exchange
or the Nasdaq Stock Market; or any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
made therein not misleading, unless (x) such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Investor for inclusion in any registration
statement, preliminary prospectus, or final prospectus, or any amendment or
supplement thereto, or in any application, as the case may be, or (y) such
loss, liability, charge, claim, damage or expense arises out of the Investor's
failure to comply with the terms and provisions of this Agreement. The
foregoing agreement to indemnify shall be in addition to any liability the
Company may otherwise have, including liabilities arising under this Agreement.
If any action is brought against the Investor or any of its officers,
directors, partners, employees, agents, or counsel, or any controlling persons
or such person (an "indemnified party") in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such
indemnified party or parties shall promptly notify the Company in
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writing of the institution of such action (but the failure so to notify shall
not relieve the Company from any liability other than pursuant to this Section
3(a) unless, the failure to so notify shall materially and adversely prejudice
any rights or defenses with respect to such claim) and the Company shall
promptly assume the defense of such action, including the employment of counsel
(reasonably satisfactory to such indemnified party or parties) provided that
the indemnified party shall have the right to employ its or their own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of such indemnified party or parties unless:
(i) the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such
action; or
(ii) such indemnified party or parties shall have
reasonably concluded, based on an opinion of counsel, that there may be one or
more legal defenses available to it or them or to other indemnified parties
which are different from or additional to those available to the Company, in
any material respect, and that as a result thereof a conflict of interest would
arise absent separate representation of the parties.
In the event of clauses (i) or (ii) above, such fees and expenses as are
reasonable shall be borne by the Company and the Company shall not have the
right to direct the defense of such action on behalf of the indemnified party
or parties. Anything in this Section 3 to the contrary notwithstanding, the
Company shall not be liable for any settlement of any such claim or action
effected without its written consent, which shall not be unreasonably withheld.
The Company shall not, without the prior written consent of each indemnified
party that is not released as described in this sentence, settle or compromise
any action, or permit a default or consent to the entry of judgment in or
otherwise seek to terminate any pending or threatened action, in respect of
which indemnity may be sought hereunder (whether or not any indemnified party
is a party thereto) unless such settlement, compromise, consent, or termination
includes an unconditional release of each indemnified party from all liability
in respect of such action. The Company agrees promptly to notify the Investor
of the commencement of any litigation or proceedings against the Company or any
of its officers or directors in connection with the sale of any Registrable
Securities or any preliminary prospectus, final prospectus, registration
statement, or amendment or supplement thereto, or any application relating to
any sale of any Registrable Securities.
(b) The Investor agrees to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Registrable Securities held by
the Investor, each other person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, and its or their respective counsel, to the same extent as the foregoing
indemnity from the Company to the Investor in Section 3(a) but only with
respect to statements or omissions, if any, made in any registration statement,
preliminary prospectus, or final prospectus or any amendment or supplement
thereto, or in any application, in reliance upon and in conformity with written
information furnished to the Company with respect to the Investor by or on
behalf of the Investor, expressly for inclusion in any such registration
statement, preliminary
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prospectus, or final prospectus, or any amendment or supplement thereto, or in
any application, as the case may be. If any action shall be brought against
the Company or any other person so indemnified based on any such registration
statement, preliminary prospectus, or final prospectus, or any amendment or
supplement thereto, or in any application, and in respect of which indemnity
may be sought against the Investor pursuant to this Section 3(b), the Investor
shall have the rights and duties given to the Company, and the Company and each
other person so indemnified shall have the rights and duties given to the
indemnified parties, by the provisions of Section 3(a).
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 3(a) or
3(b) (subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such case, or (ii) any indemnified or indemnifying party
seeks contribution under the Securities Act, the Exchange Act or otherwise,
then the Company (including for this purpose any contribution made by or on
behalf of any director of the Company, any officer of the Company who signed
any such registration statement and any controlling person of the Company) as
one entity, and the Investor included in such registration in the aggregate
(including for this purpose any contribution by or on behalf of an indemnified
party) as a second entity, shall contribute to the losses, liabilities, claims,
damages, and expenses whatsoever to which any of them may be subject, on the
basis of relevant equitable considerations such as the relative fault of the
Company and the Investor in connection with the facts which resulted in such
losses, liabilities, claims, damages, and expenses. The relative fault, in the
case of an untrue statement, alleged untrue statement, omission, or alleged
omission shall be determined by, among other things, whether such statement,
alleged statement, omission or alleged omission relates to information supplied
by the Company or by the Investor, and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement,
alleged statement, omission, or alleged omission. The Company and the Investor
agree that it would be unjust and inequitable if the respective obligations of
the Company and the Investor for contribution were determined by pro rata or
per capita allocation of the aggregate losses, liabilities, claims, damages,
and expenses (even if the Investor and the other indemnified parties were
treated as one entity for such purpose) or by any other method of allocation
that does not reflect the equitable considerations referred to in this Section
3(c). No person guilty of a fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who is not guilty of such fraudulent misrepresentation. For
purposes of this Section 3(c), each person, if any, who controls the Investor
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act and each officer, director, partner, employee, agent, and counsel
for the Investor or control person shall have the same rights to contribution
as the Investor or control person and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act of Section 20(a)
of the Exchange Act, each officer of the Company who shall have signed any such
registration statement, each director of the Company, and its or their
respective counsel shall have the same rights to contribution as the Company,
subject to each case to the provisions of this Section 3(c). Anything in this
Section 3(c) to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its
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written consent. This Section 3(c) is intended to supersede any right to
contribution under the Securities Act, the Exchange Act or otherwise.
4. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by either party
of its obligations under this Agreement, the other party, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement.
Such rights shall be in addition to, and not in lieu of, the Investor's rights
to receive the Damage Payment as specified in the Subscription Agreement.
(b) AGREEMENTS AND WAIVERS. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, unless such amendment, modification or supplement is
in writing and signed by each of the parties hereto.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, express
overnight courier, registered first class mail, overnight courier, or
telecopied, initially to the address set forth below, and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Section 4(c).
if to the Company:
Saliva Diagnostic Systems, Inc.
00000 XX 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Investor, to each investor and at such address as is
listed on the signature page to the Subscription Agreement.
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; three (3) business days after
being deposited in the mail, postage prepaid, if mailed; the next business day
after being deposited with an overnight courier, if deposited with an overnight
courier service; when receipt is acknowledged, if telecopied.
(d) REASONABLE COOPERATION OF THE INVESTOR. The Investor shall
cooperate in all reasonable respects with the filing of the registration
statement(s) contemplated hereby. Without limiting the foregoing, the Investor
shall furnish to the Company (or any regulatory authority) such written
information and representations that the Company may reasonably request in
order to facilitate any registration of the Registrable Securities hereunder.
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(e) SUCCESSORS AND ASSIGNS. This Agreement may be assigned by the
Investor to any purchaser or transferee of the Shares.
(f) COUNTERPARTS. This Agreement may be executed by facsimile
signature and in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
(g) HEADINGS. The headings in this Agreement are for convenience
of references only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Delaware without
reference to its conflict of laws provisions.
(i) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application hereof in any circumstance is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(j) ENTIRE AGREEMENT. This Agreement is intended by the parties
as a final expression of their agreement and intended to be a complete and
exclusive statement of this agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are not any
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, concerning the registration rights granted by the
Company pursuant to this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, this Agreement was duly executed on the date first
written above.
SALIVA DIAGNOSTIC SYSTEMS, INC.
By: /s/ Xxxxxxx X. XxXxxxxxx
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Xxxxxxx X. XxXxxxxxx, President
INVESTOR:
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title:
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