EXHIBIT 10.61
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of January 31, 2003, among Viragen, Inc., a Delaware corporation
(the "Company"), and the purchasers signatory hereto (each such purchaser is a
"Purchaser" and all such purchasers are, collectively, the "Purchasers").
This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof among the Company and the Purchasers (the "Purchase
Agreement").
The Company and the Purchasers hereby agree as follows:
1. Definitions
CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED HEREIN THAT ARE
DEFINED IN THE PURCHASE AGREEMENT SHALL HAVE THE MEANINGS GIVEN SUCH TERMS IN
THE PURCHASE AGREEMENT. As used in this Agreement, the following terms shall
have the following meanings:
"Business Day" means any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking
institutions in the State of New York or the State of California are
authorized or required by law or other government actions to close.
"Effectiveness Date" means, with respect to the initial
Registration Statement required to be filed hereunder, the earlier of
(i) the 90th day following the Closing Date and (ii) the fifth day
following the date on which the Company is notified by the Commission
that such Registration Statement will not be reviewed or is no longer
subject to further review and comments.
"Effectiveness Period" shall have the meaning set forth in
Section 2(a).
"Filing Date" means, with respect to the initial Registration
Statement required to be filed hereunder, the 30th day following the
Closing Date.
"Holder" or "Holders" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in
Section 5(c).
"Indemnifying Party" shall have the meaning set forth in
Section 5(c).
1
"Prospectus" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes
any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by a Registration
Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.
"Registrable Securities" means all of the shares of Common
Stock issuable upon conversion in full of the Debentures, assuming the
lowest possible conversion price that occurred since the Closing Date
(notwithstanding any limitations on conversion or resets in the
Debentures), exercise in full of the Warrants, all of the shares of
Common Stock issued to the Purchasers at the Closing, the shares
issuable in lieu of the payment of liquidated damages, together with
any securities issued or issuable upon any stock split, dividend or
other distribution recapitalization or similar event with respect to
the foregoing or pursuant to any anti-dilution provisions contained in
the Debentures or the Warrants.
"Registration Statement" means the registration statements
required to be filed hereunder and any additional registration
statements contemplated by Section 3(c), including (in each case) the
Prospectus, amendments and supplements to such registration statement
or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
"Rule 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"Rule 424" means Rule 424 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"Special Counsel" means one special counsel to the Holders,
for which the Holders will be reimbursed by the Company pursuant to
Section 4.
"Warrants" shall mean the Common Stock purchase warrants
issued to the Purchasers pursuant to the Purchase Agreement.
2. Shelf Registration
2
(a) On or prior to each Filing Date, the Company shall
prepare and file with the Commission a "Shelf" Registration Statement
covering the resale of all Registrable Securities applicable to such
Filing Date for an offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement shall be on Form S-3 and shall
contain (except if otherwise directed by the Holders) substantially the
"Plan of Distribution" attached hereto as Annex A. The Company shall
use its best efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as possible after the
filing thereof, but in any event prior to the applicable Effectiveness
Date, and shall use its best efforts to keep such Registration
Statement continuously effective under the Securities Act until the
date which is two years after the date that such Registration Statement
is declared effective by the Commission or such earlier date when all
Registrable Securities covered by such Registration Statement have been
sold or may be sold without volume restrictions pursuant to Rule 144(k)
as determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the
Company's transfer agent and the affected Holders (the "Effectiveness
Period"). The Company shall immediately notify the Holders via
facsimile of the effectiveness of the Registration Statement on the
same day that the Company receives notification of the effectiveness
from the SEC.
(b) The Registration Statements to be filed hereunder
shall include 175% of the Registrable Securities.
(c) If: (i) a Registration Statement is not filed on or
prior to its Filing Date (if the Company files a Registration Statement
without affording the Holder the opportunity to review and comment on
the same as required by Section 3(a), the Company shall not be deemed
to have satisfied clause (i)), or (ii) the Company fails to file with
the Commission a request for acceleration in accordance with Rule 461
promulgated under the Securities Act, within five Trading Days of the
date that the Company is notified (orally or in writing, whichever is
earlier) by the Commission that a Registration Statement will not be
"reviewed," or not subject to further review, or (iii) prior to its
Effective Date, the Company fails to file a pre-effective amendment and
otherwise respond in writing to comments made by the Commission in
respect of such Registration Statement within fifteen Trading Days
after the receipt of comments by or notice from the Commission that
such amendment is required in order for a Registration Statement to be
declared effective, or (iv) a Registration Statement filed or required
to be filed hereunder is not declared effective by the Commission by
its Effectiveness Date, or (v) after the Effective Date, a Registration
Statement ceases for any reason to remain continuously effective as to
all Registrable Securities for which it is required to be effective, or
the Holders are not permitted to utilize the Prospectus therein to
resell such Registrable Securities for 5 consecutive Trading Days or in
any individual case an aggregate of 10 Trading Days during any 12 month
period (which need not be consecutive Trading Days) (any such failure
or breach being referred to as an "Event", and for purposes of clause
(i) or (iv) the date on which such Event occurs, or for purposes of
clause (ii) the date on which such five Trading Day period is exceeded,
or for purposes of clause (iii) the date which such 15 Trading Day
period is exceeded, or for purposes of
3
clause (v) the date on which such 5 or 10 Trading Day period, as
applicable, is exceeded being referred to as "Event Date"), then, on
each such Event Date and every monthly anniversary thereof until the
applicable Event is cured, the Company shall pay to each Holder an
amount in cash, as liquidated damages and not as a penalty, equal to
2.0% of (i) the purchase price paid by such Holder pursuant to the
Purchase Agreement, and (ii) if the Warrants are "in the money", the
value of any outstanding Warrants (valued at the difference between the
average Closing Bid Price during the applicable month and the Exercise
Price multiplied by the number of shares of Common Stock the Warrants
are exercisable into) for the first month following such Event Date and
2.0% per month thereafter. If the Company fails to pay any liquidated
damages pursuant to this Section in full within seven days after the
date payable, the Company will pay interest thereon at a rate of 18%
per annum (or such lesser maximum amount that is permitted to be paid
by applicable law) to the Holder, accruing daily from the date such
liquidated damages are due until such amounts, plus all such interest
thereon, are paid in full and at the option of the Holder, such
liquidated damages be paid in shares of Common Stock under the Warrant.
The liquidated damages pursuant to the terms hereof shall apply on a
pro-rata basis for any portion of a month prior to the cure of an
Event.
3. Registration Procedures
In connection with the Company's registration obligations
hereunder, the Company shall:
(a) Not less than five Business Days prior to the filing
of each Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the
Company shall, (i) furnish to the Holders and their Special Counsel
copies of all such documents proposed to be filed, which documents
(other than those incorporated or deemed to be incorporated by
reference) will be subject to the review of such Holders and their
Special Counsel, and (ii) cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries
as shall be necessary, in the reasonable opinion of respective counsel
to conduct a reasonable investigation within the meaning of the
Securities Act. The Company shall not file the Registration Statement
or any such Prospectus or any amendments or supplements thereto to
which the Holders of a majority of the Registrable Securities and their
Special Counsel shall reasonably object, provided, the Company is
notified of such objection no later than 5 Business Days after the
Holders have been so furnished copies of such documents.
(b) (i) Prepare and file with the Commission such
amendments, including post-effective amendments, to a Registration
Statement and the Prospectus used in connection therewith as may be
necessary to keep a Registration Statement continuously effective as to
the applicable Registrable Securities for the Effectiveness Period and
prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all
of the Registrable Securities; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement, and
4
as so supplemented or amended to be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably possible, and in any event within ten
days, to any comments received from the Commission with respect to a
Registration Statement or any amendment thereto and as promptly as
reasonably possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to a Registration
Statement; and (iv) comply in all material respects with the provisions
of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration
Statement during the applicable period in accordance with the intended
methods of disposition by the Holders thereof set forth in such
Registration Statement as so amended or in such Prospectus as so
supplemented.
(c) If the number of Registrable Securities issuable at
any time exceeds 85% of the number of shares of Common Stock then
registered in a Registration Statement, then the Company shall file an
additional Registration Statement covering the resale of the
Registrable Securities by the Holders of not less than 150% of the
number of Registrable Securities required in order that all Underlying
Shares and all Warrant Shares issuable upon exercise of the Warrants
would then be registered in accordance with this Agreement.
(d) Notify the Holders of Registrable Securities to be
sold and their Special Counsel as promptly as reasonably possible (and,
in the case of (i)(A) below, not less than five Business Days prior to
such filing) and (if requested by any such Person) confirm such notice
in writing no later than one Business Day following the day (i)(A) when
a Prospectus or any Prospectus supplement or post-effective amendment
to a Registration Statement is proposed to be filed; (B) when the
Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in
writing on such Registration Statement (the Company shall provide true
and complete copies thereof and all written responses thereto to each
of the Holders); and (C) with respect to a Registration Statement or
any post-effective amendment, when the same has become effective; (ii)
of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a Registration
Statement or Prospectus or for additional information; (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) if at any time any of the representations and warranties
of the Company contained in any agreement contemplated hereby ceases to
be true and correct in all material respects; (v) of the receipt by the
Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (vi) of the
occurrence of any event or passage of time that makes the financial
statements included in a Registration Statement ineligible for
inclusion therein or any statement made in a Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires
any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the
Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state
5
any 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.
(e) Promptly deliver to each Holder and their Special
Counsel, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request. The Company
hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with
the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto.
(f) Prior to any public offering of Registrable
Securities, use its best efforts to register or qualify or cooperate
with the selling Holders and their Special Counsel in connection with
the registration or qualification (or exemption from such registration
or qualification) of such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the
United States as any Holder requests in writing, to keep each such
registration or qualification (or exemption therefrom) effective during
the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions
of the Registrable Securities covered by a Registration Statement;
provided, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or
subject the Company to any material tax in any such jurisdiction where
it is not then so subject.
(g) Cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration
Statement, which certificates shall be free, to the extent permitted by
the Purchase Agreement, of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in
such names as any such Holders may request.
(h) Upon the occurrence of any event contemplated this
Section 3, as promptly as reasonably possible, prepare a supplement or
amendment, including a post-effective amendment, to a Registration
Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered,
neither a Registration Statement nor such Prospectus will contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(i) Comply with all applicable rules and regulations of
the Commission.
6
(j) Use its best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the
effectiveness of a Registration Statement, or (ii) any suspension of
the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.
(k) Furnish to each Holder and their Special Counsel,
without charge, at least one conformed copy of each Registration
Statement and each amendment thereto, including financial statements
and schedules, all documents incorporated or deemed to be incorporated
therein by reference, and all exhibits to the extent requested by such
Person (including those previously furnished or incorporated by
reference) promptly after the filing of such documents with the
Commission.
4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Principal Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws (including, without limitation, fees and disbursements of counsel
for the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as requested by
the Holders )), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
requested by the Holders), (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company and Special Counsel for
the Holders (fees and expenses to Special Counsel limited to, in the aggregate,
$5,000) and (v) fees and expenses of all other Persons retained by the Company
in connection with the consummation of the transactions contemplated by this
Agreement. In addition, the Company shall be responsible for all of its internal
expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange as
required hereunder.
5. Indemnification
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, agents, brokers
(including brokers who offer and sell Registrable Securities as
principal as a result of a pledge or any failure to perform under a
margin call of Common Stock), investment advisors and employees of each
of them, each Person who controls any such Holder (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of each such
7
controlling Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities,
costs (including, without limitation, costs of preparation and
attorneys' fees) and expenses (collectively, "Losses"), as incurred,
arising out of or relating to any untrue or alleged untrue statement of
a material fact contained in a Registration Statement, any Prospectus
or any form of prospectus or in any amendment or supplement thereto or
in any preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the
extent, but only to the extent, that (1) such untrue statements or
omissions are based solely upon information regarding such Holder
furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder
or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such
Holder expressly for use in a Registration Statement, such Prospectus
or such form of Prospectus or in any amendment or supplement thereto or
(2) in the case of an occurrence of an event of the type specified in
Section 3(d)(ii)-(vi), the use by such Holder of an outdated or
defective Prospectus after the Company has notified such Holder in
writing that the Prospectus is outdated or defective and prior to the
receipt by such Holder of the Advice contemplated in Section 6(e). The
Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection
with the transactions contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall,
severally and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the
Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted
by applicable law, from and against all Losses (as determined by a
court of competent jurisdiction in a final judgment not subject to
appeal or review) arising solely out of or based solely upon any untrue
statement of a material fact contained in any Registration Statement,
any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto, or arising solely out of or based solely upon any
omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading to the extent, but only
to the extent, that such untrue statement or omission is contained in
any information so furnished in writing by such Holder to the Company
specifically for inclusion in such Registration Statement or such
Prospectus or to the extent that (1) such untrue statements or
omissions are based solely upon information regarding such Holder
furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder
or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such
Holder expressly for use in the Registration Statement, such Prospectus
or such form of Prospectus or in any amendment or supplement thereto or
(2) in the case of an occurrence of an event of the type specified in
Section 3(d)(ii)-(vi), the use by such Holder of an outdated or
defective Prospectus after the Company has notified such Holder in
writing that the Prospectus is outdated or defective and prior to the
receipt by
8
such Holder of the Advice contemplated in Section 6(e). In no event
shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any
Proceeding shall be brought or asserted against any Person entitled to
indemnity hereunder (an "Indemnified Party"), such Indemnified Party
shall promptly notify the Person from whom indemnity is sought (the
"Indemnifying Party") in writing, and the Indemnifying Party shall
assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent
that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further
review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party
9
may require such Indemnified Party to undertake to reimburse all such fees and
expenses to the extent it is finally judicially determined that such Indemnified
Party is not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under
Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public
policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
The indemnity and contribution agreements contained in this Section are
in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6. Miscellaneous
(a) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the same
shall be in writing and signed by the Company and the Holders of at
least two-thirds of the then outstanding Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to
the rights of Holders and that does not directly or indirectly affect
the
10
rights of other Holders may be given by Holders of at least a majority
of the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(b) No Inconsistent Agreements. Neither the Company nor
any of its subsidiaries has entered, as of the date hereof, nor shall
the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities,
that would have the effect of impairing the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions
hereof. Except as and to the extent specified in Schedule 6(b) hereto,
neither the Company nor any of its subsidiaries has previously entered
into any agreement granting any registration rights with respect to any
of its securities to any Person that have not been satisfied in full.
(c) No Piggyback on Registrations. Except as and to the
extent specified in Schedule 6(c) hereto, neither the Company nor any
of its security holders (other than the Holders in such capacity
pursuant hereto) may include securities of the Company in the
Registration Statement other than the Registrable Securities, and the
Company shall not after the date hereof enter into any agreement
providing any such right to any of its security holders.
(d) Compliance. Each Holder covenants and agrees that it
will comply with the prospectus delivery requirements of the Securities
Act as applicable to it in connection with sales of Registrable
Securities pursuant to the Registration Statement.
(e) Discontinued Disposition. Each Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a
notice from the Company of the occurrence of any event of the kind
described in Sections 3(d)(ii), (iii) or (vi), such Holder will
forthwith discontinue disposition of such Registrable Securities under
a Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(h), or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may
be resumed, and, in either case, has received copies of any additional
or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement.
The Company may provide appropriate stop orders to enforce the
provisions of this paragraph. The Company agrees and Acknowledges that
any periods during which the Holder is required to discontinue the
disposition of the Registrable Securities hereunder shall be subject to
the provisions of Section 2(c).
(f) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of
others under the Securities Act of any of its equity securities, other
than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or
business
11
or equity securities issuable in connection with stock option or other
employee benefit plans, then the Company shall send to each Holder
written notice of such determination and, if within fifteen days after
receipt of such notice, any such Holder shall so request in writing,
the Company shall include in such registration statement all or any
part of such Registrable Securities such holder requests to be
registered; provided, that, the Company shall not be required to
register any Registrable Securities pursuant to this Section 6(f) that
are eligible for resale pursuant to Rule 144(k) promulgated under the
Securities Act.
(g) Notices. Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be
delivered as set forth in the Purchase Agreement.
(h) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and permitted assigns
of each of the parties and shall inure to the benefit of each Holder.
The Company may not assign its rights or obligations hereunder without
the prior written consent of each Holder. Each Holder may assign their
respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.
(i) Counterparts. This Agreement may be executed in any
number of 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. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature were the original thereof.
(j) Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of this
Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address in
effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. Each
party hereto hereby irrevocably waives, to the fullest extent permitted
by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence a
Proceeding to enforce any provisions of this Agreement, then the
prevailing party in such Proceeding shall be
12
reimbursed by the other party for its attorneys fees and other costs
and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.
(k) Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way
be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(n) Independent Nature of Purchasers' Obligations and
Rights. The obligations of each Purchaser hereunder is several and not
joint with the obligations of any other Purchaser hereunder, and no
Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser hereunder. Nothing contained herein
or in any other agreement or document delivered at any closing, and no
action taken by any Purchaser pursuant hereto or thereto, shall be
deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that
the Purchasers are in any way acting in concert with respect to such
obligations or the transactions contemplated by this Agreement. Each
Purchaser shall be entitled to protect and enforce its rights,
including without limitation the rights arising out of this Agreement,
and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.
********************
13
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
VIRAGEN, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Exec. VP/CFO
[PURCHASERS' SIGNATURE PAGE FOLLOWS]
14
[PURCHASERS' SIGNATURE PAGE]
PALISADES EQUITY FUND L.P.
By: /s/ Xxxx X. Xxxxxxx Xx.
-----------------------------
Name: Xxxx X. Xxxxxxx Xx.
Title: General Partner
CRESCENT INTERNATIONAL LTD
By: /s/ Xxx Xxxx / Maxi Brezzi
-----------------------------
Name: Xxx Xxxx / Maxi Brezzi
Title: Authorized Signatories
ALPHA CAPITAL AG
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director
BRIVIS INVESTMENTS, LTD.
By: /s/ Xxxx Xxxxx
-----------------------------
Name: Xxxx Xxxxx
Title: Director
CASTLERIGG MASTER INVESTMENTS LTD.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Principal of Xxxxxxx Asset Mgmt. Corp
Advisor to Castlerigg Master
Investments Ltd.
15
Plan of Distribution
The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated transactions;
- settlement of short sales
- broker-dealers may agree with the Selling Stockholders to sell
a specified number of such shares at a stipulated price per
share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus. Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
Selling Stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved.
The selling stockholder may from time to time pledge or grant a
security interest in some or all of the Shares or common stock or Warrant owned
by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the shares of common stock
from time to time under this prospectus, or under an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act of 1933 amending the list of selling stockholders to
16
include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus.
The selling stockholders also may transfer the shares of common stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The Selling Stockholders have
informed the Company that it does not have any agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock.
The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
17