FORM OF] REGISTRATION RIGHTS AGREEMENT
Exhibit
10.16
[FORM
OF] REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT
(this "Agreement") is
entered into effective June 27, 2008 (the "Closing Date")
between microHelix, Inc., an Oregon corporation (the "Company"),
and ____________, (the "Investor").
PRELIMINARY
STATEMENT
WHEREAS,
under the Third Agreement Regarding Amendment of Promissory Note between the
Company and the Investor (the "Third
Amendment Agreement") of given date herewith, the Company issued and in
the future will issue warrants (the "Warrants")
to the Investor, and upon exercise of the Warrants the Investor will have the
right to receive Shares (as defined in Section
1.3);
WHEREAS, the ability of the Investor
to sell the Shares is subject to certain restrictions under the Securities Act
of 1933, as amended (the "1933 Act");
and
WHEREAS, the Company has agreed to
provide the Investor with a mechanism that will permit the Investor to sell the
Shares in the future;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements, and subject
to the terms and conditions contained herein, the parties hereby agree as
follows:
ARTICLE
1
DEFINITIONS
1.1 "Holder" means any
holder of outstanding Registrable Securities or securities convertible into
Registrable Securities.
1.2 "SEC" means the United
States Securities and Exchange Commission.
1.3 "Shares" means,
collectively, the shares of Common Stock, no par value, of the Company issued or
issuable upon exercise of any of the Warrants.
1.4 "Registrable
Securities" means and includes the Shares. Shares will cease
to be Registrable Securities when (a) they have been effectively registered
under the 1933 Act and disposed of in accordance with the registration statement
covering them, (b) to the extent they are freely tradable within any three-month
period without registration pursuant to Rule 144 under the 1933 Act (or any
similar provisions that are then in effect), or (c) they have been otherwise
transferred, new certificates for them not bearing a restrictive legend have
been issued by Company, and Company does not have "stop transfer" instructions
against them.
1.5 "Registration
Expenses" means all expenses incurred by the Company in complying with
its obligations under this Agreement, excluding all underwriting discounts and
selling commissions applicable to Registrable Shares.
ARTICLE
2
DEMAND
REGISTRATION RIGHTS
2.1 Form S-3
Registration. Beginning on the first day following the day
that is one year after the Company has resumed filing, and has timely filed all
of, the reports required under the 1933 Act, the Securities Exchange Act of 1934
and the rules and regulations adopted by the SEC thereunder, and through the
date all Registrable Securities may be sold by the Investor pursuant to Rule 144
under the 1933 Act, the Company will use its commercially reasonable best
efforts to register the Registrable Securities for resale under the 1933 Act on
Form S-3 (or any applicable successor form).
2.3 Expenses. The
Company will pay all Registration Expenses in connection with all registrations
under Section
2.1 and
Section
2.2, and the Investor will pay its pro rata portion of the discounts or
commissions payable to any underwriter.
ARTICLE
3
INCIDENTAL
REGISTRATION RIGHTS
3.1 Right to
Include ("Piggy-Back") Registrable Securities. Provided
that the Registrable Securities are not then registered, if at any time after
the Closing Date and prior to the date all Registrable Securities may be sold by
the Investor pursuant to Rule 144 under the 1933 Act, the Company proposes to
register any of its securities under the 1933 Act (other than by a registration
which would not permit registration of Registrable Securities for sale to the
public on Form S-8, or any successor form thereto, on Form S-4, or any successor
form thereto and other than pursuant to Article 2) on an
underwritten basis (either best-efforts or firm-commitment), the Company will
each such time give prompt written notice to the Investor of its intention to
register its securities and the Investor's rights under this Section
3.1. Upon the written request of the Investor made
within fifteen (15) days after the receipt of any such notice from the Company
(which request will specify the Registrable Securities intended to be disposed
of by the Investor and the intended method of disposition thereof), the Company
will, subject to the terms of this Agreement, use its commercially reasonable
best efforts to include such Registrable Securities in the registration
statement which covers the securities which the Company proposes to
register. The right provided the Investor pursuant to this Section
3.1 will be exercisable at the Investor's sole
discretion.
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3.2 Withdrawal
or Delay of Registration. If at any time after written notice
of its intention to register any securities and prior to the effective date of
the registration statement filed in connection with such registration the
Company determines for any reason either not to register or to delay
registration of such securities, the Company will give written notice of such
determination to the Investor. In the case of a determination not to
register, the Company will be relieved of the obligation to register any
Registrable Securities in connection with such registration under Section
3.1 (but
not from its obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the Investor's rights to registration
under Section
2.1 and
Section
2.2. In the case of a determination to delay registering, the
Company will be permitted to delay registering any Registrable Securities, for
the same period as the delay in registering such other
securities.
3.3 Expenses. The
Company will pay all Registration Expenses in connection with each registration
of Registrable Securities requested pursuant to Section
3.1 and
the Investor will pay its pro rata portion of the discounts or commissions
payable to any underwriter.
3.4 Priority
in Incidental Registrations. If the managing underwriter of
the underwritten offering contemplated by Section
3.1 informs
the Company and the Investor in writing that the managing underwriter believes
that the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering, then the Company will
include in such registration, up to the number of securities which the Company
is advised by the managing underwriter can be sold in such offering, (i) first,
securities proposed by the Company to be sold for its own account; and (ii)
second, a pro rata portion of the securities for which registration was
requested by the Investor and of all other registrable securities of the Company
of other selling security holders requested to be included in such
registration.
ARTICLE
4
REGISTRATION
PROCEDURES
4.1 Registration
Procedures. If and whenever the Company is required to effect
the registration of any Registrable Securities under the 1933 Act as provided in
Section
2.1, Section
2.2 and, as applicable, Section
3.1, the
Company will, as expeditiously as possible:
(a) prepare
and file with the SEC the registration statement, or amendments thereto, to
effect such registration (including such audited financial statements as may be
required by the 1933 Act or the rules and regulations promulgated thereunder)
and thereafter use its commercially reasonable best efforts to cause such
registration statement to be declared effective by the SEC as soon as
practicable;
(b) prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary;
(c) furnish
to the Investor such number of conformed copies of such registration statement
and of each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under the 1933 Act, in
conformity with the requirements of the 1933 Act, and such other documents, as
the Investor and underwriter may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Securities owned by the
Investor;
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(d) use
its commercially reasonable best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such other U.S. federal or state securities laws or U.S. state blue sky laws as
the Investor may reasonably request, to keep such registrations or
qualifications in effect for so long as such registration statement remains in
effect, and take any other action which may be reasonably necessary to enable
the Investor to consummate the disposition of the securities owned by the
Investor in such jurisdictions;
(e) notify
the Investor promptly after the Company has knowledge that:
(i) the
registration statement, the prospectus or any prospectus supplement related
thereto or post-effective amendment to the registration statement has been
filed, and, with respect to the registration statement or any post-effective
amendment thereto, when the same has become effective;
(ii) the
SEC has issued any stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings by any Person for that purpose;
or
(iii) the
Company has received any notification with respect to the suspension of the
qualification of any Registrable Securities for sale under the securities or
blue sky laws of any jurisdiction or the initiation or threat of any proceeding
for such purpose;
(f) notify
the Investor, at any time when a prospectus relating thereto is required to be
delivered under the 1933 Act, upon discovery that, or upon the happening of any
event as a result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material facts 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 request of the Investor promptly prepare and furnish
to the Investor a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus will not include 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 not misleading in the
light of the circumstances then existing;
(g) use
its commercially reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of the registration statement at the earliest
possible moment;
(h) enter
into such agreements and take such other actions as the Investor reasonably
requests in writing (at the expense of the Investor) in order to expedite or
facilitate the disposition of such Registrable Securities; and
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(i) use
its commercially reasonable best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which any
of the Registrable Securities are then listed.
The
Company may require the Investor to furnish the Company with information
regarding the Investor and the distribution of such securities.
4.2 Amended
Prospectus. The Investor agrees that, upon receipt of any
notice from the Company of the occurrence of any event of the kind described in
Section
4.1(f), the
Investor will forthwith discontinue the Investor's disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until the Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section
4.1(f) and,
if so directed by the Company, will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, of the prospectus
relating to such Registrable Securities in the Investor's possession at the time
of receipt of such notice.
ARTICLE
5
UNDERWRITTEN
OFFERINGS
The Investor
may not participate in any underwritten offering under Section
3.1 unless
the Investor (i) agrees to sell its Registrable Securities on the basis provided
in any underwriting arrangements approved, subject to the terms and conditions
hereof, by the Company, and (ii) completes and executes all questionnaires,
indemnities, underwriting agreements and other documents (other than powers of
attorney) required under the terms of such underwriting
arrangements. Notwithstanding the foregoing, no underwriting
agreement (or other agreement in connection with such offering) will require the
Investor to make a representation or warranty to or agreement with the Company
or the underwriters other than in a writing furnished by the Investor expressly
for use in the related registration statement, regarding the Investor, the
Investor's Registrable Securities, the Investor's intended method of
distribution, and any other representation, warranty or agreement otherwise
required by law.
ARTICLE
6
INDEMNIFICATION
6.1 Indemnification by the
Company. In the event of any registration of any Registrable
Securities under the 1933 Act, the Company will, and hereby does agree to
indemnify and hold harmless the Investor, each individual or entity who
participates as an underwriter in the offering or sale of such securities and
each other person, if any, who controls the Investor or any such underwriter
within the meaning of the 1933 Act, against any losses, claims, damages, or
liabilities ("Losses") to which the
Investor or underwriter or controlling person may become subject under the 1933
Act or otherwise, insofar as such Losses (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 any material fact contained
in the registration statement or prospectus, as amended or supplemented, or (ii)
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances in which they are made, not misleading. The Company
will reimburse the Investor and each such underwriter and controlling person for
any legal or any other expenses reasonably incurred by them in connection with
investigating or defending against any such Loss, provided that the Company will
not be liable in any such case to the extent that any such Loss (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by the Investor or underwriter. Further, the Company will not
be liable to any underwriter in the offering or sale of Registrable Securities
or to any other person, if any, who controls such underwriter within the meaning
of the 1933 Act, to the extent that any such Loss (or action or proceeding in
respect thereof) or expense arises out of such underwriter or controlling
person's failure to send or give a copy of the final prospectus, as the same may
be then supplemented or amended, within the time required by the 1933 Act to the
person or entity asserting the existence of an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such person or entity, if
such statement or omission was corrected in such final prospectus or an
amendment or supplement thereto. Such indemnity will remain in full
force and effect regardless of any investigation made by or on behalf of the
Investor or any such underwriter or controlling person and will survive the
transfer of such securities by the Investor .
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6.2 Indemnification
by the Investor. The Company may require, as a condition to
including any Registrable Securities in any registration statement filed
pursuant to this Agreement, that the Investor provide an undertaking
satisfactory to the Company that the Investor will indemnify and hold harmless
(in the same manner and to the same extent as set forth in Section
6.1) the
Company, each director of the Company, each officer of the Company and each
other person, if any, who controls the Company within the meaning of the 1933
Act, with respect to any statement or alleged statement in or omission or
alleged omission from such registration statement or prospectus, or any
amendment or supplement thereto, if such statement or omission or alleged
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by the
Investor specifically stating that it is for use in the preparation of such
registration statement, prospectus, amendment or supplement. Any such
indemnity will remain in full force and effect, regardless of any investigation
made by or on behalf of the Company or any such director, officer or controlling
person and will survive the transfer of such securities by the
Investor. The liability of the Investor under this Section
6.1 will
be limited to the net proceeds from the offering received by the
Investor.
6.3 Notices
of Claims, Etc. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in Section
6.1 or
Section
6.2, such
indemnified party will give written notice to the indemnifying party of the
commencement of such action. The failure of any indemnified party to
give notice as provided herein will not relieve the indemnifying party of its
obligations under Section
6.1 or
Section
6.2, except to
the extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party will be entitled to participate
in and to assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that the indemnifying party may wish, with
counsel reasonably satisfactory to such indemnified party. After
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof. No
indemnifying party will, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement of any such action which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability, or a
covenant not to xxx, in respect to such claim or litigation. No
indemnified party will consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying
party.
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6.4 Other
Indemnification. Indemnification similar to that specified in
Section
6.1 and
Section
6.2 (with
appropriate modifications) will be given by the Company and the Investor (but
only if and to the extent required pursuant to the terms herein) with respect to
any required registration or other qualification of securities under any Federal
or state law or regulation of any governmental authority other than the 1933
Act.
6.5 Indemnification
Payments. The indemnification required by Sections
6.1 and
6.2 will
be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
6.6 Contribution. If
recovery is not available under the foregoing indemnification provisions, for
any reason other than as specified therein, the parties entitled to
indemnification by the terms thereof will be entitled to contribution to
liabilities and expenses as more fully set forth in an underwriting agreement to
be executed in connection with such registration. In determining the
amount of such contribution to which the respective parties are entitled, there
will be considered the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. No
person or entity guilty of fraudulent misrepresentation will be entitled to
contribution from any person or entity that was not guilty of such fraudulent
misrepresentation.
ARTICLE
7
RULE
144
After the
Closing Date, the Company will use commercially reasonable efforts to obtain
financing and resume filing the reports required under the 1933 Act, the
Securities Exchange Act of 1934, and the rules and regulations adopted by the
SEC thereunder. Upon such resumption of filing, the Company will use
commercially reasonable best efforts to timely file the reports required to be
filed by it under the 1933 Act, the Securities Exchange Act of 1934, and the
rules and regulations adopted by the SEC thereunder to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the 1933 Act within the limitation of the exemptions provided
by (a) Rule 144 under the 1933 Act, as such Rule may be amended from time to
time, or (b) any similar rule or regulation hereafter adopted by the
SEC. Upon the written request of the Investor, the Company will
deliver to the Investor a written statement as to whether it has complied with
the requirements of this Article
7.
ARTICLE
8
MISCELLANEOUS
8.1 Amendments
and Waivers. This Agreement may be amended and the Company may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, only if the Company will have obtained the approval of such
amendment, action or omission to act, by the vote or consent, either in writing
or at a meeting, of holders of at least two-thirds (2/3rds) of the Registrable
Securities issued and issuable at such time. Each holder of any
Registrable Securities at the time or thereafter outstanding will be bound by
any consent authorized by this Section
8.1, whether or
not such Registrable Securities will have been marked to indicate such
consent.
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8.2 Notices. Except
as otherwise provided in this Agreement, all notices, requests and other
communications provided for hereunder will be in writing and will be delivered
to:
(a) The
Company at:
microHelix,
Inc.
X.X. Xxx
0000
Xxxxxxxx,
XX 00000
Attn: President
with a
copy to:
Xxxxxx
Xxxx LLP
000 XX
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx,
XX 00000
Fax (000)
000-0000
Attn: Xxxx
X. Xxxxxx
(b) Each
holder of Registrable Securities at such address shown in the Company's records,
or, until any such holder furnishes an address to the Company, to and at the
address of the last holder of such Registrable Securities for which the Company
has an address in its records.
Each such
notice, request or other communication will be in writing and may be personally
delivered (effective upon receipt), mailed, postage prepaid (effective three
business days after dispatch), sent by facsimile (effective upon receipt of the
facsimile in complete, readable form), or sent via a reputable overnight courier
service (effective the following business day), to the address specified
above.
8.3 Assignment. This
Agreement will be binding upon and inure to the benefit of the parties hereto,
their heirs, personal representatives, successors, and assigns. Each
holder of Registrable Securities agrees, by accepting any portion of the
Registrable Securities after the date hereof, to the provisions of this
Agreement.
8.4 Headings. The
descriptive headings of the several sections of this Agreement are inserted for
reference only and will not be used to construe or interpret this
Agreement.
8.5 Governing Law;
Jurisdiction. This Agreement will be deemed a contract made
under the laws of the State of Oregon and, together with the rights and
obligations of the parties hereunder, will be construed under and governed by
the laws of such State, without giving effect to principles of conflicts of
law. The parties hereto irrevocably submit to the jurisdiction of any
state or federal court sitting in Multnomah County, Oregon, in any action or
proceeding brought to enforce or otherwise arising out of or relating to this
Agreement, and hereby waive any objection to venue in any such court and any
claim that such forum is an inconvenient forum.
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8.6 Waiver of Jury Trial;
Attorney Fees. Each party irrevocably waives any right it may
have, and agrees not to request, a jury trial for the adjudication of any
dispute hereunder or in connection herewith or arising out of this Agreement or
any transaction contemplated hereby. In the event suit or action is
brought by any party under this Agreement to enforce any of its terms, or in any
appeal therefrom, it is agreed that the prevailing party will be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
8.7 Entire
Agreement. This Agreement sets forth the understanding of the
parties with respect to the subject matter of this Agreement and supersedes all
prior agreements and understandings, whether written or oral, between the
parties with respect to such subject matter.
8.8 Severability. Each
provision of this Agreement will be treated as a separate and independent
clause, and the unenforceability of any one clause will in no way impair the
enforceability of any of the other clauses. Moreover, if one or more
of the provisions contained in this Agreement will, for any reason, be held to
be excessively broad as to scope, activity, or subject so as to be unenforceable
at law, such provision or provisions will be construed by the appropriate
judicial body by limiting and reducing it or them, so as to be enforceable to
the maximum extent compatible with the applicable law as it will then
appear.
8.9 Failure or Indulgence Not
Waiver; Remedies Cumulative. No failure or delay on the part
of any party hereto in the exercise of any right hereunder will impair such
right or be construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty, covenant or agreement herein, nor will any single or
partial exercise of any such right preclude other or further exercise thereof or
of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
8.10 Time is of the
Essence. Time is of the essence for each and every provision
of this Agreement.
8.11 Injunctive
Relief. The parties agree that a breach or violation of this
Agreement will result in immediate and irreparable harm to the non-breaching
parties in an amount that will be impossible to ascertain at the time of the
breach or violation, and that the award of monetary damages will not be adequate
relief to the non-breaching parties. The non-breaching party will be
entitled to seek equitable or injunctive relief, in addition to other remedies
to which it may be entitled at law or equity. In any action for
equitable relief, the parties agree to waive any requirement for the posting of
a bond or security.
8.12 Counterparts. This Agreement may be
executed in one or more counterparts, each of which when executed will be deemed
to be an original, but all of which taken together will constitute one and the
same agreement. A facsimile transmission of this signed Agreement
will be legal and binding on all parties hereto.
IN WITNESS WHEREOF, the Company and the
Investor have executed this Agreement as of the day and year first above
written.
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| MICROHELIX, INC. | |||
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By
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| Xxxxx X. Xxxxxxxx, President and CFO | |||
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