REGISTRATION RIGHTS AGREEMENT
Exhibit
10.3
This REGISTRATION RIGHTS
AGREEMENT (this
“Agreement”) is made as of November __, 2017, by and
between (i) CorMedix Inc., a Delaware corporation (the
“Company”), and (ii) Xxxxxxx International, L.P. and
Xxxxxxx Associates, L.P. (collectively, “Buyer”).
WHEREAS, pursuant to the terms of that certain
Securities Purchase Agreement, dated as of November 9, 2017, by and
between the Company, and the investors party thereto (the
“Purchase
Agreement”), Buyer
has agreed to purchase shares of Series F Preferred Stock, $0.001
par value per share, of the Company, which shares are convertible
into shares of common stock, $0.001 par value per share, of the
Company (the “Common
Stock”) Common Stock (as converted, the
“Conversion
Shares”);
WHEREAS, in
connection with the transactions contemplated by the Purchase
Agreement, Buyer has entered into that certain Backstop Agreement,
dated as of November 9, 2017, by and between the Company and Buyer
(the “Backstop
Agreement”), and subject to the terms, conditions and
limitations set forth therein, the Company has issued to Buyer
warrants to acquire [______] shares of Common Stock at an exercise
price of $0.001 per share (the “Warrants”); and
WHEREAS,
as partial consideration for Buyer’s execution and delivery
of the Purchase Agreement and the Backstop Agreement and the
performance of the transactions contemplated thereby, the Company
has agreed to provide Buyer with the registration rights set forth
herein with respect to the resale of the Conversion Shares and the
Warrant Shares (as defined below) issuable to Buyer.
NOW,
THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties hereto hereby agree as
follows:
1. DEFINITIONS.
Capitalized terms used herein and not defined shall have the
meanings set forth in the Backstop Agreement. For the purposes
hereof, the following terms shall have the following
meanings:
“Business Day” means a day, other than a Saturday or
Sunday, on which banks in New York City are open for the general
transaction of business.
“Buyer” means, collectively, Buyer and any
transferee or assignee of any Registrable Securities or a Warrant,
as applicable, to whom Buyer assigns its rights under this
Agreement and who agrees to become bound by the provisions of this
Agreement and any transferee or
assignee thereof to whom a transferee or assignee of any
Registrable Securities or a Warrant, as applicable, assigns its
rights under this Agreement and who agrees to become bound by the
provisions of this Agreement.
“Effectiveness
Date” means the date a
Registration Statement is declared effective by the
SEC.
“Effectiveness Deadline” means the
date that is ninety (90) calendar days after the date
hereof.
“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and all of the rules and
regulations promulgated thereunder.
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“Filing Date” means, with respect
to the Initial Registration Statement, the date that is forty-five
(45) calendar days after delivery of a Demand Notice as
contemplated by Section 2 hereof, provided, however, that if the Filing
Date falls on a Saturday, Sunday or other day that the SEC is
closed for business the Filing Date shall be extended to the next
Business Day.
“Holder”
or “Holders”
means the holder or holders, as the case may be, from time to time,
of Registrable Securities.
“Initial Registration Statement”
means the initial Registration Statement filed pursuant to this
Agreement.
“Person” means an individual,
corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock
company, government (or agency or subdivision thereof) or other
entity of any kind.
“Registrable Securities” means (i)
the Conversion Shares, (ii) the Warrant Shares and (iii) any
capital stock of the Company issued or issuable with respect to the
Conversion Shares, the Warrant Shares, or the Warrants, including,
without limitation, as a result of any share split, share dividend,
recapitalization, exchange or similar event or otherwise, without
regard to any limitations on or exercise of a Warrant.
“Registration Statement” means any
one (1) or more registration statements filed (and/or required to
be filed pursuant hereto) with the SEC by the Company on Form S-3,
or in the event the Company is not eligible to use Form S-3, on
Form S-1, for the purpose of registering the Registrable
Securities, 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. The term
“Registration
Statement” shall include, but not be limited to, the
Initial Registration Statement.
“Rule 144” means Rule 144
promulgated by the SEC pursuant to the Securities Act and any
successor or substitute rule, law or provision.
“Rule 172” means Rule 172
promulgated by the SEC 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 SEC having substantially the same purpose
and effect as such Rule.
“Rule 424” means Rule 424
promulgated by the SEC 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 SEC having substantially the same purpose
and effect as such rule.
“SEC” means the United States
Securities and Exchange Commission.
“Securities Act” means the
Securities Act of 1933, as amended, and all of the rules and
regulations promulgated thereunder.
“Warrant Shares” means any shares
of Common Stock issued pursuant to a Warrant.
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2. DEMAND
REGISTRATION.
(a) To the extent the
Company shall receive a written request from Buyer that the Company
effect the registration under the Securities Act of all or any
portion of the Registrable Securities (a “Demand Notice”), the Company shall
prepare, and, as soon as practicable, but in no event later than
the Filing Date, the Company shall file with the SEC the Initial
Registration Statement registering for resale under the Securities
Act all of the Registrable Securities by, and for the account of,
the Holders as selling stockholders thereunder, that are not then
registered on an effective Registration Statement for an offering
to be made on a continuous basis pursuant to Rule 415. The Company
shall use its best efforts to have such Initial Registration
Statement declared effective by the SEC under the Securities Act as
soon as practicable, but in no event, later than the Effectiveness
Deadline.
(b) The Company shall
use its reasonable best efforts to keep the Initial Registration
Statement current and effective until such date (the
“Effectiveness
Period”) that is the earlier of (i) the date as of
which all of the Holders as selling stockholders thereunder may
sell all of the Registrable Securities registered for resale
thereon without restriction pursuant to Rule 144, or otherwise, or
(ii) the date when all of the Registrable Securities have been
sold, but in no event longer than three years.
(c) Notwithstanding any
other provision of this Agreement, if the SEC affirmatively limits
the number of Registrable Securities to be registered in the
Initial Registration Statement (and the Company has used its
reasonable best efforts to advocate with the SEC for the
registration of all or the maximum number of Registrable
Securities), the number of Registrable Securities to be registered
on such Registration Statement will be reduced to the maximum
number of Registrable Securities permitted to be registered in such
Initial Registration Statement. The Company shall file a new
Registration Statement as soon as practicable covering the resale
by the Holders of not less than the number of such Registrable
Securities that are not registered in the Initial Registration
Statement. The Company shall not be liable for liquidated damages
under Section 3(a)
or any other relevant penalty as to any Registrable Securities
which are expressly not permitted by the SEC staff to be included
in the initial Registration Statement. In such case, any liquidated
damages payable under Section 3(a)
shall be calculated to apply only to the percentage of Registrable
Securities which are permitted to be included in such Registration
Statement.
(d) If at any time
after the date hereof, other than a Suspension Period referred to
in Section 8, the Company shall determine to prepare and file with
the SEC 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 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 (15)
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 not
already covered by an effective Registration
Statement.
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3. PARTIAL
LIQUIDATED DAMAGES/SUSPENSION/DELAY IN EFFECTIVENESS OF A
REGISTRATION STATEMENT.
(a) If: (i) the Initial
Registration Statement and/or any other Registration Statement is
not filed on or prior to the Filing Date, (ii) the Company fails to
file with the SEC a request for acceleration in accordance with
Rule 461 promulgated under the Securities Act, within five (5)
Business Days of the date that the Company is notified (orally or
in writing, whichever is earlier) by the SEC that the Initial
Registration Statement or any other Registration Statement will not
be “reviewed” or not be subject to further review,
(iii) prior to the Effectiveness Deadline of the Initial
Registration Statement or any other Registration Statement, the
Company fails to file a pre-effective amendment and otherwise
respond in writing to comments made by the SEC in respect of such
Initial Registration Statement or any other Registration Statement
within fifteen (15) Business Days after the receipt of comments by
or notice from the SEC that such amendment is required in order for
such Initial Registration Statement or any other Registration
Statement to be declared effective, (iv) the Initial Registration
Statement and/or any other Registration Statement covering
Registrable Securities is not declared effective by the SEC by the
Effectiveness Deadline, (v) to the extent a registration statement
is filed pursuant to Section 2(d) and the Company fails to notify
the Holder of such filing or, if notice is given in accordance with
Section 2(d), the Company fails to include the Registrable
Securities upon timely request of the Holder, or (vi) after the
Effectiveness Date of the Initial Registration Statement or any
other Registration Statement, such Initial Registration Statement
or other Registration Statement ceases for any reason to remain for
any period current and effective as to all Registrable Securities
included in such Initial Registration Statement or other
Registration Statement, as applicable, or Buyer is otherwise not
permitted to utilize the prospectus therein to resell such
Registrable Securities (any such failure or breach set forth in
3(a)(i)-(vi) shall be referred to as an “Event,”
and the date such Event occurs shall be referred to as an
“Event
Date”), then, in addition to any other rights Buyer
may have hereunder and/or under applicable law, on each such Event
Date and on each monthly anniversary of each such Event Date (if
the applicable Event shall not have been cured by such date) until
the applicable Event is cured, the Company shall pay to Buyer on a
monthly basis within three (3) Business Days of the end of the
month an amount in cash equal to $15,000, as partial liquidated
damages and not as a penalty. Any monthly amount owed pursuant to
the terms hereof shall apply on a daily pro-rata basis for any
portion of a month prior to the cure of an Event. Notwithstanding
the foregoing, the aggregate amount payable as partial liquidated
damages under this Section 3(a) shall not exceed
$75,000.
(b)
In the event the Registration Statement has not been declared
effective on or prior to the Effectiveness Deadline, the Company
shall pay to Buyer liquidated damages equal to 1% of the purchase
price of Registrable Securities purchased by Buyer pursuant to the
Purchase Agreement and the Backstop Agreement within three (3)
Business Days thereof and shall pay to the Buyer liquidated damages
equal to 1% of such purchase price for each subsequent 30-day
period, up to a maximum of 9%, within three (3) Business Days of
the end of each such 30-day period.
(c) The Company shall
provide Buyer with all correspondence (whether written and/or
oral), to the SEC from the Company and from the SEC to the Company
and shall notify Buyer by facsimile or e-mail as promptly as
practicable, and in any event, within two (2) Business Days, after
a Registration Statement is declared effective and shall
simultaneously provide the Holders with a copy of any related
prospectus to be used in connection with the sale or other
disposition of the Registrable Securities covered
thereby.
4. OBLIGATIONS
OF THE COMPANY. With respect to the Initial Registration
Statement and any other Registration Statement filed by the Company
with the SEC that covers the Registrable Securities, the Company
shall:
(a) Prepare and file
with the SEC such amendments and supplements to a Registration
Statement and the prospectus used in connection therewith as may be
necessary to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by
a Registration Statement;
(b) Furnish to the
selling Holders such number of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents (including, without
limitation, prospectus amendments and supplements as are prepared
by the Company in accordance with Section 4(a)
above) as the selling Holders may reasonably request in order to
facilitate the disposition of such selling Holders’
Registrable Securities;
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(c) Use its reasonable
best efforts to comply with all applicable rules and regulations of
the SEC under the Securities Act and the Exchange Act, including,
without limitation, Rule 172 under the Securities Act, file any
final prospectus, including any supplement or amendment thereof,
with the SEC pursuant to Rule 424 under the Securities Act,
promptly inform the Holders in writing if, at any time during the
Effectiveness Period, the Company does not satisfy the conditions
specified in Rule 172 and, as a result thereof, the Holders are
required to deliver a prospectus in connection with any disposition
of Registrable Securities; notify the selling Holders of the
happening of any event as a result of which the prospectus included
in or relating to a Registration Statement contains an untrue
statement of a material fact or omits any fact necessary to make
the statements therein not misleading; and, thereafter, subject to
Section
8 hereof, the Company will promptly prepare (and, when
completed, give notice and provide a copy thereof to each selling
Holder) a supplement or amendment to such prospectus so that such
prospectus will not contain an untrue statement of a material fact
or omit to state any fact necessary to make the statements therein
not misleading; provided, however, that upon such
notification by the Company (which shall be a Suspension (as
defined herein) pursuant to Section 8),
the selling Holders will not offer or sell Registrable Securities
until the Company has notified the selling Holders that it has
prepared a supplement or amendment to such prospectus and filed it
with the SEC, or if the Company does not then meet the conditions
for the use of Rule 172, delivered copies of such supplement or
amendment to the selling Holders (it being understood and agreed by
the Company that the foregoing proviso shall in no way diminish or
otherwise impair the Company’s obligation to promptly prepare
a prospectus amendment or supplement as above provided in this
Section
4(c) and deliver copies of same as above provided in
Section
4(b) hereof); and
(d) Use its reasonable
best efforts to register and qualify the Registrable Securities
covered by a Registration Statement under such other securities or
Blue Sky laws of such states as shall be reasonably appropriate in
the opinion of the Company.
(e) Subject to the
terms and conditions of this Agreement, including Section 2
hereof, the Company shall use commercially reasonable efforts to
(i) prevent the issuance of any stop order or other suspension of
effectiveness of any Registration Statement, or the suspension of
the qualification of any of the Registrable Securities for sale in
any jurisdiction in the United States, and (ii) if such an order or
suspension is issued, obtain the withdrawal of such order or
suspension at the earliest practicable moment and notify each
Holder of Registrable Securities of the issuance of such order and
the resolution thereof or its receipt of notice of the initiation
or threat of any proceeding for that purpose.
(f) The Company shall
use its reasonable best efforts to cause its Common Stock to
continue to be registered under Sections 12(b), 12(g) and/or 15(d)
of the Exchange Act, to comply in all respects with its reporting
and filing obligations under the Exchange Act, to comply with all
requirements related to the Initial Registration Statement and any
other Registration Statement filed pursuant to this Agreement, and
to not take any action or file any document (whether or not
permitted by the Securities Act or the rules promulgated
thereunder) to terminate or suspend such registration or to
terminate or suspend its reporting and filing obligations under the
Exchange Act or Securities Act. The Company shall take all action
reasonably necessary to continue the listing, trading and/or
quotation of its Common Stock on one or more of the OTC Bulletin
Board, the Pink Sheets LLC, the OTC Markets Group, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, the New York Stock Exchange, or the NYSE
American.
(g) With a view to
making available to the Holders the benefits of Rule 144 and any
other rule or regulation of the SEC that may at any time permit the
Holders to sell the Registrable Securities to the public without
registration, the Company shall: (i) make and keep public
information available as those terms are understood in Rule 144,
(ii) furnish to a Holder as long as any Holder owns any Registrable
Securities, upon such Holder’s request, a copy of the most
recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company as may be reasonably
requested in availing such Holder of any rule or regulation of the
SEC permitting the selling of any such Registrable Securities
without registration, and (iii) undertake any additional actions
reasonably necessary to maintain the availability of the use of
Rule 144. The Company shall further take all other actions as the
Holders may reasonably request from time to time to enable the
Holders to sell the Registrable Securities without registration
under the Securities Act pursuant to the exemption provided by Rule
144 promulgated under the Securities Act, including, without
limitation, obtaining any required legal opinions from Company
counsel at the Company’s expense and delivering such legal
opinions within five (5) Business Days after receipt from such
Holder (or its representative) of documentation reasonably required
by the Company’s counsel to provide such
opinion.
(h) The Company will
file any Registration Statement and all amendments and supplements
thereto electronically on XXXXX.
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5. OBLIGATIONS
OF THE HOLDERS.
(a) Each Holder agrees
to cooperate with the Company as reasonably requested by the
Company in connection with the filing of any Registration Statement
hereunder, unless such Holder has notified the Company in writing
that such Holder elects to exclude all of its Registrable
Securities from such Registration Statement.
(b) Each Holder agrees
that, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section
4(c), each Holder shall immediately discontinue disposition
of Registrable Securities pursuant to any Registration Statement
covering such Registrable Securities until such Holders receipt of
the copies of the supplemented or amended prospectus contemplated
by Section 4(c)
or receipt of notice that no supplement or amendment is
required.
(c) Each Holder who is
a member or affiliated or associated with member(s) of FINRA will
agree, if requested by FINRA, to sign a lock-up, the form of which
shall be satisfactory to FINRA (the “FINRA Lock-Up”), in connection
with the transactions contemplated by this Agreement.
6. EXPENSES
OF REGISTRATION. The Company shall bear and pay all expenses
incurred in connection with any registration, filing or
qualification of Registrable Securities pursuant hereto, including,
without limitation, all registration, filing and qualification
fees, printer’s fees, accounting fees and fees and
disbursements of counsel for the Company, but excluding any
brokerage or underwriting fees, discounts and commissions relating
to Registrable Securities.
7. INDEMNIFICATION.
(a) To the greatest
extent permitted by law, the Company will indemnify and hold
harmless each selling Holder, and each officer and director of such
selling Holder and each person, if any, who controls such selling
Holder, within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which
they may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any untrue
or alleged untrue statement of any material fact contained in any
Registration Statement, in any preliminary prospectus or final
prospectus relating thereto or in any amendments or supplements to
any Registration Statement or any such preliminary prospectus or
final prospectus, or the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading; or (ii) any
violation by the Company or its agents of any rule or regulation
promulgated under the Securities Act applicable to the Company or
its agents and relating to action or inaction required of the
Company in connection with such registration of the Registrable
Securities; and will reimburse such selling Holder, or such
officer, director or controlling person of such selling Holder for
any legal or other expenses reasonably incurred by them in
connection with defending any such loss, claim, damage, liability
or action; provided, however, that the indemnity
agreement contained in this Section 7(a)
shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, damage, liability or action to the extent
that it arises out of or is based upon (i) an untrue statement or
alleged untrue statement or omission made in connection with any
Registration Statement, any preliminary prospectus or final
prospectus relating thereto or any amendments or supplements to any
Registration Statement or any such preliminary prospectus or final
prospectus, in reliance upon and in conformity with written
information furnished expressly for use in connection with any
Registration Statement or any such preliminary prospectus or final
prospectus by the selling Holders or (ii) at any time when the
Company has advised the Holder in writing that the Company does not
meet the conditions for use of Rule 172 and as a result that the
Holder is required to deliver a current prospectus in connection
with any disposition of Registrable Securities, an untrue statement
or alleged untrue statement or omission in a prospectus that is
(whether preliminary or final) corrected in any subsequent
amendment or supplement to such prospectus was delivered to the
selling Holder before the pertinent sale or sales by the selling
Holder.
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(b) To the extent
permitted by law, each selling Holder will severally and not
jointly indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed any Registration
Statement, each person, if any, who controls the Company within the
meaning of the Securities Act, against any losses, claims, damages
or liabilities to which the Company or any such director, officer,
controlling person, may become subject to, under the Securities Act
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are
based upon any untrue or alleged untrue statement of any material
fact contained in any Registration Statement or any preliminary
prospectus or final prospectus, relating thereto or in any
amendments or supplements to any Registration Statement or any such
preliminary prospectus or final prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent
and only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission (i) was made in any
Registration Statement, in any preliminary prospectus or final
prospectus relating thereto or in any amendments or supplements to
any Registration Statement or any such preliminary prospectus or
final prospectus, in reliance upon and in conformity with written
information furnished by the selling Holder expressly for use in
connection with any Registration Statement, or any preliminary
prospectus or final prospectus or (ii) at any time when the Company
has advised the Holder in writing that the Company does not meet
the conditions for use of Rule 172 and as a result that the Holder
is required to deliver a current prospectus in connection with any
disposition of Registrable Securities, an untrue statement or
alleged untrue statement or omission in a prospectus that is
(whether preliminary or final) corrected in any subsequent
amendment or supplement to such prospectus was corrected in any
subsequent amendment or supplement to such prospectus that was
delivered to the selling Holder before the pertinent sale or sales
by the selling Holder; and such selling Holder will reimburse any
legal or other expenses reasonably incurred by the Company or any
such director, officer, controlling person; provided, however, that notwithstanding
anything to the contrary provided herein or elsewhere, the
liability of each selling Holder hereunder shall be limited solely
to the net proceeds received by each such selling Holder from the
sale of Registrable Securities only by such Holder giving rise to
such liability, and provided further, that the
indemnity agreement contained in this Section 7(b)
shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected
without the consent of those selling Holder(s) against which the
request for indemnity is being made (which consent shall not be
unreasonably withheld).
(c) Promptly after
receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 7,
notify the indemnifying party in writing of the commencement
thereof and the indemnifying party shall have the right to
participate in and, to the extent the indemnifying party desires,
jointly with any other indemnifying party similarly noticed, to
assume at its expense the defense thereof with counsel satisfactory
to the indemnifying party or indemnifying parties, but the omission
so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for
contribution or otherwise under the indemnity agreement contained
in this Section 7
(except to the extent that such omission materially and adversely
affects the indemnifying party’s ability to defend such
action). In the event that the indemnifying party assumes any such
defense, the indemnified party may participate in such defense with
its own counsel and at its own expense, provided, however, if the defendants in
any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded, based on an opinion of counsel reasonably satisfactory
to the indemnifying party, that there may be a conflict of interest
between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available
to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action
on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its
election to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be
liable to such indemnified party under this Section 7
for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless the
indemnified party shall have employed such counsel in connection
with the assumption of legal defenses in accordance with the
proviso to the preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of
more than one separate counsel and one local counsel, reasonably
satisfactory to such indemnifying party, representing all of the
indemnified parties who are parties to such action in which case
the reasonable fees and expenses of counsel shall be at the expense
of the indemnifying party.
(d) Notwithstanding
anything to the contrary herein, the indemnifying party shall not
be entitled to settle any claim, suit or proceeding unless in
connection with such settlement the indemnified party receives an
unconditional release with respect to the subject matter of such
claim, suit or proceeding and such settlement does not contain any
admission of fault by the indemnified party.
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(e) If the
indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified
party under Section 7(a)
or Section 7(b)
above in respect of any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Holders on the other in
connection with the statements or omissions or other matters which
resulted in such losses, claims, damages or liabilities (or actions
in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference
to, among other things, in the case of an untrue statement, whether
the untrue statement relates to information supplied by the Company
on the one hand or a Holder on the other and the parties’
relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement. The Company and the
Holders agree that it would not be just and equitable if
contribution pursuant to this Section 7(e)
were determined by pro rata allocation (even if the Holders were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to above in this Section
7(e). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions
in respect thereof) referred to above in this Section 7(e)
shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating
or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Holders’ obligations in this subsection to contribute are
several in proportion to their sales of Registrable Securities to
which such loss relates and not joint. In no event shall the
contribution obligation of a Holder be greater in amount than the
dollar amount of the net proceeds (net of all expenses paid by such
Holder in connection with any claim relating to this Section 7
and the amount of any damages such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the
sale of the Registrable Securities giving rise to such contribution
obligation.
8. SUSPENSION.
Notwithstanding anything in this Agreement to the contrary, in the
event (i) of any non-voluntary demand on the Company by the SEC
during the period of effectiveness of any Registration Statement
for amendments or supplements to any Registration Statement or
related prospectus or for additional information; (ii) of the
issuance by the SEC of any stop order suspending the effectiveness
of any Registration Statement or the initiation of any proceedings
for that purpose; or (iii) of any event or circumstance which
requires in order to comply with applicable law the making of any
changes in any Registration Statement or related prospectus, or any
document incorporated or deemed to be incorporated therein by
reference, so that, in the case of any Registration Statement, it
will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and that
in the case of the prospectus, it will not contain any untrue
statement of a material fact or any omission to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading (based upon the written legal
opinion of legal counsel to the Company and provided to counsel to
the Holders), then the Company shall furnish to the selling Holders
a certificate signed by the President or Chief Executive Officer of
the Company setting forth in detail the facts relating to one or
more of the above described circumstances, and the right of the
selling Holders to use any Registration Statement (and the
prospectus relating thereto) shall be suspended for a period (the
“Suspension
Period”) of not more than forty-five (45) days after
delivery by the Company of the certificate referred to above in
this Section 8.
During the Suspension Period, none of the Holders shall offer or
sell any Registrable Securities pursuant to or in reliance upon any
Registration Statement (or the prospectus relating thereto). The
Company shall use its best efforts to terminate any Suspension
Period as promptly as practicable.
9. ENTIRE
AGREEMENT. This Agreement, the Purchase Agreement, the
Backstop Agreement, the Warrants and the other Transaction
Documents constitute and contain the entire agreement and
understanding of the parties with respect to the subject matter
hereof, and supersede any and all prior negotiations,
correspondence, agreements or understandings with respect to the
subject matter hereof.
10. MISCELLANEOUS.
(a) This Agreement may
not be amended, modified or terminated, and no rights or provisions
may be waived, except with the written consent of the Company and
the Holders of a majority of the Registrable Securities issued and
outstanding.
(b) The rights under
this Agreement shall be automatically assignable by Buyer to any
transferee of all or any portion of Buyer’s Registrable
Securities if such transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein
and such transfer shall have been conducted in accordance with all
applicable federal and state securities laws.
8
(c) This
Agreement shall be governed by and construed solely in accordance
with the internal laws of the State of New York without regard to
the conflicts of laws principles thereof. Each party hereby
expressly and 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 expressly and 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 brought in
an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby expressly and 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 for such 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. In any action brought
by the Company concerning and/or arising directly and/or indirectly
out of this Certificate, the prevailing party shall be entitled to
recover all of its legal fees and expenses incurred by it with
respect to any such legal action. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(d) Any notice, demand,
request, waiver or other communication required or permitted to be
given hereunder shall be in writing and shall be effective (a) upon
hand delivery by telecopy or facsimile at the address or number
designated below (if delivered on a Business Day during normal
business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a
Business Day during normal business hours where such notice is to
be received) or (b) on the second Business Day following the date
of mailing by express courier service, fully prepaid, addressed to
such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall
be:
9
(i) All correspondence
to the Company shall be addressed as follows:
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If to
the Company:
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000
Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxx
0000
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Xxxxxxxx
Xxxxxxx, XX 00000
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Attention:
Chief Executive Officer
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Telephone:
(000) 000-0000
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Facsimile:
(000) 000-0000
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with
copies to :
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Xxxxxx
Xxxxxxx Xxxxx & Xxxxxx LLP
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0000
Xxxx Xxxxx Xxxxx, Xxxxx 000
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Xxxxxxx,
XX 00000
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Attention:
Xxxxxxxxx X. Xxxxxxxxx, Esq.
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Telephone:
(000) 000-0000
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Facsimile:
(000) 000-0000
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(ii) All
correspondence to Buyer shall be sent to Buyer at the address set
forth in the books and records of the Company.
(iii) Any
party may change the address to which correspondence to it is to be
addressed by written notification as provided for
herein.
(e) The parties
acknowledge and agree that in the event of any breach of this
Agreement, remedies at law may be inadequate, and each of the
parties hereto shall be entitled to seek specific performance of
the obligations of the other parties hereto and such appropriate
injunctive relief as may be granted by a court of competent
jurisdiction.
(f) Should any part or
provision of this Agreement be held unenforceable, the
unenforceable part or provisions shall be replaced with a provision
which accomplishes, to the extent possible, the original business
purpose of such part or provision in a valid and enforceable
manner, and the remainder of this Agreement shall remain binding
upon the parties hereto.
(g) This Agreement may
be executed in a number of counterparts, any of which together
shall for all purposes constitute one Agreement, binding on all the
parties hereto notwithstanding that all such parties have not
signed the same counterpart.
[Signature
Page Follows.]
10
IN
WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date and year first above
written.
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By:
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Name: |
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Title:
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XXXXXXX INTERNATIONAL, L.P. | |
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By: |
Xxxxxxx
International Capital Advisors Inc., as
attorney-in-fact
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By:
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Name: |
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Title:
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XXXXXXX ASSOCIATES,
L.P. |
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By:
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Xxxxxxx Capital
Advisors, L.P., General Partner
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By: | Xxxxxxx Associates, Inc., General Partner |
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By: |
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Name: |
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Title: |
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[Signature Page to
Registration Rights Agreement]
11
