INVESTOR RIGHTS AGREEMENT
Exhibit
10.24
This
Investor Rights Agreement (this "Agreement") is made and entered into as of
December 6, 2006, by and among ULURU Inc., a Nevada corporation (the "Company"),
and each of the purchasers executing this Agreement and listed on Schedule
1
attached
hereto (collectively, the "Purchasers").
This
Agreement is being entered into pursuant to the Common Stock Purchase Agreement,
dated as of the date hereof, by and 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 shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:
"Advice"
shall
have the meaning set forth in Section 3(m).
"Affiliate"
means,
with respect to any Person, any other Person that directly or indirectly
controls or is controlled by or under common control with such Person. For
the
purposes of this definition, "control," when used with respect to any Person,
means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms of
"affiliated," "controlling" and "controlled" have meanings correlative to the
foregoing.
"Blackout
Period"
shall
have the meaning set forth in Section 3(n).
"Board"
shall
have the meaning set forth in Section 3(n).
"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 generally are
authorized or required by law or other government actions to close.
"Commission"
means
the Securities and Exchange Commission.
"Common
Stock"
means
the Company's Common Stock, par value $0.001 per share.
"Effectiveness
Deadline"
means
the date that is one hundred eighty (180) days after the Closing
Date.
"Effectiveness
Period"
shall
have the meaning set forth in Section 2.
"Event"
shall
have the meaning set forth in Section 7(e).
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"Exchange
Act"
means
the Securities Exchange Act of 1934, as amended.
"Filing
Date"
means
the 10th 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, including without limitation the Purchasers and their assignees.
"Indemnified
Party"
shall
have the meaning set forth in Section 5(c).
"Indemnifying
Party"
shall
have the meaning set forth in Section 5(c).
"Losses"
shall
have the meaning set forth in Section 5(a).
"Person"
means
an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.
"Proceeding"
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
"Prospectus"
means
the prospectus included in any 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 such Registration Statement,
and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference in such
Prospectus.
"Purchased
Shares"
means
the shares of Common Stock purchased by the Purchasers pursuant to the Purchase
Agreement.
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"Registrable
Securities"
means
(a) the Purchased Shares (without regard to any limitations on beneficial
ownership contained in the Purchase Agreement) or other securities issued or
issuable to each Purchaser or its transferee or designee (i) upon any
distribution with respect to, any exchange for or any replacement of such
Purchased Shares or (ii) upon any conversion, exercise or exchange of any
securities issued in connection with any such distribution, exchange or
replacement; (b) securities issued or issuable upon any stock split, stock
dividend, recapitalization or similar event with respect to the foregoing;
(c)
shares of Common Stock issuable upon exercisable of any warrants to purchase
Common Stock held by the Purchasers as of the date hereof; and (d) any other
security issued as a dividend or other distribution with respect to, in exchange
for, in replacement or redemption of, or in reduction of the liquidation value
of, any of the securities referred to in the preceding clauses; provided,
however, that such securities shall cease to be Registrable Securities when
such
securities have been sold to or through a broker or dealer or underwriter in
a
public distribution or a public securities transaction or when such securities
may be sold without any restriction pursuant to Rule 144(k) as determined by
the
counsel to the Company pursuant to a written opinion letter, addressed to the
Company's transfer agent to such effect as described in Section 2 of this
Agreement.
"Registration
Statement"
means
the registration statements and any additional registration statements
contemplated by Section 2, 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 in such registration statement.
"Rule
144"
means
Rule 144 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
158"
means
Rule 158 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
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.
"Securities
Act"
means
the Securities Act of 1933, as amended.
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2. Registration.
On or
prior to the Filing Date, the Company shall prepare and file with the Commission
a "shelf" Registration Statement covering all Registrable Securities for a
secondary or resale offering to be made on a continuous basis pursuant to Rule
415. The Registration Statement shall be on Form SB-2 (or if such form is not
available to the Company on another form appropriate for such registration
in
accordance herewith). The Company shall use its commercially reasonable efforts
to cause the Registration Statement to be declared effective under the
Securities Act not later than the Effectiveness Deadline (including filing
with
the Commission a request for acceleration of effectiveness 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 Commission that a Registration Statement will not be "reviewed,"
or not be subject to further review) and to keep such Registration Statement
continuously effective under the Securities Act until such date as is the
earlier of (x) the date when all Registrable Securities covered by such
Registration Statement have been sold or (y) with respect to each such Holder,
such time as all Registrable Securities held by such Holder may be sold without
any restriction pursuant to Rule 144(k) as determined by the counsel to the
Company pursuant to a written opinion letter, addressed to the Company's
transfer agent to such effect (the "Effectiveness Period"). Such Registration
Statement also shall cover, to the extent allowable under the Securities Act
and
the Rules promulgated thereunder (including Securities Act Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Registrable
Securities.
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a) Prepare
and file with the Commission on or prior to the Filing Date, a Registration
Statement on Form SB-2 (or if such form is not available to the Company on
another form appropriate for such registration in accordance herewith) (which
shall include a Plan of Distribution substantially in the form of Exhibit
A
attached
hereto), and cause the Registration Statement to become effective and remain
effective as provided herein; provided, however, that not less than three (3)
Business Days prior to the filing of the Registration Statement or any related
Prospectus or any amendment or supplement thereto, the Company shall (i) furnish
to counsel selected by Holders of at least a majority of the then outstanding
Registrable Securities held by the Holders copies of all such documents proposed
to be filed, and (ii) at the request of any Holder 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 such 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 at least a
majority of the then outstanding Registrable Securities held by the Holders
or
counsel selected by Holders of at least a majority of the then outstanding
Registrable Securities held by the Holders shall reasonably object within three
(3) Business Days after their receipt thereof. In the event of any such
objection, the Holders shall provide the Company with any requested revisions
to
such Prospectus or amendment or supplement within two (2) Business Days of
such
objection.
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(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement as may be necessary to keep the
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and to the extent any Registrable
Securities are not included in such Registration Statement for reasons other
than the failure of the Holder to comply with Section 3(m) hereof, shall prepare
and file with the Commission such amendments to the Registration Statement
or
such additional Registration Statements in order to register for resale under
the Securities Act all Registrable Securities; (ii) cause the related Prospectus
to be amended or supplemented by any required Prospectus supplement, and as
so
supplemented or amended to be filed pursuant to Rule 424 (or any similar
provisions then in force) promulgated under the Securities Act; (iii) respond
as
promptly as reasonably practicable to any comments received from the Commission
with respect to the Registration Statement or any amendment thereto and as
promptly as reasonably practicable provide the Holders true and complete copies
of all correspondence from and to the Commission relating to the 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 the Registration Statement during the
applicable period in accordance with the intended methods of disposition by
the
Holders thereof set forth in the Registration Statement as so amended or in
such
Prospectus as so supplemented.
(c) Notify
Holders of Registrable Securities to be sold as promptly as reasonably
practicable (A) when a Prospectus or any Prospectus supplement or post-effective
amendment to the Registration Statement is proposed to be filed (but in no
event
in the case of this subparagraph (A), less than three (3) Business Days prior
to
date of such filing); (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; and (C) with respect to
the
Registration Statement or any post-effective amendment, when the same has become
effective, and after the effectiveness thereof: (i) of any request by the
Commission or any other Federal or state governmental authority for amendments
or supplements to the Registration Statement or Prospectus or for additional
information; (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(iii) 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 (iv) if the financial
statements included in the Registration Statement become ineligible for
inclusion therein or of the occurrence of any event that makes any statement
made in the 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 the Registration Statement, Prospectus or other
documents so that, in the case of the 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 any 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. Without limitation to any remedies to which the
Holders may be entitled under this Agreement, if any of the events described
in
Section 3(c)(C)(i), 3(c)(C)(ii) and 3(c)(C)(iii) occur, the Company shall use
its commercially reasonable efforts to respond to and correct the
event.
(d) Use
its
commercially reasonable efforts to avoid the issuance of, or, if issued, use
commercially reasonable efforts to obtain the withdrawal of, (i) any order
suspending the effectiveness of the 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
time.
(e) If
requested by any Holder of Registrable Securities, (i) promptly incorporate
in a
Prospectus supplement or post-effective amendment to the Registration Statement
such information as the Company reasonably agrees should be included therein
and
(ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as reasonably practicable after the Company
has
received notification of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
(f) Furnish
to each Holder, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto, including financial statements and
schedules, 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.
(g) Promptly
deliver to each Holder, 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; and 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.
(h) Prior
to
any public offering of Registrable Securities, use its commercially reasonable
efforts to register or qualify or cooperate with the selling Holders 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, however, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it is
not
then so qualified or to take any action that would subject it to general service
of process in any jurisdiction where it is not then so subject or subject the
Company to any material tax in any such jurisdiction where it is not then so
subject.
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(i) Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to the
Registration Statement, which certificates shall be free, to the extent
permitted by applicable law and 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 Holder may request at least five (5)
Business Days prior to any sale of Registrable Securities. In connection
therewith, the Company shall promptly after the effectiveness of the
Registration Statement cause an opinion of counsel to be delivered to and
maintained with its transfer agent, together with any other authorizations,
certificates and directions required by the transfer agent, which authorize
and
direct the transfer agent to issue such Registrable Securities without legend
upon sale by the Holder of such shares of Registrable Securities under the
Registration Statement.
(j) Following
the occurrence of any event contemplated by Section 3(c)(C)(iv), as promptly
as
possible, prepare a supplement or amendment, including a post-effective
amendment, to the 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 the 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 the light
of the circumstances under which they were made, not misleading.
(k) Cause
all
Registrable Securities relating to the Registration Statement to be listed
on
any United States securities exchange, quotation system, market or
over-the-counter bulletin board on which similar securities issued by the
Company are then listed.
(l) Comply
in
all material respects with all applicable rules and regulations of the
Commission and make generally available to its security holders earnings
statements satisfying the provisions of Section 11(a) of the Securities Act
and
Rule 158 not later than 45 days after the end of any 3-month period (or 90
days
after the end of any 12-month period if such period is a fiscal year) commencing
on the first day of the first fiscal quarter of the Company after the effective
date of the Registration Statement, which statement shall conform to the
requirements of Rule 158.
(m) Request
each selling Holder to furnish to the Company information regarding such Holder
and the distribution of such Registrable Securities as is required by law or
the
Commission to be disclosed in the Registration Statement, and the Company may
exclude from such registration the Registrable Securities of any such Holder
who
fails to furnish such information to the extent that such information is so
requested within a reasonable time prior to (but in no event less than 3
Business Days prior to) the filing of each Registration Statement, supplemented
Prospectus and/or amended Registration Statement.
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If
the
Registration Statement refers to any Holder by name or otherwise as the holder
of any securities of the Company, then such Holder shall have the right to
require (if such reference to such Holder by name or otherwise is not required
by the Securities Act or any similar federal statute then in force) the deletion
of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
(n) 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 Section 3(c)(C)(i), 3(c)(C)(ii), 3(c)(C)(iii), 3(c)(C)(iv), or
3(o), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of
the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), 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; provided, that, notwithstanding the foregoing provisions
of this Section 3(n), the Holders shall not be prohibited from selling
Registrable Securities under the Registration Statement as a result of any
event
of the kind described in this Section 3(n) for more than an aggregate of 90
days
in any 12-month period.
(o) If
(i)
there is material non-public information regarding the Company which the
Company's Board of Directors (the "Board") reasonably determines not to be
in
the Company's best interest to disclose and which the Company is not otherwise
required to disclose, or (ii) there is a significant business opportunity
(including, but not limited to, the acquisition or disposition of assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer or other similar transaction) available to the Company which the Board
reasonably determines not to be in the Company's best interest to disclose
and
which the Company would be required to disclose under the Registration
Statement, then the Company may (i) postpone or suspend filing or effectiveness
of a Registration Statement or (ii) notify the Holders that the Registration
Statement may not be used in connection with any sales of the Companyβs
securities, in each case, for a period not to exceed 30 consecutive days,
provided that the Company may not postpone or suspend its obligation under
this
Section 3(o) for more than 90 days in the aggregate during any 12 month period
(each, a "Blackout Period").
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 the Registration
Statement is filed or becomes effective and 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 each
securities exchange, quotation system, market or over-the-counter bulletin
board
on which Registrable Securities are required hereunder to be listed, (B) with
respect to filings required to be made with the Commission, and (C) in
compliance with state securities or Blue Sky laws, (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing or photocopying prospectuses), (iii)
messenger, telephone and delivery expenses, (iv) Securities Act liability
insurance, if the Company so desires such insurance, (v) fees and expenses
of
all other Persons retained by the Company in connection with the consummation
of
the transactions contemplated by this Agreement, including, without limitation,
the Company's independent public accountants (including, in the case of an
underwritten offering, the expenses of any comfort letters or costs associated
with the delivery by independent public accountants of a comfort letter or
comfort letters) and legal counsel, and (vi) reasonable and documented fees
and
expenses of counsel selected by Holders of at least a majority of the then
outstanding Registrable Securities held by the Holders in connection with any
Registration Statement hereunder, not to exceed $5,000 in the aggregate. 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, 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 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 reasonable 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
or incorporated by reference in the 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
amendment or supplement thereto, in the light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (i) such untrue statements or omissions are based solely upon information
regarding such Holder furnished to the Company by such Holder for use therein,
which information was reasonably relied on by the Company for use therein or
to
the extent that such information relates to (x) such Holder and was reviewed
and
approved 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 (y) such Holder's proposed method of distribution of Registrable Securities
as set forth in Exhibit
A
(or as
such Holder otherwise informs the Company in writing); or (ii) in the case
of an
occurrence of an event of the type described in Section 3(c)(C)(ii),
3(c)(C)(iii), 3(c)(C)(iv) or 3(o), the use by a Holder of an outdated or
defective Prospectus after the delivery to the Holder of written notice from
the
Company that the Prospectus is outdated or defective and prior to the receipt
by
such Holder of the amended or supplemented Prospectus or the Advice contemplated
in Section 3(n), but only if and to the extent that following receipt of the
amended or supplemented Prospectus or the Advice the misstatement or omission
giving rise to such Loss would have been corrected; provided, however, that
the
indemnity agreement contained in this Section 5(a) shall not apply to amounts
paid in settlement of any Losses if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably
withheld. 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. Such indemnity
shall remain in full force and effect regardless of any investigation made
by or
on behalf of an Indemnified Party (as defined in Section 5(c) to this Agreement)
and shall survive the transfer of the Registrable Securities by the
Holders.
(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 and employees
of
such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses, as incurred, arising solely out of or based solely
upon any untrue statement of a material fact contained in the 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 (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that (i) such
untrue statement or omission is contained in or omitted from any information
so
furnished by such Holder to the Company specifically for inclusion in the
Registration Statement or such Prospectus and that such information was
reasonably relied upon by the Company for use in the Registration Statement,
such Prospectus, or in any amendment or supplement thereto, or to the extent
that such information relates to (x) such Holder and was reviewed and approved
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 (y)
such
Holder's proposed method of distribution of Registrable Securities as set forth
in Exhibit
A
(or as
such Holder otherwise informs the Company in writing), or (ii) in the case
of an
occurrence of an event of the type described in Section 3(c)(C)(ii),
3(c)(C)(iii), 3(c)(C)(iv) or 3(o), the use by a Holder of an outdated or
defective Prospectus after the delivery to the Holder of written notice from
the
Company that the Prospectus is outdated or defective and prior to the receipt
by
such Holder of the amended or supplemented Prospectus or the Advice contemplated
in Section 3(n), but only if and to the extent that following receipt of the
amended or supplemented Prospectus or the Advice the misstatement or omission
giving rise to such Loss would have been corrected; provided, however, that
the
indemnity agreement contained in this Section 5(b) shall not apply to amounts
paid in settlement of any Losses if such settlement is effected without the
prior written consent of the Holder, which consent shall not be unreasonably
withheld. Notwithstanding anything to the contrary contained herein, the Holder
shall be liable under this Section 5(b) for only that amount as does not exceed
the net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement giving rise to such Loss.
(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 promptly shall notify
the Person from whom indemnity is sought (the "Indemnifying Party") in writing,
and the Indemnifying Party shall have the right to assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all reasonable 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
in writing 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 reasonable 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 and does
not
impose any monetary or other obligation or restriction on the Indemnified Party.
All
reasonable 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 (10)
Business Days of written notice thereof to the Indemnifying Party, which notice
shall be delivered no more frequently than on a monthly basis (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled
to
indemnification hereunder; provided, that the Indemnifying Party 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).
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7
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(d) Contribution.
If a
claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party because of a failure or refusal of a governmental authority
to
enforce such indemnification in accordance with its terms (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. Notwithstanding anything to the
contrary contained herein, a Holder shall be required to contribute under this
Section 5(d) for only that amount as does not exceed the net proceeds to such
Holder as a result of the sale of Registrable Securities pursuant to such
Registration Statement giving rise to such Loss.
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. 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
indemnity and contribution agreements contained in this Section 5(d) are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties. The indemnity and contribution agreements herein are in
addition to and not in diminution or limitation of any indemnification
provisions under the Purchase Agreement.
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8
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6. Rule
144.
As
long
as any Holder owns Registrable Securities, the Company covenants to timely
file
(or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to Section 13(a) or 15(d) of the Exchange Act. As long as any Holder
owns Registrable Securities, if the Company is not required to file reports
pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare and
furnish to the Holders and make publicly available in accordance with Rule
144(c) promulgated under the Securities Act annual and quarterly financial
statements, together with a discussion and analysis of such financial statements
in form and substance substantially similar to those that would otherwise be
required to be included in reports required by Section 13(a) or 15(d) of the
Exchange Act, as well as any other information required thereby, in the time
period that such filings would have been required to have been made under the
Exchange Act. The Company further covenants that it will take such further
action as any Holder may reasonably request, all to the extent required from
time to time to enable such Person to sell Purchased Shares without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 promulgated under the Securities Act, including compliance with the
provisions of the Purchase Agreement relating to the transfer of the Purchased
Shares. Upon the request of any Holder, the Company shall deliver to such Holder
a written certification of a duly authorized officer as to whether it has
complied with such requirements.
7. Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under
this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each Holder
agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense
that
a remedy at law would be adequate.
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9
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(b) No
Inconsistent Agreements.
Except
as otherwise disclosed in the Purchase Agreement, neither the Company nor any
of
its subsidiaries is a party to an agreement currently in effect, 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 is inconsistent
with the rights granted to the Holders in this Agreement or otherwise conflicts
with the provisions hereof. Without limiting the generality of the foregoing,
other than with respect to the rights of the holders of the Companyβs currently
outstanding convertible notes and the Common Stock underlying such convertible
notes and XxXxxxxxx Xxxxx Securities Co. L.P. with respect to the Common Stock
underlying warrants held by (or to be issued to) it, without the written consent
of the Holders of a majority of the then outstanding Registrable Securities
held
by the Holders, the Company shall not grant to any Person the right to request
the Company to register any securities of the Company under the Securities
Act
unless the rights so granted are subject in all respects to the rights of the
Holders set forth herein, and are not otherwise in conflict with the provisions
of this Agreement.
(c) Notice
of Effectiveness.
Within
two (2) Business Days after the Registration Statement which includes the
Registrable Securities is ordered effective by the Commission, the Company
shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Holders
whose
Registrable Securities are included in such Registration Statement) confirmation
that the Registration Statement has been declared effective by the Commission
in
the form attached hereto as Exhibit
B.
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10
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(d) Piggy-Back
Registrations.
If at
any time when there is not an effective Registration Statement covering all
of
the Registrable Securities, 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
or
equity securities issuable in connection with stock option or other employee
benefit plans and other than with respect to the rights of the holders of the
Companyβs currently outstanding convertible notes and the Common Stock
underlying such convertible notes, the Company shall send to each Holder of
Registrable Securities written notice of such determination and, if within
seven
(7) Business Days after receipt of such notice, any such Holder shall so request
in writing (which request shall specify the Registrable Securities intended
to
be disposed of by the Holder), the Company will cause the registration under
the
Securities Act of all Registrable Securities which the Company has been so
requested to register by the Holder, to the extent required to permit the
disposition of the Registrable Securities so to be registered, provided that
if
at any time after giving 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 shall determine for any reason
not to register or to delay registration of such securities, the Company may,
at
its election, give written notice of such determination to such Holder and,
thereupon, (i) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Securities in connection with
such
registration (but not from its obligation to pay expenses in accordance with
Section 4 hereof), and (ii) in the case of a determination to delay registering,
shall be permitted to delay registering any Registrable Securities being
registered pursuant to this Section 7(d) for the same period as the delay in
registering such other securities. The Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered. In the case of an underwritten public
offering, if the managing underwriter(s) or underwriter(s) should reasonably
object to the inclusion of the Registrable Securities in such registration
statement, then if the Company after consultation with the managing underwriter
should determine that the inclusion of such Registrable Securities would
materially adversely affect the offering contemplated in such registration
statement, and based on such determination recommends inclusion in such
registration statement of fewer or none of the Registrable Securities of the
Holders, then (x) the number of Registrable Securities of the Holders included
in such registration statement shall be reduced pro-rata among such Holders
(based upon the number of Registrable Securities requested to be included in
the
registration), if the Company after consultation with the underwriter(s)
recommends the inclusion of fewer Registrable Securities, or (y) none of the
Registrable Securities of the Holders shall be included in such registration
statement, if the Company after consultation with the underwriter(s) recommends
the inclusion of none of such Registrable Securities; provided, however, that
if
securities are being offered for the account of other Persons as well as the
Company, such reduction shall not represent a greater fraction of the number
of
Registrable Securities intended to be offered by the Holders than the fraction
of similar reductions imposed on such other Persons (other than the
Company).
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11
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(e) Failure
to File Registration Statement and Other Events.
The
Company and the Holders agree that the Holders will suffer damages if the
Registration Statement is not filed on or prior to the Filing Date and
maintained in the manner contemplated herein during the Effectiveness Period.
The Company and the Holders further agree that it would not be feasible to
ascertain the extent of such damages with precision. Accordingly, if (i) the
Registration Statement is not filed on or prior to the Filing Date, or (ii)
the
registration Statement is not declared effective by the Commission on or prior
to the Effectiveness Deadline, or (iii) the Company fails to file with the
Commission 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
Commission that a Registration Statement will not be "reviewed," or not subject
to further review, or (iv) the Registration Statement is filed with and declared
effective by the Commission but thereafter ceases to be effective as to all
Registrable Securities at any time prior to the expiration of the Effectiveness
Period, without being succeeded promptly by a subsequent Registration Statement
filed with the Commission, except as otherwise permitted by Sections 3(n) or
3(o); provided, that (x) such exclusion, with respect to Section 3(n), shall
only apply for not more than an aggregate 90 days in any 12-month period as
described in Section 3(n), and (y) such exclusion, with respect to Section
3(o),
shall only apply for not more than 30 consecutive days and not more than an
aggregate of 90 days in any 12-month period as described in Section 3(o), or
(v)
trading in the Common Stock shall be suspended or if the Common Stock is
delisted from each securities exchange, quotation system, market or
over-the-counter bulletin board on which Registrable Securities are required
hereunder to be listed (each an "Exchange"), without promptly being listed
on
any other Exchange, for any reason for more than five (5) Business Days, other
than pursuant to Sections 3(n) or 3(o); provided, that (x) such exclusion,
with
respect to Section 3(n), shall only apply for not more than an aggregate 90
days
in any 12-month period as described in Section 3(n), and (y) such exclusion,
with respect to Section 3(o), shall only apply for not more than 30 consecutive
days and not more than an aggregate of 90 days in any 12-month period as
described in Section 3(o) (any such failure or breach being referred to as
an
"Event"), the Company shall pay in cash as liquidated damages (which liquidated
damages shall be the sole and exclusive remedy for the Holders) for such failure
and not as a penalty to each Holder an amount equal to one percent (1%) of
such
Holder's pro rata share of the purchase price paid by all Holders for Purchased
Shares purchased and then outstanding pursuant to the Purchase Agreement for
the
initial thirty (30) day period until the applicable Event has been cured, which
shall be pro rated for such periods less than thirty (30) days and one percent
(1%) of such Holder's pro rata share of the purchase price paid by all Holders
for Purchased Shares purchased and then outstanding pursuant to the Purchase
Agreement for each subsequent thirty (30) day period until the applicable Event
has been cured which shall be pro rated for such periods less than thirty days,
provided that all such cash payments hereunder shall not exceed in the aggregate
five percent (5%) of the purchase price paid by all Holders for Purchased Shares
pursuant to the Purchase Agreement (the "Periodic Amount"). Payments to be
made
pursuant to this Section 7(e) shall be due and payable immediately upon demand
in immediately available cash funds. The parties agree that the Periodic Amount
represents a reasonable estimate on the part of the parties, as of the date
of
this Agreement, of the amount of damages that may be incurred by the Holders
if
the Registration Statement is not filed on or prior to the Filing Date and
maintained in the manner contemplated herein during the Effectiveness Period
or
if any other Event as described herein has occurred. Notwithstanding the
foregoing, the Company shall remain obligated to cure the breach or correct
the
condition that caused the Event, and the Holder shall have the right to take
any
action necessary or desirable to enforce such obligation.
(i) The
Company and the Holders acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It
is accordingly agreed that the parties hereto shall be entitled to an injunction
or injunctions to prevent or cure breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions hereof, this being in
addition to any other remedy to which any of them may be entitled by law or
equity.
(ii) Each
of
the Company and the Holders (i) hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts located in New York City, New
York
for the purposes of any suit, action or proceeding arising out of or relating
to
this Agreement and (ii) hereby waives, and agrees not to assert in any such
suit, action or proceeding, any claim that it is not personally subject to
the
jurisdiction of such court, that the suit, action or proceeding is brought
in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper. Each of the Company and the Holders 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 in this Section 7(f) shall affect or limit any right to serve
process in any other manner permitted by law.
(g) 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 a majority of the then
outstanding Registrable Securities held by the Holders. 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 rights of other Holders may be given by
Holders 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.
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12
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(h) Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earlier of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified for
notice prior to 5:00 p.m., New York City time, on a Business Day, (ii) the
next
Business Day after the date of transmission, if such notice or communication
is
delivered via facsimile at the facsimile number specified in this Section on
a
day that is not a Business Day or later than 5:00 p.m., New York City time,
on
any date and earlier than 11:59 p.m., New York City time, on such date, (iii)
the Business Day following the date of mailing, if sent by nationally recognized
overnight courier service such as Federal Express or (iv) actual receipt by
the
party to whom such notice is required to be given. The addresses for such
communications shall be with respect to each Holder at its address set forth
under its name on Schedule
1
attached
hereto, or with respect to the Company, addressed to:
0000
Xxxxxxx Xxxxx
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxxx X. Xxxx
Facsimile
No.: (000) 000-0000
or
to
such other address or addresses or facsimile number or numbers as any such
party
may most recently have designated in writing to the other parties hereto by
such
notice. Copies of notices to the Company shall be sent to:
Xxxxxxx
XxXxxxxxx LLP
000
Xxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Xxxx X. Xxxxxxxxx, III
Facsimile
No.: (000) 000-0000
Copies
of
notices to any Holder shall be sent to the addresses, if any, listed on
Schedule
1
attached
hereto.
(i) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their successors and permitted assigns and shall inure to the benefit of
each Holder and its successors and assigns; provided, that the Company may
not
assign this Agreement or any of its rights or obligations hereunder without
the
prior written consent of Holders of at least a majority of the then outstanding
Registrable Securities held by the Holders; and provided, further, that each
Holder may assign its rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.
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13
-
(j) Assignment
of Registration Rights.
The
rights of each Holder hereunder, including the right to have the Company
register for resale Registrable Securities in accordance with the terms of
this
Agreement, shall be automatically assignable by each Holder to any transferee
of
such Holder of all or a portion of the Registrable Securities if: (i) the Holder
agrees in writing with the transferee or assignee to assign such rights, and
a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (ii) the Company is, within a reasonable time after
such
transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee, and (b) the securities with respect
to
which such registration rights are being transferred or assigned, (iii)
following such transfer or assignment the further disposition of such securities
by the transferee or assignees is restricted under the Securities Act and
applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this Section 7(j),
the transferee or assignee agrees in writing with the Company to be bound by
all
of the provisions of this Agreement, and (v) such transfer shall have been
made
in accordance with the applicable requirements of the Purchase Agreement. The
rights to assignment shall apply to the Holders (and to subsequent) successors
and assigns.
The
Company may require, as a condition of allowing such assignment in connection
with a transfer of Registrable Securities (i) that the Holder or transferee
of
all or a portion of the Registrable Securities furnish to the Company a written
opinion of counsel that is reasonably acceptable to the Company to the effect
that such transfer may be made without registration under the Securities Act,
(ii) that the Holder or transferee execute and deliver to the Company an
investment letter in form and substance acceptable to the Company and (iii)
that
the transferee be an "accredited investor" as defined in Rule 501(a) promulgated
under the Securities Act.
(k) Counterparts;
Facsimile.
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 electronic means or 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.
(l) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without regard to principles of conflicts of law
thereof.
(m) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
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14
-
(n) 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 in any
respect, 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 hereto 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.
(o) Headings.
The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
(p) Registrable
Securities Held by the Company and its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the
Company or its Affiliates (other than any Holder or transferees or successors
or
assigns thereof if such Holder is deemed to be an Affiliate solely by reason
of
its holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
(q) Obligations
of Purchasers.
The
Company acknowledges that the obligations of each Purchaser under this Agreement
are several and not joint with the obligations of any other Purchaser, and
no
Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under this Agreement. The decision of each Purchaser
to
enter into to this Agreement has been made by such Purchaser independently
of
any other Purchaser. The Company further acknowledges that nothing contained
in
this Agreement, and no action taken by any Purchaser pursuant hereto, 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 or as a group with respect to such obligations
or the transactions contemplated hereby. Each Purchaser shall be entitled to
independently 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.
[signature
page follows]
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15
-
IN
WITNESS WHEREOF, the parties hereto have caused this Investor Rights Agreement
to be duly executed by their respective authorized persons as of the date first
indicated above.
COMPANY:
By:___/s/
Xxxxx X. Gray___________________
Name:
Xxxxx X. Xxxx
Title:
President & CEO
PURCHASERS:
[Purchasersβ
signatures appear on the following pages]
PURCHASERS:
BRENCOURT
ADVISORS LLC
By:_/s/
Xxxxxxx Palm________________________
Name:
Xxxxxxx Xxxx
Title:
CFO
XXXXXXX
PRIVATE EQUITY PARTNERS I, LLC
By:
XXXXXXX
INVESTMENT COMPANY, LLC
General
Partner
By:_/s/
Xxxxxxxx Mallon_____________
Name:
Xxxxxxxx Xxxxxx
Title:
Executive Vice President
XXXXXXX
SMALL CAP PARTNERS, LP
By:
XXXXXXX
INVESTMENT COMPANY, LLC
General
Partner
By:_/s/
Xxxxxxxx Mallon_____________
Name:
Xxxxxxxx Xxxxxx
Title:
Executive Vice President
XXXXXXX
SMALL CAP INTERNATIONAL, LP
By:
XXXXXXX
INVESTMENT COMPANY, LLC
General
Partner
By:_/s/
Xxxxxxxx Mallon_____________
Name:
Xxxxxxxx Xxxxxx
Title:
Executive Vice President
CORNELL
CAPITAL PARTNERS, LP
By:
Yorkville Advisors, LLC, its General Partner
By:_/s/
Xxxx Angelo________________________
Name:
Xxxx Xxxxxx
Title:
Portfolio Manager
INVUS
PUBLIC EQUITIES L.P.
By:_/s/
Khalil Barrage________________________
Name:
Khalil Barrage
Title:
Vice President
XXXX
PIRANHA MASTER FUND, LTD.
By:
XXXX
Partners LLC, its investment advisor
By:_/s/
Xxxx Lehmann________________________
Name:
Xxxx Xxxxxxx
Title:
Partner
XXXXX
X. XXXXXXX & PARTNERS I, LP
By:_/s/
Xxxxx X. Schafer________________________
Name:
Xxxxx X. Xxxxxxx
Title:
Senior Managing Member of OSS Advisors LLC, General Partner
XXXXX
X. XXXXXXX & PARTNERS II, LP
By:_/s/
Xxxxx X. Schafer________________________
Name:
Xxxxx X. Xxxxxxx
Title:
Senior Managing Member of OSS Advisors LLC, General Partner
OSS
OVERSEAS LTD
By:_/s/
Xxxxx X. Xxxxxxx ________________________
Name:
Xxxxx X. Xxxxxxx
Title:
Senior Managing Member of Xxxxxxx Brothers LLC, General Partner
of
OSS
Capital Management LP Investment Manager
PEQUOT
HEALTHCARE FUND, L.P.
By:
PEQUOT
CAPITAL MANAGEMENT, INC
Investment
Manager
By:_/s/
Xxxxxx Fishbone ________________________
Name:
Xxxxxx Fishbone
Title:
CFO
PEQUOT
HEALTHCARE OFFSHORE FUND, INC.
By:
PEQUOT
CAPITAL MANAGEMENT, INC
Investment
Manager
By:_/s/
Xxxxxx Fishbone ________________________
Name:
Xxxxxx Fishbone
Title:
CFO
PEQUOT
DIVERSIFIED MASTER FUND, LTD
By:
PEQUOT
CAPITAL MANAGEMENT, INC
Investment
Manager
By:_/s/
Xxxxxx Fishbone ________________________
Name:
Xxxxxx Fishbone
Title:
CFO
PEQUOT
HEALTHCARE INSTITUTIONAL FUND, L.P.
By:
PEQUOT
CAPITAL MANAGEMENT, INC
Investment
Manager
By:_/s/
Xxxxxx Fishbone ________________________
Name:
Xxxxxx Fishbone
Title:
CFO
PREMIUM
SERIES PCC LIMITED -CELL 32
By:_/s/
Xxxxx X. Xxxxxxx ________________________
Name:
Xxxxx X. Xxxxxxx
Title:
Attorney in Fact
PRENOX,
LLC
By:
Prentice Capital Management, LP, as Manager
By:__/s/
Xxxxxxx Hoffman________________________
Name:
Xxxxxxx Xxxxxxx
Title:
General Counsel
WITCHES
ROCK PORTFOLIO LTD
By:
Tudor
Investment Corporation, Investment Advisor
By:_/s/
Xxxxxxx X. Waldman________________________
Name:
Xxxxxxx X. Xxxxxxx
Title:
Managing Director
THE
TUDOR BVI GLOBAL PORTFOLIO LTD.
By:
Tudor
Investment Corporation, Trading Advisor
By:_/s/
Xxxxxxx X. Waldman________________________
Name:
Xxxxxxx X. Xxxxxxx
Title:
Managing Director
TUDOR
PROPRIETARY TRADING, L.L.C.
By:_/s/
Xxxxxxx X. Waldman________________________
Name:
Xxxxxxx X. Xxxxxxx
Title:
Managing Director
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SCHEDULE
1
PURCHASERS
Name,
Address and Facsimile Number of Purchaser
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Brencourt
Advisors LLC
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxxx Xxxxxxx and Xxxx Xxxxxx
Facsimile:
000-000-0000
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Xxxxxxx
Private Equity Partners I, LLC
Xxxxxxx
Small Cap International, X.X.
Xxxxxxx
Small Cap Partners, L.P.
c/o
Chilton Investment Company, LLC
0000
Xxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx,
XX 00000
Attention:
Xxxxxx Xxxxxxx
Facsimile:
000-000-0000
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Cornell
Capital Partners, LP
000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx
Xxxx, XX 00000
Attention:
Xxxxx Xxxx
Facsimile:
000-000-0000
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Invus
Public Equities L.P.
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxxx Xxxxxxx
Facsimile:
000-000-0000
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XXXX
Piranha Master Fund, Ltd.
c/o
XXXX Partners LLC
000
Xxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxx, XX 00000
Attention:
General Counsel
Facsimile:
000-000-0000
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Xxxxx
X. Xxxxxxx & Partners I, LP
Xxxxx
X. Xxxxxxx & Partners II, LP
OSS
Overseas LTD
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxx X. Xxxxxxx
Facsimile:
212-756-8701
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Pequot
Healthcare Fund, L.P.
Pequot
Healthcare Offshore Fund, Inc.
Pequot
Diversified Master Fund, Ltd.
Pequot
Healthcare Institutional Fund, L.P.
Premium
Series PCC Limited -- Cell 32
c/o
Pequot Capital Management, Inc.
000
Xxxxx Xxxx Xxxx
Xxxxxxxx,
XX 00000
Attention:
Xxxxx Xxxxxx
Facsimile:
000-000-0000
|
Prenox,
LLC
000
Xxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxxx Xxxxxxx
Facsimile:
000-000-0000
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Witches
Rock Portfolio Ltd.
The
Tudor BVI Global Portfolio Ltd.
Tudor
Proprietary Trading, L.L.C.
c/o
Tudor Investment Corporation
00
Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxxx
Facsimile:
000-000-0000
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17
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EXHIBIT
A
PLAN
OF
DISTRIBUTION
We
are
registering the shares of common stock on behalf of the selling security
holders. Sales of shares may be made by selling security holders, including
their respective donees, transferees, pledgees or other successors-in-interest
directly to purchasers or to or through underwriters, broker-dealers or through
agents. Sales may be made from time to time on any exchange or market upon
which
our shares may trade in the future, in the over-the-counter market or otherwise,
at market prices prevailing at the time of sale, at prices related to market
prices, or at negotiated or fixed prices. The shares may be sold by one or
more
of, or a combination of, the following:
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a
block trade in which the broker-dealer so engaged will attempt to
sell the
shares as agent but may position and resell a portion of the block
as
principal to facilitate the transaction (including crosses in which
the
same broker acts as agent for both sides of the
transaction);
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purchases
by a broker-dealer as principal and resale by such broker-dealer,
including resales for its account, pursuant to this
prospectus;
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ordinary
brokerage transactions and transactions in which the broker solicits
purchases;
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through
options, swaps or derivatives;
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in
privately negotiated transactions;
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in
making short sales or in transactions to cover short sales;
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put
or call option transactions relating to the shares;
and
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any
other method permitted pursuant to applicable law.
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The
selling security holders may effect these transactions by selling shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. These broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling security holders and/or
the purchasers of shares for whom such broker-dealers may act as agents or
to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). The selling security
holders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of their securities.
The
selling security holders may enter into hedging transactions with broker-dealers
or other financial institutions. In connection with those transactions, the
broker-dealers or other financial institutions may engage in short sales of
the
shares or of securities convertible into or exchangeable for the shares in
the
course of hedging positions they assume with the selling security holders.
The
selling security holders may also enter into options or other transactions
with
broker-dealers or other financial institutions which require the delivery of
shares offered by this prospectus to those broker-dealers or other financial
institutions. The broker-dealer or other financial institution may then resell
the shares pursuant to this prospectus (as amended or supplemented, if required
by applicable law, to reflect those transactions).
The
selling security holders and any broker-dealers that act in connection with
the
sale of shares may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act of 1933, and any commissions received by
broker-dealers or any profit on the resale of the shares sold by them while
acting as principals may be deemed to be underwriting discounts or commissions
under the Securities Act. The selling security holders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares against liabilities, including liabilities arising under
the
Securities Act. We have agreed to indemnify each of the selling security holders
and each selling security holder has agreed, severally and not jointly, to
indemnify us against some liabilities in connection with the offering of the
shares, including liabilities arising under the Securities Act.
We
have
informed the selling security holders that the anti-manipulative provisions
of
Regulation M promulgated under the Securities Exchange Act of 1934 may apply
to
their sales in the market.
Selling
security holders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act, provided they
meet the criteria and conform to the requirements of Rule 144.
Upon
being notified by a selling security holder that a material arrangement has
been
entered into with a broker-dealer for the sale of shares through a block trade,
special offering, exchange distribution or secondary distribution or a purchase
by a broker or dealer, we will file a supplement to this prospectus, if required
pursuant to Rule 424(b) under the Securities Act, disclosing:
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the
name of each such selling security holder and of the participating
broker-dealer(s);
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the
number of shares involved;
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the
initial price at which the shares were
sold;
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the
commissions paid or discounts or concessions allowed to the
broker-dealer(s), where applicable;
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that
such broker-dealer(s) did not conduct any investigation to verify
the
information set out or incorporated by reference in this prospectus;
and
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other
facts material to the transactions.
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In
addition, if required under applicable law or the rules or regulations of the
Commission, we will file a supplement to this prospectus when a selling security
holder notifies us that a donee or pledgee intends to sell more than 500 shares
of common stock.
We
are
paying all expenses and fees customarily paid by the issuer in connection with
the registration of the shares. The selling security holders will bear all
brokerage or underwriting discounts or commissions paid to broker-dealers in
connection with the sale of the shares.
BUSDOCS/1601989.4
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18
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EXHIBIT
B
FORM
OF
NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT
[Name
and
Address of Transfer Agent]
Re:
ULURU
Inc.
Dear
[______]:
We
are
counsel to ULURU Inc., a Nevada corporation (the "Company"), and have
represented the Company in connection with that certain Common Stock Purchase
Agreement (the "Purchase Agreement") dated as of December ___, 2006 by and
among
the Company and the purchasers named therein (collectively, the "Holders")
pursuant to which the Company issued to the Holders shares of its Common Stock,
par value $0.001 per share (the "Common Stock"). Pursuant to the Purchase
Agreement, the Company has also entered into an Investor Rights Agreement with
the Holders (the "Investor Rights Agreement") pursuant to which the Company
agreed, among other things, to register the shares of Common Stock issued
pursuant to the Purchase Agreement, under the Securities Act of 1933, as amended
(the "1933 Act"). In connection with the Company's obligations under the
Investor Rights Agreement, on ____________ ___, 2007, the Company filed a
Registration Statement on Form SB-__ (File No. 333-_____________) (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") relating to the Registrable Securities which names each of the Holders
as
a selling securityholder thereunder.
In
connection with the foregoing, we advise you that a member of the SEC's staff
has advised us by telephone that the SEC has entered an order declaring the
Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very
truly yours,
By:__________________________________
Name:
Title:
cc:
[LIST
NAMES OF HOLDERS]
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