EXHIBIT 10.8
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made
as of March 5, 2003, by and between INTERLEUKIN GENETICS, INC., a Delaware
corporation (the "COMPANY"), and PYXIS INNOVATIONS INC., a Delaware corporation
("INVESTOR").
This Agreement is entered into in connection with this Stock
Purchase Agreement, dated as of the date of this Agreement, between the Company
and Investor (the "STOCK PURCHASE AGREEMENT"). Capitalized terms not otherwise
defined in this Agreement shall have the meanings given to them in the Stock
Purchase Agreement.
The parties agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following
terms shall have the meanings assigned to them below.
"COMMISSION" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.
"COMMON STOCK" means the Company's common stock, $0.001 par value per
share.
"CONDUCT RULES" means the conduct rules of the NASD, as they may be
amended from time to time.
"EFFECTIVE TIME," in the case of either a Resale Registration Statement
or a Piggyback Registration Statement, means the time and date as of which the
Commission declares such registration statement effective or as of which such
registration statement otherwise becomes effective.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, or any
successor thereto, and the rules and regulations of the Commission thereunder,
all as the same may be amended from time to time.
"FORM S-3" means Form S-3 promulgated under the Securities Act and as
in effect on the date hereof or any similar or successor forms promulgated under
the Securities Act or adopted by the Commission.
"HOLDER" means Investor and any successors or permitted assigns or
transferees who are subsequent holders of any Registrable Securities, in each
case for so long as such person owns any Registrable Securities.
"NASD" means the National Association of Securities Dealers, Inc. or
any successor thereto.
The term "PERSON" means a corporation, association, partnership,
organization, business, individual, government or political subdivision thereof,
governmental agency or other entity.
"REGISTRABLE SECURITIES" means the Conversion Shares and any other
securities issued or issuable with respect to or in exchange for the Preferred
Stock.
"RULE 144," "RULE 144A," "RULE 405," and "RULE 415" means, in each
case, such rule promulgated under the Securities Act (or any successor
provision), as it may be amended from time to time.
"SECURITIES ACT" means the Securities Act of 1933, or any successor
thereto, and the rules and regulations of the Commission thereunder, all as the
same may be amended from time to time.
"TERMINATION DATE" means the date that is the earlier of (i) the date
on which all Registrable Securities covered by such Registration Statement, as
amended from time to time, have been sold, and (ii) the date on which all
Registrable Securities may be sold pursuant to Rule 144(k).
Unless the context otherwise requires, any reference herein to a
"SECTION" or "CLAUSE" refers to a Section or clause, as the case may be, of this
Agreement, and the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section or other clause.
2. RESALE REGISTRATION.
(A) GENERAL. The Company shall use its reasonable best
efforts to file under the Securities Act, (i) upon demand at any time after the
second anniversary of the Closing Date, a resale registration statement
providing for the registration, and the sale on a continuous basis, or (ii) if
then available to the Company, no later than the second anniversary of the
Closing Date, (and if not then available, as soon thereafter as it becomes
available to the Company), a "shelf" registration statement on Form S-3
providing for the registration, and the sale on a continuous or delayed basis,
in each case by the Holders, of all of the Registrable Securities held by the
Holders pursuant to Rule 415 or any similar rule that may be adopted by the
Commission (each such filing, a "RESALE REGISTRATION" and each such registration
statement, a "RESALE REGISTRATION STATEMENT"). The Company shall use its
reasonable best efforts to cause the Resale Registration Statement to become or
be declared effective no later than 120 days after the filing date and to keep
the Resale Registration Statement continuously effective, in the case of a
registration statement for resales to be made on a continuous basis, until the
completion of the distribution, and in the case of a "shelf" registration
statement on Form S-3, until the Termination Date. From the Effective Time of
the Resale Registration Statement to the Termination Date, the Company shall
supplement or make amendments to the Resale Registration Statement, as and when
required by the rules, regulations or instructions applicable to the
registration form used by the Company for the Resale Registration Statement or
by the Securities Act, and the Company shall furnish to each Holder copies of
any such supplement or amendment prior to its being used or promptly following
its filing with the Commission.
(B) SELECTION OF UNDERWRITERS. If any of the Registrable
Securities covered by the Resale Registration are to be sold pursuant to an
underwritten offering, the managing underwriter or underwriters of such offering
shall be designated by the Holders holding, in the aggregate, at least a
majority of the Registrable Securities to be included in such offering, provided
that the designated managing underwriter or underwriters is or are reasonably
acceptable to the Company. Such Holders shall promptly give notice to the
Company of the selection of such underwriter or underwriters.
(C) PARTICIPATION IN UNDERWRITTEN OFFERING BY HOLDERS.
Each Holder hereby agrees with the Company and each other Holder that no Holder
may participate in any underwritten offering conducted pursuant to the Resale
Registration Statement unless such Holder (i) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all
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questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
3. PIGGYBACK REGISTRATION.
(A) RIGHT TO PIGGYBACK. Commencing on the second
anniversary hereof and for so long as Registrable Securities remain outstanding
prior to the Termination Date, if the Company proposes to file a registration
statement to register any of its Common Stock under the Securities Act and the
registration form to be used may be used for the registration of Registrable
Securities (such filing, the "PIGGYBACK REGISTRATION" and such registration
statement, the "PIGGYBACK REGISTRATION STATEMENT"), the Company shall promptly
notify all Holders of Registrable Securities and shall include in such
registration, and in any underwriting included therein, all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 30 days after the mailing of the notice, subject to
Sections 3(b) and 3(c).
(B) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested by the Holders to be included in such
registration exceeds the number which can be sold in such offering without
adversely affecting the marketability of the offering, the Company shall include
in such registration (i) first, the securities the Company proposes to sell,
(ii) second, the Registrable Securities requested to be included in such
registration, pro rata among the Holders of such Registrable Securities on the
basis of the number of Registrable Securities then owned by each such Holder,
and (iii) third, other securities requested to be included in such registration;
provided, however, that the Company shall not exclude from the registration a
number of securities more than that number which, in the reasonable opinion of
the managing underwriters, must reasonably be excluded because of the
marketability factors of the offering.
(C) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering
without adversely affecting the marketability of the offering, the Company shall
include in such registration (i) first, the securities requested to be included
therein by the holders requesting such registration, (ii) second, the
Registrable Securities requested to be included in such registration, pro rata
among the Holders of such Registrable Securities on the basis of the number of
Registrable Securities then owned by each such Holder, and (iii) third, other
securities requested to be included in such registration; provided, however,
that the Company shall not exclude from the registration a number of securities
more than that number which, in the reasonable opinion of the managing
underwriters, must reasonably be excluded because of the marketability factors
of the offering.
(D) PARTICIPATION IN UNDERWRITTEN OFFERING BY HOLDERS;
WITHDRAWAL RIGHTS. Each Holder hereby agrees with the Company and each other
Holder that no Holder may participate in any underwritten offering included in a
Piggyback Registration Statement unless such Holder (i) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements. If any Holder of
Registrable Securities disapproves of the terms of the underwriting of a
Piggyback Registration under Sections 3(b) or 3(c), the Holder may elect to
withdraw from such registration by written notice to the Company and the
managing underwriters, which notice, to be effective, must be received by the
Company at least two
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business days before the anticipated Effective Time of the applicable Piggyback
Registration Statement. The Registrable Securities or other securities so
withdrawn from such underwritten offering shall also be withdrawn from such
registration; provided, however, that if by the withdrawal of such Registrable
Securities, a greater number of Registrable Securities held by other Holders of
Registrable Securities may be included in such registration (up to the maximum
of any limitation imposed by the managing underwriters) then the Company shall
include in the registration in place of such withdrawn Registrable Securities
such additional Registrable Securities held by other Holders whose Registrable
Securities were excluded pursuant to limitations by the managing underwriters
pursuant to Section 3(b) or Section 3(c), in the same proportion (among the
group of such Holders of previously excluded Registrable Securities) as such
Registrable Securities were excluded pursuant to such managing underwriters'
limitation (with no more Registrable Securities being so included than were
withdrawn). The Company may at any time withdraw or abandon any Piggyback
Registration Statement which triggers the provisions of this Section 3(d)
without any liability to any Holder.
(E) PROHIBITION ON RESALES PURSUANT TO RESALE
REGISTRATION STATEMENT. If the managing underwriters of a Piggyback Registration
so request, each Holder shall refrain from selling or otherwise disposing of any
Registrable Securities pursuant to the Resale Registration Statement (and any
prospectus contained in the Resale Registration Statement, or any amendment or
supplement thereto) for a period of up to 30 days after the Effective Date of
such Piggyback Registration. The Company shall promptly notify each Holder with
respect to the Resale Registration Statement, at the last known address of such
Holder on the Company's records, of such request by the managing underwriter.
4. REGISTRATION PROCEDURES. The following provisions shall apply
to any registration statement that the Company files pursuant to Section 2 or
Section 3:
(A) In connection with the Company's obligations with
respect to any registration, the Company shall:
(i) [reserved]
(ii) comply with all applicable rules and
regulations of the Commission, including without limitation the provisions of
the Securities Act with respect to the disposition of all of the Registrable
Securities covered by such registration statement in accordance with the
intended methods of disposition by the Holders provided for in such registration
statement;
(iii) provide (A) the Holders, (B) any
underwriters (which term, for purposes of this Agreement, shall include a person
deemed to be an underwriter within the meaning of Section 2(a)(11) of the
Securities Act) thereof, (C) any placement or sales agent therefor, (D) counsel
for any such underwriter or agent, and (E) not more than one counsel for all the
Holders a reasonable opportunity to participate in the preparation of, and
comment on, each such registration statement and each amendment or supplement
thereto;
(iv) for a reasonable period prior to the filing
of such registration statement and, in the case of a Resale Registration
Statement, for the period such Resale Registration Statement is required to be
effective under Section 2, make available at reasonable times during normal
business hours at the Company's principal place of business or such other
reasonable place for inspection by the persons referred to in Section 4(a)(iii)
who shall certify to the Company that they have a current intention to sell the
Registrable Securities pursuant to the registration such financial and other
information and books and records of the Company, and cause the officers,
employees, counsel and independent certified public accountants of the Company
to respond to such inquiries, as shall be reasonably necessary, in the
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judgment of their respective counsel, to conduct a reasonable investigation
within the meaning of Section 11 of the Securities Act; provided, however, that
neither the Company nor such other parties shall be required to disclose any
information that is privileged or subject to legal or contractual restrictions
on disclosure; and provided further, that each recipient of the information may
be required to enter into a confidentiality agreement in form and substance
reasonably acceptable to the Company;
(v) promptly notify each of the Holders, any
placement or sales agent therefor, any underwriter therefor and the respective
counsel referred to in Section 4(a)(iii): (A) when such registration statement
or any prospectus amendment or supplement or post-effective amendment has been
filed, and, with respect to such registration statement or any post-effective
amendment, when the same has become effective, (B) of any comments by the
Commission and, if applicable, by the blue sky or securities commissioner or
regulator of any jurisdiction, with respect thereto or any request by the
Commission for amendments or supplements to such registration statement or for
additional information, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceedings for that purpose, (D) of the receipt by the
Company of any notification with respect to the suspension of the registration,
qualification or preemption of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, or (E) if at any time when a prospectus is required to be delivered
under the Securities Act, that such registration statement, prospectus,
prospectus amendment or supplement or post-effective amendment does not conform
in all material respects to the applicable requirements of the Securities Act
and the rules and regulations of the Commission thereunder or contains an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
(vi) use its reasonable best efforts to obtain
the withdrawal of any order suspending the effectiveness of such registration
statement or any post-effective amendment thereto at the earliest practicable
date;
(vii) if requested by any managing underwriter or
underwriters, any placement or sales agent or any Holder, promptly incorporate
in a prospectus supplement or post-effective amendment such information as is
required by the applicable rules and regulations of the Commission and as such
managing underwriter or underwriters, such agent or such Holder specifies should
be included therein relating to the terms of the sale of Registrable Securities,
including information with respect to the amount of Registrable Securities being
sold by such Holder or agent or to any underwriters, the name and description of
such Holder, agent or underwriter, the offering price of such Registrable
Securities and any discount, commission or other compensation payable in respect
thereof, the purchase price being paid therefor by such underwriters or relating
to any other terms of the offering of the Registrable Securities to be sold by
such Holder or agent or to such underwriters; and make all required filings of
such prospectus supplement or post-effective amendment promptly after
notification of the matters to be incorporated in such prospectus supplement or
post-effective amendment;
(viii) furnish to each Holder, any placement or
sales agent therefor, any underwriter thereof and the respective counsel
referred to in Section 4(a)(iii) a conformed copy of such registration
statement, each such amendment and supplement thereto (including all exhibits
thereto and documents incorporated by reference therein), and such number of
copies of such registration statement (excluding exhibits thereto and documents
incorporated by reference therein) and of the prospectus included in such
registration statement (including each preliminary prospectus and any summary
prospectus), and such other documents, as such Holder, any agent and any
underwriter may reasonably request in order to facilitate the offering and
disposition of the Registrable Securities owned by such
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Holder, offered or sold by such agent or underwritten by such underwriter and to
permit such Holder, agent and underwriter to satisfy the prospectus delivery
requirements of the Securities Act; and the Company hereby consents to the use
of such prospectus (including such preliminary and summary prospectus) and any
amendment or supplement thereto by each such Holder and by any such agent and
underwriter, in each case in the form most recently provided to such person by
the Company, in connection with the offering and sale of the Registrable
Securities covered by the prospectus (including such preliminary and summary
prospectus) or any supplement or amendment thereto;
(ix) unless counsel to the Company advises the
Company in a written opinion that Section 18 of the Securities Act preempts the
application of such laws to the securities to be sold in a particular offering
under the Resale Registration or a Piggyback Registration or that such
securities are exempt from registration or qualification under such laws, use
its reasonable best efforts to (A) register or qualify the Registrable
Securities to be included in such registration statement under such securities
laws or blue sky laws of such jurisdictions as any Holder and any placement or
sales agent therefor and any underwriter thereof shall reasonably request, (B)
in the case of a Resale Registration, keep such registrations or qualifications
in effect and comply with such laws so as to permit the continuance of offers,
sales and dealings therein in such jurisdictions during the period the Resale
Registration is required to remain effective under Section 2 take any and all
other actions as may be reasonably necessary or advisable to enable each such
Holder, any agent and any underwriter to consummate the disposition in such
jurisdictions of such Registrable Securities; provided, however, that the
Company shall not be required for any such purpose to (1) qualify as a foreign
corporation in any jurisdiction wherein it would not otherwise be required to
qualify but for the requirements of this Section 4(a)(ix), (2) consent to
general service of process or take any other action that would subject it to
suits in any such jurisdiction, (3) take any action that would subject it to
taxation in any such jurisdiction, or (4) make any changes to its certificate of
incorporation or by-laws or any agreement between it and its stockholders. If
the Company determines, in accordance with the first clause of this Section
4(a)(ix), that Section 18 of the Securities Act preempts the application of any
securities or blue sky laws to the securities to be sold in a particular
offering under the Resale Registration or a Piggyback Registration or that such
securities are exempt from registration or qualification under such laws, the
Company shall comply with all applicable laws, rules and regulations providing
for such preemption or exemption;
(x) cooperate with the Holders and any managing
underwriters to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, which certificates shall conform
to any requirements of any securities exchange or automated quotation service
upon which the Company's Common Stock is listed (if any), and which certificates
shall not bear any restrictive legends; and, in the case of an underwritten
offering, enable such Registrable Securities to be registered in such names as
the managing underwriters may request at least two business days prior to any
sale of the Registrable Securities;
(xi) upon request, if then listed, cause all
shares of Common Stock registered pursuant to this Agreement to be listed on
each securities exchange or automated quotation service on which the Company's
Common Stock is then listed;
(xii) if an offering is an underwritten offering,
(A) make such representations and warranties to the Holders and any placement or
sales agent therefor and any underwriters thereof in form, substance and scope
as are customarily made in connection with an offering of equity securities
pursuant to any appropriate agreement or to a registration statement filed on
the form applicable to the registration; (B) obtain an opinion of counsel to the
Company in customary form and covering such matters, of the type customarily
covered by such an opinion, as any managing underwriters or as any Holders
holding, in the aggregate, at least 20% of the Registrable Securities at the
time outstanding may
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reasonably request, addressed to such Holder or Holders and any placement or
sales agent therefor and any underwriters thereof and dated the Effective Time
of such registration statement (and if such registration statement contemplates
an underwritten offering of a part or all of the Registrable Securities, dated
the date of the closing under the underwriting agreement relating thereto); (C)
use all reasonable best efforts to obtain a statement from counsel to the
Company in which such counsel advises that it has participated in conferences
with officers and other representatives of the Company and representatives of
the independent public accountants for the Company and has considered the
matters required to be stated in the registration statement, and on the basis of
the foregoing (relying as to materiality to a large extent upon facts provided
to such counsel by officers and other representatives of the Company) and
without independent verification of the accuracy, completeness or fairness of
any information included in the registration statement (there being no assurance
that all material facts were disclosed to such counsel or that such counsel's
familiarity with the Company will be such that such counsel would necessarily
recognize the materiality of such facts as were disclosed to it), no facts came
to such counsel's attention that caused such counsel to believe that the
registration statement, at the time such registration statement or any
post-effective amendment thereto became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing (expressing no such view with respect to the
financial statements, including the notes and schedules thereto, or any other
financial or statistical information included therein), or that the prospectus
contained in such registration statement as of its date contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading (expressing no such view with respect to
the financial statements, including the notes and schedules thereto, or any
other financial or statistical information included therein); (D) obtain a "cold
comfort" letter or letters from the independent certified public accountants of
the Company addressed to the selling Holders, any placement or sales agent
therefor or any underwriters thereof, dated (i) the Effective Time of such
registration statement and if applicable, the closing of an underwritten
offering, (ii) the date of any preliminary prospectus included in such
Registration Statement that is used in selling efforts, and (iii) the date of
any prospectus supplement to the prospectus included in such registration
statement or post-effective amendment to such registration statement which
includes unaudited or audited financial statements as of a date or for a period
subsequent to that of the latest such statements included in such prospectus
(and, if such registration statement contemplates an underwritten offering
pursuant to any prospectus supplement to the prospectus included in such
registration statement or post-effective amendment to such registration
statement which includes unaudited or audited financial statements as of a date
or for a period subsequent to that of the latest such statements included in
such prospectus, dated the date of the closing under the underwriting agreement
relating thereto), such letter or letters to be in customary form and covering
such matters of the type customarily covered by letters of such type; (E)
deliver such customary documents and certificates, including officers'
certificates, as may be reasonably requested by any Holders holding, in the
aggregate, at least 20% of the Registrable Securities at the time outstanding or
any placement or sales agent therefor and any managing underwriters thereof to
evidence the accuracy of the representations and warranties made pursuant to
clause (A) above or those contained in Section 5(a) and the compliance with or
satisfaction of any agreements or conditions contained in the underwriting
agreement or other agreement entered into by the Company; and (F) undertake
obligations relating to expense reimbursement, indemnification and contribution
that are generally consistent with those provided in Section 7;
(xiii) in the event that any broker-dealer
registered under the Exchange Act shall underwrite any Registrable Securities or
participate as a member of an underwriting syndicate or selling group or "assist
in the distribution" (within the meaning of the Conduct Rules thereof, whether
as a Holder of such Registrable Securities or as an underwriter, a placement or
sales agent or a broker or dealer in respect thereof, or otherwise, assist such
broker-dealer in complying with the Conduct Rules,
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including (A) if the Conduct Rules shall so require, engaging a "qualified
independent underwriter" (as defined in the Conduct Rules) to participate in the
preparation of the registration statement relating to such Registrable
Securities and to exercise usual standards of due diligence in respect thereto,
(B) indemnifying any such qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 7 (or to such other
customary extent as may be requested by such underwriter), and (C) providing
such information and cooperation to such broker-dealer as may be required in
order for such broker-dealer to comply with the Conduct Rules; and
(xiv) in the event that the Company is required,
pursuant to Section 4(a)(v)[D or] (E), to notify the Holders, any placement or
sales agent therefor and any managing underwriters thereof, the Company shall
without delay prepare and furnish to each such person a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter delivered
to purchasers of Registrable Securities, such prospectus shall conform in all
material respects to the applicable requirements of the Securities Act and the
rules and regulations of the Commission thereunder and any applicable state
securities statute or regulation and shall not 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 not misleading in light of the
circumstances in which they were made. Each Holder agrees that upon receipt of
any notice from the Company pursuant to Section 4(a)(v)(E), such Holder shall
forthwith discontinue the disposition of Registrable Securities pursuant to the
registration statement applicable to such Registrable Securities until such
Holder shall have received copies of such amended or supplemented prospectus,
and if so directed by the Company, such Holder shall (i) destroy or (ii) deliver
to the Company (at the Company's expense) all copies, other than permanent file
copies, then in such Holder's possession of the prospectus covering such
Registrable Securities at the time of receipt of such notice.
(B) Furthermore, in connection with the Company's
obligations with respect to the Resale Registration, the Company shall:
(i) as soon as practicable prepare and file with
the Commission such amendments and supplements to the Resale Registration
Statement and the prospectus included therein as may be necessary to effect and
maintain the effectiveness of the Resale Registration Statement for the period
required under Section 2 and as may be required by the applicable rules and
regulations of the Commission and the instructions applicable to the form of the
Resale Registration Statement, and furnish to the Holders copies of any such
supplement or amendment simultaneously with or prior to its being used or filed
with the Commission;
(ii) make generally available to its
securityholders with respect to such registration statement, no later than 18
months after the effective date of such registration statement, a consolidated
earnings statement meeting the requirements of Rule 158 under the Securities Act
(which need not be audited) covering a 12-month period beginning with the first
month of the Company's first fiscal quarter commencing after the "effective date
of the registration statement" (as that term is defined in paragraph (c) of Rule
158 under the Securities Act); and
(iii) amend or supplement the Resale Registration
Statement and the prospectus contained in the Resale Registration Statement as
necessary in the event of an underwritten offering conducted in accordance with
Sections 2(b) and (c).
(C) As a condition to the Company's obligations with
respect to either a Resale Registration or a Piggyback Registration, the Company
may require such Holder to furnish to the Company such information regarding
such Holder, the Registrable Securities held by it, and such
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Holder's intended method of distribution of Registrable Securities as may be
required in order to comply with the Securities Act and all applicable rules and
regulations of the Commission. Each such Holder shall notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by such Holder to the Company or of the occurrence of any event in
either case as a result of which any prospectus relating to the registration
contains or would contain an untrue statement of a material fact regarding such
Holder or such Holder's intended method of disposition of such Registrable
Securities or omits to state any material fact regarding such Holder or such
Holder's intended method of disposition of such Registrable Securities required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing, and promptly to furnish to the
Company any additional information required to correct and update any previously
furnished information or required so that such prospectus shall not contain,
with respect to such Holder or the disposition of such Registrable Securities,
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing.
5. REGISTRATION EXPENSES. The Company agrees to bear and to pay
or cause to be paid promptly all expenses incident to the Company's performance
of or compliance with this Agreement, including (a) all Commission registration,
filing and review fees and expenses relating to the Resale Registration
Statement and any Piggyback Registration Statement, but excluding any fees and
disbursements of counsel for the Holders or underwriters (except as provided in
clause (e) of this Section 5), (b) all fees and expenses, if any, in connection
with the registration or qualification of the Registrable Securities for
offering and sale under state securities and blue sky laws referred to in
Section 4(a)(ix), but excluding any fees and disbursements of counsel for the
Holders or underwriters (except as provided in clause (e) of this Section 5),
(c) all expenses relating to the preparation, printing, production, distribution
and reproduction of each registration statement required to be filed hereunder,
each prospectus included therein or prepared for distribution pursuant hereto,
each amendment or supplement to the foregoing, the expenses of preparing the
Registrable Securities for delivery and all other documents in connection with
the offering, sale or delivery of Registrable Securities to be disposed of
(including certificates representing the Registrable Securities), (d) fees,
disbursements and expenses of counsel and independent certified public
accountants of the Company (including the expenses of any opinions or "cold
comfort" letters required by or incident to such performance and compliance),
(e) not more than an aggregate total of $50,000 of the reasonable fees,
disbursements and expenses of one counsel for the Holders retained in connection
with the Resale Registration and/or Piggyback Registrations, as selected by the
Holders holding, in the aggregate, at least a majority of the Registrable
Securities held by Holders (which counsel shall be reasonably satisfactory to
the Company), and (f) fees, expenses and disbursements of any other persons
retained by the Company in connection with each such registration (collectively,
the "REGISTRATION EXPENSES"). The Holders of the Registrable Securities being
registered shall pay all agency fees and commissions and underwriting discounts
and commissions and transfer taxes attributable to the sale of such Registrable
Securities and the fees and disbursements of any counsel or other advisors or
experts retained by such Holders (severally or jointly), other than the counsel
fees as set forth in clause (e) of this Section 5. The Holders shall be
responsible for all fees, disbursements and expenses of any underwriter and its
counsel engaged by the Holders pursuant to Section 4(a) and any "qualified
independent underwriter" and its counsel engaged pursuant to Section 4(a)(xiii).
6. RESERVED.
7. INDEMNIFICATION.
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(A) INDEMNIFICATION BY THE COMPANY. The Company will
indemnify and hold harmless each Holder of Registrable Securities included in
the Resale Registration Statement, and each Holder of Registrable Securities
included in a Piggyback Registration Statement, against any losses, claims,
damages or liabilities, joint or several, to which such Holder 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 an untrue statement or alleged untrue statement of a material fact
contained in the Resale Registration Statement or any Piggyback Registration
Statement, as the case may be, under which such Registrable Securities were
registered under the Securities Act, or any preliminary, final or summary
prospectus contained therein or furnished by the Company to any such Holder, or
any placement agent or underwriter, or any amendment or supplement thereto, or
that 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 light of the circumstances then existing,
and will reimburse such Holders for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such action
or claim as such expenses are incurred; provided, however, that the Company
shall not be liable to any such person in any such case (i) to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, or preliminary, final or summary
prospectus, or amendment or supplement thereto, in reliance upon and in
conformity with information furnished to the Company by or on behalf of such
person in connection with a registration of securities under this Agreement, or
(ii) in the case of a sale directly by such holder of Registrable Shares
(including a sale of such Registrable Shares through any underwriter retained by
such holder of Registrable Shares to engage in a distribution solely on behalf
of such holder of Registrable Shares), such untrue statement or alleged untrue
statement or omission or alleged omission was contained in a preliminary
prospectus and corrected in a final or amended prospectus, and such holder of
Registrable Shares failed to deliver a copy of the final or amended prospectus
at or prior to the confirmation of the sale of Registrable Shares to the person
asserting any such loss, claim, damage or liability in any case where such
delivery is required by the Securities Act or any state securities laws.
(B) INDEMNIFICATION BY THE HOLDERS. Each Holder of
Registrable Securities, severally and not jointly, shall (i) indemnify and hold
harmless the Company and all other Holders of Registrable Securities against any
losses, claims, damages or liabilities to which the Company or such other
Holders of Registrable Securities 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 an untrue statement or
alleged untrue statement of a material fact contained in the Resale Registration
Statement or any Piggyback Registration Statement under which such Registrable
Securities were registered under the Securities Act, or any preliminary, final
or summary prospectus contained therein or furnished by the Company to any such
Holder or any placement agent or underwriter, or any amendment or supplement
thereto, 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 light of the circumstances then
existing, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with information furnished to the Company in
writing by or on behalf of such Holder in connection with a registration of
securities under this Agreement, and (ii) reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred provided, however, that no such Holder shall be required to undertake
liability to any person under this Section 7(b) for any amounts in excess of the
dollar amount of the proceeds received by such Holder from the sale of such
Holder's Registrable Securities pursuant to such registration.
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(C) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party under subsection (a) or (b) above of written notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party pursuant to the
indemnification provisions of or contemplated by this Section 7, notify such
indemnifying party in writing of the commencement of such action; provided,
however, that the failure to so notify the indemnifying party will not relieve
the indemnifying party from any obligation that it may have hereunder to the
extent the indemnifying party is not prejudiced as a result of the failure and
the omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party other than under the
indemnification provisions of or contemplated by Section 7(a) or 7(b). In case
any such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party and, after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, such indemnifying party shall not
be liable to such indemnified party for any legal expenses of other counsel or
any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall (i) without the written consent of
the indemnified party (which consent will not be unreasonably withheld), effect
the settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder unless such settlement,
compromise or judgment (A) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (B) does not
include a statement as to, or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party, or (ii) be liable hereunder or
otherwise for or with respect to any such settlement, compromise or judgment
effected without its written consent (which consent will not be unreasonably
withheld).
(D) CONTRIBUTION. If for any reason the indemnification
provisions contemplated by Section 7(a) or Section 7(b) are unavailable or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then the 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 indemnifying party and the indemnified
party in connection with the statements or omissions 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 of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or by such indemnified party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contributions pursuant to this
Section 7(d) were determined by pro rata allocation (even if the Holders or any
agents or underwriters or all of them were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 7(d). 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 shall be deemed to
include, subject to the limitations set forth above, any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), no Holder shall be required to contribute any
amount in excess of the amount by which the dollar amount of the proceeds
received by such Holder from the sale of any Registrable Securities exceeds the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
11
omission. 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 Section 7(d) to contribute shall be several in proportion to
the amount of Registrable Securities registered by them and not joint.
(E) OTHER. The obligations of the Company under this
Section 7 shall be in addition to any liability which the Company may otherwise
have and shall extend, upon the same terms and conditions, to each officer,
director and partner of each Holder and any person who controls any Holder
within the meaning of Section 15 of the Securities Act; and the obligations of
the Holders contemplated by this Section 7 shall be in addition to any liability
which the respective Holder may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to any
person who controls the Company within the meaning of Section 15 of the
Securities Act.
8. RULE 144 AND RULE 144A. The Company shall timely file the
reports required to be filed by it under the Exchange Act or the Securities Act
(including the reports under Section 13 and 15(d) of the Exchange Act referred
to in subparagraph (c)(1) of Rule 144) and the rules and regulations adopted by
the Commission thereunder to enable such Holders to sell Registrable Securities
without registration under the Securities Act within the limitations of the
exemption provided by Rule 144 and Rule 144A or any similar or successor rule or
regulation hereafter adopted by the Commission.
9. CONDITIONS TO REGISTRATION OBLIGATIONS. The Company shall not
be obligated to effect the registration of Registrable Shares pursuant to
Sections 2 or 3 unless all holders of shares being registered consent to
reasonable conditions imposed by the Company as the Company shall determine with
the advice of counsel to be required by law including, without limitation:
(A) conditions prohibiting the sale of shares by such holders
until the registration shall have been effective for a specified period of time;
(B) conditions requiring such holder to comply with all prospectus
delivery requirements of the Securities Act and with all anti-stabilization,
anti-manipulation and similar provisions of Section 10 of the Exchange Act and
any rules issued thereunder by the Commission, and to furnish to the Company
information about sales made in such public offering;
(C) conditions prohibiting such holders upon receipt of
telegraphic or written notice from the Company (until further notice) from
effecting sales of shares, such notice being given to permit the Company to
correct or update a registration statement or prospectus;
(D) conditions requiring that at the end of the period during
which the Company is obligated to keep the registration statement effective
under Section 2, the holders of shares included in the registration statement
shall discontinue sales of shares pursuant to such registration statement upon
receipt of notice form the Company of its intention to remove from registration
the shares covered by such registration statement that remain unsold, and
requiring such holders to notify the Company of the number of shares registered
that remain unsold immediately upon receipt of notice from the Company; and
(E) conditions requiring the holders of Registrable Shares to
enter into an underwriting agreement in form and substance reasonably
satisfactory to the Company and the holders of Registrable Shares.
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10. DELAY OF REGISTRATION. In the event (i) of any request by the
Commission or any other federal or state governmental authority during the
period of effectiveness of the Resale Registration Statement or a Piggyback
Registration Statement, as the case may be, for amendments or supplements to a
Resale Registration Statement or a Piggyback Registration Statement, as the case
may be, or related prospectus or for additional information; (ii) of the
issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of a Resale Registration
Statement or a Piggyback Registration Statement, as the case may be, 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; or (iv) of any event or circumstance which, upon the advice of its
counsel, necessitates the making of any changes in the Resale Registration
Statement or a Piggyback Registration Statement, as the case may be, or
prospectus related thereto, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the Resale
Registration Statement or a Piggyback Registration Statement, as the case may
be, 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
related thereto, 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; then the Company shall deliver a certificate in
writing to the holders of Registrable Shares registered thereby (the "Suspension
Notice") to the effect of the foregoing and, upon receipt of such Suspension
Notice, the holder will refrain from selling any Registrable Securities pursuant
to the Resale Registration Statement or a Piggyback Registration Statement, as
the case may be, (a "Suspension") until the holder's receipt of copies of a
supplemented or amended prospectus prepared and filed by the Company, or until
it is advised in writing by the Company that the current prospectus may be used,
and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in any such prospectus. In the
event of any Suspension, the Company will use its reasonable best efforts to
cause the use of the prospectus so suspended to be resumed within sixty (60)
days after the delivery of a Suspension Notice to the holders.
11. MISCELLANEOUS.
(A) NO INCONSISTENT AGREEMENTS. The Company represents,
warrants, covenants and agrees that it has not granted, and shall not grant,
registration rights with respect to Registrable Securities or any other
securities that would be inconsistent with the terms contained in this
Agreement.
(B) SPECIFIC PERFORMANCE. The parties acknowledge that
there would be no adequate remedy at law if the Company fails to perform any of
its obligations hereunder and that the Holders from time to time of the
Registrable Securities may be irreparably harmed by any such failure, and
accordingly agree that the Holders, in addition to any other remedy to which
they may be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of the Company under this Agreement in accordance
with the terms and conditions of this Agreement, in any federal or state court
of competent jurisdiction.
(C) NOTICES. All notices, requests, claims, demands,
waivers and other communications hereunder shall be in writing and shall be
deemed effectively given only upon delivery to each party to be notified by (i)
personal delivery, (ii) telex or telecopier, upon receipt of confirmation of
complete transmittal, or (iii) an internationally recognized overnight air
courier, addressed to the party to be notified at the address as follows: If to
the Company, to Interleukin Genetics, Inc., 000 Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Chief Financial Officer, and if to a Holder, to
the
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address of such Holder set forth in the security register or other records of
the Company, or to such other address as the Company or any such Holder may have
furnished to the other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
(D) PARTIES IN INTEREST. All the terms and provisions of
this Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the Holders and their respective successors and permitted
assigns. If any transferee of any Holder of Registrable Securities shall acquire
Registrable Securities from a Holder in any manner, then such transferee shall,
without any further writing or action of any kind, be deemed a beneficiary
hereof for all purposes, provided that such transferee acquires at least 50,000
shares of Registrable Securities from the transferring Holder. In that event,
the Registrable Securities held by such transferee shall be held subject to all
of the terms of this Agreement, and by taking and holding such Registrable
Securities such transferee shall be entitled to receive the benefits of, and be
conclusively deemed to have agreed to be bound by all of the applicable terms
and provisions of this Agreement. Any such successor, assign or transferee shall
agree in writing to acquire and hold the Registrable Securities subject to all
of the applicable terms hereof.
(E) SURVIVAL. The respective indemnities, agreements,
representations, warranties and each other provision set forth in this Agreement
or made pursuant hereto shall remain in full force and effect regardless of any
investigation (or statement as to the results thereof) made by or on behalf of
any Holder of Registrable Securities, any director, officer or partner of such
Holder, any agent or underwriter or any director, officer or partner thereof, or
any controlling person of any of the foregoing, and shall survive delivery of
and payment for the Registrable Securities.
(F) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to principles of conflicts of law.
(G) HEADINGS. The descriptive headings of the several
Sections and paragraphs of this Agreement are inserted for convenience only, do
not constitute a part of this Agreement and shall not affect in any way the
meaning or interpretation of this Agreement.
(H) ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the
other writings referred to herein or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company and the
Holders of at least a majority of the Registrable Securities at the time
outstanding. Each Holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by any amendment or waiver effected pursuant to this
Section 11(h), whether or not any notice is delivered to such Holder.
(I) COUNTERPARTS. This Agreement may be executed by the
parties in counterparts, each of which shall be deemed to be an original, but
all such respective counterparts shall together constitute one and the same
instrument.
* * *
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This Registration Rights Agreement is signed as of the date
first written above.
The Company: INTERLEUKIN GENETICS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
Investor: PYXIS INNOVATIONS, INC.
By: /s/ Xxxx Xxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxx
Title: Duly Authorized Agent
15
