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Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of April 1,
1998, between SciClone Pharmaceuticals, Inc., a California corporation (the
"Company") Halifax Fund, L.P., Thermis Partners L.P. and Heracles Fund
(individually, an "Investor," and collectively, the "Investors").
W I T N E S S E T H
WHEREAS, pursuant to that certain Preferred Stock Investment Agreement
by and between the Company and the Investors (the "Purchase Agreement"), the
Company has agreed to sell and issue to the Investors, and the Investors have
agreed to purchase from the Company, an aggregate of 661,157 shares of the
Company's Series C Preferred Stock (the "Preferred Shares") on the terms and
conditions set forth therein, and has agreed to issue to the Investors Common
Stock Purchase Warrants ("Warrants") providing the Investors with the right to
purchase an aggregate of 100,000 shares ("Warrant Shares") of Common Stock, no
par value ("Common Stock") on the terms and conditions set forth in the
Warrants; and
WHEREAS, the Purchase Agreement contemplates that the Preferred Shares
will be convertible into shares (together with the Warrant Shares, the "Common
Shares") of Common Stock pursuant to the terms and conditions set forth in the
Certificate of Determination for such Preferred Shares (the "Certificate of
Determination"); and
WHEREAS, pursuant to the terms of, and in partial consideration for, the
Investors' agreement to enter into the Purchase Agreement, the Company has
agreed to issue the Warrants and to provide the Investors with certain
registration rights with respect to the Common Shares and certain other rights
and remedies with respect to the Preferred Shares as set forth in this
Agreement;
NOW THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in the Purchase Agreement and
this Agreement, the Company and the Investors agree as follows:
1. Certain Definitions. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Purchase Agreement or the
Certificate of Determination. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
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"Holder" and "Holders" shall include the Investors and any
transferee of the Preferred Shares, the Warrant or Common Shares or
Registrable Securities which have not been sold to the public, to whom
the registration rights conferred by this Agreement have been
transferred in compliance with this Agreement.
"Liquidation Preference" shall have the meaning ascribed to such
term in the Certificate of Determination.
"Registrable Securities" shall mean: (i) the Common Shares
issued to each Holder upon conversion of the Preferred Shares or
exercise of the Warrants or upon any stock split, stock dividend,
recapitalization or similar event with respect to such Common Shares;
(ii) any securities issued or issuable to each Holder upon the exchange
or conversion of any Preferred Shares, the Warrants or Common Shares;
and (iii) any other security of the Company issued as a dividend or
other distribution with respect to, in exchange of or in replacement of
Registrable Securities.
The terms "register", "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses to be incurred
by the Company in connection with each Holder's registration rights
under this Agreement, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel
for the Company, blue sky fees and expenses, reasonable fees and
disbursements of counsel to Holders (using a single counsel selected by
a majority in interest of the Holders) for a "due diligence" examination
of the Company and review of the Registration Statement and related
documents, and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular
employees of the Company, which shall be paid in any event by the
Company).
"Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and
all fees and disbursements of counsel for Holders not included within
"Registration Expenses".
"Registration Statement" shall have the meaning set forth in
Section 2(a) herein.
"Regulation D" shall mean Regulation D as promulgated pursuant
to the Securities Act, and as subsequently amended.
"Securities Act" or "Act" shall mean the Securities Act of 1933,
as amended.
2. Registration Requirements. The Company shall use its best efforts to
effect the registration of the Registrable Securities (including without
limitation the execution of an
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undertaking to file post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act) as would permit or
facilitate the sale or distribution of all the Registrable Securities in the
manner (including manner of sale) and in all states reasonably requested by the
Holder. Such best efforts by the Company shall include the following:
(a) The Company shall, as expeditiously as reasonably possible
after the Closing Date:
(i) Prepare and file a registration statement with the
Commission pursuant to Rule 415 under the Securities Act on Form
S-3 under the Securities Act (or in the event that the Company is
ineligible to use such form, such other form as the Company is
eligible to use under the Securities Act) covering the
Registrable Securities ("Registration Statement"), which
Registration Statement, to the extent allowable under the
Securities Act and the rules promulgated thereunder, shall state
that such Registration Statement also covers such indeterminate
number of additional shares of Common Stock as may become
issuable upon conversion of the Preferred Shares or exercise of
the Warrant (i) to prevent dilution resulting from stock splits,
stock dividends or similar transactions or (ii) by reason of
changes in the Conversion Price or the Market Conversion Price.
The number of shares of Common Stock initially included in such
Registration Statement shall be no less than the number of Common
Shares that would be issuable upon conversion of the Preferred
Shares if the Conversion Price was equal to $1.50 and upon
exercise of the Warrant without regard to any limitation on the
Investors' ability to convert the Preferred Shares and without
regard to any adjustment of the number of shares of Common Stock
issuable pursuant to the Warrants. Thereafter the Company shall
use its best efforts to cause such Registration Statement and
other filings to be declared effective prior to 90 days following
the Closing Date. The Company shall provide the Holders
reasonable opportunity to review any such Registration Statement
or amendment or supplement thereto prior to filing.
(ii) Prepare and file with the Commission such amendments
and supplements to such Registration Statement and the prospectus
used in connection with such Registration Statement as may be
necessary to comply with the provisions of the Act with respect
to the disposition of all securities covered by such Registration
Statement and notify the Holders of the filing and effectiveness
of such Registration Statement and any amendments or supplements.
(iii) Furnish to each Holder such numbers of copies of a
current prospectus conforming with the requirements of the Act,
copies of the Registration Statement, any amendment or supplement
thereto and any documents incorporated by reference therein and
such other documents as such Holder may reasonably require in
order to facilitate the disposition of Registrable Securities
owned by such Holder.
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(iv) Use its best efforts to register and qualify the
securities covered by such Registration Statement under such
other securities or "Blue Sky" laws of such jurisdictions as
shall be reasonably requested by each Holder.
(v) Notify each Holder immediately of the happening of any
event as a result of which the prospectus (including any
supplements thereto or thereof) included in such Registration
Statement, as then in effect, includes an untrue statement of
material fact or omits 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, and use
its best efforts to promptly update and/or correct such
prospectus.
(vi) Notify each Holder immediately of the issuance by the
Commission or any state securities commission or agency of any
stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose.
The Company shall use its best efforts to prevent the issuance of
any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible time.
(vii) Permit a single firm of counsel, designated as
Holder's counsel by a majority of the Registrable Securities
included in the Registration Statement, to review the
Registration Statement and all amendments and supplements thereto
within a reasonable period of time prior to each filing, and
shall not file any document in a form to which such counsel
reasonably objects.
(viii) Use its best efforts to list the Registrable
Securities covered by such Registration Statement with all
securities exchange(s) and/or markets on which the Common Stock
is then listed and prepare and file any required filings with the
National Association of Securities Dealers, Inc. or any exchange
or market where the Common Shares are traded.
(ix) Take all steps necessary to enable Holders to avail
themselves of the prospectus delivery mechanism set forth in Rule
153 (or successor thereto) under the Act.
(b) Set forth below in this Section 2(b) are (I) events that may
arise that the Investors consider will interfere with the full enjoyment
of their rights under this Agreement (the "Interfering Events"), and
(II) certain remedies applicable in each of these events.
Paragraphs (i) through (iv) of this Section 2(b) describe the
Interfering Events, provide a remedy to the Investors if an Interfering
Event occurs and provide that the Investors may require that the Company
redeem outstanding Preferred Shares at a specified price if certain
Interfering Events are not timely cured.
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Paragraph (v) provides inter alia, that if cash payments required
as the remedy in the case of certain of the Interfering Events are not
paid when due, the Company may be required by the Investors to redeem
outstanding Preferred Shares at a specified price.
Paragraph (vi) provides, inter alia that the Investors have the
right to specific performance.
The preceding paragraphs in this Section 2(b) are meant to serve
only as an introduction to this Section 2(b), are for convenience only,
and are not to be considered in applying, construing or interpreting
this Section 2(b).
(i) Delay in Effectiveness of Registration Statement. The
Company agrees that it shall file the Registration Statement
complying with the requirements of this Agreement promptly
following the date of the closing of the Purchase Agreement (the
"Closing Date") and shall use its best efforts to cause such
Registration Statement to become effective within 90 days from
the Closing Date. In the event that such Registration Statement
has not been declared effective within 90 days from the Closing
Date, then the Conversion Price or the Market Conversion Price,
as applicable, shall be reduced by 1% during and after the 30-day
period ("Default Period") from and after the 90th day following
the Closing Date during which such Registration Statement is not
effective, and be further reduced by an additional 1.5% during
and after each Default Period thereafter. For example, if the
Registration Statement does not become effective until 130 days
from the Closing Date, the Conversion Price or the Market
Conversion Price, as applicable, during days 91 through 119 shall
be equal to 99% of the Conversion Price or the Market Conversion
Price, as applicable. The Conversion Price or the Market
Conversion Price, as applicable, from and after day number 120
from the Closing Date shall be equal to 97.5%. In each case, the
Conversion Price or the Market Conversion Price, as applicable,
shall be subject to further adjustment as set forth in the
Certificate of Determination. If the Registration Statement has
not been declared effective within 180 days after the Closing
Date, then each Holder shall have the right to sell its Preferred
Shares to the Company at a price (the "Premium Redemption Price")
equal to 1.3 times (i.e., 130% of) the Liquidation Preference (as
defined in the Certificate of Determination). Payment of such
amount shall be due and payable within five (5) business days of
demand therefor and surrender by the Holder of its certificate(s)
for the Series C Preferred Stock.
(ii) No Listing Premium Price Redemption for Delisting of
Class of Shares.
(A) In the event that the Company fails, refuses or
is unable to cause the Registrable Securities covered by
the Registration Statement to be listed with the NASDAQ
National Market System and each other securities exchange
and market on which the Common Stock is then traded at all
times during the period ("Listing Period") from the 90th
day following the Closing Date until the Forced Conversion
Date (provided that such date shall be deferred 1.5 days
for each day that there is no Effective Registration),
then the Company shall pay in cash to each Holder
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a default payment in an amount equal to three percent (3%)
of the aggregate Liquidation Preference represented by the
Preferred Shares held by such Holder for each 30-day
period during the Listing Period from and after such
failure, refusal or inability to so list the Registrable
Securities until the Registrable Securities are so listed.
(B) In the event that shares of Common Stock of the
Company are delisted from the NASDAQ National Market
System any time following the Closing Date and remain
delisted for 5 consecutive business days, then at the
option of each Holder and to the extent such Holder so
elects, the Company shall on 5 business days notice redeem
the Preferred Shares and/or Common Shares held by such
Holder, in whole or in part, as follows: (I) in the case
of the Preferred Shares, they shall be redeemed at a
redemption price equal to the Premium Redemption Price (as
defined in Section 2(b)(i)); and (II) in the case of
Common Shares issued to such Holder pursuant to conversion
of the Preferred Shares, such shares shall be redeemed at
a redemption price per share equal to 1.3 times the dollar
amount which is the product of (x) the number of shares so
to be redeemed pursuant to this paragraph, and (y) the
Conversion Price or Market Conversion Price, as
appropriate, as in effect at the time such shares were
received pursuant to conversion of the Preferred Shares;
provided, however, that such Holder may revoke such
request at any time prior to receipt of such payment of
such redemption price. Default payments shall no longer
accrue on the Preferred Shares after such shares have been
redeemed by the Company pursuant to the foregoing
provision.
(iii) Blackout Periods. During the period between the
effective date of the Registration Statement and the second
anniversary of the Closing Date, in the event any Holder's
ability to sell Registrable Securities under the Registration
Statement is suspended for more than (i) five (5) consecutive
business days or (ii) fifteen (15) days in any calendar year
("Suspension Grace Period"), including without limitation by
reason of a suspension of trading of the Common Shares on the
NASDAQ National Market System or any suspension or stop order
with respect to the Registration Statement or the fact that an
event has occurred as a result of which the prospectus (including
any supplements thereto) included in such Registration Statement
then in effect includes an untrue statement of material fact or
omits 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, then the Company shall pay in
cash to each Holder a default payment in an amount equal to three
percent (3%) of the Liquidation Preference for the Preferred
Shares held by such Holder for each 30-day period from and after
the expiration of the Suspension Grace Period. At any time after
the fifth day following the expiration of the Suspension Grace
Period, a Holder shall have the right to have the Company redeem
its Preferred Shares and Common Shares at the price and on the
terms set forth in Section 2(b)(ii)(B) above.
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(iv) Conversion Deficiency Premium Price Redemption for
Conversion Deficiency. In the event that the Company does not
have a sufficient number of Common Shares available to satisfy
the Company's obligations to any Holder upon receipt of a
Conversion Notice or is otherwise unable or unwilling to issue
such Common Shares (including without limitation by reason of the
limit described in Section 10 below) (each, a "Conversion
Deficiency") in accordance with the terms of the Purchase
Agreement for any reason after receipt of a Conversion Notice,
then:
(A) The Company shall pay in cash to each Holder a
default payment in an amount equal to three percent (3%)
of the Liquidation Preference for the Preferred Shares
held by such Holder for each 30-day period that the
Company fails or refuses to issue Common Shares in
accordance with the terms of the Certificate of
Determination; and
(B) At any time five days after the commencement of
the running of the first 30-day period described above in
clause (A) of this paragraph (iv), at the request of any
Holder pursuant to a redemption notice, the Company
promptly (1) shall purchase from such Holder, at a
purchase price equal to the Premium Redemption Price, the
number of Preferred Shares equal to such Holder's pro rata
share of the "Deficiency," as such term is defined below,
if the failure to issue Common Shares results from the
lack of a sufficient number thereof and (2) shall purchase
all of such Holder's Preferred Shares if the failure to
issue Common Shares results from any other cause;
provided, however, if within three (3) business days of
such Redemption Notice the Company delivers to such Holder
a Notice stating that the Company will have a sufficient
number of Common Shares available for conversion of all
outstanding Preferred Shares within ten (10) business
days, then the Company shall not be required to redeem
such Preferred Shares pursuant to this paragraph (iv)
unless the Company shall fail to have a sufficient number
of Common Shares available for conversion of all
outstanding Preferred Shares after such ten (10) business
day period. Pursuant to the foregoing, in the event any
Holder delivers a Conversion Notice and the Company is
unable to convert any Preferred Shares under the
Certificate of Determination due to an insufficient number
of Common Shares available for any reason, the Company
promptly shall purchase from such Holder, at a purchase
price equal to the Premium Redemption Price, the number of
Preferred Shares requested to be converted in such
Conversion Notice which are not so converted. The
"Deficiency" shall be equal to the number of Preferred
Shares that could be converted for the number of Common
Shares represented by the number of Common Shares required
to be issued upon receipt of a Conversion Notice less the
number of Common Shares available for issuance upon
receipt of such Conversion Notice, if all
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outstanding Preferred Shares eligible for conversion were
submitted for conversion at the Conversion Price set forth
in the Certificate of Determination as of the date such
Deficiency is determined. Default payments shall no longer
accrue on Preferred Shares after such shares have been
redeemed by the Company pursuant to the foregoing
provision.
(v) Premium Price Redemption for Cash Payment Defaults.
(A) The Company acknowledges that any failure,
refusal or inability by the Company described in the
foregoing paragraphs (i) through (iv) will cause the
Holders to suffer damages in an amount that will be
difficult to ascertain, including without limitation
damages resulting from the loss of liquidity in the
Registrable Securities and the additional investment risk
in holding the Registrable Securities. Accordingly, the
parties agree that it is appropriate to include in this
Agreement the foregoing provisions for default payments
and mandatory redemptions in order to compensate the
Holders for such damages. The parties acknowledge and
agree that the default payments and mandatory redemptions
set forth above represent the parties' good faith effort
to quantify such damages and, as such, agree that the form
and amount of such default payments are reasonable and
will not constitute a penalty.
(B) Each default payment provided for in the
foregoing paragraphs (ii) through (iv) shall be in
addition to each other default payment. All default
payments required to be made in connection with the above
provisions shall be paid in cash by the tenth (10th) day
of each calendar month following the date on which such
payment becomes due and payable (which payments shall be
pro rata on a per diem basis for any period of less than
30 days).
(C) In the event that the Company fails or refuses
to pay any default payment when due, at any Holder's
request and option, the Company shall purchase all or a
portion of the Preferred Shares held by such Holder (with
default payments accruing through the date of such
purchase), within five (5) days of such request, at a
purchase price equal to the Premium Redemption Price,
provided that such Holder may revoke such request at any
time prior to receipt of such payment of such purchase
price. Until such time as the Company purchases such
Preferred Shares at the request of such Holder pursuant to
the preceding sentence, at any Holder's request and option
the Company shall as to such Holder pay such amount by
adding and including the amount of such default payment to
Conversion Amount and the Liquidation Preference instead
of in cash.
(vi) Cumulative Remedies. The default payments and
mandatory redemptions provided for above are in addition to and
not in lieu or limitation of
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any other rights the Holders may have at law, in equity or under
the terms of the Certificate of Determination, the Purchase
Agreement, the Warrant or this Agreement, including without
limitation the right to specific performance. Each Holder shall
be entitled to specific performance of any and all obligations of
the Company in connection with the registration rights of the
Holders hereunder.
(vii) Deferral of Forced Conversion Date. In the event of
a failure of Effective Registration, including without limitation
by reason of any of the circumstances described in the foregoing
clauses (i) through (iv) above, then the Forced Conversion Date
(as defined in the Certificate of Determination) shall be
deferred by 1.5 days for each day that any of the circumstances
in clauses (i), (ii), (iii) (without regard to the applicability
of the Suspension Grace Period), or (iv) exist.
(c) If the Holder(s) intend to distribute the Registrable
Securities by means of an underwriting, the Holder(s) shall so advise
the Company. Any such underwriting may only be administered by
investment bankers reasonably satisfactory to the Company. The Company
shall only be obligated to permit one underwritten offering, which
offering shall be determined by a majority-in-interest of the Holders.
(d) In the event of an underwriting pursuant to Section 2(c), the
Company shall enter into such customary agreements for a secondary
offering and take all such other reasonable actions reasonably requested
by the Holders in connection therewith in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and
whether or not the Registrable Securities are to be sold in an
underwritten offering:
(i) make such representations and warranties to the
Holders and the underwriter or underwriters, if any, in form,
substance and scope as are customarily made by issuers to
underwriters in secondary offerings;
(ii) cause to be delivered to the sellers of Registrable
Securities and the underwriter or underwriters, if any, opinions
of independent counsel to the Company, on and dated as of the
effective day (or in the case of an underwritten offering, dated
the date of delivery of any Registrable Securities sold pursuant
thereto) of the Registration Statement, and within ninety (90)
days following the end of each fiscal year thereafter, which
counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the Holders and the underwriter(s), if
any, and their counsel and covering, without limitation, such
matters as the due authorization and issuance of the securities
being registered and compliance with securities laws by the
Company in connection with the authorization, issuance and
registration thereof and other matters that are customarily given
to underwriters in underwritten offerings, addressed to the
Holders and each underwriter, if any.
(iii) cause to be delivered, immediately prior to the
effectiveness of the
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Registration Statement (and, in the case of an underwritten
offering, at the time of delivery of any Registrable Securities
sold pursuant thereto), and at the beginning of each fiscal year
following a year during which the Company's independent certified
public accountants shall have reviewed any of the Company's books
or records, a "comfort" letter from the Company's independent
certified public accountants addressed to the Holders and each
underwriter, if any, stating that such accountants are
independent public accountants within the meaning of the
Securities Act and the applicable published rules and regulations
thereunder, and otherwise in customary form and covering such
financial and accounting matters as are customarily covered by
letters of the independent certified public accountants delivered
in connection with secondary offerings; such accountants shall
have undertaken in each such letter to update the same during
each such fiscal year in which such books or records are being
reviewed so that each such letter shall remain current, correct
and complete throughout such fiscal year; and each such letter
and update thereof, if any, shall be reasonably satisfactory to
the Holders.
(iv) if an underwriting agreement is entered into, the
same shall include customary indemnification and contribution
provisions to and from the underwriters and procedures for
secondary underwritten offerings;
(v) deliver such documents and certificates as may be
reasonably requested by the Holders of the Registrable Securities
being sold or the managing underwriter or underwriters, if any,
to evidence compliance with clause (i) above and with any
customary conditions contained in the underwriting agreement, if
any; and
(vi) deliver to the Holders on the effective day (or in
the case of an underwritten offering, dated the date of delivery
of any Registrable Securities sold pursuant thereto) of the
Registration Statement, and at the beginning of each fiscal
quarter thereafter, a certificate in form and substance as shall
be reasonably satisfactory to the Holders, executed by an
executive officer of the Company and to the effect that all the
representations and warranties of the Company contained in the
Purchase Agreement are still true and correct except as disclosed
in such certificate; the Company shall, as to each such
certificate delivered at the beginning of each fiscal quarter,
update or cause to be updated each such certificate during such
quarter so that it shall remain current, complete and correct
throughout such quarter; and such updates received by the Holders
during such quarter, if any, shall have been reasonably
satisfactory to the Holders.
(e) The Company shall make available for inspection by the
Holders, representative(s) of all the Holders together, any underwriter
participating in any disposition pursuant to a Registration Statement,
and any attorney or accountant retained by any Holder or underwriter,
all financial and other records customary for purposes of
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the Holders' due diligence examination of the Company and review of any
Registration Statement, all SEC Documents (as defined in the Purchase
Agreement) filed subsequent to the Closing, pertinent corporate
documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably
requested by any such representative, underwriter, attorney or
accountant in connection with such Registration Statement, provided that
such parties agree to keep such information confidential.
(f) Subject to Section 2(b) above, the Company may suspend the
use of any prospectus used in connection with the Registration Statement
only in the event, and for such period of time as, such a suspension is
required in the reasonable opinion of counsel to the Company by the
rules and regulations of the Commission. The Company will use its best
efforts to cause such suspension to terminate at the earliest possible
date.
(g) The Company shall file a Registration Statement with respect
to any newly authorized shares reserved for issuance upon conversion
of the Series C Preferred Stock within five (5) business days of any
shareholders meeting authorizing same and shall use its best efforts to
cause such Registration Statement to become effective within ninety (90)
days of such shareholders meeting. If the Holders become entitled,
pursuant to an event described in clause (iii) of the definition of
Registrable Securities, to receive any securities in respect of
Registrable Securities that were already included in a Registration
Statement, subsequent to the date such Registration Statement is
declared effective, and the Company is unable under the securities laws
to add such securities to the then effective Registration Statement, the
Company shall promptly file, in accordance with the procedures set forth
herein, an additional Registration Statement with respect to such newly
Registrable Securities. The Company shall use its best efforts to (i)
cause any such additional Registration Statement, when filed, to become
effective under the Securities Act, and (ii) keep such additional
Registration Statement effective during the period described in Section
5 below. All of the registration rights and remedies under this
Agreement shall apply to the registration of such newly reserved shares
and such new Registrable Securities, including without limitation the
provisions providing for default payments contained herein.
3. Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance with registration
pursuant to this Agreement except for registration expenses incurred pursuant
to Sections 2(c) and 2(d) of this Agreement, shall be borne by the Company,
and all Selling Expenses of a Holder shall be borne by such Holder.
4. Registration on Form S-3. The Company shall use its best efforts to
qualify for registration on Form S-3 or any comparable or successor form or
forms, or in the event that the Company is ineligible to use such form, such
form as the Company is eligible to use under the Securities Act.
5. Registration Period. In the case of the registration effected by the
Company pursuant to this Agreement, the Company will use its best efforts to
keep such registration effective until all the Holders have completed the sales
or distribution described in the
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Registration Statement relating thereto or, if earlier, until such
Registerable Securities may be sold under Rule 144(k) (provided that the
Company's transfer agent has accepted an instruction from the Company to such
effect).
6. Indemnification.
The Company Indemnity. The Company will indemnify each
Holder, each of its officers, directors and partners, and
each person controlling each Holder, within the meaning of
Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which registration,
qualification or compliance has been effected pursuant to
this Agreement, and each underwriter, if any, and each
person who controls, within the meaning of Section 15 of
the Securities Act and the rules and regulations
thereunder, any underwriter, against all claims, losses,
damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document
(including any related registration statement,
notification or the like) incident to any such
registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by
the Company of the Securities Act or any state securities
law or in either case, any rule or regulation thereunder
applicable to the Company and relating to action or
inaction required of the Company in connection with any
such registration, qualification or compliance, and will
reimburse each Holder, each of its officers, directors and
partners, and each person controlling such Holder, each
such underwriter and each person who controls any such
underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in
any such case to a Holder to the extent that any such
claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission based upon
written information furnished to the Company by such
Holder or the underwriter (if any) therefor and stated to
be specifically for use therein. The indemnity agreement
contained in this Section 6(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without
the consent of the Company (which consent will not be
unreasonably withheld).
(b) Holder Indemnity. Each Holder will, severally and not
jointly, if Registrable Securities held by it are included in the
securities as to which such registration, qualification or compliance is
being effected, indemnify the Company, each of its directors, officers,
partners, and each underwriter, if any, of the Company's securities
covered by such a registration statement, each person who controls the
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Company or such underwriter within the meaning of Section 15 of the
Securities Act and the rules and regulations thereunder, each other
Holder (if any), and each of their officers, directors and partners, and
each person controlling such other Holder(s) against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus,
offering circular or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein
or necessary to make the statement therein not misleading, and will
reimburse the Company and such other Holder(s) and their directors,
officers and partners, underwriters or control persons for any legal or
any other expenses reasonably incurred in connection with investigating
and defending any such claim, loss, damage, liability or action, in each
case to the extent, but only to the extent, that such untrue statement
(or alleged untrue statement) or omission (or alleged omission) is made
in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically
for use therein, and provided that the maximum amount for which such
Holder shall be liable under this indemnity shall not exceed the net
proceeds received by such Holder from the sale of the Registrable
Securities. The indemnity agreement contained in this Section 6(b) shall
not apply to amounts paid in settlement of any such claims, losses,
damages or liabilities if such settlement is effected without the
consent of such Holder (which consent shall not be unreasonably
withheld).
(c) Procedure. Each party entitled to indemnification under this
Article (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly
after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party
to assume the defense of any such claim in any litigation resulting
therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or any litigation resulting therefrom,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in
such defense at such party's expense, and provided further that the
failure of any Indemnified Party to give notice as provided herein shall
not relieve the Indemnifying Party of its obligations under this Article
except to the extent that the Indemnifying Party is materially and
adversely affected by such failure to provide notice. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except
with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party of a release from all liability in respect to
such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation
resulting therefrom.
7. Contribution. If the indemnification provided for in Section 6 herein
is unavailable to the Indemnified Parties in respect of any losses, claims,
damages or liabilities referred to herein
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(other than by reason of the exceptions provided therein), then each such
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, claims, damages or liabilities as between the Company on the one
hand and any Holder on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of such Holder in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of any Holder on the other
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 the Company or by such
Holder.
In no event shall the obligation of any Indemnifying Party to contribute
under this Section 7 exceed the amount that such Indemnifying Party would have
been obligated to pay by way of indemnification if the indemnification provided
for under Section 6(a) or 6(b) hereof had been available under the
circumstances.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Holders or the underwriters 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 the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraphs shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to contribute any amount in excess of the amount by which (i) in the
case of any Holder, the net proceeds received by such Holder from the sale of
Registrable Securities or (ii) in the case of an underwriter, the total price at
which the Registrable Securities purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any damages
that such Holder or underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section ii
(f) of the Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
8. Survival. The indemnity and contribution agreements contained in
Sections 6 and 7 and the representations and warranties of the Company referred
to in Section 2(d)(i) shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement or the Purchase Agreement or
any underwriting agreement, (ii) any investigation made by or on behalf of any
Indemnified Party or by or on behalf of the Company, and (iii) the consummation
of the sale or successive resales of the Registrable Securities.
9. Information by Holders. Each Holder shall furnish to the Company such
information regarding such Holder and the distribution and/or sale proposed by
such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement. The intended method or methods of
disposition and/or sale (Plan of Distribution) of such securities as so provided
by such Holder and as approved by counsel to the Company shall be included
without alteration in the Registration Statement covering the Registrable
Securities and shall not be changed without the written consent of such Holder.
10. NASDAQ Limit on Stock Issuances. In the event that the Company does
not issue (i) any Common Shares upon conversion of the Preferred Shares or (ii)
any Warrant Shares, due to the rules or regulations of any market or exchange
regulator for the market or exchange on which the Common Shares or Warrant
Shares are then trading, the Company shall, at the request of any Holder
promptly following such determination, purchase such Preferred Shares of such
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Holder which cannot be converted, or Warrant Shares which cannot be issued, at a
purchase price equal to the Premium Redemption Price.
11. Replacement Certificates. The certificate(s) representing the Common
Shares or Warrant Shares held by any Investor (or then Holder) may be exchanged
by such Investor (or such Holder) at any time and from time to time for
certificates with different denominations representing an equal aggregate number
of Common Shares or Warrant Shares, as reasonably requested by such Investor (or
such Holder) upon surrendering the same. No service charge will be made for such
registration or transfer or exchange.
12. Transfer or Assignment. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Investors by
the Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to a transferee
or assignee of the Preferred Shares or the Warrant, and all other rights granted
to the Investors by the Company hereunder may be transferred or assigned to any
transferee or assignee of any Preferred Shares or the Warrant; provided in each
case that each Investor must give prior written notice to the Company of any
such transfer or assignment, stating the name and address of said transferee or
assignee and identifying the securities with respect to which such registration
rights are being transferred or assigned; and provided further that the
transferee or assignee of such rights agrees in writing to be bound by the
registration provisions of this Agreement.
13. Miscellaneous.
(a) Remedies. The Company and the Investors 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 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.
(b) Jurisdiction. The Company and each of the Investors (i)
hereby irrevocably submits to the exclusive jurisdiction of the United
States District Court, the New York State courts and other courts of the
United States sitting in New York County, 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. The Company and the Investors consent
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 paragraph shall affect or limit any right to serve
process in any other
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manner permitted by law.
(c) Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing by facsimile, mail
or personal delivery and shall be effective upon actual receipt of such
notice. The addresses for such communications shall be:
to the Company:
SciClone Pharmaceuticals, Inc.
000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx
with copies to:
Xxxx, Xxxx, Xxxx & Freidenrich LLP
000 Xxxxxxxx Xx.
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
to the Investors:
Halifax Fund, L.P.
c/o The Paladin Group
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Thermis Partners L.P.
Heracles Fund
x/x Xxx Xxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
00 Xxxx 00xx Xxxxxx
Facsimile: 000-000-0000
Attention: E. Xxxx Xxx
with copies to:
Xxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: X. Xxxxxxxxx Xxxxxx, Esq.
Any party hereto may from time to time change its address for notices by
giving at least 10 days' written notice of such changed address to the other
parties hereto.
(d) Indemnity. Each party shall indemnify each other party
against any loss,
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cost or damages (including reasonable attorney's fees) incurred as a
result of such parties' breach of any representation, warranty, covenant
or agreement in this Agreement.
(e) Waivers. No waiver by any party of any default with respect
to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereafter. The
representations and warranties and the agreements and covenants of the
Company and each Investor contained herein shall survive the Closing.
(f) Execution. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same
agreement, it being understood that all parties need not sign the same
counterpart.
(g) Publicity. The Company agrees that it will not disclose, and
will not include in any public announcement, the name of an Investor
without such Investor's consent, unless and until such disclosure is
required by law or applicable regulation, and then only to the extent of
such requirement. The Company agrees to deliver a copy of any public
announcement regarding the matters covered by this Agreement or any
agreement or document executed herewith to the Investors and any public
announcement including the name of an Investor to such Investor, prior
to the publication of such announcements.
(h) Entire Agreement. This Agreement, together with the Purchase
Agreement, the Certificate of Determination and the
Warrant and the agreements and documents contemplated hereby and
thereby, contains the entire understanding and agreement of the parties,
and may not be modified or terminated except by a written agreement
signed by both parties.
(i) Governing Law; Consent of Jurisdiction. This Agreement and
the validity and performance of the terms hereof shall be governed by
and construed in accordance with the laws of the State of New York.
(j) Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY
JURY.
(k) Titles. The titles used in this Agreement are used for
convenience only and are not to be considered in construing or
interpreting this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SCICLONE: INVESTOR:
SCICLONE PHARMACEUTICALS, INC. HALIFAX FUND, L.P.
By: THE PALLADIN GROUP, L.P.
By: Attorney-in-fact
-----------------------------------
Name: Xxxxxx X. Xxxxxxx By: PALLADIN CAPITAL
Title: President and Chief Executive MANAGEMENT, L.L.C.,
Officer General Partner
By: -----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Duly Authorized Signatory
INVESTOR:
THEMIS PARTNERS L.P.
By: Promethean Investment Group L.L.C.,
its General Partner
By: -----------------------------------
Name: E. Xxxx Xxx
Title: Duly Authorized Signatory
INVESTOR:
HERACLES FUND
By: Promethean Investment Group L.L.C.,
its Investment Advisor
By: -----------------------------------
Name: E. Xxxx Xxx
Title: Duly Authorized Signatory
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