REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”) is made and entered into
as of August 1, 2007, by and among Urigen Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and the purchasers listed on Schedule
I hereto (the “Holders”).
This
Agreement is being entered into pursuant to the Series B Preferred Stock
Purchase Agreement, dated as of July 31, 2007, among the
Company and the Holders (the “Purchase Agreement”).
The
Company and the Holders hereby agree as follows:
1. Definitions.
Capitalized
terms used and not otherwise defined herein shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:
“Affiliate”
means, with respect to any Person, any other Person that directly or indirectly
controls or is controlled by or under common control with such
Person. For the purposes of this definition, “control,” when
used with respect to any Person, means the possession, direct or indirect,
of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract
or
otherwise; and the terms of “affiliated,” “controlling” and
“controlled” have meanings correlative to the foregoing.
“Board”
shall have meaning set forth in Section 3(n).
“Business
Day” means any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the state of New York
generally are authorized or required by law or other government actions to
close.
“Closing
Date” means the date of
the closing of the purchase and sale of the Preferred Shares and the Warrants
pursuant to the Purchase Agreement.
“Commission”
means the Securities and Exchange Commission.
“Common
Stock” means the Company's Common Stock, par value $.001 per
share.
“Effectiveness
Date” means with respect to the Registration Statement the
earlier of the ninetieth (90th) day following
the
Closing Date (or in the event that the Registration Statement is reviewed by
the
Commission, the one hundred twentieth (120th) day following
the
Closing Date) or the date which is within three (3) Business Days of the date
on
which the Commission informs the Company that (i) the Commission will not review
the Registration Statement or (ii) the Company may request
the acceleration of the effectiveness of the Registration Statement and the
Company makes such request.
“Effectiveness
Period” shall have the meaning set forth in Section 2.
“Event”
shall have the meaning set forth in Section 7(d).
“Event
Date” shall have the meaning set forth in Section 7(d).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Filing
Date” means the thirtieth (30th) day
following the
Closing Date.
“Holder”
or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.
“Indemnified
Party” shall have the meaning set forth in Section 5(c).
“Indemnifying
Party” shall have the meaning set forth in Section 5(c).
“Losses”
shall have the meaning set forth in
Section 5(a).
“Person”
means an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Prospectus”
means the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference in such
Prospectus.
“Registrable
Securities” means
(A) one hundred and twenty percent (120%) of the shares of Common Stock issuable
upon conversion of the Preferred Shares and (B) the shares of Common Stock
issuable upon exercise of the Warrants (in each case giving effect to any
anti-dilution and other adjustments therein).
“Registration
Statement” means the registration statements and any additional registration
statements contemplated by Section 2, including (in each case) the Prospectus,
amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference in such registration statement.
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“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.
“Rule
158” means Rule 158 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.
“Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.
“Securities
Act” means the
Securities Act of 1933, as amended.
“Special
Counsel” means Xxxxx Xxxxxxxx & Xxxxxxx, PLC.
“Warrants”
means the warrants to purchase shares of Common Stock issued to the Holders
pursuant to the Purchase Agreement.
2. Resale
Registration.
On
or
prior to the Filing Date the Company shall prepare and file with the Commission
a “resale” shelf Registration Statement providing for the resale of all
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement shall be on Form SB-2 (except
if the Company is not then eligible to register for resale the Registrable
Securities on Form SB-2, in which case such registration shall be on another
appropriate form in accordance with the Securities Act and the rules promulgated
thereunder). The Company shall (i) not permit any securities other
than the Registrable Securities and the securities to be listed on Schedule
II hereto to be included in the Registration Statement and (ii) use its best
efforts to cause the Registration Statement to be declared effective under
the
Securities Act as promptly as possible after the filing thereof, but in any
event prior to the Effectiveness Date, and to keep such Registration Statement
continuously effective under the Securities Act until such date as is the
earlier of (x) the date when all Registrable Securities covered by such
Registration Statement have been sold, (y) the date on which all of the
Registrable Securities may be sold without any restriction pursuant to Rule
144(k) as determined by the counsel to the Company pursuant to a written opinion
letter, addressed to the Company's transfer agent to such effect or (z) two
years following the Effectiveness Date (the “Effectiveness
Period”). If at any time and for any reason, an additional
Registration Statement is required to be filed because at such time the actual
number of shares of Common Stock into which the Warrants are exercisable plus
the number of shares of Common Stock exceeds the number of shares of Registrable
Securities remaining under the Registration Statement, the Company shall have
thirty-five (35) days to file such additional Registration Statement, and the
Company shall use its best efforts to cause such additional Registration
Statement to be declared effective by the Commission as soon as possible, but
in
no event later than seventy-five (75) days after filing.
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3. Registration
Procedures.
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a) Prepare
and file with the Commission on or prior to the Filing Date, a Registration
Statement on Form SB-2 (or if the Company is not then eligible to register
for
resale the Registrable Securities on Form SB-2 such registration shall be on
another appropriate form in accordance with the Securities Act and the rules
promulgated thereunder) in accordance with the method or methods of distribution
thereof as specified by the Holders (except if otherwise directed by the
Holders), and cause the Registration Statement to become effective and remain
effective as provided herein; provided, however, that not less
than two (2) Business Days prior to the filing of the Registration Statement
or
any related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated therein by reference), the Company shall
(i)
furnish to the Holders and the Special Counsel, copies of all such documents
proposed to be filed, which documents (other than those incorporated by
reference) will be subject to the review of such Holders and such Special
Counsel, and (ii) cause its officers and directors, counsel and independent
certified public accountants to respond to such inquiries as shall be necessary,
in the reasonable opinion of Special Counsel, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company
shall not file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a majority of the
Registrable Securities or the Special Counsel shall reasonably object in writing
within one (1) Business Day of their receipt thereof.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement as may be necessary to keep the
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission
such additional Registration Statements as necessary in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule
424
(or any similar provisions then in force) promulgated under the Securities
Act;
(iii) respond as promptly as possible, but in no event later than ten (10)
Business Days, to any comments received from the Commission with respect to
the
Registration Statement or any amendment thereto and as promptly as possible
provide the Holders and Special Counsel true and complete copies of all
correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of
the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by
the
Holders thereof set forth in the Registration Statement as so amended or in
such
Prospectus as so supplemented.
(c) Notify
the Holders of Registrable Securities to be sold and the Special Counsel as
promptly as possible (and, in the case of (i)(A) below, not less than three
(3)
days prior to such filing) and (if requested by any such Person) confirm such
notice in writing no later than one (1) Business Day following the day (i)(A)
when a Prospectus or any Prospectus supplement or post-effective amendment
to
the Registration Statement is filed; (B) when the Commission notifies the
Company whether there will be a “review” of such Registration Statement and
whenever the Commission comments in writing on such Registration Statement
and
(C) with respect to the Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission or
any
other Federal or state governmental authority for amendments or supplements
to
the Registration Statement or Prospectus or for additional information; (iii)
of
the issuance by the Commission of any stop order suspending the effectiveness
of
the Registration Statement covering any or all of the Registrable Securities
or
the initiation of any Proceedings for that purpose; (iv) if at any time any
of
the representations and warranties of the Company contained in any agreement
contemplated hereby ceases to be true and correct in all material respects;
(v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any
Proceeding for such purpose; and (vi) of the occurrence of any event that makes
any statement made in the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to the Registration Statement,
Prospectus or other documents so that, in the case of the Registration Statement
or the Prospectus, as the case may be, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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(d) Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of, (i) any order suspending the effectiveness of the Registration Statement
or
(ii) any suspension of the qualification (or exemption from qualification)
of
any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(e) If
requested by the Special Counsel and the Holders of a majority in interest
of
the Registrable Securities, (i) promptly incorporate in a Prospectus supplement
or post-effective amendment to the Registration Statement such information
as
the Company reasonably agrees should be included therein and (ii) make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment.
(f) Furnish
to each Holder and the Special Counsel, without charge, at least one conformed
copy of each Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to
be
incorporated therein by reference, and all exhibits to the extent requested
by
such Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.
(g) Promptly
deliver to each Holder and the Special Counsel, without charge, as many copies
of the Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request; and
the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus
and
any amendment or supplement thereto.
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(h) Prior
to any public offering of Registrable Securities, use its best efforts to
register or qualify or cooperate with the selling Holders and the Special
Counsel in connection with the registration or qualification (or exemption
from
such registration or qualification) of such Registrable Securities for offer
and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any Holder requests in writing, to keep each such registration
or qualification (or exemption therefrom) effective during the Effectiveness
Period and to do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by a Registration Statement; provided, however, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action that would
subject it to general service of process in any such jurisdiction where it
is
not then so subject or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.
(i) Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to a
Registration Statement, which certificates shall be free of all restrictive
legends (provided that the issuance of such unlegended certificates is in
compliance with applicable securities laws), and to enable such Registrable
Securities to be in such denominations and registered in such names as any
Holder may request in writing at least two (2) Business Days prior to any sale
of Registrable Securities.
(j) Upon
the occurrence of any event contemplated by Section 3(c)(vi), as promptly as
possible, prepare a supplement or amendment, including a post-effective
amendment, to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein
by
reference, and file any other required document so that, as thereafter
delivered, neither the Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(k) Use
its best efforts to cause all Registrable Securities relating to the
Registration Statement to be listed, traded or quoted on the OTC Bulletin Board,
the Nasdaq SmallCap Market or any other securities
exchange, quotation system or market, if any, on which similar securities issued
by the Company are then listed, traded or quoted as and when required pursuant
to the Purchase Agreement.
(l) Comply
in all material respects with all applicable rules and regulations of the
Commission and make generally available to its security holders earning
statements satisfying the provisions of Section 11(a) of the Securities Act
and
Rule 158 not later than 45 days after the end of any 3-month period (or 90
days
after the end of any 12-month period if such period is a fiscal year) commencing
on the first day of the first fiscal quarter of the Company after the effective
date of the Registration Statement, which statement shall conform to the
requirements of Rule 158.
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(m) The
Company may require each selling Holder to furnish to the Company information
regarding such Holder and the distribution of such Registrable Securities as
is
required by law to be disclosed in the Registration Statement, and the Company
may exclude from such registration the Registrable Securities of any such Holder
who unreasonably fails to furnish such information within a reasonable time
after receiving such request.
If
the
Registration Statement refers to any Holder by name or otherwise as the holder
of any securities of the Company, then such Holder shall have the right to
require (if such reference to such Holder by name or otherwise is not required
by the Securities Act or any similar federal statute then in force) the deletion
of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
Each
Holder covenants and agrees that (i) it will not sell any Registrable Securities
under the Registration Statement until it has received copies of the Prospectus
as then amended or supplemented as contemplated in Section 3(g) and notice
from
the Company that such Registration Statement and any post-effective amendments
thereto have become effective as contemplated by Section 3(c) and (ii) it and
its officers, directors or Affiliates, if any, will comply with the prospectus
delivery requirements of the Securities Act as applicable to them in connection
with sales of Registrable Securities pursuant to the Registration
Statement.
Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the
kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), 3(c)(vi) or 3(n),
such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of
the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing by the Company
that the use of the applicable Prospectus may be resumed, and, in either case,
has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.
(n) If
(i) there is material non-public information regarding the Company which the
Company's Board of Directors (the “Board”) reasonably determines not to
be in the Company's best interest to disclose and which the Company is not
otherwise required to disclose, or (ii) there is a significant business
opportunity (including, but not limited to, the acquisition or disposition
of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or other similar transaction) available to the
Company which the Board reasonably determines not to be in the Company's best
interest to disclose, then the Company may (x) postpone or suspend filing of
a
registration statement for a period not to exceed thirty (30) consecutive days
or (y) postpone or suspend effectiveness of a registration statement for a
period not to exceed twenty (20) consecutive days; provided that the Company
may
not postpone or suspend effectiveness or filing of a registration statement
under this Section 3(n) for more than forty-five (45) days in the aggregate
during any three hundred sixty (360) day period; provided,
however, that no such postponement or suspension shall be permitted
for
consecutive twenty (20) day periods arising out of the same set of facts,
circumstances or transactions.
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4. Registration
Expenses.
All
fees
and expenses incident to the performance of or compliance with this Agreement
by
the Company, except as and to the extent specified in this Section 4, shall
be
borne by the Company whether or not the Registration Statement is filed or
becomes effective and whether or not any Registrable Securities are sold
pursuant to the Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (i)
all
registration and filing fees (including, without limitation, fees and expenses
(A) with respect to filings required to be made with the OTC Bulletin Board,
the
Nasdaq SmallCap Market and each other securities exchange or market on which
Registrable Securities are required hereunder to be listed, (B) with respect
to
filings required to be made with the National Association of Securities Dealers,
Inc. and the NASD Regulation, Inc. and (C) in compliance with state securities
or Blue Sky laws (including, without limitation, fees and disbursements of
counsel for the Holders in connection with Blue Sky qualifications of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as the Holders
of
a majority of Registrable Securities may designate)), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is requested by the holders of a majority of the Registrable
Securities included in the Registration Statement), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated
by
this Agreement, including, without limitation, the Company's independent public
accountants (including the expenses of any comfort letters or costs associated
with the delivery by independent public accountants of a comfort letter or
comfort letters). In addition, the Company shall be responsible for
all of its internal expenses incurred in connection with the consummation of
the
transactions contemplated by this Agreement (including, without limitation,
all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.
5. Indemnification.
(a) Indemnification
by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure
to
perform under a margin call of Common Stock), investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning
of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person,
to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
costs of preparation and attorneys' fees) and expenses (collectively,
“Losses”), as incurred, arising out of or relating to any untrue or
alleged untrue statement of a material fact contained in the Registration
Statement, any Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to
be
stated therein or necessary to make the statements therein (in the case of
any
Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that such untrue statements or omissions are
based solely upon information regarding such Holder or such other Indemnified
Party furnished in writing to the Company by such Holder expressly for use
therein. The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding of which the Company is
aware
in connection with the transactions contemplated by this Agreement.
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(b) Indemnification
by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, the directors, officers, agents and
employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents and employees of such controlling Persons, to the fullest
extent permitted by applicable law, from and against all Losses (as determined
by a court of competent jurisdiction in a final judgment not subject to appeal
or review), as incurred, arising solely out of or based solely upon any untrue
statement of a material fact contained in the Registration Statement, any
Prospectus, or any form of prospectus, or arising solely out of or based solely
upon any omission of a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus or form of
prospectus or supplement thereto, in the light of the circumstances under which
they were made) not misleading, to the extent, but only to the extent, that
such
untrue statement or omission is contained in any information so furnished in
writing by such Holder or other Indemnifying Party to the Company specifically
for inclusion in the Registration Statement or such
Prospectus. Notwithstanding anything to the contrary contained
herein, each Holder shall be liable under this Section 5(b) for only that amount
as does not exceed the lesser of (i) the net proceeds to such Holder as a result
of the sale of Registrable Securities pursuant to such Registration Statement
and (ii) the aggregate purchase price paid by such Holder for the Preferred
Shares and the Warrants pursuant to the Purchase Agreement.
(c) Conduct
of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party promptly shall notify the
Person from whom indemnity is sought (the “Indemnifying Party) in
writing, and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party
and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination
is
not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying
Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume
the
defense of such Proceeding and to employ counsel reasonably satisfactory to
such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel (which shall be reasonably acceptable to the Indemnifying Party)
that
a conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects
to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld or delayed. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from
all
liability on claims that are the subject matter of such Proceeding.
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All
fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing
to
defend such Proceeding in a manner not inconsistent with this Section) shall
be
paid to the Indemnified Party, as incurred, within ten (10) Business Days of
written notice thereof to the Indemnifying Party (regardless of whether it
is
ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying
Party may require such Indemnified Party to undertake to reimburse all such
fees
and expenses to the extent it is finally judicially determined that such
Indemnified Party is not entitled to indemnification hereunder).
(d) Contribution. If
a claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party because of a failure or refusal of a governmental authority
to
enforce such indemnification in accordance with its terms (by reason of public
policy or otherwise), then each Indemnifying Party, in lieu of indemnifying
such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying Party
on the one hand and the Indemnified Party on the other from the offering of
the
Preferred Shares and Warrants. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate
to
reflect not only the relative benefits referred to in the foregoing sentence
but
also the relative fault, as applicable, of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact, has
been
taken or made by, or relates to information supplied by, such Indemnifying
Party
or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party
as a result of any Losses shall be deemed to include, subject to the limitations
set forth in Section 5(c), any reasonable attorneys' or other reasonable fees
or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms. In no event shall any selling Holder be
required to contribute an amount under this Section 5(d) in excess of the net
proceeds received by such Holder upon sale of such Holder’s Registrable
Securities pursuant to the Registration Statement giving rise to such
contribution obligation.
-10-
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties. Notwithstanding anything to the contrary contained herein,
the Holders shall be liable under this Section 5(d) for only that amount as
does
not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities pursuant to such Registration Statement.
6. Rule
144.
As
long as any Holder owns any Registrable Securities or other securities entitling
the Holder to acquire Registrable Securities, the Company covenants to timely
file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date
hereof pursuant to Section 13(a) or 15(d) of the Exchange Act and to promptly
furnish the Holders with true and complete copies of all such
filings. As long as any Holder owns any Registrable Securities or
other securities entitling the Holder to acquire Registrable Securities, if
the
Company is not required to file reports pursuant to Section 13(a) or 15(d)
of
the Exchange Act, it will prepare and furnish to the Holders and make publicly
available in accordance with Rule 144(c) promulgated under the Securities Act
annual and quarterly financial statements, together with a discussion and
analysis of such financial statements in form and substance substantially
similar to those that would otherwise be required to be included in reports
required by Section 13(a) or 15(d) of the Exchange Act, as well as any other
information required thereby, in the time period that such filings would have
been required to have been made under the Exchange Act. The Company
further covenants that it will take such further action as any Holder may
reasonably request all to the extent required from time to time to enable such
Person to sell the Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144
promulgated under the Securities Act, including providing any legal opinions
relating to such sale pursuant to Rule 144. Upon the request of
any Holder, the Company shall deliver to such Holder a written certification
of
a duly authorized officer as to whether it has complied with such
requirements.
7. Miscellaneous.
(a) Remedies. In
the event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under
this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under
this Agreement. The Company and each Holder
agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of
the
provisions of this Agreement and hereby further agrees that, in the event of
any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
-11-
(b) No
Inconsistent Agreements. Neither the Company nor any of its
subsidiaries has, as of the date hereof entered into and currently in effect,
nor shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as disclosed
in Schedule 2.1(c) of the Purchase Agreement, neither the Company nor any
of its subsidiaries has previously entered into any agreement currently in
effect granting any registration rights with respect to any of its securities
to
any Person. Without limiting the generality of the foregoing, without
the written consent of the Holders of a majority of the then outstanding
Registrable Securities, the Company shall not grant to any Person the right
to
request the Company to register any securities of the Company, under the
Securities Act unless the rights so granted are subject in all respects to
the
prior rights in full of the Holders set forth herein, and are not otherwise
in
conflict with the provisions of this Agreement.
(c) No
Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto or
as
disclosed on Schedule 2.1(c) of the Purchase Agreement or Schedule
II hereto) may include securities of the Company in the Registration
Statement, and the Company shall not after the date hereof enter into any
agreement providing such right to any of its securityholders, unless the right
so granted is subject in all respects to the prior rights in full of the Holders
set forth herein, and is not otherwise in conflict with the provisions of this
Agreement.
(d) Failure
to File Registration Statement and Other Events. The Company and
the Holders agree that the Holders will suffer damages if the Registration
Statement is not filed on or prior to the Filing Date and the Company does
not
respond to comments from the Commission within 14 days of the receipt thereof
or
if certain other events occur. The Company and the Holders further
agree that it would not be feasible to ascertain the extent of such damages
with
precision. Accordingly, if (A) the Registration Statement is not
filed on or prior to the Filing Date, or (B) the Company fails to respond to
comments from the Commission on any registration statement filed pursuant to
this Agreement within 14 days after the receipt of such comments, or (C) the
Company fails to file with the Commission a request for acceleration in
accordance with Rule 461 promulgated under the Securities Act within three
(3)
Business Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration Statement will
not
be “reviewed,” or not subject to further review, or (D) the Registration
Statement is filed with and declared effective by the Commission but thereafter
ceases to be effective as to all Registrable Securities at any time prior to
the
expiration of the Effectiveness Period, without being succeeded immediately
by a
subsequent Registration Statement filed with and declared effective by the
Commission, or (E) the Company has breached Section 3(n), or (F) trading in
the
Common Stock shall be suspended or if the Common Stock is delisted from the
OTC
Bulletin Board (or other principal exchange on which the Common Stock is traded)
for any reason for more than three (3) Business Days in the aggregate (any
such
failure or breach being referred to as an “Event,” and for purposes of
clauses (A) and (B) the date on which such Event occurs, or for purposes of
clause (C) the date on which such three (3) Business Day period is exceeded,
or
for purposes of clause (D) after more than fifteen (15) Business Days, or for
purposes of clause (F) the date on which such three (3) Business Day period
is
exceeded, being referred to as “Event Date”), the Company shall pay an
amount as liquidated damages to each Holder equal to one and one-half percent
(1.5%) of the amount of the Holder’s initial investment in the Preferred Shares
and Warrants for each calendar month or portion thereof thereafter from the
Event Date until the applicable Event is cured; provided, however,
that in no event shall the amount of liquidated damages payable to any Holder
pursuant to this Section 7(d) exceed eighteen percent (18%) of the amount of
the
Holder’s initial investment in the Preferred Shares and
Warrants. Notwithstanding anything to the contrary in this paragraph
(e), if (i) any of the Events shall have occurred, (ii) on or prior to the
applicable Event Date, the Company shall have exercised its rights under Section
3(n) hereof and (iii) the postponement or suspension permitted pursuant to
such
Section 3(n) shall remain effective as of such applicable Event Date, then
the
applicable Event Date shall be deemed instead to occur on the second Business
Day following the termination of such postponement or suspension.
-12-
Notwithstanding
anything to the
contrary set forth herein, in the event the Commission does not permit the
Company to register all of the Registrable Securities in the Registration
Statement because of the Commission’s application of Rule 415, the Company shall
register in the Registration Statement such number of Registrable Securities
as
is permitted by the Commission, provided, however, that the number of
Registrable Securities and the Other Securities, to be included in such
Registration Statement or any subsequent registration statement shall be
determined in the following order: (i) first, the Registrable Securities; (ii)
second, the Other Securities. In the event the Commission does
not permit the Company to register all of the Registrable Securities in the
initial Registration Statement, the Company shall use its best efforts to file
subsequent Registration Statements to register the Registrable Securities that
were not registered in the initial Registration Statement as promptly as
possible and in a manner permitted by the Commission. For purposes of
a subsequent filing under this paragraph, “Filing Date” means with respect to
each subsequent Registration Statement filed pursuant hereto, the later of
(i)
ninety (90) days following the sale of substantially all of the Registrable
Securities, determined, to the extent permitted by the Commission, on a per
holder (and its affiliates) basis, included in the initial Registration
Statement or any subsequent Registration Statement and (ii) seven (7) months
following the effective date of the initial Registration Statement or any
subsequent Registration Statement, as applicable, or such earlier date as
permitted by the Commission. For purposes of a subsequent filing
under this paragraph, “Effectiveness Date” means with respect to each subsequent
Registration Statement filed pursuant hereto, the earlier of (A) the ninetieth
(90th) day following the filing date of such Registration Statement (or in
the
event such Registration Statement receives a “full review” by the Commission,
the one hundred twentieth (120th) day following such filing date) or (B) the
date which is within three (3) Business Days after the date on which the
Commission informs the Company (i) that the Commission will not review such
Registration Statement or (ii) that the Company may request the acceleration
of
the effectiveness of such Registration Statement and the Company makes such
request; provided that, if the Effectiveness Date falls on a Saturday, Sunday
or
any other day which shall be a legal holiday or a day on which the Commission
is
authorized or required by law or other government actions to close, the
Effectiveness Date shall be the following Business Day. Such
subsequent Registration Statement shall be subject to the terms of this
Agreement as a Registration Statement under Article II
hereof. Further, the liquidated damages set forth in the preceding
paragraph shall not be applicable to any Registrable Securities that are not
included in a Registration Statement in response to a Rule 415 restriction
raised in a “comment letter” from the Commission, but shall be applicable to
such Registrable Securities to the extent such Registrable Securities are,
or
should have been, included in a subsequent Registration Statement pursuant
to
the terms of this paragraph.
-13-
(e) Amendments
and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented,
and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the Holders
of
three-fourths (3/4) of the Registrable Securities outstanding.
(f) Notices. Any
and all notices or other communications or deliveries required or permitted
to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earlier of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified for notice prior to 5:00 p.m., New York City time, on a Business
Day,
(ii) the Business Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified for notice later than 5:00 p.m., New York City time, on any date
and
earlier than 11:59 p.m., New York City time, on such date, (iii) the Business
Day following the date of mailing, if sent by nationally recognized overnight
courier service or (iv) actual receipt by the party to whom such notice is
required to be given. The addresses for such communications shall be
with respect to each Holder at its address set forth under its name on
Schedule I attached hereto, or with respect to the Company, addressed
to:
000
Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxx, MD
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000 and (000) 000-0000
with
copies (which copies
shall
not
constitute notice
to
the
Company)
to: Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx Xxxx, Esq.
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
or
to
such other address or addresses or facsimile number or numbers as any such
party
may most recently have designated in writing to the other parties hereto by
such
notice. Copies of notices to the Holders shall be sent to Xxxxx
Xxxxxxxx & Xxxxxxx, PLC, 00 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000,
Attention: Xxxxx X. XxXxxxxxx, Tel No.: (000) 000-0000, Fax No.: (000)
000-0000.
-14-
(g) Successors
and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns and shall
inure to the benefit of each Holder and its successors and
assigns. The Company may not assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of each
Holder. Each Holder may assign its rights hereunder in the manner and
to the Persons as permitted under the Purchase Agreement.
(h) Assignment
of Registration Rights. The rights of each Holder hereunder,
including the right to have the Company register for resale Registrable
Securities in accordance with the terms of this Agreement, shall be
automatically assignable by each Holder to any Affiliate of such Holder or
any
other Holder or Affiliate of any
other Holder of all or a portion of
the Registrable Securities if: (i) the Holder agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment,
(ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee
or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned, (iii) following such transfer or assignment
the further disposition of such securities by the transferee or assignees is
restricted under the Securities Act and applicable state securities laws, (iv)
at or before the time the Company receives the written notice contemplated
by
clause (ii) of this Section, the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions of this Agreement, and (v)
such
transfer shall have been made in accordance with the applicable requirements
of
the Purchase Agreement. In addition, each Holder shall have the right
to assign its rights hereunder to any other Person with the prior written
consent of the Company, which consent shall not be unreasonably
withheld. The rights to assignment shall apply to the Holders (and to
subsequent) successors and assigns.
(i) Counterparts. This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create
a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.
(j) Governing
Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to any of the conflicts of law principles which would result
in
the application of the substantive law of another jurisdiction. This
Agreement shall not be interpreted or construed with any presumption against
the
party causing this Agreement to be drafted. The Company and the
Holders agree that venue for any dispute arising under this Agreement will
lie
exclusively in the state or federal courts located in New York County, New
York,
and the parties irrevocably waive any right to raise forum non
conveniens or any other argument that New York is not the proper
venue. The Company and the Holders irrevocably consent to personal
jurisdiction in the state and federal courts of the state of New
York. The Company and the Holders 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 Section 7(j) shall affect or limit any right
to serve process in any other manner permitted by law. The Company
and the Holders hereby agree that the prevailing party in any suit, action
or
proceeding arising out of or relating to the this Agreement or the Purchase
Agreement, shall be entitled to reimbursement for reasonable legal fees from
the
non-prevailing party. The parties hereby waive all rights to a trial
by jury.
-15-
(k) Cumulative
Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
(l) Severability.
If any term, provision, covenant or restriction of this Agreement is held to
be
invalid, illegal, void or unenforceable in any respect, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain
in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their reasonable efforts to find and employ
an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m) Headings. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
(n) Shares
Held by the Company and its Affiliates. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its Affiliates (other
than any Holder or transferees or successors or assigns thereof if such Holder
is deemed to be an Affiliate solely by reason of its holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
(o) Independent
Nature of Holders. The Company acknowledges that the obligations
of each Holder under the Transaction Documents are several and not joint with
the obligations of any other Holder, and no Holder shall be responsible in
any
way for the performance of the obligations of any other Holder under the
Transaction Documents. The Company acknowledges that the decision of
each Holder to purchase Securities pursuant to the Purchase Agreement has been
made by such Holder independently of any other purchase and independently of
any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company or of its Subsidiaries
which may have made or given by any other Holder or by any agent or employee
of
any other Holder, and no Holder or any of its agents or employees shall have
any
liability to any Holder (or any other person) relating to or arising from any
such information, materials, statements or opinions. The Company
acknowledges that nothing contained herein, or in any Transaction Document,
and
no action taken by any Holder pursuant hereto or thereto (including, but not
limited to, the (i) inclusion of a Holder in the Registration Statement and
(ii)
review by, and consent to, such Registration Statement by a Holder) shall be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. The
Company acknowledges that each Holder shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out
of
this Agreement or out of the other Transaction Documents, and it shall not
be
necessary for any other Holder to be joined as an additional party in any
proceeding for such purpose. The Company acknowledges that for
reasons of administrative convenience only, the Transaction Documents have
been
prepared by counsel for one of the Holders and such counsel does not represent
all of the Holders but only such Holder and the other Holders have retained
their own individual counsel with respect to the transactions contemplated
hereby. The Company acknowledges that it has elected to provide all
Holders with the same terms and Transaction Documents for the convenience of
the
Company and not because it was required or requested to do so by the
Holders. The Company acknowledges that such procedure with respect to
the Transaction Documents in no way creates a presumption that the Holders
are
in any way acting in concert or as a group with respect to the Transaction
Documents or the transactions contemplated hereby or thereby.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-16-
IN
WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed by their respective authorized persons as of
the
date first indicated above.
| URIGEN PHARMACEUTICALS, INC. | |||
|
|
By:
|
/s/ Xxxxxx X. Shamagin | |
| Name: Xxxxxx X. Xxxxxxx | |||
| Title : Chief Financial Officer | |||
| PLATINUM-MONTAUR LIFE SCIENCES, LLC | |||
|
|
By:
|
/s/ Xxxx Xxxxxxxxx | |
| Name: Xxxx Xxxxxxxxx | |||
| Title: Managing Member | |||
-17-
Schedule
I
List
of Holders
PLATINUM-MONTAUR
LIFE SCIENCES, LLC Schedule II
Securities
Permitted to be Included on the Registration Statement
None.
