REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (the “Agreement”) is made and entered into as of
August 9, 2006 by and among IsoRay, Inc., a Minnesota corporation (the
“Company”), and the “Investors” named in that certain Common Stock and Warrant
Purchase Agreement by and among the Company and the Investors (the “Purchase
Agreement”).
The
parties hereby agree as follows:
1. Certain
Definitions.
As
used
in this Agreement, the following terms shall have the following
meanings:
“Affiliate”
means,
with respect to any person, any other person which directly or indirectly
controls, is controlled by, or is under common control with, such
person.
“Business
Day”
means
a
day, other than a Saturday or Sunday, on which banks in New York City are open
for the general transaction of business.
“Common
Stock”
shall
mean the Company’s common stock, par value $0.001 per share, and any securities
into which such shares may hereinafter be reclassified.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Investors”
shall
mean the Investors identified in the Purchase Agreement and any Affiliate or
permitted transferee of any Investor who is a subsequent holder of any Warrants
or Registrable Securities.
“Prospectus”
shall
mean (i) the prospectus included in any Registration Statement, as amended
or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated
by
reference in such prospectus, and (ii) any “free writing prospectus” as defined
in Rule 163 under the Securities Act.
“Register,”
“registered”
and
“registration”
refer
to a registration made by preparing and filing a Registration Statement or
similar document in compliance with the Securities Act (as defined below),
and
the declaration or ordering of effectiveness of such Registration Statement
or
document.
“Registrable
Securities”
shall
mean (i) the Shares, (ii) the Warrant Shares and (iii) any other securities
issued or issuable with respect to or in exchange for Registrable Securities;
provided, that, a security shall cease to be a Registrable Security upon (A)
sale pursuant to a Registration Statement or Rule 144 under the Securities
Act,
or (B) such security becoming eligible for sale by the Investors pursuant to
Rule 144(k).
“Registration
Statement”
shall
mean any registration statement of the Company filed under the Securities Act
that covers the resale of any of the Registrable Securities pursuant to the
provisions of this Agreement, amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits and all material
incorporated by reference in such Registration Statement.
“Required
Investors”
means
the Investors holding a majority of the Registrable Securities.
“SEC”
means
the U.S. Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Shares”
means
the shares of Common Stock issued pursuant to the Purchase
Agreement.
“Warrants”
means
the warrants to purchase shares of Common Stock issued to the Investors pursuant
to the Purchase Agreement.
“Warrant
Shares”
means
the shares of Common Stock issuable upon the exercise of the
Warrants.
2. Registration.
(a) Shelf
Registration.
(i) Promptly
following the closing of the purchase and sale of the securities contemplated
by
the Purchase Agreement (the “Closing Date”) but no later than sixty (60) days
after the Closing Date, the Company shall prepare and file with the SEC one
Registration Statement on Form S-1 or Form SB-2 (or, if both of such forms
are
not then available to the Company, on such form of registration statement as
is
then available to effect a registration for resale of the Registrable
Securities), covering the resale of the Registrable Securities in an amount
at
least equal to the Shares and the Warrant Shares. Subject to any SEC comments,
such Registration Statement shall include the plan of distribution attached
hereto as Exhibit
A.
Such
Registration Statement also shall cover, to the extent allowable under the
Securities Act and the rules promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Registrable
Securities. The Registration Statement (and each amendment or supplement
thereto, and each request for acceleration of effectiveness thereof) shall
be
provided in accordance with Section 3(c) to the Investors and their counsel
prior to its filing or other submission.
(ii) Additional
Registrable Securities.
Upon
the written demand of any Investor following any change in the Exercise Price
(as defined in the Warrant) such that additional shares of Common Stock become
issuable upon the exercise of the Warrants, the Company shall prepare and file
with the SEC one or more Registration Statements on Form S-1 or Form SB-2 (or,
if both of such forms are not then available to the Company, on such form of
registration statement as is then available to effect a registration for resale
of such additional shares of Common Stock (the “Additional Shares”)) or amend
the Registration Statement filed pursuant to clause (i) above, if such
Registration Statement has not previously been declared effective, covering
the
resale of the Additional Shares, but only to the extent the Additional Shares
are not at the time covered by an effective Registration Statement. Such
Registration Statement also shall cover, to the extent allowable under the
Securities Act and the rules promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Additional
Shares. The Registration Statement (and each amendment or supplement thereto,
and each request for acceleration of effectiveness thereof) shall be provided
in
accordance with Section 3(c) to the Investors and their counsel prior to its
filing or other submission.
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(b) Expenses.
The
Company will pay all expenses associated with each registration, including
filing and printing fees, the Company’s counsel and accounting fees and
expenses, costs associated with clearing the Registrable Securities for sale
under applicable state securities laws, listing fees, but excluding discounts,
commissions, fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals fees and other expenses (including fees and
disbursements of counsel to the Investors which shall not exceed $10,000)
incurred by the Investors in connection with the registration with respect
to
the Registrable Securities being sold (the “Registration
Expenses”).
(c) Effectiveness.
(i) The
Company shall use its best efforts to have the Registration Statement declared
effective as soon as practicable. The Company shall notify the Investors by
facsimile or e-mail as promptly as practicable, and in any event, within
twenty-four (24) hours, after any Registration Statement is declared effective
and shall simultaneously provide the Investors with copies of any related
Prospectus to be used in connection with the sale or other disposition of the
securities covered thereby.
(ii) For
not
more than twenty (20) consecutive days or for a total of not more than
forty-five (45) days in any twelve (12) month period, the Company may delay
the
disclosure of material non-public information concerning the Company, by
suspending the use of any Prospectus included in any registration contemplated
by this Section containing such information, the disclosure of which at the
time
is not, in the good faith opinion of the Company, in the best interests of
the
Company (an “Allowed Delay”); provided, however, that the Company may suspend
the use of any Prospectus included in any registration contemplated by this
Section, and such suspension shall not be included in the number of days
constituting an Allowed Delay, for a period commencing on the date that the
Company publicly announces its quarterly or annual earnings and ending on the
date that the SEC declares effective a post-effective amendment to the related
Registration Statement including updated financial statements reflecting such
earnings (an “Update Delay”). Upon the occurrence of an Allowed Delay or an
Update Delay that the Company shall promptly (a) notify the Investors in writing
of the existence of an Allowed Delay or an Update Delay (but in no event,
without the prior written consent of an Investor, shall the Company disclose
to
such Investor any of the facts or circumstances regarding) material non-public
information giving rise to an Allowed Delay, (b) advise the Investors in writing
to cease all sales under the Registration Statement until the end of the Allowed
Delay or Update Delay and (c) use commercially reasonable efforts to terminate
an Allowed Delay or Update Delay as promptly as practicable. The Allowed Delay
and the Update Delay are referred to hereinafter collectively as the “Suspension
Period”.
(d) Additional
Interest.
If:
(i) a
Registration Statement covering the Registrable Securities is not filed with
the
SEC on or before October 16, 2006,
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(ii) a
Registration Statement is filed and declared effective but, during the
Effectiveness Period, shall thereafter cease to be effective or fail to be
usable for its intended purpose without such disability being cured within
ten
Business Days by an effective post-effective amendment to the Registration
Statement, a supplement to the Prospectus or a report filed with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act that cures
such failure; or
(iii) Suspension
Periods exceed an aggregate of 60 days in any 360-day period (each such event
referred to in foregoing clauses (i) through (iii), a “Registration Default”),
then
the
Company will make pro rata payments to each Investor, as liquidated damages
and
not as a penalty, in an amount equal to 2.0% of the portion of Purchase Price
(as defined in the Purchase Agreement) paid by each Investor pursuant to the
Purchase Agreement, for each 30-day period or pro rata for any portion thereof
from and including the day following the Registration Default to but excluding
the day on which the Registration Default has been cured, accruing during the
period during which a Registration Default shall have occurred and be continuing
(the “Blackout Period”); provided, however, that in no event shall the Company
be liable for liquidated damages in excess of 10% of the Purchase Price. Such
payments shall constitute the Investors’ exclusive monetary remedy for such
events, but shall not affect the right of the Investors to seek injunctive
relief. The amounts payable as liquidated damages pursuant to this paragraph
shall be paid monthly within three (3) Business Days of the last day of each
month following the commencement of the Blackout Period until the termination
of
the Blackout Period. Such payments shall be made to each Investor in
cash.
(e) Company
Registration.
(i) If
at any
time or from time to time the Company shall determine to register any of its
securities, either for its own account or the account of any stockholder, in
an
underwritten public offering, the Company will:
(A) promptly
give to each Investor written notice thereof and of each such Investor’s rights
under this Section; and
(B) use
commercially reasonable efforts to include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within ten (10) days after receipt of such written notice
from
the Company, by any Investor, subject to Section(e)(ii).
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(ii) The
right
of any Investor to registration pursuant to Section 2(e)(i) shall be conditioned
upon such Investor’s participation in such underwriting and the inclusion of
Registrable Securities in the underwriting to the extent provided herein. All
Investors proposing to distribute their securities through such underwriting
shall (together with the Company) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting
by
the Company. Notwithstanding any other provision of this Section 2(e), if
the managing underwriter advises the Company in writing that marketing factors
require a limitation of the number of shares to be underwritten, the managing
underwriter may limit the Registrable Securities and other securities to be
distributed through such underwriting, provided, that the Company shall include
in such registration (a) first,
one
hundred percent (100%) of the securities the Company proposes to sell, and
(b) second,
the
amount of Registrable Securities which the Investors have requested to be
included in such registration, such amount to be allocated pro rata among all
requesting Investors on the basis of the relative amount of Registrable
Securities then held by each such Investor together with other holders of rights
similar to those granted in this Agreement on a pari
passu
basis.
The Company shall so advise all Investors distributing their securities through
such underwriting of such limitation, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall
be
allocated among all Investors in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Investors at the
time
of filing the Registration Statement or in such other manner as shall be agreed
to by the Company and holders of a majority in interest of the Registrable
Securities proposed to be included in such registration. To facilitate the
allocation of shares in accordance with the above provisions, the Company may
round the number of shares allocated to any Investor or other selling
stockholder to the nearest one hundred (100) shares. If any Investor does not
agree to the terms of any such underwriting, such Investor shall be excluded
therefrom by written notice from the Company or the underwriter. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration. If shares are so withdrawn from
the
registration and if the number of shares of Registrable Securities to be
included in such registration was previously reduced as a result of marketing
factors, the Company shall then offer to all Investors who have retained the
right to include securities in the registration the right to include additional
securities in the registration in an aggregate amount equal to the number of
shares so withdrawn, with such shares to be allocated among the persons
requesting additional inclusion in accordance with this Section 2(e)(ii).
The registrations provided for in this Section 2(e) are in addition to, and
not in lieu of the registrations made on behalf of the Investors as described
elsewhere in this Section 2.
(iii) The
Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 2(e) prior to the effectiveness of such registration
whether or not any Investor has elected to include securities in such
registration. The Registration Expenses of the Investors relating to such
withdrawn registration shall be borne by the Company.
3. Company
Obligations.
The
Company will use commercially reasonable efforts to effect the registration
of
the Registrable Securities in accordance with the terms hereof, and pursuant
thereto the Company will, as expeditiously as possible:
(a) cause
such Registration Statement to become effective and to remain continuously
effective for a period that will terminate upon the earlier of (i) the date
on
which all Registrable Securities covered by such Registration Statement as
amended from time to time, have been sold, and (ii) the date on which all
Registrable Securities covered by such Registration Statement may be sold
pursuant to Rule 144(k) (the “Effectiveness Period”) and advise the Investors in
writing when the Effectiveness Period has expired;
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(b) prepare
and file with the SEC such amendments and post-effective amendments to the
Registration Statement and the Prospectus as may be necessary to keep the
Registration Statement effective for the Effectiveness Period and to comply
with
the provisions of the Securities Act and the Exchange Act with respect to
the
distribution of all of the Registrable Securities covered thereby;
(c) provide
copies to and permit counsel designated by the Investors to review each
Registration Statement and all amendments and supplements thereto no fewer
than
three (3) Business Days prior to their filing with the SEC and not file any
document to which such counsel reasonably objects;
(d) furnish
to the Investors and their legal counsel (i) promptly after the same is prepared
and publicly distributed, filed with the SEC, or received by the Company
(but
not later than two (2) Business Days after the filing date, receipt date
or
sending date, as the case may be) one (1) copy of any Registration Statement
and
any amendment thereto, each preliminary prospectus and Prospectus and each
amendment or supplement thereto, and (ii) such number of copies of a Prospectus,
including a preliminary prospectus, and all amendments and supplements thereto
and such other documents as each Investor may reasonably request in order
to
facilitate the disposition of the Registrable Securities owned by such Investor
that are covered by the related Registration Statement;
(e) use
commercially reasonable efforts to (i) prevent the issuance of any stop order
or
other suspension of effectiveness and, (ii) if such order is issued, obtain
the
withdrawal of any such order at the earliest possible moment;
(f) prior
to
any public offering of Registrable Securities, register or qualify or cooperate
with the Investors and their counsel in connection with the registration
or
qualification of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions requested by the Investors
and
do any and all other commercially reasonable acts or things necessary or
advisable to enable the distribution in such jurisdictions of the Registrable
Securities covered by the Registration Statement;
(g) use
commercially reasonable efforts to cause all Registrable Securities covered
by a
Registration Statement to be listed on each securities exchange, interdealer
quotation system or other market on which similar securities issued by the
Company are then listed;
(h) immediately
notify the Investors, at any time prior to the end of the Effectiveness Period,
upon discovery that, or upon the happening of any event as a result of which,
the Prospectus includes an untrue statement of a material fact or omits to
state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and promptly prepare, file with the SEC and furnish to such Investor a
supplement to or an amendment of such Prospectus as may be necessary so that
such Prospectus shall not include an untrue statement of a material fact
or omit
to state a material fact required to be stated therein or necessary to make
the
statements therein not misleading in light of the circumstances then existing;
and
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(i) comply
with all applicable rules and regulations of the SEC under the Securities
Act
and the Exchange Act, including, without limitation, Rule 172 under the
Securities Act, file any final Prospectus, including any supplement or amendment
thereof, with the SEC pursuant to Rule 424 under the Securities Act, promptly
inform the Investors in writing if, at any time during the Effectiveness
Period,
the Company does not satisfy the conditions specified in Rule 172 and, as
a
result thereof, the Investors are required to deliver a Prospectus in connection
with any disposition of Registrable Securities and take such other actions
as
may be reasonably necessary to facilitate the registration of the Registrable
Securities hereunder; and make available to its security holders, as soon
as
reasonably practicable, but not later than the Availability Date (as defined
below), an earnings statement covering a period of at least twelve (12) months,
beginning after the effective date of each Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act, including Rule 158 promulgated thereunder (for the purpose
of
this subsection 3(i), “Availability Date” means the 45th day following the end
of the fourth fiscal quarter that includes the effective date of such
Registration Statement, except that, if such fourth fiscal quarter is the
last
quarter of the Company’s fiscal year, “Availability Date” means the 90th day
after the end of such fourth fiscal quarter).
(j) With
a
view to making available to the Investors the benefits of Rule 144 (or its
successor rule) and any other rule or regulation of the SEC that may at any
time
permit the Investors to sell shares of Common Stock to the public without
registration, the Company covenants and agrees to: (i) make and keep public
information available, as those terms are understood and defined in Rule
144,
until the earlier of (A) six months after such date as all of the Registrable
Securities may be resold pursuant to Rule 144(k) or any other rule of similar
effect or (B) such date as all of the Registrable Securities shall have been
resold; (ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Exchange Act; and (iii) furnish
to
each Investor upon request, as long as such Investor owns any Registrable
Securities, (A) a written statement by the Company that it has complied with
the
reporting requirements of the Exchange Act, (B) a copy of the Company’s most
recent Annual Report on Form 10-KSB or Quarterly Report on Form 10-QSB, and
(C)
such other information as may be reasonably requested in order to avail such
Investor of any rule or regulation of the SEC that permits the selling of
any
such Registrable Securities without registration.
4. Due
Diligence Review; Information.
The
Company shall make available, during normal business hours, for inspection
and
review by the Investors, advisors to and representatives of the Investors
(who
may or may not be affiliated with the Investors and who are reasonably
acceptable to the Company), all financial and other records, all filings
with
the SEC, and all other corporate documents and properties of the Company
as may
be reasonably necessary for the purpose of such review, and cause the Company’s
officers, directors and employees, promptly, to supply all such information
reasonably requested by the Investors or any such representative, advisor
or
underwriter in connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries reasonably made
or
submitted by any of them), prior to and from time to time after the filing
and
effectiveness of the Registration Statement for the sole purpose of enabling
the
Investors and such representatives, advisors and underwriters and their
respective accountants and attorneys to conduct initial and ongoing due
diligence with respect to the Company and the accuracy of such Registration
Statement.
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The
Company shall not disclose material nonpublic information to the Investors,
or
to advisors to or representatives of the Investors, unless prior to disclosure
of such information the Company identifies such information as being material
nonpublic information and provides the Investors, such advisors and
representatives with the opportunity to accept or refuse to accept such material
nonpublic information for review and any Investor wishing to obtain such
information enters into an appropriate confidentiality agreement with the
Company with respect thereto.
5. Obligations
of the Investors.
(a) Each
Investor shall furnish in writing to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company
may
reasonably request. At least five (5) Business Days prior to the first
anticipated filing date of any Registration Statement, the Company shall
notify
each Investor of the information the Company requires from such Investor
if such
Investor elects to have any of the Registrable Securities included in the
Registration Statement. An Investor shall provide such information to the
Company at least three (3) Business Days prior to the first anticipated filing
date of such Registration Statement if such Investor elects to have any of
the
Registrable Securities included in the Registration Statement. The Company
shall
not have any obligation hereunder with respect to Registrable Securities
held by
an Investor that does not comply with the terms and conditions of this
Agreement.
(b) Each
Investor, by its acceptance of the Registrable Securities agrees to cooperate
with the Company as reasonably requested by the Company in connection with
the
preparation and filing of a Registration Statement hereunder, unless such
Investor has notified the Company in writing of its election to exclude all
of
its Registrable Securities from such Registration Statement.
(c) Each
Investor agrees that, upon receipt of any notice from the Company of either
(i)
the commencement of an Allowed Delay or an Update Delay pursuant to Section
2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h) hereof,
such
Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities,
until the Investor is advised by the Company that such dispositions may again
be
made.
6. Indemnification.
(a) Indemnification
by the Company.
The
Company will indemnify and hold harmless each Investor and its officers,
directors, members, employees and agents, successors and assigns, and each
other
person, if any, who controls such Investor within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several,
to
which they may become subject under the Securities Act or otherwise, insofar
as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement, any
preliminary Prospectus or final Prospectus, or any amendment or supplement
thereof; (ii) any blue sky application or other document executed by the
Company
specifically for that purpose or based upon written information furnished
by the
Company filed in any state or other jurisdiction in order to qualify any
or all
of the Registrable Securities under the securities laws thereof; (iii) the
omission or alleged omission to state therein a material fact required to
be
stated therein or necessary to make the statements therein not misleading;
(iv)
any violation by the Company or its agents of any rule or regulation promulgated
under the Securities Act applicable to the Company or its agents and relating
to
action or inaction required of the Company in connection with such registration;
or (v) any failure to register or qualify the Registrable Securities included
in
any such Registration in any state where the Company or its agents has
affirmatively undertaken or agreed in writing that the Company will undertake
such registration or qualification on an Investor’s behalf and will reimburse
such Investor, and each such officer, director or member and each such
controlling person for any legal or other expenses reasonably incurred by
them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided,
however,
that
the Company will not be liable in any such case if and to the extent that
any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so
made in
conformity with information furnished by such Investor or any such controlling
person in writing specifically for use in such Registration Statement or
Prospectus.
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(b) Indemnification
by the Investors.
Each
Investor agrees, severally but not jointly, to indemnify and hold harmless,
to
the fullest extent permitted by law, the Company, its directors, officers,
employees, stockholders and each person who controls the Company (within
the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expense (including reasonable attorney fees) resulting from any untrue
statement of a material fact or any omission of a material fact required
to be
stated in the Registration Statement or Prospectus or preliminary Prospectus
or
amendment or supplement thereto or necessary to make the statements therein
not
misleading, to the extent, but only to the extent that such untrue statement
or
omission is contained in any information furnished in writing by such Investor
to the Company specifically for inclusion in such Registration Statement
or
Prospectus or amendment or supplement thereto. In no event shall the liability
of an Investor be greater in amount than the dollar amount of the proceeds
(net
of all expense paid by such Investor in connection with any claim relating
to
this Section 6 and the amount of any damages such Investor has otherwise
been
required to pay by reason of such untrue statement or omission) received
by such
Investor upon the sale of the Registrable Securities included in the
Registration Statement giving rise to such indemnification
obligation.
(c) Conduct
of Indemnification Proceedings.
Any
person entitled to indemnification hereunder shall (i) give prompt notice
to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim
with
counsel reasonably satisfactory to the indemnified party; provided
that any
person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the
fees
and expenses of such counsel shall be at the expense of such person unless
(a)
the indemnifying party has agreed to pay such fees or expenses, or (b) the
indemnifying party shall have failed to assume the defense of such claim
and
employ counsel reasonably satisfactory to such person or (c) in the reasonable
judgment of any such person, based upon written advice of its counsel, a
conflict of interest exists between such person and the indemnifying party
with
respect to such claims (in which case, if the person notifies the indemnifying
party in writing that such person elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have
the
right to assume the defense of such claim on behalf of such person); 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 hereunder, except to the
extent that such failure to give notice shall materially adversely affect
the
indemnifying party in the defense of any such claim or litigation. It is
understood that the indemnifying party shall not, in connection with any
proceeding in the same jurisdiction, be liable for fees or expenses of more
than
one separate firm of attorneys at any time for all such indemnified parties.
No
indemnifying party will, except with the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement that 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 of such
claim or litigation.
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(d) Contribution.
If for
any reason the indemnification provided for in the preceding paragraphs (a)
and
(b) is unavailable to an indemnified party or insufficient to hold it harmless,
other than as expressly specified therein, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result
of
such loss, claim, damage or liability in such proportion as is appropriate
to
reflect the relative fault of the indemnified party and the indemnifying
party,
as well as any other relevant equitable considerations. 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 not guilty
of
such fraudulent misrepresentation. In no event shall the contribution obligation
of an Investor be greater in amount than the dollar amount of the proceeds
(net
of all expenses paid by such Investor in connection with any claim relating
to
this Section 6 and the amount of any damages such Investor has otherwise
been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission) received by it upon the sale of the Registrable Securities
giving rise to such contribution obligation.
7. Miscellaneous.
(a) Amendments
and Waivers.
This
Agreement may be amended only by a writing signed by the Company and the
Required Investors. The Company may take any action herein prohibited, or
omit
to perform any act herein required to be performed by it, only if the Company
shall have obtained the written consent to such amendment, action or omission
to
act, of the Required Investors.
(b) Notices.
Any
notices, reports or other correspondence (hereinafter collectively referred
to
as “correspondence”) required or permitted to be given hereunder shall be in
writing and shall be sent by postage prepaid first class mail, courier or
telecopy or delivered by hand to the party to whom such correspondence is
required or permitted to be given hereunder, and shall be deemed sufficient
upon
receipt when delivered personally or by courier, overnight delivery service
or
confirmed facsimile, or three (3) business days after being deposited in
the
regular mail as certified or registered mail (airmail if sent internationally)
with postage prepaid, if such notice is addressed to the party to be notified
at
such party's address or facsimile number as set forth below:
(i) All
correspondence to the Company shall be addressed as follows:
-10-
000
Xxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Attention:
Xxxxx
Xxxxxx, CEO
with
a
copy to:
Xxxxxxx
X. Xxxxxxxxxx, Esq.
Xxxxxx
Xxxxxxxx, PLC
0000
Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Facsimile:
(000) 000-0000
(ii) All
correspondence to any Investor shall be sent to such Investor at the address
set
forth in Exhibit A
to the
Purchase Agreement.
(iii) Any
person or entity may change the address to which correspondence to it is
to be
addressed by written notification as provided for herein.
(c) Assignments
and Transfers by Investors.
The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the Investors and their respective successors and assigns. An Investor may
transfer or assign, in whole or from time to time in part, to one or more
persons its rights hereunder in connection with the transfer of Registrable
Securities by such Investor to such person, provided that such Investor complies
with all laws applicable thereto and provides written notice of assignment
to
the Company promptly after such assignment is effected.
(d) Assignments
and Transfers by the Company.
This
Agreement may not be assigned by the Company (whether by operation of law
or
otherwise) without the prior written consent of the Required Investors,
provided, however, that the Company may assign its rights and delegate its
duties hereunder to any surviving or successor corporation in connection
with a
merger or consolidation of the Company with another corporation, or a sale,
transfer or other disposition of all or substantially all of the Company’s
assets to another corporation, without the prior written consent of the Required
Investors, after notice duly given by the Company to each Investor.
(e) Benefits
of the Agreement.
The
terms and conditions of this Agreement shall inure to the benefit of and
be
binding upon the respective permitted successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon
any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
(f) Counterparts;
Faxes.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. This Agreement may also be executed via facsimile, which shall
be
deemed an original.
-11-
(g) Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only
and
are not to be considered in construing or interpreting this
Agreement.
(h) Severability.
Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof but shall be interpreted as if it were written so as to
be
enforceable to the maximum extent permitted by applicable law, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate
or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law
which
renders any provisions hereof prohibited or unenforceable in any
respect.
(i) Further
Assurances.
The
parties shall execute and deliver all such further instruments and documents
and
take all such other actions as may reasonably be required to carry out the
transactions contemplated hereby and to evidence the fulfillment of the
agreements herein contained.
(j) Entire
Agreement.
This
Agreement is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(k) Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.
This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles
thereof. Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York located in New York County
and the United States District Court for the Southern District of New York
for
the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Agreement and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding may be served
on
each party hereto anywhere in the world by the same methods as are specified
for
the giving of notices under this Agreement. Each of the parties hereto
irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court. Each party
hereto
irrevocably waives any objection to the laying of venue of any such suit,
action
or proceeding brought in such courts and irrevocably waives any claim that
any
such suit, action or proceeding brought in any such court has been brought
in an
inconvenient forum.
-12-
IN
WITNESS WHEREOF, the parties have executed this Agreement or caused their
duly
authorized officers to execute this Agreement as of the date first above
written.
| The Company: | ISORAY INC. | |
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxx | |
|
Name: Xxxxx X. Xxxxxx |
||
| Title: CEO | ||
-13-
