EXHIBIT 10.18(d)
INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (the "Agreement") is entered
into this 5th day of July, 2002, by and between AspenBio, Inc., a Colorado
corporation (the "Company") and Xxxxxxx X. Xxxxx, a resident of Englewood,
Colorado (the "Purchaser").
RECITALS
A. On the date hereof, the Purchaser acquired from the Company a
convertible note in the principal amount of $500,000 (the "Note") and a warrant
to purchase up to 275,000 shares of Common Stock (the "Warrant") in
consideration of the Purchaser's agreement to advance funds to the Company.
B. The Purchaser required that the Company enter into this Agreement to
provide rights for the Purchaser as a condition to the Purchaser's agreement to
advance funds to the Company.
STATEMENT OF AGREEMENT
NOW THEREFORE, in consideration of the premises and of the respective
covenants and provisions herein contained, and intending to be legally bound
hereby, the parties agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the meanings
ascribed to them below:
"Affiliate" means (i) with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person or (ii) with respect to any
individual, the spouse, child, step-child, grandchild, niece, nephew or parent
of such Person, or the spouse thereof.
"Common Stock" means the Common Stock of the Company and any equity
securities issued or issuable with respect to the Common Stock in connection
with a reclassification, recapitalization, merger, consolidation or other
reorganization.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivisions thereof.
"Registrable Securities" means any (i) of the shares of Common Stock
issuable or issued upon conversion of the Note, (ii) shares of Common Stock
issuable or issued upon exercise of the Warrant, (iii) any shares of Common
Stock Purchaser now owns or hereinafter acquires, and (iv) any other shares of
Common Stock issued or issuable, directly or indirectly, with respect to the
Common Stock referenced in clauses (i), (ii) or (iii) or by way of stock
dividend, stock split or combination of shares. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when (a) a
registration statement filed pursuant to a Demand Registration Request (as
defined in Section 2.2 herein) with respect to such securities shall have been
declared effective under the Securities Act and the Company has materially
complied with Section 2.3(b) herein, or (b) such securities shall have been
disposed of in accordance with a registration described in Section 2.1 herein
("Piggyback Registration"), or (c) such securities shall have been sold pursuant
to Rule 144 (or any successor provision) under the Securities Act, or (d) such
securities are eligible for sale under Rule 144(k) (or any successor provision)
under the Securities Act. Provided, however, that Registrable Securities which
otherwise would cease to be considered Registrable Securities as a result of
item (a) above shall remain Registrable Securities solely for the purposes of
Section 2.1 herein.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
2. Registration Rights.
2.1 Piggyback Registrations.
(a) Piggyback Registrations. If, at any time between
September 30, 2002 and June 30, 2005 the Company proposes to register
its Common Stock under the Securities Act in connection with the public
offering of Common Stock (other than a registration relating solely to
the sale of Common Stock to participants in an employee benefit plan or
with respect to any corporate reorganization or other transaction under
Rule 145 of the Securities Act) whether or not for its own account, the
Company shall give prompt written notice of its intention to do so to
the Purchaser. Upon the written request of the Purchaser made within 15
days following the receipt of any such written notice (which request
shall specify the Registrable Securities intended to be disposed of by
the Purchaser and the intended method of distribution thereof), the
Company shall cause all such Registrable Securities to be registered
under the Securities Act (with the securities which the Company at the
time proposes to register) to permit the sale or other disposition by
the Purchaser (in accordance with the intended method of distribution
thereof) of the Registrable Securities to be so registered.
(b) Abandonment or Delay. If, at any time after
giving written notice of its intention to register its Common Stock and
prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any
reason not to register or to delay registration of its Common Stock,
the Company may, at its election, give written notice of such
determination to the Purchaser and (i) in the case of a determination
not to register, shall be relieved of its obligation to register any
Registrable Securities in connection with such abandoned registration,
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without prejudice, however, to the rights of the Purchaser under
Section 2.1(a), and (ii) in the case of a determination to delay such
registration of its Common Stock shall be permitted to delay the
registration of such Registrable Securities for the same period as the
delay in registering its Common Stock.
(c) The Purchaser's Right to Withdraw. The Purchaser
shall have the right to withdraw his request for inclusion of his
Registrable Securities in any registration statement pursuant to this
Section 2.1 by giving written notice to the Company of his request to
withdraw.
(d) Underwriting Requirements. In connection with any
offering involving an underwriting of the Common Stock, the Company
shall not be required under Section 2.1 to include any of the
Registrable Securities in such underwriting unless the Purchaser
accepts the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it (or by other Persons
entitled to select the underwriters), and then only in such quantity as
the underwriters determine in their sole discretion will not jeopardize
the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by Persons to
be included in such offering exceeds the amount of securities that the
underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include
in the offering only that number of shares of Common Stock, including
Registrable Securities, which the underwriters determine in their
discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the Persons
that have requested securities to be included in such offering
according to the total amount of securities entitled to be included
therein owned by each Person or in such proportions as shall mutually
be agreed to by such Persons). In the event that the underwriters
determine that the total amount of securities requested to be included
in the offering exceeds the amount that the underwriters determine is
compatible with the success of the offering, then the underwriters
shall provide written notice of such determination to the Purchaser.
2.2 Demand Registration.
(a) Request for Registration. Except as provided in
Section 2.2(e) below, the Purchaser shall be entitled to one Demand
Registration Request as defined herein. Subject to Section 2.2(c), at
any time between September 30, 2002 and June 30, 2005 the Purchaser
shall have the right to require the Company to file a registration
statement under the Securities Act covering the Registrable Securities,
by delivering a written request therefor to the Company specifying the
Registrable Securities to be included in such registration by the
Purchaser and the intended method of distribution thereof. Any such
request pursuant to this Section 2.2(a) is referred to herein as the
"Demand Registration Request" and the registration so requested is
referred to herein as the "Demand Registration".
(b) Registration. The Company shall, as expeditiously
as possible following the Demand Registration Request, use commercially
best efforts to effect such registration under the Securities Act
(including, without limitation, by means of a shelf
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registration pursuant to Rule 415 under the Securities Act if so
requested and if the Company is then eligible to use such a
registration) of the Registrable Securities which the Company has been
so requested to register, for distribution in accordance with such
intended method of distribution.
(c) Limitations on Requested Registration. The rights
of the Purchaser to request the Demand Registration pursuant to Section
2.2(a) are subject to the following limitations: (i) the Purchaser
shall not be entitled to a Demand Registration Request if the Purchaser
has not converted the Note, or some portion of the Note, into a minimum
of 133,334 shares of Common Stock, (ii) except as provided in Section
2.2(e), in no event shall the Purchaser be entitled to more than one
Demand Registration Request, (iii) if the request is made prior to
December 31, 2002 and the Board of Directors of the Company makes a
reasonable good faith determination that the payment of the legal and
accounting fees and other pertinent expenses incident to the filing and
prosecution of the registration statement would have a material adverse
effect on the financial condition of the Company, the Company shall not
be required to comply with the Demand Registration Request, or (iv) if
the Purchaser has participated in a Demand Registration in a 90 day
period preceding the request. Notwithstanding anything in this Section
2.2(c) to the contrary, the Company shall be required to comply with
the Demand Registration Request if the Purchaser agrees to pay such
expenses.
(d) Company Registration. During the period starting
with the date of filing of, and ending on a date 180 days after the
effective date of, a registration subject to Section 2.1 hereof, the
Company shall not be obligated to effect, or take any action to effect,
any registration pursuant to this Section 2.2; provided that the
Company is actively employing good faith and commercially best efforts
to cause such registration statement to become effective. In the event
that the Company determines not to pursue a registration or to withdraw
a registration that has been filed, notice of such action will be
provided promptly by the Company to the Purchaser.
(e) Underwriting Requirements. If the Purchaser
intends to distribute the Registrable Securities by means of an
underwriting, he shall so advise the Company as a part of his request
made pursuant to Section 2.2(a). The underwriter will be selected by
the Purchaser and shall be reasonably acceptable to the Company. All
Persons, including the Purchaser, proposing to distribute their Common
Stock through such underwriting shall (together with the Company as
provided in Section 2.7) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provisions of this Section 2.2,
if the underwriter advises the Purchaser in writing that marketing
factors require a limitation of the number of shares to be
underwritten, then the number of shares of Registrable Securities and
other securities that may be included in the underwriting shall be
allocated among the Purchaser and other Persons whose Common Stock the
Company has agreed may be included in the offering (collectively, the
"Selling Shareholders") in proportion (as nearly practicable) to the
amount of Common Stock owned by the Purchaser and the other Selling
Shareholders; provided, however, that the number of shares of
Registrable Securities or Common Stock of the Selling Shareholders the
Company has agreed may be included in the offering shall not be reduced
unless all other securities of the Company,
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for its own account, are first entirely excluded from the underwriting
and registration. In the event that notice is received from the
underwriter that the number of shares to be underwritten should be
limited, and as a result of such limitation Purchaser will continue to
hold 133,334 or more shares of Registrable Securities, then the
offering shall not be deemed to be the Demand Registration Request.
2.3 Registration Procedures. If and whenever the Company is
required by the provisions of this Agreement to use commercially best efforts to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided in this Agreement, the Company shall, as
expeditiously as possible:
(a) prepare and file with the SEC a registration
statement on an appropriate registration form of the SEC for the
disposition of such Registrable Securities in accordance with the
intended method of disposition thereof, which form (i) shall be
selected by the Company and (ii) shall, in the case of a shelf
registration, be available for the sale of the Registrable Securities
by the Purchaser and such registration statement shall comply as to
form in all material respects with the requirements of the applicable
form and include all financial statements required by the SEC to be
filed therewith, and the Company shall use its best efforts to cause
such registration statement to become effective (provided, however,
that before filing a registration statement or prospectus or any
amendments or supplements thereto, or comparable statements under
securities or blue sky laws of any jurisdiction, the Company will
furnish to one counsel for the Purchaser participating in the planned
offering and the underwriters, if any, copies of all such documents
proposed to be filed (including all exhibits thereto), which documents
will be subject to the reasonable review and reasonable comment of such
counsel, and the Company shall not file any registration statement or
amendment thereto or any prospectus or supplement thereto to which the
underwriters, if any, shall reasonably object in writing);
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for such period (which shall not be required to
exceed 180 days in the case of a Demand Registration and shall not
exceed 90 days for all other registrations unless mutually agreed to in
writing by the parties) as any seller of Registrable Securities
pursuant to such registration statement shall request and to comply
with the provisions of the Securities Act with respect to the sale or
other disposition of all Registrable Securities covered by such
registration statement in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such
registration statement;
(c) furnish, without charge, to the Purchaser and
each underwriter, if any, of the securities covered by such
registration statement such number of copies of such registration
statement, each amendment and supplement thereto (in each case
including all exhibits), and the prospectus included in such
registration statement (including each preliminary prospectus) in
conformity with the requirements of the Securities Act, and other
documents, as the Purchaser and underwriter may reasonably request in
order to facilitate the public sale or other disposition of the
Registrable
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Securities owned by the Purchaser (the Company hereby consenting to the
use in accordance with applicable law of each such registration
statement (or amendment or post-effective amendment thereto) and each
such prospectus (or preliminary prospectus or supplement thereto) by
the Purchaser and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by such
registration statement or prospectus);
(d) use its best efforts to register or qualify the
Registrable Securities covered by such registration statement under
such other securities or "blue sky" laws of such jurisdictions as the
Purchaser or any managing underwriter, if any, shall reasonably request
in writing, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such sellers or
underwriter, if any, to consummate the disposition of the Registrable
Securities in such jurisdictions, except that in no event shall the
Company be required to qualify to do business as a foreign corporation
in any jurisdiction where it would not, but for the requirements of
this paragraph (d), be required to be so qualified, to subject itself
to taxation in any such jurisdiction or to consent to general service
of process in any such jurisdiction;
(e) promptly notify the Purchaser and each managing
underwriter, if any: (i) when the registration statement, any
pre-effective amendment, the prospectus or any prospectus supplement
related thereto or post-effective amendment to the registration
statement has been filed and, with respect to the registration
statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the SEC or state securities authority
for amendments or supplements to the registration statement or the
prospectus related thereto or for additional information; (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of
the registration statement or the initiation of any proceedings for
that purpose; (iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification of any Registrable
Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation of any proceeding for such purpose; (v)
of the existence of any fact of which the Company becomes aware which
results in the registration statement, the prospectus related thereto
or any document incorporated therein by reference containing an untrue
statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make any statement
therein not misleading; and (vi) if at any time the representations and
warranties contemplated by Section 3 below cease to be true and correct
in all material respects, and, if the notification relates to an event
described in clause (v), the Company shall promptly prepare and furnish
to each such seller and each underwriter, if any, a reasonable number
of copies of a prospectus supplemented or amended so that, as
thereafter delivered to the purchasers of such Registrable Securities,
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 in the light of the
circumstances under which they were made not misleading;
(f) enter into such customary agreements (including,
if applicable, an underwriting agreement) and take such other actions
as the Purchaser shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities. The Persons
who are holders of the Registrable Securities which are to be
distributed by
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such underwriters shall be parties to such underwriting agreement and
may, at their option, require that the Company make to and for the
benefit of such Persons the representations, warranties and covenants
of the Company which are being made to and for the benefit of such
underwriters and which are of the type customarily provided in
secondary offerings;
(g) if an opinion or letter from (i) the Company's
counsel or (ii) an independent accountant of the Company is delivered
to any underwriters in the offering, the Company shall furnish to the
Purchaser, a copy of such opinion and letter addressed to the
Purchaser;
(h) delivery promptly to the Purchaser and each
underwriter, if any, copies of all correspondence between the
Commission and the Company, its counsel or auditors and any memoranda
relating to discussions with the Commission or its staff with respect
to the registration statement, other than those portions of any such
memoranda which contain information subject to attorney-client
privilege with respect to the Company, and, upon receipt of such
confidentiality agreements as the Company may reasonably request, make
reasonably available for inspection by the Purchaser, by any
underwriter, if any, participating in any disposition to be effected
pursuant to such registration statement and by any attorney, accountant
or other agent retained by the Purchaser or any such underwriter, all
pertinent financial and other records, pertinent corporate documents
and properties of the Company, and cause all of the Company's officers,
directors and employees to supply all information reasonably requested
by the Purchaser, underwriter, attorney, accountant or agent in
connection with such registration statement provided the recipient of
such information seeks such information in good faith and for a proper
purpose;
(i) make reasonably available its employees and
personnel and otherwise provide reasonable assistance to the
underwriters (taking into account the needs to the Company's businesses
and the requirements of the marketing process) in the marketing of
Registrable Securities in any underwritten offering;
(j) cooperate with the Purchaser and the managing
underwriters, if any, to facilitate the timely preparation and delivery
of certificates not bearing any restrictive legends representing the
Registrable Securities to be sold, and cause such Registrable
Securities to be issued in such denominations and registered in such
names in accordance with the underwriting agreement prior to any sale
of Registrable Securities to the underwriters or, if not an
underwritten offering, in accordance with the instructions of the
selling holders of the Registrable Securities at least three business
days prior to any sale of Registrable Securities; and
(k) take all such other commercially reasonable
actions as are necessary or advisable in order to expedite or
facilitate the disposition of such Registrable Securities.
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2.4 Registration Expenses.
(a) "Expenses" shall mean any and all fees and
expenses incident to the Company's performance of or compliance with
this Article 2, including, without limitation: (i) SEC, stock exchange
or NASD registration, listing and filing fees and all listing fees and
fees with respect to the including of securities in NASDAQ, (ii) fees
and expenses of compliance with state securities or "blue sky" laws and
in connection with the preparation of a "blue sky" survey, including
without limitation, reasonable fees and expenses of blue sky counsel,
(iii) printing and copying expenses, (iv) messenger and delivery
expenses, (v) fees and disbursements of counsel for the Company, (vi)
fees and disbursements of all independent public accountants (including
the expenses of any audit and/or "cold comfort" letter) and fees and
expenses of other persons, including special experts, retained by the
Company, and (vii) any other fees and disbursements of underwriters, if
any, customarily paid by issuers or sellers of securities
(collectively, "Expenses").
(b) The Company shall pay all Expenses with respect
to any Demand Registration, whether or not it becomes effective or
remains effective for the period contemplated by Section 2.3(b), and
with respect to any registration effected under Section 2.1.
(c) Notwithstanding the foregoing, (x) the provisions
of this Section 2.4 shall be deemed amended to the extent necessary to
cause these expense provisions to comply with "blue sky" laws of each
state in which the offering is made and (y) in connection with any
registration hereunder, the Purchaser shall pay all underwriting
discounts and commissions and any transfer taxes, if any, attributable
to the sale of his Registrable Securities, pro rata with respect to
payments of discounts and commissions in accordance with the number of
shares sold in the offering by the Purchaser, and (z) the Company
shall, in the case of all registrations under this Article 2, be
responsible for all its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties).
2.5 Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 2
with respect to the Registrable Securities of the Purchaser that the Purchaser
shall furnish to the Company such information regarding himself, the Registrable
Securities held by him, and the intended method of disposition of such
securities as shall be required to effect the registration of the Purchaser's
Registrable Securities.
2.6 Indemnification.
(a) In the event of any registration of any
securities of the Company under the Securities Act pursuant to this
Article 2, the Company will, and hereby does, indemnify and hold
harmless, to the fullest extent permitted by law, the Purchaser, its
agents and representatives against any and all losses, claims, damages
or liabilities, joint or several, actions or proceedings (whether
commenced or threatened) in respect thereof ("Claims") and expenses
(including reasonable fees of counsel and any amounts paid in
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any settlement effected with the Company's consent, which consent shall
not be unreasonably withheld or delayed) to which such indemnified
party may become subject under the Securities Act or otherwise, insofar
as such Claims or expenses arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such securities
were registered under the Securities Act, together with the documents
incorporated by reference therein, or 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, or (ii) any
untrue statement or alleged untrue statement of a material fact
contained in any preliminary, final or summary prospectus or any
amendment or supplement thereto, together with the documents
incorporated by reference therein, or the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company shall not be liable to such indemnified party
in any such case to the extent such Claim or expense arises out of or
is based upon any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission of a material fact in
such registration statement or amendment thereof or supplement thereto
or in any such prospectus or any preliminary, final or summary
prospectus in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such indemnified party
specifically for use therein. Such indemnity and reimbursement of
expenses shall remain in full force and effect regardless of any
investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such seller.
(b) In the event of any registration of any
securities of the Company under the Securities Act pursuant to this
Article 2, the Purchaser will, and hereby does, indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its
shareholders, directors, officers, agents and representatives, and each
other person, if any, who controls the Company within the meaning of
the Securities Act, against any and all losses, claims, damages or
liabilities, joint or several, actions or proceedings (whether
commenced or threatened) in respect thereof ("Claims") and expenses
(including reasonable fees of counsel and any amounts paid in any
settlement effected with the Purchaser's consent, which consent shall
not be unreasonably withheld or delayed) to which each such indemnified
party may become subject under the Securities Act or otherwise, insofar
as such Claims or expenses arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such securities
were registered under the Securities Act, together with the documents
incorporated by reference therein, or 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, or (ii) any
untrue statement or alleged untrue statement of a material fact
contained in any preliminary, final or summary prospectus or any
amendment or supplement thereto, together with the documents
incorporated by reference therein, or the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Purchaser shall not be liable to any such indemnified
party in any such case to the extent such Claim or expense arises out
of or is based upon any
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untrue statement or alleged untrue statement of a material fact or
omission or alleged omission of a material fact in such registration
statement or amendment thereof or supplement thereto or in any such
prospectus or any preliminary, final or summary prospectus unless it is
contained in the written information furnished to the Company by or on
behalf of the Purchaser specifically for use therein; provided,
further, that the obligation to indemnify will be limited to the amount
of proceeds received by the Purchaser from the sale of Registrable
Securities pursuant to such registration statement. Such indemnity and
reimbursement of expenses shall remain in full force and effect
regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by
the Purchaser.
(c) Any person entitled to indemnification under this
Agreement shall notify promptly the indemnifying party in writing of
the commencement of any action or proceeding with respect to which a
claim for indemnification may be made pursuant to this Section 2.6, but
the failure of any indemnified party to provide such notice shall not
relieve the indemnifying party of its obligations under the preceding
paragraphs of this Section 2.6, except to the extent the indemnifying
party is materially prejudiced thereby and shall not relieve the
indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Section 2. In case any
action or proceeding is brought against an indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, unless
in the reasonable opinion of outside counsel to the indemnified party a
conflict of interest between such indemnified and indemnifying parties
may exist in respect of such claim, to assume the defense thereof
jointly with any other indemnifying party similarly noticed, to the
extent that it chooses, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party that it so chooses, the indemnifying party shall not
be liable to such indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that (i) if the indemnifying party fails to take reasonable
steps necessary to defend diligently the action or proceeding within 20
days after receiving notice from such indemnified party that the
indemnified party believes it has failed to do so; or (ii) if such
indemnified party who is a defendant in any action or proceeding which
is also brought against the indemnifying party reasonably shall have
concluded that there may be one or more legal defenses available to
such indemnified party which are not available to the indemnifying
party; or (iii) if representation of both parties by the same counsel
is otherwise inappropriate under applicable standards of professional
conduct, then, in any such case, the indemnified party shall have the
right to assume or continue its own defense as set forth above, and the
indemnifying party shall be liable for any expenses therefor. No
indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may
be sought hereunder (whether or not the indemnified party is an actual
or potential party to such action or claim) unless such settlement,
compromise or judgment (A) includes an unconditional release of the
indemnified party from all liability arising out of such action or
claim and (B) does not
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include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of any indemnified party.
(d) If for any reason the foregoing indemnity is
unavailable or is insufficient to hold harmless an indemnified party
under Section 2.6 or each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of any
Claim in such proportion as is appropriate to reflect the relative
fault of the indemnifying party, on the one hand, and the indemnified
party, on the other hand, with respect to such offering of securities.
The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue
statement or omission. If, however, the allocation provided in the
second preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to the amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect
not only such relative faults but also the relative benefits of the
indemnifying party and the indemnified party as well as any other
relevant equitable considerations. The parties hereto agree that it
would not be just and equitable if contributions pursuant to this
Section 2.6(d) were to be determined by pro rata allocation or by any
other method of allocation which does not take into account the
equitable considerations referred to in the preceding sentences of this
Section 2.6(d). The amount paid or payable in respect of any Claim
shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such Claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(t) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
2.7 Underwritten Offerings. If requested by the underwriters for any
underwritten offering by the Purchaser of Registrable Securities pursuant to a
registration requested under Article 2, the Company shall enter into a customary
underwriting agreement with the underwriters. Such underwriting agreement shall
be reasonably satisfactory in form and substance to the Purchaser and shall
contain such representations and warranties by, and such other agreements on the
part of, the Company and such other terms as are generally included in the
underwriting agreement of such underwriters, including, without limitations,
indemnities and contribution agreements.
3. Rule 144 Reporting. With a view of making available to the Purchaser the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees to use its best efforts to:
(a) Make and keep public information available, as
those terms are understood and defined in SEC Rule 144 or any successor
rule promulgated under the Securities Act, at all times after the
effective date of the first registration filed by the Company for an
offering of its securities to the general public;
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(b) File with the SEC, in a timely manner, all
reports and other documents required of the Company under the Exchange
Act; and
(c) So long as the Purchaser owns any Registrable
Securities, furnish to the Purchaser forthwith upon request a written
statement by the Company as to its compliance with the reporting
requirements of Rule 144 and of the Exchange Act at any time after it
has become subject to such reporting requirements.
4. General.
4.1 Amendments and Waivers. This Agreement may be amended, modified,
supplemented or waived only upon the written agreement of the party against whom
enforcement of such amendment, modification, supplement or waiver is sought.
4.2 Notices. All notices, elections, request, demands or other
communications required hereunder shall be in writing and shall be deemed given
when sent by facsimile (receipt confirmed electronically), delivered personally,
within three days after mailing when mailed by certified or registered mail,
return receipt requested or within one day after sent by a reputable overnight
carrier, to the parties as follows (or to such other person or place, written
notice of which any party hereto shall have given to the other):
(a) If to the Purchaser: Xxxxxxx Xxxxx
c/o The Kaitar Foundation
0000 Xxxxxxx Xx., Xxxxx 0000
Xxxxxx, XX 00000
Fax: (000) 000-0000
With a Copy to: Xxxxxxxxxx Hyatt & Xxxxxx, P.C.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to Company: AspenBio, Inc.
0000 Xxxxxxxxx Xxx, Xxxxxxxx X-0
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx,
President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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With a Copy to: Krendl Krendl Xxxxxxxx & Way PC
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
and
Xxxxxx Xxxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx,
Esq.
4.3 Miscellaneous.
(a) This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and the
respective successors, personal representatives and assigns. The right
to cause the Company to register the Registrable Securities may be
assigned or otherwise conveyed by the Purchaser to any transferee who
acquires the Registrable Securities, Note or Warrant pursuant to and in
accordance with the documents that govern such securities; provided,
however, that Purchaser provides the Company written notice of such
transfer, stating the name and address of said transferee and said
transferee's agreement to be bound by the provisions of this Agreement
and if such right is assigned or conveyed to more than one person, the
holder of a majority of the Registrable Securities shall be entitled to
effect or cause the Demand Registration Request.
(b) This Agreement as well as the Note and Warrant
between the parties of even date (with the documents referred to herein
or delivered pursuant hereto) embodies the entire agreement and
understanding between the parties hereto and supersedes all prior
agreements and understanding relating to the subject matter hereof.
(c) This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Colorado
without giving effect to the conflicts of law principles thereof.
(d) The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof. All section references are to this Agreement unless
otherwise expressly provided.
(e) This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
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(f) Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
(g) The parties hereto acknowledge that there would
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in
addition to any other remedy to which it may be entitled at law or in
equity, shall be entitled to injunctive relief, including specific
performance, to enforce such obligations without the posting of any
bond, and, if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall
raise the defense that there is an adequate remedy at law.
(h) Each party hereto shall do and perform or cause
to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates,
instruments, and documents as any other party hereto reasonably may
request in order to carry out the intent and accomplish the purposes of
this Agreement and the consummation of the transactions contemplated
hereby.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have executed this
Investor Rights Agreement as of the date set forth above.
ASPENBIO, INC.
By:
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Name:
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Title:
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XXXXXXX X. XXXXX
