REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.2
REGISTRATION
RIGHTS AGREEMENT
(this
"Agreement"),
dated
as of March 16, 2007, by and among Cleveland BioLabs, Inc., a Delaware
corporation, with headquarters located at 00000 Xxxxx Xxx., Xxxxx 000,
Xxxxxxxxx, Xxxx 00000 (the "Company"),
and
the undersigned buyers (each, a "Buyer",
and
collectively, the "Buyers").
WHEREAS:
A. In
connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the "Securities
Purchase Agreement"),
the
Company has authorized a new series of convertible preferred stock of the
Company designated as Series B Convertible Preferred Stock, the terms of which
are set forth in the certificate of designation for such series of preferred
stock (the "Certificate
of Designations")(together
with any convertible preferred shares issued in replacement thereof in
accordance with the terms thereof, the "Preferred
Shares"),
which
Preferred Shares shall be convertible into the Company's common stock, par
value
$0.005 per share (the "Common
Stock"),
in
accordance with the terms of the Certificate of Designations.
B. Pursuant
to the Securities Purchase Agreement, the Company has agreed, upon the terms
and
subject to the conditions set forth in the Securities Purchase Agreement, to
issue and sell to each Buyer (other than the Agents (as defined below)) (i)
certain Preferred Shares of the Company (the "Investor
Preferred Shares")
which,
among other things, will be convertible into shares of Common Stock (as
converted, the "Investor
Conversion Shares"),
in
accordance with the terms of the Certificate of Designations, and (ii) certain
Series B Warrants (the "Investor
Warrants"),
which
will be exercisable to purchase shares of Common Stock (as exercised
collectively, the "Investor
Warrant Shares").
C. Pursuant
to the Securities Purchase Agreement, the Company has also agreed to issue
to
Sunrise Securities Corp. or its designees and certain other placement agents
(collectively, the "Agents"),
(i)
certain Preferred Shares of the Company (the "Agent
Preferred Shares"),
which, among other things, will be convertible into shares of the Common Stock
(as converted, "Agent
Conversion Shares"
and
together with the Investor Conversion Shares, the "Conversion
Shares"),
in
accordance with the terms of the Certificate of Designations, (ii) certain
Series B Warrants (the "Agent
Warrants"),
which
will be exercisable to purchase shares of Common Stock (as exercised
collectively, the "Agent
Warrant Shares")
and
(iii) certain Series C Warrants (the "Retainer
Warrants",
and
together with the Investor Warrants and the Agent Warrants, the "Warrants"),
which
will be exercisable to purchase shares of Common Stock (as exercised
collectively, the "Retainer
Warrant Shares",
and
together with the Investor Warrant Shares and the Agent Warrant Shares, the
"Warrant
Shares").
D. In
accordance with the terms of the Securities Purchase Agreement, the Company
has
agreed to provide certain registration rights under the Securities Act of 1933,
as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the "1933
Act"),
and
applicable state securities laws.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and each of the Buyers hereby agree as
follows:
1. Definitions.
Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
a. "Additional
Effectiveness Date"
means
the date the Additional Registration Statement is declared effective by the
SEC.
b. "Additional
Filing Date"
means
the date on which the Additional Registration Statement (as defined below)
is
filed with the SEC.
c. "Additional
Filing Deadline"
means
if Cutback Shares are required to be included in the Additional Registration
Statement, the date that is the later of (i) six (6) months from the Initial
Effectiveness Date or the last Additional Effectiveness Date, as applicable
and
(ii) sixty (60) days after substantially all of the Registrable Securities
held
by the Investors included in any Registration Statements previously declared
effective hereunder have been sold in accordance therewith.
d. "Additional
Registrable Securities"
means,
(i) any Cutback Shares not previously included on a Registration Statement
and
(ii) any share capital of the Company issued or issuable with respect to such
Cutback Shares, as applicable, as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to
any
limitations on conversions of Preferred Shares or exercises of the
Warrants.
e. "Additional
Registration Statement"
means a
registration statement or registration statements of the Company filed under
the
1933 Act covering any Additional Registrable Securities.
f. "Additional
Required Registration Amount"
means
the lesser of (i) any Cutback Shares not previously included on a Registration
Statement without regard to any limitations on conversions of the Preferred
Shares or exercises of the Warrants and (ii) such number of Registrable
Securities as the Company is permitted to register pursuant to Rule 415 (as
reasonably determined by the Company based upon guidance that has been provided
by the staff of the SEC).
g. "Business
Day"
means
any day other than Saturday, Sunday or any other day on which commercial banks
in the City of New York are authorized or required by law to remain
closed.
h. "Closing
Date"
shall
have the meaning set forth in the Securities Purchase Agreement.
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i. "Cutback
Shares"
means
any of the Initial Registrable Securities not included in all Registration
Statements previously declared effective hereunder as a result of a limitation
on the maximum number of shares of Common Stock of the Company permitted to
be
registered pursuant to Rule 415 (as reasonably determined by the Company based
upon guidance that has been provided by the staff of the SEC).
j. "Effectiveness
Date"
means
the Initial Effectiveness Date and/or the Additional Effectiveness Date, as
applicable.
k. "Filing
Deadline"
means
the Initial Filing Deadline (as defined below) and/or the Additional Filing
Deadline, as applicable.
l. "Initial
Effectiveness Date"
means
the date the Initial Registration Statement is declared effective by the
SEC.
m. "Initial
Filing Date"
means
the date on which the Initial Registration Statement (as defined below) is
filed
with the SEC.
n. "Initial
Filing Deadline"
means
the date that is ninety (90) days after the Closing Date.
o. "Initial
Registrable Securities"
means
(i) the Conversion Shares issued or issuable upon conversion of the Preferred
Shares, (ii) the Warrant Shares issued or issuable upon exercise of the Warrants
and (iii) any capital stock of the Company issued or issuable, with respect
to
the Preferred Shares, the Conversion Shares, the Warrant Shares or the Warrants
as a result of any stock split, stock dividend, recapitalization, exchange
or
similar event or otherwise, without regard to any limitations on conversions
of
the Preferred Shares or exercises of the Warrants.
p. "Initial
Required Registration Amount"
means
the lesser of (I) 130% of the sum of (i) the number of Conversion Shares issued
or issuable pursuant to the Preferred Shares as of the trading day immediately
preceding the applicable date of determination and (ii) the number of Warrant
Shares issued and issuable pursuant to the Warrants as of the trading day
immediately preceding the applicable date of determination or (II) such maximum
number of shares as the Company is permitted to register by the
SEC.
q. "Initial
Registration Statement"
means a
registration statement or registration statements of the Company filed under
the
1933 Act covering the Initial Registrable Securities.
r. "Investor"
means a
Buyer or any transferee or assignee thereof to whom a Buyer assigns its rights
under this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 and such a transferee or assignee thereof
to whom a transferee or assignee assigns its rights under this Agreement and
who
agrees to become bound by the provisions of this Agreement in accordance with
Section 9.
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s. "Person"
means
an individual, a limited liability company, a partnership, a joint venture,
a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
t. "register,"
"registered,"
and
"registration"
refer
to a registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant
to
Rule 415 and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.
u. "Registrable
Securities"
means
the Initial Registrable Securities and the Additional Registrable
Securities.
v. "Registration
Statement"
means a
registration statement or registration statements of the Company filed under
the
1933 Act covering the Registrable Securities.
w. "Required
Holders"
means
the holders of at least a majority of the Registrable Securities.
x. "Required
Registration Amount"
means
either the Initial Required Registration Amount or the Additional Required
Registration Amount, as applicable.
y. "Rule
415"
means
Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis.
z. "SEC"
means
the United States Securities and Exchange Commission.
2. Registration.
a. Initial
Mandatory Registration.
The
Company shall prepare, and, as soon as practicable, but in no event later than
the Initial Filing Deadline, file with the SEC the Initial Registration
Statement on Form S-3 covering the resale of the Initial Registrable Securities.
In the event that Form S-3 is unavailable for such a registration, the Company
shall use such other form as is available for such a registration on another
appropriate form reasonably acceptable to the Required Holders, subject to
the
provisions of Section 2(e). The Initial Registration Statement prepared pursuant
hereto shall register for resale at least the number of shares of Common Stock
equal to the Initial Required Registration Amount determined as of date the
Registration Statement is initially filed with the SEC (subject to subsequent
reduction if directed by the staff of the SEC). The Initial Registration
Statement shall contain (except if otherwise directed by the Required Holders)
the "Selling
Stockholders"
and
"Plan
of Distribution"
sections in substantially the form attached hereto as Exhibit
B.
The
Company shall use its reasonable best efforts to have the Initial Registration
Statement declared effective by the SEC as soon as practicable. By 9:30 a.m.,
New York time, on the second Business Day following the Initial Effectiveness
Date,
the
Company shall file with the SEC in accordance with Rule 424 under the 1933
Act
the final prospectus to be used in connection with sales pursuant to such
Registration Statement.
b. Additional
Mandatory Registrations.
The
Company shall prepare, and, as soon as practicable but in no event later than
the Additional Filing Deadline, file with the SEC an
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Additional
Registration Statement on Form S-3 covering the resale of the Additional
Registrable Securities not previously registered on a Registration Statement
hereunder. To the extent the staff of the SEC does not permit the Additional
Required Registration Amount to be registered on an Additional Registration
Statement, the Company shall file Additional Registration Statements
successively trying to register on each such Additional Registration Statement
the maximum number of remaining Additional Registrable Securities until the
Additional Required Registration Amount has been registered with the SEC. In
the
event that Form S-3 is unavailable for such a registration, the Company shall
use such other form as is available for such a registration on another
appropriate form reasonably acceptable to the Required Holders, subject to
the
provisions of Section 2(e). Each Additional Registration Statement prepared
pursuant hereto shall register for resale at least that number of shares of
Common Stock equal to the Additional Required Registration Amount as of date
the
Registration Statement is initially filed with the SEC. Each Additional
Registration Statement shall contain (except if otherwise directed by the
Required Holders) the "Selling
Stockholders"
and
"Plan
of Distribution"
sections in substantially the form attached hereto as Exhibit
B.
The
Company shall use its reasonable best efforts to have each Additional
Registration Statement declared effective by the SEC as soon as practicable.
By
9:30 a.m., New York time, on the second Business Day following the Additional
Effectiveness Date,
the
Company shall file with the SEC in accordance with Rule 424 under the 1933
Act
the final prospectus to be used in connection with sales pursuant to such
Registration Statement.
c. Allocation
of Registrable Securities.
The
initial number of Registrable Securities included in any Registration Statement
and any increase in the number of Registrable Securities included therein shall
be allocated pro rata among the Investors based on the number of Registrable
Securities held by each Investor at the time the Registration Statement covering
such initial number of Registrable Securities or increase thereof is declared
effective by the SEC. In the event that an Investor sells or otherwise transfers
any of such Investor's Registrable Securities in a transaction in which such
Investor's rights hereunder with respect to such Registrable Securities are
assigned to such transferee in accordance with Section 9 hereof, such transferee
shall be allocated a pro rata portion of the then remaining number of
Registrable Securities included in such Registration Statement for such
transferor. Any shares of Common Stock included in a Registration Statement
and
which remain allocated to any Person which ceases to hold any Registrable
Securities covered by such Registration Statement shall be allocated to the
remaining Investors, pro rata based on the number of Registrable Securities
then
held by such Investors which are covered by such Registration Statement. In
no
event shall the Company include any securities other than Registrable Securities
on any Registration Statement without the prior written consent of the Required
Holders. In the event that the SEC causes the Company to limit the number of
shares of Common Stock in the Initial Registration Statement, then the Agent
Warrant Shares and the Retainer Warrant Shares shall not be included on such
Initial Registration Statement and shall only be included on the final
Additional Registration Statements filed hereunder on or after all the other
Registrable Securities hereunder have been registered on a Registration
Statement.
d. Legal
Counsel.
Subject
to Section 5 hereof, the Required Holders shall have the right to select one
legal counsel to review and oversee any registration pursuant to this Section
2
("Legal
Counsel"),
which
shall be Xxxxxxx Xxxx & Xxxxx LLP or such other counsel as thereafter
designated by the Required Holders. The Company and Legal Counsel
shall
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reasonably
cooperate with each other in performing the Company's obligations under this
Agreement.
e. Ineligibility
for Form S-3.
In the
event that Form S-3 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall (i) register the resale
of
the Registrable Securities on Form S-1, Form SB-2 or another appropriate form
reasonably acceptable to the Required Holders and (ii) undertake to register
the
Registrable Securities on Form S-3 (or by post-effective amendment to the
existing Registration Statement, or otherwise) as soon as such form is available
for such registration, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time
as a
Registration Statement (or post-effective amendment) on Form S-3 covering the
Registrable Securities has been declared effective by the SEC.
f. Sufficient
Number of Shares Registered.
In the
event the number of shares available under a Registration Statement filed
pursuant to Section 2(a) is insufficient to cover all of the Registrable
Securities required to be covered by such Registration Statement or an
Investor's allocated portion of the Registrable Securities pursuant to Section
2(c), the Company shall amend the applicable Registration Statement, or file
a
new Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover at least the Required Registration Amount
as of the trading day immediately preceding the date of the filing of such
amendment or new Registration Statement, in each case, as soon as practicable,
but in any event (other with respect to Cutback Shares) not later than thirty
(30) days after the necessity therefor arises. The Company shall use its best
efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof. For purposes
of
the foregoing provision, the number of shares available under a Registration
Statement shall be deemed "insufficient to cover all of the Registrable
Securities" if at any time the number of shares of Common Stock available for
resale under the Registration Statement is less than the product determined
by
multiplying (i) the Required Registration Amount as of such time by (ii) 0.80.
The calculation set forth in the foregoing sentence shall be made without regard
to any limitations on the conversion of the Preferred Shares or the exercise
of
the Warrants and such calculation shall assume that the Preferred Shares are
then convertible into shares of Common Stock at the then prevailing Conversion
Rate (as defined in the Certificate of Designations and that the Warrants are
then exercisable for shares of Common Stock at the then prevailing Exercise
Price (as defined in the Warrants).
g. Effect
of Failure to File.
If (i)
a Registration Statement covering all of the Registrable Securities required
to
be covered thereby and required to be filed by the Company pursuant to this
Agreement is not filed with the SEC on or before the respective Filing Deadline
(a "Filing
Failure")
or
(ii) on any day after the Effectiveness Date sales of all of the Registrable
Securities required to be included on such Registration Statement cannot be
made
(other than during an Allowable Grace Period (as defined in Section 3(r))
pursuant to such Registration Statement or otherwise (including, without
limitation, because of a failure to keep such Registration Statement effective,
to disclose such information as is necessary for sales to be made pursuant
to
such Registration Statement, to register a sufficient number of shares of Common
Stock or to maintain the listing of the shares of Common Stock) (a "Maintenance
Failure")
then,
as partial relief for the damages to any holder by reason of any such delay
in
or reduction of its ability to sell the underlying shares of Common Stock (which
remedy shall not
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be
exclusive of any other remedies available at law or in equity), the Company
shall pay to each holder of Registrable Securities relating to such Registration
Statement an amount in cash equal to one percent (1.0%) of the Stated Amount
(as
such term is defined in the Securities Purchase Agreement) of such holder's
Preferred Shares from which the Registrable Securities included in such
Registration Statement are convertible on each of the following dates: (i)
the
day of a Filing failure and the thirtieth day (pro rated for periods totaling
less than 30 days) thereafter until such Filing Failure is cured and (ii) the
initial day of a Maintenance Failure and on every thirtieth day (pro rated
for
periods totaling less than thirty days) thereafter until such Maintenance
Failure is cured. The payments to which a holder shall be entitled pursuant
to
this Section 2(g) are referred to herein as "Registration
Delay Payments."
The
Registration Delay Payments shall be paid on the day of the Filing Failure
and
on the initial day of the Maintenance Failure, as applicable, and thereafter
on
the fifth Business Day after the earlier of (i) the last day of the calendar
month in which such Registration Delay Payments are incurred and (ii) the date
on which the Filing Failure or Maintenance Failure is cured (each, a
"Registration
Delay Payment Date").
Notwithstanding anything herein or in the Securities Purchase Agreement to
the
contrary, in no event shall the aggregate amount of Registration Delay Payments
exceed, in the aggregate, six percent (6.0%) of the aggregate Purchase
Price.
3. Related
Obligations.
At
such
time as the Company is obligated to file a Registration Statement with the
SEC
pursuant to Section 2(a), 2(d) or 2(e), the Company will use its reasonable
best
efforts to effect the registration of the Registrable Securities in accordance
with the intended method of disposition thereof and, pursuant thereto, the
Company shall have the following obligations:
a. The
Company shall promptly prepare and file with the SEC a Registration Statement
with respect to the Registrable Securities and use its reasonable best efforts
to cause such Registration Statement relating to the Registrable Securities
to
become effective as soon as reasonably practicable after such filing. The
Company shall use its reasonable best efforts to keep each Registration
Statement effective pursuant to Rule 415 at all times until the earlier of
(i)
the date as of which the Investors may sell all of the Registrable Securities
covered by such Registration Statement without restriction pursuant to Rule
144(k) (or any successor thereto) promulgated under the 1933 Act or (ii) the
date on which the Investors shall have sold all of the Registrable Securities
covered by such Registration Statement (the "Registration
Period").
The
Company shall ensure that each Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain
any
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 case
of
prospectuses, in the light of the circumstances in which they were made) not
misleading. The term "reasonable best efforts" shall mean, among other things,
that the Company shall submit to the SEC, within five (5) Business Days after
the later of the date that (i) the Company learns that no review of a particular
Registration Statement will be made by the staff of the SEC or that the staff
of
the SEC has no further comments on a particular Registration Statement, as
the
case may be, and (ii) the approval of Legal Counsel pursuant to Section 3(c)
(which approval is promptly sought), a request for acceleration of effectiveness
of such Registration Statement to a time and date not later than 48 hours after
the submission of such request.
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b. The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and
the
prospectus used in connection with such Registration Statement as may be
necessary to keep such Registration Statement effective at all times during
the
Registration Period, and, during such period, comply with the provisions of
the
1933 Act with respect to the disposition of all Registrable Securities of the
Company covered by such Registration Statement until such time as all of such
Registrable Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth
in
such Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 10-QSB, Form 10-KSB or any analogous report under the Securities
Exchange Act of 1934, as amended (the "1934
Act")),
the
Company shall have incorporated such report by reference into such Registration
Statement, if applicable, or shall file such amendments or supplements with
the
SEC promptly after the 1934 Act report is filed which created the requirement
for the Company to amend or supplement such Registration Statement.
c. The
Company shall (A) permit Legal Counsel to review and comment upon (i) a
Registration Statement at least three (3) Business Days prior to its filing
with
the SEC and (ii) all amendments and supplements to all Registration Statements
(except for Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB,
Current Reports on Form 8-K, and any similar or successor reports) within a
reasonable number of days prior to their filing with the SEC, and (B) not file
any Registration Statement or amendment or supplement thereto in a form to
which
Legal Counsel reasonably objects. The Company shall not submit a request for
acceleration of the effectiveness of a Registration Statement or any amendment
or supplement thereto without the prior approval of Legal Counsel, which consent
shall not be unreasonably withheld, conditioned or delayed. The Company shall
furnish to Legal Counsel, without charge, (i) copies of any correspondence
from
the SEC or the staff of the SEC to the Company or its representatives relating
to any Registration Statement, (ii) promptly after the same is prepared and
filed with the SEC, one copy of any Registration Statement and any amendment(s)
thereto, including financial statements and schedules, all documents
incorporated therein by reference, if requested by an Investor, and all exhibits
and (iii) upon the effectiveness of any Registration Statement, one copy of
the
prospectus included in such Registration Statement and all amendments and
supplements thereto. The Company shall reasonably cooperate with Legal Counsel
in performing the Company's obligations pursuant to this Section 3.
d. The
Company shall furnish to each Investor whose Registrable Securities are included
in any Registration Statement unless filed with the SEC through XXXXX, without
charge, (i) promptly after the same is prepared and filed with the SEC, at
least
one copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, all exhibits and each preliminary
prospectus, (ii) upon the effectiveness of any Registration Statement, one
(1)
copy of the prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such
Investor may reasonably request) and (iii) such other documents, including
copies of any preliminary or final prospectus, as such Investor may reasonably
request from time to time in order to facilitate the disposition of the
Registrable Securities owned by such Investor.
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e. The
Company shall use its reasonable best efforts to (i) register and qualify,
unless an exemption from registration and qualification applies, the resale
by
Investors of the Registrable Securities covered by a Registration Statement
under such other securities or "blue sky" laws of all applicable jurisdictions
in the United States and the applicable securities laws of Canada, (ii) prepare
and file in those jurisdictions, such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may
be
necessary to maintain the effectiveness thereof during the Registration Period,
(iii) take such other actions as may be necessary to maintain such registrations
and qualifications in effect at all times during the Registration Period, and
(iv) take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent
to
service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
and any other securities laws of Canada or its receipt of actual notice of
the
initiation or threatening of any proceeding for such purpose.
f. The
Company shall notify Legal Counsel and each Investor in writing of the happening
of any event, as promptly as reasonably practicable after becoming aware of
such
event, as a result of which the prospectus included in a Registration Statement,
as then in effect, includes an untrue statement of a material fact or omission
to state a material fact required to be stated therein or necessary to make
the
statements therein, in the light of the circumstances under which they were
made, not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and, subject to Section 3(r), promptly prepare
a supplement or amendment to such Registration Statement to correct such untrue
statement or omission and deliver one (1) copy of such supplement or amendment
to Legal Counsel and each Investor (or such other number of copies as Legal
Counsel or such Investor may reasonably request). The Company shall also
promptly notify Legal Counsel and each Investor in writing (i) when a prospectus
or any prospectus supplement or post-effective amendment has been filed, and
when a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to Legal
Counsel and each Investor by facsimile or e-mail on the same day of such
effectiveness and by overnight mail), (ii) of any request by the SEC for
amendments or supplements to a Registration Statement or related prospectus
or
related information, and (iii) of the Company's reasonable determination that
a
post-effective amendment to a Registration Statement would be
appropriate.
g. The
Company shall use its reasonable best efforts to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration Statement,
or
the suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest possible
moment and to notify Legal Counsel and each Investor who holds Registrable
Securities being sold of the issuance of such order and the resolution thereof
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.
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h. If
any
Investor is deemed to be, alleged to be or reasonably believes it may be deemed
or alleged to be, an underwriter or is required under applicable securities
laws
to be described in the Registration Statement as an underwriter, at the
reasonable request of such Investor, the Company shall furnish to such Investor,
on the date of the effectiveness of the Registration Statement and thereafter
from time to time on such dates as an Investor may reasonably request (i) a
letter, dated such date, from the Company's independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the Investors (subject to the Investors making such representations
and undertakings as such accountants may reasonably request), and (ii) an
opinion, dated as of such date, of counsel representing the Company for purposes
of such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the
Investors.
i. If
any
Investor is deemed to be, alleged to be or reasonably believes it may be deemed
or alleged to be, an underwriter or is required under applicable securities
laws
to be described in the Registration Statement as an underwriter, upon the
written request of any Investor in connection with such Investor's due diligence
requirements, if any, the Company shall make available for inspection by (i)
any
Investor, (ii) Legal Counsel and (iii) one firm of accountants or other agents
retained by the Investors (collectively, the "Inspectors"),
all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the "Records"),
as
shall be reasonably deemed necessary by each Inspector, and cause the Company's
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each Inspector shall agree
to
hold in strict confidence and shall not make any disclosure (except to an
Investor) or use of any Record or other information which the Company determines
in good faith to be confidential, and of which determination the Inspectors
are
so notified, unless (a) the disclosure of such Records is necessary to avoid
or
correct a misstatement or omission in any Registration Statement or is otherwise
required under the 1933 Act (and only after giving the Company a reasonable
opportunity to make such disclosure itself), (b) the release of such Records
is
ordered pursuant to a final, non-appealable subpoena or order from a court
or
government body of competent jurisdiction, or (c) the information in such
Records has been made generally available to the public other than by disclosure
in violation of this Agreement. Each Investor agrees that it shall, upon
learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. Nothing herein (or in any other
confidentiality agreement between the Company and any Investor) shall be deemed
to limit the Investors' ability to sell Registrable Securities in a manner
that
is otherwise consistent with applicable laws and regulations.
j. The
Company shall hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such
-10-
information
has been made generally available to the public other than by disclosure in
violation of this Agreement or any other agreement. The Company agrees that
it
shall, upon learning that disclosure of such information concerning an Investor
is sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt written notice to such Investor and allow
such
Investor, at the Investor's expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such
information.
k. The
Company shall use its reasonable best efforts either to (i) cause all of the
Registrable Securities covered by a Registration Statement to be listed on
each
securities exchange on which securities of the same class or series issued
by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii) if,
despite the Company's reasonable best efforts, the Company is unsuccessful
in
satisfying the preceding clause (i) and, without limiting the generality of
the
foregoing, to use its reasonable best efforts to arrange for at least two market
makers to register with the National Association of Securities Dealers, Inc.
("NASD")
as
such with respect to such Registrable Securities. The Company shall pay all
fees
and expenses in connection with satisfying its obligation under this Section
3(k).
l. The
Company shall, to the extent applicable, facilitate the timely preparation
and
delivery of certificates (not bearing any restrictive legend) representing
the
Registrable Securities to be offered pursuant to an effective Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the Investors may reasonably request and registered
in
such names as the Investors may request.
m. If
requested by an Investor, the Company shall as soon as reasonably practicable
(i) incorporate in a prospectus supplement or post-effective amendment such
information as an Investor reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering;
(ii) make all required filings of such prospectus supplement or post-effective
amendment after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment; and (iii) supplement or
make
amendments to any Registration Statement if reasonably requested by an Investor
holding any Registrable Securities.
n. The
Company shall make generally available to its security holders not later than
ninety (90) days after the close of the period covered thereby, an earnings
statement (in form complying with, and in the manner provided by, the provisions
of Rule 158 under the 0000 Xxx) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next following the
effective date of the Registration Statement.
o. Within
two (2) Business Days after a Registration Statement which covers Registrable
Securities is ordered effective by the SEC, the Company shall deliver, or shall
cause legal counsel for the Company to deliver, to the transfer agent for such
Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC substantially
in
the form attached hereto as Exhibit
A.
-11-
p. Notwithstanding
anything to the contrary herein, at any time after the Effectiveness Date,
the
Company may delay the disclosure of material, non-public information concerning
the Company the disclosure of which at the time is not, in the good faith
opinion of the Board of Directors of the Company after consultation with its
counsel, in the best interest of the Company (a "Grace
Period");
provided, that the Company shall promptly (i) notify the Investors in writing
of
the existence of material, non-public information giving rise to a Grace Period
(provided that in each notice the Company will not disclose the content of
such
material, non-public information to the Investors) and the date on which the
Grace Period will begin, and (ii) notify the Investors in writing of the
date on which the Grace Period ends; and, provided further, that no Grace Period
shall exceed ten (10) consecutive days and during any three hundred sixty five
(365) day period such Grace Periods shall not exceed an aggregate of forty
(40)
days and the first day of any Grace Period must be at least five (5) trading
days after the last day of any prior Grace Period (each, an "Allowable
Grace Period").
For
purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the Investors receive the notice referred
to
in clause (i) and shall end on and include the later of the date the Investors
receive the notice referred to in clause (ii) and the date referred to in such
notice. The provisions of Section 3(g) hereof shall not be applicable during
the
period of any Allowable Grace Period. Upon expiration of the Grace Period,
the
Company shall again be bound by the first sentence of Section 3(f) with respect
to the information giving rise thereto unless such material, non-public
information is no longer applicable. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended shares of
Common Stock to a transferee of an Investor in accordance with the terms of
the
Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which an Investor has entered into a contract for
sale and delivered a copy of the prospectus included as part of the applicable
Registration Statement (unless an exemption from such prospectus delivery
requirements exists), prior to the Investor's receipt of the notice of a Grace
Period and for which the Investor has not yet settled.
q. The
Company shall make any filing as may be required by NASD Rule 2710 in connection
with the offering under any Registration Statement of the applicable Registrable
Securities and shall make any such filing concurrently with its initial filing
of such Registration Statement with the SEC.
4. Obligations
of the Investors.
a. At
least
five (5) Business Days prior to the first anticipated filing date of a
Registration Statement, the Company shall notify each Investor in writing of
the
information the Company requires from each such Investor if such Investor elects
to have any of such Investor's Registrable Securities included in such
Registration Statement. It shall be a condition precedent to the obligations
of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Investor that such Investor shall
furnish 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 and maintain
the effectiveness of the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company
may
reasonably request.
-12-
b. Each
Investor, by such Investor's 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 any Registration Statement hereunder, unless
such Investor has notified the Company in writing of such Investor's election
to
exclude all of such Investor's Registrable Securities from such Registration
Statement.
c. Each
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(g) or the first
sentence of 3(f), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or the first
sentence of 3(f) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary, the Company shall cause
its
transfer agent to deliver unlegended shares of Common Stock to a transferee
of
an Investor in accordance with the terms of the Securities Purchase Agreement
in
connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale prior to the Investor's receipt
of
a notice from the Company of the happening of any event of the kind described
in
Section 3(g) or the first sentence of 3(f) and for which the Investor has not
yet settled.
d. Each
Investor covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it or an exemption therefrom
in
connection with sales of Registrable
Securities pursuant to the Registration Statement.
5. Expenses
of Registration.
All
reasonable expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to Sections
2 and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements
of
counsel for the Company shall be paid by the Company. The Company shall also
reimburse the Investors for the fees and disbursements of Legal Counsel in
connection with registration, filing or qualification pursuant to Sections
2 and
3 of this Agreement which amount shall be limited to $15,000 for the Initial
Registration Statement and for each Additional Registration
Statement.
6. Indemnification.
In
the
event any Registrable Securities are included in a Registration Statement under
this Agreement:
a. To
the
fullest extent permitted by law, the Company will, and hereby does, indemnify,
hold harmless and defend each Investor, the directors, officers, members,
partners, employees, agents, representatives of, and each Person, if any, who
controls any Investor within the meaning of the 1933 Act or the 1934 Act (each,
an "Indemnified
Person"),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable attorneys' fees, amounts paid in settlement or
expenses, joint or several (collectively, "Claims"),
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental,
-13-
administrative
or other regulatory agency, body or the SEC, whether pending or threatened,
whether or not an indemnified party is or may be a party thereto ("Indemnified
Damages"),
to
which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of
or are based upon: (i) any untrue statement or alleged untrue statement of
a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any jurisdiction
in
which Registrable Securities are offered ("Blue
Sky Filing"),
or
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in
any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented,
if
the Company files any amendment thereof or supplement thereto with the SEC)
or
the omission or alleged omission to state therein any material fact necessary
to
make the statements made therein, in light of the circumstances under which
the
statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any violation of this
Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, "Violations").
Subject to Section 6(c), the Company shall reimburse the Indemnified Persons,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified Person
for such Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement
thereto; and (ii) shall not apply to amounts paid in settlement of any Claim
if
such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld or delayed. Such indemnity
shall remain in full force and effect regardless of any investigation made
by or
on behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
b. In
connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement and each Person, if any, who controls
the
Company within the meaning of the 1933 Act or the 1934 Act (each, an
"Indemnified
Party"),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim
or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by
such
Investor expressly for use in connection with such Registration Statement;
and,
subject to Section 6(c), such Investor will reimburse any legal or other
expenses reasonably incurred by an Indemnified Party in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this
-14-
Section
6(b) and the agreement with respect to contribution contained in Section 7
shall
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Investor, which consent
shall
not be unreasonably withheld or delayed; provided, further, however, that the
Investor shall be liable under this Section 6(b) for only that amount of a
Claim
or Indemnified Damages as does not exceed the net proceeds to such Investor
as a
result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity 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 the Registrable Securities by the Investors pursuant
to
Section 9.
c. Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section
6
of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person
or
Indemnified Party shall, if a Claim in respect thereof is to be made against
any
indemnifying party under this Section 6, deliver to the indemnifying party
a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party
so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as
the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses of
not
more than one counsel for all such Indemnified Person or Indemnified Party
to be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by
such
counsel in such proceeding. In the case of an Indemnified Person, legal counsel
referred to in the immediately preceding sentence shall be selected by the
Investors holding at least a majority in interest of the Registrable Securities
included in the Registration Statement to which the Claim relates. The
Indemnified Party or Indemnified Person shall cooperate reasonably with the
indemnifying party in connection with any negotiation or defense of any such
action or Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or Claim. The indemnifying
party
shall keep the Indemnified Party or Indemnified Person fully apprised at all
times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of
any
action, claim or proceeding effected without its prior written consent,
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person, consent to
entry
of any judgment or enter into any settlement or other compromise which does
not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such Claim or litigation, and such settlement shall not include
any admission as to fault on the part of the Indemnified Party. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter
for
which indemnification has been made. The failure to deliver written notice
to
the indemnifying party within a reasonable time of the commencement of any
such
action shall not relieve such
-15-
indemnifying
party of any liability to the Indemnified Person or Indemnified Party under
this
Section 6, except to the extent that the indemnifying party is prejudiced in
its
ability to defend such action.
d. The
indemnification required by this Section 6 shall be made by periodic payments
of
the amount thereof during the course of the investigation or defense, as and
when bills are received or Indemnified Damages are incurred.
e. The
indemnity agreements contained herein shall be in addition to (i) any cause
of
action or similar right of the Indemnified Party or Indemnified Person against
the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.
7. Contribution.
To
the
extent any indemnification by an indemnifying party is prohibited or limited
by
law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however, that: (i) no Person involved
in the sale of Registrable Securities which Person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) in
connection with such sale shall be entitled to contribution from any Person
involved in such sale of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities pursuant to such Registration
Statement.
8. Reports
Under the 1934 Act.
With
a
view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that
may
at any time permit the Investors to sell securities of the Company to the public
without registration ("Rule
144"),
the
Company agrees to:
a. make
and
keep public information available, as those terms are understood and defined
in
Rule 144;
b. file
with
the SEC in a timely manner all annual reports on Form 10-K or 10-KSB, and
quarterly reports on Form 10-Q or 10-QSB required of the Company under the
1934
Act so long as the Company remains subject to such requirements and the filing
of such reports and other documents is required for the applicable provisions
of
Rule 144; and
c. furnish
to each Investor so long as such Investor owns Registrable Securities, promptly
upon written request, (i) a written statement by the Company, if true, that
it
has complied with the reporting requirements of Rule 144, the 1933 Act and
the
1934 Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested to permit the Investors
to
sell such securities pursuant to Rule 144 without registration.
-16-
9. Assignment
of Registration Rights.
The
rights under this Agreement shall be automatically assignable by the Investors
to any transferee of all or any portion of such Investor's Registrable
Securities if: (i) the Investor 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) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act or applicable state securities laws; (iv) at
or
before the time the Company receives the written notice contemplated by clause
(ii) of this sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein; and (v) such
transfer shall have been made in accordance with the applicable requirements
of
the Securities Purchase Agreement.
10. Amendment
of Registration Rights.
Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Holders. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company. No such amendment shall
be
effective to the extent that it applies to less than all of the holders of
the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of this
Agreement unless the same consideration also is offered to all of the parties
to
this Agreement.
11. Miscellaneous.
a. A
Person
is deemed to be a holder of Registrable Securities whenever such Person owns
or
is deemed to own of record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon the
basis
of instructions, notice or election received from such record owner of such
Registrable Securities.
b. Any
notices, consents, waivers or other communications required or permitted to
be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall
be:
If
to the
Company:
Cleveland
BioLabs, Inc.
00000
Xxxxx Xxx., Xxxxx 000
-00-
Xxxxxxxxx,
Xxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
Xxxxxxxx
With
a
copy (for informational purposes only) to:
Xxxxxx
Xxxxxx Rosenman LLP
000
Xxxx
Xxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Ram
Xxxxxxxxxxx
If
to the
Transfer Agent:
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxxxx
If
to
Legal Counsel:
Xxxxxxx
Xxxx & Xxxxx LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx X. Xxxxx, Esq.
If
to a
Buyer, to its address and facsimile number set forth on Schedule
I
to the
Securities Purchase Agreement, with copies to such Buyer's representatives
as
set forth on the Schedule of Buyers, or to such other address and/or facsimile
number and/or to the attention of such other Person as the recipient party
has
specified by written notice given to each other party at least five (5) days
prior to the effectiveness of such change. Written confirmation of receipt
(A)
given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
c. Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as
a
waiver thereof.
-18-
d. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or
the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
e. This
Agreement, the other Transaction Documents (as defined in the Securities
Purchase Agreement) and the instruments referenced herein and therein constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein.
This
Agreement, the other Transaction Documents and the instruments referenced herein
and therein supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
f. Subject
to the requirements of Section 9, this Agreement shall inure to the benefit
of
and be binding upon the permitted successors and assigns of each of the parties
hereto.
g. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
h. This
Agreement may be executed in identical counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same agreement.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile or other electronic transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
i. Each
party 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,
-19-
instruments
and documents as any other party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation
of
the transactions contemplated hereby.
j. All
consents and other determinations required to be made by the Investors pursuant
to this Agreement shall be made, unless otherwise specified in this Agreement,
by the Required Holders.
k. The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent and no rules of strict construction
will
be applied against any party.
l. This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
m. The
obligations of each Investor hereunder are several and not joint with the
obligations of any other Investor, and no provision of this Agreement is
intended to confer any obligations on any Investor vis-à-vis any other Investor.
Nothing contained herein, and no action taken by any Investor pursuant hereto,
shall be deemed to constitute the Investors as a partnership, an association,
a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated herein.
*
* * * *
*
[Signature
Page Follows]
-20-
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
COMPANY:
|
|
|
CLEVELAND
BIOLABS, INC.
|
|
|
By:
/s/ Xxxxxxx
Xxxxxxxx
Name:
Xxxxxxx Xxxxxxxx
Title:
Chief Executive Officer & President
|
|
IN
WITNESS WHEREOF,
each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
BUYERS:
|
|
|
SUNRISE
SECURITIES CORP.
|
|
|
By:
/s/ Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
|
|
[Signature
pages of other Buyers intentionally omitted]
EXHIBIT
A
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
Continental
Stock Transfer and Trust Company
00
Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx
Xxxx,
XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxxxx
Re: Cleveland
BioLabs, Inc.
Ladies
and Gentlemen:
[We
are][I am] counsel to Cleveland BioLabs, Inc., a Delaware corporation (the
"Company"),
and
have represented the Company in connection with that certain Securities Purchase
Agreement (the "Securities
Purchase Agreement")
entered into by and among the Company and the buyers named therein
(collectively, the "Holders")
pursuant to which the Company issued to the Holders preferred shares (the
"Preferred
Shares")
convertible into the Company's common stock, $0.005 par value (the "Common
Stock"),
warrants exercisable for shares of Common Stock (the "Warrants").
Pursuant to the Securities Purchase Agreement, the Company also has entered
into
a Registration Rights Agreement with the Holders (the "Registration
Rights Agreement")
pursuant to which the Company agreed, among other things, to register the
Registrable Securities (as defined in the Registration Rights Agreement),
including the shares of Common Stock issuable upon conversion of the Preferred
Shares and the shares of Common Stock issuable upon exercise of the Warrants,
under the Securities Act of 1933, as amended (the "1933
Act").
In
connection with the Company's obligations under the Registration Rights
Agreement, on ____________ ___, 200_, the Company filed a Registration Statement
on Form ____ (File No. 333-_____________) (the "Registration
Statement")
with
the Securities and Exchange Commission (the "SEC")
relating to the Registrable Securities which names each of the Holders as a
selling stockholder thereunder.
In
connection with the foregoing, [we][I] advise you that a member of the SEC's
staff has advised [us][me] by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at
[ENTER
TIME OF EFFECTIVENESS]
on
[ENTER
DATE OF EFFECTIVENESS]
and
[we][I] have no knowledge, after telephonic
Exhibit
A-1
inquiry
of a member of the SEC's staff, that any stop order suspending its effectiveness
has been issued or that any proceedings for that purpose are pending before,
or
threatened by, the SEC and the Registrable Securities are available for resale
under the 1933 Act pursuant to the Registration Statement.
This
letter shall serve as our standing instruction to you that the shares of Common
Stock are freely transferable by the Holders pursuant to the Registration
Statement. You need not require further letters from us to effect any future
legend-free issuance or reissuance of shares of Common Stock to the Holders
as
contemplated by the Company's Irrevocable Transfer Agent Instructions dated
_______ __, 2007.
Very
truly yours,
[ISSUER'S
COUNSEL]
By:_____________________
CC: [LIST
NAMES OF HOLDERS]
Exhibit
A-2
EXHIBIT
B
SELLING
STOCKHOLDERS
The
shares of Common Stock being offered by the selling stockholders are issuable
upon conversion of the convertible preferred shares and upon exercise of the
warrants. For additional information regarding the issuance of those convertible
preferred shares and warrants, see "Private Placement of Convertible Preferred
Shares and Warrants" above. We are registering the shares of Common Stock in
order to permit the selling stockholders to offer the shares for resale from
time to time. Except for the ownership of the preferred shares and warrants
issued pursuant to the Securities Purchase Agreement, the selling stockholders
have not had any material relationship with us within the past three
years.
The
table
below lists the selling stockholders and other information regarding the
beneficial ownership of the shares of Common Stock by each of the selling
stockholders. The second column lists the number of shares of Common Stock
beneficially owned by each selling stockholder, based on its ownership of the
convertible preferred shares and warrants, as of ________, 200_, assuming
conversion of all convertible preferred shares and exercise of the warrants
held
by the selling stockholders on that date, without regard to any limitations
on
conversions or exercise.
The
third
column lists the shares of Common Stock being offered by this prospectus by
the
selling stockholders.
In
accordance with the terms of a registration rights agreement with the selling
stockholders, this prospectus generally covers the resale of at least 130%
of
the sum of (i) the number of shares of Common Stock issuable upon conversion
of
the convertible preferred shares as of the trading day immediately preceding
the
date the registration statement of which this prospectus is a part was initially
filed with the SEC and (ii) the number of shares of Common Stock issuable upon
exercise of the related warrants as of the trading day immediately preceding
the
date the registration statement of which this prospectus is a part was initially
filed with the SEC [Subject to revision for Additional Registration Statements].
Because the conversion price of the convertible preferred shares and the
exercise price of the warrants may be adjusted, the number of shares that will
actually be issued may be more or less than the number of shares being offered
by this prospectus. The fourth column assumes the sale of all of the shares
offered by the selling stockholders pursuant to this prospectus.
Under
the
terms of the certificate of designations and the warrants, a selling stockholder
may not convert the preferred shares or exercise the warrants to the extent
such
conversion or exercise would cause such selling stockholder, together with
its
affiliates, to beneficially own a number of shares of Common Stock which would
exceed 9.99% of our then outstanding shares of Common Stock following such
conversion or exercise, excluding for purposes of such determination shares
of
Common Stock issuable upon conversion of the convertible preferred shares which
have not been converted and upon exercise of the warrants which have not been
exercised. The number of shares in the second column does not reflect this
limitation. The selling stockholders may sell all, some or none of their shares
in this offering. See "Plan of Distribution."
Exhibit
B-1
|
Name
of Selling Stockholder
|
Number
of Shares of Common Stock Owned Prior to Offering
|
Maximum
Number of Shares of Common Stock to be Sold Pursuant to this
Prospectus
|
Number
of Shares of Common Stock Owned After Offering
|
|||
PLAN
OF DISTRIBUTION
We
are
registering the shares of Common Stock issuable upon conversion of the
convertible preferred shares and upon exercise of the warrants to permit the
resale of these shares of Common Stock by the holders of the convertible
preferred shares and warrants from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by the selling
stockholders of the shares of Common Stock. We will bear all fees and expenses
incident to our obligation to register the shares of Common Stock.
The
selling stockholders may sell all or a portion of the shares of Common Stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the shares of
Common Stock are sold through underwriters or broker-dealers, the selling
stockholders will be responsible for underwriting discounts or commissions
or
agent's commissions. The shares of Common Stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions,
| · |
on
any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of
sale;
|
| · |
in
the over-the-counter market;
|
| · |
in
transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
|
| · |
through
the writing of options, whether such options are listed on an options
exchange or otherwise;
|
| · |
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
| · |
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
| · |
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
| · |
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
| · |
privately
negotiated transactions;
|
| · |
short
sales;
|
| · |
sales
pursuant to Rule 144;
|
| · |
broker-dealers
may agree with the selling securityholders to sell a specified number
of
such shares at a stipulated price per
share;
|
|
·
|
a
combination of any such methods of sale;
and
|
| · |
any
other method permitted pursuant to applicable
law.
|
If
the
selling stockholders effect such transactions by selling shares of Common Stock
to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or commissions from
purchasers of the shares of Common Stock for whom they may act as agent or
to
whom they may sell as principal (which discounts, concessions or commissions
as
to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales
of
the shares of Common Stock or otherwise, the selling stockholders may enter
into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of Common Stock in the course of hedging in positions they
assume. The selling stockholders may also sell shares of Common Stock short
and
deliver shares of Common Stock covered by this prospectus to close out short
positions created after the effective date of the registration statement of
which this prospectus is a part and to return borrowed shares in connection
with
such short sales. The selling stockholders may also loan or pledge shares of
Common Stock to broker-dealers that in turn may sell such shares.
The
selling stockholders may pledge or grant a security interest in some or all
of
the convertible preferred shares or warrants or shares of Common Stock owned
by
them and, if they default in the performance of their secured obligations,
the
pledgees or secured parties may offer and sell the shares of Common Stock from
time to time pursuant to this prospectus or any supplement to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of
1933, as amended, amending, if necessary, the list of selling stockholders
to
include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus. The selling stockholders also may transfer
and donate the shares of Common Stock in other circumstances in which case
the
transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.
The
selling stockholders and any broker-dealer participating in the distribution
of
the shares of Common Stock may be deemed to be "underwriters" within the meaning
of the Securities Act, and any commission paid, or any discounts or concessions
allowed to, any such broker-dealer may be deemed to be underwriting commissions
or discounts under the Securities Act. At the time a particular offering of
the
shares of Common Stock is made, a prospectus supplement, if required, will
be
distributed which will set forth the aggregate amount of shares of Common Stock
being offered and the terms of the offering, including the name or names of
any
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling stockholders and any discounts,
commissions or concessions allowed or reallowed or paid to
broker-dealers.
Under
the
securities laws of some states, the shares of Common Stock may be sold in such
states only through registered or licensed brokers or dealers. In addition,
in
some states the shares of Common Stock may not be sold unless such shares have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
-2-
There
can
be no assurance that any selling stockholder will sell any or all of the shares
of Common Stock registered pursuant to the shelf registration statement, of
which this prospectus forms a part.
The
selling stockholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of
1934,
as amended, and the rules and regulations thereunder, including, without
limitation, Regulation M of the Exchange Act, which may limit the timing of
purchases and sales of any of the shares of Common Stock by the selling
stockholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of Common
Stock to engage in market-making activities with respect to the shares of Common
Stock. All of the foregoing may affect the marketability of the shares of Common
Stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of Common Stock.
We
will
pay all expenses of the registration of the shares of Common Stock pursuant
to
the registration rights agreement, estimated to be
$[ ] in total, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with
state securities or "blue sky" laws; provided, however, that a selling
stockholder will pay all underwriting discounts and selling commissions, if
any.
We will indemnify the selling stockholders against certain liabilities,
including certain liabilities under the Securities Act, in accordance with
the
registration rights agreements, or the selling stockholders will be entitled
to
contribution with respect thereto. We will be indemnified by the selling
stockholders against civil liabilities, including liabilities under the
Securities Act, that may arise from any written information furnished to us
by
the selling stockholder specifically for use in this prospectus, in accordance
with the related registration rights agreement, or we will be entitled to
contribution.
Once
sold
under the registration statement, of which this prospectus forms a part, the
shares of Common Stock will be freely tradable in the hands of persons other
than our affiliates.
-3-
