SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT Between STAR SCIENTIFIC, INC., as Issuer, And The Investors Set Forth on Schedule I hereto March 5, 2010
Exhibit 10.1
Execution Version
Between
STAR SCIENTIFIC, INC.,
as Issuer,
And
The Investors Set Forth on Schedule I hereto
March 5, 2010
This SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is
entered into and effective as of March 5, 2010, between Star Scientific, Inc., a Delaware
corporation (the “Company”), and the several investors set forth on Schedule I
hereto (each an “Investor” and collectively, the “Investors”).
WHEREAS, each Investor has previously entered into a securities purchase and registration
rights agreement with the Company whereby the Company sold to each Investor and each Investor
purchased from the Company a warrant (in each case a “Prior Warrant” and collectively, the
“Prior Warrants”), to purchase the amount of shares of the Company’s common stock, par
value $0.0001 per share (“Common Stock”), set forth opposite each Investor’s name under the
heading “Warrant Shares” on Schedule I (in each case, the “Warrant Shares”), having
a per share exercise price set forth opposite each Investor’s name under the heading “Prior
Exercise Price” on Schedule I hereto;
WHEREAS, the Company and each Investor desire that upon the terms and conditions set forth
herein that: (i) the Investor will purchase from the Company and the Company will issue and sell to
the Investor the aggregate amount of shares of Common Stock opposite to the Investor’s name under
the heading “Shares” on Schedule I hereto (in each case, the “Shares”) and, in
exchange therefor, the Investor will pay the Company the aggregate consideration set forth opposite
the Investor’s name under the heading “Aggregate Consideration” on Schedule I hereto; and
(ii) the Company will reduce the exercise price of the Investor’s Prior Warrants to the exercise
price set forth opposite the Investor’s name under the heading “New Exercise Price” on Schedule
I hereto (the Prior Warrant reflecting the New Exercise Price, the “Adjusted Warrant”);
WHEREAS, each Investor acknowledges that as an inducement for the Company to enter into this
Agreement, the Investor has waived its rights under Section 12 of its Prior Warrants, with regard
to the transactions contemplated hereby; and
WHEREAS, each Investor will have registration rights with respect to the Shares and other
Registrable Securities (as defined herein) pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Agreement to Sell and Purchase the Shares and Adjusted Warrant. At the Closing (as
defined herein), the Company will sell to each Investor, and each Investor will purchase from the
Company, upon the terms and subject to the conditions hereinafter set forth, its Shares and the
Adjusted Warrant for the aggregate purchase price set forth opposite each Investor’s name under the
heading “Aggregate Consideration” on Schedule I hereto.
2. Delivery of the Shares and Adjusted Warrant at Closing. The completion of the
purchase, sale and issuance of the Shares and the delivery of the Adjusted Warrant (the
“Closing”) shall occur on the date of this Agreement (the “Closing Date”) (or upon
such other date as the Company and each Investor shall agree), at the offices of the Company’s
counsel. At the Closing, the Company shall issue to each Investor as indicated on Schedule
I hereto (i) one or more stock certificates, registered in the Investor’s name and address as
set forth on Schedule I hereto, representing the Shares and (ii) the Adjusted Warrant
issued in the name of the Investor. The Company’s obligation to issue the Shares and deliver the
Adjusted Warrant to each Investor shall be
1
subject to the following conditions, any one or more of which may be waived by the Company: (i)
receipt by the Company of a wire transfer of immediately available funds to an account designated
in writing by the Company, in the full amount of the total purchase price payable by the Investor
for the Shares and Adjusted Warrant that the Investor is hereby agreeing to purchase set forth
opposite the name of such Investor under the heading “Aggregate Consideration” on Schedule
I hereto; and (ii) the accuracy, in all material respects, of the representations and
warranties made by the Investor and the fulfillment, in all material respects, of those
undertakings of the Investor to be fulfilled prior to the Closing. Each Investor’s obligation to
purchase the Shares shall be subject to the following conditions, any one or more of which may be
waived by an Investor (provided that no such waiver shall be deemed given unless in writing and
executed by the Investor): (i) receipt by the Investor of a counter-signed copy of this Agreement
executed by the Company; (ii) receipt by the Investor of a copy of the Adjusted Warrant; and (iii)
the accuracy, in all material respects, of the representations and warranties made by the Company
and the fulfillment, in all material respects, of those undertakings of the Company to be fulfilled
prior to the Closing.
3. Representations, Warranties and Covenants of the Company. The Company hereby
represents and warrants to, and covenants with each Investor, as follows:
3.1 Organization. Each of the Company and its Subsidiaries (as defined in Rule 405
under the Securities Act of 1933, as amended (the “Securities Act”)) is duly organized and
validly existing in good standing under the laws of the jurisdiction of its organization. Each of
the Company and its Subsidiaries has full power and authority to own, operate and occupy its
properties and to conduct its business as presently conducted and is registered or qualified to do
business and in good standing in each jurisdiction in which it owns or leases property or transacts
business and where the failure to be so qualified would have a material adverse effect upon the
financial condition or business, operations, assets or prospects of the Company and its
Subsidiaries, taken as a whole (a “Material Adverse Effect”).
3.2 Due Authorization. The Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement and the Adjusted Warrant, and has taken
all necessary corporate action to enter into and perform this Agreement, to issue the Shares in
accordance with the terms of this Agreement, to enter into and perform the Adjusted Warrant, and to
issue the Warrant Shares in accordance with the terms of the Adjusted Warrant. This Agreement has
been, and upon the Closing in accordance with the terms of the Agreement, the Adjusted Warrant will
be, duly authorized, validly executed and delivered by the Company and constitutes, or will
constitute, a legal, valid and binding agreement of the Company enforceable against the Company in
accordance with their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law). Upon their issuance in accordance with the terms of this Agreement and the
Shares will be duly authorized, validly issued, fully paid and non-assessable, the Adjusted Warrant
will be duly authorized and validly issued, and the Warrant Shares, upon exercise of the Adjusted
Warrant in accordance with its terms, will be duly authorized.
3.3 Non-Contravention. Except as would not reasonably be expected to have a Material
Adverse Effect, the execution and delivery of this Agreement, the issuance and sale of the
Shares and the Adjusted Warrant under this Agreement, the fulfillment of the terms of this
2
Agreement and the consummation of the transactions contemplated hereby will not (i) conflict with
or constitute a violation of, or default (with or without the giving of notice or the passage of
time or both) under, (A) any material bond, debenture, note or other evidence of indebtedness, or
under any material lease, indenture, mortgage, deed of trust, loan agreement, joint venture or
other agreement or instrument to which the Company or any Subsidiary is a party or by which it or
any of its Subsidiaries or their respective properties are bound, (B) the charter, by-laws or other
organizational documents of the Company or any Subsidiary, or (C) any law, administrative
regulation, ordinance or order of any court or governmental agency, arbitration panel or authority
applicable to the Company or any Subsidiary or their respective properties, or (ii) result in the
creation or imposition of any lien, encumbrance, claim, security interest or restriction whatsoever
upon any of the material properties or assets of the Company or any Subsidiary or an acceleration
of indebtedness pursuant to any obligation, agreement or condition contained in any material bond,
debenture, note or any other evidence of indebtedness or any material indenture, mortgage, deed of
trust or any other agreement or instrument to which the Company or any Subsidiary is a party or by
which any of them is bound or to which any of the property or assets of the Company or any
Subsidiary is subject. No consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, self-regulatory
organization, stock exchange or market, or other governmental body in the United States is required
for the execution and delivery of this Agreement, the valid issuance and sale of the Shares and
Adjusted Warrant pursuant to this Agreement, other than such as have been or will be made or
obtained prior to the Closing Date, and except for any securities filings required to be made under
federal or state securities laws.
3.4 SEC Filings. Since January 1, 2009, the Company and its Subsidiaries have filed
all reports, schedules, forms, statements and other documents required to be filed by it with the
Securities and Exchange Commission (the “Commission”) pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (such
reports, including exhibits thereto and documents incorporated by reference therein collectively,
the “SEC Documents”). To the best of the Company’s knowledge, as of their respective filing
dates, none of the SEC Documents contained an untrue statement of material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the statements made
therein, in the light and circumstances under which they were made, not misleading, except to the
extent corrected by subsequently filed SEC Documents.
3.5 Absence of Certain Change. Except as disclosed in the SEC Documents, since
September 30, 2009, there has been no adverse change or adverse development in the business,
properties, assets, operations, financial condition, prospects, liabilities or results of
operations of the Company or its Subsidiaries which to the knowledge of the Company would
reasonably be expected to have a Material Adverse Effect.
3.6 Capitalization. As of March 1, 2010, the authorized capital stock of the Company
consists of (i) 170,000,000 shares of Common Stock, of which 107,676,768 shares are issued and
outstanding and 26,084,214 shares are issuable and reserved for issuance pursuant to the Company’s
stock option plans or securities exercisable or exchangeable for, or convertible into, shares of
Common Stock, and (ii) 100,000 shares of preferred stock, of which as of the date hereof no shares
are issued. All of such outstanding shares have been, or upon issuance will be, validly issued,
fully paid and nonassessable. Except as disclosed in the SEC Documents, as of the date
hereof, (i) no shares of the Company’s capital stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by the Company, (ii) there are no
3
outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, any shares of capital stock of
the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares
of capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its Subsidiaries, (iii)
there are no outstanding securities of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a
security of the Company or any of its Subsidiaries, and (iv) the Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. The
Company disclosed in its SEC Documents or has furnished to Investor true and correct copies of the
Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the
“Certificate of Incorporation”), and the Company’s By-laws, as in effect on the date hereof
(the “By-laws”).
4. Representations, Warranties and Covenants of Investor. Each Investor severally for
itself, and not jointly with the other Investors, represents and warrants to, and covenants with
the Company, as follows:
4.1 Due Authorization; Organization. Investor has all requisite power, authority and
capacity to execute, deliver and perform its obligations under this Agreement, and has taken all
necessary corporate, company, partnership or individual action as the case may be to enter and
perform this Agreement. This Agreement has been duly authorized and validly executed and delivered
by Investor and constitutes a legal, valid and binding agreement of Investor enforceable against
Investor in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law). Any individual retirement account (“XXX”) to which the Shares, the
Adjusted Warrant or Warrant Shares may be issued and delivered on behalf of the Investor, if
applicable, is duly organized and validly existing in good standing under the laws of the
jurisdiction of its organization. Such XXX has full power and authority to own, operate and occupy
its properties and to conduct its business as presently conducted and is registered or qualified to
do business and in good standing in each jurisdiction in which it owns or leases property or
transacts business and where the failure to be so qualified would have a material adverse effect on
the financial condition of Investor or such XXX.
4.2 Non-Contravention. The execution and delivery of this Agreement, the purchase of
the Shares and the Adjusted Warrant under this Agreement, the fulfillment of the terms of this
Agreement and the consummation of the transactions contemplated hereby will not (i) conflict with
or constitute a violation of, or default (with or without the giving of notice or the passage of
time or both) under, (A) any material bond, debenture, note or other evidence of indebtedness, or
under any material lease, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument to which Investor is a party, (B) the charter,
by-laws or other organizational documents of Investor, as applicable, or (C) any law,
administrative regulation, ordinance or order of any court or governmental agency, arbitration
panel or authority applicable to
4
Investor or its property, or (ii) result in the creation or
imposition of any lien, encumbrance, claim, security interest or restriction whatsoever upon any of
the material properties or assets of Investor or an acceleration of indebtedness pursuant to any
obligation, agreement or condition contained in any material bond, debenture, note or any other
evidence of indebtedness or any material indenture, mortgage, deed of trust or any other agreement
or instrument to which Investor is a party or by which any of them is bound or to which any of the
property or assets of Investor is subject. No consent, approval, authorization or other order of,
or registration, qualification or filing with, any regulatory body, administrative agency,
self-regulatory organization, stock exchange or market, or other governmental body in the United
States is required for the execution and delivery of this Agreement and the purchase of the Shares
and the Adjusted Warrant by Investor, other than such as have been made or obtained.
4.3 Private Placement. Investor represents and warrants to, and covenants with, the
Company that Investor is acquiring the Shares and the Adjusted Warrant for its own account for
investment only and with no present intention of distributing any of the Shares, the Adjusted
Warrant or the Warrant Shares in violation of the applicable securities laws, or any arrangement or
understanding with any other persons regarding the distribution of the Shares, Adjusted Warrant or
Warrant Shares. Investor has been advised and understands that neither the Shares nor the Adjusted
Warrant have been registered under the Securities Act or under the “blue sky” or similar laws of
any jurisdiction and may be resold only if registered pursuant to the provisions of the Securities
Act and such other laws, if applicable, or, subject to the terms and conditions of this Agreement,
if an exemption from registration is available. Investor has been advised and understands that the
Company, in issuing the Shares and the Adjusted Warrant, is relying upon, among other things, the
representations and warranties of Investor herein in concluding that such issuance is a “private
offering” and is exempt from the registration provisions of the Securities Act.
4.4 Certain Trading Activities. Neither Investor nor any of its affiliates has
directly or indirectly, nor has any person acting on behalf of or pursuant to any understanding
with such Investor, engaged in any purchase or sale of Common Stock (including, without limitation,
any Short Sales (as defined below) involving the Company’s securities) since the date that such
Investor was presented with draft documentation relating to the transactions proposed hereby. For
the purposes of this Section 4.4, “Short Sales” include, without limitation, all “short
sales” as defined in Rule 200 of Regulation SHO adopted under the Exchange Act and all types of
direct and indirect stock pledges, forward sales contracts, options, puts, calls, short sales and
other transaction through non-US broker-dealers or foreign regulated brokers having the effect of
hedging the securities of the Company or the investment contemplated under this Agreement. Such
Investor covenants that neither it, nor any person acting on its behalf or pursuant to any
understanding with it, will engage in any transaction in the securities of the Company (including
short sales) prior to the filing of a Current Report on Form 8-K, Annual Report on Form 10-K,
press release, or other applicable Exchange Act report reporting this transaction.
4.5 No Advice. Investor understands that nothing in this Agreement or any other
materials presented to Investor in connection with the purchase and sale of the Shares and the
Adjusted Warrant constitutes legal, tax or investment advice. Investor has consulted such legal,
tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Shares and the Adjusted Warrant.
5
4.6 Accredited Investor. Investor is an “accredited investor” as that term is defined
in Rule 501(a) of Regulation D under the Securities Act and is able to bear the risk of its
investment in the Shares, Adjusted Warrant, and Warrant Shares. Investor has such knowledge and
experience in financial and business matters that it is capable of evaluating the merits and risks
of the purchase of the Shares, Adjusted Warrant and Warrant Shares.
4.7 Limited Representations. Investor and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the Company and its
Subsidiaries which have been requested and materials relating to the offer and sale of the Shares,
Adjusted Warrant, and Warrant Shares, which have been requested by Investor. Investor and its
advisors, if any, have been afforded the opportunity to ask such questions of the Company as they
deem appropriate for purposes of the investment contemplated hereby. Investor acknowledges and
agrees that the most recent disclosure of the Company’s results is for the three and nine month
periods ended on, and the most recent disclosure of the Company’s financial condition is at,
September 30, 2009, as reported on the Company’s quarterly report on Form 10-Q, filed with the
Commission on November 11, 2009, and that, except as disclosed in the SEC documents, no information
more recent than such date has been provided to Investor as to the Company’s results, operations,
financial condition, business or prospects. Investor understands that its purchase of the Shares,
Adjusted Warrant and, if applicable, Warrant Shares involves a high degree of risk and that
Investor may lose its entire investment in the Shares, Adjusted Warrant and, if applicable, Warrant
Shares, and that Investor can afford to do so without material adverse consequences to its
financial condition. Investor is not relying on any information provided by the Company and its
Subsidiaries, except to the extent provided in Section 3 herein.
4.8 No Recommendation. Investor understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any recommendation or
endorsement of the Shares, Adjusted Warrant or Warrant Shares or the fairness or suitability of an
investment in the Shares, Adjusted Warrant or Warrant Shares nor have such authorities passed upon
or endorsed the merits thereof.
4.9 Restrictive Legend. The Company shall issue the Adjusted Warrant and certificates
for the Shares and, if applicable, Warrant Shares to Investor with a legend as described in
Section 6 below. Investor covenants that, in connection with any transfer of any Shares or
Warrant Shares pursuant to the registration statement registering the resale of the Warrant Shares
or registration statement contemplated by Section 5 hereof, as applicable, including the
prospectuses contained therein, Investor will comply with the applicable prospectus delivery
requirements of the Securities Act, provided that copies of a current prospectus relating to such
effective registration statements are available to Investor.
4.10 Residence. Investor is a resident or organized under the laws of the
jurisdiction set forth next to Investor’s name on Schedule I hereto.
4.11 No Market. Investor understands that the Shares are restricted securities and
that there is no public trading market for the Adjusted Warrant, that none is expected to develop,
and that the Shares and Adjusted Warrant must be held indefinitely unless and until the resale of
such Shares or Adjusted Warrant is registered under the Securities Act or subject to the terms
and conditions of this Agreement and the applicable securities laws, an exemption from registration is
6
available. Investor has been advised or is aware of the provisions of Rule 144 promulgated
under the Securities Act.
4.12 No Commissions. Investor has taken no action which would give rise to any claim
by any person for brokerage commissions, finder’s fees or similar payments by the Company or
Investor relating to this Agreement or the transactions contemplated hereby.
4.13 Transactional Exemption. Investor understands that the Shares, Adjusted Warrant
and Warrant Shares are being offered and sold in reliance on a transactional exemption from the
registration requirements of federal and state securities laws and that the Company is relying upon
the truth and accuracy of the representations, warranties, agreements, acknowledgments and
understandings of Investor set forth herein in order to determine the applicability of such
exemptions and the suitability of Investor to acquire the Shares, Adjusted Warrant and Warrant
Shares.
4.14. Investor Undertaking. Investor covenants that it will not sell, transfer,
assign, hypothecate or pledge in any way any of the Shares unless the resale of the Shares has been
registered for resale under the Securities Act and in compliance with applicable prospectus
delivery requirements, if any, or otherwise in compliance with the requirements of an available
exemption from registration under the Securities Act and the rules and regulations promulgated
thereunder.
5. Registration Rights.
5.1 Certain Definitions
“Holder” and “Holders” shall include Investor and any transferee or transferees of Registrable
Securities to whom the registration rights conferred by this Agreement and the Prior Purchase
Agreement, have been transferred in compliance with this Agreement and the Prior Purchase
Agreement.
The terms “register,” “registered” and “registration” shall refer to a registration effected
by preparing and filing a registration statement in compliance with the Securities Act and
applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness
of such registration statement.
“Registrable Securities” shall mean: (i) the Shares issued or issuable to each Holder (A)
upon any distribution with respect to, any exchange for or any replacement of such Shares, or (B)
upon any conversion, exercise or exchange of any securities issued in connection with any such
distribution, exchange or replacement; (ii) securities issued or issuable upon any stock split,
stock dividend, recapitalization or similar event with respect to the foregoing; and (iii) any
other security issued as a dividend or other distribution with respect to, in exchange for or in
replacement of the securities referred to in the preceding clauses, except that any such Shares, or
other securities shall cease to be Registrable Securities when (C) they have been sold to the
public or (D) they may be sold by the Holder thereof without restriction pursuant to Rule 144.
“Registration Expenses” shall mean all expenses to be incurred by the Company in connection
with each Holder’s registration rights under this Agreement (such amount not to exceed $5,000 in
the aggregate), including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, and blue sky fees and expenses,
7
reasonable fees
and disbursements of counsel to Holders (using a single counsel selected by a majority in interest
of the Holders) for a review of the Registration Statement (as defined herein) and related
documents, and the expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company, which shall be paid in any
event by the Company).
“Selling Expenses” shall mean all underwriting discounts, selling commissions and transfer
taxes applicable to the sale of Registrable Securities and all fees and disbursements of counsel
for Holders not included within “Registration Expenses.”
5.2 Registration Requirements. The Company shall use its reasonable best efforts to
effect the registration of the resale of the Registrable Securities (including, without limitation,
the execution of an undertaking to file post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as would permit or facilitate the resale of all the
Registrable Securities in the manner (including manner of sale) and in all states reasonably
requested by the Holder. Such reasonable best efforts by the Company shall include, without
limitation, the following:
(a) The Company shall, as expeditiously as possible:
(i) But in any event within 60 days of the Closing, prepare and file a
registration statement with the Commission pursuant to Rule 415 under the Securities
Act on Form S-3 under the Securities Act (or in the event that the Company is
ineligible to use such form, such other form as the Company is eligible to use under
the Securities Act provided that such other form shall be converted into a Form S-3
promptly after Form S-3 becomes available to the Company) covering resales by the
Holders as selling stockholders (not underwriters) of the Shares (the
“Registration Statement”). The Company shall use its reasonable best efforts
to cause such Registration Statement and other filings to be declared effective as
soon as possible, and in any event prior to 120 days (or, if the Commission elects to
review the Registration Statement, 180 days) following the Closing.
(ii) Without limiting the foregoing, the Company will promptly respond to all
Commission comments, inquiries and requests, and shall request acceleration of
effectiveness of the Registration Statement at the earliest possible date. The
Company shall provide the Holders reasonable opportunity to review the portions of
any such Registration Statement or amendment or supplement thereto containing
disclosure regarding the Holders prior to filing.
(iv) Prepare and file with the Commission such amendments and supplements to
such Registration Statement and the prospectus used in connection with such
Registration Statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement and notify the Holders of the filing and effectiveness of such
Registration Statement and any amendments or supplements.
8
(v) Furnish or otherwise make available to each Holder copies of a current
prospectus included in the Registration Statement conforming with the requirements of
the Securities Act, copies of the Registration Statement, any amendment or supplement
thereto and any documents incorporated by reference therein and such other documents
as such Holder may reasonably require in order to facilitate the disposition of
Registrable Securities owned by such Holder.
(vi) Register and qualify the securities covered by the Registration Statement
under the securities or “blue sky” laws of all domestic jurisdictions, to the extent
required; provided that the Company shall not be required in connection therewith or
as a condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(vii) Notify each Holder immediately of the happening of any event (but not the
substance or details of any such events unless specifically requested by a Holder) as
a result of which the prospectus (including any supplements thereto or thereof)
included in such Registration Statement, as then in effect, includes an untrue
statement of material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of the
circumstances then existing, and use its reasonable best efforts to promptly update
and/or correct such prospectus.
(viii) Notify each Holder immediately of the issuance by the Commission or any
state securities commission or agency of any stop order suspending the effectiveness
of the Registration Statement or the threat or initiation of any proceedings for that
purpose. The Company shall use its reasonable best efforts to prevent the issuance
of any stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible time.
(ix) Permit counsel to the Holders to review the Registration Statement and all
amendments and supplements thereto within a reasonable period of time (but not less
than two (2) full days on which there is trading on the Nasdaq Global Market (the
“Principal Market”) or such other market or exchange on which the Common
Stock is then principally traded) prior to each filing and will not request
acceleration of the Registration Statement without prior notice to such counsel.
(x) Qualify the Registrable Securities covered by such Registration Statement
for listing on the Principal Market or the principal securities exchange and/or
market on which the Common Stock is then listed, including the preparation and filing
of any required filings with such principal market or exchange.
(b) In the event that the Registration Statement has been declared effective by the Commission
and, afterwards, any Holder’s ability to sell Registrable Securities registered for resale under
the Registration Statement is suspended for more than (i) 45 days in any 90-day period or (ii) 90
days in any calendar year, including without limitation by reason of any suspension or
stop order with respect to the Registration Statement or the fact that an event has occurred
as a result of which the prospectus (including any supplements thereto) included in the
Registration Statement then in effect includes an untrue statement of material fact or omits to
state a material fact
9
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, then the Company shall take such action as
may be necessary to amend or supplement the Registration Statement or the prospectus (including any
supplements thereto) included in the Registration Statement, such that the Registration Statement
or the prospectus, as so amended, shall not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements not
misleading.
(c) If the Holder(s) intend to distribute the Registrable Securities by means of an
underwriting, the Holder(s) shall so advise the Company. Any such underwriting may only be
administered by nationally or regionally recognized investment bankers reasonably satisfactory to
the Company.
(d) Subject to Section 5.2(c) above, the Company shall enter into such customary
agreements (including an underwriting agreement containing such representations and warranties by
the Company and such other terms and provisions, as are customarily contained in underwriting
agreements for comparable offerings and are reasonably satisfactory to the Company) and take all
such other actions as the Holder or the underwriters participating in such offering and sale may
reasonably request in order to expedite or facilitate such offering and sale other than such
actions which are disruptive to the Company or require significant management availability.
(e) The Company shall make available for inspection by the Holders, representative(s) of all
the Holders together, any underwriter participating in any disposition pursuant to the Registration
Statement, and any attorney or accountant retained by any Holder or underwriter, all financial and
other records customary for purposes of the Holders’ due diligence examination of the Company and
review of the Registration Statement, all documents filed with the Commission subsequent to the
Closing, pertinent corporate documents and properties of the Company, and cause the Company’s
officers, directors and employees to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with the Registration Statement,
provided that such parties agree to keep such information confidential. Notwithstanding the
foregoing, the foregoing right shall not extend to any Holder (i) who is not a financial investor
or entity or (ii) who, itself or through any affiliate, has any strategic business interest that
would reasonably be expected to be in conflict with any business of the Company or its
Subsidiaries.
(f) The Company may suspend the use of any prospectus used in connection with the Registration
Statement only in the event, and for such period of time as, (i) such a suspension is required by
the rules and regulations of the Commission or (ii) it is determined in good faith by the Board of
Directors of the Company that because of valid business reasons (not including the avoidance of the
Company’s obligations hereunder), it is in the best interests of the Company to suspend such use,
and prior to suspending such use in accordance with this clause (f)(ii) the Company provides the
Holders with written notice of such suspension, which notice need not specify the nature of the
event giving rise to such suspension. The Company will use reasonable best efforts to cause such
suspension to terminate at the earliest possible date.
(g) The Company shall prepare and file with the Commission such amendments (including
post-effective amendments) and supplements to the Registration Statement and the prospectus used in
connection with the Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the Securities Act, as may be necessary to keep the
10
Registration Statement
effective at all times during the Registration Period (as defined below), and, during such period,
comply with the provisions of the Securities Act with respect to the disposition of all Registrable
Securities of the Company covered by the Registration Statement. In the case of amendments and
supplements to the Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 5.2(g)) by reason of the Company filing a report on
Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the Company shall
have incorporated such report by reference into the Registration Statement, if applicable, or shall
file such amendments or supplements with the Commission on the same day on which the Exchange Act
report is filed which created the requirement for the Company to amend or supplement the
Registration Statement.
(h) Each Holder agrees by its acquisition of the Registrable Securities that, upon receipt of
a notice from the Company of the occurrence of any event of the kind described in Sections
5.2(a)(vii) or 5.2(a)(viii), and upon notice of any suspension under Section 5.2(f),
such Holder will forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder’s receipt of the copies of the supplemented prospectus
and/or amendment to the Registration Statement contemplated by this Section 5.2, or until
it is advised in writing by the Company that the use of the applicable prospectus may be resumed,
and, in either case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such prospectus or the Registration
Statement. The Company may provide appropriate stop orders to enforce the provisions of this
paragraph.
(i) If requested by a Holder, the Company shall (i) as soon as practicable incorporate in a
prospectus supplement or post-effective amendment such information as a Holder 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) as soon as practicable 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) as
soon as practicable, supplement or make amendments to the Registration Statement if reasonably
requested by a Holder holding any Registrable Securities.
5.3 Expenses of Registration. All Registration Expenses in connection with any
registration, qualification or compliance with registration pursuant to this Agreement shall be
borne by the Company, and all Selling Expenses of a Holder shall be borne by such Holder.
5.4 Registration on Form S-3. The Company shall use its reasonable best efforts to
remain qualified for registration on Form S-3 or any comparable or successor form or forms, or in
the event that the Company is ineligible to use such form, such form as the Company is eligible to
use under the Securities Act, provided that if such other form is used, the Company shall convert
such other form to a Form S-3 promptly after the Company becomes so eligible, provided that the
Company shall maintain the effectiveness of the Registration Statement then in effect until such
time as the Registration Statement covering the Registrable Securities has been declared
effective by the Commission.
5.5 Registration Period. In the case of the registration effected by the Company
pursuant to this Agreement, the Company shall keep such registration effective from the date on
which the
11
Registration Statement initially became effective until the earlier of (i) the date on
which all the Holders have completed the sales or distribution described in the Registration
Statement relating to the Registrable Securities registered for resale thereunder or, (ii) until
such Registrable Securities may be sold by the Holders without restriction pursuant to Rule 144 (or
any successor thereto) (provided that the Company’s transfer agent has accepted an instruction from
the Company to such effect) (the “Registration Period”). Thereafter, the Company shall be
entitled to withdraw such Registration Statement and the Holders shall have no further right to
offer or sell any of the Registrable Securities registered for resale thereon pursuant to the
Registration Statement (or any prospectus relating thereto).
5.6 Indemnification.
(a) Company Indemnity. The Company will indemnify and hold harmless each Holder, each
of its officers, directors, agents and partners, and each person controlling each of the foregoing,
within the meaning of Section 15 of the Securities Act and the rules and regulations thereunder
with respect to which registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls, within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, any underwriter, against
all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or compliance, or based
on any omission (or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of the circumstances
under which they were made, or any violation by the Company of the Securities Act or any state
securities law or in either case, any rule or regulation thereunder applicable to the Company and
relating to action or inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each Holder, each of its officers, directors,
agents and partners, and each person controlling each of the foregoing, each such underwriter and
each person who controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such case to a Holder to the extent
that any such claim, loss, damage, liability or expense arises out of or is based (i) on any untrue
statement or omission based upon written information furnished to the Company by a Holder or the
underwriter (if any) therefore, (ii) the failure of a Holder to deliver at or prior to the written
confirmation of sale, the most recent prospectus, as amended or supplemented, or (iii) the failure
of a Holder otherwise to comply with this Agreement. The indemnity agreement contained in this
Section 5.6(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent of the Company
(which consent will not be unreasonably withheld).
(b) Holder Indemnity. Each Holder will, severally and not jointly, if Registrable
Securities held by it are included in the securities as to which such registration, qualification
or compliance is being effected, indemnify and hold harmless the Company, each of its directors,
officers, agents and partners, and each underwriter, if any, of the Company’s securities covered by
such a registration statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act and the rules and regulations thereunder, each other
Holder (if any), and each of their officers, directors and partners, and each person controlling
such
12
other Holder(s) against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make a statement therein not misleading in light of the
circumstances under which they were made, and will reimburse the Company and such other Holder(s)
and their directors, officers and partners, underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with investigating and defending any such claim,
loss, damage, liability or action, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder and stated to be
specifically for use therein, and provided that the maximum amount for which such Holder shall be
liable under this indemnity shall not exceed the net proceeds received by such Holder from the sale
of the Registrable Securities pursuant to the registration statement in question. The indemnity
agreement contained in this Section 5.6(b) shall not apply to amounts paid in settlement of
any such claims, losses, damages or liabilities if such settlement is effected without the consent
of such Holder (which consent shall not be unreasonably withheld).
(c) Procedure. Each party entitled to indemnification under this Section 5.6
(the “Indemnified Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party
to assume the defense of any such claim in any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation
resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such defense at its own
expense, and provided further that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this Section 5.6
except to the extent that the Indemnifying Party is materially and adversely affected by such
failure to provide notice. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such non-privileged information
regarding itself or the claim in question as an Indemnifying Party may reasonably request in
writing and as shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
5.7 Contribution. If the indemnification provided for in Section 5.6 herein
is unavailable to the Indemnified Parties in respect of any losses, claims, damages or liabilities
referred to herein
(other than by reason of the exceptions provided therein), then each such Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, claims, damages or liabilities as between the
Company on the one hand and any Holder on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of such Holder in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company on the one hand and of any
Holder on the other shall be determined by reference to, among other things, whether the untrue or
alleged untrue
13
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or by such Holder.
In no event shall the obligation of any Indemnifying Party to contribute under this
Section 5.7 exceed the amount that such Indemnifying Party would have been obligated to pay
by way of indemnification if the indemnification provided for under Sections 5.6(a) or
5.6(b) hereof had been available under the circumstances.
The Company and the Holders agree that it would not be just and equitable if contribution
pursuant to this Section 5.7 were determined by pro rata allocation (even if the Holders or
the underwriters were treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the immediately
preceding paragraphs. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding paragraphs shall
be deemed to include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this section, no Holder or underwriter
shall be required to contribute any amount in excess of the amount by which (i) in the case of any
Holder, the net proceeds received by such Holder from the sale of Registrable Securities pursuant
to the registration statement in question or (ii) in the case of an underwriter, the total price at
which the Registrable Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such Holder or underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
5.8 Survival. The indemnity and contribution agreements contained in Sections 5.6
and 5.7 and the representations and warranties of the Company referred to in Section
5.2(d) shall remain operative and in full force and effect regardless of (i) any termination of
this Agreement or any underwriting agreement, (ii) any investigation made by or on behalf of any
Indemnified Party or by or on behalf of the Company, and (iii) the consummation of the sale or
successive resales of the Registrable Securities.
5.9 Information by Holders. Each Holder shall promptly furnish to the Company such
information regarding such Holder and the distribution and/or sale proposed by such Holder as the
Company may from time to time reasonably request in writing in connection with any registration,
qualification or compliance referred to in this Agreement, and the Company may exclude from such
registration the Registrable Securities of any Holder who unreasonably fails to furnish such
information within a reasonable time after receiving such request. The intended method or
methods of disposition and/or sale of such securities as so provided by such purchaser shall be
included without alteration in the Registration Statement covering the Registrable Securities and
shall not be changed without written consent of such Holder. Each Holder agrees that, other than
ordinary course brokerage arrangements, in the event it enters into any arrangement with a broker
dealer for the sale of any Registrable Securities through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, such Holder shall
promptly deliver to the Company in writing all applicable information required in order for the
Company to be able to timely file a supplement to the Prospectus pursuant to Rule 424(b), or take
any other action, under
14
the Securities Act, to the extent that such supplement or other action is
legally required. Such information shall include a description of (i) the name of such Holder and
of the participating broker dealer(s), (ii) the number of Registrable Securities involved, (iii)
the price at which such Registrable Securities were or are to be sold, and (iv) the commissions
paid or to be paid or discounts or concessions allowed or to be allowed to such broker dealer(s),
where applicable.
6. Stock Legend.
6.1 Upon payment therefor as provided in this Agreement, the Company will issue the Shares in
the name of each Investor.
Any certificate representing Shares shall be stamped or otherwise imprinted with a legend in
substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION AND MAY
NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, AND AFTER
RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT OR THAT THE PROSPECTUS DELIVERY REQUIREMENTS HAVE BEEN
MET.
Any certificate representing the Warrant Shares issued by the Company shall also be stamped or
otherwise imprinted with a legend in substantially the following form:
THESE SECURITIES REPRESENTED HEREBY ARE ALSO SUBJECT TO RIGHTS AND OBLIGATIONS AS SET FORTH IN
A SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENTS DATED AS OF MARCH 2, 2009 AND MARCH 5,
2010, IN EACH CASE, BY AND AMONG STAR SCIENTIFIC, INC. AND THE SEVERAL INVESTORS PARTY THERETO AS
SUCH MAY BE AMENDED FROM TIME TO TIME.
The Adjusted Warrant shall be imprinted with the legends set forth in the Adjusted Warrant on
Exhibit A hereto.
The Company agrees to issue the Shares or Warrant Shares, issued upon exercise of the Adjusted
Warrant without the legends set forth above at such time as the Holder thereof is (i)
permitted to transfer such Shares or Warrant Shares, as applicable, without restriction
pursuant to an available exemption from registration under the Securities Act, and upon such
transfer after delivery to the Company of a customary representation satisfactory to the Company
that such exemption has been met, or (ii) at such time the Shares or Warrant Shares, as applicable,
have been registered for resale under the Securities Act, and upon such resale after delivery to
the Company of a customary representation that the Holder has complied with the plan of
distribution in the applicable prospectus contained in the registration statement and that the
prospectus delivery requirements have been met, if any.
15
7. Survival of Representations, Warranties and Agreements. Notwithstanding any
investigation made by any party to this Agreement, all covenants, agreements, representations and
warranties made by the Company and Investor herein shall survive the execution of this Agreement,
the delivery to Investor of the Shares and the Adjusted Warrant being purchased and the payment
therefor.
8. Notices. All notices, requests, consents and other communications hereunder shall
be in writing, shall be mailed (i) if within domestic United States by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile, or (ii) if delivered from outside the United States, by International Federal Express or
facsimile, and shall be deemed given (A) if delivered by first-class registered or certified mail
domestic, three business days after so mailed, (B) if delivered by nationally recognized overnight
carrier, one business day after so mailed, (C) if delivered by International Federal Express, two
business days after so mailed, and (D) if delivered by facsimile, upon electric confirmation of
receipt and shall be delivered as addressed as follows:
| (a) | if to the Company, to: |
Star Scientific, Inc.
0000 Xxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
0000 Xxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
with copies to:
Star Scientific, Inc.
0000 Xxxxxxxxx Xxx.
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
General Counsel
Phone: (000) 000-0000
Telecopy: (000) 000-0000;
0000 Xxxxxxxxx Xxx.
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
General Counsel
Phone: (000) 000-0000
Telecopy: (000) 000-0000;
and
Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. X’Xxxxx
Phone: (000) 000-0000
Telecopy: (000) 000-0000
000 Xxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. X’Xxxxx
Phone: (000) 000-0000
Telecopy: (000) 000-0000
(b) if to Investor, at its address set forth under its name on Schedule I hereto, or
at such other address or addresses as may have been furnished to the Company in writing.
16
9. Changes. This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Investors.
10. Headings. The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of this Agreement.
11. Severability. In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or impaired thereby.
12. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York, without giving effect to the principles of
conflicts of law.
13. Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto pertaining to the subject matter hereof, and any and all other written or oral
agreements relating to such subject matter are expressly cancelled.
14. Finders Fees. Neither the Company nor Investor nor any affiliate thereof has
incurred any obligation which will result in the obligation of the other party to pay any finder’s
fee or commission in connection with this transaction.
15. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original, but all of which, when taken together, shall constitute but one
instrument, and shall become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.
16. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Company and Investor. Investor shall not
assign any rights or obligations under this Agreement other than, solely with respect to any
Shares, Adjusted Warrant or Warrant Shares transferred in accordance with this Agreement, including
the legends described herein, to any permitted transferee of such Shares, Adjusted Warrant or
Warrant Shares, provided, however, that no such assignment shall relieve Investor
of its obligations under this Agreement.
17. Expenses. Each of the Company and Investor shall bear its own expenses in
connection with the preparation and negotiation of the Agreement.
18. Independent Nature of Investors’ Obligations and Rights. The obligations of each
Investor under this Agreement are several and not joint with the obligations of any other Investor,
and no Investor shall be responsible in any way for the performance of the obligations of any other
Investor under this Agreement. 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 by this Agreement and the Company acknowledges that the Investors are not acting in
concert or as a group with respect to such obligations or the transactions contemplated by this
Agreement. Each Investor confirms that it has independently participated in the negotiation of the
transaction contemplated hereby with the advice of its own counsel and advisors. Each Investor
shall be entitled to
17
independently protect and enforce its rights, including, without limitation,
the rights arising out of this Agreement, and it shall not be necessary for any other Investor to
be joined as an additional party in any proceeding for such purpose.
19. Pronouns. All pronouns or any variation thereof shall be deemed to refer to the
masculine, feminine or neuter, singular or plural, as the identity of the person, persons, entity
or entities may require.
20. Public Statements or Releases. The Company shall by 8:30 a.m. New York time on
the business day following the Closing Date, issue a press release or file a Current Report on Form
8-K disclosing the transactions contemplated hereby.
[Signature pages follow.]
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.
| STAR SCIENTIFIC, INC. |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | Chairman, President and Chief Operating Officer |
|||
Signature Page to Securities Purchase and Registration Rights Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.
| IROQUOIS MASTER FUND LTD |
||||
| By: | /s/ Xxxxxx Xxxxxxxxx | |||
| Name: | Xxxxxx Xxxxxxxxx | |||
| Title: | Authorized Signatory | |||
Signature Page to Securities Purchase and Registration Rights Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.
| IROQUOIS CAPITAL, LP |
||||
| By: | /s/ Xxxxxx Xxxxxxxxx | |||
| Name: | Xxxxxx Xxxxxxxxx | |||
| Title: | Authorized Signatory | |||
Signature Page to Securities Purchase and Registration Rights Agreement
SCHEDULE I
SCHEDULE OF INVESTORS
| Aggregate | Warrant | Prior Exercise | New Exercise | |||||||||||||||||||||
| Name and Address | Shares | Price Per Share | Consideration | Shares | Price | Price | ||||||||||||||||||
Iroquois Master Fund Ltd |
2,649,007 | $ | 1.05 | $ | 2,781457.35 | 2,649,007 | $ | 3.50 | $ | 1.50 | ||||||||||||||
Iroquois Capital, LP |
1,000,000 | $ | 1.05 | $ | 1,050,000 | 1,000,000 | $ | 3.50 | $ | 1.50 | ||||||||||||||
Total: |
3,649,007 | $ | 3,831,457.35 | |||||||||||||||||||||
