EXHIBIT (10.9)
ADVANCED BIOTHERAPY, INC.
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (the "Agreement") is made as of the 15th day of
April, 2002, by and among Advanced Biotherapy, Inc., a Delaware corporation (the
"Company"), and the holders of 2002 Subordinated Convertible Pay-In-Kind Notes
due September 30, 2004, of the Company (each of whom is sometimes herein
referred to as an "Investor," and collectively as the "Investors") who have
executed, or may from time to time execute, an Investors Rights Agreement
Joinder, generally in the form attached hereto as Exhibit A. The Investors are
identified on Schedule A hereto, which will be amended from time to time to
update the parties to this Agreement.
RECITALS
The Investors have subscribed for the Company's 2002 Subordinated Convertible
Pay-In-Kind Notes due September 30, 2004 ("Convertible Notes") evidenced by debt
instruments substantially in the form of Exhibit B pursuant to the Subscription
Agreement of even date herewith (the "Subscription Agreement"). The Company and
the Investors desire to enter into this Agreement in order to provide the
Investors with certain rights to register shares of the Company's common stock,
par value $0.001 ("Common Stock") underlying the Convertible Notes. The Company
desires to induce the Investors to purchase Convertible Notes by agreeing to the
terms and conditions set forth herein.
AGREEMENT
The parties hereby agree as follows:
1. REGISTRATION RIGHTS The Company and the Investors covenant and agree as
follows:
1.1. DEFINITIONS. For purposes of this Agreement:
(a) The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended, or
successor statute, and applicable rules and regulations thereunder (the
"Securities Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means (i) the shares of
Common Stock issuable or issued pursuant to the conversion of the Company's
Convertible Notes and (ii) any other shares of the Company's Common Stock issued
as (or issuable upon the conversion or exercise of any Convertible Notes,
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, the
shares listed in (i); provided, however, that the foregoing definition shall
exclude in all cases
any Registrable Securities sold by a person in a transaction in which such
person's rights under this Agreement are not assigned. Notwithstanding the
foregoing, neither the Company's Common Stock nor its other securities shall be
treated as Registrable Securities if they have been (A) sold to or through a
broker or dealer or underwriter in a public distribution or a public securities
transaction, or (B) sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section 4(1)
thereof so that all transfer restrictions, and restrictive legends with respect
thereto, if any, are removed upon the consummation of such sale;
(c) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities;
(d) The term "Holder" means any person owning, or having the
right to acquire, Registrable Securities or any assignee thereof in accordance
with Section 1.8 of this Agreement;
(e) The term "SEC" means the Securities and Exchange Commission;
and
1.2 REQUEST FOR REGISTRATION.
(a) If the Company shall receive at any time after October 1,
2002, through December 31, 2004, inclusive, a written request from the Holders
of at least fifty percent (50%) of the Registrable Securities then outstanding
(the "Initiating Holders") that the Company file a registration statement under
the Securities Act covering the registration of at least such number of the
Registrable Securities then outstanding as would yield an aggregate offering
price of at least $500,000.00 before underwriting discounts and commissions,
then the Company shall, within thirty (30) days of the receipt thereof, give
written notice of such request to all Holders and shall, subject to the
limitations of subsection 1.2(b), use its reasonable best efforts to effect as
soon as practicable, the registration under the Securities Act of all
Registrable Securities which the Holders request to be registered by the Company
in accordance with Section 1.3.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 1.2 and the Company shall include such information in the written
notice referred to in subsection 1.2(a). The underwriter will be selected by a
majority in interest of the Initiating Holders and shall be reasonably
acceptable to the Company. In such event, the right of any Holder to include his
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities
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through such underwriting shall (together with the Company as provided in
subsection 1.5(e)) enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting. Notwithstanding
any other provision of this Section 1.2, if the underwriter advises the Company
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Company shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the number
of shares of Registrable Securities that may be included in the underwriting
shall be allocated among all Holders thereof, including the Initiating Holders,
in proportion (as nearly as practicable) to the amount of Registrable Securities
of the Company owned by each Holder. Any Registrable Securities excluded or
withdrawn from such underwriting shall be withdrawn from the registration.
(c) Notwithstanding the foregoing, if the Company shall furnish
to Holders requesting a registration statement pursuant to this Section 1.2, a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period of not more than 180 days after receipt of the request of the
Initiating Holders; provided, however, that the Company may not utilize this
right more than once in any twelve-month period, whether pursuant to this
Section 1.2(c) or pursuant to Section 1.4(b)(iii).
(d) In addition and without limitation of Section 1.15 hereof,
the Company shall not be obligated to effect, or to take any action to effect,
any registration pursuant to this Section 1.2:
(i) After the Company has effected one (1) registration
pursuant to this Section 1.2 and such registration has been declared or ordered
effective;
(ii) During the period starting with the date sixty (60) days
prior to the Company's good faith estimate of the date of filing of, and ending
on a date one hundred eighty (180) days after the effective date of, a
registration subject to Section 1.4 hereof; provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective;
(iii) If the Initiating Holders propose to dispose of shares
of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 1.4 below;
(iv) If within thirty (30) days of receipt of a written
request from Initiating Holders pursuant to Section 1.2(a), the Company gives
notice to the Holders of the Company's intention to make a public offering
within ninety (90) days; or
(v) At any time after December 31, 2004.
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(e) Notwithstanding the foregoing, a registration will not count
as the required registration under Section 1.2(d)(i) unless the Initiating
Holders were able to sell a minimum of fifty-percent (50%) of the shares sought
to be so registered in such registration.
1.3 HOLDER PROCEDURES. Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by it
shall, within fifteen (15) days after the notice from the Company described in
Section 1.2, above, so notify the Company in writing. Such notice shall state
the intended method of disposition of the Registrable Securities by such Holder.
If a Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Holder thereafter
shall have no further right to include any Registrable Securities in any
subsequent registration statement or registration statements as may be filed by
the Company with respect to offerings of its securities.
1.4 FORM S-3 REGISTRATION. In the event that the Company shall
receive, from any Holder or Holders of not less than fifty percent (50%) of the
Registrable Securities then outstanding, a written request or requests that the
Company effect a registration on Form S-3 with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, the Company shall:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 1.4:
(i) if Form S-3 is not available for such offering by the
Holders;
(ii) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities (if any) at an aggregate
price to the public before deducting any underwriters' discounts or commissions)
of less than $500,000;
(iii) if the Company shall furnish to the Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such Form S-3 registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the Form S-3 registration statement for a period of not more
than 180 days after receipt of the request of the Holder or Holders under this
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Section 1.4; provided, however, that the Company shall not utilize this right
more than once in any twelve (12) month period, whether pursuant to this Section
1.4(b)(iii) or pursuant to Section 1.2(c);
(iv) if within thirty (30) days of receipt of a written
request from Initiating Holders pursuant to Section 1.4, the Company gives
notice to the Holders of the Company's intention to make a public offering
within ninety (90) days;
(v) if the Company has, within the twelve (12) month period
preceding the date of such request, effected a registration on Form S-3 for the
Holders pursuant to this Section 1.4;
(vi) in any particular jurisdiction in which the Company
would be required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or compliance;
or
(vii) after the Company has effected one (1) registration
pursuant to Section 1.2 and such registration has been declared effective or
ordered effective.
(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable after receipt of the request or requests of
the Holders. Registrations effected pursuant to this Section 1.4 shall not be
counted as demands for registration effected pursuant to Sections 1.2,
respectively.
1.5 OBLIGATIONS OF THE COMPANY. When required under this Section 1 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its reasonable best efforts to
cause such registration statement to become effective, and, upon the request of
the Holders of a majority of the Registrable Securities registered thereunder,
keep such registration statement effective up to and including September 30,
2004 ("Expiration Date"). The Company shall be required to file, cause to become
effective or maintain the effectiveness of any registration statement that
contemplates a distribution of securities on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act, subject to such Expiration Date.
(b) Prepare and file with the SEC 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 through the Expiration Date, inclusive.
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(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its reasonable best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders holding a majority of the Registrable Securities then outstanding,
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.
(e) Notify each Holder of Registrable Securities at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act of the happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing, such obligation to continue through the
Expiration Date, inclusive.
(f) Cause all such Registrable Securities registered pursuant to
such registration statement to be listed on any securities exchange on which
similar securities issued by the Company are then listed.
(g) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such registration.
1.6 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
1.7 EXPENSES OF REGISTRATION.
(a) Demand Registration. All expenses, other than underwriting
discounts and commissions, incurred in connection with registrations, filings or
qualifications pursuant to Section 1.2 , including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company (collectively "registration
expenses") shall be borne by the Holders and payable in advance upon demand by
the Company.
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(b) Registration on Form S-3. All expenses other than
underwriting discounts and commissions incurred in connection with two (2)
registrations requested pursuant to Section 1.4, including (without limitation)
all registration, filing, qualification, printers' and accounting fees and the
fees and disbursements of counsel for the Company shall be borne by the Company.
(c) Notwithstanding anything to the contrary herein, the Holders
shall bear full responsibility for all costs and expenses of any kind occurred
in connection with any underwriting, distribution, offer, sale or other
transfers of Registrable Securities, including, without limitation, underwriting
discounts and commissions.
1.8 UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.2 or 1.4 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be first taken from the Holders of Registrable Securities and
apportioned pro rata among the selling stockholders according to the total
amount of securities entitled to be included therein owned by each selling
stockholder or in such other proportions as shall mutually be agreed to by such
selling stockholders, but in no event shall any shares being sold by a
stockholder exercising registration rights pursuant to Section 1.2 be excluded
from such offering. For purposes of the preceding sentence concerning
apportionment, for any Holder which is a partnership or corporation, the
partners, retired partners and stockholders of such Holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons, shall be deemed to be a single "selling
stockholder," and any pro-rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling stockholder," as defined in this sentence.
1.9 DELAY OF REGISTRATION. No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.10 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Section 1:
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(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder and, if applicable, any underwriter (as defined in
the Securities Act) for such Holder and each person, if any, who controls such
Holder, or underwriter within the meaning of the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law; and the
Company will pay to each such Holder, underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however , that the indemnity agreement contained in this
subsection 1.6(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 shall not be unreasonably withheld),
nor shall the Company be liable to any Holder, underwriter or controlling person
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, its officers and
each person who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter,
any other Holder selling securities in such registration statement and any
controlling person of any such underwriter or other Holder against any losses,
claims, damages, or liabilities (joint or several) to which any of the foregoing
persons may become subject, under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) 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 by such
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this subsection 1.6(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 1.6(b) 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 Holder which consent shall not be unreasonably
withheld; further, that in no event shall the amounts payable in indemnity by a
Holder
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under this subsection 1.6(b) in respect of a Violation exceed the net proceeds
received by such Holder in the registered offering out of which such Violation
arises.
(c) Promptly after receipt by an indemnified party under this
Section 1.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.6, 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 the defense thereof with counsel mutually
satisfactory to the parties; provided, however , that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall relieve such indemnifying party of liability to the indemnified
party under this Section 1.6 to the extent that the indemnifying party has been
prejudiced thereby, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 1.6.
(d) If the indemnification provided for in this Section 1.6 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations; provided, that in no event shall the amounts payable in
contribution by a Holder under this subsection 1.6(d) in respect of a Violation
exceed the net proceeds received by such Holder in the registered offering out
of which Violation arises. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) The obligations of the Company and Holders under this Section
1.10 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
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1.11 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, so long as the Company remains
subject to the periodic reporting requirements under Sections 13 or 15(d) of the
Exchange Act;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to any Holder, so long as accurate and so long as the
Holder owns any Registrable Securities, forthwith upon request a written
statement by the Company that it has complied with the reporting requirements of
SEC Rule 144, the Securities Act and the Exchange Act, and such information as
may be reasonably requested in availing any Holder of any rule or regulation of
the SEC which permits the selling of any such securities without registration or
pursuant to such form.
1.12 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations and together with the
Registrable Securities and related Convertible Notes as permitted pursuant to
and in accordance with the Convertible Notes), provided (i) the Company is,
within ten (10) days after such transfer, furnished with written notice of the
name and address of such transferee or assignee and the securities with respect
to which such registration rights are being assigned; (ii) such transferee
agrees in writing to be subject to all restrictions set forth in this Agreement
and provided, further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Securities Act.
1.13 TERMINATION OF REGISTRATION RIGHTS. No Holder shall be entitled
to exercise any right provided for in this Section 1 (i) on or after December
31, 2004, or (ii) during such times as Rule 144 (or another similar exemption
under the Securities Act) is available for the sale of all of such Holder's
shares during a three (3) month period without registration.
2. ARBITRATION. In the event of any controversy, dispute or claim arising
out of or related to this Agreement, the Subscription Agreement or the
Convertible Notes, or the interpretation, breach, termination or validity hereof
or thereof, the parties shall submit such controversy, dispute or claim to
binding arbitration hereunder. All arbitration proceedings pursuant to this
Section shall be before a retired judge of the United States District Court for
the Central District of California, Los Angeles Division, or the Los Angeles
County Superior Court or such other arbitrator as the parties shall mutually
agree upon. In the event that the parties are unable to agree upon the selection
of an arbitrator, any party may request the presiding judge of the United States
District Court for the Central District of California, Los
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Angeles Division, or the Los Angeles County Superior Court to appoint such
arbitrator. Arbitration of the dispute shall commence no later than thirty (30)
days after the selection or appointment of such arbitrator. The arbitrator shall
be bound by the express terms of this Agreement and shall endeavor to reach his
or her decision as quickly as possible, which decision shall be final and
binding on the parties to this Agreement. The arbitrator shall also have the
power to award costs and expenses (including, without limitation, reasonable
attorneys' fees) to the prevailing party. Application to enforce the
arbitrator's decision can be made in any court or other tribunal of competent
jurisdiction; any other application or dispute shall be submitted to the United
States District Court for the Central District of California, Los Angeles
Division, or the Los Angeles County Superior Court for determination. The rules
of discovery then pertaining to the United States District Court for the Central
District of California, Los Angeles Division, or a California Court of Law, as
the case may be, shall apply to any such arbitration, including, without
limitation, Sections 1283.01 and 1283.05 of the California Code of Civil
Procedure, the provisions of which are hereby incorporated herein and made a
part hereof by reference. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE PARTIES
HEREBY IRREVOCABLY WAIVE ANY RIGHT THEY MAY HAVE TO JURY TRIAL OR TO ASSERT THE
DOCTRINE OF INCONVENIENT FORUM OR TO OBJECT TO VENUE TO THE EXTENT ANY ACTION
SUIT, ARBITRATION OR OTHER PROCEEDING IS BROUGHT IN THE COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA.
3. MISCELLANEOUS.
3.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
Agreement, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective permitted successors and assigns of the
parties (including transferees of any Common Stock issued upon conversion or
exercise thereof). Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
3.2 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended or
waived only with the written consent of the Company and the holders of at least
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company.
3.3 NOTICES. Unless otherwise provided, any notice required or permitted
by this Agreement shall be in writing and shall be deemed sufficient upon
delivery, when delivered personally or one (1) day after delivery by overnight
courier or sent by facsimile, or electronic mail provided that in each case, the
sender retains proof of receipt, or four (4) days after being deposited in the
U.S. mail, as certified or registered mail, with postage prepaid, addressed to
the party to be notified at such party's address as set forth on the signature
pages hereto or as subsequently modified by written notice.
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3.4 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
3.5 GOVERNING LAW. This agreement and all acts and transactions pursuant
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of California, without giving effect to principles of conflicts of
laws.
3.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.7 RECOVERY OF FEES AND COSTS. In the event that any legal, equitable,
arbitration or other proceeding is brought for the enforcement of this
Agreement, or because of an alleged dispute, breach, default, termination or
invalidity in connection with any provision of this Agreement, the successful or
prevailing party shall be entitled to recover reasonable attorneys' fees and
costs incurred in such proceeding, in addition to any other relief to which such
party may be entitled.
3.8 DRAFTING PRESUMPTION. It is acknowledged that the parties and their
respective agents have participated in an arms'-length negotiation in the
preparation of this Agreement. As a consequence, the parties agree that no
presumption shall be applied in any interpretation of this Agreement that the
terms hereof shall be more strictly construed against one party by reason of any
rule or construction that a document is to be construed more strictly against
the party who prepared the same, whether through such party's agents or
otherwise and the parties expressly waive the application of Section 1654 of the
California Civil Code.
3.9 ENTIRE AGREEMENT. This Agreement and the documents referred to
herein, constitute the entire agreement between the parties hereto pertaining to
the subject matter hereof and any and all other written or oral agreements
existing between the parties hereto are expressly canceled.
3.10 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
The parties hereto have executed this Investor Rights Agreement as of
the date first written above.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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COMPANY: INVESTORS:
ADVANCED BIOTHERAPY, INC.
a Delaware corporation WITH RESPECT TO THE INVESTORS, THE
SIGNATURE PAGE TO THIS AGREEMENT
CONSISTS OF THE INVESTOR RIGHTS
AGREEMENT JOINDER, WHICH, IN SOME CASES,
By: WILL BE INCLUDED AS PART OF THE
----------------------------------- SUBSCRIPTION AGREEMENT SIGNATURE PAGE.
Xxxxxx X. Xxxxxxxxxx, President
and Chief Executive Officer
Address: Advanced Biotherapy Concepts, Inc.
0000 Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
Fax: 000-000-0000
13
EXHIBIT A
TO INVESTOR RIGHTS AGREEMENT
INVESTOR RIGHTS AGREEMENT JOINDER
By signing and returning this Investor Rights Agreement Joinder, the
undersigned agrees to be a party to that certain Investor Rights Agreement, by
and between the Company and the Investors identified therein, a copy of which
has been presented to the undersigned along with the Investor Rights Agreement
Joinder. The undersigned shall have all rights, and shall observe all the
obligations, applicable to an "Investor" as set forth in the Investor Rights
Agreement. In order to give effect to this transaction, please add the
undersigned to the list of "Investors" as set forth in Schedule A to the
Investor Rights Agreement effective upon execution of this Investor Rights
Agreement Joinder and acceptance by the Company of the undersigned's
subscription.
Date:
----------------
INVESTOR:
-------------------------------
[Signature]
-------------------------------
[Print or Type Name]
Address:
-------------------------------
-------------------------------
-------------------------------
Social Security Number:
-------------------------------
14
SCHEDULE A
TO INVESTOR RIGHTS AGREEMENT
INVESTORS
Name/Address/Fax No. Principal Amount of Convertible Notes
-------------------- -------------------------------------
15
