Exhibit 10.10
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
January 16, 2004, is by and between CELLEGY PHARMACEUTICALS, INC. (the
"Company") and KINGSBRIDGE CAPITAL LIMITED (the "Investor").
WHEREAS, the Company and the Investor have entered into that certain
Common Stock Purchase Agreement, dated as of the date hereof (the "Purchase
Agreement"), pursuant to which the Company may issue, from time to time, to the
Investor up to 3,740,000 shares of Common Stock;
WHEREAS, pursuant to the terms of, and in partial consideration for the
Investor entering into, the Purchase Agreement, the Company has issued to the
Investor a warrant, exercisable from time to time within five (5) years
following the six-month anniversary of the date of issuance (the "Warrant") for
the purchase of an aggregate of up to 260,000 shares of Common Stock at a price
specified in such Warrant;
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investor's agreement to enter into the Purchase Agreement, the Company has
agreed to provide the Investor with certain registration rights with respect to
the Registrable Securities (as defined in the Purchase Agreement) as set forth
herein;
NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein, in the Warrant, and in
the Purchase Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, intending to be legally
bound hereby, the parties hereto agree as follows (capitalized terms used herein
and not defined herein shall have the respective meanings ascribed to them in
the Purchase Agreement):
ARTICLE I
REGISTRATION RIGHTS
Section 1.1. REGISTRATION STATEMENT.
(a) Filing of the Registration Statement. Upon the terms and
subject to the conditions set forth in this Agreement, the Company shall file
with the Commission, within five (5) days after the date by which the Company's
annual report on Form 10-K with respect to the year ended December 31, 2003 is
required to be filed with the Commission, a registration statement on Form S-1
under the Securities Act or such other form as deemed appropriate by counsel to
the Company for the registration for the resale by the Investor of the
Registrable Securities (the "Registration Statement").
(b) Effectiveness of the Registration Statement. The Company
shall use commercially reasonable efforts (i) to have the Registration Statement
declared effective by the Commission as soon as reasonably practicable, but in
any event no later than thirty-five (35) calendar days, or eighty (80) calendar
days in the event that the Commission reviews the Registration Statement,
following the date that the Registration Statement is filed and (ii) to ensure
that the Registration Statement remains in effect throughout the term of this
Agreement as set forth in Section 4.2, subject to the terms and conditions of
this Agreement.
(c) Regulatory Disapproval. The contemplated effective date
for the Registration Statement as described in Section 1.1(b) shall be extended
without default or liquidated damages hereunder or under the Purchase Agreement
in the event that the Company's failure to obtain the effectiveness of the
Registration Statement on a timely basis results solely from the Commission's
disapproval of the structure of the transactions contemplated by the Purchase
Agreement. In such event, the parties agree to cooperate with one another in
good faith to arrive at a resolution acceptable to the Commission.
(d) Failure to Maintain Effectiveness of Registration
Statement. In the event the Company fails to maintain the effectiveness of the
Registration Statement (or the Prospectus) throughout the period set forth in
Section 4.2, other than temporary suspensions as set forth in Section 1.1(e) or
2.1(n), and the Investor holds any Registrable Securities at any time during the
period of such ineffectiveness (an "Ineffective Period"), the Company shall pay
to the Investor in immediately available funds into an account designated by the
Investor an amount equal to the product of (x) the total number of Registrable
Securities issued to the Investor under the Purchase Agreement and owned by the
Investor at any time during such Ineffective Period and (y) the result, if
greater than zero, obtained by subtracting the VWAP on the Trading Day
immediately following the last day of such Ineffective Period from the VWAP on
the Trading Day immediately preceding the day on which any such Ineffective
Period began; provided, however, that the foregoing payments shall not apply in
respect of Registrable Securities that are otherwise freely tradable by the
Investor.
(e) Deferral or Suspension During a Blackout Period.
Notwithstanding the provisions of Section 1.1 (d), if in the good faith judgment
of the Company, following consultation with legal counsel, it would be
detrimental to the Company or its stockholders for the Registration Statement to
be filed or for resales of Registrable Securities to be made pursuant to the
Registration Statement due to (i) the existence of a material development or
potential material development involving the Company that the Company would be
obligated to disclose in the Registration Statement, which disclosure would be
premature or otherwise inadvisable at such time or would have a Material Adverse
Effect on the Company or its stockholders, or (ii) a filing of a
Company-initiated registration of any class of its equity securities, which, in
the good faith judgment of the Company, would adversely effect or require
premature disclosure of the filing of such Company-initiated registration
(notice thereof, a "Blackout Notice"), the Company shall have the right to (A)
immediately defer such filing for a period of not more than sixty (60) days
beyond the date by which such Registration Statement was otherwise required
hereunder to be filed or (B) suspend use of such Registration Statement for a
period of not more than thirty (30) days (any such deferral or suspension
period, a "Blackout Period"). The Investor acknowledges that it would be
seriously detrimental to the Company and its stockholders for such Registration
Statement to be filed (or remain in effect) during a Blackout Period and
therefore essential to defer such filing (or suspend the use thereof) during
such Blackout Period and agrees to cease any disposition of the Registrable
Securities during such Blackout Period. The Company may not utilize any of its
rights under this Section 1.1(e) to defer the filing of a Registration Statement
(or suspend its effectiveness) more than six (6) times in any twelve (12) month
period. In the event that, within fifteen (15) Trading Days following any
Settlement Date, the Company gives a Blackout Notice to the Investor and the
VWAP on the Trading Day immediately preceding such Blackout Period ("Old VWAP")
is greater than the VWAP on the first Trading Day following such Blackout Period
that the Investor may sell its Registrable Securities pursuant to an effective
Registration Statement ("New VWAP"), then the Company shall pay to the Investor,
by wire transfer of immediately funds to an account designated by the Investor,
the "Blackout Amount." For the purposes of this Agreement, Blackout Amount means
a percentage equal to: (1) seventy-five percent (75%) if such Blackout Notice is
delivered prior to the fifth (5th)Trading Day following such Settlement Date;
(2) fifty percent (50%) if such Blackout Notice is delivered on or after the
fifth (5th)Trading Day following such Settlement Date, but prior to the tenth
(10th) Trading Day following such Settlement Date; (3) twenty-five percent (25%)
if such Blackout Notice is delivered on or after the tenth (10th) Trading Day
following such Settlement Date, but prior to the fifteenth (15th) Trading Day
following such Settlement Date; and (4) zero percent (0%) thereafter of: the
product of (i) the number of Registrable Securities purchased by the Investor
pursuant to the most recent Draw Down and actually held by the Investor
immediately prior to the Blackout Period and (ii) the
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result obtained by subtracting the New VWAP from the Old VWAP. For any Blackout
Period in respect of which a Blackout Amount becomes due and payable, rather
than paying the Blackout Amount, the Company may at is sole discretion, issue to
the Investor shares of Common Stock with an aggregate market value determined as
of the first Trading Day following such Blackout Period equal to the Blackout
Amount ("Blackout Shares")..
(f) Liquidated Damages. The Company and the Investor hereto
acknowledge and agree that the amounts payable under Sections 1.1(d) and 1.1(e)
and the Blackout Shares deliverable under Section 1.1(e) above shall constitute
liquidated damages and not penalties. The parties further acknowledge that (i)
the amount of loss or damages likely to be incurred by the Investor is incapable
or is difficult to precisely estimate, (ii) the amounts specified in such
subsections bear a reasonable proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred in connection with
any failure by the Company to obtain or maintain the effectiveness of the
Registration Statement, (iii) one of the reasons for the Company and the
Investor reaching an agreement as to such amounts was the uncertainty and cost
of litigation regarding the question of actual damages, and (iv) the Company and
the Investor are sophisticated business parties and have been represented by
sophisticated and able legal and financial counsel and negotiated this Agreement
at arm's length.
(g) Additional Registration Statements. In the event and to
the extent that the Registration Statement fails to register a sufficient amount
of Common Stock necessary for the Company to issue and sell to the Investor and
the Investor to purchase from the Company all of the Registrable Securities to
be issued, sold and purchased under the Purchase Agreement and the Warrant, the
Company shall prepare and file with the Commission an additional registration
statement or statements in order to effectuate the purpose of this Agreement,
the Purchase Agreement, and the Warrant.
ARTICLE II
REGISTRATION PROCEDURES
Section 2.1. FILINGS; INFORMATION. The Company shall effect the registration
with respect to the sale of the Registrable Securities by the Investor in
accordance with the intended methods of disposition thereof. Without limiting
the foregoing, the Company in each such case will do the following as
expeditiously as possible, but in no event later than the deadline, if any,
prescribed therefor in this Agreement:
(a) Subject to Section 1.1(e), the Company shall (i) prepare
and file with the Commission the Registration Statement; (ii) use commercially
reasonable efforts to cause such filed Registration Statement to become and to
remain effective (pursuant to Rule 415 under the Securities Act or otherwise);
(iii) prepare and file with the Commission such amendments and supplements to
the Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective for the time
period prescribed by Section 4.2 and in order to effectuate the purpose of this
Agreement, the Purchase Agreement, and the Warrant; and (iv) comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the Investor set forth in
such Registration Statement; provided, however, that the Investor shall be
responsible for the delivery of the Prospectus to the Persons to whom the
Investor sells the Shares and the Warrant Shares, and the Investor agrees to
dispose of Registrable Securities in compliance with the plan of distribution
described in the Registration Statement and otherwise in compliance with
applicable federal and state securities laws.
(b) If so requested by a managing underwriter or underwriters,
if any, or the holders of a majority of the Registrable Securities being sold in
connection with the filing of a Registration Statement under the Securities Act
for the offering on a continuous or delayed basis in the future of all of
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the Registrable Securities (a "Shelf Registration"), the Company shall (i)
promptly incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, and such holders agree should
be included therein, and (ii) make all required filings of such prospectus
supplement or post-effective amendment as soon as practicable after the Company
has received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment; provided, however, that the Company
shall not be required to take any action pursuant to this Section 2.1(b)(ii)
that would, in the opinion of counsel for the Company, violate applicable law.
(c) In the event of an underwritten (other than by the
Investor) offering of Registrable Securities pursuant to the Registration
Statement, the Company shall enter into such reasonable agreements and take all
such other reasonable actions in connection therewith (including those
reasonably requested by the managing underwriters, if any) in order to expedite
or facilitate the disposition of such Registrable Securities, and in such
connection, the Company shall (i) make such representations and warranties to
the holders of such Registrable Securities and the underwriters, if any, with
respect to the business of the Company (including with respect to businesses or
assets acquired or to be acquired by the Company), and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, in form, substance (subject to
such exceptions as the Company may disclose) and scope as are customarily made
by issuers to underwriters in underwritten offerings, and confirm such
representations and warranties if and when requested; (ii) if an underwriting
agreement is entered into, it shall contain indemnification provision and
procedures no less favorable to the selling holders of such Registrable
Securities and the underwriters, if any, than those set forth herein (or such
other provisions and procedures acceptable to the Company, holders of a majority
of Registrable Securities covered by such Registration Statement and the
managing underwriters, if any); and (iii) deliver such documents and
certificates as may be reasonably requested by the holders of a majority of the
Registrable Securities being sold, their counsel and the managing underwriters,
if any, to evidence the continued validity of their representations and
warranties made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company.
(d) Three (3) Trading Days prior to filing the Registration
Statement or Prospectus, or any amendment or supplement thereto (excluding
amendments deemed to result from the filing of documents incorporated by
reference therein), the Company shall deliver to the Investor and to counsel
representing the Investor, in accordance with the notice provisions of Section
4.8, copies of the Registration Statement, Prospectus and/or any amendments or
supplements thereto as proposed to be filed, together with exhibits thereto,
which documents will be subject to review by the Investor and such counsel, and
thereafter deliver to the Investor and such counsel, in accordance with the
notice provisions of Section 4.8, such number of copies of the Registration
Statement, each amendment and supplement thereto (in each case including all
exhibits thereto), the Prospectus (including each preliminary prospectus) and
such other documents or information as the Investor or counsel may reasonably
request in order to facilitate the disposition of the Registrable Securities.
(e) The Company shall deliver, in accordance with the notice
provisions of Section 4.8, to each seller of Registrable Securities covered by
the Registration Statement such number of conformed copies of the Registration
Statement and of each amendment and supplement thereto (in each case including
all exhibits and documents incorporated by reference), such number of copies of
the Prospectus (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 promulgated under the
Securities Act relating to such seller's Registrable Securities, and such other
documents, as such seller may reasonably request to facilitate the disposition
of its Registrable Securities.
(f) After the filing of the Registration Statement, the
Company shall promptly notify the Investor of any stop order issued or
threatened by the Commission in connection therewith and take
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all commercially reasonable actions required to prevent the entry of such stop
order or to remove it if entered.
(g) The Company shall use commercially reasonable efforts to
(i) register or qualify the Registrable Securities under such other securities
or blue sky laws of each jurisdiction in the United States as the Investor may
reasonably (in light of its intended plan of distribution) request, and (ii)
cause the Registrable Securities to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary by
virtue of the business and operations of the Company and do any and all other
customary acts and things that may be reasonably necessary or advisable to
enable the Investor to consummate the disposition of the Registrable Securities;
provided, however, that the Company will not be required to qualify generally to
do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 2.1(g), subject itself to taxation in any such
jurisdiction, consent or subject itself to general service of process in any
such jurisdiction, change any existing business practices, benefit plans or
outstanding securities or amend or otherwise modify the Charter or Bylaws.
(h) In the event of an underwritten offering, the Company
shall enter into customary agreements and take such other actions as are
reasonably required in order to expedite the disposition of such Registrable
Securities.
(i) The Company shall make available to the Investor (and will
deliver to Investor's counsel),(A) subject to restrictions imposed by the United
States federal government or any agency or instrumentality thereof, copies of
all public correspondence between the Commission and the Company concerning the
Registration Statement and will also make available for inspection by the
Investor and any attorney, accountant or other professional retained by the
Investor (collectively, the "Inspectors"),(B) upon reasonable advance notice
during normal business hours all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "Records")
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers and employees to supply all
information reasonably requested by any Inspectors in connection with the
Registration Statement; provided, however, that any such Inspectors must agree
in writing for the benefit of the Company not to use or disclose any such
Records except as provided in this Section 2.1(i). Records that the Company
determines, in good faith, to be confidential and that it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless the
disclosure or release of such Records is requested or required pursuant to oral
questions, interrogatories, requests for information or documents or a subpoena
or other order from a court of competent jurisdiction or other judicial or
governmental process; provided, however, that prior to any disclosure or release
pursuant to the immediately preceding clause, the Inspectors shall provide the
Company with prompt notice of any such request or requirement so that the
Company may seek an appropriate protective order or waive such Inspectors'
obligation not to disclose such Records; and, provided, further, that if failing
the entry of a protective order or the waiver by the Company permitting the
disclosure or release of such Records, the Inspectors, upon advice of counsel,
are compelled to disclose such Records, the Inspectors may disclose that portion
of the Records that counsel has advised the Inspectors that the Inspectors are
compelled to disclose; provided, however, that upon any such required
disclosure, such Inspector shall use his or her best efforts to obtain
reasonable assurances that confidential treatment will be afforded such
information. The Investor agrees that information obtained by it solely as a
result of such inspections (not including any information obtained from a third
party who, insofar as is known to the Investor after reasonable inquiry, is not
prohibited from providing such information by a contractual, legal or fiduciary
obligation to the Company) shall be deemed confidential and shall not be used
for any purposes other than as indicated above or by it as the basis for any
market transactions in the securities of the Company or its affiliates unless
and until such information is made generally available to the public. The
Investor further agrees that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
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Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of the Records deemed confidential.
(j) In the event of an underwritten (other than the Investor)
offering of the sale of Registrable Securities pursuant to the Registration
Statement, then to the extent required by the managing underwriters and
reasonably necessary to effect a sale of Registrable Securities in accordance
with prevailing business practices at the time of any such underwritten sale of
Registrable Securities pursuant to a Registration Statement, the Company shall
deliver to the Investor a signed counterpart, addressed to the Investor, of (1)
an opinion or opinions of counsel to the Company, and (2) a comfort letter or
comfort letters from the Company's independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as the Investor therefor
reasonably requests.
(k) The Company shall otherwise comply with all applicable
rules and regulations of the Commission, including, without limitation,
compliance with applicable reporting requirements under the Exchange Act.
(l) The Company shall appoint a transfer agent and registrar
for all of the Registrable Securities covered by such Registration Statement not
later than the effective date of such Registration Statement.
(m) The Investor shall cooperate with the Company, as
reasonably requested by the Company, in connection with the preparation and
filing of any Registration Statement hereunder. The Company may require the
Investor to promptly furnish in writing to the Company such information as may
be required in connection with such registration including, without limitation,
all such information as may be requested by the Commission or the NASD or any
state securities commission and all such information regarding the Investor, the
Registrable Securities held by the Investor and the intended method of
disposition of the Registrable Securities. The Investor agrees to provide such
information requested in connection with such registration within five (5)
Business days after receiving such written request and the Company shall not be
responsible for any delays in obtaining or maintaining the effectiveness of the
Registration Statement caused by the Investor's failure to timely provide such
information.
(n) Upon receipt of a Blackout Notice from the Company, the
Investor shall immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until (i) the Company advises the Investor that the Blackout Period has
terminated and (ii) the Investor receives copies of a supplemented or amended
prospectus, if necessary. If so directed by the Company, the Investor will
deliver to the Company (at the expense of the Company) or destroy (and deliver
to the Company a certificate of destruction) all copies in the Investor's
possession (other than a limited number of file copies) of the prospectus
covering such Registrable Securities that is current at the time of receipt of
such notice.
(o) If the Investor determines to engage in an Underwritten
Offering, the Investor will enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering, and will take such other actions as are
reasonably required in order to expedite or facilitate the disposition of the
Registrable Securities. The Investor shall consult with the Company prior to any
Underwritten Offering and shall defer such Underwritten Offering for a
reasonable period upon the commercially reasonable request of the Company.
Section 2.2. REGISTRATION EXPENSES. The Company shall pay all registration
expenses incurred in connection with the Registration Statement (the
"Registration Expenses"), including, without limitation: (i) all registration,
filing, securities exchange listing and fees required by the National
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Association of Securities Dealers, (ii) all registration, filing, qualification
and other fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities), (iii) all word processing,
duplicating, printing, messenger and delivery expenses, (iv) the Company's
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), (v) the fees
and expenses incurred by the Company in connection with the listing of the
Registrable Securities, (vi) reasonable fees and disbursements of counsel for
the Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses of any special
audits or comfort letters or costs associated with the delivery by independent
certified public accountants of such special audit(s) or comfort letter(s)
requested pursuant to Section 2.1(k) hereof), (vii) the fees and expenses of any
special experts retained by the Company in connection with such registration and
amendments and supplements to the Registration Statement and Prospectus, (viii)
all reasonable fees and expenses of counsel for the Investor to the extent
incurred in connection with the review, and assistance in preparation, of the
Registration Statement, correspondence with the Commission and amendments and
supplements to the Registration Statement and Prospectus, up to a maximum of
$2,500, and (ix) premiums and other costs of the Company for policies of
insurance against liabilities arising out of any public offering of the
Registrable Securities being registered. Any fees and disbursements of
underwriters, broker-dealers or investment bankers, including without limitation
underwriting fees, discounts, transfer taxes or commissions, and any other fees
or expenses (including legal fees and expenses) if any, attributable to the sale
of Registrable Securities, shall be payable by each holder of Registrable
Securities pro rata on the basis of the number of Registrable Securities of each
such holder that are included in a registration under this Agreement.
ARTICLE III
INDEMNIFICATION
Section 3.1. INDEMNIFICATION. The Company agrees to indemnify and hold harmless
the Investor, its partners, Affiliates, officers, directors, employees and duly
authorized agents, and each Person or entity, if any, who controls the Investor
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, together with the partners, Affiliates, officers, directors,
employees and duly authorized agents of such controlling Person or entity
(collectively, the "Controlling Persons"), from and against any loss, claim,
damage, liability, costs and expenses (including, without limitation, reasonable
attorneys' fees and disbursements and costs and expenses of investigating and
defending any such claim) (collectively, "Damages"), joint or several, and any
action or proceeding in respect thereof to which the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, and any
Controlling Person, may become subject under the Securities Act or otherwise, as
incurred, insofar as such Damages (or actions or proceedings in respect thereof)
arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement, or in any
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement relating to the Registrable Securities or arises out of, or are based
upon, any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein under the
circumstances not misleading, and shall reimburse the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, and each
such Controlling Person, for any legal and other expenses reasonably incurred by
the Investor, its partners, affiliates, officers, directors, employees and duly
authorized agents, or any such Controlling Person, as incurred, in investigating
or defending or preparing to defend against any such Damages or actions or
proceedings; provided, however, that the Company shall not be liable to the
extent that any such Damages arise out of the Investor's (or any other
indemnified Person's) failure to send or give a copy of the final prospectus or
supplement (as then amended or supplemented) to the persons asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
person if such statement or omission was corrected in such final prospectus or
supplement; provided,
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further, that the Company shall not be liable to the extent that any such
Damages arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such Registration Statement,
or any such preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Investor or any
other person who participates as an underwriter in the offering or sale of such
securities, in either case, specifically stating that it is for use in the
preparation thereof. In connection with any Registration Statement with respect
to which the Investor is participating, such Investor will indemnify and hold
harmless, to the same extent and in the same manner as set forth in the
preceding paragraph, the Company, each of its directors, officers, each Person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (each a "Company Indemnified
Person") against any Damages to which any Company Indemnified Person may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as such
Damages arise out of or are based upon (a) any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement, or
in any preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement relating to the Registrable Securities or arise out of, or are
based upon, any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein under
the circumstances not misleading to the extent that such violation occurs in
reliance upon and in conformity with written information furnished to the
Company by the Investor or on behalf of the Investor expressly for use in
connection with such Registration Statement or (b) any failure by the Investor
to comply with prospectus delivery requirements of the Securities Act, the
Exchange Act or any other law or legal requirement applicable to sales under the
Registration Statement
Section 3.2. CONDUCT OF INDEMNIFICATION PROCEEDINGS. All claims for
indemnification under Section 3.1 shall be asserted and resolved in accordance
with the provisions of Section 10.02 and 10.03 of the Purchase Agreement.
Section 3.3. ADDITIONAL INDEMNIFICATION. Indemnification similar to that
specified in the preceding paragraphs of this Article 3 (with appropriate
modifications) shall be given by the Company with respect to any required
registration or other qualification of securities under any federal or state law
or regulation of any governmental authority other than the Securities Act. The
provisions of this Article III shall be in addition to any other rights to
indemnification, contribution or other remedies which an Indemnified Party or a
Company Indemnified Person may have pursuant to law, equity, contract or
otherwise.
To the extent that any indemnification provided for herein is prohibited or
limited by law, the indemnifying party will make the maximum contribution with
respect to any amounts for which it would otherwise be liable under this Article
III to the fullest extent permitted by law. However, (a) no contribution will be
make under circumstances where maker of such contribution would not have been
required to indemnify the indemnified party under the fault standards set forth
in this Article III, (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any Person who is not
guilty of such fraudulent misrepresentation, and (c) contribution (together with
any indemnification obligations under this Agreement) by any seller of
Registrable Securities will be limited in amount of proceeds received by such
seller from the sale of such Registrable Securities.
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ARTICLE IV
MISCELLANEOUS
Section 4.1. NO OUTSTANDING REGISTRATION RIGHTS. Except as otherwise disclosed
in accordance with the Purchase Agreement or in the Commission Documents, the
Company represents and warrants to the Investor that there is not in effect on
the date hereof any agreement by the Company pursuant to which any holders of
securities of the Company have a right to cause the Company to register or
qualify such securities under the Securities Act or any securities or blue sky
laws of any jurisdiction.
Section 4.2. TERM. The registration rights provided to the holders of
Registrable Securities hereunder, and the Company's obligation to keep the
Registration Statement effective, shall terminate at the earlier of (i) such
time that is two years following the termination of the Purchase Agreement, (ii)
such time as all Registrable Securities have been issued and have ceased to be
Registrable Securities, or (iii) upon the consummation of an "Excluded Merger or
Sale" as defined in the Purchase Agreement. Notwithstanding the foregoing,
paragraphs (c) and (d) of Section 1.1, Article III, Section 4.8, and Section 4.9
shall survive the termination of this Agreement.
Section 4.3. RULE 144. The Company will, at its expense, promptly take such
action as holders of Registrable Securities may reasonably request to enable
such holders of Registrable Securities to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act ("Rule 144"), as such Rule may
be amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission. If at any time the Company is not required to file
such reports, it will, at its expense, forthwith upon the written request of any
holder of Registrable Securities, make available adequate current public
information with respect to the Company within the meaning of paragraph (c)(2)
of Rule 144 or such other information as necessary to permit sales pursuant to
Rule 144. Upon the request of the Investor, the Company will deliver to the
Investor a written statement, signed by the Company's principal financial
officer, as to whether it has complied with such requirements.
Section 4.4. CERTIFICATE. The Company will, at its expense, forthwith upon the
request of any holder of Registrable Securities, deliver to such holder a
certificate, signed by the Company's principal financial officer, stating (a)
the Company's name, address and telephone number (including area code), (b) the
Company's Internal Revenue Service identification number, (c) the Company's
Commission file number, (d) the number of shares of each class of Stock
outstanding as shown by the most recent report or statement published by the
Company, and (e) whether the Company has filed the reports required to be filed
under the Exchange Act for a period of at least ninety (90) days prior to the
date of such certificate and in addition has filed the most recent annual report
required to be filed thereunder.
Section 4.5. AMENDMENT AND MODIFICATION. Any provision of this Agreement may be
waived, provided that such waiver is set forth in a writing executed by both
parties to this Agreement. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of the holders of a majority
of the then outstanding Registrable Securities. Notwithstanding the foregoing,
the waiver of any provision hereof with respect to a matter that relates
exclusively to the rights of holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and does not directly or
indirectly affect the rights of other holders of Registrable Securities may be
given by holders of at least a majority of the Registrable Securities being sold
by such holders; provided that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence. No course of dealing between or among any
Person having any interest in this Agreement will be deemed effective to modify,
amend or discharge any part of this Agreement or any rights or obligations of
any person under or by reason of this Agreement.
9
Section 4.6. SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. The Investor may
assign its rights under this Agreement to any subsequent holder of the
Registrable Securities (unless sold pursuant to an effective registration
statement or in accordance with Rule 144 under the Securities Act), provided
that the Company shall have the right to require any holder of Registrable
Securities to execute a counterpart of this Agreement as a condition to such
holder's claim to any rights hereunder. The Company may assign this Agreement at
any time in connection with a sale or acquisition of the Company, whether by
merger, consolidation, sale of all or substantially all of the Company's assets,
or similar transaction, without the consent of the Investor or other holders of
Registrable Securities, provided that the successor or acquiring Person or
entity agrees in writing to assume all of the Company's rights and obligations
under this Agreement. This Agreement, together with the Purchase Agreement and
the Warrant(s) sets forth the entire agreement and understanding between the
parties as to the subject matter hereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature among them.
Section 4.7. SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that such severability shall be ineffective if
it materially changes the economic benefit of this Agreement to any party
hereto.
Section 4.8. NOTICES. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be given in
accordance with Section 10.04 of the Purchase Agreement.
Section 4.9. GOVERNING LAW; DISPUTE RESOLUTION. This Agreement shall be
construed under the laws of the State of New York. Any dispute arising out of or
relating to this Agreement shall be resolved by means of arbitration pursuant to
the provisions of Article X of the Purchase Agreement.
Section 4.10. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect their meaning, construction or effect.
Section 4.11. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute one and the same instrument.
Section 4.12. FURTHER ASSURANCES. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
Section 4.13. ABSENCE OF PRESUMPTION. This Agreement shall be construed without
regard to any presumption or rule requiring construction or interpretation
against the party drafting or causing any instrument to be drafted.
10
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be executed by the undersigned, thereunto duly authorized,
as of the date first set forth above.
CELLEGY PHARMACEUTICALS, INC.
By:
---------------------------
Name:
Title:
KINGSBRIDGE CAPITAL LIMITED
By:
---------------------------
Name: Valentine X'Xxxxxxxx
Title: Director
