REGISTRATION RIGHTS AGREEMENT
Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of January 25, 2005 (the “Effective Date”), by and among GENETRONICS BIOMEDICAL CORPORATION, a corporation organized under the laws of the State of Delaware (the “Company”), and the undersigned (the “Shareholders”).
WHEREAS:
A. The Company and the Shareholders have entered into a Stock Purchase Agreement dated January 25, 2005 (the “Stock Purchase Agreement”) capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Stock Purchase Agreement). In connection with the Stock Purchase Agreement, the Company has agreed, upon the terms and subject to the conditions contained therein, to issue to the Shareholders shares of the Company’s Series D Preferred Stock, $0.001 par value (the “Preferred Stock”). The Preferred Stock consists of the following shares: (i) shares issuable to the Shareholders immediately upon the Closing of the Stock Purchase Agreement (the “Closing Shares”) and (ii) shares issuable to the Shareholders upon the achievement of certain milestones set forth in section 1.4 of the Stock Purchase Agreement (the “Milestone Shares”). The Preferred Stock shall be automatically converted into shares of the Company’s common stock, par value $0.001 (the “Common Stock”) at the times and upon the terms and conditions set forth in the Stock Purchase Agreement. The shares of Common Stock issuable upon conversion of the Closing Shares held by the Shareholders are referred to herein as the “Genetronics Closing Shares.” The shares of Common Stock issuable upon conversion of the Milestone Shares held by the Shareholders are referred to herein as the “Genetronics Milestone Shares.”
B. To induce the Shareholders to execute and deliver the Stock Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state securities laws;
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Shareholders, intending to be legally bound, hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following meanings:
(i) “Shareholders” shall have the meaning set forth in the introductory paragraph of this Agreement and shall include any transferees or assignees who agree to become bound by the provisions of this Agreement in accordance with Section 9 hereof.
(ii) “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a continuous basis (“Rule 415”), and the declaration or ordering of effectiveness of such Registration Statement by the United States Securities and Exchange Commission (the “SEC”).
(iii) “Registrable Closing Securities” means the Genetronics Closing Shares.
(iv) “Registrable Milestone Securities” means the Genetronics Milestone Shares.
(v) “Registrable Securities” means the Genetronics Closing Shares and the Genetronics Milestone Shares.
(vi) “Registration Statement” means one or more registration statements of the Company under the Securities Act registering all of the Registrable Securities, including the Closing Registration Statements, any Uncovered Closing Shares Amendments, Uncovered Closing Shares Registration Statements, Milestone Registration Statements, any Uncovered Milestone Shares Amendments and any Uncovered Milestone Shares Registration Statements (each, as defined below).
2. REGISTRATION.
a. Mandatory Closing Share Registration. The Company shall file with the United States Securities and Exchange Commission (“SEC”), on the date which is on or before Ninety (90) calendar days after the Closing Date (the “Closing Share Filing Deadline”) a Registration Statement on Form S-3 (or, if Form S-3 is not then available, on such form of Registration Statement as is then available to effect a registration of the Registrable Securities) covering the resale of the Genetronics Closing Shares (the “Closing Registration Statement”) which shall become effective within One Hundred Eighty (180) calendar days after the Closing Date. The Registrable Closing Securities included in each Closing Registration Statement shall be registered on behalf of the Shareholders as set forth in Section 11(k) hereof. The Closing Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided to the Shareholders and their counsel at least two (2) Business Days prior to its filing or other submission. If for any reason (including, but not limited to, a determination by the staff of the SEC that all or any portion of the Registrable Closing Securities cannot be included in each Closing Registration Statement (an “SEC Determination”)) the Closing Registration Statement declared effective by the SEC does not include all of the Registrable Closing Securities (any such shares that are not included being the “Uncovered Closing Shares”), the Company shall prepare and file with the SEC, as soon as practicable, but in any event prior to the tenth (10th) business day after becoming aware of the existence of any Uncovered Closing Shares (such date referred to herein as the “Uncovered Closing Share Filing Deadline”), either (a) an amendment (the “Uncovered Closing Shares Amendment”) to the Closing Registration Statement effecting a registration of the Uncovered Closing Shares or (b) a registration statement which registers the Uncovered Closing Shares (the “Uncovered Closing Shares Registration Statement”). The Uncovered Closing Shares Amendment or the Uncovered Closing Shares Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided to the Shareholders and their counsel at least concurrently with its filing or other submission. The Company shall use its reasonable efforts to cause the Closing Registration Statements and the Uncovered Closing Shares Amendment or the Uncovered Closing Shares Registration Statement to become effective as soon as practicable after the filing thereof. The Company shall use its reasonable efforts to cause the Closing Registration Statement required to be filed pursuant to this Section 2(a) to become effective as soon as practicable, but, as to any Uncovered Closing Shares Amendment or Uncovered Closing Shares Registration Statement, in no event later than the 60th day after the Uncovered Closing Shares Filing Deadline.
b. Mandatory Milestone Share Registration. The Company shall file with the SEC, on the date which is on or before Ninety (90) calendar days after the issuance of any Milestone Shares (the “Milestone Share Filing Deadline”) a Registration Statement on Form S-3 (or, if Form S-3 is not then available, on such form of Registration Statement as is then available to effect a registration of the Registrable Securities) covering the resale of the Genetronics Milestone Shares (the “Milestone Registration Statement”) which shall become effective within One Hundred Eighty (180) calendar days after the Closing Date. The Registrable Milestone Securities included in each Milestone Registration Statement shall be registered on behalf of the Shareholders as set forth in Section 11(k) hereof. The Milestone Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided to the Shareholders and their counsel at least two (2) Business Days prior to its filing or other submission. If for any reason (including, but not limited to, a determination by the staff of the SEC that all or any portion of the Registrable Milestone Securities cannot be included in each Milestone Registration Statement (an “SEC Determination”)) the Milestone Registration Statement declared effective by the SEC does not include all of the Registrable Milestone Securities (any such shares that are not included being the “Uncovered Milestone Shares”), the Company shall prepare and file with the SEC, as soon as practicable, but in any event prior to the tenth (10th) business day after becoming aware of the existence of any Uncovered Milestone Shares (such date referred to herein as the “Uncovered Milestone Share Filing Deadline”), either (a) an amendment (the “Uncovered Milestone Shares Amendment”) to the Milestone Registration Statement effecting a registration of the Uncovered Milestone Shares or (b) a registration statement which registers the Uncovered Milestone Shares (the “Uncovered Milestone Shares Registration Statement”). The Uncovered Milestone Shares Amendment or the Uncovered Milestone Shares Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided to the Shareholders and their counsel at least concurrently with its filing or other submission. The Company shall use its reasonable efforts to cause the Milestone Registration Statements and the Uncovered Milestone Shares Amendment or the Uncovered Milestone Shares Registration Statement to become effective as soon as practicable after the filing thereof. The Company shall use its reasonable efforts to cause the Milestone Registration Statement required to be filed pursuant to this Section 2(b) to become effective as soon as practicable, but, as to any Uncovered Milestone Shares Amendment or Uncovered Milestone Shares Registration Statement, in no event later than the 60th day after the Uncovered Milestone Shares Filing Deadline.
c. Notwithstanding any other provision of this Agreement to the contrary, a registration pursuant to Section 2(a) or 2(b) hereof shall not be deemed to have been effected (i) unless the Registration Statement filed in connection therewith becomes effective or (ii) if after such Registration Statement has become effective, it becomes subject to any stop order, or an injunction or other order or decree of the SEC or other governmental agency or court is issued for any reason other than a misrepresentation or an omission by a Shareholder, which injunction, order or decree prohibits or otherwise has a material adverse effect on the offer and sale of the Registrable Securities so registered prior to the completion of the distribution thereof in accordance with the plan of distribution set forth in such Registration Statement.
d. Eligibility for Form S-3. The Company represents and warrants that it is eligible to register the resale of Registrable Securities on a registration statement on Form S-3 under the Securities Act, and that the Company is not aware of any facts or circumstances (including without limitation any required approvals or waivers or any circumstances that may delay or prevent the obtaining of accountant’s consents) that would prohibit or delay the preparation and filing of a registration statement on Form S-3 with respect to the Registrable Securities provided that such registration is not deemed a “primary offering”, in which case the Company could face potential qualification problems regarding the requirement of having an aggregate market value held by non-affiliates of $75 million or more. The Company shall use its reasonable efforts to file all reports required to be filed by the Company with the SEC in a timely manner so as to maintain or, if applicable, regain its eligibility for the use of Form S-3.
3. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities, the Company shall have the following obligations:
a. The Company shall prepare and file with the SEC, (i) on or before the Closing Share Filing Deadline or the Uncovered Closing Share Filing Deadline, as applicable with respect to the Closing Shares, and (ii) on or before the Milestone Share Filing Deadline or the Uncovered Milestone Share Filing Deadline, as applicable with respect to the Milestone Shares, the Registration Statements required by Sections 2(a) and 2(b) and shall use its reasonable efforts to cause each such Registration Statement to become effective as soon as practicable after such filing. The Company shall use its best efforts to keep each such Registration Statement effective pursuant to Rule 415 until the earliest of: (i) a period of 24 months from the date the Registration Statement becomes effective, (ii) all shares are sold or (iii) all shares are capable of being sold under Rule 144(k) of the Securities Act (the “Registration Period”). In the event that the sale of Registrable Securities by one or more Shareholders is determined by the SEC to constitute a primary offering, upon the written request from time to time of any such Shareholder, the Company shall as promptly as practicable cause a Registration Statement to be amended and/or one or more additional Registration Statements (which may be requested on a sequential basis) to be filed (as specified by the applicable Shareholders) and to be declared effective; and take all other actions reasonably requested by such Shareholders to effectuate the offering of Registrable Securities. If a Registration Statement is not filed on Form S-3, the Company shall, as soon as it is eligible to do so, file a post-effective amendment on Form S-3 to the Registration Statement to the extent permitted by the SEC or, if not so permitted, file a new Registration Statement on Form S-3 to permit sales of the Registrable Securities pursuant to Rule 429 under the Securities Act; and the Company shall use its reasonable efforts to cause such post-effective amendment or Registration Statement to become effective as soon as possible. Each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein and all documents incorporated by reference therein) filed pursuant to this Agreement (i) shall comply in all material respects with the requirements of the Securities Act and the rules and regulations of the SEC promulgated thereunder and (ii) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not misleading. The financial statements of the Company included in the Registration Statement or incorporated by reference therein will comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC applicable with respect thereto. Such financial statements shall be prepared in accordance with U.S. generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and shall fairly present in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to immaterial year-end adjustments).
b. The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective at all times during the Registration Period, 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. Notwithstanding any provision in this Agreement to the contrary, the Company’s obligations hereunder to file a Registration Statement, to have the same declared effective and to keep a registration statement continuously in effect under the Securities Act shall be suspended (a “Grace Period”) if the fulfillment of such obligations would require the Company to make a disclosure that would, in the reasonable judgment of the Company’s Board of Directors, have a material adverse effect on the financial condition or operations of the Company or a material adverse effect on the future prospects of the Company or its stockholders; provided, that the Registration Statement shall be suspended for a total of no more than Sixty (60) days during any twelve (12) month period, which Sixty (60) days shall not be consecutive. The provisions of Section 2(b) hereof shall not be applicable during and shall be tolled as a result of any Grace Period.
c. The Company shall furnish to each Shareholder whose Registrable Securities are included in the Registration Statement (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one copy of the Registration Statement and any amendment thereto, each preliminary prospectus and prospectus and each amendment or supplement thereto. In the case of the Registration Statement referred to in Section 2(a), the Company shall furnish to each Shareholder which requests (i) a copy of any request to accelerate the effectiveness of any Registration Statement or amendment thereto, (ii) on the date of effectiveness of the Registration Statement or any amendment thereto, a notice stating that the Registration Statement or amendment has been declared effective, and (iii) such number of copies of a prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as such Shareholder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Shareholder. In responding to comments from the staff of the SEC, the Company shall cooperate with any Shareholder that notifies the Company that it desires to be consulted with respect to such process. Such cooperation shall solely consist of providing any such Shareholder with a reasonable opportunity to comment on the text and substance of proposed written responses to the extent such comment relates to such investor or its plan of distribution of the Registrable Securities. To the extent that issues raised by the staff of the SEC have an impact primarily on any such investor rather than the Company, the Company shall give reasonable deference to such Shareholder’s requests with respect to the process and substance of responses with respect to such issues.
d. The Company shall use its reasonable efforts to (i) register and qualify the Registrable Securities covered by the Registration Statement under such other securities or “blue sky” laws of such jurisdictions in the United States as each Shareholder who holds Registrable Securities being offered reasonably requests, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (a) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (b) subject itself to general taxation in any such jurisdiction, (c) file a general consent to service of process in any such jurisdiction, (d) provide any undertakings that cause the Company undue expense or burden, or (e) make any change in its certificate of incorporation or bylaws, which in each case the Board of Directors of the Company determines to be contrary to the best interests of the Company and its stockholders.
e. As promptly as practicable after becoming aware of such event, the Company shall notify each Shareholder by telephone or facsimile of the happening of any event, of which the Company has knowledge, as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and use its reasonable efforts promptly to prepare a supplement or amendment to the Registration Statement to correct such untrue statement or omission and deliver such number of copies of such supplement or amendment to each Shareholder as such Shareholder may reasonably request.
f. The Company shall use its reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, and, if such an order is issued, to obtain the withdrawal of such order at the earliest practicable date (including in each case by amending or supplementing such Registration Statement). The Company shall immediately notify by telephone or facsimile each Shareholder who holds Registrable Securities being sold of the issuance of such order and the resolution thereof (and if such Registration Statement is supplemented or amended, deliver such number of copies of such supplement or amendment to each Shareholder as such Shareholder may reasonably request).
g. The Company shall make available for inspection by (i) any Shareholder whose Registrable Securities are included in a Registration Statement and (ii) one firm of attorneys and one firm of accountants or other agents retained by the Shareholders (collectively, the “Inspectors”) all pertinent financial and other records (including an earnings statement which satisfies the provisions of Section 11(a) of the Securities Act), and pertinent corporate documents and properties of the Company, as shall be reasonably deemed necessary by each Inspector to enable each Inspector to exercise its due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably request for purposes of such due diligence.
h. The Company shall hold in confidence and not make any disclosure of information concerning a Shareholder provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other order from a court or governmental body of competent jurisdiction, (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement, or (v) such Shareholder consents to the form and content of any such disclosure. The Company agrees that it shall, upon learning that disclosure of such information concerning a Shareholder is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to such Shareholder prior to making such disclosure, and allow the Shareholder, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.
i. The Company shall use its reasonable efforts to promptly either (i) secure the designation and quotation, of all the Registrable Securities covered by the Registration Statement on The Nasdaq Stock Market, or (ii) cause all the Registrable Securities covered by the Registration Statement to be listed on the NYSE or the AMEX or another national securities exchange and on each additional national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange.
j. The Company shall provide a transfer agent and registrar, which may be a single entity, for the Registrable Securities not later than the effective date of the Registration Statement.
k. The Company shall timely provide the Shareholders who hold Registrable Securities being offered with certificates (not bearing any restrictive legends) representing Registrable Securities to be offered pursuant to the Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Shareholders may reasonably request and registered in such names as the Shareholders may request.
l. At the request of a Shareholder who holds a majority-in-interest of the Registrable Securities, the Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with the Registration Statement each as approved by the Company, which approval shall not be unreasonably withheld or delayed, as may be necessary in order to change the plan of distribution set forth in such Registration Statement.
m. The Company shall comply with applicable federal and state securities laws and regulations related to the Registration Statement and offering and sale of securities.
4. OBLIGATIONS OF THE SHAREHOLDERS.
In connection with the registration of the Registrable Securities, the Shareholders shall have the following obligations:
a. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Shareholder (or any damages to such Shareholder) that such Shareholder shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. At least five (5) Business Days prior to the first anticipated filing date of the Registration Statement, the Company shall notify each Shareholder of any information the Company requires from each such Shareholder.
b. Each Shareholder, by such Shareholder’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statement hereunder, unless such Shareholder has notified the Company in writing of such Shareholder’s election to exclude all of such Shareholder’s Registrable Securities from the Registration Statement.
5. EXPENSES OF REGISTRATION.
The Company shall pay (or reimburse the Shareholders for) all fees and expenses incident to the performance of or compliance with this Agreement by the Company, including without limitation (a) all registration and filing fees and expenses, including without limitation those related to filings with the Commission, any trading market and in connection with applicable state securities or Blue Sky laws, (b) printing expenses (including without limitation expenses of printing certificates for Registrable Securities and of printing prospectuses requested by the Shareholders), (c) messenger, telephone and delivery expenses, (d) fees and disbursements of counsel for the Company, (e) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, and (f) all listing fees to be paid by the Company to the trading market.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration Statement under this Agreement:
a. To the extent permitted by law, the Company will indemnify, hold harmless and defend (i) each Shareholder who holds such Registrable Securities, and (ii) the directors, officers, partners, members, employees and agents of such Shareholder and each person who controls any Shareholder within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), if any (each, an “Indemnified Person”), against any joint or several losses, claims, damages, liabilities or expenses (collectively, together with actions, proceedings or inquiries by any regulatory or self-regulatory organization, whether commenced or threatened, in respect thereof, “Claims”) to which any of them may become subject insofar as such Claims arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or the omission or alleged omission to state therein a material fact required to be stated or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, 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 thereunder relating to the offer or sale of the Registrable Securities (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”). Subject to the restrictions set forth in Section 6(c) with respect to the number of legal counsel, the Company shall reimburse the Shareholders and each other Indemnified Person, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person expressly for use in the Registration Statement or any such amendment thereof or supplement thereto; (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without an unconditional release of the Company and all of its controlling persons, employees and agents, or without the prior written consent of the Company, which consent shall not be unreasonably withheld; and (iii) with respect to any prospectus, shall not inure to the benefit of any Indemnified Person if the untrue statement or omission of material fact contained in such prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented, if such corrected prospectus was timely made available by the Company pursuant to Section 3(c) hereof, and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a Violation and such Indemnified Person, notwithstanding such advice, used it. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Shareholders pursuant to Section 9.
b. In connection with any Registration Statement in which a Shareholder is participating, each such Shareholder agrees severally and not jointly to indemnify, hold harmless and defend, to the same extent and in the same manner set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement, its employees, agents, attorneys and 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, and any other stockholder selling securities pursuant to the Registration Statement or any of its directors or officers or any person who controls such stockholder within the meaning of the Securities Act or the Exchange Act (collectively and together with an Indemnified Person, an “Indemnified Party”), against any Claim to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim arises out of or is based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Shareholder expressly for use in connection with such Registration Statement; and subject to Section 6(c) such Shareholder will reimburse any reasonable legal or other expenses (promptly as such expenses are incurred and are due and payable) reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without an unconditional release of such Shareholder and all of its controlling persons, employees and agents, or without the prior written consent of such Shareholder, which consent shall not be unreasonably withheld. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact by the Shareholder contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented, and the Indemnified Party failed to utilize such corrected prospectus.
c. Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action (including any governmental action), such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that such indemnifying party shall not be entitled to assume such defense and an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential conflicts of interest between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding or the actual or potential defendants in, or targets of, any such action include both the Indemnified Person or the Indemnified Party and the indemnifying party and any such Indemnified Person or Indemnified Party reasonably determines that there may be legal defenses available to such Indemnified Person or Indemnified Party which are in conflict with those available to such indemnifying party. The indemnifying party shall pay for only one separate legal counsel for all Indemnified Persons or the Indemnified Parties, as applicable, and such legal counsel shall be selected by Shareholders holding a majority-in-interest of the Registrable Securities included in the Registration Statement to which the Claim relates, if the Shareholders are entitled to indemnification hereunder, or by the Company, if the Company is entitled to indemnification hereunder, as applicable. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is actually prejudiced in its ability to defend such action. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6, (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any other person who was not guilty of such fraudulent misrepresentation, and (iii) contribution (together with any indemnification or other obligations under this Agreement) by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.
8. REPORTS UNDER THE EXCHANGE ACT.
With a view to making available to the Shareholders the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Shareholders to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees to:
a. file with the SEC in a timely manner and make and keep available all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements (it being understood that nothing herein shall limit the Company’s obligations under Section 5(c) of the Stock Purchase Agreement) and the filing and availability of such reports and other documents as is required for the applicable provisions of Rule 144; and
b. furnish to each Shareholder so long as such Shareholder owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Shareholders to sell such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights of the Shareholders hereunder, including the right to have the Company register Registrable Securities pursuant to this Agreement, shall be assignable by each Shareholder to any transferee of all or any portion of the Registrable Securities if: (i) the Shareholder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company after such assignment, (ii) the Company is furnished with written notice of (a) the name and address of such transferee or assignee and (b) the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment, the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and applicable state securities laws, (iv) the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein, and (v) such transfer shall have been made in accordance with the applicable requirements of the Stock Purchase Agreement. In addition, and notwithstanding anything to the contrary contained in this Agreement or the Stock Purchase Agreement, the Genetronics Shares may be pledged, and all rights of the Shareholders under this Agreement or any other agreement or document related to the transaction contemplated hereby may be assigned, without further consent of the Company, to a bona fide pledgee in connection with an Shareholder’s margin or brokerage accounts.
10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), by Shareholders who hold fifty-one percent (51%) in interest of the Registrable Securities or, in the case of a waiver, with the written consent of the party charged with the enforcement of any such provision. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Shareholder and the Company.
11. MISCELLANEOUS.
a. A person or entity is deemed to be a holder of Registrable Securities whenever such person or entity owns of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.
b. Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier or by confirmed telecopy, and shall be effective five (5) days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier or confirmed telecopy, in each case addressed to a party. The addresses for such communications shall be:
If to the Company:
Genetronics Biomedical Corporation
00000 Xxxxxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
Attention: Xx. Xxxxx Xxxx, Chief Financial Officer
Facsimile No.: 000-000-0000
With a copy to:
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx LLP
00000 Xxxxx Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone (000) 000-0000
Fax (000) 000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
If to a Shareholder, at such address as such Shareholder shall have provided in writing to the Company or such other address as such Shareholder furnishes by notice given in accordance with this Section 11(b).
Each party hereto may from time to time change its address or facsimile number for notices under this Section 11(b) by giving at least ten (10) days’ prior written notice of such changed address or facsimile number, in the case of the Shareholders to the Company, and in the case of the Company to all of the Shareholders.
c. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.
d. Governing Law; Venue; Waiver Of Jury Trail. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THE COMPANY AND PURCHASERS HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF LOS ANGELES, STATE OF CALIFORNIA FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY OR ANY PURCHASER HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY OR ANY PURCHASER, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY AND PURCHASERS HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.
e. This Agreement and the Stock Purchase Agreement (including all schedules and exhibits thereto) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement and the Stock Purchase Agreement supersede all prior agreements and understandings among the parties hereto and thereto with respect to the subject matter hereof and thereof.
f. Subject to the requirements of Section 9 hereof, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto.
g. The headings in this Agreement are for convenience of reference only and shall not form part of or effect the interpretation of this Agreement.
h. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other parties hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. In the event any signature is delivered by facsimile transmission, the party using such means of delivery shall cause the manually executed signature page(s) hereof to be physically delivered to the other party within five (5) days of the execution hereof..
i. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
j. All consents, approvals and other determinations to be made by the Shareholders pursuant to this Agreement shall be made by the Shareholders holding more than fifty-one percent (51%) of the Registrable Securities then held by all Shareholders.
k. The initial number of Registrable Securities included on any Registration Statement and each increase to the number of Registrable Securities included thereon shall be registered on behalf of each Shareholder pro rata based on the number of Registrable Securities held by each Shareholder at the time of such establishment or increase, as the case may be. In the event a Shareholder shall sell or otherwise transfer any of such holder’s Registrable Securities, each transferee shall be deemed to have registered on its behalf a pro rata portion of the number of Registrable Securities included on a Registration Statement for such transferor. Any shares of Common Stock included on a Registration Statement on behalf of any person or entity which does not hold any Registrable Securities shall be deemed registered on behalf of the remaining Shareholders, pro rata based on the number of shares of Registrable Securities then held by such Shareholders.
l. For purposes of this Agreement, the term “Business Day” means any day other than a Saturday or Sunday or a day on which banking institutions in the State of New York or California are authorized or obligated by law, regulation or executive order to close.
m. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other jurisdiction.
n. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by any other person.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first above written.
GENETRONICS BIOMEDICAL CORPORATION
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: President and Chief Executive Officer
SHAREHOLDERS:
TERJE LOMO
By: /s/ Terje Lomo
Name: Terje Lomo
KS TEKNOINVEST VII
By: /s/ Andreas Mollatt
Name: Andreas Mollatt
Title: By Proxy
OJADA AS
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Director
SELVAAG INVEST AS
By: /s/ Jens Xxxxxx Xxxxx
Name: Jens Xxxxxx Xxxxx
Title: By Special Authority
XXXXX XXXXXXXXX
By: /s/ Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxxxxxx
WINGANA AS
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: By Special Authority
LAGOPUS AS
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: By Special Authority
