REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated
as of October 27, 2004, is entered into by and between Hemobiotech, a Delaware
corporation (the "COMPANY"), and Xxxxxx Associates, L.P., as agent for the
purchasers whose names appears on EXHIBIT A hereto (each, a "PURCHASER" and
collectively, the "Purchasers").
WHEREAS:
A. In connection with the Private Placement Offering
Memorandum dated as of August 16, 2004 (the "MEMORANDUM") and related
Subscription Agreement (the "SUBSCRIPTION AGREEMENT") by and among the Company
and the Purchasers (collectively, the "TRANSACTION DOCUMENTS"), the Company,
upon the terms and subject to the conditions of the Transaction Documents,
issued and sold to the Purchasers (the "OFFERING"), Units consisting of (i) a
Convertible Unsecured Promissory Note equal to $50,000 (each, a "NOTE") and (ii)
58,824 shares of Common Stock (the "UNIT SHARES") and 117,648 Warrants (each, a
"WARRANT"), each Warrant entitling the holder to purchase one share of Common
Stock (the "WARRANT SHARES"), such shares and Warrants having an aggregate
purchase price of $50,000.
B. To induce the Purchasers to execute and deliver the
Subscription Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT"), and applicable state securities laws, as described herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Purchasers hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
a. "AGENT" means Xxxxxx Associates, L.P., which shall
serve as agent on behalf of the Purchasers for the purposes of this Agreement.
b. "BUSINESS DAY" means any day other than Saturday,
Sunday or any other day on which commercial banks in the city of Dallas are
authorized or required by law to remain closed.
c. "INVESTOR" means a Purchaser and any permitted
transferee or assignee thereof to whom a Purchaser assigns its rights under this
Agreement and who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 and any subsequent permitted transferee or assignee
thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 9.
d. "PERSON" means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and governmental or any department or agency
thereof.
e. "NOTE SHARES" means the shares of Common Stock of
the Company issuable (i) in payment of all or a portion of the accrued but
otherwise unpaid interest on the Notes and (ii) upon conversion of the Notes.
f. "REGISTER," "REGISTERED," and "REGISTRATION" refer
to a registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis ("RULE 415"), and the declaration or
ordering of effectiveness of such Registration Statement(s) by the United States
Securities and Exchange Commission (the "SEC").
g. "REGISTRABLE SECURITIES" means (i) Unit Shares,
(ii) the Note Shares, and (iii) the Warrant Shares.
h. "REGISTRATION STATEMENT" means a registration
statement or registration statements of the Company filed under the 1933 Act
covering the Registrable Securities.
i. "UNIT SHARES" means the 58,824 shares of Common
Stock issuable to each Investor upon purchase of each Unit in the Offering.
j. "WARRANT SHARES" means the shares of Common Stock
issuable upon exercise of the Warrants underlying each Unit.
Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Transaction Documents.
2. REGISTRATION.
a. MANDATORY REGISTRATION. The Company shall prepare,
and, as soon as practicable but in no event later than 60 days after the final
Closing Date of the Offering (the "FILING DEADLINE"), file with the SEC the
Registration Statement on Form SB-2 or other appropriate form of registration
statement to be determined by the Company, covering the resale of all of the
Registrable Securities. The Registration Statement prepared pursuant hereto
shall register for resale all of the Registrable Securities. The Company shall
use its commercially reasonable efforts to have the Initial Registration
Statement declared effective by the SEC within 120 days after the final Closing
Date of the Offering (the "EFFECTIVENESS DEADLINE").
b. LEGAL COUNSEL. Subject to Section 5 hereof, the
Purchasers holding at least a majority of the Registrable Securities shall have
the right to select one legal counsel to review and oversee any offering
pursuant to this Section 2 ("LEGAL COUNSEL"), which shall be Xxxxxxxxx Xxxxxxx,
LLP or such other counsel as thereafter designated by the holders of at least a
majority of the Registrable Securities. The Company and Legal Counsel shall
reasonably cooperate with each other in performing the Company's obligations
under this Agreement. All expenses incurred by Xxxxxxxxx Xxxxxxx, LLP hereunder
shall be borne exclusively by the Purchasers on a pro rata basis, except an
aggregate of the first $2,500 of such expenses, which shall be borne by the
Company.
c. EFFECT OF FAILURE TO FILE REGISTRATION STATEMENT
AND EFFECTIVNESS DEADLINE. If the Registration Statement covering the
Registrable Securities required to be filed by the Company pursuant to Section
2(a) hereof has not been filed by the Filing Deadline and or declared effective
by the Effectiveness Deadline, the Company shall, for every 30 consecutive days
(pro-rated daily) during which the Registration Statement has not been so filed
and/or declared effective, as the case may be, pay each Purchaser as liquidated
damages an amount equal to 2% of such Purchaser's subscription amount in the
Offering.
3. RELATED OBLIGATIONS.
At such time as the Company is obligated to file a
Registration Statement with the SEC pursuant to Section 2(a) hereto, the Company
will use its commercially reasonable efforts to effect the registration of the
Registrable Securities in accordance with the intended method of disposition
thereof and, pursuant thereto, the Company shall have the following obligations:
a. The Company shall promptly prepare and file with
the SEC a Registration Statement with respect to the Registrable Securities (but
in no event later than the applicable Filing Deadline) and use its commercially
reasonable efforts to cause such Registration Statement relating to the
Registrable Securities to become effective by the Effectiveness Deadline. The
Company shall keep each Registration Statement effective pursuant to Rule 415 at
all times to permit the sale of the Registrable Securities until the earlier of
(i) the date that all of the Registrable Securities have been sold pursuant to
the Registration Statement, or (ii) the date the holders of the Registrable
Securities may sell their Registrable Securities covered by such Registration
Statement pursuant to Rule 144 (or successor thereto) promulgated under the 1933
Act, or (iii) the date the holders of the Registrable Securities receive an
opinion of counsel that such shares may be sold under the provisions of Rule
144(k) (in each case, the "REGISTRATION PERIOD"), which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading.
b. The Company shall prepare and file with the SEC
such amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to
this Section 3(b)) by reason of the Company filing a report on Form 10-KSB, Form
10-QSB or Form 8-K or any analogous report under the Securities Exchange Act of
1934, as amended (the "1934 ACT"), the Company shall have incorporated such
report by reference into the Registration Statement, if applicable, or shall
file such amendments or supplements with the SEC on the same day on which the
1934 Act report is filed which created the requirement for the Company to amend
or supplement the Registration Statement.
c. The Company shall (A) permit Legal Counsel to
review and comment upon (i) the Registration Statement at least three (3)
Business Days prior to its filing with the SEC and (ii) all other Registration
Statements and all amendments and supplements to all Registration Statements
(except for Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB, and
Current Reports on Form 8-K and any similar or successor reports) within a
reasonable number of days prior to their filing with the SEC, and (B) not file
any Registration Statement or amendment or supplement thereto in a form to which
Legal Counsel reasonably objects. The Company shall not submit a request for
acceleration of the effectiveness of a Registration Statement or any amendment
or supplement thereto without the prior approval of Legal Counsel, which consent
shall not be unreasonably withheld. The Company shall furnish to Legal Counsel,
without charge, (i) copies of any correspondence from the SEC or the staff of
the SEC to the Company or its representatives relating to any Registration
Statement, (ii) promptly after the same is prepared and filed with the SEC, one
copy of any Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, and all exhibits and (iii) upon the
effectiveness of any Registration Statement, one copy of the prospectus included
in such Registration Statement and all amendments and supplements thereto. Each
of the Company and Legal Counsel shall reasonably cooperate with each other in
performing their respective obligations pursuant to this Section 3.
d. The Company shall furnish to the Investors whose
Registrable Securities are included in any Registration Statement, without
charge, (i) promptly after the same is prepared and filed with the SEC, at least
one copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, all exhibits and each preliminary
prospectus, (ii) upon the effectiveness of any Registration Statement, one (1)
copy of the
prospectus included in such Registration Statement and all amendments and
supplements thereto (or such other number of copies as such Investor may
reasonably request) and (iii) such other documents, including copies of any
preliminary or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.
e. The Company shall use its commercially reasonable
efforts to (i) register and qualify, unless an exemption from registration and
qualification applies, the resale by Investors of the Registrable Securities
covered by a Registration Statement under such other securities or "blue sky"
laws of all applicable jurisdictions in the United States, (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 reasonably necessary to maintain such registrations
and qualifications in effect at all times during the Registration Period, and
(iv) take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; PROVIDED, HOWEVER, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and the Agent on behalf of each Investor who holds Registrable
Securities of the receipt by the Company of any notification with respect to the
suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or "blue sky" laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or
threatening of any proceeding for such purpose.
f. The Company shall notify Legal Counsel and the
Agent on behalf of each Investor in writing, including via facsimile or e-mail
followed by overnight courier, of the happening of any event, as promptly as
practicable after becoming aware of such event, as a result of which the
prospectus included in a Registration Statement, as then in effect, includes an
untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (provided
that in no event shall such notice contain any material, nonpublic information),
and, subject to Section 3(o) hereof, promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission, and
deliver a copy of such supplement or amendment to Legal Counsel and the Agent on
behalf of each Investor (or such other number of copies as Legal Counsel or such
Investor may reasonably request). The Company shall also promptly notify Legal
Counsel and the Agent on behalf of each Investor in writing, including via
facsimile or e-mail followed by overnight courier, (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel and
Agent on behalf of each Investor by facsimile or e-mail on the same day of such
effectiveness and by overnight
mail), (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related prospectus or related information, and (iii)
of the Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
g. The Company shall use its commercially reasonable
efforts to prevent the issuance of any stop order or other suspension of
effectiveness of a Registration Statement, or the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
and, if such an order or suspension is issued, to obtain the withdrawal of such
order or suspension at the earliest possible moment and to notify Legal Counsel
and the Agent on behalf of each Investor who holds Registrable Securities being
sold of the issuance of such order and the resolution thereof or its receipt of
actual notice of the initiation or threat of any proceeding for such purpose.
h. Upon at least five (5) Business Days prior written
notice, the Company shall make available for inspection by (i) the Agent on
behalf of the Investors, (ii) Legal Counsel and/or (iii) one firm of accountants
or other agents retained by the Investors (collectively, the "INSPECTORS"), all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the "RECORDS"), as shall be reasonably
deemed necessary by each Inspector in order to enable it 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 the purpose of such due diligence; PROVIDED, HOWEVER, that in making such
request, the Inspectors shall act together and in so acting shall not be
entitled to make such request more than two (2) times in any fiscal year of the
Company, and that any such inspection shall be at the sole cost and expense of
the Investors; PROVIDED, FURTHER, HOWEVER, that each Inspector shall agree to
hold in strict confidence and shall not make any disclosure (except to an
Investor) or use of any Record or other information which the Company determines
in good faith to be confidential, and of which determination the Inspectors are
so notified, unless (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is otherwise
required under the 1933 Act, (b) the release of such Records is ordered pursuant
to a final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement of which the Inspector has knowledge. Each Investor
agrees that it shall, upon learning that disclosure of such Records is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to the Company and allow the Company, at its expense,
to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. Nothing herein (or in any
other confidentiality agreement between the Company and any Investor) shall be
deemed to limit the Investors' ability to sell Registrable Securities in a
manner which is otherwise consistent with applicable laws and regulations.
i. The Company shall hold in confidence and not make
any disclosure of information concerning an Investor provided to the Company
unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
j. The Company shall cooperate with the Investors and
the Agent who hold Registrable Securities being offered and, to the extent
applicable, facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be
in such denominations or amounts, as the case may be, as the Investors or Agent
may reasonably request and registered in such names as the Investors or Agent
may request.
k. If requested by the Agent on behalf of a
majority-in-interest of the Investors, the Company shall (i) as soon as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as an Investor reasonably requests to be included therein
relating to the sale and distribution of Registrable Securities, including,
without limitation, information with respect to the number of Registrable
Securities being offered or sold, the purchase price being paid therefor and any
other terms of the offering of the Registrable Securities to be sold in such
offering; and (ii) as soon as practicable make all required filings of such
prospectus supplement or post-effective amendment after being notified of the
matters to be incorporated in such prospectus supplement or post-effective
amendment.
l. The Company shall use its commercially reasonable
efforts to cause the Registrable Securities covered by the Registration
Statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to consummate the disposition of such
Registrable Securities.
m. The Company shall otherwise use its commercially
reasonable efforts to comply with all applicable rules and regulations of the
SEC in connection with any registration hereunder.
n. Within two (2) Business Days after a Registration
Statement which covers Registrable Securities is ordered effective by the SEC,
the Company shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities (with copies to
the Agent on behalf of the Investors whose Registrable Securities are included
in such Registration Statement) confirmation that such Registration Statement
has been declared effective by the SEC in the form attached hereto as EXHIBIT A.
o. Notwithstanding anything to the contrary herein,
at any time after the Registration Statement has been declared effective by the
SEC, the Company may delay the disclosure of material non-public information
concerning the Company, the disclosure of which at the time is not, in the good
faith opinion of the Board of Directors of the Company and its counsel, in the
best interest of the Company and, in the opinion of counsel to the Company,
otherwise required (a "GRACE PERIOD"); PROVIDED, that the Company shall promptly
(i) notify the Investors in writing of the existence of material non-public
information giving rise to a Grace Period (provided that in each notice the
Company will not disclose the content of such material non-public information to
the Investors) and the date on which the Grace Period will begin, and (ii)
notify the Investors in writing of the date on which the Grace Period ends; and,
PROVIDED FURTHER, that no Grace Period shall exceed 30 consecutive days and
during any 365 day period such Grace Periods shall not exceed an aggregate of 60
days and the first day of any Grace Period must be at least 2 trading days after
the last day of any prior Grace Period (an "ALLOWABLE GRACE PERIOD"). For
purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the holders receive the notice referred to
in clause (i) and shall end on and include the later of the date the holders
receive the notice referred to in clause (ii) and the date referred to in such
notice. The provisions of Section 3(g) hereof shall not be applicable during the
period of any Allowable Grace Period. Upon expiration of the Grace Period, the
Company shall again be bound by the first sentence of Section 3(f) with respect
to the information giving rise thereto unless such material non-public
information is no longer applicable. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended shares of
Common Stock to a transferee of an Investor in connection with any sale of
Registrable Securities with respect to which an Investor has entered into a
contract for sale, and delivered a copy of the prospectus included as part of
the applicable Registration Statement, prior to the Investor's receipt of the
notice of a Grace Period and for which the Investor has not yet settled.
p. The Company shall not include any securities in
the Registration Statement other than the Registrable Securities without the
prior written consent of the Agent.
4. OBLIGATIONS OF THE INVESTORS.
a. At least two (2) Business Days prior to the first
anticipated filing date of a Registration Statement, the Company shall notify
each Investor in writing of the information the Company requires from each such
Investor if such Investor elects to have any of such Investor's Registrable
Securities included in such Registration Statement. It shall be a condition
precedent to the obligations of the Company to complete the registration
pursuant to this Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it, as
shall be reasonably required to effect and maintain the effectiveness of the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.
b. Each Investor, by such Investor's acceptance of
the Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from such Registration Statement.
c. Each Investor agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of 3(f), such Investor will immediately
discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Investor's receipt
of the copies of the supplemented or amended prospectus contemplated by Section
3(g) or the first sentence of 3(f) or receipt of notice that no supplement or
amendment is required. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee of an Investor in accordance with the terms of the Securities
Purchase Agreement in connection with any sale of Registrable Securities with
respect to which an Investor has entered into a contract for sale prior to the
Investor's receipt of a notice from the Company of the happening of any event of
the kind described in Section 3(g) or the first sentence of 3(f) and for which
the Investor has not yet settled.
5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company shall be paid by the Company.
Further, in the event that the Agent is required under the rules of the NASD, to
file the registration statement with the Corporate Finance Department of the
NASD, the Company shall pay the filing fees incurred by the Agent in connection
with such filing and the reasonable legal fees of counsel to the Agent which
shall not be in excess of $10,000, and related expenses for copying and mailing,
if any.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
a. To the fullest extent permitted by law, the
Company will, and hereby does, indemnify, hold harmless and defend each
Investor, the directors, officers, partners, employees, agents, representatives
of, and each Person, if any, who controls any Investor within the meaning of the
1933 Act or the 1934 Act (each, an "INDEMNIFIED PERSON"), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys' fees, amounts paid in settlement or expenses, joint or
several, (collectively, "CLAIMS") incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a party thereto
("INDEMNIFIED DAMAGES"), to which any of them may become subject insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or any
post-effective amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other "blue sky" laws of
any jurisdiction in which Registrable Securities are offered ("BLUE SKY
FILING"), or the omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus if used prior to the effective date of
such Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading,
(iii) any violation or alleged violation by the Company of the 1933 Act, the
1934 Act, any other law, including, without limitation, any state securities
law, or any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement or (iv) any material
violation of this Agreement (the matters in the foregoing clauses (i) through
(iv) being, collectively, "VIOLATIONS"). Subject to Section 6(c), the Company
shall reimburse the Indemnified Persons, promptly as such expenses are incurred
and are due and payable, for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person for such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(d); (ii) with respect to any
preliminary prospectus, shall not inure to the benefit of any such person from
whom the person asserting any such Claim purchased the Registrable Securities
that are the subject thereof (or to the benefit of any person controlling such
person) if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the prospectus, as then amended or
supplemented, if such prospectus was timely made available by the Company
pursuant to Section 3(d), 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 or
failed to deliver the correct prospectus as required by the 1933 Act and such
correct prospectus was timely made available pursuant to Section 3(d); (iii)
shall not be available to the extent such Claim is based on a failure of the
Investor to deliver or to cause to be delivered the prospectus made available by
the Company, including a corrected prospectus, if such prospectus or corrected
prospectus was timely made available by the Company pursuant to Section 3(d);
and (iv) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably
withheld or delayed. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9.
b. In connection with any Registration Statement in
which an Investor is participating, each such Investor agrees to severally and
not jointly indemnify, hold harmless and defend, to the same extent and in the
same manner as is set forth in Section 6(a), the Company, each of its directors,
each of its officers who signs the Registration Statement each Person, if any,
who controls the Company within the meaning of the 1933 Act or the 1934 Act
(each, an "INDEMNIFIED PARTY"), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for use in
connection with such Registration Statement; and, subject to Section 6(c), such
Investor will reimburse any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section 6(b)
and the agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed; provided, further, however, that the Investor
shall be liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to such Investor as a
result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9. 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 contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented.
c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section
6, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; PROVIDED, HOWEVER, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by
the indemnifying party, the representation by such counsel of the Indemnified
Person or Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential differing interests between such Indemnified Person
or Indemnified Party and any other party represented by such counsel in such
proceeding. In the case of an Indemnified Person, legal counsel referred to in
the immediately preceding sentence shall be selected by the Investors holding at
least a majority in interest of the Registrable Securities included in the
Registration Statement to which the Claim relates. The Indemnified Party or
Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, PROVIDED, HOWEVER, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action.
d. The indemnification required by this Section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or Indemnified
Damages are incurred.
e. The indemnity agreements contained herein shall be
in addition to (i) any cause of action or similar right of the Indemnified Party
or Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; PROVIDED, HOWEVER, that:
(i) no person involved in the sale of Registrable Securities which person is
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) in connection with such sale shall be entitled to
contribution from any person involved in such sale of Registrable Securities who
was not guilty of fraudulent misrepresentation; and (ii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities
pursuant to such Registration Statement.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investors the benefits
of Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration ("RULE 144"), the
Company agrees to:
a. make and keep public information available, as
those terms are understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports
and other documents required of the Company under the 1933 Act and the 1934 Act
so long as the Company remains subject to such requirements and the filing of
such reports and other documents is required for the applicable provisions of
Rule 144; and
c. furnish to each Investor so long as such Investor
owns Registrable Securities, promptly upon request, (i) a written statement by
the Company, if true, that it has complied with the reporting requirements of
Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so filed
by the Company, and (iii) such other information as may be reasonably requested
to permit the Investors to sell such securities pursuant to Rule 144 without
registration, including opinions of counsel to the company.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights under this Agreement shall be automatically
assignable by the Investors to any transferee of Registrable Securities if: (i)
the Investor agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment; (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned;
(iii) immediately following such transfer or assignment the further disposition
of such securities by the transferee or assignee is restricted under the 1933
Act and applicable state securities laws; (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein; and (v) such transfer shall have been made in
accordance with the applicable requirements of the Subscription Agreement, Notes
and Warrants.
10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and Investors who then hold at least a majority of the Registrable Securities.
Any amendment or waiver effected in accordance with this Section 10 shall be
binding upon each Investor and the Company. No such amendment shall be effective
to the extent that it applies to less than all of the holders of the Registrable
Securities. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of this Agreement
unless the same consideration also is offered to all of the parties to this
Agreement.
11. MISCELLANEOUS.
a. A Person is deemed to be a holder of Registrable
Securities whenever such Person owns or is deemed to own of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more Persons with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the such record owner of such Registrable
Securities.
b. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one Business Day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
If to the Company:
Hemobiotech, Inc.
0000 Xxxxxxxx Xxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn.: Xx. Xxxxxx Xxxxxx
Chairman and Chief Executive Officer
With a copy to:
Xxxxxxxxx Traurig LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
If to Legal Counsel:
Xxxxxxxxx & Xxxxxxx, LLP
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxx, Esq.
If to Agent:
Xxxxxx Associates, L.P.
00 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii) or
(iii) above, respectively.
c. Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof.
d. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of Delaware, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Delaware. Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the state and federal courts
sitting in the County of New York, New York, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
e. This Agreement and the Transaction Documents
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 Transaction Documents supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
f. Subject to the requirements of Section 9, this
Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.
g. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in identical
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
i. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, 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 and other determinations required to
be made by the Agent and/or Investors pursuant to this Agreement shall be made,
unless otherwise specified in this Agreement, by Investors holding at least a
majority of the Registrable Securities.
k. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent and no
rules of strict construction will be applied against any party.
l. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not
for the benefit of, nor may any provision hereof be enforced by, any other
Person.
IN WITNESS WHEREOF, the parties have caused this Registration
Rights Agreement to be duly executed as of day and year first above written.
------------------------------------------ -------------------------------------
COMPANY: AGENT:
------------------------------------------ -------------------------------------
HEMOBIOTECH, INC. XXXXXX ASSOCIATES LP
AS AGENT FOR THE PURCHASERS
and for Itself
By: Xxxxxx Xxxxxxx Securities Corp.
General Partner
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxx
---------------------------------- ---------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxx Xxxxxx
Title: Chief Executive Officer Title: President
------------------------------------------ -------------------------------------
------------------------------------------ -------------------------------------
SCHEDULE OF PURCHASERS
--------------------------------------------------------------------------------
INVESTOR ADDRESS INVESTOR'S REPRESENTATIVE'S
INVESTOR AND FACSIMILE NUMBER ADDRESS AND FACSIMILE NUMBER
Xxxxx and Xxxxxxxx Xxxxxx c/o Meyers Associates, L.P.
00 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Xxxx Xxxx -same as above-
Martyn and Xxxxxxxxx Till, -same as above-
as tenants by the entirety
Xxxx Xxxxxxx -same as above-
Xxxx Xxxxxxxxxxx -same as above-
Xxxxxxx Xxxxx -same as above-
Xxxxxxxx Xxxxxxx -same as above-
Xxxxx Xxxxxxx -same as above-
Mr. and Xxx. Xxxxx Xxxxxxxxxxxxx, -same as above-
as tenants by the entirety
Xxxx Xxxxx -same as above-
Xxxxx Xxxx -same as above-
Xxxx van den Toorn -same as above-
Xxxxxxxxx and Xxxx Xxxxx, -same as above-
as tenants by the entirety
Landmark Realty Pension Plan -same as above-
Xxxxxxx Xxxxxxx -same as above-
Xxxxxx X. Xxxxxxxx -same as above-
Xxxxxx Xxxxx -same as above-
Xxxxxxx Xxxxxxxx -same as above-
Xxxxxx Xxxxxxx -same as above-
Xxxxxx Xxxx -same as above-
Xxxxxx Xxxxx Xxxx -same as above-
Xxxxxxxx Xxxxxx Xxxxxxx -same as above-
Xxxx and Xxxxxxx Xxxxxxxxxx, -same as above-
as tenants by the entirety
Xxxxxxx Xxxxxx -same as above-
Xxxxxx Xxxx -same as above-
Xxxxx Xxxxxxx -same as above-
Xxxxx and Xxxxxx Xxxxxxx, -same as above-
as tenants by the entirety
Xxxxx and Xxxxxx Xxxxx, -same as above-
as tenants in common
Xxxxx X. Xxxxxx Revocable Trust -same as above-
Xxxxxxx Xxxxxx and Xxx Xxxxx, -same as above-
as tenants in common
Xxxxxx Xxxxx -same as above-
Xxxxxx Xxxxx -same as above-
Hews Associates LLC -same as above-
Xxxx and Xxxxxxxxx Xxxxxx, -same as above-
as tenants by the entirety
Xxxx Xxxxxxxx -same as above-
Xxx Xxxxx Xxxxx -same as above-
Xxxxxx Xxxxxxxxxx -same as above-
Xxxxxxx Xxxxxxxx -same as above-
Xxxxx Xxxxx -same as above-
Xxxxxx Family Trust -same as above-
The Frost National Bank, f/b/o -same as above-
Renaissance Capital Growth &
Income Fund III, Inc.,
Trust No. W00740000
The Frost National Bank, f/b/o -same as above-
Renaissance US Growth Investment
Trust PLC, Trust No. WS00740100
The Frost National Bank, f/b/o -same as above-
BFS US Special Opportunities
Trust PLC, Trust No. WS00118000
Xxxxxx Xxxxxxx -same as above-
Xxxx XxXxxxx -same as above-
Xxxx Xxxxxxxx -same as above-
Xxxxxx Xxxxxxxx -same as above-
Xxxxx Xxxx -same as above-
Xxxxxx Xxxxxxx -same as above-
Xxxxxxxxxxx Convey -same as above-
Xxxx Xxxxxx -same as above-
Xxxxxxx Xxxxxx -same as above-
Xxxxxxx & Company, LLC -same as above-
Xxxxx Xxxxxxx -same as above-
Xxxxxx & Xxxxxxx Xxxxxxxx, as -same as above-
Tenants by the Entirety
Xxxxxxx Xxxxxxxxx -same as above-
Xxxxx X. Xxxxxxxxx Trust -same as above-
SRG Capital LLC -same as above-
Xxxxxxx Xxxxxxxxxx -same as above-
Xxxx X. Xxxxxxx -same as above-
Xxxxxx Xxxxxx -same as above-
Xxxxxx Xxxxxxx III -same as above-
Xxx Xxxxxxxxx -same as above-
Xxxxxxx X. Xxxxxxx -same as above-
X. Xxxxxx Xxxxxxxx -same as above-
EXHIBIT B
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[insert transfer agent's address]
Attention: _____________ (Re: HEMOBIOTECH, INC.)
Ladies and Gentlemen:
We are counsel to Hemobiotech, Inc., a Delaware corporation
(the "COMPANY"), and have represented the Company in connection with the private
placement of Units by the Company, pursuant to which the Company issued to each
of the purchasers (each, a "PURCHASER") shares (the "UNIT SHARES") of its Common
Stock, par value $.001 per share (the "COMMON STOCK"), promissory notes (each, a
"NOTE") convertible into shares of Common Stock (the "NOTE SHARES") and Warrants
(each, a "WARRANT") to purchaser shares of Common Stock (the "WARRANT SHARES")
in accordance with the terms of separate Subscription Agreements (each, a
"SUBSCRIPTION AGREEMENT"). Pursuant to the Subscription Agreement, the Company
also has entered into a Registration Rights Agreement with the Purchasers (the
"REGISTRATION RIGHTS AGREEMENT") pursuant to which the Company agreed, among
other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement) under the Securities Act of 1933, as amended (the
"1933 ACT"). In connection with the Company's obligations under the Registration
Rights Agreement, on ____________ ___, 200_, the Company filed a Registration
Statement on Form (File No. 333-_____________) (the "REGISTRATION STATEMENT")
with the Securities and Exchange Commission (the "SEC") relating to the
Registrable Securities which names each of the Purchasers as a selling
stockholder thereunder.
In connection with the foregoing, we advise you that a member
of the SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
By:_____________________
CC: [LIST NAMES OF PURCHASERS]
