Exhibit: 4.2
REGISTRATION RIGHTS AGREEMENT
HYSEQ, INC.
This Registration Rights Agreement (the "Agreement") is made and entered
into as of the __th day of ______, 199_, by and between Hyseq, Inc., a Nevada
corporation (the "Company"), and _______________ or its designee (the "Holder")
executing a Stock Purchase Agreement concurrently herewith in connection with
each such Holder's purchase of shares of the Company's Common Stock, par value
$.001 per share (the "Common Stock" or "Shares").
W I T N E S S E T H:
WHEREAS, the Holder has agreed to acquire shares of Common Stock of the
Company; and
WHEREAS, as additional consideration for the purchase of the Shares by the
Holder, the Company desires to grant to each such Holder registration rights
with respect to the Shares;
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement:
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(a) The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"1933 Act") and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means (i) the Common Stock acquired
by the Holder (the "Common Stock") which is not subject to reconveyance; and
(ii) any Common Stock of the Company issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of, the Common Stock, excluding in all cases, however, any
Registrable Securities sold by a person in a transaction in which such person's
registration rights are not assigned; provided, however, that as to any
particular securities that are included in Registrable Securities, such
securities shall cease to be Registrable Securities when (i) such shares shall
have been sold to the public pursuant to a registered public offering or (ii)
such securities shall have been sold pursuant to Rule 144 (or any successor
provision) under the 1933 Act.
(c) The number of shares of "Registrable Securities then outstanding" shall
be determined by the number of shares of Common Stock outstanding which are, and
the number of shares of Common Stock issuable pursuant to then exercisable or
convertible securities which are exercisable or convertible into, Registrable
Securities; and
(d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Paragraph 10 hereof.
2. Incidental Registration. If (but without any obligation to do so) the
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Company, at any time, proposes to register (including for this purpose a
registration effected by the Company for stockholders other than the Holder) any
of its stock or other securities under the 1933 Act (other than on Form S-4,
Form S-8 or any successor form), the Company shall, each such time, give the
Holder at least 45 days' prior written notice of such registration in accordance
with subparagraph 14(b) hereof. Upon the written request of the Holder given
within
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twenty (20) business days after mailing of such notice by the Company, the
Company shall use its best efforts, subject to the provisions of Paragraph 6, to
cause to be registered under the Securities Act all of the Registrable
Securities that the Holder has requested to be registered; provided that the
Company shall have the right to postpone or withdraw any registration effected
pursuant to this Paragraph 2 without obligation to the Holder.
3. Obligations of the Company. Whenever required under this Agreement to
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effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible (unless otherwise specified in this
Agreement):
(a) Prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its best efforts to cause such registration
statement to become effective, and, upon the request of the Holder, keep such
registration statement effective until this Agreement is terminated pursuant to
Paragraph 13 hereof.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
1933 Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holder, such numbers of copies of the registration
statement (including each preliminary prospectus) and the prospectus contained
therein in conformity with the requirements of the 1933 Act, and such other
documents all as they may reasonably request in order to facilitate the
disposition of such Registrable Securities.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holder, provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify the Holder at any time when a prospectus relating thereto is
required to be delivered under the 1933 Act of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing. Upon
such notification, such Holders shall immediately cease making offers of
Registered Securities. The Company shall promptly provide such Holders with
revised prospectuses and, following receipt of the revised prospectuses, such
Holder shall be free to resume making offers of the Registered Securities.
(g) If the offering is underwritten, at the request of the Holder, use its
best efforts to furnish on the date that Registrable Securities are delivered to
the underwriters for sale pursuant to such registration: (i) an opinion, dated
such date, of counsel representing the Company for the purposes of such
registration, addressed to the underwriters and to such Holder, stating that
such registration statement has become effective under the 1933 Act and that (A)
to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the 1933 Act, (B) the
registration statement, the related prospectus and each amendment or supplement
thereof comply as to form in all material respects with the requirements of the
1933 Act (except that such counsel need not express any opinion as to financial
statements contained therein) and (C) to such other effects as reasonably may be
requested by counsel for the underwriters or by such Holder or its counsel and
(ii) a letter dated such date from the independent public accountants retained
by the Company, addressed to the underwriters and to such Holder, stating that
they are independent public accountants within the meaning of the 1933 Act and
that, in the opinion of such accountants, the financial statements of the
Company included in the registration statement or the prospectus, or any
amendment or
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supplement thereof, comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may request.
(h) Use its best efforts to list the Registrable Securities covered by such
registration statement with any securities exchange or interdealer quotation
system on which the Common Stock is then listed or included for quotation.
4. Provision of Information. It shall be a condition precedent to the
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obligations of the Company to take any action pursuant to this Agreement that
the Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by them, and the intended method of disposition of
such securities as shall be required to effect the registration of the
Registrable Securities.
5. Expenses of Incidental Registration. The Company shall bear and pay
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all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Paragraph 2 for the Holder, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees
relating or apportionable thereto and the reasonable fees and disbursements of
one counsel for the Holder selected by it, but excluding underwriting discounts
and commissions of underwriters relating to Registrable Securities.
6. Underwriting Requirements. In connection with any offering involving
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an underwriting of shares being issued by the Company, the Company shall not be
required under Paragraph 2 to include any of the Holder's securities in such
underwriting unless it accepts the terms of the underwriting as agreed upon
between the Company and the underwriters and then only in such quantity as will
not, in the opinion of the underwriters, jeopardize the success of the offering
by the Company. If the total amount of securities, including Registrable
Securities, requested by stockholders to be included in such offering exceeds
the amount of securities sold other than by the Company that the underwriters
reasonably believe compatible with the success of the offering, then the Company
shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters believe
will not jeopardize the success of the offering (the securities so included to
be apportioned such that all Registrable Securities held by the Holder shall be
included in such registration, and if this is not possible, then, prior to
including securities owned by any other selling stockholders. For purposes of
the preceding parenthetical concerning apportionment, for any selling
stockholder, including the Holder, that is a partnership or corporation, the
partners, retired partners and stockholders of such Holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "selling
stockholder," and any pro rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling stockholder," as defined in this sentence.
7. Delay of Registration. The Holder shall not have any right to obtain
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or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
8. Indemnification. In the event any Registrable Securities are included
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in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless the Holder of such Registrable Securities, the officers and directors
of such Holder, any underwriter (as defined in the 0000 Xxx) for such Holder and
each person, if any, who controls such Holder or underwriter within the meaning
of the 1933 Act or the Securities and Exchange Act of 1934, as amended ("xxx
0000 Xxx"), against any losses, claims, damages or liabilities joint or several)
to which they may become subject under the 1933 Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based
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upon any of the following statements, omissions or violations (collectively, a
"Violation"): (i) any untrue statement or alleged untrue statement of material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the 1933 Act, the 1934 Act or any state securities
law; and the Company will reimburse the Holder, officer or director, underwriter
or controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this subparagraph 8(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder.
(b) To the extent permitted by law, the Holder will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each person, if any, who controls the Company
within the meaning of the 1933 Act, any underwriter and any other stockholder
selling securities in such registration statement or any of its directors or
officers or any person who controls such selling stockholder, against any
losses, claims, damages or liabilities joint or several) to which the Company or
any such director, officer or controlling person may become subject, under the
1933 Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and such Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter or controlling person, other selling
stockholder, officer, director, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subparagraph
8(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; provided, that,
in no event shall any indemnity under this subparagraph 8(b) exceed the gross
proceeds from the offering received by the Holder.
(c) Promptly after receipt by an indemnified party under this Paragraph 8
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Paragraph 8, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that any indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
actions, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Paragraph 10, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Paragraph 8.
(d) To provide for just and equitable contribution, if (i) an indemnified
party makes a claim for indemnification pursuant to subparagraph 8(a) or 8(b)
but it is found in a final judicial determination, not subject to further
appeal, that such indemnification may not be enforced in such case, even though
this Agreement expressly provides for indemnification in such case, or (ii) any
indemnified or indemnifying party seeks contribution under the 1933 Act, the
1934 Act, or otherwise, then the Company (including for this purpose any
contribution made by or
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on behalf of any officer, director, employee, agent or counsel of the Company,
or any controlling person of the Company), on the one hand, and the Holder
(including for this purpose any contribution by or on behalf of an indemnified
party), on the other hand, shall contribute to the losses, liabilities, claims,
damages, and expenses to which any of them may be subject, in such proportions
as are appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Holder, on the other hand; provided, however, that if
applicable law does not permit such allocation, then other relevant equitable
considerations such as the relative fault of the Company and the Holder in
connection with the facts which resulted in such losses, liabilities, claims,
damages and expenses shall also be considered. The relative benefits received by
the Company, on the one hand, and the Holder, on the other hand, shall be deemed
to be in the same proportion as the total proceeds from the offering received by
each of the Company on the one hand and the Holder, on the other hand.
The relative fault, in the case of an untrue statement, alleged untrue
statement, omission, or alleged omission, shall be determined by, among other
things, whether such statement, alleged statement, omission, or alleged omission
relates to information supplied by the Company or by the Holder, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement, alleged statement, omission, or alleged
omission. The Company and Holder agree that it would be unjust and inequitable
if the respective obligations of the Company and the Holder for contribution
were determined by pro rata or per capital allocation of the aggregate losses,
liabilities, claims, damages and expenses or by any other method of allocation
that does not reflect the equitable considerations referred to in this
subparagraph 8(d). No person guilty of a fraudulent misrepresentation (within
the meaning of subparagraph 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this subparagraph 8(d), each person, if any,
who controls the Holder within the meaning of Section 15 of the 1933 Act or
Section 20(a) of the 1934 Act and each officer, director, stockholder, employee,
agent and counsel of the Holder shall have the same rights of contribution as
the Holder, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act and each officer,
director, employee, agent and counsel of the Company, shall have the same rights
to contribution as the Company, subject in each case to the provisions of this
subparagraph 8(d). Anything in this subparagraph 8(d) to the contrary
notwithstanding, no party shall be liable for contribution with respect to the
settlement of any claim or action effected without its written consent. This
subparagraph 8(d) is intended to supersede any right to contribution under the
1933 Act, the 1934 Act, or otherwise.
(e) The obligations of the Company and Holder under this Paragraph 8 shall
survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement, and otherwise.
9. Efforts Under the 1934 Act. With a view to making available to the
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Holder the benefits of Rule 144 under the 1933 Act and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times after 90 days after the
effective date of the first registration statement filed by the Company for the
offering of its securities to the general public;
(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; and
(c) furnish to the Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144 (at any time after
90 days after the effective date of the first registration statement filed by
the Company), the 1933 Act and the 1934 Act (at any time after it has become
subject to such reporting requirements), (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
in availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration.
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10. Assignment of Registration Rights. The rights to cause the Company to
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register Registrable Securities pursuant to this Agreement may be assigned by
the Holder to a transferee or assignee of such securities; provided, in each
case, the Company is, within a reasonable time after such transfer, furnished
with written notice of the name and address of such transferee or assignee and
the securities with respect to which such registration rights are being
assigned; and, such transferee or assignee shall, as a condition to such
transfer, deliver to the Company a written instrument by which such transferee
or assignee agrees to be bound by the obligations imposed on Holders of
Registrable Securities pursuant to this Agreement and provided, further, that
such assignment shall be effective only if immediately following such transfer,
the disposition of such securities by the transferee or assignee: (i) is
restricted under the 1933 Act; or (ii) is exempt from registration under the
1933 Act.
11. Market Stand-Off Agreement. The Holder hereby agrees that it shall
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not, to the extent requested by the Company and an underwriter of Common Stock
(or other securities) of the Company, sell or otherwise transfer or dispose
(other than to donees who agree to be similarly bound) of any Registrable
Securities during a reasonable and customary period of time, as agreed to by the
Company and the underwriters, not to exceed 90 days, following the effective
date of a registration statement of the Company filed under the 1933 Act;
provided, however, that:
(a) such agreement shall be applicable only to a registration statement of
the Company which covers shares (or securities) to be sold to the public by an
underwriter on its behalf in an initial public offering; and
(b) such agreement shall only be applicable in the event shares held by the
Holder exceed one percent (1%) of the then outstanding common shares or common
share equivalents of the Company.
(c) all officers and directors of the Company and all other persons with
registration rights (whether or not pursuant to this Agreement) enter into
similar agreements.
In order to enforce the foregoing covenant, the Company may impose stop-
transfer instructions with respect to the Registrable Securities of the Holder
thereof until the end of such reasonable and customary period.
12. Amendment of Registration Rights. Any provision of this Agreement may
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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 the Holder; provided, however, that any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each holder of any securities purchased under this Agreement at the time
outstanding, each future holder of all such securities, and the Company.
13. Termination of Registration Rights. The Company's obligations
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pursuant to this Agreement (other than pursuant to Paragraphs 8) shall
terminate as to the Holder on the earlier of (i) when the Holder can remove the
restrictive legend on all such Holder's shares pursuant to Rule 144(k) under the
1933 Act (or any such successor rule) or (ii) on the second anniversary of the
closing of the initial registered public offering of Common Stock of the
Company.
14. Miscellaneous.
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(a) Remedies. In the event of a breach by the Company of its obligations
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under this Agreement, the Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.
(b) Notices. All notices and other communications provided for or
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permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, or telecopies, initially to the address set forth below, and
thereafter at such other address, notice of which is given in accordance with
the provisions of this subparagraph 14(b):
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(i) if to the Company:
Xxxxx X. Xxxxxx, President and CEO
Hyseq, Inc.
Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
(ii) if to the Holder:
At the address set forth in the Company's Stock Register.
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; two business days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; and when receipt is acknowledged, if telecopied.
(c) Successors and Assigns. Subject to Paragraph 10, this Agreement shall
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inure to the benefit of and be binding upon the successors and assigns of each
of the parties, including without limitation and without the need for an express
assignment, subsequent holders of the Registrable Shares subject to the terms
hereof.
(d) Counterparts. This Agreement may be executed in any number of
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counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(e) Headings. The headings in this Agreement are for convenience of
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references only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Illinois without reference to its
conflicts of law provisions.
(g) Severability. In the event that any one or more of the provisions
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contained herein, or the application hereof in any circumstance is held invalid,
illegal or unenforceable, the validity, legality and enforceability of any such
provisions contained herein shall not be affected or impaired thereby.
(h) Entire Agreement. This Agreement is intended by the parties as a final
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expression of their agreement and intended to be a complete and exclusive
statement of this agreement and understanding of the parties hereto in respect
of the subject matter contained herein. There are not restrictions, promises
warranties or undertakings, other than those set forth or referred to herein,
concerning the registration rights granted by the Company pursuant to this
Agreement.
(i) Future Grants. The Company shall not grant to any third party any
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registration rights more favorable than, or inconsistent with, any of those
contained herein so long as any of the registration rights under this Agreement
remains in effect.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
HYSEQ, INC.
By: _________________________________________
Name: Xxxxx X. Xxxxxx
Title: President and CEO
HOLDER:
________________________
By: _______________________________
Its: _____________________________
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