EXHIBIT 10.97
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of September ___, 1996 by and between Biomune Systems, Inc., a Nevada
corporation (the "Company"), and _______________ (the "Investor").
RECITALS:
A. WHEREAS, the Company has prepared a Confidential Private Placement
Memorandum (the "Memorandum") in connection with the offering by the Company of
a total of 5,000 shares of its Series C 8% Cumulative Convertible Non-Voting
Preferred Stock (the "Shares") at $1,000 per Share in a private placement
transaction; and
B. WHEREAS, the Investor desires to purchase the Shares from the Company
and enter into this Agreement to evidence certain registration rights granted by
the Company to the Investor in connection with the offer and sale of the Shares
to the Investor.
IN CONSIDERATION OF the foregoing and other promises contained herein, the
parties hereby agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect at the time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended,
or any similar federal statute, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at
the time.
"Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the 1933
Act.
"Common Stock" shall mean the restricted shares of Common Stock,
$0.0001 par value per share, of the Company, as constituted as of the date
of this Agreement that are issued to the Investor upon the conversion of
the Series C Preferred Stock or that are issued to the Investor upon the
exercise of the Prior Warrants and/or the Current Warrants.
"Current Warrants" shall mean the warrants to purchase a total of
500,000 of the Company's common shares at $3.25 per share for two years
from the date of the closing of the private placement transaction
contemplated by the Memorandum.
"Prior Warrants" shall mean the warrants to purchase a total of
1,295,657 of the Company's common shares at an exercise price of $2.38 per
share that were issued by the Company to Flurina Development S.A. in
connection with the issuance by the Company of shares of its Series D 8%
Cumulative Convertible Non-Voting Preferred Stock on or about March 10,
1996, which warrants have been amended to increase the number of the
Company's common shares thereunder to 1,470,588 shares at an exercise price
of $2.125 per share.
"Registration Statement" shall mean the registration statement on Form
X-0, Xxxx X-0 or other Form of general applicability satisfactory to the
Company and its legal counsel filed with the Commission to register the
Common Stock under the 1933 Act.
"Selling Expenses" shall mean the expenses described in Section 5
below.
"Series C Preferred Stock" shall mean the shares of the Company's
Series C 8% Cumulative Convertible Non-Voting Preferred Stock, $0.0001 par
value per share, issued to the Investor pursuant to the Memorandum.
2. Restrictive Legend. Each certificate representing Common Stock shall,
except as otherwise provided herein, be stamped or otherwise imprinted with a
legend substantially in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 OR ANY STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES
LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
THIS SECURITY IS SUBJECT TO A REGISTRATION RIGHTS AGREEMENT
ENTERED INTO BY AND BETWEEN BIOMUNE SYSTEMS, INC. AND THE
INVESTOR, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL
OFFICE OF BIOMUNE SYSTEMS, INC.
3. Registration Rights. The Company will use its reasonable best efforts to
prepare and file the Registration Statement with the Commission no later than
October 30, 1996 covering the Common Stock (which Common Stock underlies the
Series C Preferred Stock, the Company's common shares underlying the Prior
Warrants and the Company's common shares underlying the Current Warrants) and
shall use its reasonable best efforts to have the Registration Statement
declared effective by the Commission by January 2, 1997. In the event the
Registration Statement has not been declared effective by the Commission by
March 1, 1997, the Investor shall have the right to convert the Series C
Preferred Stock into any other type of exempt transaction as may be determined
by the Investor, in its sole discretion, and the Company shall provide all
required cooperation in that regard.
4. Registration Procedures. The Company will, as expeditiously as possible,
use its reasonable best efforts to:
(a) prepare and file with the Commission the Registration Statement
with respect to the Common Stock and use its reasonable best efforts to
cause the Registration Statement to become effective;
(b) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Registration Statement
effective for twelve (12) months and comply with the provisions of the 1933
Act with respect to the disposition of shares of Common Stock covered by
the Registration Statement in accordance with the Investor's intended
method of disposition set forth in the Registration Statement for such
period;
(c) furnish to the Investor such number of copies of the Registration
Statement and the printed prospectus included therein (including each
preliminary prospectus) as the Investor reasonably may request in order to
facilitate the public sale or other disposition of the Common Stock covered
by the Registration Statement;
(d) after the filing of the Registration Statement, the Company will
promptly notify the Investor of all comments delivered to the Company by
the Commission and take all reasonable actions required and use its best
efforts to respond to such comments and to prevent the entry of any stop
order or to remove any stop order if entered;
(e) use its reasonable best efforts to register or qualify the Common
Stock covered by the Registration Statement under the securities or "blue
sky" laws of such states or jurisdictions as the Investor shall request;
provided, however, that the Company shall not for any such purpose be
required to qualify generally to transact business as a foreign corporation
in any state or jurisdiction where it is not so qualified or to consent to
general service of process in any such state or jurisdiction;
(f) use its reasonable best efforts to list the Common Stock covered
by the Registration Statement on the NASDAQ SmallCap Market or any
securities exchange on which the Company's common shares are then-listed;
(g) immediately notify the Investor at any time when a prospectus
relating thereto is required to be delivered under the 1933 Act, of the
happening of any event of which the Company has knowledge, as a result of
which the prospectus contained in the 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 light of the circumstances then
existing;
(h) make available for inspection by the Investor and any attorney,
accountant or other agent retained by the Investor all financial and other
records, pertinent corporate documents and properties of the Company and
cause the Company's officers, directors and employees to supply all
information reasonably requested by the Investor, attorney, accountant or
agent in connection with the Registration Statement;
(i) in connection with the registration hereunder, the Investor will
furnish to the Company in writing such information with respect to itself
and the proposed distribution by it as reasonably shall be necessary in
order to assure compliance with federal and applicable state securities
laws, rules and regulations;
(j) in connection with the preparation and filing of the Registration
Statement under the 1933 Act pursuant to this Agreement, the Company will
give the Investor the opportunity to participate in the preparation of such
aspects of the Registration Statement as relate to or impact upon the
Investor's interests, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto; and
(k) notwithstanding the provisions of Sections 3 and 4(a) above, the
Company's obligation to file the Registration Statement or cause the
Registration Statement to become and remain effective, shall be suspended
for a period not to exceed ninety (90) days if there exists at the time
material non-public information relating to the Company that, in the
reasonable opinion of the Company, should not be disclosed.
5. Selling Expenses. All expenses incurred by in connection with the
registration pursuant to Section 3 above (excluding underwriters' commissions
and discounts and legal fees incurred by the Investor, if any), including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel and independent public accountants for the Company,
fees and expenses (including counsel fees) incurred in connection with complying
with state securities or "blue sky" laws, fees of the National Association of
Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars, costs of insurance shall be borne by the Company.
6. Indemnification and Contribution.
(a) In the event of a registration of any of the Common Stock under the
1933 Act pursuant to Section 3 above, the Company will indemnify and hold
harmless the Investor and each other person, if any, who controls the Investor
within the meaning of the 1933 Act, against any losses, claims, damages or
liabilities, joint or several, to which the Investor or controlling person may
become subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement under which such Common Stock was
registered under the 1933 Act pursuant to Section 3 above, any final prospectus
contained therein, or any amendment thereof or supplement thereto, or arise out
of or are based upon 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, and will reimburse the Investor and each such
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 Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished by the Investor or any such controlling person in writing specifically
for use in the Registration Statement or any prospectus.
(b) In the event of a registration of any of the Common Stock under the
1933 Act pursuant to Section 3 above, the Investor will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the 1933 Act, each officer of the Company who signs the Registration
Statement and each director of the Company against all losses, claims, damages
or liabilities, joint or several, to which the Company or such officer, director
or controlling person may become subject under the 1933 Act or otherwise insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement under which such
Common Stock was registered under the 1933 Act pursuant to Section 3 above, any
final prospectus contained therein, or any amendment thereof or supplement
thereof, or arise out of or are based upon 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, and will reimburse the Company and each
such officer, director and 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
Investor will be liable hereunder in any such case if and only to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information pertaining to the
Investor, as such, furnished in writing to the Company by the Investor
specifically for use in the Registration Statement or prospectus; provided,
further, however, that the liability of the Investor hereunder shall be limited
to the proportion of any such loss, claim, damage, liability or expense that is
equal to the proportion that the public offering price of the shares sold by the
Investor under the Registration Statement bears to the total public offering
price of all securities sold thereunder, but not in any event to exceed the net
proceeds received by the Investor from the sale of Common Stock covered by the
Registration Statement.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action or the threat of commencement thereof, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party in writing thereof,
but the omission to so notify the indemnifying party shall not relieve it from
any liability that it may have to such indemnified party other than under this
Section 6 and shall only relieve it from any liability that it may have to such
indemnified party under this Section 6 if and to the extent the indemnifying
party is prejudiced by such omission. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent it desires, to assume and undertake the defense thereof with
counsel satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of its election so to assume and
undertake the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 6 for any legal expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation and of liaison with and oversight of
counsel so selected; provided, however, that, if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it that are different from or in addition to those
available to the defenses available to the indemnifying party or if the
interests of the indemnified party reasonably may be deemed to conflict with the
interests of the indemnifying party, the indemnified party shall have the right
to select a separate counsel and to assert such legal defenses and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses and fees of such separate counsel and other
expenses related to such participation to be reimbursed by the indemnifying
party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the 1933 Act in any case in which either (i) the Investor or any
controlling person of the Investor makes a claim for indemnification pursuant to
this Section 6 but it is judicially determined (by the entry of a final judgment
or decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding the fact that this Section 6
provides for indemnification in such case, or (ii) contribution under the 1933
Act may be required on the part of the Investor or any such controlling person
in circumstances for which indemnification is provided under this Section 6;
then, and in each such case, the Company and the Investor will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that the Investor is
responsible for the portion represented by the percentage that the public
offering price of its Common Stock offered by the Registration Statement bears
to the public offering price of all securities offered by the Registration
Statement, and the Company is responsible for the remaining portion; provided,
however, that, in any such case, (A) the Investor will not be required to
contribute any amount in excess of the net proceeds of the sale of all such
shares of Common Stock sold by it pursuant to the Registration Statement; and
(B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) will be entitled to contribution from
any person or entity.
7. Changes in Common Stock. If, and as often as, there is any change in the
Common Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions of this Agreement so that the rights and privileges granted
hereby shall continue with respect to the Common Stock as so changed.
8. Special Dividends. The Company shall pay the Investor one or more
special dividends in the amount of 1-1/2% of the Share Purchase Price (as that
term is defined in the Memorandum in cash if the shares of the Company's Common
Stock underlying the Series C Preferred Stock have not been registered with the
Commission by January 2, 1997. The special dividend shall be paid in cash on the
1st and 15th day of each month that the shares of Common Stock underlying the
Series C Preferred Stock have not been registered with the Commission,
commencing with January 2, 1997.
9. Miscellaneous.
(a) All covenants and agreements contained in this Agreement by or on
behalf of either of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto (including, without
limitation, transferees of any Common Stock), whether so expressed or not.
(b) All notices, requests, consents and other communications hereunder
shall be in writing and shall be hand-delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed as
follows:
(i) if to the Company, to the address of the Company set forth in the
Memorandum;
(ii) if to the Investor, to it at such address as may have been
furnished to the Company in writing;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of the Investor) or to the Investor (in
the case of the Company) in accordance with the provisions of this Section 9(b)
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of Utah.
(d) This Agreement may not be amended or modified, and no provision hereof
may be waived, without the written consent of the Company and the Investor.
(e) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which, when taken together, shall
constitute one and the same instrument.
(f) The obligations of the Company to register shares of Common Stock under
Section 3 above shall terminate on the first (1st) anniversary of the date of
this Agreement.
(g) If any provision of this Agreement shall be held to be illegal, invalid
or unenforceable, such illegality, invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render illegal,
invalid or unenforceable any other provision of this Agreement, and this
Agreement shall be carried out as if any such illegal, invalid or unenforceable
provision were not contained herein.
(h) If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
attorneys' fees, costs and disbursements in addition to any other relief to
which such party may otherwise be entitled.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized, effective as of
the date first written above.
THE INVESTOR: THE COMPANY:
______________________________, BIOMUNE SYSTEMS, INC.,
a ____________ corporation a Nevada corporation
By: __________________________ By: _____________________________
__________________________ Xxxxx X. Xxxxxxx
Its: __________________________ Its: Chief Executive Officer
