Exhibit 10.9
BACL REGISTRATION RIGHTS AGREEMENT
BACL REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement, dated as of September 1, 2005 (this
"Agreement"), by and among Bioaccelerate Holdings, Inc., a Nevada corporation
(the "Company"), and the Purchasers (as defined below).
W I T N E S S E T H :
WHEREAS, the Company is offering (the "Offering") an aggregate of up to
Five Million (5,000,000) shares (the "Shares") of its Series A Convertible
Preferred Stock, par value $0.001 per share (the "Series A Preferred Stock")
convertible into shares (the "Common Shares") of the Company's common stock, par
value $0.001 per share (the "Common Stock"), and up to Ten Million (10,000,000)
of the Company's common stock purchase warrants (the "Warrants"), each Warrant
to purchase one share of the Company's Common Stock (each such share underlying
a Warrant, a "Warrant Share") (the Shares and the Warrants offered in the
Offering being sometimes hereinafter referred to as (the "Securities"), in each
case subject to an up to 10% overallotment at the Company's sole discretion;
WHEREAS, the Company desires to issue and sell to the persons listed on
Schedule A, attached hereto (each a "Purchaser," and collectively, the
"Purchasers"), the Securities as set forth in one or more Securities Purchase
Agreements entered into or to be entered into by and between the Company and
each Purchaser (the "Securities Purchase Agreement");
WHEREAS, the Company and the Purchasers have entered or will have
entered into a Securities Purchase Agreement;
WHEREAS, it is a condition precedent to the consummation of the
transactions contemplated by the Securities Purchase Agreement that the Company
provide for the rights set forth in this Agreement; and
WHEREAS, certain terms used in this Agreement are defined in Section 3
hereof.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, intending to be legally bound, the parties hereto hereby agree as
follows:
1. Registration Rights.
1.1 Required Registration. The Company shall use its reasonable
best efforts to accomplish the following:
(x) prepare and file with the "SEC" (as such term is hereafter
defined) a registration statement on Form SB-1 or a successor form or another
form selected by the Company that is available to the Company under the
"Securities Act" (as such term is hereafter defined) which conforms with
applicable rules and regulations (a "Required Registration Statement") covering
the "Registrable Securities" (as such term is hereafter defined), to permit the
offer and re-sale from time to time of such Registrable Securities in accordance
with the methods of distribution provided by the Purchasers, by the date (the
"Registration Statement Filing Date") which is not more than sixty (60) days
after the first to occur (the "Commencement Date") of the following dates: (i)
the "Final Closing Date" (as such term is defined in the Securities Purchase
Agreement) or the termination of the Offering, if there is no Final Closing
Date; and
(y) cause either of the following (the "Effectiveness Actions")
to occur by a date (the "Effectiveness Date") which is not more than ninety (90)
days after the Registration Statement Filing Date: (A) cause the SEC to declare
the Required Registration Statement to be effective or (B) cause the SEC to
communicate to the Company, orally or in writing, that the Required Registration
Statement will not be reviewed or that the SEC has no further comments
thereupon, whereupon the Company shall cause the Required Registration Statement
to be effective.
The failure of the Company to file a Required Registration Statement prior
to the Required Filing Date, or to cause either of the Effectiveness Actions to
occur prior to the Required Effectiveness Date, shall be deemed to be a
"Non-Registration Event". The Company and the Purchasers agree that the
Purchasers will suffer damages if a Non-Registration Event occurs, and that it
would not be feasible to ascertain the extent of such damages with precision.
Accordingly, if a Non-Registration Event should occur, then for each thirty (30)
day period during the pendency of such Non-Registration Event, the Company shall
deliver to each Purchaser, as liquidated damages, an amount equal to one percent
(1.0%) of the aggregate Purchase Price (as such term is defined in the
Securities Purchase Agreement) paid by such Purchaser for Shares (as such term
is defined in the Securities Purchase Agreement), with such payment being
pro-rated for any Non-Registration Event of less than thirty (30) days, subject
to a maximum penalty payable to all Purchasers in the aggregate of 18.5% of the
gross proceeds. Each such payment is hereinafter referred to as a
"Non-Registration Event Penalty Payment". Notwithstanding the foregoing, in no
event shall the Company be obligated to pay more than one Non-Registration Event
Penalty Payment to the same Purchaser in respect of a substantively concurrent
failure to perform; i.e., if a Non-Registration Event Penalty Payment is
accruing due to failure to file a Required Registration Statement prior to the
Required Filing Date, a separate Non-Registration Event Penalty Payment shall
not be due for a contemporaneous failure to cause an Effectiveness Action to
occur prior to the Required Effectiveness Date. The Company, at its sole
discretion, shall pay the Non-Registration Event Penalty Payment in cash or in
shares of its Common Stock, provided, that the Company may not elect to pay some
Purchasers in cash while it pays others in Common Stock. In the event that the
Company elects to pay the Non-Registration Event Penalty Payment to a Purchaser
in shares of the Company's Common Stock, it shall deliver unregistered, legended
shares of its Common Stock whose aggregate Market Price is equal to the
Non-Registration Event Penalty Payment due to such Purchaser.
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The Company shall use its reasonable best efforts to keep such Required
Registration Statement continuously effective (the "Effective Period") for a
period of two years after the Required Registration Statement first becomes
effective plus whatever period of time as shall equal any period, if any, during
such two year period in which the Company was not current with its reporting
requirements under the "Exchange Act" (as such term is hereinafter defined).
To the extent that the Registrable Securities are not sold under the
Required Registration Statement, the Purchasers shall have the registration
rights as enumerated in Sections 1.3 and 1.4 of this Agreement.
1.2 Current Public Information. The Company covenants that it will
use reasonable best efforts to file all reports required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the SEC thereunder, and will use reasonable best efforts to take such further
action as the Purchaser may reasonably request, all to the extent required to
enable the holders of Registrable Securities to sell Registrable Securities
pursuant to Rule 144 or Rule 144A adopted by the SEC under the Securities Act or
any similar rule or regulation hereafter adopted by the SEC. The Company shall,
upon the request of a holder of Registrable Securities (each a "Designated
Holder" and collectively, the "Designated Holders"), deliver to such Designated
Holder a written statement as to whether it has complied with such requirements.
1.3 Form S-3 Registration. If the Company is eligible to use Form
S-3 under the Securities Act (or any similar successor form) and shall receive
from a Purchaser and its permitted transferees (the "S-3 Initiating Holders") a
written request or requests that the Company effect a registration on such Form
S-3, including without limitation, pursuant to Rule 415 of the Securities Act
and any related qualification or compliance with respect to all or part of the
Registrable Securities owned by the S-3 Initiating Holders and its permitted
transferees (provided, that the S-3 Initiating Holders registering Registrable
Securities in such registration (together with all other holders of Registrable
Securities to be included in such registration) propose to sell their
Registrable Securities at an aggregate price (calculated based upon the Market
Price of the Registrable Securities on the date of filing of the Form S-3 with
respect to such Registrable Securities) to the public of no less than the lesser
of $5,000,000 or the remaining Registrable Securities), the Company shall (i)
promptly give written notice of the proposed registration, and any related
qualification or compliance, to all other holders of Registrable Securities; and
(ii) as soon as practicable, use reasonable best efforts to file and effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of the Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other holder in
the group of holders joining in such request as is specified in a written
request given within fifteen (15) days after the holder's receipt of such
written notice from the Company. No registration requested by any S-3 Initiating
Holders pursuant to this Section 1.3 shall be deemed a registration pursuant to
Section 1.1.
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1.4 Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register
any of its securities under the Securities Act (other than pursuant to a
registration pursuant to Section 1.3 or a registration on Form S-4 or S-8 or any
successor or similar forms) and the registration form to be used may be used for
the registration of Registrable Securities, whether or not for sale for its own
account, the Company will give prompt written notice (but in no event less than
twenty five (25) days before the anticipated filing date) to all holders of
Registrable Securities, and such notice shall describe the proposed registration
and distribution and offer to all holders of Registrable Securities the
opportunity to register the number of Registrable Securities as each such holder
may request. The Company will include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within fifteen (15) days after the holders' receipt of the
Company's notice (a "Piggyback Registration").
(b) Reasonable Efforts. The Company shall use all reasonable best
efforts to cause the managing underwriter or underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in a Piggyback Registration to be included on the same terms and
conditions as any similar securities of the Company or any other security holder
included therein and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method of distribution thereof.
(c) Withdrawal. Any Designated Holder shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
Registration Statement pursuant to this Section 1.4 by giving written notice to
the Company of its request to withdraw; provided, that in the event of such
withdrawal (other than pursuant to Section 1.4(e) hereof, the Company shall not
be required to reimburse such holder for the fees and expenses referred to in
Section 1.6(t) hereof incurred by or on behalf of such holder prior to such
withdrawal, unless such withdrawal was due to a material adverse change to the
Company. The Company may withdraw a Piggyback Registration at any time prior to
the time it becomes effective.
(d) Priority in Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing (with a copy to each party hereto
requesting registration of Registrable Securities) that in their opinion the
number of Registrable Securities requested to be included on a secondary basis
in such registration exceeds the number which can be sold in such offering
without materially and adversely affecting the marketability of such primary or
secondary offering (the "Company Offering Quantity"), then the Company will
include in such registration securities in the following priority:
(i) First, the Company will include the securities the Company
proposes to sell.
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(ii) Second, the Company will include all Registrable
Securities requested to be included by any Designated Holder and any securities
which any Pari Passu Holder may request to be so included, and if the number of
such Designated Holders' securities and Pari Passu Holder securities requested
to be included exceeds the Company Offering Quantity, then the Company shall
include only each such requesting Designated Holders' and Pari Passu Holders'
pro rata share of the shares available for registration by the Purchaser, based
on the amount of securities held by such holder, on an as converted basis. For
purposes of this Agreement, the term "Pari Passu Holder" shall mean any holder
of the Company's securities outstanding as of the completion of the Offering
that has registration rights, as well as any subsequent purchaser of "Permitted
Preferred Shares", if any, as such term is defined in the Securities Purchase
Agreement.
(iii) Third, the Company will include other securities of the
Company proposed to be included in the registration.
(e) Cutback. If, as a result of the proration provisions of this
Section 1.4, any Designated Holders shall not be entitled to include all
Registrable Securities in a Piggyback Registration that such Designated Holders
has requested to be included, such holder may elect to withdraw his request to
include Registrable Securities in such registration but the Company shall be
required to reimburse such holder for the fees and expenses referred to in
Section 1.6(t) hereof incurred by such holder prior to such withdrawal.
1.5 Holdback Agreements.
(a) To the extent not inconsistent with applicable law, in
connection with a public offering of securities of the Company, upon the request
of the Company or the underwriter, in the case of an underwritten public
offering, the underwriters managing such underwritten offering of the Company's
securities, each holder of Registrable Securities who owns at least 5% of the
outstanding capital stock of the Company on an "as-converted" basis or is an
officer or director of the Company will not effect any public sale or
distribution (other than those included in the registration) of any securities
of the Company, or any securities, options or rights convertible into or
exchangeable or exercisable for such securities during the seven (7) days prior
to and the ninety (90) -day period beginning on such effective date, unless (in
the case of an underwritten public offering) the managing underwriters otherwise
agree to a shorter period of time. Notwithstanding the foregoing, no Designated
Holder shall be required to enter into any such "lock up" agreement unless and
until all of the Company's executive officers and directors execute
substantially similar "lock up" agreements and the Company uses commercially
reasonable efforts to cause each holder of more than 5% of its outstanding
capital stock to execute substantially similar "lock up" agreements. Neither the
Company nor the underwriter shall amend, terminate or waive a "lock up"
agreement unless each "lock up" agreement with a Designated Holder is also
amended or waived in a similar manner or terminated, as the case may be.
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(b) The Company shall have the right at any time to require that
the Designated Holders of Registrable Securities suspend further
open market offers and sales of Registrable Securities pursuant to a
Registration Statement filed hereunder whenever in the reasonable judgment of
the Company after consultation with counsel there is or may be in existence a
Changing Event (as defined in Section 1.6(e)). The Company will give the
Designated Holders notice of any such suspension and will use all reasonable
best efforts to minimize the length of such suspension.
1.6 Registration Procedures. Whenever any Registrable Securities
are required to be registered pursuant to this Agreement, the Company will use
reasonable best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended methods of disposition
thereof, and pursuant thereto the Company will as expeditiously as possible:
(a) prepare and file with the SEC on any form, if not so otherwise
provided for, for which the Company qualifies, as soon as practicable after the
end of the period within which requests for registration may be given to the
Company, a Registration Statement with respect to the offer and sale of such
Registrable Securities and thereafter use reasonable best efforts to cause such
Registration Statement to become effective and remain effective until the
completion of the distribution contemplated thereby or the required time period
under this Agreement, whichever is shorter (and before filing such Registration
Statement, the Company will furnish to the counsel selected by the holders of a
majority of the Registrable Securities initiating such Registration Statement
copies of all such documents proposed to be filed); provided, however, that the
Company may postpone for not more than sixty (60) calendar days the filing or
effectiveness of any registration statement required pursuant to this Agreement
other than a Required Registration Statement required to be filed pursuant to
Section 1.1 of this Agreement if the Board of Directors, in its good faith
judgment, determines that such registration could reasonably be expected to have
a material adverse effect on the Company and its stockholders for any reason
including, but not limited to, any proposal or plan by the Company to engage in
any acquisition or sale of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer or similar transaction then
under consideration (in which event, the Designated Holders shall be entitled to
withdraw such request, and if such request is withdrawn such registration will
not count as a registration statement pursuant to this Agreement) by delivering
written notice to the Designated Holders who requested inclusion of Registrable
Securities in such Registration Statement of its determination to postpone such
Registration Statement; provided, further, that (i) the Company shall not
disclose any information that could be deemed material non-public information to
any holder of Registrable Securities included in a Registration Statement that
is subject to such postponement, (ii) in no event may the Company postpone a
filing requested hereunder more than twice in any twelve (12) month period;
provided, that any two postponements must be at least three (3) months apart;
provided, further, that the Company shall delay the effectiveness of any such
registration statement if the SEC rules and regulations prohibit the Company
from declaring a Registration Statement effective because its financial
statements are stale at a time when its fiscal year has ended or it has made an
acquisition reportable under Item 2 of Form 8-K or any other similar situation
until the earliest time in which the SEC would allow the Company to declare a
Registration Statement effective (provided that the Company shall use its
reasonable best efforts to cure any such situation as soon as possible so that
the Registration Statement can be made effective at the earliest possible time);
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(b) prepare and file with the SEC such amendments and supplements
to such Registration Statement and the prospectus used in connection therewith
as may be necessary to keep such Registration Statement effective for a period
provided for in the applicable Section above, or if not so provided, for a
period of twelve (12) (for a registration pursuant to Rule 415 of the Securities
Act) or, if such Registration Statement relates to an underwritten offering,
such period as in the opinion of counsel for the underwriters a prospectus is
required by law to be delivered in connection with sales of Registrable
Securities by an underwriter or dealer or (ii) such shorter period as will
terminate when all of the securities covered by such Registration Statement have
been disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof set forth in such Registration Statement (but in any
event not before the expiration of any longer period required under the
Securities Act), and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement until such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such Registration Statement. In the event the Company shall
give any notice pursuant to Section 1.5(b), the applicable time period mentioned
in this Section 1.6(b) during which a Registration Statement is to remain
effective shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to Section 1.5(b) to
and including the date when each seller of a Registrable Security covered by
such Registration Statement shall have received the copies of the supplemented
or amended prospectus contemplated by Section 1.6(e);
(c) furnish to each seller of Registrable Securities, prior to
filing a Registration Statement, such number of copies of such Registration
Statement, each amendment and supplement thereto, the prospectus included in
such Registration Statement (including each preliminary prospectus) and such
other documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such seller;
(d) register or qualify such Registrable Securities under such
other securities or blue sky laws of such jurisdictions as any seller reasonably
requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such seller and to
keep each such registration or qualification (or exemption therefrom) effective
during the period which the Registration Statement is required to be kept
effective (provided, that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph, (ii) subject itself to taxation
in any such jurisdiction or (iii) consent to general service of process in any
such jurisdiction);
(e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event (a "Changing Event") as a result
of which, the prospectus included in such Registration Statement contains an
untrue statement of a material fact or omits any fact necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made, and, at the request of any such seller, the Company will as soon
as possible prepare and furnish to such seller (a "Correction Event") a
reasonable number of copies of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not misleading in the
light of the circumstances under which they were made;
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(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on The Nasdaq Stock Market or the
Nasdaq SmallCap trading system or the Nasdaq OTC Bulletin Board;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such Registration Statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form with any underwriter, if any is selected by the
Company) and take all such other actions as the holders of a majority of the
Registrable Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities, including causing its officers to participate in "road shows" and
other information meetings organized by an underwriter, if any, provided that
any underwriter shall have been selected by the Company;
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
Registration Statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
employees and independent accountants to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such Registration Statement;
(j) before filing a Registration Statement or prospectus or any
amendments or supplements thereto, the Company shall provide counsel selected by
the Designated Holders holding a majority of the Registrable Securities being
registered in such registration ("Holders' Counsel") and any other Inspector (as
defined below) with an adequate and appropriate opportunity to review and
comment on such Registration Statement and each prospectus included therein (and
each amendment or supplement thereto) to be filed with the SEC, subject to such
documents being under the Company's control, and the Company shall notify the
Holders' Counsel and each seller of Registrable Securities of any stop order
issued or threatened by the SEC;
(k) otherwise comply with all applicable rules and regulations of
the SEC, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve months
beginning with the first day of the Company's first full calendar quarter after
the effective date of the Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
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(l) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any securities included in such Registration Statement for sale in any
jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order;
(m) obtain one or more comfort letters, dated the effective date of
such Registration Statement (and, if such registration includes an underwritten
offering, dated the date of the closing under the underwriting agreement),
signed by the Company's independent public accountants in customary form and
covering such matters of the type customarily covered by comfort letters as the
holders of a majority of the Registrable Securities being sold reasonably
request;
(n) provide a legal opinion of the Company's outside counsel, dated
the effective date of such Registration Statement (and, if such registration
includes an underwritten offering, dated the date of the closing under the
underwriting agreement), with respect to the Registration Statement, each
amendment and supplement thereto, the prospectus included therein (including the
preliminary prospectus) and such other documents relating thereto in customary
form and covering such matters of the type customarily covered by legal opinions
of such nature;
(o) subject to execution and delivery of mutually satisfactory
confidentiality agreements, make available at reasonable times for inspection by
any seller of Registrable Securities, any managing underwriter participating in
any disposition of such Registrable Securities pursuant to a Registration
Statement, Holders' Counsel and any attorney, accountant or other agent retained
by any managing underwriter (each, an "Inspector" and collectively, the
"Inspectors"), during normal business hours of Company at Company's corporate
office in New York, New York and without unreasonable disruption of Company's
business or unreasonable expense to Company and solely for the purpose of due
diligence with respect to the registration statement, non-confidential, legally
disclosable, financial and other records and pertinent corporate documents of
the Company and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's and its subsidiaries' officers,
directors and employees, and the independent public accountants of the Company,
to make available for inspection, at such parties' offices during their
respective normal business hours and without unreasonable disruption of their
business or unreasonable expense to Company and solely for the purpose of due
diligence with respect to a registration statement covering Registrable
Securities pursuant to this Agreement all information reasonably requested by
any such Inspector in connection with such Registration Statement;
(p) subject to execution and delivery of mutually satisfactory
confidentiality agreements, keep Holders' Counsel advised as to the initiation
and progress of any registration hereunder including, but not limited to,
providing Holders' Counsel with all correspondence with the SEC;
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(q) cooperate with each seller of Registrable Securities and each
underwriter participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be made with
the NASD; and
(r) take all other steps reasonably necessary to effect the
registration of the Registrable Securities contemplated hereby.
(s) Conditions Precedent to Company's Obligations Pursuant to this
Agreement. It shall be a condition precedent to the obligations of Company to
take any action pursuant to this Agreement that each of the holders whose
Registrable Securities are to be registered pursuant to this Agreement shall
furnish such holder's written agreement to be bound by the terms and conditions
of this Agreement prior to performance by Company of its obligations under this
Agreement. By executing and delivering this Agreement, each holder represents
and warrants that the information concerning, and representations and warranties
by, such holder, including information concerning the securities of the Company
held, beneficially or of record, by such holder, furnished to the Company
pursuant to the Securities Purchase Agreement and the Purchasers Questionnaire
delivered pursuant thereto, are true and correct as if the same were represented
and warranted on the date of any registration statement by the Company pursuant
to this Agreement or any amendment thereto, and each holder covenants to
immediately notify the Company in writing of any change in any such information,
representation or warranty and to refrain from offering or disposing of any
securities pursuant to any such registration statement until the Company has
reflected such change in the registration statement. By executing and delivering
this Agreement, each such holder further agrees to furnish any additional
information as the Company may reasonably request in connection with any action
to be taken by the Company pursuant to this Agreement, and to pay such holder's
expenses which are not required to be paid by the Company pursuant to this
Agreement.
(t) Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Agreement including, without limitation,
all registration and filing fees payable by the Company, fees and expenses of
compliance by the Company with securities or blue sky laws, printing expenses of
the Company, messenger and delivery expenses of the Company, and fees and
disbursements of counsel for the Company and all independent certified public
accountants of the Company, underwriters (excluding discounts and commissions,
which will be paid by the sellers of Registrable Securities) and other Persons
retained by the Company will be borne by the Company, and the Company will pay
its internal expenses (including, without limitation, all salaries and expenses
of its Employees performing legal or accounting duties), the expense of any
annual audit or quarterly review, the expense of any liability insurance of the
Company and the expenses and fees for listing the securities to be registered on
each securities exchange on which similar securities issued by the Company are
then listed or on The Nasdaq National Market, Nasdaq SmallCap Market or the OTC
Bulletin Board trading system. The Company shall have no obligation to pay any
underwriting discounts or commissions attributable to the sale of Registrable
Securities and any of the expenses incurred by any holder of Registrable
Securities which are not payable by the Company, such costs to be borne by such
holder or holders, including, without limitation, underwriting fees, discounts
and expenses, if any, applicable to any holder's Registrable Securities; fees
and disbursements of counsel or other professionals that any holder may choose
to retain in connection with the registration statement filed pursuant to this
Agreement; selling commissions or stock transfer taxes applicable to the
Registrable Securities registered on behalf of any holder; any other expenses
incurred by or on behalf of such holder in connection with the offer and sale of
such Holder's Registrable Securities other than expenses which the Company is
expressly obligated to pay pursuant to this Agreement.
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1.7 Indemnification.
(a) The Company agrees to indemnify and hold harmless, to the
fullest extent permitted by law, each holder of Registrable Securities and its
general or limited partners, officers, directors, members, managers, employees,
advisors, representatives, agents and Affiliates (collectively, the
"Representatives") from and against any loss, claim, damage, liability,
attorney's fees, cost or expense and costs and expenses of investigating and
defending any such claim (collectively, the "Losses"), joint or several, and any
action in respect thereof to which such holder of Registrable Securities or its
Representatives may become subject under the Securities Act or otherwise,
insofar as such Losses (or actions or proceedings, whether commenced or
threatened, in respect thereto) arise out of or are based upon (i) any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, prospectus or preliminary or summary prospectus or any amendment or
supplement thereto or (ii) any 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 the Company shall reimburse each such holder of
Registrable Securities and its Representatives for any legal or any other
expenses incurred by them in connection with investigating or defending or
preparing to defend against any such Loss, action or proceeding; provided,
however, that the Company shall not be liable to any such holder or other
indemnitee in any such case to the extent that any such Loss (or action or
proceeding, whether commenced or threatened, in respect thereof) arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission, made in such Registration Statement, any such prospectus or
preliminary or summary prospectus or any amendment or supplement thereto, in
reliance upon, and in conformity with, written information prepared and
furnished to the Company by any holder of Registrable Securities or its
Representatives expressly for use therein or by failure of any holder of
Registrable Securities to deliver a copy of the Registration Statement or
prospectus or any amendments or supplements thereto after the Company has
furnished such holder of Registrable Securities with a sufficient number of
copies of the same. In no event, however, shall the Company be liable for
indirect, incidental or consequential or special damages of any kind. In
connection with an underwritten offering, the Company will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the holders of Registrable
Securities.
11
(b) In connection with any Registration Statement in which the
holders of Registrable Securities are participating pursuant to this Agreement,
the holders of Registrable Securities will furnish to the Company in writing
such information as the Company reasonably requests for use in connection with
any such Registration Statement or prospectus and, to the fullest extent
permitted by law, each such holder of Registrable Securities will indemnify and
hold harmless the Company and its Representatives from and against any Losses,
severally but not jointly, and any action in respect thereof to which the
Company and its Representatives may become subject under the Securities Act or
otherwise, insofar as such Losses (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon (i) the
purchase or sale of Registrable Securities during a suspension as set forth in
Section 1.5(b) after written receipt of notice of such suspension, (ii) any
untrue or alleged untrue statement of a material fact contained in the
Registration Statement, prospectus or preliminary or summary prospectus or any
amendment or supplement thereto, or (iii) any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but, with respect to clauses (ii) and (iii) above, only
to the extent that such untrue statement or omission is made in such
Registration Statement, any such prospectus or preliminary or summary prospectus
or any amendment or supplement thereto, in reliance upon and in conformity with
written information prepared and furnished to the Company by such holder of
Registrable Securities expressly for use therein or by failure of such holder of
Registrable Securities to deliver a copy of the Registration Statement or
prospectus or any amendments or supplements thereto after the Company has
furnished such holder of Registrable Securities with a sufficient number of
copies of the same, and such holder of Registrable Securities will reimburse the
Company and each Representative for any legal or any other expenses incurred by
them in connection with investigating or defending or preparing to defend
against any such Loss, action or proceeding; provided, however, that such holder
of Registrable Securities shall not be liable in any such case to the extent
that prior to the filing of any such Registration Statement or prospectus or
amendment or supplement thereto, such holder of Registrable Securities has
furnished in writing to the Company information expressly for use in such
Registration Statement or prospectus or any amendment or supplement thereto
which corrected or made not misleading information previously furnished to the
Company; provided, further, however, that the obligation to indemnify will be
individual to each such holder of Registrable Securities and will be limited to
the net amount of proceeds received by such holder of Registrable Securities
from the sale of Registrable Securities pursuant to such Registration Statement.
In no event, however, shall any holder be liable for indirect, incidental or
consequential or special damages.
(c) Promptly after receipt by any Person in respect of which
indemnity may be sought pursuant to Section 1.7(a) or 1.7(b) (an "Indemnified
Party") of notice of any claim or the commencement of any action, the
Indemnified Party shall, if a claim in respect thereof is to be made against the
Person against whom such indemnity may be sought (an "Indemnifying Party"),
promptly notify the Indemnifying Party in writing of the claim or the
commencement of such action; provided, that the failure to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
which it may have to an Indemnified Party otherwise than under Section 1.7(a) or
1.7(b) except to the extent of any actual prejudice resulting therefrom. If any
such claim or action shall be brought against an Indemnified Party, and it shall
notify the Indemnifying Party thereof, the Indemnifying Party shall be entitled
to participate therein, and, to the extent that it wishes, jointly with any
other similarly notified Indemnifying Party, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such claim or action, the Indemnifying Party shall not be liable to
the Indemnified Party for any legal or other expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided, that the Indemnified Party shall
have the right to employ separate counsel to represent the Indemnified Party and
its Representatives who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Indemnified Party against the
12
Indemnifying Party, but the fees and expenses of such counsel shall be for the
account of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the written opinion of counsel to such Indemnified Party, representation
of both parties by the same counsel would be inappropriate due to actual or
potential conflicts of interest between them, it being understood, however, that
the Indemnifying Party shall not, in connection with any one such claim or
action or separate but substantially similar or related claims or actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all Indemnified
Parties. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any claim or pending or threatened
proceeding in respect of which the Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability arising out of such claim or proceeding other than the
payment of monetary damages by the Indemnifying Party on behalf of the
Indemnified Party. Whether or not the defense of any claim or action is assumed
by the Indemnifying Party, such Indemnifying Party will not be subject to any
liability for any settlement made without its consent, which consent will not be
unreasonably withheld.
(d) If the indemnification provided for in this Section 1.7 is
unavailable to the Indemnified Parties in respect of any Losses referred to
herein, then each Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the holders of the
Registrable Securities on the other from the offering of the Registrable
Securities, or if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits but also
the relative fault of the Company on the one hand and the holders of the
Registrable Securities on the other in connection with the statements or
omissions which resulted in such Losses, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of each
holder of the Registrable Securities on the other shall be determined by
reference to, among other things, whether any action taken, including any untrue
or alleged untrue statement of a material fact, or the omission or alleged
omission to state a material fact relates to information supplied by such party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
13
The Company and the holders of the Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this Section 1.7(d)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an Indemnified
Party as a result of the Losses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 1.7, no holder of the Registrable
Securities shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities of such holder were
offered to the public exceeds the amount of any Losses which such holder has
otherwise paid by reason of such untrue or alleged untrue statement or omission
or alleged omission. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. Each holder's obligations to contribute pursuant to this
Section 1.7 is several in the proportion that the proceeds of the offering
received by such holder of the Registrable Securities bears to the total
proceeds of the offering received by all the holders of the Registrable
Securities and not joint.
1.8 Participation in Underwritten Registrations.
(a) No Person may participate in any registration hereunder which is
underwritten unless such Person (i) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements (including, without
limitation, pursuant to the terms of any over-allotment or "green shoe" option
requested by the managing underwriter(s), provided, that each holder of
Registrable Securities shall not be required to sell more than the number of
Registrable Securities that such holder has requested the Company to include in
any registration) and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and this Agreement.
(b) Each Person that is participating in any registration under
this Agreement agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 1.6(e) above, such
Person will forthwith discontinue the disposition of its Registrable Securities
pursuant to the Registration Statement and all use of the Registration Statement
or any prospectus or related document until such Person's receipt of the copies
of a supplemented or amended prospectus as contemplated by such Section 1.6(e)
and, if so directed by the Company, will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in
holder's possession of such documents at the time of receipt of such notice.
Furthermore, each holder agrees that if such holder uses a prospectus in
connection with the offering and sale of any of the Registrable Securities, the
holder will use only the latest version of such prospectus provided by Company.
14
2. Transfers of Certain Rights.
2.1 Transfer. The rights granted to the Purchaser under this
Agreement are non-transferable except for a transfer, without any consideration
whatsoever, to a person or entity which is an Affiliate of the transferor, and
any such transfer, in any case, shall be subject to the provisions of Sections
2.2 and 2.3; provided that nothing contained herein shall be deemed to permit an
assignment, transfer or disposition of the Registrable Securities in violation
of the terms and conditions of the Securities Purchase Agreement, the
Certificate of Designations of the Series A Preferred Stock, or applicable law.
2.2 Transferees. Any permitted transferee to whom rights under this
Agreement are transferred shall, as a condition to such transfer, deliver to the
Company a written instrument by which such transferee agrees to be bound by the
obligations imposed upon the Purchaser under this Agreement to the same extent
as if such transferee were a Purchaser hereunder.
2.3 Subsequent Transferees. A transferee to whom rights are
transferred pursuant to this Section 2 may not again transfer such rights to any
other person or entity, other than as provided in Sections 2.1 or 2.2 above.
3. Certain Definitions. The following capitalized terms shall have the
meanings ascribed to them below:
"Affiliate" means any Person that directly or indirectly controls, or is
under control with, or is controlled by such Person. As used in this definition,
"control" (including with its correlative meanings, "controlled by" and "under
common control with") shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a Person
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise).
"Closing Price" means, with respect to the Registrable Securities (a) if
the shares are listed or admitted for trading on any national securities
exchange or included in The Nasdaq National Market or Nasdaq SmallCap Market,
the last reported sales price as reported on such exchange or market; (b) if the
shares are not listed or admitted for trading on any national securities
exchange or included in The Nasdaq National Market or Nasdaq SmallCap Market,
the average of the last reported closing bid and asked quotation for the shares
as reported on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or a similar service if NASDAQ is not reporting such
information; (c) if the shares are not listed or admitted for trading on any
national securities exchange or included in The Nasdaq National Market or Nasdaq
SmallCap Market or quoted by NASDAQ or a similar service, the average of the
last reported bid and asked quotation for the shares as quoted by a market maker
in the shares (or if there is more than one market maker, the bid and asked
quotation shall be obtained from two market makers and the average of the lowest
bid and highest asked quotation). In the absence of any available public
quotations for the Common Stock, the Board and a majority of the Holders shall
determine in good faith the fair value of the Common Stock
15
"Common Stock" means the common stock, par value $0.001 per share, of the
Company.
"Employees" means any current, former, or retired employee, office
consultant, advisor, independent contractor, agent, officer or director of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Market Price" means, on any date of determination, the average of the
daily Closing Price of the Registrable Securities for the immediately preceding
five (5) on which the national securities exchanges are open for trading.
"Person" means any individual, company, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental body or other entity.
"Registrable Securities" means, subject to the immediately following
sentence, (i) shares of Common Stock issued or issuable upon the conversion of
shares of Series A Preferred Stock and the Warrant Shares (including any shares
issued upon exercise of any warrant issued to placement agents engaged by the
Company) issued or issuable upon the exercise of the Warrants or placement agent
warrants acquired by the applicable Purchaser or placement agent from the
Company in the Offering pursuant to the Securities Purchase Agreement, and (ii)
any shares of Common Stock issued or issuable directly or indirectly with
respect to the securities referred to in clause (i) by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization. As to any particular shares of
Common Stock constituting Registrable Securities, such shares of Common Stock
will cease to be Registrable Securities when they (x) have been effectively
registered under the Securities Act and disposed of in accordance with a
Registration Statement covering them, (y) have been sold to the public pursuant
to Rule 144 (or by similar provision under the Securities Act), or (z) are
eligible for resale under Rule 144(k) (or by similar provision under the
Securities Act) without any limitation on the amount of securities that may be
sold under paragraph (e) thereof.
"Registration Statement" means any registration statement of the Company
filed under the Securities Act which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the prospectus,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits and all material incorporated by
reference in such registration statement.
"SEC" means the United States Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
16
4. Miscellaneous.
4.1 Recapitalizations, Exchanges, etc. The provisions of this
Agreement shall apply to the full extent set forth herein with respect to (i)
the Registrable Securities, (ii) any and all shares of Common Stock into which
the Registrable Securities are converted, exchanged or substituted in any
recapitalization or other capital reorganization by the Company and (iii) any
and all equity securities of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in conversion of, in exchange for or in
substitution of, the Registrable Securities and shall be appropriately adjusted
for any stock dividends, splits, reverse splits, combinations, recapitalizations
and the like occurring after the date hereof. The Company shall cause any
successor or assign (whether by merger, consolidation, sale of assets or
otherwise) to enter into a new registration rights agreement with the Designated
Holders on terms substantially the same as this Agreement as a condition of any
such transaction.
4.2 No Inconsistent Agreements. The Company has not and shall not
enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the Purchasers in this Agreement or grant any
additional registration rights to any Person or with respect to any securities
which are not Registrable Securities which are prior in right to or materially
inconsistent with the rights granted in this Agreement. The Purchasers expressly
acknowledge and agree that the Company has granted registration rights
heretofore and may hereafter grant registration rights to holders of Series A
Preferred Stock and to holders of Permitted Preferred Shares, if any are
hereafter issued, which shall be pari passu with, and substantially the same as,
those granted to the Purchasers in the Offering, that such registration rights
are permitted under this Section 4.2 and shall not be deemed to conflict with
the registration rights of the Purchasers, and that holders of such registration
rights shall be treated pari passu with holders of the registration rights
granted under this Agreement with respect to priority in piggy-back
registrations, and vice versa.
4.3 Amendments and Waivers. The provisions of this Agreement may be
amended and the Company may take action herein prohibited, or omit to perform
any act herein required to be performed by it, if, but only if, the Company has
obtained the written consent of holders of at least a majority of the
Registrable Securities then in existence.
4.4 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
4.5 Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17
4.6 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including telecopy, telex or similar
writing) and shall be deemed given or made as of the date delivered, if
delivered personally or by telecopy (provided that delivery by telecopy shall be
followed by delivery of an additional copy personally, by mail or overnight
courier), one day after being delivered by overnight courier or four business
days after being mailed by registered or certified mail (postage prepaid for the
most expeditious form of delivery, return receipt requested), to the parties at
the following addresses (or to such other address or telex or telecopy number as
a party may have specified by notice given to the other party pursuant to this
provision):
If to the Company, to:
Bioaccelerate Holdings, Inc.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Reference: Series A Preferred Private Placement
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Purchaser, to:
The address or facsimile number of each Purchaser as
recorded in the stockholders records of the Company.
4.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflicts of laws rules or provisions.
4.8 Forum; Service of Process. Any legal suit, action or proceeding
brought by any party or any of its affiliates arising out of or based upon this
Agreement shall be instituted in any federal or state court in New York County,
New York, and each party waives any objection which it may now or hereafter have
to the laying of venue or any such proceeding, and irrevocably submits to the
jurisdiction of such courts in any such suit, action or proceeding.
4.9 Captions. The captions, headings and arrangements used in this
Agreement are for convenience only and do not in any way limit or amplify the
terms and provisions hereof.
4.10 No Prejudice. The terms of this Agreement shall not be
construed in favor of or against any party on account of its participation in
the preparation hereof.
4.11 Words in Singular and Plural Form. Words used in the singular
form in this Agreement shall be deemed to import the plural, and vice versa, as
the sense may require.
4.12 Remedy for Breach. The Company hereby acknowledges that in the
event of any breach or threatened breach by the Company of any of the provisions
of this Agreement, the holders of the Registrable Securities would have no
adequate remedy at law and could suffer substantial and irreparable damage.
Accordingly, the Company hereby agrees that, in such event, the holders of the
Registrable Securities shall be entitled, and notwithstanding any election by
any holder of the Registrable Securities to claim damages, to obtain a temporary
and/or permanent injunction to restrain any such breach or threatened breach or
to obtain specific performance of any such provisions, all without prejudice to
any and all other remedies which any holder of the Registrable Securities may
have at law or in equity.
18
4.13 Successors and Assigns; Third Party Beneficiaries. This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto, each subsequent holder of the Registrable
Securities and their respective permitted successors and assigns and executors,
administrators and heirs. Holders of the Registrable Securities are intended
third party beneficiaries of this Agreement and this Agreement may be enforced
by such holders.
4.14 Entire Agreement. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.
4.15 Exceptions to Representations, Warranties, Covenants and
Agreements. Notwithstanding anything to the contrary contained in this
Agreement, the parties hereto acknowledge and agree that as of the date of this
Agreement the Company is not current in its obligations to file all reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder, and such currently existing
condition shall not be deemed to be a breach of representation, warranty,
covenant or agreement, or the basis for any penalty, pursuant to this Agreement,
provided that the Company shall continue to use its reasonable best efforts to
become current in such filing obligations.
[Remainder of page intentionally left blank.]
19
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date and year first written
above.
BIOACCELERATE HOLDINGS, INC.
By:_________________________________
Name:
Title:
20
IN WITNESS WHEREOF, the undersigned Purchaser has caused this
Registration Rights Agreement to be duly executed as of the date and year first
above written and to be bound hereby.
Securities
--------------------------------------
are in: Print Name of Purchaser
--------------------------------------------------
shares of Series A Preferred Stock (which shall be
____ individual name acquired together with certain related
Warrants, Cynat Shares and Genaderm
Shares)
____ tenants in the entirety --------------------------------------
Print Name of Joint Purchaser
(if applicable)
____ corporation (an officer must sign) --------------------------------------
Signature of Purchaser
____ partnership (all general partners must sign) --------------------------------------
Signature of Joint Purchaser
____ trust --------------------------------------
--------------------------------------
(with a copy to:)
--------------------------------------
--------------------------------------
Address of Purchaser
___ limited liability company
