REGISTRATION RIGHTS AGREEMENT
Execution
Copy
THIS
REGISTRATION RIGHTS AGREEMENT
(this
“Agreement”)
is
made as of March 19, 2004, by and among Lev Pharmaceuticals, Inc., a Delaware
corporation (the “Company”)
and
each of the individuals and entities listed on Exhibit A attached hereto
(collectively, the “Holders”
and
each a “Holder”).
WHEREAS,
the
Company and certain Holders are parties to stock purchase agreements
and
a
warrant purchase agreement (collectively, the
“Purchase
Agreements”)
providing for, among other things, the purchase and sale of Common Stock
of the
Company (the “Common
Stock”);
and
WHEREAS,
in
order to induce such Holders to purchase shares of the Company’s Common Stock
and enter into the Purchase Agreements, the Company desires to grant to such
Holders and other parties certain registration rights as set forth
herein.
NOW,
THEREFORE,
in
consideration of the promises and mutual covenants contained herein, the
parties
hereto hereby agree as follows:
1. Registration
Rights.
The
Company covenants and agrees as follows (capitalized terms used but not defined
herein shall have the meanings ascribed thereto in the Purchase
Agreement):
1.1 Definitions.
For
purposes of this Section 1:
1.1.1 The
term
“1934
Act”
means
the Securities Exchange Act of 1934, as amended.
1.1.2 The
term
“Act”
means
the Securities Act of 1933, as amended.
1.1.3 The
term
“Closing”
has the
meaning ascribed to it in the Purchase Agreement.
1.1.4 The
term
“Common
Stock”
means
the Company’s common stock, par value per share of $0.00001.
1.1.5 “Emigrant”
means
Emigrant Capital Corporation, a Delaware corporation.
1.1.6 “Emigrant
Registrable Securities”
means
the Registrable Securities from time to time owned by Emigrant,
Xxxx
Xxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxxxx May or their
respective
permitted assigns hereunder.
1.1.7 The
term
“Equity
Securities”of
any
Person means (i) any capital stock, partnership, membership, joint venture
or
other ownership or equity interest, participation or securities in or of
such
Person (whether voting or non-voting, whether preferred, common or otherwise,
and including any stock appreciation, contingent interest or similar right)
and
(ii) any option, warrant, security or other right (including debt securities)
directly or indirectly convertible into or exercisable or exchangeable for,
or
otherwise to acquire directly or indirectly, any stock, interest, participation
or security described in clause (i) above.
1.1.8 The
term
“Form S-3”
means
such form under the Act as in effect on the date hereof or any registration
form
under the Act subsequently adopted by the SEC that permits inclusion or
incorporation of substantial information by reference to other documents
filed
by the Company with the SEC.
1.1.9 The
term
“Holder”
means
any Person owning Registrable Securities or any assignee thereof in accordance
with Section 1.11 hereof.
1.1.10 The
term
“Closing”
has the
meaning ascribed to it in the Purchase Agreement.
1.1.11 The
term
“IPO”
means
the sale of the Company’s Common Stock pursuant to an underwritten initial
public offering pursuant to a registration statement declared effective under
the Act.
1.1.12 The
term
“Person”
means
an individual, a partnership, a joint venture, a corporation, a trust, a
limited
liability company, an unincorporated organization or a government or any
department or agency thereof.
1.1.13 The
term
“Public
Sale"
means a
sale of securities pursuant to a registration statement declared effective
under
the Act or
to the
public through a broker, dealer or market maker pursuant to the provisions
of
Rule 144 (or any similar provision then in effect) adopted under the Securities
Act.
1.1.14 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 Act and the declaration or ordering
of
effectiveness of such registration statement or document by the
SEC.
1.1.15 The
term
“Registrable
Securities”
means:
(i) Common Stock held by the Holders as of the date hereof, including
the
shares of Common Stock issuable upon exercise of a warrant granted to HAE
Associates, LLC (the “Warrant”) and (ii) any Equity Securities 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, in exchange for or in replacement of the shares referenced
in
clause (i) above, excluding in all cases, however, (a) any Registrable
Securities that have been previously sold pursuant to a registration statement
filed and declared effective by the SEC, (b) Registrable Securities that
have
been sold by a Person in a transaction in which his or her rights under this
Section 1 are not duly assigned as provided herein, (c) any Registrable
Securities after such securities have been sold in a Public Sale.
The
Warrant does not have to be exercised in order to include the shares of Common
Stock issuable upon exercise thereof in any registration statement under
this
Agreement. Use of the term “Registrable Securities then outstanding” shall in no
way infer that the Warrant is required to be exercised in order to include
the
shares of Common Stock issuable upon exercise thereof in any registration
statement under this Agreement.
1.1.16 The
term
“SEC”
shall
mean the Securities and Exchange Commission.
1.2.1 Registration
Rights.
From
and after the earlier to occur of (i) January 1, 2009, and (ii) that
date that is six (6) months after the IPO, the holders of a majority of the
then
outstanding Emigrant Registrable Securities may deliver a written request
to the
Company requesting that the Company file, on one (1) occasion, a registration
statement under the Act covering the registration of not less than a majority
of
the then outstanding Emigrant Registrable Securities. From and after the
earlier
to occur of (i) January 1, 2009, and (ii) that date that is
six (6)
months after the IPO, the Holders of at least a majority of the Registrable
Securities then outstanding (excluding the Emigrant Registrable Securities
and
assuming the exercise of the Warrant) shall be entitled to deliver a written
request to the Company requesting that the Company file, on one (1) occasion,
a
registration statement under the Act covering the registration of a majority
of
the then outstanding Registrable Securities (assuming the exercise of the
Warrant). Any Person or group of Persons who delivers a request for registration
pursuant to this Section 1.2.1 shall be referred to herein with respect to
such
request as the “Initiating
Holder”
or the
“Initiating
Holders”,
as the
case may be. If the Company shall receive any such written request, then
the
Company shall use its commercially reasonable efforts to:
1.2.1.1 within
ten (10) days of the receipt of a request made pursuant to Section 1.2.1,
give
written notice of such request to all Holders in accordance with
Section 3.5 hereof; and
1.2.1.2 effect
as
soon as practicable, and in any event within one hundred twenty (120) days
of
the receipt of such request, such registration under the Act (including,
without
limitation, filing post-effective amendments, appropriate
qualifications under applicable blue sky or other state securities
laws,
and
appropriate compliance with the Act) as would permit or facilitate the sale
and
distribution of all or such portion of such Registrable Securities that the
Holders request to be registered, subject to the limitations of this
Section 1.2.
1.2.2 Underwriting
Requirements.
If the
Initiating Holder(s) intend to distribute the Registrable Securities covered
by
their request by means of an underwriting, they shall so advise the Company
as a
part of their request made pursuant to Subsection 1.2.1 and the Company
shall include such information in the written notice referred to in
Subsection 1.2.1. The underwriter will be selected by the Initiating
Holder(s) and shall be reasonably acceptable to the Company. . In such event,
the right of any Holder or other holder of securities of the Company to include
securities in such registration shall be conditioned upon such Holder’s or
holder’s participation in such underwriting and the inclusion of such Holder’s
or holders’ securities in the underwriting to the extent provided herein. All
Holders and other holders of securities of the Company proposing to distribute
their securities through such underwriting shall (together with the Company
as
provided in Subsection 1.5.5) enter into an underwriting agreement
in
customary form with the underwriter or underwriters selected for such
underwriting. If a Person who has requested inclusion in such registration
as
provided above does not agree to the terms of any such underwriting, then
(i) such Person shall be excluded therefrom and (ii) the securities
so
excluded shall be withdrawn from registration. Notwithstanding any other
provision of this Section 1.2, if the underwriter advises the Initiating
Holder(s) in writing that marketing factors require a limitation of the number
of shares to be underwritten, then the Initiating Holder(s) shall so advise
all
Holders of Registrable Securities that would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Securities that may be included
in the underwriting shall be allocated among all Holders thereof, including
the
Initiating Holder(s), in proportion (as nearly as practicable) to the amount
of
Registrable Securities of the Company owned by each Holder.
1.2.3 Deferral.
Notwithstanding the foregoing, if the Company shall furnish to Holders a
certificate signed by the Chief Executive Officer or President of the Company
stating that in the good faith judgment of the Board of Directors of the
Company
it would not be in the best interest of the Company for such registration
statement to be filed, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than one hundred eighty
(180) days after the date of such certificate; provided,
however,
that
the Company shall not defer its obligation in this manner more than once
in any
twelve (12) month period.
1.2.4 Limitations.
In
addition, the Company shall not be obligated to effect, or to take any action
to
effect, any registration pursuant to this Section 1.2:
1.2.4.1 if
the
Initiating Holder(s) propose to dispose of shares of Registrable Securities
that
may be immediately registered on Form S-3 pursuant to a request made
pursuant to Section 1.4 below;
1.2.4.2 within
one hundred twenty (120) days of any underwritten public offering;
or
1.2.4.3 if
the
Registrable Securities requested to be registered under this Section 1.2
do
not have an anticipated aggregate offering price to the public (before deducting
any underwriter discounts, concessions or commissions) in excess of
$5,000,000.
1.2.5 Notwithstanding
the foregoing, a registration will not count as the registration permitted
to be
initiated by the applicable Initiating Holder(s) under this Section 1.2 unless
such Initiating Holder(s) are able to register and sell at least 90% of the
Registrable Securities that such Initiating Holder(s)have requested to be
included in such registration.
1.3 Company
Registration.
1.3.1 Registration
Rights.
If (but
without any obligation to do so) the Company proposes to register (including
for
this purpose a registration effected by the Company for stockholders other
than
the Holders) any of its stock or other securities under the Act in connection
with the public offering of such securities solely for cash (other than a
registration statement relating either to the sale of securities to employees
of
the Company pursuant to a stock option, stock purchase or similar plan, a
registration made on Form S-4 or any successor forms then in effect or a
SEC
Rule 145 transaction), the Company shall, at such time, promptly give
each
Holder written notice of such registration and such Holders shall have the
right
to request that their Registrable Securities be included in such registration.
Upon the written request of each Holder given within fifteen (15) days after
receipt by such Holder of notice by the Company, the Company shall, subject
to
the provisions of paragraph 1.3.2 below, cause to be included in such
registration all of the Registrable Securities that each such Holder has
requested to be so included.
1.3.2 Underwriting
Requirements.
1.3.2.1 The
right
of any Holder or other holder of securities of the Company to include securities
in such registration shall be conditioned upon such Holder’s or holders’
participation in such underwriting and the inclusion of such Holder’s or
holders’ securities in the underwriting to the extent provided herein. All
Holders and other holders of securities of the Company proposing to distribute
their securities through such underwriting shall (together with the Company
as
provided in Subsection 1.5.5) enter into an underwriting agreement
in
customary form with the underwriter or underwriters selected for such
underwriting. If a Holder who has requested inclusion in such registration
as
provided above does not agree to the terms of any such underwriting, then
(i) such Holder shall be excluded therefrom and (ii) the securities
owned by such Holder so excluded shall be withdrawn from registration.
1.3.2.2 If
the
total amount of securities, including Registrable Securities, requested by
stockholders (including Holders) to be included in such offering exceeds
the
amount of securities that the underwriters determine in their sole discretion
is
compatible with the success of the offering, then the Company, subject to
Section 1.3.2.4 below, shall be required to include in the offering only
that
number of such securities, including Registrable Securities, that the
underwriters determine in their sole discretion will not jeopardize the success
of the offering.
1.3.2.3 Right
to Terminate Registration.
The
Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 1.3 before the effectiveness of such registration
whether or not any Holder has elected to include securities in such
registration.
1.3.2.4 Pro
Rata Allocation.
Allocation of securities held by stockholders (including Holders) to be included
in such registration and sold in the related offering under this
Section 1.3 shall be made on a pro rata basis among the stockholders
(including Holders) who requested to have securities (including Registrable
Securities) included in such registration according to the total number of
securities (including Registrable Securities) held by each such stockholder
(including each Holders).
1.4 Form
S-3 Registration.
In case
the Company shall receive from (i) the holders of not less than thirty percent
(30%) of the then outstanding Emigrant Registrable Securities or (ii) any
Holder
or Holders of not less than thirty percent (30%) of the Registrable Securities,
a written request or requests that the Company effect a registration on
Form S-3 or any comparable or successor form or forms, the Company
will use
its commercially reasonable efforts to:
1.4.1 promptly
give written notice of the proposed registration, and any related qualification
or compliance, to all other Holders; and
1.4.2 as
soon
as practicable, 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 such Holder’s or Holders’ Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any other Holder or Holders joining in such
request as are specified in a written request given within fifteen (15) days
after such written notice from the Company; provided, however, that the Company
shall not be obligated to effect any such registration, qualification or
compliance pursuant to this Section 1.4:
1.4.2.1 unless
the Registrable Securities requested by all Holders to be registered pursuant
to
this Section 1.4 have an anticipated aggregate offering price to the
public
(before deducting underwriter discounts, concessions or commissions) that
exceeds $2,000,000;
1.4.2.2 if
the
Company is not eligible to register securities on Form S-3; or
1.4.2.3 if
the
Company shall furnish to the Holders a certificate signed by the Chief Executive
Officer or President of the Company stating that, in the good faith judgment
of
the Board of Directors of the Company, it would not be in the best interests
of
the Company for such Form S-3 Registration to be effected at such
time, in
which event the Company shall have the right to defer the filing of the
Form S-3 registration statement for a period of not more than one
hundred
twenty (120) days after the date of such certificate; provided,
however,
that
the Company shall not defer this obligation in this manner more than once
in any
twelve (12) month period.
1.4.3 If
the
registration is for an underwritten offering, the provisions of
Section 1.2.2 hereof shall apply to such registration.
1.5.1 Each
of
(i) the holders of a majority of the then outstanding Emigrant Registrable
Securities and (ii) the holders of a majority of the Registrable
Securities then
outstanding (excluding
the Emigrant Registrable
Securities
and
assuming the exercise of the Warrant),
will be
entitled to request one registration on any applicable “short form” pursuant to
Rule 415 under the Securities Act (a “415
Registration”),
if
available; provided
that
the
Company will have no obligation to grant any request for a 415 Registration
unless such registration is on Form S-2 or S-3 or any similar short-form;
and
provided
further
that the
Company will have no obligation to grant any request for a 415 Registration
unless the aggregate value of the Registrable Securities to be sold through
such
registration equals at least $2.0 million. Subject to the availability of
required financial information, within 45 days after the Company receives
written notice of a request for a 415 Registration, the Company will file
with
the SEC a registration statement under the Securities Act for the 415
Registration. The Company will use its commercially reasonable efforts to
cause
the 415 Registration to be declared effective under the Securities Act as
soon
as practicable after filing and, once effective, the Company will (subject
to
the provisions of clause (ii) below) cause such 415 Registration to remain
effective for such time period as is specified in such request, but for no
time
period longer than the period ending on the earlier of (A) the second
anniversary of the date of filing of the 415 Registration, (B) the date on
which
all Registrable Securities covered by such 415 Registration have been sold
pursuant to the 415 Registration and (C) the date as of which there are no
longer any Registrable Securities covered by such 415 Registration in
existence.
1.5.2 If
the
Holders of a majority of the Registrable Securities notify the Company in
writing that they intend to effect the sale of all or substantially all of
the
Registrable Securities held by such Holders pursuant to a single integrated
offering pursuant to a then effective registration statement for a 415
Registration (a “Takedown”),
then
so long as the aggregate value of the Registrable Securities to be sold through
such Takedown equals at least $1.0 million, the Company and each holder of
Registrable Securities will not effect any public sale or distribution of
its
Equity Securities during the 90-day period beginning on the date such notice
of
a Takedown is received, except pursuant to such Takedown. Notwithstanding
anything contained herein to the contrary, all holders of Registrable Securities
and holders of Common Stock who have a contractual right to participate in
such
Takedown may participate in such Takedown, pro
rata
based on
the number of shares of Registrable Securities requested by such holders
to be
included in such Takedown.
1.6 Obligations
of the Company.
Unless
otherwise provided herein, whenever required under this Section 1
to effect
the registration of any Registrable Securities, the Company will use its
reasonable commercial efforts to:
1.6.1 Prepare
and file with the SEC a registration statement with respect to such Registrable
Securities, cause such registration statement to become effective, and, upon
the
request of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for a period of up
to one
hundred eighty (180) days (or 2 years in the case of a 415 Registration)
or
until the distribution contemplated in the Registration Statement has been
completed, whichever is earlier.
1.6.2 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 Act with respect
to the
disposition of all securities covered by such registration
statement.
1.6.3 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 Holders; 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.
1.6.4 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.
1.6.5 Promptly
notify each Holder of Registrable Securities covered by such registration
statement and any underwriter participating in any distribution pursuant
to such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the 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.
1.6.6 Notify
each Holder of Registrable Securities covered by such registration statement
and
any underwriter participating in any distribution pursuant to such registration
statement of (i) the effectiveness of such registration statement, (ii) the
filing of any post-effective amendments to such registration statement, or
(iii)
the filing of a supplement to such registration statement.
1.6.7 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, use its commercially
reasonable efforts to obtain promptly the withdrawal of such order.
1.6.8 Cooperate
with each holder of Registrable Securities covered by the applicable
registration statement and the managing underwriters, if any, to facilitate
the
timely preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates will not bear any restrictive legends
and will be in a form eligible for deposit with the transfer agent for the
Common Stock; and enable such Registrable Securities to be in such denominations
and registered in such names as the managing underwriters, if any, or holders
may request at least two business days prior to any sale of Registrable
Securities.
1.6.9 Use
its
commercially reasonable efforts to cause its management to participate fully
in
the sale process, including, without limitation, the preparation of the
applicable registration statement and the preparation and presentation of
any
“road shows,” whether domestic or international;
1.6.10 Make
available for inspection by a representative selected by a majority of the
holders of Registrable Securities, if any, participating in the offering,
any
underwriter participating in any disposition pursuant to the registration
and
any attorney or accountant retained by such selling holder or underwriter
(each,
an “Inspector”), all financial and other records, pertinent corporate documents
and properties of the Company (the “Records”), and cause the Company’s officers,
directors and employees to supply all information reasonably requested by
any
such Inspector in connection with such registration; provided
that
the
Company will not be required to comply with this Section 1.6.9 if there is
a
reasonable likelihood, in the judgment of the Company exercised in good faith,
that such delivery could result in the loss of any attorney-client privilege
related thereto; and provided
further
that
Records which the Company determines, in good faith, to be confidential and
which it notifies the Inspectors are confidential will not be disclosed by
the
Inspectors (other than to any holder of Registrable Securities participating
in
the offering) unless (x) such Records have become generally available to
the
public or (y) the disclosure of such Records may be necessary or appropriate
(A)
to comply with any law, rule, regulation or order applicable to any such
Inspectors or holder of Registrable Securities, (B) in response to any subpoena
or other legal process or (C) in connection with any litigation to which
such
Inspectors or any holder of Registrable Securities is a party (provided
that
Company
is provided with reasonable notice of such proposed disclosure and a reasonable
opportunity to seek a protective order or other appropriate remedy with respect
to such Records).
1.6.11 Use
commercially reasonable efforts to furnish to each Holder of Registrable
Securities covered by such registration statement and any underwriter
participating in any distribution pursuant to such registration statement,
if
requested by such entity, (i) a copy of the opinion dated such date
of
counsel representing the Company for the purposes of such registration,
addressed to the underwriters, and in customary form and containing customary
substance and such other reasonably acceptable substance as may be required
by
any underwriters, and (ii) a copy of the letter dated such date from the
independent certified public accountants retained by the Company, addressed
to
the underwriters and covering such matters with respect to such registration
as
are customarily included in “comfort letters” provided to
underwriters.
1.6.12 Cause
all
such Registrable Securities registered hereunder to be listed on each securities
exchange on which similar securities issued by the Company are then
listed.
1.6.13 Provide
a
transfer agent and registrar for all Registrable Securities registered pursuant
to a registration statement and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such
registration.
1.7 Furnish
Information.
1.7.1 Each
selling Holder seeking to sell shares pursuant to a registration requested
pursuant to this Section 1 shall furnish to the Company such information
regarding itself, the Registrable Securities held by it and the intended
method
of disposition of such securities that the Company shall reasonably request
in
writing and as shall be reasonably required to effect the registration of
such
Holder’s Registrable Securities.
1.7.2 The
Company shall have no obligation with respect to any registration requested
pursuant to Section 1.2 or Section 1.4 if, due to the operation
of
Subsection 1.7.1, the number of shares or the anticipated aggregate
offering price of the Registrable Securities to be included in the registration
does not equal or exceed the anticipated aggregate offering price required
to
originally trigger the Company’s obligation to initiate such registration as
specified in Subsection 1.2.1 or Subsection 1.4.2.1, whichever
is
applicable.
1.8 Registration
Expenses.
All
expenses (exclusive of underwriting discounts and commissions that shall
be
borne pro rata by the Holders) incurred in connection with registrations,
filings or qualifications pursuant to this Section 1, including, without
limitation, all registration, filing and qualification fees, printers’ and
accounting fees, fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one (1) counsel for all selling
Holders of Registrable Securities shall be borne by the Company, whether
or not it has become effective.
1.9.1
If the
Company has previously filed a registration statement with respect to
Registrable Securities pursuant to Section 1 hereof (including Section 1.3)
and
if such previous registration has not been withdrawn or abandoned, the Company
will not file or cause to be effected any other registration of any of its
Equity Securities or securities convertible or exchangeable into or exercisable
for its Equity Securities under the Securities Act (except on Form S-4 or
Form
S-8 or any successor forms), whether on its own behalf or at the request
of any
holder or holders of such securities, until a period of at least 180 days
has
elapsed from the date such previous registration became effective.
1.9.2 Notwithstanding
anything to the contrary contained in this Agreement, the Company will not
effect any public sale or distribution of its Equity Securities during the
seven
days prior to and during the 180-day period beginning on the effective date
of
the IPO, any underwritten registration requested under Section 1 of
this
Agreement or any underwritten registration in which Registrable Securities
are
requested to be included pursuant to this Section 1 (in each case
except as
part of such underwritten registration or pursuant to registrations on Form
S-8
or any successor form).
1.10 Indemnification.
In the
event any Registrable Securities are included in a registration under this
Section 1:
1.10.1 To
the
maximum extent permitted by law, the Company will indemnify and hold harmless
each Holder, each Holder’s affiliates, partners, shareholders, members,
officers, directors and agents, any underwriter (as defined in the Act) for
such
Holder and each Person, if any, who controls such Holder or underwriter within
the meaning of the Act or the 1934 Act against any losses, claims, damages,
or
liabilities (joint or several) arising out of or based upon any of the following
statements, omissions or violations (each a “Violation”):
(i) any untrue statement or alleged untrue statement of a material
fact
contained in any registration statement, prospectus, offering circular, or
any
amendment or supplement 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 Act, the 1934 Act, any state securities
law applicable to the Company or any Rule or regulation promulgated
under
the Act, the 1934 Act or any state securities law applicable to the Company;
and
the Company will pay to each such Holder, each of its officers, directors,
partners or members, and each Person controlling such Holder, each such
underwriter and each Person who controls any such underwriter, any legal
or
other expenses reasonably incurred by them in connection with investigating
or
defending any such loss, claim, damage, liability, or action, as such expenses
are incurred; provided,
however,
that
the indemnity agreement contained in this Subsection 1.9.1 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 that is caused
by
reliance upon written information furnished to the Company by a Holder expressly
for use in connection with such registration by any such Holder, underwriter
or
controlling Person.
1.10.2 To
the
maximum extent permitted by law, each Holder that holds Registrable Securities
included in the registration will indemnify and hold harmless the Company,
each
of its directors, each of its officers who has signed the registration
statement, each Person, if any, who controls the Company within the meaning
of
the Act, any underwriter, any other Holder selling securities in such
registration statement and any controlling Person of any such underwriter
or
other Holder, severally but not jointly, against any losses, claims, damages,
or
liabilities (joint or several) to which any of the foregoing Persons may
become
subject, under the 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 only to the extent
that such Violation is caused by reliance upon written information furnished
to
the Company by such Holder expressly for use in connection with such
registration; and each such Holder will pay any legal or other expenses
reasonably incurred by any Person intended to be indemnified pursuant to
this
Subsection 1.9.2, in connection with investigating or defending any
such
loss, claim, damage, liability, or action; provided,
however,
that
the indemnity agreement contained in this Subsection 1.9.2 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; and provided further that
in no
event shall Holder’s cumulative, aggregate liability under this
Subsection 1.9.2, under Subsection 1.9.4, or under such sections
taken
together, exceed the net proceeds received by such Holder from the offering
out
of which such Violation arises.
1.10.3 Promptly
after receipt by an indemnified party under this Section 1.9 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 Section 1.9, 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 one (1) counsel mutually satisfactory
to
the parties; provided,
however,
that an
indemnified party shall have the right to retain one (1) separate
counsel,
with the fees and expenses to be paid by the indemnifying party, if in
such
indemnified party’s reasonable judgment a conflict of interest between
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 action shall not
relieve such indemnifying party of any liability to the indemnified party
under
this Section 1.9 unless the failure to deliver notice is materially
prejudicial to its ability to defend such action. Any omission to so 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
Section 1.9.
1.10.4 If
the
indemnification provided for in this Section 1.9 is held by a court
of
competent jurisdiction to be unavailable to an indemnified party with respect
to
any loss, liability, claim, damage, or expense referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party
as a
result of such loss, liability, claim, damage, or expense in such proportion
as
is appropriate to reflect the relative fault of the indemnifying party on
the
one hand, and of the indemnified party on the other, in connection with the
statements or omissions that resulted in such loss, liability, claim, damage,
or
expense as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates
to
information supplied by the indemnifying party or by the indemnified party
and
the parties’ relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission. In no event shall Holder’s
cumulative, aggregate liability under this Subsection 1.9.4, under
Subsection 1.9.2, or under such sections together, exceed the net
proceeds
received by such Holder from the offering out of which such indemnification
is
sought less any amounts paid by such Holder pursuant to Section
1.10.2.
1.10.5 The
obligations of the Company and Holders under this Section 1.9 shall
survive
the completion of any offering of Registrable Securities in a registration
statement under this Section 1, and otherwise.
1.10.6 Notwithstanding
any contrary provision in this Section 1.9, neither the Company nor any seller
of Registrable Securities will be liable for indemnification or contribution
in
any case to the extent that any untrue statement or omission attributable
to the
Company or such seller of Registrable Securities was contained or made in
a
preliminary prospectus and corrected in the final prospectus and any such
loss,
claim, damage or liability suffered or incurred by an indemnified party resulted
from an action, claim, or suit by any Person who purchased shares from such
indemnified party and such indemnified party received a copy of the final
prospectus or final similar information document but failed to deliver or
provide a copy of the final prospectus or final similar information document
to
such Person at or prior to the confirmation of the sale of such
shares.
1.11 Rule 144
Reporting.
With a
view to making available the benefits of certain rules and regulations of
the
SEC that may permit the sale of the Registrable Securities to the public
without
registration or pursuant to a registration statement on Form S-3,
the
Company agrees to:
1.11.1 Make
and
keep public information available as those terms are understood and defined
in
Rule 144 under the Act, at all times from and after ninety (90) days
following the IPO;
1.11.2 Use
its
best efforts to file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act at any time
after it has become subject to such reporting requirements;
1.11.3 So
long
as a Holder owns any Registrable Securities, furnish to the Holder forthwith
upon request a written statement by the Company as to its compliance with
the
reporting requirements of Rule 144 (at any time from and after ninety
(90)
days following the effective date of the first registration statement filed
by
the Company for an offering of its securities to the general public), and
of the
Act and the 1934 Act (at any time after it has become subject to such reporting
requirements).
1.12 Assignment
of Registration Rights.
The
rights to cause the Company to register Registrable Securities pursuant to
this
Section 1 may be assigned or transferred (but only with all related
obligations) by a Holder to, (i) in the case of any Holder that is
a
partnership, limited liability company or corporation, any current and former
constituent directors, officers, partners, members, shareholders, subsidiaries
and affiliates of that Holder or any directors, officers, partners, members,
shareholders, subsidiaries or affiliates of the foregoing, and (ii) a
Person who or entity that, after such assignment or transfer, holds (along
with
its Affiliates as defined below) at least 50,000 shares of Registrable
Securities, subject to appropriate adjustment for stock splits, dividends,
reclassifications, recapitalizations, combinations or the like, provided,
in each
case, that: (i) 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; (ii) such transferee or assignee
agrees in writing to be bound by and subject to the terms and conditions
of this
Agreement, including, without limitation, the provisions of Section 1.12
below; and (iii) such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Act; provided,
further,
that in
no event shall a Holder transfer such registration rights to a competitor
of the
Company.
1.13 Termination
of Registration Rights.
The
right of any Holder to request registration or to include Registrable Securities
in any registration pursuant to this Section 1 shall terminate
on such
date as a public trading market shall exist for the Company’s Common Stock and
all shares of Registrable Securities beneficially owned and subject to
Rule 144 aggregation by such Holder may immediately be sold under
Rule 144 during any 90-day period; provided
that any
security that ceases to be a Registrable Security by operation of this Section
1.13 will again be deemed to be a Registrable Security if a subsequent decrease
in trading volume results in the Holder thereof not being able to sell such
securities during such period without registration pursuant to Rule
144.
1.14 Aggregation
of Registration Rights.
For
purposes of allocation of securities to be included in any registration under
this Section 1 for any Holder that is a partnership or corporation,
the
partners, retired or former partners and stockholders of such Holder (and
in the
case of a partnership, any affiliated partnerships), 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.
2. Miscellaneous.
2.1 Successors
and Assigns.
Except
as otherwise provided herein, the terms and conditions of this Agreement
shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties (including transferees of any shares of Registrable
Securities). Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or liabilities under
or
by reason of this Agreement, except as expressly provided in this
Agreement.
2.2 Governing
Law;
WAIVER OF JURY TRIAL.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York (without reference to the conflicts of law
provisions thereof). The Company hereby irrevocably consents to the jurisdiction
of the Courts of the State of New York and of any Federal Court located in
New
York in connection with any action or proceeding arising out of or relating
to
this Agreement. In any such litigation the Company waives personal service
of
any summons, complaint or other process and agrees that the service thereof
may
be made by certified or registered mail directed to the Chief Executive Officer
of the Company at its address set forth below. THE
PARTIES TO THIS AGREEMENT EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY
LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF
ACTION
(I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED
OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT
OR
ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING
OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE
PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A
JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART
OF
A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF
THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
2.3 Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed
an
original but all of which together shall constitute one and the same
instrument.
2.4 Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only
and
are not to be considered in construing or interpreting this
Agreement.
3. Notices.
All
notices, deliveries and other communications provided for herein shall be
in
writing and shall be (i) delivered in person, (ii) transmitted by telecopy,
(iii) sent by first-class, registered or certified mail, postage prepaid,
or
(iv) sent by reputable overnight courier service, fees prepaid, to the recipient
at the address (a) in the case of the Company to 000 Xxxxxxxxx Xxxx, Xxxxxxxx,
XX 00000, Attention Xxxxxx Xxxxxx, CEO or by telecopy to (000) 000-0000,
(b) in
the case of any Holder which or who is an original party to this Agreement
at
the address of such Holder as set forth on Exhibit A attached hereto or such
other address for such Holder as shall be designated in writing from time
to
time by such Holder and (iii) in the case of any permitted transferee of
a party
to this Agreement or its transferee, to such transferee at its address as
designated in writing by such transferee to the Company from time to time.
Notices shall be deemed given upon personal delivery, seven days following
deposit in the mail as set forth above, upon acknowledgment by the receiving
telecopier or one day following deposit with an overnight courier
service.
3.1 Attorneys’
Fees.
Except
as otherwise provided herein, 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 reasonable attorneys’ fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
3.2 Amendments
and Waivers.
Any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and
either
retroactively or prospectively), only with the written consent of the Company,
the holders of a majority of the outstanding Emigrant Securities, and the
holders of a majority of the Registrable Securities then outstanding
(excluding the Emigrant Registrable Securities and assuming the exercise
of the
Warrant).
Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each holder of any Registrable Securities then outstanding, each future
holder of all such Registrable Securities and the Company.
3.3 Severability.
If one
or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and
the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
3.4 Entire
Agreement.
This
Agreement (including the Exhibits hereto, if any) constitutes the full and
entire understanding and Agreement between the parties. The parties hereto
further acknowledge and agree that this Agreement supersedes and renders
void
every other prior written or oral understanding among or between the parties
hereto with regard to the subject matter contained herein and
therein.
3.5 Specific
Performance.
The
parties hereto agree that irreparable damage would occur if any of the
provisions of this Agreement were not performed in accordance with these
specific terms or were otherwise breached. It is accordingly agreed that
the
parties shall be entitled to seek an injunction or injunctions (without
posting any bond or other security) to
prevent breaches of this Agreement and to enforce specifically the terms
and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
3.6 No
Inconsistent Agreements.
The
Company will not after the execution of this Agreement enter into any agreement
with respect to its Equity Securities which is inconsistent with or violates
the
rights granted to the holders of Registrable Securities in this
Agreement.
3.7 Adjustments
Affecting Registrable Securities.
The
Company will not take any action, or permit any change to occur, with respect
to
its Equity Securities which would materially and adversely affect the ability
of
the holders of Registrable Securities to include such Registrable Securities
in
a registration undertaken pursuant to this Agreement or which would materially
and adversely affect the marketability of such Registrable Securities in
any
such registration (including effecting a stock split or a combination of
shares).
3.8 Additional
Parties. The
Company and the Holders whose signature pages appear on the signature page
hereto agree that should the Company sell additional shares of Common Stock
to
additional Persons, such Persons, at the Company’s option, may become Holders
hereunder by executing a counterpart to this Agreement as additional Holders
hereunder, and in such case shall have all rights and obligations of Holders
hereunder. Neither the addition of such additional parties nor the amendment
of
Exhibit A to this Agreement to include such additional parties shall be deemed
amendments under Section 3.2 so long as none of the other provisions of this
Agreement are modified or amended in any way. Upon the addition of such
additional parties, (i)
Exhibit
A
to this Agreement shall be automatically amended so as to incorporate such
additional parties as Holders hereunder
and (ii)
notice of such additional parties shall be given by the Company to the Holders
pursuant to Section 3 hereof.
*
* *
IN
WITNESS WHEREOF,
the
parties have executed this Registration Rights Agreement as of the date first
above written.
|
LEV
PHARMACEUTICALS, INC.
By:
President
and Chief Executive Officer
HOLDERS
HAE
Associates
LLC
By:
Ajax
Partners
By:
Xxxxx
Xxxxx
Authorized
Signatory
Sands
Brothers Venture Capital LLC
By:
SB Venture Capital Management LLC, Manager
By:
Xxxxxx
Xxxxx
Manager
|
|
Sands
Brothers Venture Capital II LLC
By:
SB Venture Capital Management II LLC, Manager
By:
Xxxxxx
Xxxxx
Manager
Sands
Brothers Venture Capital III LLC
By:
SB Venture Capital Management III LLC, Manager
By:
Xxxxxx
Xxxxx
Manager
Sands
Brothers Venture Capital IV LLC
By:
SB Venture Capital Management IV LLC
By:
Xxxxxx
X. Xxxxx
Manager
Targhee
Trust
By:
Xxxxxxx
Xxxxxxxxx
Trustee
KWG
Trust dated 1/1/04
By:
Xxxx
Xxxxxx
Agent
for Trustee
|
|
EAH
Heart Associates LLC
By:
EAH Heart Management Associates LLC
By:
Xxxxxx
X. Xxxxx
Manager
Xxxxxx
Xxxxxxxxxxx
Xxxxx
Xxxxxxx
Xxxxx
Xxxxxxx
Xxxxxx
Xxxxxxxx
Xxxxxxx
Xxxxxxx
|
|
Emigrant
Capital Corporation
By:
Name:
Xxxx Xxxx
Title:
Managing Director
Xxxx
Xxxx
Xxxxxxx
Xxxxx
Xxxxx
Xxxxxxxxx
Xxxxx
Xxxxxx
Xxxxxxx
May
|
Exhibit
A
List
of Holders
|
Purchaser
|
Registrable
Securities
|
|
Ajax
Partners
|
200,000
|
|
Sands
Brothers Venture Capital LLC
|
33,333
|
|
Sands
Brothers Venture Capital II LLC
|
33,333
|
|
Sands
Brothers Venture Capital III LLC
|
86,667
|
|
Sands
Brothers Venture Capital IV LLC
|
46,667
|
|
Targhee
Trust
|
33,333
|
|
KWG
Trust dated 1/1/04
|
33,333
|
|
EAH
Heart Associates LLC
|
680,000
|
|
Xxxxxx
Xxxxxxxxxxx
|
20,000
|
|
Xxxxx
Xxxxxxx
|
6,667
|
|
Xxxxx
Xxxxxxx
|
13,333
|
|
Xxxxxx
Xxxxxxxx
|
6,667
|
|
Xxxxxxx
Xxxxxxx
|
6,667
|
|
HAE
Associates
LLC
|
12,500,000
|
|
Xxxxxx
Xxxxxx
|
5,277,273
|
|
Xxxxxx
Xxxxxx
|
5,277,273
|
|
Emigrant
Capital Corporation
|
3,529,412
|
|
Xxxx
Xxxx
|
117,647
|
|
Xxxxxxx
Xxxxx
|
117,647
|
|
Xxxxx
Xxxxxxxxx
|
117,647
|
|
Xxxxx
Xxxxxx
|
117,647
|
|
Xxxxxxx
May
|
29,412
|