REGISTRATION RIGHTS AGREEMENT
REGISTRATION
RIGHTS AGREEMENT (“Agreement”), effective as of November 29, 2006, is by and
among Bio Solutions Manufacturing, Inc., a New York corporation (the “Company”
or “BSLM”), and the parties set forth on the signature page hereto and their
endorsees, transferees, and assigns (the “Investors”).
This
Agreement is made pursuant to the Loan Agreement, dated as of the date hereof
between the Company and the Investors (the “Loan Agreement”).
The
Company and the Investors hereby agree as follows:
1. Definitions.
Capitalized
terms used and not otherwise defined herein that are defined in the Loan
Agreement shall have the meanings given such terms in the Loan Agreement. As
used in this Agreement, the following terms shall have the following meanings:
“Affiliate”
means,
with respect to any Person, any other Person that directly or indirectly
controls or is controlled by or under common control with such Person. For
the
purposes of this definition, “control,” when used with respect to any Person,
means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
“affiliated,” “controlling” and “controlled” shall have meanings correlative to
the foregoing.
“Business
Day”
means
any day except Saturday, Sunday and any day which shall be a legal holiday
or a
day on which banking institutions in the State of New York or the State of
California generally are authorized or required by law or other government
actions to close.
“Commission”
means
the Securities and Exchange Commission.
“Common
Stock”
means
the Company’s common stock, $0.001 par value, or such securities that such stock
shall hereafter be reclassified into.
“Conversion
Date”
shall
have the meaning ascribed to it in the Notes.
“Effectiveness
Period”
for
a
Registration Statement shall have the meaning set forth in Section
2(a).
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Holder”
or
“Holders”
means
the holder or holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified
Party”
shall
have the meaning set forth in Section 5(c).
“Indemnifying
Party”
shall
have the meaning set forth in Section 5(c).
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“Losses”
shall
have the meaning set forth in Section 5(a).
“Notes”
shall
have the meaning ascribed to it in the Loan Agreement.
“Note
Shares”
means
the shares of Common Stock issuable upon conversion of the principal amount
and
interest under the Notes.
“Person”
means
an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.
“Proceeding”
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Prospectus”
means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 43 OA promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement,
and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
“Registrable
Securities”
means
the Note Shares.
“Registration
Statement”
means,
collectively, the registration statements contemplated by Section 2(a),
including the Prospectus, amendments and supplements thereto, including pre-
and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statements. Each Registration Statement shall be for an offering to be made
on a
continuous basis pursuant to Rule 415.
“Rule
144”
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Rule
415”
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Rule
424”
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Special
Counsel”
means
one special counsel to the Holders, for which the Holders will be reimbursed
by
the Company pursuant to Section 4.
“Underwritten
Registration or Underwritten Offering”
means
a
registration in connection with which securities of the Company are sold to
an
underwriter for reoffering to the public pursuant to an effective registration
statement.
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2. Demand
Registration
(a) Upon
a
written request therefor from any record holder or holders of more than 50%
of
the Note Shares issued and issuable upon conversion of the outstanding Notes,
the Company shall prepare and file with the Commission a registration statement
under the 1933 Act registering the Registrable Securities (the “Demand
Request”), which are the subject of such request for unrestricted public resale
by the holder thereof. For purposes of this Section, Registrable Securities
shall not include Securities which are (A) registered for resale in an effective
registration statement, (B) included for registration in a pending registration
statement, or (C) which have been issued without further transfer restrictions
after a sale or transfer pursuant to Rule 144 under the 1933 Act. Upon the
receipt of such request, the Company shall promptly give written notice to
all
other record holders of the Registrable Securities that such registration
statement is to be filed and shall include in such registration statement
Registrable Securities for which it has received written requests within ten
(10) days after the Company gives such written notice.
(b) The
Company shall file with the Commission a Registration Statement on Form SB-2
(or
such other form that it is eligible to use) in order to register the Registrable
Securities for resale and distribution under the 1933 Act within forty-five
(45)
calendar days after receipt of a Demand Request (the
“Filing Date”), and use its best efforts to cause to be declared effective
not
later
than one hundred and fifty (150) calendar days after the Demand Request
(the
“Effectiveness Date”). The Company will register not less than a number of
shares of common stock in the aforedescribed registration statement that is
equal to 200%
of
the Note Shares issuable upon conversion of all of the Notes. The Registrable
Securities shall be reserved and set aside exclusively for the benefit of each
Investor, pro rata,
and not
issued, employed or reserved for anyone other than each such Investor. The
Registration Statement will immediately be amended or additional registration
statements will be immediately filed by the Company as necessary to register
additional shares of Common Stock to allow the public resale of all Common
Stock
included in and issuable by virtue of the Registrable Securities. Except with
the written consent of the Investors, or as described, no securities of the
Company other than the Registrable Securities will be included in the
Registration Statement.
(c) If
the
Holders of a majority of the Registrable Securities then outstanding so elect,
an offering of Registrable Securities pursuant to a Registration Statement
may
be effected in the form of an Underwritten Offering. In such event, and, if
the
managing underwriters advise the Company and such Holders in writing that in
their opinion the amount of Registrable Securities proposed to be sold in such
Underwritten Offering exceeds the amount of Registrable Securities which can
be
sold in such Underwritten Offering, there shall be included in such Underwritten
Offering the amount of such Registrable Securities which in the opinion of
such
managing underwriters can be sold, and such amount shall be allocated pro-rata
among the Holders proposing to sell Registrable Securities in such Underwritten
Offering.
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(d) If
any of
the Registrable Securities are to be sold in an Underwritten Offering, the
investment banker in interest that will administer the offering will be selected
by the Holders of a majority of the Registrable Securities included in such
offering upon consultation with the Company. No Holder may participate in any
Underwritten Offering hereunder unless such Holder (i) agrees to sell its
Registrable Securities on the basis provided in any underwriting agreements
approved by the Persons entitled hereunder to approve such arrangements and
(ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
arrangements.
(e) If
(i) a
Registration Statement is not filed on or before the applicable Filing Date
pursuant to Section 2(b) (if the Company files such Registration Statement
without affording the Holder the opportunity to review and comment on the same
as required by Section 3(a) hereof, the Company shall not be deemed to have
satisfied this clause (i)), or (ii) the Company fails to file with the
Commission a request for acceleration in accordance with Rule 12d-2 promulgated
under the Exchange Act within five (5) days of the date that the Company is
notified (orally or in writing, whichever is earlier) by the Commission that
a
Registration Statement will not be “reviewed” or is not subject to further
review, or (iii) the Registration Statement filed hereunder is not declared
effective by the Commission on or before the Effectiveness Date, or (iv) after
a
Registration Statement has been declared effective by the Commission, such
Registration Statement is either not effective as to all Registrable Securities
required to be covered thereby until such date when all Registrable Securities
covered by such Registration Statement have been sold without volume
restrictions pursuant to Rule 144(k) (the “Effectiveness Period”) or the Holders
are not permitted for any reason to make sales thereunder during such Period,
(v) an amendment to the Registration Statement is not filed by the Company
with
the Commission within ten (10) days of the Commission’s notifying the Company
that such amendment is required in order for a Registration Statement to be
declared effective, or (vi) trading in the Common Stock shall be suspended
from
the OTC Bulletin Board or a Subsequent Market (as defined in the Notes) for
more
than three (3) Business Days (which need not be consecutive days) (any such
failure or breach being referred to as an “Event,” and for purposes of clauses
(i), (iii) and (iv) the date on which such Event occurs, or for purposes of
clause (ii) the date on which such five (5) day period is exceeded, or for
purposes of clause (v) the date on which such ten (10) day period is exceeded,
or for purposes of clause (vi) the date on which such three (3) Business Day
period is exceeded being referred to as the “Event Date”), then, in any such
case, as partial relief for the damages suffered therefrom by the Holders (which
remedy shall not be exclusive of any other remedies available at law or in
equity), the Company shall, on the Event Date and on each monthly anniversary
thereof until the triggering Event is cured, pay to the Holders an amount in
cash, as liquidated damages, and not as a penalty, for the estimated cost to
the
Holders of not having liquid securities in the time contemplated by the
Transaction Documents, equal to 2% of the then outstanding principal amount
under the Notes. The payments to which the Holders shall be entitled pursuant
to
this Section are referred to herein as “Registration Delay Payments.”
Registration Delay Payments shall be calculated on a cumulative basis and paid
within five (5) Business Days of the Event Date and each monthly anniversary
thereof. If the Company fails to make Registration Delay Payments in a timely
manner, such Registration Delay Payments shall bear interest at the rate of
2.0%
per month (or the maximum rate permitted by law), pro-rated for partial months,
until paid in full.
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3. Registration
Procedures.
In
connection with the Company’s registration obligations hereunder, the Company
shall:
(a) Ensure
that each Registration Statement filed pursuant to Section 2(a) shall contain
(except if otherwise directed by the Holders) the “Plan of Distribution”
attached hereto as Annex A, and cause the Registration Statement to become
effective and remain effective as provided herein; provided, that not less
than
three (3) Business Days prior to the filing of the Registration Statement or
any
related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), the Company shall, (i) furnish to the Holders, their Special Counsel
and any managing underwriters, copies of all such documents proposed to be
filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Holders, theft
Special Counsel and such managing underwriters, and (ii) cause its officers
and
directors, counsel and independent certified public accountants to respond
to
such inquiries as shall be necessary, in the reasonable opinion of respective
counsel to such Holders and such underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities, their Special Counsel, or any managing underwriters, shall
reasonably object.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep the Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of
the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented
or
amended to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably possible, and in any event within ten (10) days, to any comments
received from the Commission with respect to the Registration Statement or
any
amendment thereto and as promptly as reasonably possible provide the Holders
true and complete copies of all correspondence from and to the Commission
relating to the Registration Statement; and (iv) comply in all material respects
with the provisions of the Securities Act and the Exchange Act with respect
to
the disposition of all Registrable Securities covered by the Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the Holders thereof set forth in the Registration Statement
as
so amended or in such Prospectus as so supplemented.
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(c) (i)
File
additional Registration Statements if the number of Registrable Securities
at
any time exceeds 85% of the number of shares of Common Stock then registered
in
a Registration Statement. The Company shall have twenty (20) days to file such
additional Registration Statements after such requirement notice of which may
be
given by the Holders). In such event, the Registration Statement required to
be
filed by the Company shall include a number of shares of Common Stock equal
to
no less than 200% of the number of shares of Common Stock into which the then
outstanding principal amount and interest under the Notes is convertible
(assuming such conversion occurred on the filing date for such Registration
Statement or the date of the filing of the final acceleration request therefor,
whichever date yields a lower Conversion Price) and any other Registrable
Securities not then registered in a Registration Statement. The Filing Date
and
Effectiveness Date relative to any such Registration Statements shall be the
30th and 90th day, respectively, following the date that such shortfall first
existed.
(ii)
File
such supplements or attach “stickers” to the Registration Statement or
Prospectus as and when required by the Commission to evidence a material amount
of resales by a Holder pursuant to a Prospectus. In connection therewith, if
such supplements or such “stickers” are periodically required by the Commission,
the Company shall, within four (4) Business Days, file such supplements or
attach such “stickers” whenever a Holder has sold 50% of the Registrable
Securities covered by the then outstanding Prospectus (as last supplemented
or
“stickered”) in order to cover 100% of the number of the outstanding Registrable
Securities.
(d) Notify
the Holders, their Special Counsel and any managing underwriters as promptly
as
reasonably possible (and, in the case of (i)(A) below, not less than five (5)
Business Days (or, in the case of a supplement or “sticker” required to be filed
pursuant to Section 3(c)(ii), within one ( 1 ) Business Day) prior to such
filing) and (if requested by any such Person) confirm such notice in writing
no
later than one (1) Business Day following the day (i)(A) when a Prospectus
or
any Prospectus supplement or post-effective amendment to the Registration
Statement is proposed to be filed; (lB) when the Commission notifies the Company
whether there will be a “review” of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company
shall
provide true and complete copies thereof and all written responses thereto
to
each of the Holders); and (C) with respect to the Registration Statement or
any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus or
for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any
or
all of the Registrable Securities or the initiation of any Proceedings for
that
purpose; (iv) if at any time any of the representations and warranties of the
Company contained in any agreement (including any underwriting agreement)
contemplated hereby ceases to be true and correct in all material respects;
(v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any
Proceeding for such purpose; and (vi) of provided, however, that the Company
shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified or subject the Company to any material tax
in
any such jurisdiction where it is not then so subject.
(e) Cooperate
with the Holders and any managing underwriters to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the loan Agreement,
of
all restrictive legends, and to enable such Registrable Securities to be in
such
denominations and registered in such names as any such managing underwriters
or
Holders may request.
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(f) Upon
the
occurrence of any event contemplated by Section 3(d)(vi), as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to
the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(g) Use
its
best efforts to cause all Registrable Securities relating to such Registration
Statement to be listed on the Nasdaq SmallCap Market (“NASDAQ”) or on any other
stock market or trading facility on which the shares of Common Stock are traded,
listed or quoted (each a “Subsequent Market”) as and when required pursuant to
the Loan Agreement.
(h) Enter
into such agreements (including an underwriting agreement in form, scope and
substance as is customary in Underwritten Offerings) and take all such other
actions in connection therewith (including those reasonably requested by any
managing underwriters and the Holders of a majority of the Registrable
Securities being sold) in order to expedite or facilitate the disposition of
such Registrable Securities, and whether or not an underwriting agreement is
entered into, (i) make such representations and warranties to such Holders
and
such underwriters as are customarily made by issuers to underwriters in
underwritten public offerings (subject to the scheduling of appropriate
exceptions to insure such representations and warranties are accurate), and
confirm the same if and when requested; (ii) in the case of an Underwritten
Offering obtain and deliver copies thereof to each Holder and the managing
underwriters, if any, of opinions of counsel to the Company and updates thereof
addressed to each Holder and each such underwriter, in form, scope and substance
reasonably satisfactory to any such managing underwriters and Special Counsel
to
the selling Holders coveting the matters customarily covered in opinions
requested in Underwritten Offerings and such other matters as may be reasonably
requested by such Special Counsel and underwriters; (iii) immediately prior
to
the effectiveness of the Registration Statement, and, in the case of an
Underwritten Offering, at the time of delivery of any Registrable Securities
sold pursuant thereto, use its best reasonable efforts to obtain and deliver
copies to the Holders and the managing underwriters, if any, of “cold comfort”
letters and updates thereof from the independent certified public accountants
of
the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by
the
Company for which financial statements and financial data is, or is required
to
be, included in the Registration Statement), addressed to the Company in form
and substance as are customary in the occurrence of any event or passage of
time
that makes the financial statements included in the Registration Statement
ineligible for inclusion therein or any statement made in the Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material
fact
or omit to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading.
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(i) Use
its
best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of
(i) any order suspending the effectiveness of the Registration Statement, or
(ii) any suspension of the qualification (or exemption from qualification)
of
any of the Registrable securities for sale in any jurisdiction, at the earliest
practicable moment.
(j) If
requested by any managing underwriter or the Holders of a majority in interest
of the Registrable Securities to be sold in connection with an Underwritten
Offering, (i) promptly incorporate in a Prospectus supplement or post-effective
amendment to the Registration Statement such information as such managing
underwriters and such Holders reasonably agree should be included therein,
and
(ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus supplement
or
post-effective amendment, provided, that the Company shall not be required
to
take any action pursuant to this Section 3(f) that would, in the opinion of
counsel for the Company, violate applicable law or be materially detrimental
to
the business prospects of the Company.
(k) Furnish
to each Holder, its Special Counsel and any managing underwriters, without
charge, at least one conformed copy of each Registration Statement and each
amendment thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
to the extent requested by such Person (including those previously furnished
or
incorporated by reference) promptly after the filing of such documents with
the
Commission.
(l) Promptly
deliver to each Holder, its Special Counsel, and any managing underwriters,
without charge, as many copies of the Prospectus or Prospectuses (including
each
form of prospectus) and each amendment or supplement thereto as such Persons
may
reasonably request; and the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders and any underwriters in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.
(m) Prior
to
any public offering of Registrable Securities, use its best efforts to register
or qualify or cooperate with the selling Holders, their Special Counsel and
any
underwriters in connection with the registration or qualification (or exemption
from such registration or qualification) of such Registrable Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions
within the United States as any Holder or underwriter requests in writing,
to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary. or advisable to enable the disposition in such jurisdictions of
the
Registrable Securities covered by a Registration Statement; connection with
Underwritten Offerings; (iv) if an underwriting agreement is entered into,
the
same shall contain indemnification provisions and procedures no less favorable
to the selling Holders and the underwriters, if any, than those set forth in
Section 5 (or such other provisions and procedures acceptable to the managing
underwriters, if any, and Holders of a majority of Registrable Securities
participating in such Underwritten Offering); and (v) deliver such documents
and
certificates as may be reasonably requested by the Holders of a majority of
the
Registrable Securities being sold, their Special Counsel or any managing
underwriters to evidence the continued validity of the representations and
warranties made pursuant to Section 3(m)(i) above and to evidence compliance
with any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company.
9
(n) Make
available for inspection by the selling Holders, any representative of such
Holders, any underwriter participating in any disposition of Registrable
Securities, and any attorney or accountant retained by such selling Holders
or
underwriters, at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the officers,
directors, agents and employees of the Company and its subsidiaries to supply
all information in each ease reasonably requested by any such Holder,
representative, underwriter, attorney or accountant in connection with the
Registration Statement; provided, that any information that is determined in
good faith by the Company in writing to be of a confidential nature at the
time
of delivery of such information shall be kept confidential by such Persons,
unless (i) disclosure of such information is required by court or administrative
order or is necessary to respond to inquiries of regulatory authorities; (ii)
disclosure of such information, in the opinion of counsel to such Person, is
required by law; (iii) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard by such
Person; or (iv) such information becomes available to such Person from a source
other than the Company and such source is not known by such Person to be bound
by a confidentiality agreement with the Company.
(o) Comply
with all applicable rules and regulations of the Commission.
(p) The
Company may require each selling Holder to furnish to the Company such
information regarding the distribution of such Registrable Securities and the
beneficial ownership of Common Stock held by such Holder as is required by
law
to be disclosed in the Registration Statement, and the Company may exclude
from
such registration the Registrable Securities of any such Holder who unreasonably
fails to furnish such information within a reasonable time after receiving
such
request.
(q) If
the
Registration Statement refers to any Holder by name or otherwise as the holder
of any securities of the Company, then such Holder shall have the right to
require (if such reference to such Holder by name or otherwise is not required
by the Securities Act or any similar Federal statute then in force) the deletion
of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
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4. Registration
Expenses
(a) All
fees
and expenses incident to the performance of or compliance with this Agreement
by
the Company, except as and to the extent specified in Section 4(b), shall be
borne by the Company whether or not pursuant to an Underwritten Offering and
whether or not the Registration Statement is filed or becomes effective and
whether or not any Registrable Securities are sold pursuant to the Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required
to be
made with the NASDAQ and any Subsequent Market on which the Common Stock is
then
listed for trading, and (B) in compliance with state securities or Blue Sky
laws
(including, without limitation, fees and disbursements of counsel for the
Holders in connection with Blue Sky qualifications or exemptions of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as the managing
underwriters, if any, or the Holders of a majority of Registrable Securities
may
designate)), (ii) printing expenses (including, without limitation, expenses
of
printing certificates for Registrable Securities and of printing prospectuses
if
the printing of prospectuses is requested by the managing underwriters, if
any,
or by the Holders of a majority of the Registrable Securities included in the
Registration Statement), (iii)messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company and Special Counsel for the
Holders, (v) Securities Act liability insurance, if the Company so desires
such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated
by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation,
all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.
(b) If
the
Holders require an Underwritten Offering pursuant to the terms hereof and there
shall not be at such time an effective Registration Statement coveting all
of
the Registrable Securities pursuant to which the Holders are both named Selling
Securityholders thereunder and permitted to utilize the Prospectus thereunder
to
resell such Registrable Securities held by them, then the Company shall be
responsible for all costs, fees and expenses in connection therewith, except
for
the fees and disbursements of the Underwriters (including any underwriting
commissions and discounts) and their legal counsel and accountants. By way
of
illustration which is not intended to diminish from the provisions of Section
4(a), the Holders shall not be responsible for, and the Company shall be
required to pay, the fees or disbursements incurred by the Company (including
by
its legal counsel and accountants) in connection with, the preparation and
filing of a Registration Statement and related Prospectus for such offering,
the
maintenance of such Registration Statement in accordance with the terms hereof,
the listing of the Registrable Securities in accordance with the requirements
hereof, and printing expenses incurred to comply with the requirements hereof.
If the Holders require an Underwritten Offering at a time when all of the
circumstances specified in the opening clause to the first sentence of this
Section 4(13) are present, then such Holders shall bear all the fees and
disbursements of the underwriters, including those costs specified in this
Section 4(b).
11
5. Indemnification
(a) Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless each Holder, the officers, directors, agents (including any
underwriters retained by such Holder in connection with the offer and sale
of
Registrable Securities), brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure
to
perform under a margin call of Common Stock), investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning
of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person,
to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
costs of preparation and attorneys’ fees) and expenses (collectively, “Losses”),
as incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
form
of prospectus or supplement thereto. in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (1) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to
such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form
of
Prospectus or in any amendment or supplement thereto or (2) in the case of
an
occurrence of an event of the type specified in Section 3(d)(ii)-(vi), the
use
by such Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective
and
prior to the receipt by such Holder of the Advice contemplated in Section 6(0.
The Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with
the
transactions contemplated by this Agreement.
(b) Indemnification
by Holders.
Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of
such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses (as determined by a court of competent jurisdiction
in a final judgment not subject to appeal or review) arising solely out of
or
based solely upon any untrue statement of a material fact contained in the
Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto, or arising solely out of or based solely upon
any omission of a material fact required to be stated therein or necessary
to
make the statements therein not misleading to the extent, but only to the
extent, that such untrue statement or omission is contained in any information
so furnished in writing by such Holder to the Company specifically for inclusion
in the Registration Statement or such Prospectus or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement,
such
Prospectus or such form of Prospectus, or in any amendment or supplement
thereto. In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
12
(c) Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify
the Person from whom indemnity is sought (the “Indemnifying Party›”) in writing,
and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and
the
payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant
to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have proximately
and materially adversely prejudiced the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to
such
lndemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing
that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of
the
Indemnified Party, effect any settlement of any pending Proceeding in respect
of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
All
fees
and expenses of the Indemnified Party (including reasonable fees ‘and expenses
to the extent incurred in connection with investigating or preparing to defend
such Proceeding in a manner not inconsistent with this Section) shall be paid
to
the Indemnified Party, as incurred, within ten (10) Business Days of written
notice thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent it
is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).
(d) Contribution.
If a
claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), 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
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in .question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.
13
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that
such
Holder has otherwise been required to pay 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 1 l(f) of the Securities Act)
hall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
6. Miscellaneous
(a) Remedies.
In the event of a breach by the Company or by a Holder, of any of their
obligations under this Agreement, each Holder or the Company, as the ease may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance o fits rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation
for
any losses incurred by reason of a breach by it of any of the provisions of
this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense
that
a remedy at law would be adequate.
(b) No
Inconsistent Agreements.
Neither
the Company nor any of its subsidiaries has entered, as of the date hereof,
nor
shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as and to the extent
specified in Schedule 6(b) hereto, neither the Company nor any of its
subsidiaries has previously entered into any agreement granting any registration
rights with respect to any of its securities to any Person. Without limiting
the
generality of the foregoing, without the written consent of the Holders of
a
majority of the then outstanding Registrable Securities, the Company shall
not
grant to any Person the right to request the Company to register any securities
of the Company under the Securities Act unless the rights so granted are subject
in all respects to the prior rights in full of the Holders set forth herein,
and
are not otherwise in conflict or inconsistent with the provisions of this
Agreement.
14
(c) No
Piggyback on Registrations.
Except
as and to the extent specified in Schedule 6(b) hereto, neither the Company
nor
any of its security holders (other than the Holders in such capacity pursuant
hereto) may include securities of the Company in the Registration Statement
other than the Registrable Securities, and the Company shall not after the
date
hereof enter into any agreement providing any such right to any of its security
holders.
(d) Piggy-Back
Registrations.
If at
any time when there is not an effective Registration Statement covering all
of
the Registrable Securities, the Company shall determine to prepare and file
with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to
be
issued solely in connection with any acquisition of any entity or business
or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of
such
determination and, if within twenty (20) days after receipt of such notice,
any
such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered; provided, however, that the Company shall
not
be required to register any Registrable Securities pursuant to this Section
6(d)
that are eligible for sale pursuant to Rule 144(k) of the Securities
Act.
(e) Prospectus
Delivery Requirements.
Each
Holder covenants and agrees that (i) it will not sell any Registrable Securities
under the Registration Statement until it has received copies of the Prospectus
as then amended or supplemented as contemplated in Section 3(h) and notice
from
the Company that such Registration Statement and any post-effective amendments
thereto have become effective as contemplated by Section 3(d), and (ii) it
and
its officers, directors or Affiliates, if any, will comply with the prospectus
delivery requirements of the Securities Act as applicable to any of them in
connection with sales of Registrable Securities pursuant to the Registration
Statement.
(f) Discontinued
Disposition.
Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the
kind
described in Sections 3(d)(ii), 3(d)(iii), 3(d)(iv), 3(d)(v) or 3(d)(vi), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the Registration Statement until such Holder’s receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement contemplated
by Section 3(k), or until it is advised in writing (the “Advice”) by the Company
that the use of the applicable Prospectus may be resumed, and, in either case,
has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.
15
(g) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless the same shall be in writing
and
signed by the Company and the Holders of at least two-thirds of the then
outstanding Registrable Securities. Notwithstanding the foregoing, a waiver
or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of certain Holders and that does not directly
or indirectly affect the rights of other Holders may be given by Holders of
at
least a majority of the Registrable Securities to which such waiver or consent
relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions
of
the immediately preceding sentence.
(h) Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified in this
Section prior to 6:30 p.m. (New York City time) on a Business Day, (ii) the
Business Day after the date of transmission, if such notice or communication
is
delivered via facsimile at the facsimile telephone number specified in the
Loan
Agreement later than 6:30 p.m. (New York City time) on any date and earlier
than
11:59 p.m. (New York City time) on such date, (iii) the Business Day following
the date of mailing, if sent by nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to
be
given. The address for such notices and communications shall be as
follows:
If
to the
Company: Bio
Solutions Manufacturing, Inc.
0000
Xxxxxxx Xxxxxx # 0
Xxx
Xxxxx, XX 00000
Facsimile
No.: (000) 000-0000
Attn:
Secretary
If
to
Holders: At
the
address set forth opposite their name on the signature page
If
to any
other Person who is then the registered Holder: To the address of such Holder
as
it appears in the stock transfer books of the Company or such other address
as
may be designated in writing hereafter, in the same manner, by such
Person.
(i) Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties and shall inure to the benefit of
each
Holder and its successors and permitted assigns. The Company may not assign
its
rights or obligations hereunder without the prior written consent of each
Holder. Each Holder may assign their respective rights hereunder in the manner
and to the Persons as permitted under this Agreement and the Loan
Agreement.
(j) Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
16
(k) Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party hereby irrevocably submits
to
the exclusive jurisdiction of the state and federal courts sitting in the county
of New York, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
to
such party at the address in effect for notices to it under this Agreement
and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any
way
any right to serve process in any manner permitted by law.
(l) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
(m) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of’ the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(n) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(o) Shares
Held by the Company and its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the
Company or its Affiliates (other than any Holder or transferees or successors
or
assigns thereof if such Holder is deemed to be an Affiliate solely by reason
of
its holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
| BIO SOLUTIONS MANUFACTURING, INC. |
|
By:/s/
Xxxxx X. Xxxxxxx
|
| Name: Xxxxx X. Xxxxxxx |
| Title: President |
17
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE TO FOLLOW]
HOLDERS:
[INTENTIONALLY
OMITTED]
Annex
A
Plan
of Distribution
The
Selling Stockholders and any of their pledgees, donees, transferees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of Common Stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales may be
at
fixed or negotiated prices. The Selling Stockholders may use any one or more
of
the following methods when selling shares:
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
short
sales;
|
|
·
|
broker-dealers
may agree with the Selling Stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
|
·
|
a
combination of any such methods of sale;
and
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act, if
available,
rather than under this prospectus.
The
Selling Stockholders may also engage in short sales against the box, puts and
calls and other transactions in securities of the Company or derivatives of
Company securities and may sell or deliver shares in connection with these
trades. The Selling Stockholders may pledge their shares to their brokers under
the margin provisions of customer agreements. If a Selling Stockholder defaults
on a margin loan, the broker may, from time to time, offer and sell the pledged
shares.
Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
Selling Stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved.
A-2
The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
The
Company is required to pay all fees and expenses incident to the registration
of
the shares, including fees and disbursements of counsel to the Selling
Stockholders. The Company has agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Security Act.
