EXHIBIT 10.19(c)
INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (the "Agreement") is entered into this
5th day of July, 2002, by and between AspenBio, Inc., a Colorado corporation
(the "Company") and Cambridge Holdings, Ltd., a Colorado corporation (the
"Purchaser").
RECITALS
A. On the date hereof, the Purchaser acquired from the Company a note in
the principal amount of $200,000 (the "Note") and a warrant to purchase up to
100,000 shares of Common Stock (the "Warrant") in consideration of the
Purchaser's agreement to advance funds on behalf of the Company in connection
with a Limited Continuing Guaranty, made by the Purchaser to the First Bank of
Tech Center in connection with the Company's construction loan obtained from the
Bank.
B. The Purchaser required that the Company enter into this Agreement to
provide rights for the Purchaser as a condition to the Purchaser's agreement to
advance funds to the Company.
STATEMENT OF AGREEMENT
NOW THEREFORE, in consideration of the premises and of the respective
covenants and provisions herein contained, and intending to be legally bound
hereby, the parties agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the meanings
ascribed to them below:
"Affiliate" means (i) with respect to any Person, any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person or (ii) with respect to any individual, the
spouse, child, step-child, grandchild, niece, nephew or parent of such Person,
or the spouse thereof.
"Common Stock" means the Common Stock of the Company and any equity
securities issued or issuable with respect to the Common Stock in connection
with a reclassification, recapitalization, merger, consolidation or other
reorganization.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivisions thereof.
"Registrable Securities" means any (i) shares of Common Stock issuable or
issued upon exercise of the Warrant, (ii) any shares of Common Stock Purchaser
now owns or hereinafter acquires, and (iii) any other shares of Common Stock
issued or issuable, directly or indirectly, with respect to the Common Stock
referenced in clauses (i) or (ii) or by way of stock dividend, stock split or
combination of shares. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (a) a registration
statement filed pursuant to a Demand Registration Request (as defined in Section
2.2 herein) with respect to such securities shall have been declared effective
under the Securities Act and the Company has materially complied with Section
2.3(b) herein, or (b) such securities shall have been disposed of in accordance
with a registration described in Section 2.1 herein ("Piggyback Registration"),
or (c) such securities shall have been sold pursuant to Rule 144 (or any
successor provision) under the Securities Act, or (d) such securities are
eligible for sale under Rule 144(k) (or any successor provision) under the
Securities Act. Provided, however, that Registrable Securities which otherwise
would cease to be considered Registrable Securities as a result of item (a)
above shall remain Registrable Securities solely for the purposes of Section 2.1
herein.
"SEC" means the United States Securities and Exchange Commission. ---
"Securities Act" means the Securities Act of 1933, as amended.
2. Registration Rights.
2.1 Piggyback Registrations.
(a) Piggyback Registrations. If, at any time between September
30, 2002 and June 30, 2005 the Company proposes to register its Common
Stock under the Securities Act in connection with the public offering of
Common Stock (other than a registration relating solely to the sale of
Common Stock to participants in an employee benefit plan or with respect to
any corporate reorganization or other transaction under Rule 145 of the
Securities Act) whether or not for its own account, the Company shall give
prompt written notice of its intention to do so to the Purchaser. Upon the
written request of the Purchaser made within 15 days following the receipt
of any such written notice (which request shall specify the Registrable
Securities intended to be disposed of by the Purchaser and the intended
method of distribution thereof), the Company shall cause all such
Registrable Securities to be registered under the Securities Act (with the
securities which the Company at the time proposes to register) to permit
the sale or other disposition by the Purchaser (in accordance with the
intended method of distribution thereof) of the Registrable Securities to
be so registered.
(b) Abandonment or Delay. If, at any time after giving written
notice of its intention to register its Common Stock and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall
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determine for any reason not to register or to delay registration of its
Common Stock, the Company may, at its election, give written notice of such
determination to the Purchaser and (i) in the case of a determination not
to register, shall be relieved of its obligation to register any
Registrable Securities in connection with such abandoned registration,
without prejudice, however, to the rights of the Purchaser under Section
2.1(a), and (ii) in the case of a determination to delay such registration
of its Common Stock shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering its
Common Stock.
(c) The Purchaser's Right to Withdraw. The Purchaser shall have
the right to withdraw his request for inclusion of his Registrable
Securities in any registration statement pursuant to this Section 2.1 by
giving written notice to the Company of his request to withdraw.
(d) Underwriting Requirements. In connection with any offering
involving an underwriting of the Common Stock, the Company shall not be
required under Section 2.1 to include any of the Registrable Securities in
such underwriting unless the Purchaser accepts the terms of the
underwriting as agreed upon between the Company and the underwriters
selected by it (or by other Persons entitled to select the underwriters),
and then only in such quantity as the underwriters determine in their sole
discretion will not jeopardize the success of the offering by the Company.
If the total amount of securities, including Registrable Securities,
requested by Persons 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 shall be
required to include in the offering only that number of shares of Common
Stock, including Registrable Securities, which the underwriters determine
in their discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the Persons that
have requested securities to be included in such offering according to the
total amount of securities entitled to be included therein owned by each
Person or in such proportions as shall mutually be agreed to by such
Persons). In the event that the underwriters determine that the total
amount of securities requested to be included in the offering exceeds the
amount that the underwriters determine is compatible with the success of
the offering, then the underwriters shall provide written notice of such
determination to the Purchaser.
2.2 Demand Registration.
(a) Request for Registration. Except as provided in Section
2.2(e) below, the Purchaser shall be entitled to one Demand Registration
Request as defined herein. Subject to Section 2.2(c), at any time between
September 30, 2002 and June 30, 2005 the Purchaser shall have the right to
require the Company to file a registration statement under the Securities
Act covering the Registrable Securities, by delivering a written request
therefor to the Company specifying the Registrable Securities to be
included in such registration by the Purchaser and the intended method of
distribution thereof. Any such request pursuant to this Section 2.2(a) is
referred to herein as the
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"Demand Registration Request" and the registration so requested is referred
to herein as the "Demand Registration".
(b) Registration. The Company shall, as expeditiously as possible
following the Demand Registration Request, use commercially best efforts to
effect such registration under the Securities Act (including, without
limitation, by means of a shelf registration pursuant to Rule 415 under the
Securities Act if so requested and if the Company is then eligible to use
such a registration) of the Registrable Securities which the Company has
been so requested to register, for distribution in accordance with such
intended method of distribution.
(c) Limitations on Requested Registration. The rights of the
Purchaser to request the Demand Registration pursuant to Section 2.2(a) are
subject to the following limitations: (i) the Purchaser shall not be
entitled to a Demand Registration Request if the Purchaser has not
converted the Note, or some portion of the Note, into a minimum of 133,334
shares of Common Stock, (ii) except as provided in Section 2.2(e), in no
event shall the Purchaser be entitled to more than one Demand Registration
Request, (iii) if the request is made prior to December 31, 2002 and the
Board of Directors of the Company makes a reasonable good faith
determination that the payment of the legal and accounting fees and other
pertinent expenses incident to the filing and prosecution of the
registration statement would have a material adverse effect on the
financial condition of the Company, the Company shall not be required to
comply with the Demand Registration Request, or (iv) if the Purchaser has
participated in a Demand Registration in a 90 day period preceding the
request. Notwithstanding anything in this Section 2.2(c) to the contrary,
the Company shall be required to comply with the Demand Registration
Request if the Purchaser agrees to pay such expenses.
(d) Company Registration. During the period starting with the
date of filing of, and ending on a date 180 days after the effective date
of, a registration subject to Section 2.1 hereof, the Company shall not be
obligated to effect, or take any action to effect, any registration
pursuant to this Section 2.2; provided that the Company is actively
employing good faith and commercially best efforts to cause such
registration statement to become effective. In the event that the Company
determines not to pursue a registration or to withdraw a registration that
has been filed, notice of such action will be provided promptly by the
Company to the Purchaser.
(e) Underwriting Requirements. If the Purchaser intends to
distribute the Registrable Securities by means of an underwriting, he shall
so advise the Company as a part of his request made pursuant to Section
2.2(a). The underwriter will be selected by the Purchaser and shall be
reasonably acceptable to the Company. All Persons, including the Purchaser,
proposing to distribute their Common Stock through such underwriting shall
(together with the Company as provided in Section 2.7) enter into an
underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. Notwithstanding any other
provisions of this Section 2.2, if the underwriter advises the Purchaser in
writing that marketing factors require a limitation of the number of shares
to be underwritten, then the number of shares of Registrable
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Securities and other securities that may be included in the underwriting
shall be allocated among the Purchaser and other Persons whose Common Stock
the Company has agreed may be included in the offering (collectively, the
"Selling Shareholders") in proportion (as nearly practicable) to the amount
of Common Stock owned by the Purchaser and the other Selling Shareholders;
provided, however, that the number of shares of Registrable Securities or
Common Stock of the Selling Shareholders the Company has agreed may be
included in the offering shall not be reduced unless all other securities
of the Company, for its own account, are first entirely excluded from the
underwriting and registration.
2.3 Registration Procedures. If and whenever the Company is required
by the provisions of this Agreement to use commercially best efforts to effect
or cause the registration of any Registrable Securities under the Securities Act
as provided in this Agreement, the Company shall, as expeditiously as possible:
(a) prepare and file with the SEC a registration statement on an
appropriate registration form of the SEC for the disposition of such
Registrable Securities in accordance with the intended method of
disposition thereof, which form (i) shall be selected by the Company and
(ii) shall, in the case of a shelf registration, be available for the sale
of the Registrable Securities by the Purchaser and such registration
statement shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith, and the Company shall use its
best efforts to cause such registration statement to become effective
(provided, however, that before filing a registration statement or
prospectus or any amendments or supplements thereto, or comparable
statements under securities or blue sky laws of any jurisdiction, the
Company will furnish to one counsel for the Purchaser participating in the
planned offering and the underwriters, if any, copies of all such documents
proposed to be filed (including all exhibits thereto), which documents will
be subject to the reasonable review and reasonable comment of such counsel,
and the Company shall not file any registration statement or amendment
thereto or any prospectus or supplement thereto to which the underwriters,
if any, shall reasonably object in writing);
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
for such period (which shall not be required to exceed 180 days in the case
of a Demand Registration and shall not exceed 90 days for all other
registrations unless mutually agreed to in writing by the parties) as any
seller of Registrable Securities pursuant to such registration statement
shall request and to comply with the provisions of the Securities Act with
respect to the sale or other disposition of all Registrable Securities
covered by such registration statement in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement;
(c) furnish, without charge, to the Purchaser and each
underwriter, if any, of the securities covered by such registration
statement such number of copies of such registration statement, each
amendment and supplement thereto (in each case
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including all exhibits), and the prospectus included in such registration
statement (including each preliminary prospectus) in conformity with the
requirements of the Securities Act, and other documents, as the Purchaser
and underwriter may reasonably request in order to facilitate the public
sale or other disposition of the Registrable Securities owned by the
Purchaser (the Company hereby consenting to the use in accordance with
applicable law of each such registration statement (or amendment or
post-effective amendment thereto) and each such prospectus (or preliminary
prospectus or supplement thereto) by the Purchaser and the underwriters, if
any, in connection with the offering and sale of the Registrable Securities
covered by such registration statement or prospectus);
(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under such other
securities or "blue sky" laws of such jurisdictions as the Purchaser or any
managing underwriter, if any, shall reasonably request in writing, and do
any and all other acts and things which may be reasonably necessary or
advisable to enable such sellers or underwriter, if any, to consummate the
disposition of the Registrable Securities in such jurisdictions, except
that in no event shall the Company be required to qualify to do business as
a foreign corporation in any jurisdiction where it would not, but for the
requirements of this paragraph (d), be required to be so qualified, to
subject itself to taxation in any such jurisdiction or to consent to
general service of process in any such jurisdiction;
(e) promptly notify the Purchaser and each managing underwriter,
if any: (i) when the registration statement, any pre-effective amendment,
the prospectus or any prospectus supplement related thereto or
post-effective amendment to the registration statement has been filed and,
with respect to the registration statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the SEC or state
securities authority for amendments or supplements to the registration
statement or the prospectus related thereto or for additional information;
(iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the registration statement or the initiation of any
proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws of
any jurisdiction or the initiation of any proceeding for such purpose; (v)
of the existence of any fact of which the Company becomes aware which
results in the registration statement, the prospectus related thereto or
any document incorporated therein by reference containing an untrue
statement of a material fact or omitting to state a material fact required
to be stated therein or necessary to make any statement therein not
misleading; and (vi) if at any time the representations and warranties
contemplated by Section 3 below cease to be true and correct in all
material respects, and, if the notification relates to an event described
in clause (v), the Company shall promptly prepare and furnish to each such
seller and each underwriter, if any, a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not
include 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 the light of the circumstances under which they were made not
misleading;
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(f) enter into such customary agreements (including, if
applicable, an underwriting agreement) and take such other actions as the
Purchaser shall reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities. The Persons who are holders of
the Registrable Securities which are to be distributed by such underwriters
shall be parties to such underwriting agreement and may, at their option,
require that the Company make to and for the benefit of such Persons the
representations, warranties and covenants of the Company which are being
made to and for the benefit of such underwriters and which are of the type
customarily provided in secondary offerings;
(g) if an opinion or letter from (i) the Company's counsel or
(ii) an independent accountant of the Company is delivered to any
underwriters in the offering, the Company shall furnish to the Purchaser, a
copy of such opinion and letter addressed to the Purchaser;
(h) delivery promptly to the Purchaser and each underwriter, if
any, copies of all correspondence between the Commission and the Company,
its counsel or auditors and any memoranda relating to discussions with the
Commission or its staff with respect to the registration statement, other
than those portions of any such memoranda which contain information subject
to attorney-client privilege with respect to the Company, and, upon receipt
of such confidentiality agreements as the Company may reasonably request,
make reasonably available for inspection by the Purchaser, by any
underwriter, if any, participating in any disposition to be effected
pursuant to such registration statement and by any attorney, accountant or
other agent retained by the Purchaser or any such underwriter, all
pertinent financial and other records, pertinent corporate documents and
properties of the Company, and cause all of the Company's officers,
directors and employees to supply all information reasonably requested by
the Purchaser, underwriter, attorney, accountant or agent in connection
with such registration statement provided the recipient of such information
seeks such information in good faith and for a proper purpose;
(i) make reasonably available its employees and personnel and
otherwise provide reasonable assistance to the underwriters (taking into
account the needs to the Company's businesses and the requirements of the
marketing process) in the marketing of Registrable Securities in any
underwritten offering;
(j) cooperate with the Purchaser and the managing underwriters,
if any, to facilitate the timely preparation and delivery of certificates
not bearing any restrictive legends representing the Registrable Securities
to be sold, and cause such Registrable Securities to be issued in such
denominations and registered in such names in accordance with the
underwriting agreement prior to any sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in accordance with the
instructions of the selling holders of the Registrable Securities at least
three business days prior to any sale of Registrable Securities; and
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(k) take all such other commercially reasonable actions as are
necessary or advisable in order to expedite or facilitate the disposition
of such Registrable Securities.
2.4 Registration Expenses.
(a) "Expenses" shall mean any and all fees and expenses incident
to the Company's performance of or compliance with this Article 2,
including, without limitation: (i) SEC, stock exchange or NASD
registration, listing and filing fees and all listing fees and fees with
respect to the including of securities in NASDAQ, (ii) fees and expenses of
compliance with state securities or "blue sky" laws and in connection with
the preparation of a "blue sky" survey, including without limitation,
reasonable fees and expenses of blue sky counsel, (iii) printing and
copying expenses, (iv) messenger and delivery expenses, (v) fees and
disbursements of counsel for the Company, (vi) fees and disbursements of
all independent public accountants (including the expenses of any audit
and/or "cold comfort" letter) and fees and expenses of other persons,
including special experts, retained by the Company, and (vii) any other
fees and disbursements of underwriters, if any, customarily paid by issuers
or sellers of securities (collectively, "Expenses").
(b) The Company shall pay all Expenses with respect to any Demand
Registration, whether or not it becomes effective or remains effective for
the period contemplated by Section 2.3(b), and with respect to any
registration effected under Section 2.1.
(c) Notwithstanding the foregoing, (x) the provisions of this
Section 2.4 shall be deemed amended to the extent necessary to cause these
expense provisions to comply with "blue sky" laws of each state in which
the offering is made and (y) in connection with any registration hereunder,
the Purchaser shall pay all underwriting discounts and commissions and any
transfer taxes, if any, attributable to the sale of his Registrable
Securities, pro rata with respect to payments of discounts and commissions
in accordance with the number of shares sold in the offering by the
Purchaser, and (z) the Company shall, in the case of all registrations
under this Article 2, be responsible for all its internal expenses
(including, without limitation, all salaries and expenses of its officers
and employees performing legal or accounting duties).
2.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 2 with
respect to the Registrable Securities of the Purchaser that the Purchaser shall
furnish to the Company such information regarding himself, the Registrable
Securities held by him, and the intended method of disposition of such
securities as shall be required to effect the registration of the Purchaser's
Registrable Securities.
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2.6 Indemnification.
(a) In the event of any registration of any securities of the
Company under the Securities Act pursuant to this Article 2, the Company
will, and hereby does, indemnify and hold harmless, to the fullest extent
permitted by law, the Purchaser, its agents and representatives against any
and all losses, claims, damages or liabilities, joint or several, actions
or proceedings (whether commenced or threatened) in respect thereof
("Claims") and expenses (including reasonable fees of counsel and any
amounts paid in any settlement effected with the Company's consent, which
consent shall not be unreasonably withheld or delayed) to which such
indemnified party may become subject under the Securities Act or otherwise,
insofar as such Claims or expenses arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained
in any registration statement under which such securities were registered
under the Securities Act, together with the documents incorporated by
reference therein, or 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 (ii) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary, final or
summary prospectus or any amendment or supplement thereto, together with
the documents incorporated by reference therein, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company shall not be liable to such indemnified party in
any such case to the extent such Claim or expense arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact or
omission or alleged omission of a material fact in such registration
statement or amendment thereof or supplement thereto or in any such
prospectus or any preliminary, final or summary prospectus in reliance upon
and in conformity with written information furnished to the Company by or
on behalf of such indemnified party specifically for use therein. Such
indemnity and reimbursement of expenses shall remain in full force and
effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by such
seller.
(b) In the event of any registration of any securities of the
Company under the Securities Act pursuant to this Article 2, the Purchaser
will, and hereby does, indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its shareholders, directors, officers,
agents and representatives, and each other person, if any, who controls the
Company within the meaning of the Securities Act, against any and all
losses, claims, damages or liabilities, joint or several, actions or
proceedings (whether commenced or threatened) in respect thereof ("Claims")
and expenses (including reasonable fees of counsel and any amounts paid in
any settlement effected with the Purchaser's consent, which consent shall
not be unreasonably withheld or delayed) to which each such indemnified
party may become subject under the Securities Act or otherwise, insofar as
such Claims or expenses arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement under which such securities were registered under
the Securities Act, together with the documents incorporated by reference
therein, or the omission or
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alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (ii)
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary, final or summary prospectus or any amendment
or supplement thereto, together with the documents incorporated by
reference therein, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Purchaser shall not
be liable to any such indemnified party in any such case to the extent such
Claim or expense arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
of a material fact in such registration statement or amendment thereof or
supplement thereto or in any such prospectus or any preliminary, final or
summary prospectus unless it is contained in the written information
furnished to the Company by or on behalf of the Purchaser specifically for
use therein; provided, further, that the obligation to indemnify will be
limited to the amount of proceeds received by the Purchaser from the sale
of Registrable Securities pursuant to such registration statement. Such
indemnity and reimbursement of expenses shall remain in full force and
effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by the
Purchaser.
(c) Any person entitled to indemnification under this Agreement
shall notify promptly the indemnifying party in writing of the commencement
of any action or proceeding with respect to which a claim for
indemnification may be made pursuant to this Section 2.6, but the failure
of any indemnified party to provide such notice shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of
this Section 2.6, except to the extent the indemnifying party is materially
prejudiced thereby and shall not relieve the indemnifying party from any
liability which it may have to any indemnified party otherwise than under
this Section 2. In case any action or proceeding is brought against an
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, unless in the reasonable opinion of outside
counsel to the indemnified party a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, to
assume the defense thereof jointly with any other indemnifying party
similarly noticed, to the extent that it chooses, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party that it so chooses, the
indemnifying party shall not be liable to such indemnified party for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that (i) if the indemnifying party fails
to take reasonable steps necessary to defend diligently the action or
proceeding within 20 days after receiving notice from such indemnified
party that the indemnified party believes it has failed to do so; or (ii)
if such indemnified party who is a defendant in any action or proceeding
which is also brought against the indemnifying party reasonably shall have
concluded that there may be one or more legal defenses available to such
indemnified party which are not available to the indemnifying party; or
(iii) if representation of both
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parties by the same counsel is otherwise inappropriate under applicable
standards of professional conduct, then, in any such case, the indemnified
party shall have the right to assume or continue its own defense as set
forth above, and the indemnifying party shall be liable for any expenses
therefor. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or
judgment (A) includes an unconditional release of the indemnified party
from all liability arising out of such action or claim and (B) does not
include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of any indemnified party.
(d) If for any reason the foregoing indemnity is unavailable or
is insufficient to hold harmless an indemnified party under Section 2.6 or
each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of any Claim in such proportion as is
appropriate to reflect the relative fault of the indemnifying party, on the
one hand, and the indemnified party, on the other hand, with respect to
such offering of securities. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party or
the indemnified party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement
or omission. If, however, the allocation provided in the second preceding
sentence is not permitted by applicable law, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative faults
but also the relative benefits of the indemnifying party and the
indemnified party as well as any other relevant equitable considerations.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 2.6(d) were to be determined by pro
rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to in the preceding
sentences of this Section 2.6(d). The amount paid or payable in respect of
any Claim shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such Claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(t) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
2.7 Underwritten Offerings. If requested by the underwriters for any
underwritten offering by the Purchaser of Registrable Securities pursuant to a
registration requested under Article 2, the Company shall enter into a customary
underwriting agreement with the underwriters. Such underwriting agreement shall
be reasonably satisfactory in form and substance to the Purchaser and shall
contain such representations and warranties by, and such other agreements on the
part of, the Company and such other terms as are generally included in the
underwriting agreement of such underwriters, including, without limitations,
indemnities and contribution agreements.
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3. Rule 144 Reporting. With a view of making available to the Purchaser the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144 or any successor rule
promulgated under the Securities Act, at all times after the effective date
of the first registration filed by the Company for an offering of its
securities to the general public;
(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act; and
(c) So long as the Purchaser owns any Registrable Securities,
furnish to the Purchaser forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144
and of the Exchange Act at any time after it has become subject to such
reporting requirements.
4. General.
4.1 Amendments and Waivers. This Agreement may be amended, modified,
supplemented or waived only upon the written agreement of the party against whom
enforcement of such amendment, modification, supplement or waiver is sought.
4.2 Notices. All notices, elections, request, demands or other
communications required hereunder shall be in writing and shall be deemed given
when sent by facsimile (receipt confirmed electronically), delivered personally,
within three days after mailing when mailed by certified or registered mail,
return receipt requested or within one day after sent by a reputable overnight
carrier, to the parties as follows (or to such other person or place, written
notice of which any party hereto shall have given to the other):
(a) If to the Purchaser: Cambridge Holdings, Ltd.
000 Xxxxx Xxxxxxxxxx, #00
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxxx, President
(b) If to Company: AspenBio, Inc.
0000 Xxxxxxxxx Xxx, Xxxxxxxx X-0
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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With a Copy to: Krendl Krendl Xxxxxxxx & Way PC
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
and
Xxxxxx Xxxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
4.3 Miscellaneous.
(a) This Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto and the respective successors,
personal representatives and assigns. The right to cause the Company to
register the Registrable Securities may be assigned or otherwise conveyed
by the Purchaser to any transferee who acquires the Registrable Securities,
or Warrant pursuant to and in accordance with the documents that govern
such securities; provided, however, that Purchaser provides the Company
written notice of such transfer, stating the name and address of said
transferee and said transferee's agreement to be bound by the provisions of
this Agreement and if such right is assigned or conveyed to more than one
person, the holder of a majority of the Registrable Securities shall be
entitled to effect or cause the Demand Registration Request.
(b) This Agreement as well as the Note and Warrant between the
parties of even date (with the documents referred to herein or delivered
pursuant hereto) embodies the entire agreement and understanding between
the parties hereto and supersedes all prior agreements and understanding
relating to the subject matter hereof.
(c) This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Colorado without giving
effect to the conflicts of law principles thereof.
(d) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
All section references are to this Agreement unless otherwise expressly
provided.
(e) This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall
constitute one instrument.
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(f) Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of
this Agreement or affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction.
(g) The parties hereto acknowledge that there would be no
adequate remedy at law if any party fails to perform any of its obligations
hereunder, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled
to injunctive relief, including specific performance, to enforce such
obligations without the posting of any bond, and, if any action should be
brought in equity to enforce any of the provisions of this Agreement, none
of the parties hereto shall raise the defense that there is an adequate
remedy at law.
(h) Each party hereto shall do and perform or cause to be done
and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments, and documents
as any other party hereto reasonably may request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have executed this Investor Rights
Agreement as of the date set forth above.
ASPENBIO, INC.
By:
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Name:
-----------------------------------
Title:
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CAMBRIDGE HOLDINGS, LTD.
By:
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Name:
-----------------------------------
Title:
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