EXHIBIT 4.4
FORM OF REGISTRATION RIGHTS AGREEMENT.
THIS AGREEMENT (the "Agreement") is dated as of February __, 2005, and is by and
between XECHEM INTERNATIONAL, INC., a Delaware corporation (the "Company"), and
_______________________ (the "Holder").
WITNESSETH:
WHEREAS, the Holder has been granted a warrant (the "Warrant") to purchase
_____________ shares of common stock, par value $.00001 per share (the "Common
Stock"), of the Company, and the Holder has advanced certain funds to the
Company as evidenced by the Company's secured convertible promissory note (the
"Note"), convertible into __________ shares of Common Stock; and
WHEREAS, the Company has agreed to grant the Holder certain registration
rights with respect to the Common Stock issuable upon the exercise of the
Warrant and conversion of the Note;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows.
1. Registrable Securities.
As used herein, the term "Registrable Securities" shall mean without
duplication, any shares of Common Stock issued pursuant to an exercise of the
Warrant or a conversion of the Note or issued in respect thereof as a result of
a stock dividend or stock split or a recapitalization, merger or other
reorganization of the Company in which the Company is the surviving entity or
any security subsequently issued in exchange for such shares of stock.
2. Immediate Registration.
The Company shall use its best efforts to file with the Securities and
Exchange Commission a registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), on Form S-1 or Form SB-2 or any other legally
available form for such registration, covering the sale by the Holder of all of
the Registrable Securities as soon as practicable after the date hereof, but in
no event more than ninety (90) days thereafter (the "Initial Registration
Form"). Thereafter, the Company shall diligently prosecute the Initial
Registration Form to effectiveness and thereupon shall keep it effective for a
period extending until nine (9) months after the expiration of the term of the
Warrants.
3. Demand Registration.
(a) At any one time (and not more than one time), upon the written
request of the Holder (the "Demand Registration Request") requesting that
the Company effect the registration under the Securities Act of at least
50% of the Registrable Securities then held by or available for issuance
to the Holder or any transferees directly from the Holder of the Warrant
or the shares of Common Stock issuable upon exercise thereof, the Company
shall, as expeditiously as may be practicable, use reasonable efforts to
effect such registration under the Securities Act (a "Demand
Registration").
(b) (i) The Company may postpone for up to six months the filing or
the effectiveness of a registration statement for a Demand Registration if
the Company and the Holder agree that such Demand Registration would
reasonably be expected to have an adverse effect on any proposal or plan
by the Company or any of its subsidiaries to engage in any acquisition of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or similar transaction; provided that in each
such event, the Holder will be entitled to withdraw any request and, if
such request is withdrawn, such Demand Registration will not count as the
one permitted Demand Registration hereunder and the Company will pay all
expenses incurred by the Holder in connection with such registration.
(ii) If the Holder makes a Demand Registration Request within
three months of the Company's fiscal year end, the Company may
postpone for up to six months the filing or the effectiveness of a
registration statement for a Demand Registration.
4. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to either (i)
register any share of Common Stock under the Securities Act on its own
behalf (other than any registration on Form S-4 or S-8 or any successor
form thereto or a form of registration statement not available for the
general registration of securities) (a "Company Registration"), or (ii)
register any Registrable Securities pursuant to a Demand Registration
(other than any registration on a form of registration statement not
available for general registration of securities) and the registration
form to be used may be used for the registration of Registrable Securities
(a "Piggyback Registration"), the Company will, not less than 30 days
prior to the filing of the registration statement to be used for such
Piggyback Registration, give written notice (the "Registration Notice") to
the Holder of its intention to effect such a registration and will,
subject to the provisions set forth below, include in such registration
all Registrable Securities with respect to which the Company has received,
within 15 days after the date on which the Holder has received the
Registration Notice, a written request from the Holder for inclusion
therein (which request shall specify the Registrable Securities intended
to be included therein and the holders thereof).
(b) Priority on Company Registrations. If a Piggyback Registration
is an underwritten primary Company Registration, and the managing
underwriters advise the Company in writing that in their opinion the
aggregate of the number of securities proposed to be sold by the Company
and the number of Registrable Securities and other securities held by
persons with piggyback registration rights requested to be included in
such registration exceeds the number which can be sold in such offering
without adversely affecting the marketability of the offering, the Company
will include in such registration the following securities in the
following order of priority: (i) first, all of the securities the Company
proposes to sell and (ii) second, the Registrable Securities and all other
securities held by persons with piggyback registration rights requested to
be included in such registration, pro rata among the holders of such
Registrable Securities and other securities on the basis of the number of
shares of Registrable Securities or other securities owned by each such
holder. Notwithstanding the foregoing or any other provision contained
herein, the Company shall have the right, at any time prior to the
effective date thereof, to postpone, withdraw or abandon any Company
Registration without any obligation to any holder of Registrable
Securities. The Company covenants and agrees that, so long as any
Registrable Securities are subject to this Agreement, it shall not grant
registration rights to any person or entity that are superior to the
rights of the Holder hereunder, it being understood that this shall not
preclude the Company from granting registration rights to any person or
entity that are pari passu with the rights granted to the Holder
hereunder.
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(c) Priority on Demand Registrations. If a Piggyback Registration is
an underwritten primary Demand Registration, and the managing underwriters
advise the Company in writing that in their opinion the aggregate of the
number of securities proposed to be sold pursuant to the Demand
Registration Request and the number of other Registrable Securities and
other securities held by persons with piggyback registration rights
requested to be included in such registration exceed the number which can
be sold in such offering without adversely effecting the marketability of
the offering, the Company will include in such registration the following
securities in the following order of priority: (i) first, all of the
securities requested to be included in such registration pursuant to a
Demand Registration Request, pro rata among the holders of such securities
on the basis of the number of shares of Registrable Securities or other
securities owned by each such holder, and (ii) any other securities
requested to be included in such registration by any other person having a
right thereto. Notwithstanding the foregoing or any other provision
contained herein, the party who delivered the Demand Registration Request
shall have the right, at any time prior to the effective date thereof, to
direct the Company to postpone, withdraw or abandon any Demand
Registration without any obligation to any holder of Registrable
Securities.
5. Registration Procedures.
Whenever the holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company
will, subject to the provisions set forth above, including without limitation,
the right of the Company to postpone, withdraw or abandon any Company
Registration and the right of the Holder to postpone, withdraw or abandon any
Demand Registration, use its reasonable efforts to effect the registration of
such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company will as expeditiously as
possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use
its reasonable efforts to cause such registration statement to become
effective; provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will
furnish to counsel selected by the reasonable opportunity to review and
comment on such documents;
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(b) prepare and file with the Securities and Exchange Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than 90 days
(without taking into account any period during which a stop order may be
in effect) and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement during such period in accordance with the tended methods of
disposition by the sellers thereof set forth in such registration
statement;
(c) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such U.S.
jurisdictions as any seller reasonably requests and do any and all other
acts and things which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller, provided that the Company
will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction;
(e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening any event which causes the prospectus
included in such registration statement to contain an true statement of a
material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company will
prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or
omit to state any fact necessary to make the statements therein not
misleading, it being hereby acknowledged and agreed that each holder of
Registrable Securities shall be deemed to have agreed by acquisition of
such Registrable Securities that upon the receipt of any notice from the
Company of the occurrence of any event of the kind described in this
paragraph, such holder shall thereupon discontinue such holder's offer and
disposition of Registrable Securities until such holder's receipt of the
copies of the "stickered," supplemented or amended prospectus and/or
registration statement contemplated hereby and, if so directed by the
Company, shall deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, of the prospectus covering such
Registrable Securities then in such holder's possession;
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(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are
then listed and, if not so listed, use its best efforts in connection with
any Company Registration (but not any Demand Registration) to cause all
such Registrable Securities to be listed on the NASD automated quotation
system;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration
statement;
(h) make available for inspection by any seller of Registrable
Securities or any underwriter participating in any disposition pursuant to
such registration statement and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement;
(i) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the Securities and Exchange
Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at
least twelve months (but not more than eighteen months) beginning with the
first day of the Company's first full fiscal quarter after the effective
date of the registration statement, which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(j) permit any holder of Registrable Securities, which holder, in
its sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of
such registration statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable
judgment of such holder and its counsel should be included (subject to the
consent of the Company which shall not be unreasonably withheld);
(k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any Common Stock included in such registration statement
for sale in any jurisdiction, the Company will notify each holder of
Registrable Securities and use its reasonable efforts promptly to obtain
the withdrawal of such order;
(l) use its reasonable efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved
by such other United States (or any state or territory thereof)
governmental agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such Registrable
Securities; and
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(m) obtain a cold comfort letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as the Holders may reasonably
request.
6. Registration Expenses.
All expenses incident to the Company's performance of or compliance with
the foregoing, including without limitation all registration and filing fees,
fees and expenses for compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses and fees and disbursements of counsel
for the Company and all independent certified public accountants (excluding
discounts and commissions) and other persons retained by the Company shall be
borne by the Company. The Company shall also pay the fees and disbursements of
one legal counsel representing the Holder and all other persons requesting
registration pursuant to agreements providing registration rights. All other
fees and expenses incurred by the holders of registrable securities requesting
registration, including fees and disbursements of additional counsel, shall be
borne by such holders, pro rata, based upon the number of shares of registrable
securities held by each such holder.
7. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted by law,
each holder of Registrable Securities, its officers and directors and each
person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by
any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as the same is
caused by or contained in any information furnished in writing to the
Company by such holder expressly for use therein or by such holder's
failure to deliver a copy of the registration statement or prospectus or
any amendments or supplements thereto after the Company has furnished such
holder with a sufficient number of copies of the same in a timely manner.
In connection with an underwritten offering, the Company will indemnify
such underwriters, their officers and directors and each person who
controls such underwriters (within the meaning of the Securities Act) to
the same extent as provided above with respect to the indemnification of
the holders of Registrable Securities.
(b) In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder will furnish
to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration
statement or prospectus and, to the extent permitted by law, will
indemnify the Company, its directors and officers and each person who
controls the Company (within the meaning of the Securities Act) against
any losses, claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only to the extent that
such untrue statement or omission is contained in, or omitted from, any
information or affidavit so furnished in writing by such holder; provided
that the obligation to indemnify will be limited to the net amount of
proceeds received by such holder from the sale of Registrable Securities
pursuant to such registration statement.
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(c) Any person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification, provided that the failure to give such
notice shall relieve the indemnifying party hereunder of liability
hereunder only if and to the extent that the indemnifying party has been
prejudiced in any material respect by such failure, and (ii) unless in
such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with respect
to such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party.
If such defense is assumed, the indemnifying party will not be subject to
any liability for any settlement made by the indemnified party without its
consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such indemnifying
party with respect to such claim, unless in the reasonable judgment of an
indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect
to such claim.
(d) If the indemnification provided for in the preceding
subdivisions of this Section 7 is unavailable to an indemnified party with
respect to any expense, loss, claim, damage or liability referred to
therein, then each indemnifying party, in lieu of indemnifying such party,
shall contribute to the amount paid or payable by such indemnifying party
as a result of such expense, loss, claim, damage or liability in such
proportions as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Holder, on the other hand, from the
distribution of Registrable Securities and the relative fault of the
Company, on the one hand, and the Holder, on the other hand, in connection
with the statements or omissions which resulted in such expense, loss,
claim, damage or liability, as well as any other relevant equitable
considerations. The amount paid or payable by an indemnified party as a
result of the expenses, losses, claims, damages and liabilities referred
to in the preceding sentence shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
foregoing, the Holder shall not be required to contribute any amount in
excess of the amount received by such Holder from the sale of Registrable
Securities in the registration resulting in any such expense, loss, claim,
damages or liability. No person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Securities Act shall be
entitled to contribution with respect thereto from any person who was not
guilty of such fraudulent misrepresentation.
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8. Participation in Underwritten Registrations.
No holder of Registrable Securities may participate in any registration
hereunder which is underwritten unless such person (i) agrees to sell such
Registrable Securities on the basis provided in any underwriting arrangements to
be executed in connection with such offering and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other document required under the terms of such underwriting arrangements;
provided that no holder of Registrable Securities included in any underwritten
registration shall be required to make any representations or warranties to the
Company or the underwriters other than representations and warranties regarding
such holder and such holder's intended method of distribution, ownership of
securities or other information required under federal or state securities laws.
9. Termination of Registrable Securities.
As to any particular Registrable Securities, such securities will cease to
be Registrable Securities when they have been distributed to the public pursuant
to a public offering registered under the Securities Act or sold to the public
through a broker, dealer or market maker in compliance with Rule 144 under the
Securities Act (or any similar rule then in force) or if the Registrable
Securities may, in the opinion of counsel reasonably acceptable to the Holder of
such Registrable Securities, be freely sold to the public in a single
transaction without registration under the Securities Act.
10. Amendments and Waivers.
Except as otherwise provided herein, the provisions of this Agreement may
be amended or waived only upon the prior written consent of the Company and the
Holder.
11. Successors and Assigns.
All covenants and agreements in this Agreement by or on behalf of any of
the parties hereto will bind and inure to the benefit of the respective
successors and assigns of the parties hereto (including, with respect to all
Registrable Securities, all subsequent registered holders of such Registrable
Securities).
12. Severability.
Whenever possible, each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this Agreement.
13. Counterparts.
This Agreement may be executed in one or more counterparts, and all such
counterparts taken together will constitute one and the same Agreement.
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14. Notices.
All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and
shall be delivered personally to the recipient, sent to the recipient by
reputable express courier service (charges prepaid) or mailed to the recipient
by certified or registered mail, return receipt requested and postage prepaid
and shall be deemed given when received. Such notices, demands and other
communications may be sent to each party hereto (other than the Company) at the
address set forth in the Company's records for such party, and to the Company at
the address of its chief executive office, or to such other address as the
recipient party has specified by prior written notice to the sending party.
15. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to contracts made and to be wholly
performed within such State.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
XECHEM INTERNATIONAL, INC.
By:___________________________________
Name:______________________________
Title:_____________________________
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