REGISTRATION RIGHTS AGREEMENT
Exhibit
10.3
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into effective as of this ___ day of May, 2007 (the
“Effective
Date”)
between Modigene Inc. (f/k/a
LDG, Inc.), a Nevada corporation (the “Company”),
and
the parties set forth on the signature page and Exhibit
A
hereto
(each a “Purchaser”
and
collectively the “Purchasers”).
RECITALS:
WHEREAS,
the Company and Modigene Inc., a Delaware corporation (“Modigene”),
have
entered into an Agreement and Plan of Merger and Reorganization, pursuant to
which a newly organized, wholly-owned subsidiary of the Company has merged
with
and into Modigene, with Modigene remaining as the surviving entity and a
wholly-owned subsidiary of the Company (the “Merger”);
WHEREAS,
as a condition to the consummation of the Merger, and to provide the capital
required by Modigene for working capital and other purposes, the Company has
offered in compliance with Rule 506 of Regulation D of the Securities Act of
1933, as amended (the “Securities
Act”),
and
available prospectus exemptions in Canada, to accredited investors in a private
placement transaction (the “Offering”),
an
aggregate of [________]
units
(the “Units”)
of the
Company’s securities, at the purchase price of $1.50 per Unit (“Purchase
Price”),
each
Unit consisting of one share of the Company’s common stock, par value $0.00001
per share (“Common
Stock”),
and a
warrant (the “Investor
Warrants”)
to
purchase one-quarter, or 25%, of a share of Common Stock for five years at
the
exercise price of $2.50 per whole share of Common Stock;
WHEREAS,
the initial closing of the Offering and the Merger have taken place on the
Effective Date; and
WHEREAS,
the Purchasers, in connection with their purchase of Units in the Offering,
have
executed and delivered separate Subscription Agreements (collectively, the
“Subscription
Agreements”)
and
Investor Questionnaires (the “Investor
Questionnaires”),
each
memorializing the Purchasers’ agreement to purchase and the Company’s agreement
to sell the number of Units set forth therein at the Purchase Price, and this
Agreement, pursuant to which the Company will provide certain registration
rights related to the shares of Common Stock underlying the Units, including
“piggyback” registration rights with respect to the shares of Common Stock
issuable upon exercise of the Investor Warrants, on the terms set forth herein
(the Subscription Agreements, Investor Questionnaires, and Registration Rights
Agreements are collectively referred to as the “Transaction
Documents”).
NOW,
THEREFORE,
in
consideration of the mutual promises, representations, warranties, covenants,
and conditions set forth herein, the parties mutually agree as follows:
1. Certain
Definitions.
As used
in this Agreement, the following terms shall have the following respective
meanings:
“Approved
Market”
means
the NASD Over-The-Counter Bulletin Board, the Nasdaq Stock Market, the New
York
Stock Exchange, Inc. or the American Stock Exchange, Inc.
“Blackout
Period”
means,
with respect to a registration, a period, in each case commencing on the day
immediately after the Company notifies the Purchasers that they are required,
because of the occurrence of an event of the kind described in Section 4(f)
hereof, to suspend offers and sales of Registrable Common Shares during which
the Company, in the good faith judgment of its board of directors, determines
(because of the existence of, or in anticipation of, any acquisition, financing
activity, or other transaction involving the Company, or the unavailability
for
reasons beyond the Company’s control of any required financial statements,
disclosure of information which is in its best interest not to publicly
disclose, or any other event or condition of similar significance to the
Company) that the registration and distribution of the Registrable Common Shares
to be covered by such Registration Statement, if any, would be seriously
detrimental to the Company and its stockholders and ending on the earlier of
(1)
the date upon which the material non-public information commencing the Blackout
Period is disclosed to the public or ceases to be material and (2) such time
as
the Company notifies the selling Holders that the Company will no longer delay
such filing of the Registration Statement, recommence taking steps to make
such
Registration Statement effective, or allow sales pursuant to such Registration
Statement to resume; provided,
that
(a) the Company shall limit its use of Blackout Periods, in the aggregate,
to 30
Trading Days in any 12-month period and (b) no Blackout Period may commence
sooner than 60 days after the end of a prior Blackout Period.
“Business
Day”
means
any day of the year, other than a Saturday, Sunday, or other day on which the
Commission is required or authorized to close.
“Commission”
means
the U. S. Securities and Exchange Commission or any other federal agency at
the
time administering the Securities Act.
“Common
Stock”
means
the common stock, par value $0.00001 per share, of the Company and any and
all
shares of capital stock or other equity securities of: (i) the Company which
are
added to or exchanged or substituted for the Common Stock by reason of the
declaration of any stock dividend or stock split, the issuance of any
distribution or the reclassification, readjustment, recapitalization or other
such modification of the capital structure of the Company; and (ii) any other
corporation, now or hereafter organized under the laws of any state or other
governmental authority, with which the Company is merged, which results from
any
consolidation or reorganization to which the Company is a party, or to which
is
sold all or substantially all of the shares or assets of the Company, if
immediately after such merger, consolidation, reorganization or sale, the
Company or the stockholders of the Company own equity securities having in
the
aggregate more than 50% of the total voting power of such other
corporation.
“Effective
Date”
means
the date set forth in the preamble to this Agreement.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder.
“Family
Member”
means
(a) with respect to any individual, such individual’s spouse, any descendants
(whether natural or adopted), any trust all of the beneficial interests of
which
are owned by any of such individuals or by any of such individuals together
with
any organization described in Section 501(c)(3) of the Internal Revenue Code
of
1986, as amended, the estate of any such individual, and any corporation,
association, partnership or limited liability company all of the equity
interests of which are owned by those above described individuals, trusts or
organizations and (b) with respect to any trust, the owners of the beneficial
interests of such trust.
“Holder”
means
each Purchaser or any of such Purchaser’s respective successors and Permitted
Assigns who acquire rights in accordance with this Agreement with respect to
any
Registrable Securities directly or indirectly from a Purchaser or from any
Permitted Assignee.
“Investor
Warrants” mean
the
warrants issued in connection with the Purchasers’ purchase of Units in the
Offering.
“Majority
Holders”
means
at any time Holders representing a majority of the Registrable
Securities.
“Permitted
Assignee”
means
(a) with respect to a partnership, its partners or former partners in
accordance with their partnership interests, (b) with respect to a
corporation, its stockholders in accordance with their interest in the
corporation, (c) with respect to a limited liability company, its members
or former members in accordance with their interest in the limited liability
company, (d) with respect to an individual party, any Family Member of such
party, (e) an entity that is controlled by, controls, or is under common control
with a transferor, or (f) a party to this Agreement.
“Piggyback
Common Share Registration”
means,
in any registration of Common Stock as set forth in Section 3(b)(i), the ability
of holders of Common Stock to include Registrable Common Shares in such
registration.
“Piggyback
Registration”
means,
in any registration of Common Stock referenced in Section 3(b), the right of
each Holder to include the Registrable Securities of such Holder in such
registration.
“Piggyback
Warrant Share Registration”
means,
in any registration of Common Stock as set forth in Section 3(b)(ii), the
ability of holders of the Investor Warrants, or Common Stock issued upon
exercise of the Investor Warrants, to include Registrable Warrant Shares in
such
registration.
The
terms
“register,”
“registered,”
and
“registration”
refer
to a registration effected by preparing and filing a registration statement
in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
“Registrable
Common Shares”
means
the shares of Common Stock issued or issuable to each Purchaser in connection
with such Purchaser’s purchase of Units pursuant to the Subscription Agreements
(and not including the shares of Common Stock issuable on exercise of the
Investor Warrants issued to the Purchasers in connection with their purchase
of
Units) but excluding (i) any Registrable Common Shares that have been publicly
sold or may be sold immediately without registration under the Securities Act
either pursuant to Rule 144 of the Securities Act or otherwise; (ii) any
Registrable Common Shares sold by a person in a transaction pursuant to a
registration statement filed under the Securities Act, or (iii) any Registrable
Common Shares that are at the time subject to an effective registration
statement under the Securities Act.
“Registrable
Securities”
means
the Registrable Common Shares together with the Registrable Warrant Shares.
“Registrable
Warrant Shares”
means
the shares of Common Stock issued or issuable to each Purchaser on exercise
of
the Investor Warrants issued to the Purchasers in connection with their purchase
of Units but excluding (i) any Registrable Warrant Shares that have been
publicly sold or may be sold immediately without registration under the
Securities Act either pursuant to Rule 144 of the Securities Act or otherwise;
(ii) any Registrable Warrant Shares sold by a person in a transaction pursuant
to a registration statement filed under the Securities Act, or (iii) any
Registrable Warrant Shares that are at the time subject to an effective
registration statement under the Securities Act.
“Registration
Default Date”
means
the date that is 180 days after the Registration Filing Date.
“Registration
Default Period”
means
the period following the Registration Default Date during which any Registration
Event occurs and is continuing.
“Registration
Event”
means
the occurrence of any of the following events:
(a) the
Company fails to file with the Commission the Registration Statement on or
before the Registration Filing Date;
(b) the
Registration Statement is not declared effective by the Commission on or before
the Registration Default Date;
(c) after
the
SEC Effective Date, sales cannot be made pursuant to the Registration Statement
for any reason (including without limitation by reason of a stop order, or
the
Company’s failure to update the Registration Statement) except as excused
pursuant to Section 3(a); or
(d) the
Common Stock generally or the Registrable Common Shares specifically are not
listed or included for quotation on an Approved Market, or trading of the Common
Stock is suspended or halted on the Approved Market, which at the time
constitutes the principal market for the Common Stock, for more than two full,
consecutive Trading Days; provided,
however,
a
Registration Event shall not be deemed to occur if all or substantially all
trading in equity securities (including the Common Stock) is suspended or halted
on the Approved Market for any length of time.
“Registration
Filing Date”
means
the date that is 120 days after the Effective Date.
“Registration
Statement”
means
the registration statement that the Company is required to file pursuant to
this
Agreement to register the Registrable Common Shares.
“Rule
144”
means
Rule 144 promulgated by the Commission under the Securities Act.
“Securities
Act”
means
the Securities Act of 1933, as amended, or any similar federal statute
promulgated in replacement thereof, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time.
“SEC
Effective Date”
means
the date the Registration Statement is declared effective by the
Commission.
“Subscription
Agreement”
means
each of the Subscription Agreements, each dated as of the date hereof, between
the Company and the Purchaser named therein setting forth the terms and
conditions of the Company’s offer of Units and the purchase of Units by the
Purchaser that is party to such Subscription Agreements.
“Trading
Day”
means
any day on which the national securities exchange, the Nasdaq Stock Market,
the
NASD Over-The-Counter Bulletin Board or such other securities market or
quotation system, which at the time constitutes the principal securities market
for the Common Stock, is open for general trading of securities.
“Units”
has
the
meaning given it in the second recital of this Agreement.
2. Term.
This
Agreement shall continue in full force and effect for a period of two years
from
the Effective Date, unless terminated sooner hereunder.
3. Registration.
(a) Registration
on Form SB-2.
Not
later than the Registration Filing Date, the Company shall file with the
Commission a Registration Statement on Form SB-2, or other applicable form,
relating to the resale by the Holders of all of the Registrable Common Shares,
and the Company shall use its best efforts to cause such Registration Statement
to be declared effective prior to the Registration Default Date; provided,
that
the Company shall not be obligated to effect any such registration,
qualification, or compliance pursuant to this Section, or keep such registration
effective pursuant to the terms hereunder in any particular jurisdiction in
which the Company would be required to qualify to do business as a foreign
corporation or as a dealer in securities under the securities or blue sky laws
of such jurisdiction or to execute a general consent to service of process
in
effecting such registration, qualification or compliance, in each case where
it
has not already done so.
(b) Piggyback
Registration.
(i) Piggyback
Common Share Registration.
If the
Company shall determine to register for sale for cash any of its Common Stock,
for its own account or for the account of others (other than the Holders),
other
than (i) a registration relating solely to employee benefit plans or securities
issued or issuable to employees, consultants (to the extent the securities
owned
or to be owned by such consultants could be registered on Form S-8) or any
of
their Family Members (including a registration on Form S-8) or (ii) a
registration relating solely to a Commission Rule 145 transaction, a
registration on Form S-4 in connection with a merger, acquisition, divestiture,
reorganization, or similar event, the Company shall promptly give to the Holders
written notice thereof (and in no event shall such notice be given less than
20
calendar days prior to the filing of such registration statement), and shall,
subject to Section 3(c), include as a Piggyback Registration all of the
Registrable Common Shares specified in a written request delivered by the Holder
thereof within 10 calendar days after receipt of such written notice from the
Company. However, the Company may, without the consent of the Holders, withdraw
such registration statement prior to its becoming effective if the Company
or
such other stockholders have elected to abandon the proposal to register the
securities proposed to be registered thereby.
(ii) Piggyback
Warrant Share Registration.
If
after the SEC Effective Date, the Company shall determine to register for sale
for cash any of its Common Stock, for its own account or for the account of
others (other than the Holders), other than (i) a registration relating solely
to employee benefit plans or securities issued or issuable to employees,
consultants (to the extent the securities owned or to be owned by such
consultants could be registered on Form S-8) or any of their Family Members
(including a registration on Form S-8) or (ii) a registration relating solely
to
a Commission Rule 145 transaction, a registration on Form S-4 in connection
with
a merger, acquisition, divestiture, reorganization, or similar event, the
Company shall promptly give to the Holders written notice thereof (and in no
event shall such notice be given less than 20 calendar days prior to the filing
of such registration statement), and shall, subject to Section 3(c), include
as
a Piggyback Registration all of the Registrable Warrant Shares specified in
a
written request delivered by the Holder thereof within 10 calendar days after
receipt of such written notice from the Company. However, the Company may,
without the consent of the Holders, withdraw such registration statement prior
to its becoming effective if the Company or such other stockholders have elected
to abandon the proposal to register the securities proposed to be registered
thereby.
(c) Underwriting.
If a
Piggyback Registration is for a registered public offering that is to be made
by
an underwriting, the Company shall so advise the Holders of the Registrable
Common Shares and the Registrable Warrant Shares eligible for inclusion in
such
Registration Statement pursuant to Sections 3(b)(i) and (ii), respectively.
In
that event, the right of any Holder to Piggyback Registration shall be
conditioned upon such Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Common Shares or the Holder’s Registrable
Warrant Shares in the underwriting to the extent provided herein. All Holders
proposing to sell any of their Registrable Securities through such underwriting
shall (together with the Company and any other stockholders of the Company
selling their securities through such underwriting) enter into an underwriting
agreement in customary form with the underwriter selected for such underwriting
by the Company or the selling stockholders, as applicable. Notwithstanding
any
other provision of this Section, if the underwriter or the Company determines
that marketing factors require a limitation on the number of shares of Common
Stock or the amount of other securities to be underwritten, the underwriter
may
exclude some or all Registrable Securities from such registration and
underwriting. The Company shall so advise all Holders (except those Holders
who
failed to timely elect to include their Registrable Securities through such
underwriting or have indicated to the Company their decision not to do so),
and
indicate to each such Holder the number of shares of Registrable Securities
that
may be included in the registration and underwriting, if any. The number of
shares of Registrable Securities to be included in such registration and
underwriting shall be allocated among such Holders as follows:
(i) If
the
Piggyback Registration was initiated by the Company, the number of shares that
may be included in the registration and underwriting shall be allocated first
to
the Company and then, subject to obligations and commitments existing as of
the
date hereof, to all selling stockholders, including the Holders, who have
requested to sell in the registration on a pro rata basis according to the
number of shares requested to be included therein; and
(ii) If
the
Piggyback Registration was initiated by the exercise of demand registration
rights by a stockholder or stockholders of the Company (other than the Holders),
then the number of shares that may be included in the registration and
underwriting shall be allocated first to such selling stockholders who exercised
such demand and then, subject to obligations and commitments existing as of
the
date hereof, to all other selling stockholders, including the Holders, who
have
requested to sell in the registration, on a pro rata basis according to the
number of shares requested to be included.
No
Registrable Securities excluded from the underwriting by reason of the
underwriter’s marketing limitation shall be included in such registration. If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw his or her Registrable Securities therefrom by delivering
a
written notice to the Company and the underwriter. The Registrable Securities
so
withdrawn from such underwriting shall also be withdrawn from such registration;
provided,
however,
that,
if by the withdrawal of such Registrable Securities, a greater number of
Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation imposed by the underwriters),
then the Company shall offer to all Holders who have included Registrable
Securities in the registration the right to include additional Registrable
Securities pursuant to the terms and limitations set forth herein in the same
proportion used above in determining the underwriter limitation.
(d) Other
Registrations.
Before
the SEC Effective Date, the Company will not, without the prior written consent
of the Majority Holders, file any other registration statement with the
Commission or request the acceleration of any other registration statement
filed
with the Commission, and during any time subsequent to the SEC Effective Date
when the Registration Statement for any reason is not available for use by
any
Holder for the resale of any Registrable Common Shares, the Company shall not,
without the prior written consent of the Majority Holders, file any other
registration statement or any amendment thereto with the Commission under the
Securities Act or request the acceleration of the effectiveness of any other
registration statement previously filed with the Commission, other than (i)
any
registration statement on Form S-8 or Form S-4 and (ii) any registration
statement or amendment which the Company is required to file or as to which
the
Company is required to request acceleration pursuant to any obligation in effect
on the date of execution and delivery of this Agreement.
(e) Occurrence
of Registration Event.
If a
Registration Event occurs, then the Company will make payments to each Holder
(a
“Qualified
Purchaser”),
as
partial liquidated damages for the minimum amount of damages to the Qualified
Purchaser by reason thereof, and not as a penalty, at a rate equal to 1.25%
of
the Purchase Price per share of Registrable Common Shares then held by each
Qualified Purchaser for each full period of 30 days of the Registration Default
Period (which shall be pro rated for any period less than 30 days); provided,
however,
if a
Registration Event occurs (or is continuing) on a date more than one-year after
the Qualified Purchaser acquired the Registrable Common Shares (and thus the
one-year holding period under Rule 144(d) has elapsed), liquidated damages
shall
be paid only with respect to that portion of the Qualified Purchaser’s
Registrable Common Shares that cannot then be immediately resold in reliance
on
Rule 144. Notwithstanding the foregoing, the maximum amount of liquidated
damages that may be paid to any Qualified Purchaser pursuant to this Section
3(e) shall be an amount equal to 12.5% of the Purchase Price per share of
Registrable Common Shares held by such Qualified Purchaser at the time of the
first occurrence of the Registration Events. Each such payment shall be due
and
payable within five days after the end of each full 30-day period of the
Registration Default Period until the termination of the Registration Default
Period and within five days after such termination. Such payments shall
constitute the Qualified Purchaser’s exclusive remedy for such events. The
Registration Default Period shall terminate upon (i) the filing of the
Registration Statement in the case of clause (a) of the definition of
Registration Event, (ii) the SEC Effective Date in the case of clause (b) of
the
definition of Registration Event, (iii) the ability of the Qualified Purchaser
to effect sales pursuant to the Registration Statement in the case of clause
(c)
of the definition of Registration Event, (iv) the listing or inclusion and/or
trading of the Common Stock on an Approved Market, as the case may be, in the
case of clause (d) of the definition of Registration Event, and (v) in the
case
of the events described in clauses (b) and (c) of the definition of Registration
Event, the earlier termination of the Registration Default Period. The amounts
payable as partial liquidated damages pursuant to this Section 3(e) shall be
payable in lawful money of the United States. Amounts payable as liquidated
damages to each Qualified Purchaser hereunder with respect to each share of
Registrable Common Shares shall cease when the Qualified Purchaser no longer
holds such Registrable Common Shares or all such Registrable Common Shares
can
be immediately sold by the Qualified Purchaser in reliance on Rule 144(k).
4. Registration
Procedures for Registrable Common Shares.
The
Company will keep each Holder reasonably advised as to the filing and
effectiveness of the Registration Statement. At its expense with respect to
the
Registration Statement, the Company will:
(a) prepare
and file with the Commission with respect to the Registrable Common Shares,
a
Registration Statement on Form SB-2, or any other form for which the Company
then qualifies or which counsel for the Company shall deem appropriate and
which
form shall be available for the sale of the Registrable Common Shares in
accordance with the intended methods of distribution thereof, and use its
commercially reasonable efforts to cause such Registration Statement to become
effective and shall remain effective for a period of two years or for such
shorter period ending on the earlier to occur of (i) the sale of all Registrable
Common Shares and (ii) the availability under Rule 144(k) for the Holder to
sell
the Registrable Common Shares (the “Effectiveness
Period”);
(b) if
the
Registration Statement is subject to review by the Commission, promptly respond
to all comments and diligently pursue resolution of any comments to the
satisfaction of the Commission;
(c) prepare
and file with the Commission such amendments and supplements to such
Registration Statement as may be necessary to keep such Registration Statement
effective during the Effectiveness Period;
(d) furnish,
without charge, to each Holder of Registrable Common Shares covered by such
Registration Statement (i) a reasonable number of copies of such Registration
Statement (including any exhibits thereto other than exhibits incorporated
by
reference), each amendment and supplement thereto as such Holder may reasonably
request, (ii) such number of copies of the prospectus included in such
Registration Statement (including each preliminary prospectus and any other
prospectus filed under Rule 424 under the Securities Act) as such Holders may
reasonably request, in conformity with the requirements of the Securities Act,
and (iii) such other documents as such Holder may require to consummate the
disposition of the Registrable Common Shares owned by such Holder, but only
during the Effectiveness Period;
(e) use
its
commercially reasonable best efforts to register or qualify such registration
under such other applicable securities or blue sky laws of such jurisdictions
as
any Holder of Registrable Common Shares covered by such Registration Statement
reasonably requests and as may be necessary for the marketability of the
Registrable Common Shares (such request to be made by the time the applicable
Registration Statement is deemed effective by the Commission) and do any and
all
other acts and things necessary to enable such Holder to consummate the
disposition in such jurisdictions of the Registrable Common Shares owned by
such
Holder; provided,
that
the Company shall 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
paragraph, (ii) subject itself to taxation in any such jurisdiction, or (iii)
consent to general service of process in any such jurisdiction.
(f) as
promptly as practicable after becoming aware of such event, notify each Holder
of Registrable Common Shares, the disposition of which requires delivery of
a
prospectus relating thereto under the Securities Act, of the happening of any
event, which comes to the Company’s attention, that will after the occurrence of
such event cause the prospectus included in such Registration Statement, if
not
amended or supplemented, to contain an untrue statement of a material fact
or an
omission to state a material fact required to be stated therein or necessary
to
make the statements therein not misleading and the Company shall promptly
thereafter prepare and furnish to such Holder a supplement or amendment to
such
prospectus (or prepare and file appropriate reports under the Exchange Act)
so
that, as thereafter delivered to the purchasers of such Registrable Common
Shares, such prospectus shall not contain an 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 not misleading, unless suspension of the use of
such
prospectus otherwise is authorized herein or in the event of a Blackout Period,
in which case no supplement or amendment need be furnished (or Exchange Act
filing made) until the termination of such suspension or Blackout Period;
(g) comply,
and continue to comply during the Effectiveness Period, in all material respects
with the Securities Act and the Exchange Act and with all applicable rules
and
regulations of the Commission with respect to the disposition of all securities
covered by such Registration Statement;
(h) as
promptly as practicable after becoming aware of such event, notify each Holder
of Registrable Common Shares being offered or sold pursuant to the Registration
Statement of the issuance by the Commission of any stop order or other
suspension of effectiveness of the Registration Statement;
(i) use
its
best efforts to cause all the Registrable Common Shares covered by the
Registration Statement to be quoted on the NASD OTC Bulletin Board or such
other
principal securities market on which securities of the same class or series
issued by the Company are then listed or traded;
(j) provide
a
transfer agent and registrar, which may be a single entity, for the shares
of
Common Stock at all times;
(k) cooperate
with the Holders of Registrable Common Shares being offered pursuant to the
Registration Statement to issue and deliver, or cause its transfer agent to
issue and deliver, certificates representing Registrable Common Shares to be
offered pursuant to the Registration Statement within a reasonable time after
the delivery of certificates representing the Registrable Common Shares to
the
transfer agent or the Company, as applicable, and enable such certificates
to be
in such denominations or amounts as the Holders may reasonably request and
registered in such names as the Holders may request;
(l) during
the Effectiveness Period, refrain from bidding for or purchasing any Common
Stock or any right to purchase Common Stock or attempting to induce any person
to purchase any such security or right if such bid, purchase or attempt would
in
any way limit the right of the Holders to sell Registrable Common Shares by
reason of the limitations set forth in Regulation M under the Exchange Act;
and
(m) take
all
other reasonable actions necessary to expedite and facilitate the disposition
by
the Holders of the Registrable Common Shares pursuant to the Registration
Statement.
5. Suspension
of Offers and Sales.
Each
Holder agrees that, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 4(f) hereof or of the commencement
of a Blackout Period, such Holder shall discontinue the disposition of
Registrable Common Shares included in the Registration Statement until such
Holder’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 4(f) hereof or notice of the end of the Blackout Period,
and, if so directed by the Company, such Holder shall deliver to the Company
(at
the Company’s expense) all copies (including, without limitation, any and all
drafts), other than permanent file copies, then in such Holder’s possession, of
the prospectus covering such Registrable Common Shares current at the time
of
receipt of such notice.
6. Registration
Expenses.
The
Company shall pay all expenses in connection with any registration obligation
provided herein, including, without limitation, all registration, filing, stock
exchange fees, printing expenses, all fees and expenses of complying with
securities or blue sky laws, and the fees and disbursements of counsel for
the
Company and of its independent accountants; provided,
that,
in any underwritten registration, each party shall pay for its own underwriting
discounts and commissions and transfer taxes. Except as provided in this Section
and Section 9, the Company shall not be responsible for the expenses of any
attorney or other advisor employed by a Holder.
7. Assignment
of Rights.
No
Holder may assign its rights under this Agreement to any party without the
prior
written consent of the Company; provided,
however,
that
any Holder may assign its rights under this Agreement without such consent
to a
Permitted Assignee as long as (a) such transfer or assignment is effected in
accordance with applicable securities laws; (b) such transferee or assignee
agrees in writing to become subject to the terms of this Agreement; and (c)
such
Holder notifies the Company in writing of such transfer or assignment, stating
the name and address of the transferee or assignee and identifying the
Registrable Common Shares with respect to which such rights are being
transferred or assigned.
8. Information
by Holder.
Holders
included in any registration shall furnish to the Company such information
as
the Company may reasonably request in writing regarding such Holders and the
distribution proposed by such Holders.
9. Indemnification.
(a) In
the
event of the offer and sale of Registrable Securities under the Securities
Act,
the Company shall, and hereby does, indemnify and hold harmless, to the fullest
extent permitted by law, each Holder, its directors, officers, partners, each
other person who participates as an underwriter in the offering or sale of
such
securities, and each other person, if any, who controls or is under common
control with such Holder or any such underwriter within the meaning of Section
15 of the Securities Act, against any losses, claims, damages or liabilities,
joint or several, and expenses to which the Holder or any such director,
officer, partner or underwriter or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement of any material fact contained in any registration statement prepared
and filed by the Company under which Registrable Securities were registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto,
or
any omission to state therein a material fact required to be stated or necessary
to make the statements therein in light of the circumstances in which they
were
made not misleading, and the Company shall reimburse the Holder, and each such
director, officer, partner, underwriter and controlling person for any legal
or
any other expenses reasonably incurred by them in connection with investigating,
defending or settling any such loss, claim, damage, liability, action or
proceeding; provided,
that,
the Company shall not be liable in any such case (i) to the extent that any
such
loss, claim, damage, liability (or action or proceeding in respect thereof)
or
expense arises out of or is based upon an untrue statement in or omission from
such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by or on behalf of such Holder specifically stating that it is for
use
in the preparation thereof or (ii) if the person asserting any such loss, claim,
damage, liability (or action or proceeding in respect thereof) who purchased
the
Registrable Securities that are the subject thereof did not receive a copy
of an
amended preliminary prospectus or the final prospectus (or the final prospectus
as amended or supplemented) at or prior to the written confirmation of the
sale
of such Registrable Securities to such person because of the failure of such
Holder or underwriter to so provide such amended preliminary or final prospectus
and the untrue statement or omission of a material fact made in such preliminary
prospectus was corrected in the amended preliminary or final prospectus (or
the
final prospectus as amended or supplemented). Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf
of
the Holders, or any such director, officer, partner, underwriter or controlling
person and shall survive the transfer of such shares by the Holder.
(b) As
a
condition to including Registrable Securities in any registration statement
filed pursuant to this Agreement, each Holder agrees to be bound by the terms
of
this Section 9 and to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors and officers, and each other
person, if any, who controls the Company within the meaning of Section 15 of
the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director or officer or controlling
person may become subject under the Securities Act or otherwise, insofar as
such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) that arises out of or is based
upon
an untrue statement in or omission from such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
by the Holder through an instrument duly executed by or on behalf of the Holder
specifically stating that it is for use in the preparation thereof, and such
Holder shall reimburse the Company, and each such director, officer, and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating, defending, or settling any such loss, claim,
damage, liability, action, or proceeding; provided,
however,
that
such indemnity agreement found in this Section 9 shall in no event exceed the
net proceeds from the Offering received by such Holder. Such indemnity shall
remain in full force and effect, regardless of any investigation made by or
on
behalf of the Company or any such director, officer or controlling person and
shall survive the transfer by any Holder of such shares.
(c) Promptly
after receipt by an indemnified party of notice of the commencement of any
action or proceeding involving a claim referred to in this Section (including
any governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to
the
indemnifying party of the commencement of such action; provided that
the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Section, except
to
the extent that the indemnifying party is actually prejudiced by such failure
to
give notice. In case any such action is brought against an indemnified party,
unless in the reasonable judgment of counsel to such indemnified party a
conflict of interest between such indemnified and indemnifying parties may
exist
or the indemnified party may have defenses not available to the indemnifying
party in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof, unless in such indemnified party’s
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties arises in respect of such claim after the assumption of
the
defenses thereof or the indemnifying party fails to defend such claim in a
diligent manner, other than reasonable costs of investigation. Neither an
indemnified nor an indemnifying party shall be liable for any settlement of
any
action or proceeding effected without its consent. No indemnifying party shall,
without the consent of the indemnified party, consent to entry of any judgment
or enter into any settlement, which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of
a
release from all liability in respect of such claim or litigation.
Notwithstanding anything to the contrary set forth herein, and without limiting
any of the rights set forth above, in any event any party shall have the right
to retain, at its own expense, counsel with respect to the defense of a
claim.
(d) If
an
indemnifying party does or is not permitted to assume the defense of an action
pursuant to Sections 9(c) or in the case of the expense reimbursement obligation
set forth in Sections 9(a) and (b), the indemnification required by Sections
9(a) and 9(b) shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills received or
expenses, losses, damages, or liabilities are incurred.
(e) If
the
indemnification provided for in Section 9(a) or 9(b) is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect
to
any loss, liability, claim, damage or expense referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall (i) contribute to the amount paid or payable by such indemnified party
as
a result of such loss, liability, claim, damage or expense as is appropriate
to
reflect the proportionate relative fault of the indemnifying party on the one
hand and the indemnified party on the other (determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact
or omission 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), or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, not only the proportionate relative
fault of the indemnifying party and the indemnified party, but also the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other, as well as any other relevant equitable considerations.
No
indemnified party guilty of fraudulent misrepresentation (within the meaning
of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any
indemnifying party who was not guilty of such fraudulent
misrepresentation.
(f) Other
Indemnification.
Indemnification similar to that specified in this Section (with appropriate
modifications) shall be given by the Company and each Holder of Registrable
Securities with respect to any required registration or other qualification
of
securities under any federal or state law or regulation or governmental
authority other than the Securities Act.
10. Rule
144.
For
a
period of at least 24 months following the Effective Date,
the
Company will use its commercially reasonable best efforts to timely file all
reports required to be filed by the Company after the date hereof under the
Securities Act and the Exchange Act and the rules and regulations adopted by
the
Commission thereunder, and if the Company is not required to file reports
pursuant to such sections, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as
is
required for the Purchasers to sell shares of Common Stock under Rule
144.
11. Independent
Nature of Each Purchaser’s Obligations and Rights.
The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and each Purchaser shall not be
responsible in any way for the performance of the obligations of any other
Purchaser under this Agreement. Nothing contained herein and no action taken
by
any Purchaser pursuant hereto, shall be deemed to constitute such Purchasers
as
a partnership, an association, a joint venture, or any other kind of entity,
or
create a presumption that the Purchasers are in any way acting in concert or
as
a group with respect to such obligations or the transactions contemplated by
this Agreement. Each Purchaser shall be entitled to independently protect and
enforce its rights, including without limitation the rights arising out of
this
Agreement, and it shall not be necessary for any other Purchaser to be joined
as
an additional party in any proceeding for such purpose.
12. Miscellaneous.
(a) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware and the United States of America, both substantive and
remedial, without regard to Delaware conflicts of law principles. Any
judicial proceeding brought against either of the parties to this Agreement
or
any dispute arising out of this Agreement or any matter related hereto shall
be
brought in the courts of the State of New York, New York County, or in the
United States District Court for the Southern District of New York and, by
its
execution and delivery of this Agreement, each party to this Agreement accepts
the jurisdiction of such courts. The foregoing consent to jurisdiction shall
not
be deemed to confer rights on any person other than the parties to this
Agreement.
(b) Remedies.
In the
event of a breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, shall be entitled to
specific performance of its 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 not assert or shall
waive the defense that a remedy at law would be adequate.
(c) Successors
and Assigns.
Except
as otherwise provided herein, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors, Permitted Assigns, executors and
administrators of the parties hereto. In the event the Company merges with,
or
is otherwise acquired by, a direct or indirect subsidiary of a publicly traded
company, the Company shall condition the merger or acquisition on the assumption
by such parent company of the Company’s obligations under this
Agreement.
(d) 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 would
have the effect of impairing the rights granted to the Holders in this Agreement
or otherwise conflicts with the provisions hereof.
(e) Entire
Agreement.
This
Agreement constitutes the full and entire understanding and agreement between
the parties with regard to the subjects hereof.
(f) Notices,
etc.
All
notices or other communications which are required or permitted under this
Agreement shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, by electronic
mail, or by courier or overnight carrier, to the persons at the addresses set
forth below (or at such other address as may be provided hereunder), and shall
be deemed to have been delivered as of the date so delivered:
If
to the
Company to:
0000
Xxxxxx Xxxxxxxx Xxxxx
Xxxxx
0000
Xxxxxx,
XX 00000
Attention:
Xxxx Xxxxx, President
Facsimile:
(000) 000-0000
with
copy
to:
Barack
Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx & Xxxxxxxxx LLP
000
Xxxx
Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attn:
Xxxxxxxx Xxxxx, Esq.
Facsimile:
(000) 000-0000
After
May
28, 2007:
Barack
Xxxxxxxxxx Xxxxxxxxxx & Xxxxxxxxx LLP
000
Xxxx
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attn:
Xxxxxxxx Xxxxx, Esq.
Facsimile:
(000) 000-0000
If
to the
Purchasers:
To
each
Purchaser at the address set forth on Exhibit A
or
at
such other address as any party shall have furnished to the other parties in
writing.
(g) Delays
or Omissions.
No
delay or omission to exercise any right, power or remedy accruing to any Holder,
upon any breach or default of the Company under this Agreement, shall impair
any
such right, power or remedy of such Holder nor shall it be construed to be
a
waiver of any such breach or default, or an acquiescence therein, or of any
similar breach or default thereunder occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval
of
any kind or character on the part of any Holder of any breach or default under
this Agreement, or any waiver on the part of any Holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only
to
the extent specifically set forth in such writing. All remedies, either under
this Agreement, or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
(h) Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
enforceable against the parties actually executing such counterparts, and all
of
which together shall constitute one instrument. In the event that any signature
is delivered by facsimile transmission, such signature shall create a valid
and
binding obligation of the party executing (or on whose behalf such signature
is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
(i) Severability.
In the
case any provision of this Agreement shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall
not
in any way be affected or impaired thereby.
(j) Amendments.
The
provisions of this Agreement may be amended at any time and from time to time,
and particular provisions of this Agreement may be waived, with and only with
an
agreement or consent in writing signed by the Company and the Majority Holders.
The Purchasers acknowledge that by the operation of this Section, the Majority
Holders may have the right and power to diminish or eliminate all rights of
the
Purchasers under this Agreement.
(k) Limitation
on Subsequent Registration Rights.
After
the date of this Agreement, the Company shall not, without the prior written
consent of the Majority Holders, enter into any agreement with any holder or
prospective holder of any securities of the Company that would grant such holder
registration rights senior to those granted to the Holders
hereunder.
[SIGNATURE
PAGES FOLLOW]
This
Registration Rights Agreement is hereby executed as of the date first above
written.
|
COMPANY:
|
||
|
MODIGENE,
INC.
|
||
| |
|
|
| By: | ||
| Name: |
Xxxx Xxxxx |
|
| Its: | President | |
[SIGNATURE
PAGE OF PURCHASER FOLLOWS]
This
Registration Rights Agreement is hereby executed as of the date first above
written.
|
PURCHASER
(Individual)
|
||
|
|
||
|
(Print
Name)
|
||
|
PURCHASER
(Entity)
|
||
| |
|
|
| By: | ||
|
|
||
|
Name:
|
||
|
(Print
Name)
|
||
|
Its:
|
||
|
(Print
Title)
|
||
