REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
is
dated as of February 7, 2007, among DOR BioPharma, Inc., a Delaware corporation
(the "Company"),
and
the Investors signatory hereto (each such Investor, an “Investor”
and
collectively, the “Investors”).
This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of
the
date hereof among the Company and the Investors (the “Purchase
Agreement”).
The
Company and the Investors hereby agree as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
“Advice”
shall
have the meaning set forth in Section 6(c).
“Common
Stock”
means
the common stock of the Company, par value $.001 per share, and any securities
into which such common stock may hereafter be classified.
“Effectiveness
Date”
means,
(a) with respect to the initial Registration Statement required to be filed
hereunder, the earlier of (i) the 120th day following the Closing Date, and
(ii)
the fifth Trading Day following the date on which the Company is notified by
the
Commission that the Registration Statement will not be reviewed or is no longer
subject to further review and comments, and (b) with respect to any additional
Registration Statement(s) that may be required pursuant to Section 2(b), the
earlier of (i) the 120th day following (x) if such Registration Statement is
required because the Commission shall have notified the Company in writing
that
certain Registrable Securities were not eligible for inclusion on a previously
filed Registration Statement, the date or time on which the Commission shall
indicate as being the first date or time that such Registrable Securities may
then be included in a Registration Statement, or (y) if such Registration
Statement is required for a reason other than as described in (x) above, the
date on which the Company first knows, or reasonably should have known, that
such additional Registration Statement(s) is required and (ii) the fifth Trading
Day following the date on which the Company is notified by the Commission that
such additional Registration Statement will not be reviewed or is no longer
subject to further review and comments.
“Effectiveness
Period”
shall
have the meaning set forth in Section 2(a).
“Event”
shall
have the meaning set forth in Section 2(c).
“Event
Date”
shall
have the meaning set forth in Section 2(c).
“Filing
Date”
means,
with (a) respect to the initial Registration Statement required to be filed
hereunder, the 30th
day
after the Closing, and (b) with respect to any additional Registration
Statements that may be required pursuant to Section 2(b), the 30th
day
following (x) if such Registration Statement is required because the Commission
shall have notified the Company in writing that certain Registrable Securities
were not eligible for inclusion on a previously filed Registration Statement,
the date or time on which the Commission shall indicate as being the first
date
or time that such Registrable Securities may then be included in a Registration
Statement, or (y) if such Registration Statement is required for a reason other
than as described in (x) above, the date on which the Company first knows,
or
reasonably should have known, that such additional Registration Statements
is
required.
“Force
Majeure”
shall
mean any unusual event arising from causes reasonably beyond the control of
the
Company that could not be reasonably anticipated that causes a delay in or
prevents the performance of any obligation under this Agreement, including
but
not limited to, acts of God, fire, war, terrorism, insurrection, civil
disturbance, explosion, adverse weather conditions, unusual delay in
transportation, strikes or other labor disputes, and restraint by court order
or
order of public authority.
“Grace
Period”
shall
have the meaning set forth in Section 2(c)(iv).
“Holder”
or
“Holders”
means
the holder or holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified
Party”
shall
have the meaning set forth in Section 5(c).
“Indemnifying
Party”
shall
have the meaning set forth in Section 5(c).
“Losses”
shall
have the meaning set forth in Section 5(a).
“Proceeding”
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Prospectus”
means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Registrable
Securities”
means
all of the Shares, together with any shares of Common Stock issued or issuable
upon any stock split, dividend or other distribution, recapitalization or
similar event with respect to the foregoing.
“Registration
Statement”
means
the registration statement(s) required to be filed hereunder, including (in
each
case) the Prospectus, amendments and supplements to such registration
statement(s) or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement(s).
“Response
Date”
shall
have the meaning set forth in Section 2(c)(ii).
“Rule
415”
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.
“Rule
424”
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same purpose and
effect as such Rule.
2. Registration.
(a) On
or
prior to each Filing Date, the Company shall prepare and file with the
Commission the Registration Statement covering the resale of all of the
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement required hereunder shall be on Form
S-3
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case the Registration shall be
on
another appropriate form in accordance herewith). The Registration Statement
required hereunder shall contain (except if otherwise directed by the Holders)
the “Plan
of Distribution”
attached hereto as Annex
A.
Subject
to the terms of this Agreement, the Company shall use its best efforts to cause
the Registration Statement to be declared effective under the Securities Act
as
promptly as possible after the filing thereof, but in any event not later than
the Effectiveness Date, and shall use its best efforts to keep the Registration
Statement continuously effective under the Securities Act until the date when
all Registrable Securities covered by the Registration Statement have been
sold
or may be sold without volume restrictions pursuant to Rule 144(k) as determined
by the counsel to the Company pursuant to a written opinion letter to such
effect, addressed and acceptable to the Company’s transfer agent and the
affected Holders (the “Effectiveness
Period”).
(b) If
for
any reason the Commission does not permit all of the Shares to be included
in
the Registration Statement filed pursuant to Section 2(a), or for any other
reason any Registrable Securities are not then included in a Registration
Statement filed under this Agreement, then the Company shall prepare and file
as
soon as possible after the date on which the Commission shall indicate as being
the first date or time that such filing may be made, but in any event by its
Filing Date, an additional Registration Statement covering the resale of all
Registrable Securities not already covered by an existing and effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415. Each such Registration Statement shall contain (except if otherwise
directed by the Holders) the "Plan of Distribution" attached hereto as
Annex
A.
The
Company shall use its best efforts to cause each such Registration Statement
to
be declared effective under the Securities Act as soon as possible but, in
any
event, no later than its Effectiveness Date, and shall use its best efforts
to
keep such Registration Statement continuously effective under the Securities
Act
during its entire Effectiveness Period.
(c) If:
(i) a
Registration Statement is not filed on or prior to its Filing Date (if the
Company files a Registration Statement without affording the Holders the
opportunity to review and comment on the same as required by Section 3(a)
hereof, the Company shall not be deemed to have satisfied this clause (i)),
or
(ii) prior to the date when such Registration Statement is first declared
effective by the Commission, the Company fails to file a pre-effective amendment
and otherwise respond in writing to comments made by the Commission in respect
of such Registration Statement within 30 calendar days (the “Response
Date”)
after
the receipt of comments by or notice from the Commission that such amendment
is
required in order for such Registration Statement to be declared effective,
or
(iii) a Registration Statement filed or required to be filed hereunder is not
declared effective by the Commission on or before its Effectiveness Date, or
(iv) during the Effectiveness Period, a Registration Statement ceases for any
reason to remain continuously effective as to all Registrable Securities for
which it is required to be effective, or the Holders are not permitted to
utilize the Prospectus therein to resell such Registrable Securities, for in
any
and all such cases for more than an aggregate of 20 Trading Days (the
“Grace
Period”)
during
any 12-month period during the Effectiveness Period (which need not be
consecutive Trading Days)(any such failure or breach being referred to as an
“Event,”
and
for purposes of clause (i) or (iii) the date on which such Event occurs, or
for
purposes of clause (ii) the date which such 30 calendar days is exceeded, or
for
purposes of clause (iv) the date on which such 20 Trading Days is exceeded
being
referred to as “Event
Date”),
then
in addition to any other rights the Holders may have hereunder or under
applicable law: (x) on each such Event Date the Company shall pay to each Holder
an amount in cash, as partial liquidated damages and not as a penalty, equal
to
1.5% of the aggregate Investment Amount paid by such Holder pursuant to the
Purchase Agreement; and (y) on each monthly anniversary of each such Event
Date
(if the applicable Event shall not have been cured by such date) until the
applicable Event is cured, the Company shall pay to each Holder an amount in
cash, as partial liquidated damages and not as a penalty, equal to 1.5% of
the
aggregate Investment Amount paid by such Holder pursuant to the Purchase
Agreement. If the Company fails to pay any partial liquidated damages pursuant
to this Section in full within seven days after the date payable, the Company
will pay interest thereon at a rate of 10% per annum (or such lesser maximum
amount that is permitted to be paid by applicable law) to the Holder, accruing
daily from the date such partial liquidated damages are due until such amounts,
plus all such interest thereon, are paid in full. The partial liquidated damages
pursuant to the terms hereof shall apply on a daily pro-rata basis for any
portion of a month prior to the cure of an Event, except in the case of the
first Event Date. Notwithstanding the foregoing, any day on which a Force
Majeure has occurred or is continuing shall not count toward the calculation
of
the number of days for the Filing Date, the Effectiveness Date, the Response
Date and a Grace Period.
3. Registration
Procedures
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a) Not
less
than three Trading Days prior to the filing of a Registration Statement or
any
related Prospectus or any amendment or supplement thereto, the Company shall
furnish to the Holders copies of the “Selling Stockholders” section of such
document, the “Plan of Distribution” and any risk factor contained in such
document that addresses specifically this transaction or the Selling
Stockholders, as proposed to be filed which documents will be subject to the
review of such Holders. The Company shall not file a Registration Statement
or
any such Prospectus or any amendments or supplements thereto that does not
contain the disclosure regarding such Holder as a “Selling Stockholder” as
provided to the Company by such Holder in connection therewith.
(b)
(i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep the Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of
the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented
or
amended to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably possible to any comments received from the Commission with respect
to
the Registration Statement or any amendment thereto and, as promptly as
reasonably possible, upon request, provide the Holders true and complete copies
of all correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of
the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement (to the extent
such
provisions are applicable to the Company). Notwithstanding anything else
contained herein to the contrary, the Company shall not provide any material,
nonpublic information to the Holders.
(c) Notify
the Holders of Registrable Securities as promptly as reasonably possible (and,
in the case of (i)(A) below, not less than two Trading Days prior to such
filing) and (if requested by any such Person) confirm such notice in writing
promptly following the day (i)(A) when a Prospectus or any Prospectus supplement
or post-effective amendment to the Registration Statement is proposed to be
filed; (B) when the Commission notifies the Company whether there will be a
“review” of the Registration Statement and whenever the Commission comments in
writing on the Registration Statement (the Company shall provide copies thereof
and all written responses thereto to each of the Holders to the extent such
materials address the Selling Stockholder or Plan of Distribution sections
of
such Registration Statement, and to the extent they address risk factors or
other disclosure in such Registration Statement particular to the Holder or
the
transactions contemplated hereby); and (C) with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other Federal or state governmental
authority during the period of effectiveness of the Registration Statement
for
amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of the Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of
any
event or passage of time that makes the financial statements included in the
Registration Statement ineligible for inclusion therein or any statement made
in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material
fact
or omit to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading.
(d) Use
reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of the Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(e) Deliver
to each Holder, by 9:00 a.m. (New York City time) on the date following the
Effective Date, without charge, as many copies of the Prospectus or Prospectuses
(including each form of prospectus) and each amendment or supplement thereto
as
such Persons may reasonably request in connection with resales by the Holder
of
Registrable Securities. Subject to the terms of this Agreement, the Company
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders in connection with the offering and
sale
of the Registrable Securities covered by such Prospectus and any amendment
or
supplement thereto, subject to notices pursuant to Section 3(c).
(f) Prior
to
any resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the selling Holders
in connection with the registration or qualification (or exemption from the
Registration or qualification) of such Registrable Securities for the resale
by
the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep the
Registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement; provided,
that
the Company shall not be required to qualify generally to do business or file
a
general consent to service of process in any jurisdiction where it is not then
so qualified.
(g) If
requested by the Holders, cooperate with each Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
to
be delivered to a transferee pursuant to the Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement,
of all restrictive legends, and to enable such Registrable Securities to be
in
such denominations and registered in such names as any such Holders may
request.
(h) Upon
the
occurrence of any event contemplated by this Section 3, as promptly as
commercially reasonably possible under the circumstances taking into account
the
Company’s good faith assessment of any adverse consequences to the Company and
its stockholders of the premature disclosure of such events, prepare a
supplement or amendment, including a post-effective amendment, to the
Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus will contain an untrue statement
of a
material fact or omit to state a material fact required to be stated therein
or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. If
the
Company notifies the Holders in accordance with clauses (ii) through (v) of
Section 3(c) above to suspend the use of any Prospectus until the requisite
changes to such Prospectus have been made, then the Holders shall suspend use
of
such Prospectus. The Company will use its best efforts to ensure that the use
of
the Prospectus may be resumed as promptly as is commercially practicable. The
Company shall be entitled to exercise its right under this Section 3(h) to
suspend the availability of a Registration Statement and Prospectus, subject
to
the payment of liquidated damages pursuant to Section 2(c), for a period not
to
exceed 60 days (which need not be consecutive days) in any 12 month
period.
(i) Comply
with all applicable rules and regulations of the Commission.
(j) Each
Holder agrees to furnish to the Company a completed Questionnaire in the form
attached to this Agreement as Annex
B
(a
“Selling
Holder Questionnaire”).
The
Company shall not be required to include the Registrable Securities of a Holder
in a Registration Statement and shall not be required to pay any liquidated
or
other damages under Section 2(c) to such Holder who fails to furnish to the
Company a fully completed Selling Holder Questionnaire at least one Trading
Day
prior to the Filing Date (subject to the requirements set forth in Section
3(a)).
(k) Upon
notification by the Commission that a Registration Statement will not be
reviewed or is no longer subject to further review and comments, the Company
shall request acceleration of such Registration Statement such that it becomes
effective at 5:00 p.m. (New York City time) on the Effective Date.
4. Registration
Expenses.
All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The
fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
Principal Market on which the Common Stock is then listed for trading, and
(B)
in compliance with applicable state securities or Blue Sky laws), (ii) printing
expenses (including, without limitation, expenses of printing certificates
for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for
the
Company, (v) Securities Act liability insurance, if the Company so desires
such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated
by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation,
all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange or market as required hereunder. In no event shall the
Company be responsible for any broker or similar commissions of the
Holders.
5. Indemnification
(a) Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless each Holder, the officers, directors, agents and employees of
each
of them, each Person who controls any such Holder (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable
attorneys' fees) and expenses (collectively, “Losses”),
as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained in the Registration Statement, any Prospectus
or
any form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus
or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (i) such
untrue statements or omissions are based solely upon information regarding
such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use
in
the Registration Statement, such Prospectus or such form of Prospectus or in
any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose), (ii) in the case of an occurrence
of
an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder
of an outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior to
the
receipt by such Holder of the Advice or an amended or supplemented Prospectus,
but only if and to the extent that following the receipt of the Advice or the
amended or supplemented Prospectus the misstatement or omission giving rise
to
such Loss would have been corrected or (iii) such Holder fails to comply with
any applicable prospectus delivery requirements of the Securities Act applicable
to it in connection with sales of Registrable Securities pursuant to a
Registration Statement. The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding of which the Company is
aware
in connection with the transactions contemplated by this Agreement.
(b) Indemnification
by Holders.
Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of
such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses, as incurred, arising solely out of or based solely
upon: (x) such Holder's failure to comply with the prospectus delivery
requirements of the Securities Act to the extent that delivery of such
Prospectus would have avoided such Loss or (y) any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement thereto
or in any preliminary prospectus, or arising solely out of or based solely
upon
any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading to the
extent, but only to the extent, that such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to
the
Company by such Holder expressly for use therein. In no event shall the
liability of any selling Holder hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification
obligation.
(c) Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”),
such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying
Party”)
in
writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to
the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have proximately and materially prejudiced the Indemnifying
Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to
such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party
(in
which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense
thereof and the reasonable fees and expenses of up to an aggregate of three
separate counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent. No Indemnifying Party shall, without
the
prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party
from
all liability on claims that are the subject matter of such
Proceeding.
Subject
to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in
a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party; provided,
that
the Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is not entitled to indemnification hereunder, determined
based
upon the relative faults of the parties.
(d) Contribution.
If a
claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in this Section 5, any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which
the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that
such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission or other act in question.
No
party
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of
the Securities Act) shall be entitled to contribution from any party that was
not guilty of such fraudulent misrepresentation.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
6. Miscellaneous
(a) Remedies.
In the
event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under
this
Agreement, including recovery of damages, will be entitled to specific
performance 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 waive the defense
that
a remedy at law would be adequate.
(b) Compliance.
Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.
(c) Discontinued
Disposition.
Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the
kind
described in Section 3(c), such Holder will forthwith discontinue disposition
of
such Registrable Securities under the Registration Statement until such Holder's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement or until it is advised in writing (the “Advice”)
by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company will use its best efforts to ensure that
the
use of the Prospectus may be resumed as promptly as is commercially practicable.
The
Company agrees and acknowledges that any periods during which the Holder is
required to discontinue the disposition of the Registrable Securities hereunder
shall be subject to the provisions of Section 2(c).
(d) Piggy-Back
Registrations.
If at
any time during the Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under
the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with the stock option or other employee benefit plans, then the
Company shall send to each Holder a written notice of such determination and,
if
within fifteen days after the date of such notice, any such Holder shall so
request in writing, the Company shall include in such registration statement
all
or any part of such Registrable Securities such Holder requests to be
registered, subject to customary underwriter cutbacks applicable to all holders
of registration rights.
(e) No
Piggyback on Registration Statement.
Except
as set forth in Schedule
6(e),
neither
the Company nor any of its security holders (other than the Holders in such
capacity pursuant hereto) may include securities of the Company in a
Registration Statement other than the Registrable Securities, and the Company
shall not after the date hereof enter into any agreement providing any such
right to any of its security holders.
(f) Amendments
and Waivers.
No
provision of this Agreement may be waived or amended except in a written
instrument signed by the Company and the Investors holding a majority of the
Registrable Securities. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.
(g) Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be made in accordance with the provisions of the
Purchase Agreement.
(h) Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties and shall inure to the benefit of
each
Holder. Each Holder may assign their respective rights hereunder in the manner
and to the Persons as permitted under the Purchase Agreement. The Company may
not assign its rights or obligations hereunder.
(i) Execution
and Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
(j) Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be determined with the provisions of the Purchase
Agreement.
(k) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
(l) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable best efforts
to find and employ an alternative means to achieve the same or substantially
the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(n) Independent
Nature of Holders' Obligations and Rights.
The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible
in
any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered at
any
closing, and no action taken by any Holder pursuant hereto or thereto, shall
be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder acknowledges that
no
other Holder has acted as agent for such Holder in connection with executing
this Agreement and that no Holder will be acting as agent of such Holder in
connection with monitoring the registration of the Registrable Securities or
enforcing its rights under this Agreement. Each Holder shall be entitled to
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Holder to
be
joined as an additional party in any Proceeding for such purpose. The Company
acknowledges that each of the Investors has been provided with the same
Transaction Documents and will likely have their respective Registrable
Securities included on the same Registration Statement, for the purpose of
closing a transaction with multiple Investors and not because it was required
or
requested to do so by any Investor.
*************************
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
DOR
BIOPHARMA, INC.
By:
/s/
Xxxxxxxxxxx X. Xxxxxxx
Name:
Xxxxxxxxxxx X. Xxxxxxx
Title:
Chief Executive Officer
[SIGNATURE
PAGE OF HOLDERS FOLLOWS]
[INVESTOR
SIGNATURE PAGE TO DOR RRA]
Name
of
Investing Entity: __________________________
Signature
of Authorized Signatory of Investing entity:
__________________________
Name
of
Authorized Signatory: _________________________
Title
of
Authorized Signatory: __________________________
By:_/s/Xxxxxx
Butts__________
Name: Xxxxxx
Xxxxx
|
Title:
|
Managing
Member
|
Southpoint
Master Fund
By:_/s/Xxxxxxxxxxx
X. Xxxxxxx and Xxxxxxxx Xxxxxxx
|
Name:
|
Xxxxxxxxxxx
X. Xxxxxxx and Xxxxxxxx Xxxxxxx
|
|
Title:
|
By:_/s/Xxxx
Xxxxxxxxxxxxxxx and Xxxxxxxxxxx Xxxxxxxxxxxxxxx JTWROS
|
Name:
|
Xxxx
Xxxxxxxxxxxxxxx and Xxxxxxxxxxx Xxxxxxxxxxxxxxx
JTWROS
|
|
Title:
|
By:_/s/Xxxxxx
Xxxxxxxxxxxxxxx and Xxxxxxxxx Xxxxxxxxxxxxxxx
|
Name:
|
Xxxxxx
Xxxxxxxxxxxxxxx and Xxxxxxxxx Xxxxxxxxxxxxxxx
|
|
Title:
|
By:_/s/Xxxxx
Xxxxxxx
|
Name:
|
Xxxxx
Xxxxxxx
|
|
Title:
|
By:_/s/Xxxxx
X. Xxxxxx
|
Name:
|
Xxxxx
X. Xxxxxx
|
|
Title:
|
By:_/s/Xxxxxx
Xxxxxxx
|
Name:
|
Xxxxxx
Xxxxxxx
|
Director
Firebird
Global Master Fund
|
Title:
|
By:_/s/Xxxxxxx
X. Xxxxxxx
|
Name:
|
Xxxxxxx
X. Xxxxxxx
|
|
Title:
|
By:_/s/Xxxxxx
X. Xxxxxxxx
|
Name:
|
Xxxxxx
X. Xxxxxxxx
|
|
Title:
|
By:_/s/Xxxxx
Xxxxxxx
|
Name:
|
Xxxxx
Xxxxxxx
|
By:_/s/Xxxxxxx
Xxxxxxx
|
Name:
|
Xxxxxxx
Xxxxxxx
|
|
Title:
|
By:_/s/Xxxx
Xxxxxxx
|
Name:
|
Xxxx
Xxxxxxx
|
By:_/s/Xxxxxxx
X. Xxxxxxx
|
Name:
|
Xxxxxxx
X. Xxxxxxx
|
Schedule
6(e)
As
per
issued warrants:
|
Bristol
Investment Partners LPI
|
62,500
|
|
Xxxxxx
X. Xxxxxxxx
|
37,500
|
|
Crystal
Research
|
150,000
|
|
Xxxxx
Xxxxxxx
|
85,000
|
|
Xxxx
Xxxxxxxxx
|
85,000
|
|
Xxxxxxx
Xxxxx
|
40,000
|
|
Xxxxx
Xxxxxxxx
|
40,000
|
|
TOTAL
|
500,000
|
As
per
issued unregistered shares:
|
Sigma
Tau
|
4,065,041
|
|
Alpha
Capital AG
|
134,781
|
|
Platinum
Partners
|
272,861
|
|
Xxxxxxx
Xxxxxxx
|
227,384
|
|
Iroquois
Master Fund LTD
|
204,545
|
|
Little
Gem Life Sciences Fund, LLC
|
45,477
|
|
Xx
Xxxxx
|
45,477
|
|
Xxxxxx
Xxxx
|
11,369
|
|
Xxxx
Xxxxxxxxxxxxxxx
|
11,369
|
|
Xxxxxx
Xxxxxxxxxxxxxxx
|
9,095
|
|
Xxxxx
Xxxxxxx
|
7,580
|
|
Xxxx
Xxxxxxx
|
7,580
|
|
Xxxxxxx
Xxxxxxx
|
7,580
|
|
Xxxxxxx
Xxxxxx
|
6,301
|
|
Xxx
Xxxxxxxxxx
|
4,548
|
|
Voisin
Consulting
|
312,500
|
|
Xxxx
Xxxxxx
|
60,000
|
|
BMC
Communications Group
|
142,857
|
|
TOTAL
|
5,576,345
|
ANNEX
A
Plan
of
Distribution
The
selling stockholders and any of their pledgees, donees, transferees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales may be
at
fixed or negotiated prices. The selling stockholders may use any one or more
of
the following methods when selling shares:
| · |
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits investors;
|
| · |
block
trades in which the broker-dealer will attempt to sell the shares as
agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
| · |
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
| · |
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
| · |
privately
negotiated transactions;
|
| · |
to
cover short sales and other hedging transactions made after the date
that
the registration statement of which this prospectus is a part is declared
effective by the Securities and Exchange
Commission;
|
| · |
broker-dealers
may agree with the selling stockholders to sell a specified number
of such
shares at a stipulated price per share;
|
| · |
a
combination of any such methods of sale;
and
|
| · |
any
other method permitted pursuant to applicable
law.
|
The
selling stockholders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus.
Broker-dealers
engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling stockholders (or, if any broker-dealer acts as agent for the
investor of shares, from the purchaser) in amounts to be negotiated. The selling
stockholders do not expect these commissions and discounts to exceed what is
customary in the types of transactions involved.
The
selling stockholders may from time to time pledge or grant a security interest
in some or all of the Shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell shares of common stock from time to time under this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
Upon
our
being notified in writing by a selling stockholder that any material arrangement
has been entered into with a broker-dealer for the sale of common stock through
a block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, a supplement to this prospectus will
be
filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing
(i) the name of each such selling stockholder and of the participating
broker-dealer(s), (ii) the number of shares involved, (iii) the price at
which
such shares of common stock were sold, (iv) the commissions paid or discounts
or
concessions allowed to such broker-dealer(s), where applicable, (v) that
such
broker-dealer(s) did not conduct any investigation to verify the information
set
out or incorporated by reference in this prospectus, and (vi) other facts
material to the transaction. In addition, upon our being notified in writing
by
a selling stockholder that a donee or pledge intends to sell more than 500
shares of common stock, a supplement to this prospectus will be filed if
then
required in accordance with applicable securities law.
The
selling stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors
in
interest will be the selling beneficial owners for purposes of this
prospectus.
The
selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be "underwriters" within the meaning of
the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Discounts, concessions, commissions and
similar selling expenses, if any, that can be attributed to the sale of
securities will be paid by the selling stockholders and/or the purchasers of
the
securities.
Each
selling stockholder that is affiliated with a registered broker-dealer has
confirmed to us that, at the time it acquired the securities subject to the
registration statement of which this prospectus is a part, it did not have
any
agreement or understanding, directly or indirectly, with any person to
distribute any of such securities. The Company has advised each selling
stockholder that it may not use shares registered on the registration statement
of which this prospectus is a part to cover short sales of our common stock
made
prior to the date on which such registration statement was declared effective
by
the SEC.
We
are
required to pay certain fees and expenses incident to the registration of the
shares. We have agreed to indemnify the selling stockholders against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act. We agreed to keep this prospectus effective until the earlier
of
(i) the date on which the shares may be resold by the selling stockholders
without registration and without regard to any volume limitations by reason
of
Rule 144(e) under the Securities Act or any other rule of similar effect and
(ii) such time as all of the shares have been publicly sold.
Annex
B
DOR
BIOPHARMA, INC.
Selling
Securityholder Questionnaire
The
undersigned beneficial owner of shares of Common Stock (the “Registrable
Securities”)
of DOR
BioPharma, Inc. (the “Company”)
understands that the Company has filed or intends to file with the Securities
and Exchange Commission a registration statement (the “Registration
Statement”)
for the
registration and resale under the Securities Act of 1933, as amended (the
“Securities
Act”),
of the
Registrable Securities. This Questionnaire is delivered pursuant to the terms
of
the Registration Rights Agreement, dated as of February ____, 2007 (the
“Registration
Rights Agreement”),
among
the Company and the Investors named therein. A copy of the Registration Rights
Agreement is available from the Company upon request at the address set forth
below. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Registration Rights Agreement.
Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus.
The
undersigned beneficial owner (the “Selling
Securityholder”)
of
Registrable Securities hereby elects to include the Registrable Securities
owned
by it and listed below in Item 3 (unless otherwise specified under such Item
3)
in the Registration Statement.
The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
1. Name.
|
(a)
|
Full
Legal Name of Selling
Securityholder
|
|
(b)
|
Full
Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are
held:
|
|
(c)
|
Full
Legal Name of each Control Person (which means a natural person that
directly or indirectly has power to vote or dispose of the securities
covered by this Questionnaire):
|
2.
Address for Notices to Selling Securityholder:
|
Telephone:
|
|
Fax:
|
|
Contact
Person:
|
3.
Beneficial Ownership of Registrable Securities:
|
(a)
|
Type
and Principal Amount of Registrable Securities beneficially
owned:
|
4.
Broker-Dealer Status:
|
(a)
|
Are
you a broker-dealer?
|
Yes
No
|
Note:
|
If
yes, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
|
(b)
|
Are
you an affiliate of a
broker-dealer?
|
Yes
No
|
(c)
|
If
you are an affiliate of a broker-dealer, do you certify that you
bought
the Registrable Securities in the ordinary course of business, and
at the
time of the purchase of the Registrable Securities to be resold,
you had
no agreements or understandings, directly or indirectly, with any
person
to distribute the Registrable
Securities?
|
Yes
No
|
Note:
|
If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
5.
Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.
Except
as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
|
(a)
|
Type
and Amount of Other Securities beneficially owned by the Selling
Securityholder:
|
6.
Relationships with the Company:
Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.
State
any
exceptions here:
7. Claims
against the Company:
Except
as set forth below, to the actual knowledge of the officers and directors or
persons performing similar functions for the undersigned, neither the
undersigned nor any of its Affiliates, officers, directors or principal equity
holders (owners of 5% or more of the equity securities of the undersigned)
has
any claims against the Company, its directors, officers, agents and employees,
and each Person who controls the Company (within the meaning of Section 15
of
the Securities Act and Section 20 of the Exchange Act) relating to the Company’s
sale of Registrable Securities to the undersigned.
State
any
exceptions here:
________________________________________________________________________________________________________________________________________________________________________________________________________________________
The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein (other than changes in beneficial ownership
of Common Stock after the effectiveness of the Registration Statement) that
may
occur subsequent to the date hereof at any time prior to the effectiveness
of
the Registration Statement or while the Registration Statement remains
effective.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers hereto and the inclusion of such information
in
the Registration Statement and the related prospectus and any amendments or
supplements thereto. The undersigned understands that such information will
be
relied upon by the Company in connection with the preparation or amendment
of
the Registration Statement and the related prospectus.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.
Dated:
Beneficial
Owner:
By:
Name:
Title:
PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED QUESTIONNAIRE, AND RETURN THE ORIGINAL
BY OVERNIGHT MAIL, TO:
Xxxxxx
X. Xxxxxxx
Xxxxxxx
Xxxxxx Xxxxxx & Dodge, LLP
000
X. Xxx Xxxx Xxxxxxxxx
Xxxxx
0000
Xxxx
Xxxxxxxxxx, XX 00000-0000
Fax
No. (000) 000-0000
