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EXHIBIT 10(lxxi)
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
March 17, 1999, is made and entered into between VIRAGEN, INC., a Delaware
corporation (the "Company"), and Ballsbridge Finance, Limited, Xxxxxxx, Xxxx &
Associates, Inc. and Ven-Gua Capital Markets Ltd. (the "Holders").
WHEREAS, the Company has issued to the Holders Warrants, which Warrants
are exercisable for common stock of the Company (the "Registerable Securities");
WHEREAS, the Company has agreed to provide the Holders with certain
registration rights with respect to the Registrable Securities;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, intending to be legally bound
hereby, the parties hereto agree as follows (capitalized terms used herein and
not defined herein shall have the meaning ascribed to such terms in the Purchase
Agreement dated as of the date hereof between the Company and The Isosceles Fund
Limited and Cefeo Investments Limited):
ARTICLE I
REGISTRATION RIGHTS
Section 1.1. REGISTRATION STATEMENT.
(a) FILING OF REGISTRATION STATEMENT. Subject to the terms and
conditions of this Agreement, the Company shall file with the SEC within 20 days
following the Initial Purchase Date a registration statement on Form S-3 under
the Securities Act for the registration of the Registerable Securities for
resale by the Holders to the public (each a "Registration Statement").
(b) FAILURE TO FILE REGISTRATION STATEMENT. In the event that a
Registration Statement is not filed within 20 days following each issuance of
the Redeemable Convertible Notes (the "Purchase Date"), the Company will pay a
penalty in cash pro rata to the Holders in the amount of two percent of the
Penalty Amount (as defined below) and an additional penalty of two percent in
cash at the end of each 30 day period thereafter until the Registration
Statement is filed with the SEC (pro-rated for each period less than 30 days).
(c) EFFECTIVENESS OF THE REGISTRATION STATEMENT. The Company shall use
its reasonable best efforts to have the Registration Statement declared
effective by the SEC by no later than 90 days following the Purchase Date if
there are no comments from the SEC, and 105 days if there are comments from the
SEC and to ensure that the Registration Statement remains in effect throughout
the term of this Agreement as set forth in Section 11.2, subject to the terms
and conditions of this Agreement; PROVIDED, HOWEVER, that if the Purchase
Agreement shall be
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terminated in accordance with Section 11.2 thereof, the Company shall have no
further obligation to cause the Registration Statement to become effective.
(d) FAILURE TO HAVE REGISTRATION STATEMENT DECLARED EFFECTIVE. In the
event that the Registration Statement is not effective within 90 days after the
Purchase Date, if there are no comments from the SEC, and 105 days after the
Purchase Date if there are comments from the SEC (the "Registration Period"),
then the Company will pay a penalty pro rata to the Holders of two percent of
the Penalty Amount in cash and an additional penalty of two percent of the
Penalty Amount in cash at the end of each 30 day period thereafter (pro-rated
for each period less than 30 days).
(e) FAILURE TO MAINTAIN EFFECTIVENESS OF REGISTRATION STATEMENT OR
LISTING. In the event the Company fails to maintain the effectiveness of the
Registration Statement (or the underlying prospectus) throughout the period set
forth in Section 4.2, other than temporary suspensions as set forth in Section
2.1(i), and the Holders hold any Registrable Securities at any time during the
period of such ineffectiveness (an "Ineffective Period") or the Company fails to
maintain the listing of its Common Stock on NASDAQ, the Company shall pay a
penalty pro rata to the Holders of two percent of the Penalty Amount in cash and
an additional penalty of two percent of the Penalty Amount in cash at the end of
each 30 day period thereafter (pro-rated for each period less than 30 days).
(f) REDEMPTION UPON FAILURE TO MAINTAIN EFFECTIVENESS. At any time
after 180 days following the Initial Purchase Date, provided that: (A) the
Registration Statement is not yet effective; or (B) the Registration Statement
ceases to be effective for 30 consecutive business days or a total of 60
business days during any 12 month period, the Holders will have the right to
require the Company within 30 days of a written notice from a Holder to the
Company to redeem all such Holder's Notes and Warrants and such Common Stock as
has been received upon conversion or exercise for a cash price equal to the
greater of: (A) "Parity" where Parity is defined as (A1) the number of shares
that the Notes and Warrants can be converted into plus the number of Common
Stock already so converted but not resold, multiplied by (A2) the high trade
price of the Company's Common Stock on the date of such notice; or (B) the sum
of (B1) 115% of the Penalty Amount (as defined below), and (B2) the amount of
all other penalties outstanding up to the date of the notice.
(g) LIQUIDATED DAMAGES. The parties hereto acknowledge and agree that
the sums payable under Sections 1(d),(e) and (f) above shall constitute
liquidated damages and not penalties. The parties further acknowledge that (a)
the amount of loss or damages likely to be incurred is incapable or is difficult
to precisely estimate, (b) the amounts specified in such Sections bear a
reasonable proportion and are not plainly or grossly disproportionate to the
probable loss likely to be incurred in connection with any failure by the
Company to obtain or maintain the effectiveness of a Registration Statement, (c)
one of the reasons for the parties reaching an agreement as to such amounts was
the uncertainty and cost of litigation regarding the question of actual damages,
and (d) the parties are sophisticated business parties and have been represented
by legal and financial counsel and negotiated this Agreement at arm's length.
(h) THE PENALTY AMOUNT. The Penalty Amount shall be (a) with respect to
any common stock converted from Notes, the principal amount of such converted
Notes, plus (b)
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with respect to common stock received upon exercise of Warrants, the Closing
Market Price relating to such Warrants and (c) the principal amount of any
outstanding and unconverted Notes; provided that no common stock sold by such
Holder shall be included in the Penalty Amount.
ARTICLE II
REGISTRATION PROCEDURES
Section 2.1. FILINGS; INFORMATION. The Company will effect the registration and
sale of the Registrable Securities in accordance with the intended methods of
disposition thereof. Without limiting the foregoing, the Company will do the
following as expeditiously as possible, but in no event later than the deadline,
if any, prescribed therefor in this Agreement:
(a) The Company shall (i) prepare and file with the SEC a Registration
Statement on Form S-3 (if use of such form is then available to the Company
pursuant to the rules of the SEC and, if not, on such other form promulgated by
the SEC for which the Company then qualifies and which counsel for the Company
shall deem appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with the
provisions of this Agreement and in accordance with the intended method of
distribution of the Registrable Securities); (ii) use reasonable best efforts to
cause such filed Registration Statement to become and remain effective (pursuant
to Rule 415 under the Act or otherwise); (iii) prepare and file with the SEC
such amendments and supplements to the Registration Statement and the prospectus
used in connection therewith as may be necessary to keep the Registration
Statement effective for the time periods prescribed by Section 1.1(b); and (iv)
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by the Registration Statement during such period in
accordance with the intended methods of disposition by the Holders set forth in
the Registration Statement. The number of shares of Common Stock to be
registered shall be sufficient to cover the Company's obligations under the
Purchase Agreement and, in any case, shall be at least 155,339 shares of Common
Stock with respect to sales by the Holders.
(b) The Company shall file all necessary amendments to the Registration
Statement in order to effectuate the purpose of this Agreement and the Purchase
Agreement.
(c) If so requested by the managing underwriters, if any, or the
holders of a majority in aggregate principal amount of the Registrable
Securities being sold in connection with the filing of the Registration
Statement under the Securities Act for the offering on a continuous or delayed
basis in the future of all of the Registrable Securities (a "Shelf
Registration"), the Company shall (i) promptly incorporate in a prospectus
supplement or post-effective amendment such information as the managing
underwriters, if any, and such holders agree should be included therein, and
(ii) make all required filings of such prospectus supplement or post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such prospectus supplement or post-effective
amendment; provided, however, that the Company shall not be required to take any
action pursuant to this Section 2.1(c)(ii) that would, in the opinion of counsel
for the Company, violate applicable law.
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(d) In connection with the filing of a Shelf Registration, the Company
shall enter into such agreements and take all such other reasonable actions in
connection therewith (including those reasonably requested by the managing
underwriters, if any, or the holders of a majority in aggregate principal amount
of the Registrable Securities being sold) in order to expedite or facilitate the
disposition of the Registrable Securities, and in such connection, whether or
not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration, (i) make such representations and
warranties to the holders of the Registrable Securities and the underwriters, if
any, with respect to the business of the Company (including with respect to
businesses or assets acquired or to be acquired by the Company), and the
Registration Statement, prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings, and confirm such representations and warranties if and when
requested; (ii) if an underwriting agreement is entered into, the same shall
contain indemnification provision and procedures no less favorable to the
selling holders of the Registrable Securities and the underwriters, if any, than
those set forth herein (or such other provisions and procedures acceptable to
the holders of a majority in aggregate principal amount of Registrable
Securities covered by the Registration Statement and the managing underwriters,
if any); and (iii) deliver such documents and certificates as may be reasonably
requested by the holders of a majority in aggregate principal amount of the
Registrable Securities being sold, their counsel and the managing underwriters,
if any, to evidence the continued validity of their representations and
warranties made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company.
(e) Five Business Days prior to filing the Registration Statement or
prospectus, or any amendment or supplement thereto (excluding amendments deemed
to result from the filing of documents incorporated by reference therein), the
Company shall deliver to the Holders, in accordance with the notice provisions
of Section 4.8, copies of the Registration Statement as proposed to be filed,
together with exhibits thereto, which documents will be subject to review by
such parties, and thereafter deliver to the Holders, in accordance with the
notice provisions of Section 4.8, copies of any correspondence with the SEC, and
further deliver such number of copies of the Registration Statement, each
amendment and supplement thereto (in each case including all exhibits thereto),
the prospectus included in the Registration Statement (including each
preliminary prospectus) and such other documents or information as the Holders
may reasonably request in order to facilitate the disposition of the Registrable
Securities.
(f) The Company shall deliver, in accordance with the notice provisions
of Section 4.8, to each seller of Registrable Securities covered by the
Registration Statement such number of conformed copies of the Registration
Statement and of each amendment and supplement thereto (in each case including
all exhibits and documents incorporated by reference), such number of copies of
the prospectus contained in the Registration Statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus file
under Rule 424 promulgated under the Securities Act relating to such seller's
Registrable Securities, and such other documents, as such seller may reasonably
request to facilitate the disposition of its Registrable Securities.
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(g) After the filing of the Registration Statement, the Company shall
promptly notify the Holders of any stop order issued or threatened by the SEC in
connection therewith and the resolution thereof and use its best efforts to
prevent the entry of such stop order or to remove it if entered.
(h) The Company shall (i) register or qualify the Registrable
Securities under such other securities or blue sky laws of such jurisdictions in
the United States as the Holders may reasonably (in light of their intended plan
of distribution) request, and (ii) cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
in the United States as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may be
reasonably necessary or advisable to enable the Holders to consummate the
disposition of the Registrable Securities; provided that the Company will not be
required to qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this paragraph (h), subject itself
to taxation in any such jurisdiction, or consent or subject itself to general
service of process in any such jurisdiction.
(i) The Company shall immediately notify the Holders upon the
occurrence of any of the following events in respect of a Registration Statement
or related prospectus in respect of an offering of Registrable Securities: (i)
receipt of any request for additional information by the SEC or any other
federal or state governmental authority during the period of effectiveness of
the Registration Statement for additional information, amendments or supplements
to the Registration Statement or related prospectus; (ii) the issuance by the
SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; (iii) receipt 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; (iv) the happening of any event
that makes any statement made in the Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in the Registration Statement, related prospectus or documents so that,
in the case of the Registration Statement, 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 not misleading, and
that in the case of the related prospectus, 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 the light of the
circumstances under which they were made, not misleading; (v) the Company's
reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate; and the Company will promptly make available to
the Holders any such supplement or amendment to the related prospectus and (vi)
the Effective Date of such Registration Statement (such notification to be made
by facsimile) with a copy to any other parties set forth in Section 4.8 below.
(j) The Company shall enter into customary agreements and take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities (whereupon the Holders may, at their
option, require that any or all of the representations, warranties and covenants
of the Company also be made to and for the benefit of the Holders).
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(k) The Company shall make available to the Holders, subject to
restrictions imposed by the United States federal government or any agency or
instrumentality thereof, copies of all correspondence between the SEC and the
Company, its counsel or auditors and will also make available for inspection by
the Holders and any attorney, accountant or other professional retained by the
Holders (collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Company's officers and employees to
supply all information reasonably requested by any Inspectors in connection with
the Registration Statement. Records that the Company determines, in good faith,
to be confidential and which it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in the Registration
Statement or (ii) the disclosure or release of such Records is requested or
required pursuant to oral questions, interrogatories, requests for information
or documents or a subpoena or other order from a court of competent jurisdiction
or other process; provided that prior to any disclosure or release pursuant to
clause (ii), the Inspectors shall provide the Company with prompt notice of any
such request or requirement so that the Company may seek an appropriate
protective order or waive such Inspectors' obligation not to disclose such
Records; and, provided further, that if failing the entry of a protective order
or the waiver by the Company permitting the disclosure or release of such
Records, the Inspectors, upon advice of counsel, are compelled to disclose such
Records, the Inspectors may disclose that portion of the Records which counsel
has advised the Inspectors that the Inspectors are compelled to disclose. The
Holders agree that information obtained by them solely as a result of such
inspections (not including any information obtained from a third party who,
insofar as is known to the Holders after reasonable inquiry, is not prohibited
from providing such information by a contractual, legal or fiduciary obligation
to the Company) shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company or its
affiliates unless and until such information is made generally available to the
public. The Holders further agree that they will, upon learning that disclosure
of such Records is sought in a court of competent jurisdiction, give notice to
the Company and allow the Company, at its expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential.
(l) The Company shall deliver, in accordance with the notice provisions
of Section 4.8, to the Holders a signed counterpart, addressed to each Holder,
of (1) an opinion or opinions of counsel to the Company, and (2) to the extent
required by law or reasonably necessary to effect a sale of Registrable
Securities in accordance with prevailing business practices at the time of any
sale of Registrable Securities pursuant to a Registration Statement, a comfort
letter or comfort letters from the Company's independent public accountants,
each in customary form and covering such matters of the type customarily covered
by opinions or comfort letters, as the case may be, as the Holders therefor
reasonably requests.
(m) The Company shall otherwise comply with all applicable rules and
regulations of the SEC, including, without limitation, compliance with
applicable reporting requirements under the Exchange Act.
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(n) The Company shall appoint a transfer agent and registrar for all
Registrable Securities covered by a Registration Statement not later than the
effective date of the Registration Statement.
(o) The Company may require the Holders to promptly furnish in writing
to the Company such information as may be legally required in connection with
the registration including, without limitation, all such information as may be
requested by the SEC or the National Association of Securities Dealers. The
Holders agree to provide such information requested in connection with the
registration within ten business days after receiving such written request and
the Company shall not be responsible for any delays in obtaining or maintaining
the effectiveness of the Registration Statement caused by the Holders' failure
to timely provide such information.
(p) The Company shall hold in confidence and not make any disclosure of
information concerning the Holders provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities law,
(ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, or (iv) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it shall, upon
learning that disclosure of such information concerning a Holder is sought in or
by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to such investor prior to making such disclosure, and
allow such Holder, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for such information.
(q) The Company shall ensure the continued quotation of the Registrable
Securities on NASDAQ and the coverage of the Registrable Securities by at least
two market makers.
(r) The Company shall cooperate with the Holders and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends) representing
Registrable Securities to be offered pursuant to a Registration Statement and
enable such certificates to be in such denominations or amounts, as the case may
be, as the managing underwriter or underwriters, if any, or the Holders may
reasonably request and registered in such names as the managing underwriter or
underwriters, if any, or the Holders may request, and the Company shall deliver
to the transfer agent for the Registrable Securities (with copies to the
Holders) an instruction in the form attached as Exhibit F to the Purchase
Agreement in the period specified therein.
(s) The Company shall not, and shall not agree to, allow the holders of
any securities of the Company to include any of their securities in any
Registration Statement under Section 2(a) hereof or any amendment or supplement
thereto hereof without the consent of the holders of a majority-in-interest of
the Registrable Securities.
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(t) The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Subscibers of Registrable Securities
pursuant to a Registration Statement.
Section 2.2. REGISTRATION EXPENSES. In connection with each Registration
Statement, the Company shall pay all registration expenses incurred in
connection with the registration thereunder (the "Registration Expenses"),
including, without limitation: (i) all registration, filing, securities exchange
listing and fees required by the National Association of Securities Dealers,
(ii) all registration, filing, qualification and other fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iii) all word processing, duplicating, printing,
messenger and delivery expenses, (iv) the Company's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) the fees and expenses
incurred in connection with the listing of the Registrable Securities, (vi)
reasonable fees and disbursements of counsel for the Company and customary fees
and expenses for independent certified public accountants retained by the
Company (including the expenses of any special audits or comfort letters or
costs associated with the delivery by independent certified public accountants
of such special audit(s) or comfort letter(s) requested pursuant to Section
2.1(l) hereof), (vii) the fees and expenses of any special experts retained by
the Company in connection with the registration, (viii) premiums and other costs
of policies of insurance obtained at the discretion of the Company against
liabilities arising out of any public offering of the Registrable Securities
being registered, and (ix) any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but excluding underwriting
fees, discounts, transfer taxes or commissions, if any, attributable to the sale
of Registrable Securities, which shall be payable by each holder of Registrable
Securities pro rata on the basis of the number of Registrable Securities of each
such holder that are included in a registration under this Agreement.
ARTICLE III
INDEMNIFICATION AND CONTRIBUTION
Section 3.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless each Holder, its partners, affiliates, officers, directors,
employees and duly authorized agents, and each Person or entity, if any, who
controls the Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, together with the partners, Affiliates,
officers, directors, employees and duly authorized agents of such controlling
Person or entity (collectively, the "Controlling Persons"), from and against any
loss, claim, damage, liability, costs and expenses (including, without
limitation, reasonable attorneys' fees and disbursements and costs and expenses
of investigating and defending any such claim) (collectively, "Damages"), joint
or several, and any action or proceeding in respect thereof to which the Holder,
its partners, affiliates, officers, directors, employees and duly authorized
agents, and any such Controlling Person may become subject under the Securities
Act or otherwise as incurred and, insofar as such Damages (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or prospectus relating to the Registrable Securities or
any preliminary prospectus, or arises out of, or are based upon, any omission or
alleged
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omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are based upon information furnished in writing to the Company by such
Holder expressly for use therein, and shall reimburse each Holder, its partners,
affiliates, officers, directors, employees and duly authorized agents, and each
such Controlling Person for any legal and other expenses reasonably incurred by
the Holder, its partners, affiliates, officers, directors, employees and duly
authorized agents, or any such Controlling Person, as incurred, in investigating
or defending or preparing to defend against any such Damages or actions or
proceedings; provided, however, that the Company shall not be liable to a Holder
to the extent that any such Damages arise out of or are based upon an untrue
statement or omission made in any preliminary prospectus if (i) the Holder
failed to send or deliver a copy of the final prospectus delivered by the
Company to the Holder with or prior to the delivery of written confirmation of
the sale by the Holder to the Person asserting the claim from which such Damages
arise, and (ii) the final prospectus would have corrected such untrue statement
or alleged untrue statement or such omission or alleged omission and the
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a Violation and such Indemnified
Person, notwithstanding such advice, used it. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Holders.
Section 3.2. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt by
any person or entity in respect of which indemnity may be sought pursuant to
Section 3.1 (an "Indemnified Party") of notice of any claim or the commencement
of any action, the Indemnified Party shall, if a claim in respect thereof is to
be made against the person or entity against whom such indemnity may be sought
(the "Indemnifying Party"), notify the Indemnifying Party in writing of the
claim or the commencement of such action; in the event an Indemnified Party
shall fail to give such notice as provided in this Section 3.2 and the
Indemnifying Party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was materially prejudiced by the
failure to give such notice, the indemnification provided for in Section 3.1
shall be reduced to the extent of any actual prejudice resulting from such
failure to so notify the Indemnifying Party; provided, that the failure to
notify the Indemnifying Party shall not relieve the Indemnifying Party from any
liability that it may have to an Indemnified Party otherwise than under Section
3.1. If any such claim or action shall be brought against an Indemnified Party,
and it shall notify the Indemnifying Party thereof, the Indemnifying Party shall
be entitled to participate therein, and, to the extent that it wishes, jointly
with any other similarly notified Indemnifying Party, to assume the defense
thereof with counsel reasonably satisfactory to the Indemnified Party. After
notice from the Indemnifying Party to the Indemnified Party of its election to
assume the defense of such claim or action, the Indemnifying Party shall not be
liable to the Indemnified Party for any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation; provided that the Indemnified Party
shall have the right to employ separate counsel to represent the Indemnified
Party and its Controlling Persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Indemnified Party
against the Indemnifying Party, but the fees and expenses of such counsel shall
be for the account of such Indemnified Party unless (i) the Indemnifying Party
and the Indemnified Party shall have mutually agreed to the retention of such
counsel or (ii) in the reasonable judgment of the Company and such Indemnified
Party, representation of both parties by the same counsel
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would be inappropriate due to actual or potential conflicts of interest between
them, it being understood, however, that the Indemnifying Party shall not, in
connection with any one such claim or action or separate but substantially
similar or related claims or actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the fees and expenses
of more than one separate firm of attorneys (together with appropriate local
counsel) at any time for all Indemnified Parties, or for fees and expenses that
are not reasonable. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any claim or pending
or threatened proceeding in respect of which the Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability arising out of such claim or
proceeding. Whether or not the defense of any claim or action is assumed by the
Indemnifying Party, such Indemnifying Party will not be subject to any liability
for any settlement made without its consent, which consent will not be
unreasonably withheld.
Section 3.3. OTHER INDEMNIFICATION. Indemnification similar to that specified in
the preceding paragraphs of this Article 3 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any federal or state law or regulation of any governmental authority other than
the Securities Act. The provisions of this Article III shall be in addition to
any other rights to indemnification, contribution or other remedies which an
Indemnified Party may have pursuant to law, equity, contract or otherwise.
Section 3.4. CONTRIBUTION. If the indemnification provided for in this Article
III is unavailable to the Indemnified Parties in respect of any Damages referred
to herein, then the 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 Damages as between the Company on the one hand and the
relevant Holder on the other, in such proportion as is appropriate to reflect
the relative fault of the Company and of such Holder in connection with such
statements or omissions, as well as other equitable considerations. The relative
fault of the Company on the one hand and of the Holder on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 3.4 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Party as a result of the Damages referred to
in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 3.4, the Holders
shall in no event be required to contribute any amount in excess of the amount
by which the total price at which the Registrable Securities of each Holder were
sold to the public (less underwriting discounts and commissions) exceeds the
amount of any damages which the Holder has otherwise been required
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to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
ARTICLE IV
MISCELLANEOUS
Section 4.1. NO OUTSTANDING REGISTRATION RIGHTS. The Company represents and
warrants to the Holders that there is not in effect on the date hereof any
agreement by the Company pursuant to which any holders of securities of the
Company have a right to cause the Company to register or qualify such securities
under the Securities Act or any securities or blue sky laws of any jurisdiction
that would conflict or be inconsistent with any provision of this Agreement or
the Purchase Agreement.
Section 4.2. TERM. The registration rights provided to the holders of
Registrable Securities hereunder shall terminate at such time as all Purchased
Shares (i) have been disposed of pursuant to the Registration Statement, (ii)
have been sold under circumstances under which all of the applicable conditions
of Rule 144 (or any similar provision then in force) under the Securities Act
("Rule 144") are met, (iii) have been otherwise transferred to holders who may
trade such shares without restriction under the Securities Act, and the Company
has delivered a new certificate or other evidence of ownership for such
securities not bearing a restrictive legend, or (iv) may be sold without any
time, volume or manner limitations pursuant to Rule 144(k) (or any similar
provision then in effect) under the Securities Act in the opinion of counsel to
the Company, which counsel shall be reasonably acceptable to the Holders;
PROVIDED, HOWEVER, that the registration rights shall not terminate sooner than
two years following the Subscription Date. Notwithstanding the foregoing,
paragraphs (d) and (e) of Section 1.1, Article III, Section 4.8, and Section 4.9
shall survive the termination of this Agreement.
Section 4.3. RULE 144. The Company covenants that it will file all reports
required to be filed by it under the Act and the Exchange Act and that it will
take such further action as holders of Registrable Securities may reasonably
request, all to the extent required from time to time to enable the Holders to
sell Registrable Securities without registration under the Act within the
limitation of the exemptions provided by (a) Rule 144, as such Rule may be
amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the SEC. If at any time the Company is not required to file such
reports, it will, upon the request of any holder of Registrable Securities, make
publicly available other information so long as necessary to permit sales
pursuant to Rule 144. Upon the request of the Holders, the Company will deliver
to the Holders a written statement as to whether it has complied with such
requirements.
Section 4.4. CERTIFICATE. The Company will, at its expense, forthwith upon the
request of any holder of Registrable Securities, deliver to such holder a
certificate, signed by the Company's principal financial officer, stating (a)
the Company's name, address and telephone number (including area code), (b) the
Company's Internal Revenue Service identification number, (c) the Company's
Commission file number, (d) the number of shares of each class of Stock
outstanding as shown by the most recent report or statement published by the
Company,
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and (e) whether the Company has filed the reports required to be filed under the
Exchange Act for a period of at least 90 days prior to the date of such
certificate and in addition has filed the most recent annual report required to
be filed thereunder.
Section 4.5. AMENDMENT AND MODIFICATION. Any provision of this Agreement may be
waived, provided that such waiver is set forth in a writing executed by both
parties to this Agreement. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of the holders of a majority
of the then outstanding Registrable Securities. Notwithstanding the foregoing,
the waiver of any provision hereof with respect to a matter that relates
exclusively to the rights of holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and does not directly or
indirectly affect the rights of other holders of Registrable Securities may be
given by holders of at least a majority of the Registrable Securities being sold
by such holders; provided that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence. No course of dealing between or among any
Person having any interest in this Agreement will be deemed effective to modify,
amend or discharge any part of this Agreement or any rights or obligations of
any person under or by reason of this Agreement.
Section 4.6. SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. The Holders may
assign their rights under this Agreement to any subsequent holder or holders of
the Registrable Securities, provided that the Company shall have the right to
require any holder of Registrable Securities to execute a counterpart of this
Agreement as a condition to such holder's claim to any rights hereunder;
provided further that such holder is an "accredited investor" as defined in Rule
501 of Regulation D of the Securities Act. This Agreement, together with the
Purchase Agreement the terms of the Notes and the Warrants sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.
Section 4.7. SEPARABILITY In the event that any provision of this Agreement or
the application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected except to the extent necessary to delete
such illegal, invalid or unenforceable provision unless that provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.
Section 4.8. NOTICES. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and
shall be (i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by
reputable air courier service with charges prepaid, or (iv) transmitted by hand
delivery, telegram or facsimile, addressed as set forth below or to such other
address as such party shall have specified most recently by written notice. Any
notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by facsimile, with
accurate confirmation generated by the transmitting
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facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
If to Viragen, Inc.:
Xxxxxx X. Xxxxxx
Chief Financial Officer
Viragen, Inc.
000 XX 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to (which communication shall not constitute notice):
Xxxxx Xxxxxxxxx, Esq.
Atlas, Xxxxxxxx, Trop & Borkson
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Xxxxxxx Xxxx:
Xxxx Xxxx
Xxxxxxx, Xxxx & Associates, Inc.
00000 Xxxxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
(000) 000-0000
(000) 000-0000 (fax)
If to Ven-Gua:
Xxxxxx Xxxxxxxxxxx
VenGua Capital Markets Ltd.
Xxx Xxxx, Xxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx XX00 0XX
(00) 0-0000-00-00-00
(00) 0-0000-00-00-00 (fax)
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If to Ballsbridge:
Xxxxx Xxxxxx
Ballsbridge Finance, Ltd.
00 Xxxxxxxx Xx.
Xxxxxx X0X 0XX
(00) 000-000-0000
(00) 000 000-0000 (fax)
Either party hereto may from time to time change its address or facsimile number
for notices under this Section 4.8 by giving at least ten days' prior written
notice of such changed address or facsimile number to the other party hereto.
Section 4.9. GOVERNING LAW. This Agreement shall be construed under the laws of
the State of New York.
Section 4.10. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect their meaning, construction or effect.
Section 4.11. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute one and the same instrument.
Section 4.12. FURTHER ASSURANCES. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
Section 4.13. REMEDIES. In the event of a breach or a threatened breach by any
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by law.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that the remedy at law, including
monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense or objection in any action for
specific performance or injunctive relief that a remedy at law would be adequate
is waived.
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be executed by the undersigned, thereunto duly authorized,
as of the date first set forth above.
VIRAGEN, INC.
By:
---------------------------
Xxxxxx X. Xxxxxx
Chief Financial Officer
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BALLSBRIDGE FINANCE LIMITED
By:
---------------------------
Name:
Title:
VEN-GUA CAPITAL MARKETS LIMITED
By:
---------------------------
Name:
Title:
XXXXXXX, XXXX & ASSOCIATES, INC.
By:
---------------------------
Name:
Title:
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