Registration Rights Agreement – Transgenomic Inc.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement“) is made and
entered into as of February 2, 2012, by and among Transgenomic, Inc., a Delaware
corporation (the “Company“), and the several signatories hereto.
This Agreement is made pursuant to (i) the Securities Purchase Agreement (the
“Purchase Agreement“), dated as of the date hereof between the Company
and each purchaser signatory thereto (each a “Purchaser” and
collectively, the “Purchasers“) and (ii) the Convertible Promissory
Note Purchase Agreement, dated December 30, 2011, by and among the Company and
each of the Third Security Holders (as defined below).
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each of the Holders
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” has the meaning set forth in Section 6(d).
“Affiliate” means, with respect to any person, any other person
which directly or indirectly controls, is controlled by, or is under common
control with, such person.
“Agreement” has the meaning set forth in the Preamble.
“Business Day” means a day, other than a Saturday or Sunday, on
which banks in New York City are open for the general transaction of business.
“Closing” has the meaning set forth in the Purchase Agreement.
“Closing Date” has the meaning set forth in the Purchase Agreement.
“Commission” means the Securities and Exchange Commission.
“Common Stock” means the common stock of the Company, par value
$0.01 per share, and any securities into which such common stock may hereinafter
be reclassified.
“Company” has the meaning set forth in the Preamble.
“Effective Date” means each date that the Registration Statement
filed pursuant to Section 2(a) and any post-effective amendment thereto is
declared effective by the Commission.
“Effectiveness Deadline” means, with respect to the Initial
Registration Statement or the New Registration Statement, the 90th
calendar day following the Closing Date (or, in the event the Commission reviews
and has written comments to the Initial Registration Statement or the New
Registration Statement, the 120th calendar day following the Closing
Date); provided, however, that if the Company is notified by the
Commission that the Initial Registration Statement or the New Registration
Statement will not be reviewed or is no longer subject to further review and
comments, the Effectiveness Deadline as to such Registration Statement shall be
the 3rd Trading Day following the date on which the Company is so
notified if such date precedes the dates otherwise required above;
provided, further, that if the Effectiveness Deadline falls on a Saturday,
Sunday or other day that the Commission is closed for business, the
Effectiveness Deadline shall be extended to the next Business Day on which the
Commission is open for business.
“Effectiveness Period” has the meaning set forth in Section 2(b).
“Event” has the meaning set forth in Section 2(c).
“Event Date” has the meaning set forth in Section 2(c).
“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
“Filing Deadline” means, with respect to the Initial Registration
Statement required to be filed pursuant to Section 2(a), the 45th
calendar day following the Closing Date; provided, however, that if the
Filing Deadline falls on a Saturday, Sunday or other day that the Commission is
closed for business, the Filing Deadline shall be extended to the next business
day on which the Commission is open for business.
“Holder” or “Holders” means the holder or holders, as the
case may be, from time to time of Registrable Securities.
“Indemnified Party” has the meaning set forth in Section 5(c).
“Indemnifying Party” has the meaning set forth in Section 5(c).
“Initial Registration Statement” means the initial Registration
Statement filed pursuant to Section 2(a) of this Agreement.
“Liquidated Damages” has the meaning set forth in Section
2(c).
“Losses” has the meaning set forth in Section 5(a).
“New Registration Statement” has the meaning set forth in Section
2(a).
“Person” means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
“Principal Market” means the Trading Market on which the Common
Stock is primarily listed on and quoted for trading, which, as of the Closing
Date, shall be the OTC Bulletin Board.
“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.
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“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 a 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.
“Purchase Agreement” has the meaning set forth in the Recitals.
“Purchaser” or “Purchasers” has the meaning set forth in
the Recitals.
“Registrable Securities” means all of (i) the Shares, (ii) the
Warrant Shares, (iii) the Third Security Shares and (iv) any securities issued
or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing,
provided, that the Holder has completed and delivered to the Company a
Selling Stockholder Questionnaire; and provided, further, that with
respect to a particular Holder, such Holder153s Shares, Warrant Shares and/or
Third Security Shares shall cease to be Registrable Securities upon the earliest
to occur of the following: (A) a sale pursuant to a Registration Statement or
Rule 144 under the Securities Act (in which case, only such security sold by the
Holder shall cease to be a Registrable Security); or (B) becoming eligible for
resale by the Holder under Rule 144 without the requirement for the Company to
be in compliance with the current public information requirement thereunder and
without volume or manner-of-sale restrictions, pursuant to a written opinion
letter to such effect, addressed, delivered and acceptable to the Transfer
Agent.
“Registration Statements” means any one or more registration
statements of the Company filed under the Securities Act that covers the resale
of any of the Registrable Securities pursuant to the provisions of this
Agreement (including, without limitation, the Initial Registration Statement,
the New Registration Statement and any Remainder Registration Statements),
including (in each case) the amendments and supplements to such Registration
Statements, including pre- and post-effective amendments thereto, all exhibits
and all material incorporated by reference or deemed to be incorporated by
reference in such Registration Statements.
“Remainder Registration Statement” has the meaning set forth in
Section 2(a).
“Rule 144” means Rule 144 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 effect as such Rule.
“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 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 effect as such Rule.
“SEC Guidance” means (i) any publicly-available written or oral
guidance, comments, requirements or requests of the Commission staff, provided,
that any such oral guidance, comments, requirements or requests are reduced to
writing by the Commission and (ii) the Securities Act.
“Securities Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
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“Selling Stockholder Questionnaire” means a questionnaire in the
form attached as Annex B hereto, or such other form of questionnaire as
may reasonably be adopted by the Company from time to time.
“Shares” means the shares of Common Stock issued or issuable to the
Purchasers pursuant to the Purchase Agreement.
“Special Registration Statement” means a registration statement
relating to any employee benefit plan on Form S-8 or similar form or, with
respect to any corporate reorganization or other transaction under Rule 145 of
the Securities Act, a registration statement on Form S-4 or similar form.
“Third Security Holders” means Third Security Senior Staff 2008 LLC,
Third Security Staff 2010 LLC, and Third Security Incentive 2010 LLC.
“Third Security Purchase Agreement” means that certain Convertible
Promissory Note Purchase Agreement by and among the Company, Third Security
Senior Staff 2008 LLC, Third Security Staff 2010 LLC, and Third Security
Incentive 2010 LLC dated December 30, 2011.
“Third Security Shares” means (i) the shares of Common Stock
issuable upon conversion of the Convertible Promissory Notes issued pursuant to
the Third Security Purchase Agreement and (ii) the shares of Common Stock
issuable upon exercise of the Third Security Warrants.
“Third Security Warrants” means the Warrants to purchase Common
Stock issuable upon conversion of the Convertible Promissory Notes issued
pursuant to the Third Security Purchase Agreement.
“Trading Day” means (i) a day on which the Common Stock is listed or
quoted and traded on its Principal Market (other than the OTC Bulletin Board),
or (ii) if the Common Stock is not listed on a Trading Market (other than the
OTC Bulletin Board), a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported in the “pink sheets”
by Pink Sheets LLC (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event that the
Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof,
then Trading Day shall mean a Business Day.
“Trading Market” means whichever of the New York Stock Exchange, the
NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ
Capital Market or the OTC Bulletin Board on which the Common Stock is listed or
quoted for trading on the date in question.
“Warrants” means the Warrants issued pursuant to the Purchase
Agreement.
“Warrant Shares” means the shares of Common Stock issued or issuable
upon exercise of the Warrants.
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2. Registration.
(a) On or prior to the Filing Deadline, the Company shall prepare and file
with the Commission a Registration Statement covering the resale of all of the
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 or, if Rule 415 is not available for offers and sales of the
Registrable Securities, by such other means of distribution of Registrable
Securities as the Holders may reasonably specify (the “Initial Registration
Statement“). The Initial Registration Statement shall be on Form S-1 (or
such other form available to register for resale the Registrable Securities as a
secondary offering) subject to the provisions of Section 2(e) and shall contain
(except if otherwise required pursuant to written comments received from the
Commission upon a review of such Registration Statement) a “Plan of
Distribution” section substantially in the form attached hereto as Annex
A (which may be modified to respond to comments, if any, provided by the
Commission). Notwithstanding the registration obligations set forth in this
Section 2, in the event the Commission informs the Company that all of
the Registrable Securities cannot, as a result of the application of Rule 415,
be registered for resale as a secondary offering on a single registration
statement, the Company agrees to promptly (i) inform each of the Holders thereof
and use its commercially reasonable efforts to file amendments to the Initial
Registration Statement as required by the Commission and/or (ii) withdraw the
Initial Registration Statement and file a new registration statement (a
“New Registration Statement“), in either case covering the maximum
number of Registrable Securities permitted to be registered by the Commission,
on Form S-1 or such other form available to register for resale the Registrable
Securities as a secondary offering; provided, however, that prior to
filing such amendment or New Registration Statement, the Company shall be
obligated to use its commercially reasonable efforts to advocate with the
Commission for the registration of all of the Registrable Securities in
accordance with SEC Guidance, including without limitation, the Manual of
Publicly Available Telephone Interpretations D.29 and Compliance and Disclosure
Interpretations. Notwithstanding any other provision of this Agreement and
subject to the payment of liquidated damages in Section 2(c), if any SEC
Guidance sets forth a limitation of the number of Registrable Securities
permitted to be registered on a particular Registration Statement as a secondary
offering (and notwithstanding that the Company used commercially reasonable
efforts to advocate with the Commission for the registration of all or a greater
number of Registrable Securities), unless otherwise directed in writing by a
Holder as to its Registrable Securities, the number of Registrable Securities to
be registered on such Registration Statement will first be reduced by the Third
Security Shares (applied, in the case that some Third Security Shares may be
registered, to the Third Security Holders on a pro rata basis based on the total
number of unregistered Third Security Shares held by such Third Security
Holders), second by the Warrant Shares (applied, in the case that some Warrant
Shares may be registered, to the Holders on a pro rata basis based on the total
number of unregistered Warrant Shares held by such Holders) and third by the
Shares (applied, in the case that some Shares may be registered, to the Holders
on a pro rata basis based on the total number of unregistered Shares held by
such Holders), subject to a determination by the Commission that certain Holders
must be reduced first based on the number of Registrable Securities held by such
Holders. In the event the Company amends the Initial Registration Statement or
files a New Registration Statement, as the case may be, under clauses (i) or
(ii) above, the Company will use its commercially reasonable efforts to file
with the Commission, as promptly as allowed by Commission or SEC Guidance
provided to the Company or to registrants of securities in general, one or more
registration statements on Form S-1 or such other form available to register for
resale those Registrable Securities that were not registered for resale on the
Initial Registration Statement, as amended, or the New Registration Statement
(the “Remainder Registration Statements“). No Holder shall be named as
an “underwriter” in any Registration Statement without such Holder153s prior
written consent.
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(b) The Company shall use its commercially reasonable efforts to cause each
Registration Statement or any post-effective amendment thereto to be declared
effective by the Commission as soon as practicable and, with respect to the
Initial Registration Statement or the New Registration Statement, as applicable,
no later than the Effectiveness Deadline (including, with respect to the Initial
Registration Statement or the New Registration Statement, as applicable, filing
with the Commission a request for acceleration of effectiveness in accordance
with Rule 461 promulgated under the Securities Act within five (5) Business Days
after the date that the Company is notified (orally or in writing, whichever is
earlier) by the Commission that such Registration Statement will not be
“reviewed,” or not be subject to further review and the effectiveness of such
Registration Statement may be accelerated), and, subject to Sections 2(e) and
(f), shall use its commercially reasonable efforts to keep each Registration
Statement continuously effective under the Securities Act until the earlier of
(i) such time as all of the Registrable Securities covered by such Registration
Statement have been publicly sold by the Holders or (ii) the date that is one
(1) year following the Closing Date (the “Effectiveness Period“). The
Company shall promptly notify the Holders via facsimile or electronic mail of
the effectiveness of a Registration Statement or any post-effective amendment
thereto on or before the first Trading Day after the date that the Company
telephonically confirms effectiveness with the Commission. The Company shall, by
9:30 a.m. New York City time on the first Trading Day after the Effective Date,
file a final Prospectus with the Commission, as required by Rule 424(b).
(c) If: (i) the Initial Registration Statement is not filed with the
Commission on or prior to the Filing Deadline, (ii) the Initial Registration
Statement or the New Registration Statement, as applicable, is not declared
effective by the Commission (or otherwise does not become effective) for any
reason on or prior to the Effectiveness Deadline or (iii) after its Effective
Date and except for the reasons as set forth in Sections 2(e) and (f) and
Section 3(h), (A) such Registration Statement ceases for any reason (including,
without limitation, by reason of a stop order or the Company153s failure to update
the Registration Statement), to remain continuously effective as to all
Registrable Securities included in such Registration Statement or (B) the
Holders are not permitted to utilize the Prospectus therein to resell such
Registrable Securities for any reason (other than due to a change in the “Plan
of Distribution” or the inaccuracy of any information regarding the Holders), in
each case, for more than an aggregate of 20 consecutive calendar days or 45
calendar days (which need not be consecutive days) during any 12-month period
(other than as a result of a breach of this Agreement by a Holder, due to a
circumstance set forth in Section 2(f) below or a Holder153s failure to return a
Selling Stockholder Questionnaire within the time period provided by Section
2(d) hereof) (any such failure or breach in clauses (i) through (iii) above
being referred to as an “Event,” and, for purposes of clauses (i) or
(ii), the date on which such Event occurs, or for purposes of clause (iii), the
date on which such 20 or 45 calendar day period is exceeded, being referred to
as an “Event Date“), then in addition to any other rights the Holders
may have hereunder or under applicable law: (x) within five Business Days after
an Event Date relating to a failure in clause (i) only, the Company shall pay to
each Holder an amount in cash, as liquidated damages and not as a penalty, equal
to 1.5% of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement or the Third Security Purchase Agreement, as applicable, for
any Registrable Securities held by such Holder on such Event Date; and (y) on
each 30-day anniversary (or pro rata portion thereof) following any Event Date
(including, for the avoidance of doubt, a failure in clause (i), in which case
each 30-day anniversary shall be measured commencing on the 31st day
following such Event Date) until the earlier of (1) the applicable Event is
cured or (2) the Registrable Securities are eligible for resale pursuant to Rule
144 without manner of sale or volume restrictions, the Company shall pay to each
Holder an amount in cash, as liquidated damages and not as a penalty, equal to
1.5% of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement or the Third Security Purchase Agreement, as applicable, for
any unregistered Registrable Securities then held by such Holder. The amounts
payable pursuant to the foregoing clauses (x) and (y) are referred to
collectively as “Liquidated Damages.” The parties agree that (1)
notwithstanding anything to the contrary herein, no Liquidated Damages shall be
payable with respect to any period after the expiration of the Effectiveness
Period and in no event shall the aggregate amount of Liquidated Damages payable
to a Holder exceed, in the aggregate, 10% of the aggregate purchase price paid
by such Holder pursuant to the Purchase Agreement or the Third Security Purchase
Agreement, as applicable and (2) in no event shall the Company be liable in any
30-day period for Liquidated Damages under this Agreement in excess of 1.5% of
the aggregate purchase price paid by the Holders pursuant to the Purchase
Agreement or the Third Security Purchase Agreement, as applicable. If the
Company fails to pay any Liquidated Damages pursuant to this Section 2(c) in
full within five Business Days after the date payable, the Company will pay
interest thereon at a rate of 1.5% per month (or such lesser maximum amount that
is permitted to be paid by applicable law) to the Holder, accruing daily from
the date such Liquidated Damages are due until such amounts, plus all such
interest thereon, are paid in full. Unless otherwise specified in Section 2(c),
the 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, nothing
shall preclude any Holder from pursuing or obtaining any available remedies at
law, specific performance or other equitable relief with respect to this Section
2(c) in accordance with applicable law. The Company shall not be liable for
Liquidated Damages under this Agreement as to any Registrable Securities which
are not permitted by the Commission to be included in a Registration Statement
due solely to SEC Guidance from the time that it is determined that such
Registrable Securities are not permitted to be registered until such time as the
provisions of this Agreement as to the Remainder Registration Statements
required to be filed hereunder are triggered, in which case the provisions of
this Section 2(c) shall once again apply, if applicable. In such case, the
Liquidated Damages shall be calculated to only apply to the percentage of
Registrable Securities which are permitted in accordance with SEC Guidance to be
included in such Registration Statement. The Effectiveness Deadline for a
Registration Statement shall be extended without default or Liquidated Damages
hereunder in the event that the Company153s failure to obtain the effectiveness of
the Registration Statement on a timely basis results from the failure of a
Holder to timely provide the Company with information requested by the Company
and necessary to complete the Registration Statement in accordance with the
requirements of the Securities Act (in which the Effectiveness Deadline would be
extended with respect to Registrable Securities held by such Holder).
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(d) Each Holder agrees to furnish to the Company a completed Selling
Stockholder Questionnaire not more than ten Trading Days following the date of
this Agreement. At least 10 Trading Days prior to the first anticipated filing
date of a Registration Statement for any registration under this Agreement, the
Company will notify each Holder of the information the Company requires from
that Holder other than the information contained in the Selling Stockholder
Questionnaire, if any, which shall be completed and delivered to the Company
promptly upon request and, in any event, within three Trading Days prior to the
applicable anticipated filing date. Each Holder further agrees that it shall not
be entitled to be named as a selling securityholder in the Registration
Statement or use the Prospectus for offers and resales of Registrable Securities
at any time, unless such Holder has returned to the Company a completed and
signed Selling Stockholder Questionnaire and a response to any requests for
further information as described in the previous sentence. If a Holder of
Registrable Securities returns a Selling Stockholder Questionnaire or a request
for further information, in either case, after its respective deadline, the
Company shall use its commercially reasonable efforts to take such actions as
are required to name such Holder as a selling security holder in the
Registration Statement or any pre-effective or post-effective amendment thereto
and to include (to the extent not theretofore included) in the Registration
Statement the Registrable Securities identified in such late Selling Stockholder
Questionnaire or request for further information. Each Holder acknowledges and
agrees that the information in the Selling Stockholder Questionnaire or request
for further information as described in this Section 2(d) will be used by the
Company in the preparation of the Registration Statement and hereby consents to
the inclusion of such information in the Registration Statement.
(e) In the event that Form S-3 is not available for the registration of the
resale of Registrable Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on Form S-1 and (ii) undertake to register
the Registrable Securities on Form S-3 promptly after such form is available,
provided that the Company shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration Statement on Form S-3
covering the Registrable Securities has been declared effective by the
Commission.
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3. Registration Procedures.
In connection with the Company153s registration obligations hereunder, the
Company shall:
(a) Not less than five Trading Days prior to the filing of each Registration
Statement and not less than one Trading Day prior to the filing of any related
Prospectus or any amendment or supplement thereto (except for Annual Reports on
Form 10-K, and Quarterly Reports on Form 10-Q and Current Reports on Form 8-K
and any similar or successor reports), (i) furnish to the Holder copies of such
Registration Statement, Prospectus or amendment or supplement thereto, as
proposed to be filed, which documents will be subject to the review of such
Holder (it being acknowledged and agreed that if a Holder does not object to or
comment on the aforementioned documents within such five Trading Day or one
Trading Day period, as the case may be, then the Holder shall be deemed to have
consented to and approved the use of such documents) and (ii) use commercially
reasonable efforts to cause its officers and directors, counsel and independent
registered public accountants to respond to such inquiries as shall be
necessary, in the reasonable opinion of respective counsel to each Holder, to
conduct such review. The Company shall not file any Registration Statement or
Prospectus or any amendment or supplement thereto in a form to which a Holder
reasonably objects in good faith, provided that, the Company is notified of such
objection in writing within the five Trading Day or one Trading Day period
described above, as applicable.
(b) (i) Subject to Section 2(e) and (f) and Section 3(h), prepare and file
with the Commission such amendments (including post-effective amendments) and
supplements to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective as to the applicable Registrable Securities for its Effectiveness
Period; (ii) cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement (subject to the terms of this Agreement), and, as
so supplemented or amended, to be filed pursuant to Rule 424; (iii) respond as
promptly as reasonably practicable to any comments received from the Commission
with respect to each Registration Statement or any amendment thereto and, as
promptly as reasonably possible, provide the Holders true and complete copies of
all correspondence from and to the Commission relating to such Registration
Statement that pertains to the Holders as “Selling Stockholders” but not any
comments that would result in the disclosure to the Holders of material and
non-public information concerning the Company; and (iv) comply with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement
until such time as all of such Registrable Securities cease to be Registrable
Securities or shall have been disposed of (subject to the terms of this
Agreement) in accordance with the intended methods of disposition by the Holders
thereof as set forth in such Registration Statement as so amended or in such
Prospectus as so supplemented; provided, however, that in the event the
Company informs the Holders in writing that it does not satisfy the conditions
specified in Rule 172 and, as a result thereof, the Holders are required to
deliver a Prospectus in connection with any disposition of Registrable
Securities, the Company shall deliver to the Holders a copy of the Prospectus in
electronic format and each such Holder shall be responsible for the delivery of
the Prospectus to the Persons to whom such Holder sells any of the Registrable
Securities, and each Holder agrees to dispose of Registrable Securities in
compliance with the “Plan of Distribution” described in the Registration
Statement and otherwise in compliance with applicable federal and state
securities laws. In the case of amendments and supplements to a Registration
Statement which are required to be filed pursuant to this Agreement (including
pursuant to this Section 3(b)) by reason of the Company filing a report on Form
10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the
Company shall have incorporated such report by reference into such Registration
Statement, if applicable, or shall file such amendments or supplements with the
Commission on the same day on which the Exchange Act report which created the
requirement for the Company to amend or supplement such Registration Statement
was filed.
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(c) Notify the Holders (which notice shall, pursuant to clauses (iii) through
(v) hereof, be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made) as promptly as reasonably
practicable via facsimile or electronic mail (and, in the case of (i)(A) below,
not less than one (1) Trading Day prior to such filing) and no later than one
Trading Day following the day: (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement is proposed
to be filed; (B) when the Commission notifies the Company whether there will be
a “review” of such Registration Statement or post-effective amendment and
whenever the Commission comments in writing on any Registration Statement or any
post-effective amendment thereto (in which case the Company shall provide to
each of the Holders true and complete copies of all comments that pertain to the
Holders as a “Selling Stockholder” or to the “Plan of Distribution” and all
written responses thereto, but not information that the Company believes would
constitute material and non-public information); and (C) with respect to each
Registration Statement or any post-effective amendment thereto, when the same
has become effective; (ii) of any request by the Commission or any other Federal
or state governmental authority for amendments or supplements to a Registration
Statement or Prospectus or for additional information that pertains to the
Holders as “Selling Stockholders” or the “Plan of Distribution”; (iii) of the
issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of a 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 a Registration Statement ineligible for
inclusion therein or any statement made in such 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 such
Registration Statement, Prospectus or other documents so that, in the case of
such 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 the case of any Prospectus, form of prospectus or supplement thereto, in
light of the circumstances under which they were made), not misleading.
(d) Use commercially reasonable efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, as soon as practicable.
(e) If requested by a Holder, furnish to such Holder, without charge, at
least one conformed copy of each Registration Statement and each amendment
thereto and all exhibits to the extent requested by such Person (including those
previously furnished or incorporated by reference) promptly after the filing of
such documents with the Commission; provided, that the Company shall
have no obligation to provide any document pursuant to this clause that is
available on the Commission153s EDGAR system.
(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 each 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 each Registration Statement;
provided, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified, would
subject the Company to any material tax in any such jurisdiction where it is not
then so subject or file a general consent to service of process in any such
jurisdiction.
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(g) If requested by a Holder, cooperate with such 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 or the Third Security Purchase Agreement, as applicable, and
under law, 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
reasonably request.
(h) Following the occurrence of any event contemplated by Section 3(c), as
promptly as reasonably practicable, prepare a supplement or amendment, including
a post-effective amendment, to the affected Registration Statements 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, no Registration Statement nor any 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
the case of any Prospectus, form of prospectus or supplement thereto, in light
of the circumstances under which they were made), not misleading. If the Company
notifies the Holders in accordance with clauses (iii) 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 commercially reasonable efforts to ensure
that the use of the Prospectus may be resumed as promptly as is 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 for a period
not to exceed 45 calendar days (which need not be consecutive days) in any
12-month period without incurring liability for Liquidated Damages otherwise
required pursuant to Section 2(c). For the avoidance of doubt, any period of
time for which the availability of a Registration Statement and Prospectus are
suspended pursuant to Sections 2(e) and (f) shall be disregarded when
determining the time period allotted under this Section 3(h).
(i) The Company may require each selling Holder to furnish to the Company a
certified statement as to (i) the number of shares of Common Stock beneficially
owned by such Holder and any Affiliate thereof, (ii) any Financial Industry
Regulatory Authority, Inc. (“FINRA“) affiliations, (iii) any natural
persons who have the power to vote or dispose of the common stock and (iv) any
other information as may be requested by the Commission, FINRA or any state
securities commission. During any periods that the Company is unable to meet its
obligations hereunder with respect to the registration of Registrable Securities
because any Holder fails to furnish such information within five Trading Days of
the Company153s request, any Liquidated Damages that are accruing at such time as
to such Holder only shall be tolled and any Event that may otherwise occur
solely because of such delay shall be suspended as to such Holder only, until
such information is delivered to the Company; provided, however, if the failure
of the Holder to furnish the required information results the occurrence of an
Event under 2(c), any Liquidated Damages that are accruing at such time shall be
tolled and any such Event that occurs as a result thereof shall be suspended
until such time as the Holder furnishes such information.
(j) The Company shall cooperate with any registered broker through which a
Holder proposes to resell its Registrable Securities in effecting a filing with
FINRA pursuant to FINRA Rule 5110 as reasonably requested by any such Holder,
and the Company shall pay the filing fee required for the first such filing
within five Business Days of the request therefor.
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4. Registration Expenses. All fees and expenses incident to the
Company153s performance of or compliance with its obligations under this Agreement
(excluding any underwriting discounts and selling commissions and all legal fees
and expenses of legal counsel for any Holder) shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a 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 any Trading Market on which the Common Stock is then listed for
trading, (B) with respect to compliance with applicable state securities or Blue
Sky laws (including, without limitation, fees and disbursements of counsel for
the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as requested by
the Holders) and (C) if not previously paid by the Company pursuant to Section
3(j) hereof, with respect to any filing that may be required to be made by any
broker through which a Holder intends to make sales of Registrable Securities
with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no
more than a customary brokerage commission in connection with such sale, (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 as required hereunder. In no event shall the Company be
responsible for any underwriting, broker or similar fees or commissions of any
Holder or any legal fees or other costs of the Holders.
5. Indemnification.
(a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify, defend and hold harmless each
Holder, the officers, directors, agents, partners, members, managers,
stockholders, Affiliates 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, partners, members,
managers, stockholders, 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 costs of preparation and investigation and reasonable attorneys153
fees) and expenses (collectively, “Losses“), as incurred, that arise
out of or are based upon (i) any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, any Prospectus or in any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose), or arising out of or relating
to any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus or supplement thereto, in light of the circumstances under which they
were made) not misleading or (ii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or any state securities law, or
any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to the Registration Statement or any violation
of this Agreement, except to the extent, but only to the extent that (A) such
untrue statements, alleged untrue statements, omissions or alleged omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder, or to the extent that such information relates to such
Holder or such Holder153s proposed method of distribution of Registrable
Securities and was reviewed and approved in writing by such Holder expressly for
use in the Registration Statement, such Prospectus or in any amendment or
supplement thereto (it being understood that each Holder has approved Annex
A hereto for this purpose) or (B) in the case of an occurrence of an Event
of the type specified in Section 3(c)(iii)-(v), related to the use by a 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 contemplated and defined in Section 6(d)
below, following the receipt of the Advice the misstatement or omission giving
rise to such Loss would have been corrected, or (C) any such Losses arise out of
the Purchaser153s (or any other indemnified Person153s) failure to send or give a
copy of the Prospectus or supplement (as then amended or supplemented), if
required pursuant to Rule 172 under the Securities Act (or any successor rule),
to the Persons asserting an untrue statement or alleged untrue statement or
alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of Registrable Securities to such Person if
such statement or omission was corrected in such Prospectus or supplement. The
Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding arising from or in connection with the transactions
contemplated by this Agreement of which the Company is aware. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of an Indemnified Party (as defined in Section 5(c)) and shall survive
the transfer of the Registrable Securities by the Holders.
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(b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents, stockholders, Affiliates 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 out of or are based solely upon any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus, or in any amendment or supplement
thereto, 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 supplement thereto, in light of the
circumstances under which they were made) not misleading (i) to the extent, but
only to the extent, that such untrue statements or omissions are based upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein or (ii) to the extent that such information
relates to such Holder or such Holder153s proposed method of distribution of
Registrable Securities and was reviewed and approved in writing by such Holder
expressly for use in a Registration Statement (it being understood that the
Holder has approved Annex A hereto for this purpose), such Prospectus or
in any amendment or supplement thereto or (iii) in the case of an occurrence of
an event of the type specified in Section 3(c)(iii)-(v), to the extent, but only
to the extent, related to 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 contemplated in Section 6(d). 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 reasonable 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 materially and adversely prejudiced the
Indemnifying Party.
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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 conflict of interest exists 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 such counsel shall be at the expense of the Indemnifying
Party); provided, that the Indemnifying Party shall not be liable for
the fees and expenses of more than one separate firm of attorneys at any time
for all Indemnified Parties. The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its prior written consent,
which consent shall not be unreasonably withheld, delayed or conditioned. 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 and such settlement does not include any
non-monetary limitation on the actions of any Indemnified Party or any of its
affiliates or any admission of fault or liability on behalf of any such
Indemnified Party.
Subject to the terms of this Agreement, all 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 5) shall be paid to the Indemnified
Party, as incurred, within 20 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 finally
judicially determined to not be entitled to indemnification hereunder). The
failure to deliver written notice to the Indemnifying Party within a reasonable
time of the commencement of any such action shall not relieve such Indemnifying
Party of any liability to the Indemnified Party under this Section 5, except to
the extent that the Indemnifying Party is materially and adversely prejudiced in
its ability to defend such action.
(d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party or insufficient to hold an
Indemnified Party harmless for any Losses, 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
parties153 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 Agreement, any reasonable attorneys153 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 5 was available to
such party in accordance with its terms.
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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), (A) no Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the net 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 and (B) no
contribution will be made under circumstances where the maker of such
contribution would not have been required to indemnify the Indemnified Party
under the fault standards set forth in this Section 5. 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.
The indemnity and contribution agreements contained in this Section 5 are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties and are not in diminution or limitation of the
indemnification provisions under the Purchase Agreement or the Third Security
Purchase Agreement, as applicable.
6. Miscellaneous.
(a) Remedies. Subject to the limitations set forth elsewhere in this
Agreement, 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) No Piggyback on Registrations; Prohibition on Filing Other
Registration Statements. 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 prior to the initial Effective Date of the Initial
Registration Statement enter into any new agreement providing any such right to
any of its security holders. The Company shall not file with the Commission a
registration statement relating to an offering for its own account under the
Securities Act of any of its equity securities other than a Special Registration
Statement until the earlier of (i) the date that the Initial Registration
Statement or New Registration Statement, as the case may be, is declared
effective or (ii) the date that all Registrable Securities are eligible for
resale by non-affiliates without volume or manner of sale restrictions under
Rule 144 and without the requirement for the Company to be in compliance with
the current public information requirements under Rule 144. For the avoidance of
doubt, the Company shall not be prohibited from preparing and filing with the
Commission a registration statement relating to an offering of Common Stock by
existing stockholders of the Company under the Securities Act pursuant to the
terms of registration rights held by such stockholder or from filing amendments
to registration statements filed prior to the date of this Agreement.
(c) Compliance. Each Holder covenants and agrees that, in the event
the Company informs such Holder in writing that it does not satisfy the
conditions specified in Rule 172 and, as a result thereof, such Holder is
required to deliver a Prospectus in connection with any disposition of
Registrable Securities, it will comply with the prospectus delivery requirements
of the Securities Act as applicable to it (unless an exemption therefrom is
available) in connection with sales of Registrable Securities pursuant to the
Registration Statement, and shall sell the Registrable Securities only in
accordance with a method of distribution described in the Registration Statement
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(d) Discontinued Disposition. By its acquisition of Registrable
Securities, the Holder agrees that, upon receipt of a notice from the Company of
the occurrence of any event of the kind described in Section 3(c)(iii)-(v), such
Holder will forthwith discontinue disposition of such Registrable Securities
under a Registration Statement until it is advised in writing (the
“Advice“) by the Company that the use of the applicable Prospectus (as
it may have been supplemented or amended) may be resumed. The Company will use
its commercially reasonable efforts to ensure that the use of the Prospectus may
be resumed as promptly as is practicable. The Company may provide appropriate
stop orders to enforce the provisions of this paragraph.
(e) 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 a Special Registration Statement, then the Company
shall deliver to each Holder a written notice of such determination and, if
within seven days after the date of the delivery 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; provided, however, that the Company shall not
be required to register any Registrable Securities pursuant to this Section 6(e)
that are (i) eligible for resale pursuant to Rule 144 without the requirement
for the Company to be in compliance with the current public information required
thereunder and without volume or manner-of-sale restrictions or (ii) the subject
of a then-effective Registration Statement.
(f) No Inconsistent Agreements. The Company has not entered, as of the
date hereof, nor shall the Company, on or after the date hereof, enter into any
agreement with respect to its securities, that would have the effect of
impairing the rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof.
(g) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, or waived unless the same shall be in writing and signed by the
Company and each Holder. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of all of the
Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.
(h) Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be delivered as set forth
in the Purchase Agreement or the Third Security Purchase Agreement, as
applicable.
(i) 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. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. The Company may not assign its
rights (except by merger or in connection with another entity acquiring all or
substantially all of the Company153s assets) or obligations hereunder without the
prior written consent of all the Holders of the then outstanding Registrable
Securities. Each Holder may assign its respective rights with respect to any or
all of its Shares, Warrant Shares and/or Third Security Shares hereunder in the
manner and to the Persons as permitted under the Purchase Agreement or the Third
Security Purchase Agreement, as applicable; provided in each case that
(i) the Holder agrees in writing with the transferee or assignee to assign such
rights and related obligations under this Agreement, and for the transferee or
assignee to assume such obligations, and a copy of such agreement is furnished
to the Company within a reasonable time after such assignment, (ii) the Company
is, within a reasonable time after such transfer or assignment, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being transferred
or assigned, (iii) at or before the time the Company received the written notice
contemplated by clause (ii) of this sentence, the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained
herein and (iv) the transferee is an “accredited investor,” as that term is
defined in Rule 501 of Regulation D.
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(j) Execution and Counterparts. This Agreement may be executed in two
or more 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 and shall become effective when counterparts have been signed by each
party and delivered to the other party, it being understood that both parties
need not sign the same counterpart. In the event that any signature is delivered
by facsimile transmission or by e-mail delivery of a “.pdf” format data file,
such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature were the original thereof.
(k) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.
(l) Cumulative Remedies. Except as provided herein, the remedies
provided herein are cumulative and not exclusive of any other remedies provided
by law.
(m) 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 good faith reasonable 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.
(n) Headings. The headings in this Agreement are for convenience only
and shall not limit or otherwise affect the meaning hereof.
[signature pages follow]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
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TRANSGENOMIC, INC. |
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Craig J. Tuttle |
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Title: |
President/Chief Executive Officer |
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
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HOLDER: |
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AUTHORIZED SIGNATORY |
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By: |
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Name: |
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Title: |
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AUTHORIZED SIGNATORY |
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c/o: |
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Street: |
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Attention: |
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Annex A
PLAN OF DISTRIBUTION
We are registering the shares of common stock previously issued to the
selling stockholders and issuable upon exercise of the warrants previously
issued to the selling stockholders to permit the resale of these shares of
common stock by the holders of the common stock and warrants from time to time
after the date of this prospectus. We will not receive any of the proceeds from
the sale by the selling stockholders of the shares of common stock. We will bear
all fees and expenses incident to our obligation to register the shares of
common stock.
The selling stockholders may sell all or a portion of the shares of common
stock beneficially owned by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers or agents. If the shares of
common stock are sold through underwriters or broker-dealers, the selling
stockholders will be responsible for underwriting discounts or commissions or
agent153s commissions. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
The selling stockholders will act independently of us in making decisions with
respect to the timing, manner and size of each sale. These sales may be effected
in transactions, which may involve crosses or block transactions,
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on any national securities exchange or quotation service on which the |
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in the over-the-counter market; |
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in transactions otherwise than on these exchanges or systems or in the |
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through the writing of options, whether such options are listed on an options |
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ordinary brokerage transactions and transactions in which the broker-dealer |
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block trades in which the broker-dealer will attempt to sell the shares as |
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purchases by a broker-dealer as principal and resale by the broker-dealer for |
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an exchange distribution in accordance with the rules of the applicable |
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privately negotiated transactions; |
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short sales; |
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through the distribution of the common stock by any selling stockholders to |
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through one or more underwritten offerings on a firm commitment or best |
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sales pursuant to Rule 144; |
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broker-dealers may agree with the selling stockholders to sell a specified |
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a combination of any such methods of sale; and |
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any other method permitted pursuant to applicable law. |
If the selling stockholders effect such transactions by selling shares of
common stock to or through underwriters, broker-dealers or agents, such
underwriters, broker-dealers or agents may receive commissions in the form of
discounts, concessions or commissions from the selling stockholders or
commissions from purchasers of the shares of common stock for whom they may act
as agent or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved). In connection
with sales of the shares of common stock or otherwise, the selling stockholders
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the shares of common stock in the course of hedging in
positions they assume. The selling stockholders may also sell shares of common
stock short and deliver shares of common stock covered by this prospectus to
close out short positions and to return borrowed shares in connection with such
short sales. The selling stockholders may also loan or pledge shares of common
stock to broker-dealers that in turn may sell such shares.
The selling stockholders may pledge or grant a security interest in some or
all of the shares of common stock or warrants owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time pursuant to this
prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act amending, if necessary, the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus. The selling stockholders
also may transfer and donate the shares of common stock in other circumstances
in which case the transferees, donees, pledgees or other successors in interest
will be the selling beneficial owners for purposes of this prospectus.
The selling stockholders and any broker-dealer participating in the
distribution of the shares of common stock may be deemed to be “underwriters”
within the meaning of the Securities Act, and any commission paid, or any
discounts or concessions allowed to, any such broker-dealer may be deemed to be
underwriting commissions or discounts under the Securities Act. At the time a
particular offering of the shares of common stock is made, a prospectus
supplement, if required, will be distributed which will set forth the aggregate
amount of shares of common stock being offered and the terms of the offering,
including the name or names of any broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker-dealers. The selling stockholders may indemnify any
broker-dealer that participates in transactions involving the sale of the shares
of common stock against certain liabilities, including liabilities arising under
the Securities Act.
Under the securities laws of some states, the shares of common stock may be
sold in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of common stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.
There can be no assurance that any selling stockholder will sell any or all
of the shares of common stock registered pursuant to the registration statement,
of which this prospectus forms a part.
The selling stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Regulation
M of the Exchange Act, which may limit the timing of purchases and sales of any
of the shares of common stock by the selling stockholders and any other
participating person. Regulation M may also restrict the ability of any person
engaged in the distribution of the shares of common stock to engage in
market-making activities with respect to the shares of common stock. All of the
foregoing may affect the marketability of the shares of common stock and the
ability of any person or entity to engage in market-making activities with
respect to the shares of common stock.
We will pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, estimated to be $______ in total,
including, without limitation, SEC filing fees and expenses of compliance with
state securities or “Blue Sky” laws; provided, however, that a
selling stockholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling stockholders against liabilities,
including some liabilities under the Securities Act, in accordance with the
registration rights agreement, or the selling stockholders will be entitled to
contribution. We may be indemnified by the selling stockholders against civil
liabilities, including liabilities under the Securities Act, that may arise from
any written information furnished to us by the selling stockholder specifically
for use in this prospectus, in accordance with the registration rights
agreement, or we may be entitled to contribution.
Once sold under the registration statement, of which this prospectus forms a
part, the shares of common stock will be freely tradable in the hands of persons
other than our affiliates.
Annex B
TRANSGENOMIC, INC.
SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE
The undersigned holder of shares of the common stock, par value $0.01 per
share, of Transgenomic, Inc. (the “Company“) understands that the
Company intends to file with the Securities and Exchange Commission a
registration statement on Form S-1 (the “Resale Registration
Statement”) for the registration and the resale under Rule 415 of the
Securities Act of 1933, as amended (the “ Securities Act“), of the
Registrable Securities in accordance with the terms of the Registration Rights
Agreement. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Registration Rights Agreement.
In order to sell or otherwise dispose of any Registrable Securities pursuant
to the Resale Registration Statement, a holder of Registrable Securities
generally will be required to be named as a selling stockholder in the related
prospectus or a supplement thereto (as so supplemented, the
“Prospectus“), deliver the Prospectus to purchasers of Registrable
Securities (including pursuant to Rule 172 under the Securities Act) and be
bound by the provisions of the Registration Rights Agreement (including certain
indemnification provisions, as described below). Holders must complete and
deliver this Notice and Questionnaire in order to be named as selling
stockholders in the Prospectus. Holders of Registrable Securities who do
not complete, execute and return this Notice and Questionnaire within three
Trading Days following the date of the Registration Rights Agreement (1) will
not be named as selling stockholders in the Resale Registration Statement or the
Prospectus and (2) may not use the Prospectus for resales of Registrable
Securities.
Certain legal consequences arise from being named as a selling stockholder in
the Resale Registration Statement and the Prospectus. Holders of Registrable
Securities are advised to consult their own securities law counsel regarding the
consequences of being named or not named as a selling stockholder in the Resale
Registration Statement and the Prospectus.
NOTICE
The undersigned holder (the “Selling Stockholder“) of Registrable
Securities hereby gives notice to the Company of its intention to sell or
otherwise dispose of Registrable Securities owned by it and listed below in Item
(3), unless otherwise specified in Item (3), pursuant to the Resale Registration
Statement. The undersigned, by signing and returning this Notice and
Questionnaire, understands and agrees that it will be bound by the terms and
conditions of this Notice and Questionnaire and the Registration Rights
Agreement.
The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and complete:
QUESTIONNAIRE
|
1. |
Name. |
|
|
(a) |
Full Legal Name of Selling Stockholder: |
|
|
____________________________ |
|
(b) |
Full Legal Name of Registered Holder (if not the same as (a) above) through |
|
|
____________________________ |
||
|
(c) |
Full Legal Name of Natural Control Person (which means a natural person who |
|
|
____________________________ |
|
2. |
Address for Notices to Selling Stockholder: |
|
Telephone: |
|
Fax: |
|
Contact Person: |
|
E-mail address of Contact Person: |
|
3. |
Beneficial Ownership of Registrable Securities: |
|
|
(a) |
Type and Number of Registrable Securities beneficially owned: |
|
|
____________________________ |
||
|
____________________________ |
||
|
____________________________ |
||
|
(b) |
Number of shares of Common Stock to be registered pursuant to this Notice for |
|
|
____________________________ |
||
|
____________________________ |
||
|
____________________________ |
|
4. |
Broker-Dealer Status: |
|
|
(a) |
Are you a broker-dealer? |
|
Yes ¨ No ¨
|
(b) |
If “yes” to Section 4(a), did you receive your Registrable Securities as |
Yes ¨ No ¨
|
Note: |
If no, the Commission153s staff has indicated that you should be identified as |
|
(c) |
Are you an affiliate of a broker-dealer? |
Yes ¨ No ¨
|
Note: |
If yes, provide a narrative explanation below: |
|
|
____________________________ |
||
|
____________________________ |
|
(d) |
If you are an affiliate of a broker-dealer, do you certify that you bought |
Yes ¨ No ¨
|
Note: |
If no, the Commission153s staff has indicated that you should be identified as |
|
5. |
Beneficial Ownership of Other Securities of the Company Owned by the |
|
Except as set forth below in this Item 5, the undersigned is not the |
Type and amount of other securities beneficially owned:
___________________________________________________________________________________________________
________________________________________________________
___________________________________________________________________________________________________
________________________________________________________
|
6. |
Relationships with the Company: |
|
Except as set forth below, neither the undersigned nor any of its |
|
State any exceptions here: |
|
|
7. |
Plan of Distribution: |
|
The undersigned has reviewed the form of Plan of Distribution attached as |
|
|
State any exceptions here: |
|
***********
The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the effective date of any applicable Resale Registration
Statement. All notices hereunder and pursuant to the Registration Rights
Agreement shall be made in writing, by hand delivery, confirmed or facsimile
transmission, first-class mail or air courier guaranteeing overnight delivery at
the address set forth below. In the absence of any such notification, the
Company shall be entitled to continue to rely on the accuracy of the information
in this Notice and Questionnaire.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to Items (1) through (7) above and
the inclusion of such information in the Resale Registration Statement and the
Prospectus. The undersigned understands that such information will be relied
upon by the Company in connection with the preparation or amendment of any such
Registration Statement and the Prospectus.
By signing below, the undersigned acknowledges that it understands its
obligation to comply, and agrees that it will comply, with the provisions of the
Exchange Act and the rules and regulations thereunder, particularly Regulation M
in connection with any offering of Registrable Securities pursuant to the Resale
Registration Statement. The undersigned also acknowledges that it understands
that the answers to this Questionnaire are furnished for use in connection with
Registration Statements filed pursuant to the Registration Rights Agreement and
any amendments or supplements thereto filed with the Commission pursuant to the
Securities Act.
By returning this Questionnaire, the undersigned will be deemed to be aware
of the foregoing interpretation.
I confirm that, to the best of my knowledge and belief, the foregoing
statements (including, without limitation the answers to this Questionnaire) are
correct.
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: |
||
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