EXHIBIT 10.4
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made as of May
___, 2006, by and among Applied DNA Sciences, Inc., a Nevada corporation (the
"Company"), and each of the undersigned (individually, the "Subscriber").
WHEREAS, the Company has sold up to 140 units (the "Units") as of the date
hereof to "accredited investors" who are not "U.S. persons," including the
Subscriber, at a price of $50,000 per Unit for a maximum offering of $7,000,000
(the "Offering");
WHEREAS, each Unit consists of (i) a $50,000 principal amount 10% Secured
Convertible Promissory Note (each a "Note," or collectively, the "Notes") and
(ii) a warrant to purchase 100,000 shares of common stock of Applied DNA (each a
"Warrant," or collectively, the "Warrants"); and
WHEREAS, the Company desires to provide to the holders of the Notes and
the Warrants certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar successor
statute as each may be in effect from time to time (collectively, the
"Securities Act"), and applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Subscriber
agree as follows:
ARTICLE 1 - DEFINITIONS
1.1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Agreement" has the meaning set forth in the preamble hereto.
(b) "Business Day" means any day other than a Saturday, Sunday or
holiday on which banking institutions in New York, New York are closed.
(c) "Company" has the meaning set forth in the preamble hereto.
(d) "Common Stock" shall mean the common stock of the Company, par
value $0.001 per share.
(e) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, or any
similar successor statute, as each may be in effect from time to time.
(f) "Investors" means, collectively, the holders of the Notes and
the Warrants and any of their transferees or assignees who have
registration rights under this Agreement in accordance with the terms
hereof. "Investor" means any such persons, individually.
(g) "Note" or "Notes" has the meaning set forth in the preamble
hereto.
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(h) "Note Shares" means the shares of Common Stock issued or
issuable upon conversion of the Notes.
(i) "register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and the declaration or
ordering of effectiveness of such Registration Statement or Statements by
the SEC.
(j) "Registrable Securities" means (i) the Warrant Shares, (ii) the
Note Shares, (iii) any Common Stock issued or issuable in respect of the
Warrant Shares or the Notes Shares upon any stock split, stock dividend,
recapitalization, or similar event; and (iv) any capital stock or other
securities otherwise issued or issuable with respect to the Warrant Shares
or the Notes Shares; provided, however, that shares of Common Stock or
other securities shall only be treated as Registrable Securities if and
for so long as they have not been (A) sold to or through a broker or
dealer or underwriter in a public distribution, or (B) sold in a
transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(l) thereof, in the case
of either clause (A) or clause (B) in such a manner that, upon the
consummation of such sale, all transfer restrictions and restrictive
legends with respect to such shares are removed upon the consummation of
such sale. For the avoidance of doubt, "Registrable Securities" does not
include any unexercised option(s) or warrant(s) for the purchase of any
capital stock or convertible notes of the Company.
(k) "Registration Statement" means any registration statement of the
Company, and any amendments thereto, under the Securities Act subject to
or pursuant to Article 2 or another provision of this Agreement, as
applicable.
(l) "SEC" means the United States Securities and Exchange
Commission.
(m) "Selling Securityholder" means any Investor participating in any
registration of Registrable Securities pursuant to this Agreement.
(n) "Subscriber" has the meaning set forth in the preamble hereto.
(o) "Warrant Shares" means the shares of Common Stock issued or
issuable upon exercise of the Warrants.
1.2. Capitalized Terms. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings set forth in the agreements
with respect to sale of Registrable Securities.
ARTICLE 2 - REGISTRATION
2.1. Registration. The Company shall prepare and file a registration
statement with the SEC with respect to the Registrable Securities underlying the
Notes and the Warrants within 30 days of the Company's Registration Statement or
Form SB-2 (SEC File No. 333-122848), as amended, being declared effective by the
SEC. The Company shall use its reasonable best efforts to have the Registration
Statement declared effective by the SEC by no later than 180 days after filing.
The obligations of the Company to file and have the Registration Statement
declared effective shall terminate as to any holder of the Units upon the
earlier of the date: (a) when all of
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such holder's Registrable Securities may be sold during a single three (3) month
period under Rule 144 of the Securities Act; and (b) when all of such holder's
Registrable Securities may be transferred under Rule 144(k) of the Securities
Act unless such holder later becomes an affiliate of the Company (as defined in
Rule 144 of the Securities Act) in which case the Company's obligation shall be
revived until such holder's rights otherwise terminate under clause (a) above.
ARTICLE 3 - OBLIGATIONS OF THE COMPANY
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
3.1. Availability of Registration Statement. The Company shall prepare
promptly and file with the SEC any Registration Statement required by Article 2,
use reasonable best efforts to cause such Registration Statement relating to the
Registrable Securities to become effective within 180 days after such filing,
and keep the Registration Statement continuously effective and available for use
at all times, except as set forth herein, until such date as all of the
Registrable Securities have been sold pursuant to such Registration Statement or
the registration rights with respect to the Registrable Securities have been
terminated pursuant to Section 2.1 hereof (the "Registration Period").
3.2. Amendments to Registration Statement. The Company shall prepare and
file with the SEC such amendments (including post-effective amendments) and
supplements to a Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to keep the Registration
Statement effective and such prospectus available for use at all times during
the Registration Period (including, without limitation, amendments and
supplements necessary in connection with a change in the "Plan of Distribution"
section in any Registration Statement or prospectus) and, during such period,
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities covered by the Registration Statement until the
termination of the Registration Period. The Company shall cause any such
amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof.
3.3. Correction of Statements or Omissions. As soon as practicable after
becoming aware of such event, the Company shall publicly announce or notify all
Selling Securityholders of the happening of any event, of which the Company has
actual knowledge, as a result of which the prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a material fact or
fails to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and use commercially reasonable
efforts as soon as possible to (but in any event it shall within five Business
Days or three Business Days of the receipt by the Company from its accountants
of financial information required to correct such untrue statement or omission,
as applicable) prepare a supplement or amendment to the Registration Statement
(and make all required filings with the SEC and all applicable state securities
or blue sky commissions) to correct such untrue statement or omission if not
otherwise satisfied through the filing of a report to the SEC or otherwise
pursuant to applicable securities laws (but such a supplement or amendment or
other filing shall not be required if, notwithstanding the Company's
commercially reasonable efforts to so prepare and file such supplement,
amendment or other filing, such a supplement, amendment or other filing is no
longer required by applicable law to correct such untrue statement or omission
because such untrue statement or omission no longer exists) and the Company
shall simultaneously (and
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thereafter as requested) deliver such number of copies of such supplement or
amendment to each Investor (or other applicable document) as such Investor may
request in writing.
3.4. Stop Orders. The Company shall use commercially reasonable efforts to
prevent the issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest practicable time, and the Company shall
immediately notify all Selling Securityholders and, in the event of an
underwritten offering, the managing underwriter(s), of the issuance of such
order and the resolution thereof.
3.5. Listing. The Company shall use commercially reasonable efforts to
cause the listing and the continuation of listing of all the Registrable
Securities covered by any Registration Statement on each securities exchange or
quotation system upon which any other securities of the Company is then listed
or quoted.
3.6. Transfer Agent. The Company shall provide a transfer agent and
registrar, which may be a single entity, for the Registrable Securities not
later than the effective date of the Registration Statement.
3.7. Compliance with Laws. The Company shall comply with all applicable
laws related to a Registration Statement and offering and sale of securities
covered by the Registration Statement and all applicable rules and regulations
of governmental authorities in connection therewith (including, without
limitation, the Securities Act and the Exchange Act).
ARTICLE 4 - OBLIGATIONS OF THE INVESTORS
4.1. Obligations of the Investors. Each Investor electing to participate
in any registration of Registrable Securities as a Selling Securityholder
generally agrees as follows:
(a) Information Concerning Investors; Cooperation. Each Selling
Securityholder agrees to cooperate with the Company in connection with the
preparation and filing of any Registration Statement hereunder, and for so
long as the Company is obligated to keep any such Registration Statement
effective, such Selling Securityholder will provide to the Company, in
writing, for use in the Registration Statement, all information regarding
such Selling Securityholder, the Registrable Securities held by him, her
or it, the intended method of distribution of such Registrable Securities
and such other information as may be necessary to enable the Company to
prepare the Registration and prospectus covering the Registrable
Securities and to maintain the currency and effectiveness thereof. At
least 30 days prior to the first anticipated filing date of a Registration
Statement, the Company shall notify each Selling Securityholder of the
information the Company so requires from each such Selling Securityholder
and each Selling Securityholder shall deliver to the Company such
requested information within 20 days of request therefor or shall be
excluded from such registration.
(b) SEC. Each Selling Securityholder agrees to use reasonable
efforts to cooperate with the Company (at the Company's expense) in
responding to comments of the staff of the SEC relating to such Investor.
(c) Suspension of Offering or Distribution. On notice from the
Company of the happening of any of the events specified in Sections 3.3 or
3.4, the
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Company requires the suspension by such Selling Securityholder of the
distribution of any of the Registrable Securities, then such Selling
Securityholder shall cease offering or distributing the Registrable
Securities until such time as the Company notifies such Selling
Securityholder that offering and distribution of the Registrable
Securities may recommence.
ARTICLE 5 - EXPENSES OF REGISTRATION
5.1. Expenses. With respect to each registration of Registrable Securities
hereunder, all expenses (other than underwriting discounts and commissions and
transfer taxes), including, without limitation, the reasonable fees and
disbursements of one counsel to the Selling Securityholders, all registration,
listing and qualification fees, printers and accounting fees, and the fees and
disbursements of counsel for the Company, shall be borne by the Company.
ARTICLE 6 - INDEMNIFICATION
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
6.1. Indemnification by the Company. The Company will indemnify, hold
harmless and defend (a) each Selling Securityholder, (b) each underwriter of
Registrable Securities, and (c) the directors, officers, partners, members,
employees, agents and persons who control each such Selling Securityholder and
any such underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, if any (each, a "Investor Indemnified Person"),
against any losses, claims, damages, liabilities or expenses (collectively,
together with actions, proceedings or inquiries whether or not in any court,
before any administrative body or by any regulatory or self-regulatory
organization, whether commenced or threatened, in respect thereof, "Claims") to
which any of them may become subject insofar as such Claims arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of a material
fact in a Registration Statement or the omission or alleged omission to state
therein a material fact required to be stated or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used
prior to the effective date of such Registration Statement, or contained in the
final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading, or (iii) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities (the matters in the
foregoing clauses (i) through (iii) being, collectively, "Violations"). The
Company shall reimburse each such Investor Indemnified Person, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees and
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the Company shall not be required to indemnify or hold harmless a
Investor Indemnified Person (A) with respect to a Claim arising out of or based
upon (1) any violation of federal or state securities laws, rules or regulations
committed by such Investor Indemnified Persons (or any person who controls any
of them or any agent, broker-dealer or underwriter engaged by them) or in the
case of a non-underwritten offering, any failure by such Investor Indemnified
Person to give any purchaser of Registrable Securities at or prior to the
written confirmation of such sale, a copy of
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the most recent prospectus, (2) an untrue statement or omission contained in any
Registration Statement or prospectus which statement or omission was made in
reliance upon and in conformity with written information provided by or on
behalf of such Investor Indemnified Person specifically for use or inclusion in
the Registration Statement or any prospectus, (3) any prospectus used after such
time as the Company advised such Investor Indemnified Person that the filing of
a post effective amendment or supplement thereto was required, except the
prospectus as so amended or supplemented, or (4) any prospectus used after such
time as the Company's obligation to keep the Registration Statement effective
and current has expired or been suspended hereunder, provided, that the Company
has so advised such Investor Indemnified Person; (B) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld; and (C) with respect to any preliminary prospectus, shall not inure to
the benefit of a Investor Indemnified Person if the untrue statement or omission
of material fact contained in the preliminary prospectus was corrected on a
timely basis in the prospectus, as then amended or supplemented, if such
corrected prospectus was timely made available by the Company pursuant to
Section 3.3 hereof, and such Investor Indemnified Person was promptly advised in
writing not to use the incorrect prospectus prior to the use giving rise to a
Claim and such Investor 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 Investor Indemnified Person and shall
survive the transfer of the Registrable Securities by a Investor pursuant to
Article 9.
6.2. Indemnification by Investors. An Investor shall indemnify, hold
harmless and defend, to the same extent and in the same manner set forth in
Section 6.1, the Company, each of its directors, each of its officers who signs
the Registration Statement, its employees, agents and persons, if any, who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and any other securityholder selling securities
pursuant to the Registration Statement and any underwriter of securities covered
by such Registration Statement, together with its directors, officers and
members, and any person who controls such securityholder or underwriter within
the meaning of the Securities Act or the Exchange Act (each, a "Company
Indemnified Person"), against any Claim to which any of them may become subject,
under the Securities Act, the Exchange Act or otherwise, insofar as such Claim
arises out of or is based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and such
Investor will reimburse any legal or other expenses (promptly as such expenses
are incurred and are due and payable) reasonably incurred by them in connection
with investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 6.2 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably
withheld; and provided, further, however, that such Investor shall be liable
under this Agreement (including this Section 6.2 and Article 7) for only that
amount as does not exceed the net proceeds actually received by such Investor as
a result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Company Indemnified Person and
shall survive the transfer of the Registrable Securities by such Investor
pursuant to Article 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6.2 with respect
to any preliminary prospectus shall not inure to the benefit of any Company
Indemnified Person if the untrue statement or omission of material fact
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contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, and the Company Indemnified Person
failed to utilize such corrected prospectus.
6.3. Notices. Promptly after receipt by a Investor Indemnified Person or
Company Indemnified Person under this Article 6 of notice of the commencement of
any action (including any governmental action), such Investor Indemnified Person
or Company Indemnified Person shall, if a Claim in respect thereof is to be made
against any indemnifying party under this Article 6, deliver to the indemnifying
party a written notice of the commencement thereof, and the indemnifying party
shall have the right (at its expense) to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume and continue control of the defense thereof with
counsel mutually satisfactory to the indemnifying party and the Investor
Indemnified Person or the Company Indemnified Person, as the case may be;
provided, however, that such indemnifying party shall diligently pursue such
defense and an indemnifying party shall not be entitled to assume (or continue)
such defense if the representation by such counsel of the Investor Indemnified
Person or Company Indemnified Person and the indemnifying party would be
inappropriate due to actual or potential conflicts of interest between such
Investor Indemnified Person or Company Indemnified Person and any other party
represented by such counsel in such proceeding or the actual or potential
defendants in, or targets of, any such action include both the Investor
Indemnified Person or the Company Indemnified Person and the indemnifying party,
and any such Investor Indemnified Person or Company Indemnified Person
reasonably determines that there may be legal defenses available to such
Investor Indemnified Person or Company Indemnified Person which are different
from or in addition to those available to such indemnifying party.
Notwithstanding any assumption of such defense and without limiting any
indemnification obligation provided for in Section 6.1 or 6.2, the Company
Indemnified Person or Investor Indemnified Person, as the case may be, shall be
entitled to be represented by counsel (at its own expense if the indemnifying
party is permitted to assume and continue control of the defense and otherwise
at the expense of the indemnifying party) and such counsel shall be entitled to
participate in such defense. 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
Investor Indemnified Person or Company Indemnified Person under this Article VI,
except to the extent that the indemnifying party is actually materially
prejudiced in its ability to defend such action. The indemnification required by
this Article 6 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
ARTICLE 7 - CONTRIBUTION
7.1. To provide for just and equitable contribution, if (i) an indemnified
party makes a claim for indemnification pursuant to Section 6.1 or 6.2 (subject
to the limitations thereof) but it is found in a final judicial determination,
not subject to further appeal, that such indemnification may not be enforced in
such case, even though this Agreement expressly provides for indemnification in
such case, or (ii) any indemnified or indemnifying party seeks contribution
under the Securities Act, the Exchange Act or otherwise, then the Company
(including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the Company who signed any such
registration statement, and any controlling person of the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act), as one entity, and the Selling Securityholders whose Registrable
Securities are included in such
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registration in the aggregate (including for this purpose any contribution by or
on behalf of an indemnified party), as a second entity, shall contribute to the
losses, liabilities, claims, damages, and expenses whatsoever to which any of
them may be subject, on the basis of relevant equitable considerations such as
the relative fault of the Company and such Selling Securityholders in connection
with the facts which resulted in such losses, liabilities, claims, damages, and
expenses. The relative fault, in the case of an untrue statement, alleged untrue
statement, omission, or alleged omission, shall be determined by, among other
things, whether such statement, alleged statement, omission, or alleged omission
relates to information supplied by the Company or by such Selling
Securityholders, and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement, alleged
statement, omission, or alleged omission. Subject to the following sentence, the
Company and Investors agree that it would be unjust and inequitable if the
respective obligations of the Company and the Selling Securityholders for
contribution were determined by pro rata or per capita allocation of the
aggregate losses, liabilities, claims, damages, and expenses (even if the
Selling Securityholders and the other indemnified parties were treated as one
entity for such purpose) or by any other method of allocation that does not
reflect the equitable considerations referred to in this Section 7.1. In no case
shall any Selling Securityholder be responsible for a portion of the
contribution obligation imposed on all Selling Securityholders in excess of the
net proceeds actually received by such Selling Securityholder as a result of the
sale of Registrable Securities pursuant to such Registration Statement. No
person guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation. For purposes of this
Section 7.1, each person, if any, who controls any Selling Securityholder within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act and each officer, director, partner, employee, agent, and counsel of each
such Selling Securityholder or control person shall have the same rights to
contribution as such Selling Securityholder or control person and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, each officer of the Company
who signs the Registration Statement, each director of the Company, and its or
their respective counsel shall have the same rights to contribution as the
Company, subject in each case to the provisions of this Section 7.1. Anything in
this Section 7.1 to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This Section 7.1 is intended to supersede any right
to contribution under the Securities Act, the Exchange Act or otherwise.
ARTICLE 8 - MARKET STAND-OFF
8.1. "Market Stand-Off". Each Investor hereby agrees that, during the
period specified by the Company and any underwriter of Common Stock or other
securities of the Company following the effective date of a Registration
Statement of the Company filed under the Securities Act, it shall not, to the
extent requested by the Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of the Company
held by it at any time during such period except Common Stock included in such
registration; provided, that (i) such market stand-off time period shall not
exceed 180 days following the effective date of such registration if such
registration relates to the Company's initial public offering of securities, and
shall not exceed 90 days following the effective date of such registration in
all other cases; (ii) the directors, officers and holders of more than 2% of the
Company's then outstanding capital stock (each such director,
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officer and stockholder, a "Lockup Party") shall have agreed to be at least as
restricted with respect to the offer, sale or other transfer of such persons'
securities in the Company (a "lockup"); and (iii) the Company shall promptly
provide notice to each Investor of any discretionary waiver or early termination
by the Company or its underwriter of the lockup of any Lockup Party, and cause
each Investor to receive, on a proportionate basis, the benefit of any such
waiver or termination.
ARTICLE 9 - REPORTS UNDER THE EXCHANGE ACT
9.1. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the SEC which may at any time permit the sale
of the Registrable Securities to the public without registration after such time
as a public market exists for the Common Stock of the Company, the Company
agrees to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times
after the date that the Company becomes subject to the reporting
requirements of the Securities Act or the Exchange Act;
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) So long as any Investor owns any Registrable Securities, to
furnish to such Investor forthwith upon written request a written
statement by the Company as to its compliance with the reporting
requirements of said Rule 144 (at any time after 90 days after the
effective date of the first registration statement filed by the Company
for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents
of the Company and other information in the possession of or reasonably
obtainable by the Company as any such Investor may reasonably request in
availing itself of any rule or regulation of the SEC allowing such
Investor to sell any such securities without registration.
ARTICLE 10 - AMENDMENT AND ASSIGNMENT OF REGISTRATION RIGHTS
10.1. Assignment of Registration Rights. The rights of any Investor
hereunder as to Registrable Securities transferred by such Investor, including
the right to have the Company register Registrable Securities pursuant to this
Agreement, shall be automatically assigned by the Investor to any transferee of
all or any portion of the Registrable Securities, whether such transfer occurs
before or after the Registration Statement becomes effective, if: (a) the
transferring Investor agrees in writing with the transferee or assignee to
assign such rights, and a copy of such agreement is furnished to the Company
within 10 days after such assignment, (b) the Company is, within 10 days after
such transfer or assignment, furnished with written notice of (i) the name and
address of such transferee or assignee, and (ii) the securities with respect to
which such registration rights are being transferred or assigned, (c) following
such transfer or assignment, the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act or applicable
state securities laws, and (d) at or before the time the Company
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receives the written notice contemplated by clause (b) of this sentence, the
transferee or assignee agrees in writing for the benefit of the Company to be
bound by all of the provisions contained herein. The rights of any Investor
hereunder with respect to any Registrable Securities retained by such Investor
shall not be assigned by virtue of the transfer of other Registrable Securities.
10.2. Amendment of Registration Rights. Except as expressly provided in
this Agreement, neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by
the party against whom enforcement of any such amendment, waiver, discharge or
termination is sought; provided, however, that holders of more than 50% of the
Registrable Securities may, with the written consent of the Company, waive,
modify or amend on behalf of all holders, any provisions hereof benefitting such
holders, so long as the effect thereof will be that all such holders will be
treated equally.
ARTICLE 11 - MISCELLANEOUS
11.1. Registered Holders. A person or entity is deemed to be a holder (or
a holder in interest) of Registrable Securities whenever such person or entity
owns of record such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more persons or entities with
respect to the same Registrable Securities, the Company shall act upon the basis
of instructions, notice or election received from the registered owner of such
Registrable Securities.
11.2. Notices, etc. All notices and other communications required or
permitted under this Agreement shall be sent by registered or certified mail,
postage prepaid, overnight courier, confirmed facsimile or other electronic
transmission or otherwise delivered by hand or by messenger, addressed (a) if to
a Investor, at such Investor's address set forth on the signature page hereto or
at such other address as such Investor shall have furnished to the Company in
writing, (b) if to the Company at its offices to the attention of the President
or at such other address as the Company shall have furnished to the Investors in
writing, or (c) if any transferee or assignee of a Investor pursuant to Section
10.1, at such address as such transferee or assignee shall have furnished to the
Company in writing. Each such notice or other communication shall for all
purposes of this Agreement be treated as effective or having been received or
given, as applicable, (i) when delivered if delivered personally, (ii) if sent
by mail, at the earlier of its receipt or three Business Days after the
registration or certification thereof, (iii) if sent by overnight courier, one
Business Day after the same has been deposited with a nationally recognized
courier service, or (iv) when sent by confirmed facsimile or other electronic
transmission, on the day sent (if a Business Day) if sent during normal business
hours of the recipient, and if not, then on the next Business Day (provided,
that such facsimile or other electronic transmission is followed by delivery via
another method permitted by this Section 11.2).
11.3. Delays or Omissions. Except as expressly provided in this Agreement,
no delay or omission to exercise any right, power or remedy accruing to any
Investor upon any breach or default of the Company under this Agreement shall
impair any such right, power or remedy of such Investor nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any Investor of any
breach or default under this Agreement, or any waiver on the part of any
Investor of any provisions or conditions of this Agreement, must be in writing
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and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any Investor shall be cumulative and not alternative.
11.4. Governing Law; Jurisdiction. This Agreement shall be governed in all
respects by the laws of the State of New York without giving effect to the
conflicts of laws principles thereof. All suits, actions or proceedings arising
out of, or in connection with, this Agreement or the transactions contemplated
by this Agreement shall be brought in any federal or state court of competent
subject matter jurisdiction sitting in New York, New York Each of the parties
hereto by execution and delivery of this Agreement, expressly and irrevocably
(i) consents and submits to the personal jurisdiction of any such courts in any
such action or proceeding; (ii) consents to the service of any complaint,
summons, notice or other process relating to any such action or proceeding by
delivery thereof to such party as set forth in Section 11.2 hereof; and (iii)
waives any claim or defense in any such action or proceeding based on any
alleged lack of personal jurisdiction, improper venue, forum non conveniens or
any similar basis.
11.5. Entire Agreement; Amendment. This Agreement and the other documents
delivered pursuant to this Agreement at the Closing constitute the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof and thereof and supersede all prior agreements and merge
all prior discussions, negotiations, proposals and offers (written or oral)
between them, and no party shall be liable or bound to any other party in any
manner by any representations, warranties, covenants or agreements except as
specifically set forth herein or therein. Except as expressly provided in this
Agreement, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge or termination
is sought.
11.6. Successors and Assigns. Subject to Article 10 hereof, the provisions
of this Agreement shall inure to the benefit of, and be binding upon, the
permitted successors, assigns, heirs, executors and administrators of the
parties to this Agreement, except that the Company may not assign this Agreement
without the written consent of the Holders of at least 50% of the then
outstanding Registrable Securities.
11.7. Titles and Subtitles. The headings in this Agreement are used for
convenience of reference only and shall not be considered in construing or
interpreting this Agreement.
11.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument. This Agreement may be delivered by facsimile, and facsimile
signatures shall be treated as original signatures for all applicable purposes.
11.9. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
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11.10. Consents. Unless otherwise provided herein, all consents and other
determinations to be made pursuant to this Agreement shall be made on the basis
of a majority in interest (determined by number of securities) with respect to
the Registrable Securities.
11.11. Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
11.12. No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the parties hereto, each investor,
their permitted successors and assigns and parties eligible for indemnification
under Article 6, and only in accordance with the express terms of this
Agreement.
11.13. Confidentiality of Agreement, Press Releases and Public
Announcements. Except as set forth below, the parties shall, and shall cause
their officers, employees and representatives to, treat and hold as confidential
the existence and terms of this Agreement at all times. No party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the Company and the holders
of at least 50% of the number of Registrable Securities; provided, however, that
any party may make any public disclosure it believes in good faith is required
by applicable law (including applicable securities laws) or any listing or
trading agreement concerning its publicly-traded securities to make such
disclosure (in which case the disclosing party will use its reasonable efforts
to advise the other parties in writing prior to making the disclosure).
11.14. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder and any applicable common law, unless the
context requires otherwise. The word "including" shall mean including without
limitation and is used in an illustrative sense rather than a limiting sense.
Terms used with initial capital letters will have the meanings specified,
applicable to singular and plural forms, for all purposes of this Agreement.
Reference to any gender will be deemed to include all genders and the neutral
form.
11.15. Incorporation of Exhibits, Annexes and Schedules. The Exhibits,
Annexes and Schedules identified in this Agreement, if any, are incorporated
herein by reference and made a part hereof.
THIS SPACE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first above written.
APPLIED DNA SCIENCES, INC.
By:
--------------------------------
Name:
Title:
IF INDIVIDUAL INVESTOR:
------------------------------------
(Signature)
------------------------------------
(Printed Name)
IF CORPORATION, TRUST,
ESTATE OR REPRESENTATIVE:
------------------------------------
Name of Investor
By:
--------------------------------
Name:
Title:
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