Contract
Exhibit
10.2
Execution
Copy
This
REGISTRATION RIGHTS AGREEMENT (this "Agreement"),
dated
as of April 17, 2006, is by and between DISCOVERY LABORATORIES, INC. (the
"Company")
and
KINGSBRIDGE CAPITAL LIMITED, an entity organized and existing under the laws
of
the British Virgin Islands (the "Investor").
WHEREAS,
the Company and the Investor have entered into that certain Common Stock
Purchase Agreement, dated as of the date hereof (the "Purchase
Agreement"),
pursuant to which the Company may issue, from time to time, to the Investor
up
to $50 million worth of shares of Common Stock as provided for
therein;
WHEREAS,
pursuant to the terms of, and in partial consideration for the Investor entering
into, the Purchase Agreement, the Company has issued to the Investor a warrant,
exercisable from time to time within five (5) years following the six-month
anniversary of the date of issuance (the "Warrant")
for
the purchase of an aggregate of up to 490,000 shares of Common Stock at a
price
specified in such Warrant;
WHEREAS,
pursuant to the terms of, and in partial consideration for, the Investor's
agreement to enter into the Purchase Agreement, the Company has agreed to
provide the Investor with certain registration rights with respect to the
Registrable Securities (as defined in the Purchase Agreement) as set forth
herein;
NOW,
THEREFORE, in consideration of the premises, the representations, warranties,
covenants and agreements contained herein, in the Warrant, and in the Purchase
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, intending to be legally bound
hereby, the parties hereto agree as follows (capitalized terms used herein
and
not defined herein shall have the respective meanings ascribed to them in
the
Purchase Agreement):
ARTICLE
I
REGISTRATION
RIGHTS
Section
1.1. Registration
Statement.
(a) Filing
of the Registration Statement.
Upon
the terms and subject to the conditions set forth in this Agreement, the
Company
shall file with the Commission within sixty (60) calendar days after the
Closing
Date a registration statement on Form S-3 under the Securities Act or such
other
form as deemed appropriate by counsel to the Company for the registration
for
the resale by the Investor of the Registrable Securities (the "Registration
Statement").
(b) Effectiveness
of the Registration Statement.
The
Company shall use commercially reasonable efforts (i) to have the Registration
Statement declared effective by the Commission as soon as reasonably
practicable, but in any event no later than one hundred eighty (180) calendar
days after the Closing Date and (ii) to ensure that the Registration Statement
remains in effect throughout the term of this Agreement as set forth in Section
4.2, subject to the terms and conditions of this Agreement.
(c) Regulatory
Disapproval.
The
contemplated effective date for the Registration Statement as described in
Section 1.1(b) shall be extended without default or liquidated damages hereunder
or under the Purchase Agreement in the event that the Company's failure to
obtain the effectiveness of the Registration Statement on a timely basis
results
from (i)
the
failure of the Investor 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, or (ii) the
Commission’s
disapproval of the structure of the transactions contemplated by the Purchase
Agreement,
or
(iii)
events or circumstances that are not in any way attributable to the Company.
In
the
event
of
clause (ii) above,
the
parties agree to cooperate with one another in good faith to arrive at a
resolution acceptable to the Commission.
(d) Failure
to Maintain Effectiveness of Registration Statement.
In
the
event the Company fails to maintain the effectiveness of the Registration
Statement (or the Prospectus) throughout the period set forth in Section
4.2,
other than temporary suspensions as set forth in Section 1.1(e) and the Investor
holds any Registrable Securities at any time during the period of such
ineffectiveness (an “Ineffective
Period”),
the
Company shall pay to the Investor in immediately available funds into an
account
designated by the Investor an amount equal to the product of (x) the total
number of Registrable Securities issued to the Investor under the Purchase
Agreement (which, for the avoidance of doubt, shall not include any Warrant
Shares) and owned by the Investor at any time during such Ineffective Period
(and
not
otherwise sold, hypothecated or transferred) and
(y)
the result, if greater than zero, obtained by subtracting the VWAP on the
Trading Day immediately following the last day of such Ineffective Period
from
the VWAP on the Trading Day immediately preceding the day on which any such
Ineffective Period began; provided, however, that (i)
the
foregoing payments shall not apply in respect of Registrable Securities
(A)
that
are
otherwise freely tradable by the Investor,
including pursuant to Rule 144 under the Securities Act (as such Rule may
be
amended from time to time, "Rule 144") or (B) if the Company offers to
repurchase from the Investor such Registrable Securities for a per share
purchase price equal to the VWAP on the Trading Day immediately preceding
the
day on which any such Ineffective Period began and (ii) that the Company
shall
be under no obligation to supplement the Prospectus to reflect the issuance
of
any Shares pursuant to a Draw Down at any time prior to the day following
the
Settlement Date with respect to such Shares and that the failure to supplement
the Prospectus prior to such time shall not be deemed a failure to maintain
the
effectiveness of the Registration Statement (or Prospectus) for purposes
of this
Agreement (including this Section 1.1(d)).
(e) Deferral
or Suspension During a Blackout Period.
Notwithstanding the provisions of Section 1.1(d),
if in the good faith judgment of the Company, following consultation with
internal or external legal counsel, it would be detrimental to the Company
or
its stockholders for the Registration Statement to be filed or for resales
of
Registrable Securities to be made pursuant to the Registration Statement
due to
(i) the
existence of a material development or potential material development involving
the Company that the Company would be obligated to disclose in the Registration
Statement, which disclosure would be premature or otherwise inadvisable at
such
time or would have a Material Adverse Effect on the Company or its stockholders,
or (ii) a
filing
of a Company-initiated registration of any class of its equity securities,
which, in the good faith judgment of the Company, because such filing of
the
Registration Statement or continued resale would adversely affect or require
premature disclosure of the filing of such Company-initiated registration
(notice thereof, a “Blackout
Notice”),
the
Company shall have the right to (A) immediately
defer such filing for a period of not more than sixty (60) days beyond the
date
by which such Registration Statement was otherwise required hereunder to
be
filed or (B) suspend
use of such Registration Statement for a period of not more than thirty (30)
days (any such deferral or suspension period, a “Blackout
Period”).
The
Investor acknowledges that it would be seriously detrimental to the Company
and
its stockholders for such Registration Statement to be filed (or remain in
effect) during a Blackout Period and therefore essential to defer such filing
(or suspend the use thereof) during such Blackout Period and agrees to cease
any
disposition of the Registrable Securities during such Blackout Period. The
Company may not utilize any of its rights under this Section 1.1(e)
to
defer the filing of a Registration Statement (or suspend its effectiveness)
more
than six (6) times in any twelve (12) month period. In the event that, within
fifteen (15) Trading Days following any Settlement Date, the Company gives
a
Blackout Notice to the Investor and the VWAP on the Trading Day immediately
preceding such Blackout Period (“Old
VWAP”)
is
greater than the VWAP on the first Trading Day following such Blackout Period
that the Investor may sell its Registrable Securities pursuant to an effective
Registration Statement (“New
VWAP”),
then
the Company shall pay to the Investor, by wire transfer of immediately available
funds to an account designated by the Investor, the
“Blackout
Amount.”
For
the purposes of this Agreement, Blackout Amount means a percentage equal
to:
(1) seventy-five percent (75%) if such Blackout Notice is delivered
prior to the fifth (5th) Trading Day following such Settlement Date;
(2) fifty percent (50%) if such Blackout Notice is delivered on or after
the fifth (5th) Trading Day following such Settlement Date, but prior to
the
tenth (10th) Trading Day following such Settlement Date; (3) twenty-five
percent (25%) if such Blackout Notice is delivered on or after the tenth
(10th)
Trading Day following such Settlement Date, but prior to the fifteenth (15th)
Trading Day following such Settlement Date; and (4) zero percent (0%)
thereafter of: the product of (i) the
number of Registrable Securities purchased by the Investor pursuant to the
most
recent Draw Down and actually held by the Investor (and not otherwise sold,
hypothecated or transferred) immediately prior to the Blackout
Period
and
(ii) the result, if greater than zero, obtained by subtracting the New VWAP
from the Old VWAP;
provided, however, that no Blackout Amount shall be payable in respect of
Registrable Securities (A) that are otherwise freely tradable by the Investor,
including under Rule 144, during the Blackout Period, or (B) if the Company
offers to repurchase from the Investor such Registrable Securities for a
per
share purchase price equal to the VWAP on the Trading Day immediately preceding
the day on which any such Ineffective Period began.
For any
Blackout Period in respect of which a Blackout Amount becomes due and payable,
rather than paying the Blackout Amount, the Company may at its
sole
discretion, issue to the Investor shares of Common Stock with an aggregate
market value determined as of the first Trading Day following such Blackout
Period equal to the Blackout Amount (“Blackout
Shares”).
2
(f) Liquidated
Damages;
Sole
Remedy.
The
Company and the Investor hereto acknowledge and agree that the amounts payable
under Sections 1.1(d) and 1.1(e) (including
any Blackout Shares) (i)
shall
constitute the Investor’s sole remedy with respect to the Company’s failure to
maintain the effectiveness, or for any deferral or suspension, of the
Registration Statement, and (ii)
shall
constitute liquidated damages and not penalties. The parties further acknowledge
that (A)
the
amount of loss or damages likely to be incurred by the Investor is incapable
or
is difficult to precisely estimate, (B)
the
amounts specified in such subsections bear a reasonable proportion and are
not
plainly or grossly disproportionate to the probable loss likely to be incurred
in connection with any failure by the Company to obtain or maintain the
effectiveness of the Registration Statement, (C)
one of
the reasons for the Company and the Investor reaching an agreement as to
such
amounts was the uncertainty and cost of litigation regarding the question
of
actual damages, and (D)
the
Company and the Investor are sophisticated business parties and have been
represented by sophisticated and able legal and financial counsel and negotiated
this Agreement at arm's length.
The
Investor further agrees that, if the Company makes the payments provided
for in
Section 1.1(e), the Company’s deferral or suspension of the Registration
Statement pursuant to Section 1.1(e) shall not constitute a material breach
or
default of any obligation of the Company to the Investor.
(g) Additional
Registration Statements.
In the
event and to the extent that the Registration Statement fails to register
a
sufficient amount of Common Stock necessary for the Company to issue and
sell to
the Investor and the Investor to purchase from the Company all of the
Registrable Securities to be issued, sold and purchased under the Purchase
Agreement and the Warrant, the Company shall, upon a timetable mutually
agreeable to both the Company and the Investor, prepare and file with the
Commission an additional registration statement or statements in order to
effectuate the purpose of this Agreement, the Purchase Agreement, and the
Warrant.
3
ARTICLE
II
REGISTRATION
PROCEDURES
Section
2.1. Filings;
Information.
The
Company shall effect the registration with respect to the sale of the
Registrable Securities by the Investor in accordance with the intended methods
of disposition thereof. Without limiting the foregoing, the Company in each
such
case will do the following as expeditiously as possible, but in no event
later
than the deadline, if any, prescribed therefor in this Agreement:
(a) Subject
to Section 1.1(e), the Company shall (i) prepare and file with the Commission
the Registration Statement; (ii) use commercially reasonable efforts to cause
such filed Registration Statement to become and to remain effective (pursuant
to
Rule 415 under the Securities Act or otherwise); (iii) prepare and file with
the
Commission such amendments and supplements to the Registration Statement
and the
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective for the time period prescribed by Section
4.2
and in order to effectuate the purpose of this Agreement, the Purchase
Agreement, and the Warrant; and (iv) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered
by such
Registration Statement during such period in accordance with the intended
methods of disposition by the Investor set forth in such Registration Statement;
provided,
however,
that
the Investor shall be responsible for the delivery of the Prospectus to the
Persons to whom the Investor sells the Shares and the Warrant Shares, and
the
Investor 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.
(b) After
the
filing of the Registration Statement, the Company shall promptly notify the
Investor of any stop order issued or threatened by the Commission in connection
therewith and take all commercially reasonable actions required to prevent
the
entry of such stop order or to remove it if entered.
(c) The
Company shall use commercially reasonable efforts to (i) register or qualify
the
Registrable Securities under such other securities or blue sky laws of each
jurisdiction in the United States as the Investor may reasonably (in light
of
its intended plan of distribution) request, and (ii) cause the Registrable
Securities to be registered with or approved by such other governmental agencies
or authorities in the United States as may be necessary by virtue of the
business and operations of the Company and do any and all other customary
acts
and things that may be reasonably necessary or advisable to enable the Investor
to consummate the disposition of the Registrable Securities; provided,
however,
that
the Company will not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this
Section 2.1(c), subject itself to taxation in any such jurisdiction, consent
or
subject itself to general service of process in any such jurisdiction, change
any existing business practices, benefit plans or outstanding securities
or
amend or otherwise modify the Charter or Bylaws.
(d) The
Company shall make available to the Investor (and will deliver to Investor's
counsel), (A) subject to restrictions imposed by the United States federal
government or any agency or instrumentality thereof, copies of all public
correspondence between the Commission and the Company concerning the
Registration Statement and will also make available for inspection by the
Investor and any attorney, accountant or other professional retained by the
Investor (collectively, the "Inspectors"),
(B)
upon reasonable advance notice during normal business hours all financial
and
other records, pertinent corporate documents and properties of the Company
(collectively, the "Records")
as
shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers and employees to supply
all
information reasonably requested by any Inspectors in connection with the
Registration Statement; provided,
however,
that
any such Inspectors must agree in writing for the benefit of the Company
not to
use or disclose any such Records except as provided in this Section 2.1(d).
Records that the Company determines, in good faith, to be confidential and
that
it notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless the disclosure or release of such Records is requested
or
required pursuant to oral questions, interrogatories, requests for information
or documents or a subpoena or other order from a court of competent jurisdiction
or other judicial or governmental process; provided,
however,
that
prior to any disclosure or release pursuant to the immediately preceding
clause,
the Inspectors shall provide the Company with prompt notice of any such request
or requirement so that the Company may seek an appropriate protective order
or
waive such Inspectors' obligation not to disclose such Records; and,
provided,
further,
that if
failing the entry of a protective order or the waiver by the Company permitting
the disclosure or release of such Records, the Inspectors, upon advice of
counsel, are compelled to disclose such Records, the Inspectors may disclose
that portion of the Records that counsel has advised the Inspectors that
the
Inspectors are compelled to disclose; provided,
however,
that
upon any such required disclosure, such Inspector shall use his or her best
efforts to obtain reasonable assurances that confidential treatment will
be
afforded such information. The Investor agrees that information obtained
by it
solely as a result of such inspections (not including any information obtained
from a third party who, insofar as is known to the Investor after reasonable
inquiry, is not prohibited from providing such information by a contractual,
legal or fiduciary obligation to the Company) shall be deemed confidential
and
shall not be used for any purposes other than as indicated above or by it
as the
basis for any market transactions in the securities of the Company or its
affiliates unless and until such information is made generally available
to the
public. The Investor further agrees that it will, upon learning that disclosure
of such Records is sought in a court of competent jurisdiction, give notice
to
the Company and allow the Company, at its expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential.
4
(e) The
Company shall otherwise comply, in all material respects, with the applicable
rules and regulations of the Commission, including, without limitation,
compliance with applicable reporting requirements under the Exchange
Act.
(f) The
Company shall appoint a transfer agent and registrar for all of the Registrable
Securities covered by such Registration Statement not later than the effective
date of such Registration Statement.
(g) The
Investor shall cooperate with the Company, as reasonably requested by the
Company, in connection with the preparation and filing of any Registration
Statement hereunder. The Company may require the Investor to promptly furnish
in
writing to the Company such information as may be required in connection
with
such registration including, without limitation, all such information as
may be
requested by the Commission or the NASD or any state securities commission
and
all such information regarding the Investor, the Registrable Securities held
by
the Investor and the intended method of disposition of the Registrable
Securities. The Investor agrees to provide such information requested in
connection with such registration within five (5) business days after receiving
such written request and the Company shall not be responsible for any delays
in
obtaining or maintaining the effectiveness of the Registration Statement
caused
by the Investor's failure to timely provide such information.
(h) Upon
receipt of a Blackout Notice from the Company, the Investor shall immediately
discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until (i) the Company advises
the
Investor that the Blackout Period has terminated and (ii) the Investor receives
copies of a supplemented or amended prospectus, if necessary. If so directed
by
the Company, the Investor will deliver to the Company (at the expense of
the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in the Investor's possession (other than a limited number of file
copies) of the prospectus covering such Registrable Securities that is current
at the time of receipt of such notice.
5
Section
2.2. Registration
Expenses.
Except
as set forth in Section 10.01 of the Purchase Agreement, the Company shall
pay
all registration expenses incurred in connection with the Registration Statement
(the "Registration
Expenses"),
including, without limitation: (i) all registration, filing, securities exchange
listing and fees required by the National Association of Securities Dealers,
(ii) all registration, filing, qualification and other fees and expenses
of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iii) all word processing, duplicating, printing,
messenger and delivery expenses, (iv) the Company's internal expenses
(including, without limitation, all salaries and expenses of its officers
and
employees performing legal or accounting duties), (v) the fees and expenses
incurred by the Company in connection with the listing of the Registrable
Securities, (vi) reasonable fees and disbursements of counsel for the Company
and customary fees and expenses for independent certified public accountants
retained by the Company (including the expenses of any special audits or
comfort
letters or costs associated with the delivery by independent certified public
accountants of such special audit(s) or comfort letter(s), (vii)
the
fees and expenses of any special experts retained by the Company in connection
with such registration and amendments and supplements to the Registration
Statement and Prospectus, and (viii) premiums and other costs of the Company
for
policies of insurance against liabilities of the Company arising out of any
public offering of the Registrable Securities being registered to the extent
the
Company in its discretion elects to obtain and maintain such insurance. Any
fees
and disbursements of underwriters, broker-dealers or investment bankers,
including without limitation underwriting fees, discounts, transfer taxes
or
commissions, and any other fees or expenses (including legal fees and expenses)
if any, attributable to the sale of Registrable Securities, shall be payable
by
each holder of Registrable Securities pro
rata
on the
basis of the number of Registrable Securities of each such holder that are
included in a registration under this Agreement.
ARTICLE
III
INDEMNIFICATION
Section
3.1. Indemnification.
The
Company agrees to indemnify and hold harmless the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, and
each
Person or entity, if any, who controls the Investor within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, together
with the partners, affiliates, officers, directors, employees and duly
authorized agents of such controlling Person or entity (collectively, the
"Controlling
Persons") (each
of
the
Investor, its partners, affiliates, officers, directors, employees and duly
authorized agents, and the
Investor’s Controlling Persons, an “Investor Indemnified Person”),
from
and against any loss, claim, damage, liability, costs and expenses (including,
without limitation, reasonable attorneys' fees and disbursements and costs
and
expenses of investigating and defending any such claim) (collectively,
"Damages"), joint or several, and any action or proceeding in respect thereof
to
which an
Indemnified Investor Person
may
become subject under the Securities Act or otherwise, as incurred, insofar
as
such Damages (or actions or proceedings in respect thereof) arise out of,
or are
based upon, any untrue statement or alleged untrue statement of a material
fact
contained in any Registration Statement, or in any preliminary prospectus,
final
prospectus, summary prospectus, amendment or supplement relating to the
Registrable Securities or arises out of, or are based upon, any omission
or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein under the circumstances not
misleading, and shall reimburse such
Investor Indemnified Person
for any
legal and other expenses reasonably incurred by the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, or
any
such Controlling Person, as incurred, in investigating or defending or preparing
to defend against any such Damages or actions or proceedings; provided,
however,
that
the Company shall not be liable to the extent that any such Damages arise
out of
or
are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement, or any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement
in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Investor or any other person who participates
as
an underwriter in the offering or sale of such securities, in either case,
specifically stating that it is for use in the preparation thereof. In
connection with any Registration Statement with respect to which the Investor
is
participating, the Investor will indemnify and hold harmless, to the same
extent
and in the same manner as set forth in the preceding paragraph, the Company,
each of its partners, affiliates, officers, directors, employees and
duly
authorized agents and
each
of the Company’s Controlling Persons (each
a
"Company
Indemnified Person")
against any Damages to which any Company Indemnified Person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such
Damages
arise out of or are based upon (a) any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement, or
in any
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement relating to the Registrable Securities or arise out of, or are
based
upon, any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein under the
circumstances not misleading to the extent that such violation occurs in
reliance upon and in conformity with written information furnished to the
Company by the Investor or on behalf of the Investor expressly for use in
connection with such Registration Statement, or (b) any failure by the Investor
to comply with prospectus delivery requirements of the Securities Act, the
Exchange Act or any other law or legal requirement applicable to sales under
the
Registration Statement.
6
Section
3.2. Conduct
of Indemnification Proceedings.
All
claims for indemnification under Section 3.1 shall be asserted and resolved
in
accordance with the provisions of Section 9.02 and 9.03 of the Purchase
Agreement.
Section
3.3. Additional
Indemnification.
Indemnification
similar to that specified in the preceding paragraphs of this Article 3 (with
appropriate modifications) shall be given by the Company and
the
Investor with
respect to any required registration or other qualification of securities
under
any federal or state law or regulation of any governmental authority other
than
the Securities Act. The provisions of this Article III shall be in addition
to
any other rights to indemnification, contribution or other remedies which
an
Investor
Indemnified
Person
or a
Company Indemnified Person may have pursuant to law, equity, contract or
otherwise.
To
the
extent that any indemnification provided for herein is prohibited or limited
by
law, the indemnifying party will make the maximum contribution with respect
to
any amounts for which it would otherwise be liable under this Article III
to the
fullest extent permitted by law. However, (a) no contribution will be made
under
circumstances where maker of such contribution would not have been required
to
indemnify the indemnified party under the fault standards set forth in this
Article III, (b) if the Investor is guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act),
no
Investor
Indemnified Person
will
be
entitled to contribution from any Person who is not guilty of such fraudulent
misrepresentation, and (c) contribution (together with any indemnification
obligations under this Agreement) by the Investor will be limited in amount
to
the proceeds received by the Investor from sales of Registrable
Securities.
ARTICLE
IV
MISCELLANEOUS
Section
4.1. No
Outstanding Registration Rights.
Except
as otherwise disclosed in accordance with the Purchase Agreement or in the
Commission Documents, the Company represents and warrants to the Investor
that
there is not in effect on the date hereof any agreement by the Company pursuant
to which any holders of securities of the Company have a right to cause the
Company to register or qualify such securities under the Securities Act or
any
securities or blue sky laws of any jurisdiction.
7
Section
4.2. Term.
The
registration rights provided to the holders of Registrable Securities hereunder,
and the Company's obligation to keep the Registration Statement effective,
shall
terminate at the earlier of (i) such time that is two years following the
termination of the Purchase Agreement, (ii) such time as all Registrable
Securities have been issued and have ceased to be Registrable Securities,
or
(iii) upon the consummation of an "Excluded Merger or Sale" as defined in
the
Warrant. Notwithstanding the foregoing, paragraphs
(d)
and
(f)
of
Section 1.1, Article III, Section 4.7, Section 4.8, Section 4.9, Section
4.10
and Section 4.13 shall survive the termination of this Agreement.
Section
4.3. Rule
144.
The
Company will, at its expense, promptly take such action as holders of
Registrable Securities may reasonably request to enable such holders of
Registrable Securities to sell Registrable Securities without registration
under
the Securities Act within the limitation of the exemptions provided by (a)
Rule
144,
or (b)
any similar rule or regulation hereafter adopted by the Commission;
provided, that such holders of Registrable Securities may not make any such
request more than once in any calendar quarter during the term of this
Agreement.
If at
any time the Company is not required to file such reports, it will, at its
expense, forthwith upon the written request of any holder of Registrable
Securities, make available adequate current public information with respect
to
the Company within the meaning of paragraph (c)(2) of Rule 144 or such other
information as necessary to permit sales pursuant to Rule 144. Upon the request
of the Investor, the Company will deliver to the Investor a written statement,
signed by the Company's principal financial officer, as to whether it has
complied with such requirements.
Section
4.4. Certificate.
The
Company will, at its expense, forthwith upon the request of any holder of
Registrable Securities, deliver to such holder a certificate, signed by the
Company's principal financial officer, stating (a) the Company's name, address
and telephone number (including area code), (b) the Company's Internal Revenue
Service identification number, (c) the Company's Commission file number,
(d) the
number of shares of each class of Stock outstanding as shown by the most
recent
report or statement published by the Company, and (e) whether the Company
has
filed the reports required to be filed under the Exchange Act for a period
of at
least ninety (90) days prior to the date of such certificate and in addition
has
filed the most recent annual report required to be filed
thereunder.
Section
4.5. Amendment
And Modification.
Any
provision of this Agreement may be waived, provided that such waiver is set
forth in a writing executed by both parties to this Agreement. The provisions
of
this Agreement, including the provisions of this sentence, may be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may be given, with the written consent of the Investor
and the
Company. No course of dealing between or among any Person having any interest
in
this Agreement will be deemed effective to modify, amend or discharge any
part
of this Agreement or any rights or obligations of any person under or by
reason
of this Agreement.
Section
4.6. Successors
and Assigns; Entire Agreement.
This
Agreement and all of the provisions hereof shall be binding upon and inure
to
the benefit of the parties hereto and their respective successors and permitted
assigns. The Company may assign this Agreement at any time in connection
with a
sale or acquisition of the Company, whether by merger, consolidation, sale
of
all or substantially all of the Company’s assets, or similar transaction,
without the consent of the Investor, provided that the successor or acquiring
Person or entity agrees in writing to assume all of the Company’s rights and
obligations under this Agreement. Investor may assign its rights and obligations
under this Agreement only with the prior written consent of the Company,
and any
purported assignment by the Investor absent the Company’s consent shall be null
and void. This Agreement, together with the Purchase Agreement and the Warrant,
sets forth the entire agreement and understanding between the parties as
to the
subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.
8
Section
4.7. Severability.
If
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; provided
that, if
the severance of such provision materially changes the economic benefits
of this
Agreement to either party as such benefits are anticipated as of the date
hereof, then such party may terminate this Agreement on five (5) business
days
prior written notice to the other party. In such event, the Purchase
Agreement will terminate simultaneously with the termination of this
Agreement.
Section
4.8. Notices.
All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be given in accordance with Section
10.04
of the Purchase Agreement.
Section
4.9. Governing
Law; Dispute Resolution.
This
Agreement shall be construed under the laws of the State of New York.
Section
4.10. Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
constitute a part of this Agreement, nor shall they affect their meaning,
construction or effect.
Section
4.11. Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed to be an original instrument and all of which together shall constitute
one and the same instrument.
Section
4.12. Further
Assurances.
Each
party shall cooperate and take such action as may be reasonably requested
by
another party in order to carry out the provisions and purposes of this
Agreement and the transactions contemplated hereby.
Section
4.13. Absence
of Presumption.
This
Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting or causing any
instrument to be drafted.
9
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
the undersigned, thereunto duly authorized, as of the date first set forth
above.
KINGSBRIDGE
CAPITAL LIMITED
By: |
/s/
Xxxx Xxxxxx
|
Xxxx Xxxxxx |
Chief Executive Officer |
DISCOVERY
LABOARATORIES, INC.
By: |
/s/
Xxxx X. Xxxxxx
|
Xxxx X. Xxxxxx |
Executive Vice President and Chief Financial Officer |
10