EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of March 3, 2004, by and among DOR BioPharma, Inc., a Delaware
corporation (the "Company"), and the Investors signatory hereto (each such
Investor, an "Investor" and collectively, the "Investors").
This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof among the Company and the Investors (the "Purchase
Agreement").
The Company and the Investors hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:
"Advice" shall have the meaning set forth in Section 6(c).
"Common Stock" means the common stock of the Company, par value
$.001 per share and any securities into which such common stock may
hereafter be classified.
"Effectiveness Date" means, (a) with respect to the initial
Registration Statement required to be filed hereunder, the earlier of (i)
the 90th day following the Closing Date, and (ii) the fifth Trading Day
following the date on which the Company is notified by the Commission that
the Registration Statement will not be reviewed or is no longer subject to
further review and comments, and (b) with respect to any additional
Registration Statement(s) that may be required pursuant to Section 2(b),
the earlier of (i) the 90th day following (x) if such Registration
Statement is required because the Commission shall have notified the
Company in writing that certain Registrable Securities were not eligible
for inclusion on a previously filed Registration Statement, the date or
time on which the Commission shall indicate as being the first date or
time that such Registrable Securities may then be included in a
Registration Statement, or (y) if such Registration Statement is required
for a reason other than as described in (x) above, the date on which the
Company first knows, or reasonably should have known, that such additional
Registration Statement(s) is required and (ii) the fifth Trading Day
following the date on which the Company is notified by the Commission that
such additional Registration Statement will not be reviewed or is no
longer subject to further review and comments.
"Effectiveness Period" shall have the meaning set forth in Section
2(a).
"Event" shall have the meaning set forth in Section 2(c).
"Event Date" shall have the meaning set forth in Section 2(c).
"Filing Date" means, with (a) respect to the initial Registration
Statement required to be filed hereunder, April 15, 2004, and (b) with
respect to any additional Registration Statements that may be required
pursuant to Section 2(b), the 30th day following (x) if such Registration
Statement is required because the Commission shall have notified the
Company in writing that certain Registrable Securities were not eligible
for inclusion on a previously filed Registration Statement, the date or
time on which the Commission shall indicate as being the first date or
time that such Registrable Securities may then be included in a
Registration Statement, or (y) if such Registration Statement is required
for a reason other than as described in (x) above, the date on which the
Company first knows, or reasonably should have known, that such additional
Registration Statements is required.
"Holder" or "Holders" means the holder or holders, as the case may
be, from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section
5(c).
"Indemnifying Party" shall have the meaning set forth in Section
5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of
the Registrable Securities covered by the Registration Statement, and all
other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such Prospectus.
"Registrable Securities" means all of the Shares and the Warrant
Shares, together with any shares of Common Stock issued or issuable upon
any stock split, dividend or other distribution, recapitalization or
similar event with respect to the foregoing.
"Registration Statement" means the registration statement(s)
required to be filed hereunder, including (in each case) the Prospectus,
amendments and supplements to such registration statement(s) or
Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement(s).
"Rule 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
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"Rule 424" means Rule 424 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
2. Registration.
(a) On or prior to each Filing Date, the Company shall prepare and
file with the Commission the Registration Statement covering the resale of
all of the Registrable Securities for an offering to be made on a
continuous basis pursuant to Rule 415. The Registration Statement required
hereunder shall be on Form S-3 (except if the Company is not then eligible
to register for resale the Registrable Securities on Form S-3, in which
case the Registration shall be on another appropriate form in accordance
herewith). The Registration Statement required hereunder shall contain
(except if otherwise directed by the Holders) the "Plan of Distribution"
attached hereto as Annex A. Subject to the terms of this Agreement, the
Company shall use its best efforts to cause the Registration Statement to
be declared effective under the Securities Act as promptly as possible
after the filing thereof, but in any event not later than the
Effectiveness Date, and shall use its best efforts to keep the
Registration Statement continuously effective under the Securities Act
until the date when all Registrable Securities covered by the Registration
Statement have been sold or may be sold (assuming for such purposes that
the Holder shall elect to utilize the cashless or net exercise provisions
under the Warrants) without volume restrictions pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the Company's transfer
agent and the affected Holders (the "Effectiveness Period").
(b) If for any reason the Commission does not permit all of the
Shares and all Warrant Shares to be included in the Registration Statement
filed pursuant to Section 2(a), or for any other reason any Registrable
Securities are not then included in a Registration Statement filed under
this Agreement, then the Company shall prepare and file as soon as
possible after the date on which the Commission shall indicate as being
the first date or time that such filing may be made, but in any event by
its Filing Date, an additional Registration Statement covering the resale
of all Registrable Securities not already covered by an existing and
effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415. Each such Registration Statement
shall contain (except if otherwise directed by the Holders) the "Plan of
Distribution" attached hereto as Annex A. The Company shall use its best
efforts to cause each such Registration Statement to be declared effective
under the Securities Act as soon as possible but, in any event, no later
than its Effectiveness Date, and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act
during its entire Effectiveness Period
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(c) If: (i) a Registration Statement is not filed on or prior to its
Filing Date (if the Company files a Registration Statement without
affording the Holders the opportunity to review and comment on the same as
required by Section 3(a) hereof, the Company shall not be deemed to have
satisfied this clause (i)), or (ii) prior to the date when such
Registration Statement is first declared effective by the Commission, the
Company fails to file a pre-effective amendment and otherwise respond in
writing to comments made by the Commission in respect of such Registration
Statement within 10 days after the receipt of comments by or notice from
the Commission that such amendment is required in order for such
Registration Statement to be declared effective, or (iii) a Registration
Statement filed or required to be filed hereunder is not declared
effective by the Commission on or before its Effectiveness Date, or (iv)
during the Effectiveness Period, a Registration Statement ceases for any
reason to remain continuously effective as to all Registrable Securities
for which it is required to be effective, or the Holders are not permitted
to utilize the Prospectus therein to resell such Registrable Securities,
for in any and all such cases for more than an aggregate of 20 Trading
Days during such Effectiveness Period (which need not be consecutive
Trading Days)(any such failure or breach being referred to as an "Event,"
and for purposes of clause (i) or (iii) the date on which such Event
occurs, or for purposes of clause (ii) the date which such 10 calendar
days is exceeded, or for purposes of clause (iv) the date on which such 20
Trading Days is exceeded being referred to as "Event Date"), then in
addition to any other rights the Holders may have hereunder or under
applicable law: (x) on each such Event Date the Company shall pay to each
Holder an amount in cash, as partial liquidated damages and not as a
penalty, equal to 1.0% of the aggregate Investment Amount paid by such
Holder pursuant to the Purchase Agreement; and (y) on each monthly
anniversary of each such Event Date (if the applicable Event shall not
have been cured by such date) until the applicable Event is cured, the
Company shall pay to each Holder an amount in cash, as partial liquidated
damages and not as a penalty, equal to 1.0% of the aggregate Investment
Amount paid by such Holder pursuant to the Purchase Agreement. If the
Company fails to pay any partial liquidated damages pursuant to this
Section in full within seven days after the date payable, the Company will
pay interest thereon at a rate of 10% per annum (or such lesser maximum
amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such partial liquidated damages are due until
such amounts, plus all such interest thereon, are paid in full. The
partial liquidated damages pursuant to the terms hereof shall apply on a
daily pro-rata basis for any portion of a month prior to the cure of an
Event, except in the case of the first Event Date.
3. Registration Procedures
In connection with the Company's registration obligations hereunder, the
Company shall:
(a) Not less than four Trading Days prior to the filing of a
Registration Statement or any related Prospectus or any amendment or
supplement thereto, the Company shall furnish to the Holders copies of the
"Selling Stockholders" section of such document, the "Plan of
Distribution" and any risk factor contained in such document that
addresses specifically this transaction or the Selling Stockholders, as
proposed to be filed which documents will be subject to the review of such
Holders. The Company shall not file a Registration Statement or any such
Prospectus or any amendments or supplements thereto that does not contain
the disclosure regarding such Holder as a "Selling Stockholder" as
provided to the Company by such Holder in connection therewith.
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(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep the
Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file
with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable
Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented
or amended to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably possible to any comments received from the Commission with
respect to the Registration Statement or any amendment thereto and, as
promptly as reasonably possible, upon request, provide the Holders true
and complete copies of all correspondence from and to the Commission
relating to the Registration Statement; and (iv) comply in all material
respects with the provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered by
the Registration Statement (to the extent such provisions are applicable
to the Company).
(c) Notify the Holders of Registrable Securities as promptly as
reasonably possible (and, in the case of (i)(A) below, not less than two
Trading Days prior to such filing) and (if requested by any such Person)
confirm such notice in writing promptly following the day (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed; (B) when the Commission
notifies the Company whether there will be a "review" of the Registration
Statement and whenever the Commission comments in writing on the
Registration Statement (the Company shall provide copies thereof and all
written responses thereto to each of the Holders to the extent such
materials address the Selling Stockholder or Plan of Distribution sections
of such Registration Statement, and to the extent they address risk
factors or other disclosure in such Registration Statement particular to
the Holder or the transactions contemplated hereby); and (C) with respect
to the Registration Statement or any post-effective amendment, when the
same has become effective; (ii) of any request by the Commission or any
other Federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements
to the Registration Statement or Prospectus or for additional information;
(iii) of the issuance by the Commission or any other federal or state
governmental authority of any stop order suspending the effectiveness of
the Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of
the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation
or threatening of any Proceeding for such purpose; and (v) of the
occurrence of any event or passage of time that makes the financial
statements included in the Registration Statement ineligible for inclusion
therein or any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to
the Registration Statement, Prospectus or other documents so that, in the
case of the Registration Statement or the Prospectus, as the case may be,
it will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading.
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(d) Use reasonable best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the
effectiveness of the Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable
moment.
(e) Promptly deliver to each Holder, without charge, as many copies
of the Prospectus or Prospectuses (including each form of prospectus) and
each amendment or supplement thereto as such Persons may reasonably
request in connection with resales by the Holder of Registrable
Securities. Subject to the terms of this Agreement, the Company hereby
consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders in connection with the offering and
sale of the Registrable Securities covered by such Prospectus and any
amendment or supplement thereto, subject to notices pursuant to Section
3(b).
(f) Prior to any resale of Registrable Securities by a Holder, use
its reasonable best efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the Registration or qualification) of such Registrable
Securities for the resale by the Holder under the securities or Blue Sky
laws of such jurisdictions within the United States as any Holder
reasonably requests in writing, to keep the Registration or qualification
(or exemption therefrom) effective during the Effectiveness Period and to
do any and all other acts or things reasonably necessary to enable the
disposition in such jurisdictions of the Registrable Securities covered by
the Registration Statement; provided, that the Company shall not be
required to qualify generally to do business or file a general consent to
service of process in any jurisdiction where it is not then so qualified.
(g) Cooperate with each Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be
delivered to a transferee pursuant to the Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any
such Holders may request.
(h) Upon the occurrence of any event contemplated by Section
3(b)(v), as promptly as commercially reasonably possible, prepare a
supplement or amendment, including a post-effective amendment, to the
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference,
and file any other required document so that, as thereafter delivered,
neither the Registration Statement nor such Prospectus will contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
If the Company notifies the Holders in accordance with clauses (ii)
through (v) of Section 3(a) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the
Holders shall suspend use of such Prospectus. The Company will use its
best efforts to ensure that the use of the Prospectus may be resumed as
promptly as is commercially practicable. The Company shall be entitled to
exercise its right under this Section 3(g) to suspend the availability of
a Registration Statement and Prospectus, subject to the payment of
liquidated damages pursuant to Section 2(c), for a period not to exceed 60
days (which need not be consecutive days) in any 12 month period.
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(i) Comply with all applicable rules and regulations of the
Commission.
(j) Each Holder agrees to furnish to the Company a completed
Questionnaire in the form attached to this Agreement as Annex B (a
"Selling Holder Questionnaire"). The Company shall not be required to
include the Registrable Securities of a Holder in a Registration Statement
and shall not be required to pay any liquidated or other damages under
Section 2(c) to such Holder who fails to furnish to the Company a fully
completed Selling Holder Questionnaire at least one Trading Day prior to
the Filing Date (subject to the requirements set forth in Section 3(a)).
4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Principal Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange or market as required hereunder. In no event shall the
Company be responsible for any broker or similar commissions of the Holders.
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5. Indemnification
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, agents and employees of
each of them, each Person who controls any such Holder (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act) and
the officers, directors, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or relating to any
untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or
arising out of or relating to any omission or alleged omission of a
material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were
made) not misleading, except to the extent, but only to the extent, that
(i) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates
to such Holder or such Holder's proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing
by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement
thereto (it being understood that the Holder has approved Annex A hereto
for this purpose) or (ii) in the case of an occurrence of an event of the
type specified in Section 3(c)(ii)-(v), the use by such Holder of an
outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior
to the receipt by such Holder of the Advice or an amended or supplemented
Prospectus, but only if and to the extent that following the receipt of
the Advice or the amended or supplemented Prospectus the misstatement or
omission giving rise to such Loss would have been corrected. The Company
shall notify the Holders promptly of the institution, threat or assertion
of any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling
Persons, to the fullest extent permitted by applicable law, from and
against all Losses, as incurred, arising solely out of or based solely
upon: (x) such Holder's failure to comply with the prospectus delivery
requirements of the Securities Act to the extent that delivery of such
Prospectus would have avoided such Loss or (y) any untrue or alleged
untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or any form of prospectus, or in any amendment
or supplement thereto or in any preliminary prospectus, or arising solely
out of or based solely upon any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent, that (1)
such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates
to such Holder or such Holder's proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing
by such Holder expressly for use in the Registration Statement (it being
understood that the Holder has approved Annex A hereto for this purpose),
such Prospectus or such form of Prospectus or in any amendment or
supplement thereto or (2) in the case of an occurrence of an event of the
type specified in Section 3(c)(ii)-(v), the use by such Holder of an
outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective and prior
to the receipt by such Holder of an Advice or an amended or supplemented
Prospectus, but only if and to the extent that following the receipt of
the Advice or the amended or supplemented Prospectus the misstatement or
omission giving rise to such Loss would have been corrected. 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.
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(c) Conduct of Indemnification Proceedings. If any Proceeding shall
be brought or asserted against any Person entitled to indemnity hereunder
(an "Indemnified Party"), such Indemnified Party shall promptly notify the
Person from whom indemnity is sought (the "Indemnifying Party") in
writing, and the Indemnifying Party shall have the right to assume the
defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all fees and
expenses incurred in connection with defense thereof; provided, that the
failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have
proximately and materially prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed
in writing to pay such fees and expenses; (2) the Indemnifying Party shall
have failed promptly to assume the defense of such Proceeding and to
employ counsel reasonably satisfactory to such Indemnified Party in any
such Proceeding; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and
the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a material conflict of interest is likely to exist if the
same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying
Party in writing that it elects to employ separate counsel at the expense
of the Indemnifying Party, the Indemnifying Party shall not have the right
to assume the defense thereof and the reasonable fees and expenses of up
to an aggregate of three separate counsel shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent. No
Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in
respect of which any Indemnified Party is a party, unless such settlement
includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.
All reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and
expenses applicable to such actions for which such Indemnified Party is
not entitled to indemnification hereunder, determined.
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(d) Contribution. If a claim for indemnification under Section 5(a)
or 5(b) is unavailable to an Indemnified Party (by reason of public policy
or otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions
that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such action, statement or omission. The amount paid or payable by
a party as a result of any Losses shall be deemed to include, subject to
the limitations set forth in this Section 5, any reasonable attorneys' or
other reasonable fees or expenses incurred by such party in connection
with any Proceeding to the extent such party would have been indemnified
for such fees or expenses if the indemnification provided for in this
Section was available to such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 5(d),
no Holder shall be required to contribute, in the aggregate, any amount in
excess of the amount by which the proceeds actually received by such
Holder from the sale of the Registrable Securities subject to the
Proceeding exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission or other act in question. No
party guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any party that was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to
the Indemnified Parties.
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6. Miscellaneous
(a) Remedies. In the event of a breach by the Company or by a
Holder, of any of their obligations under this Agreement, each Holder or
the Company, as the case may be, in addition to being entitled to exercise
all rights granted by law and under this Agreement, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would
not provide adequate compensation for any losses incurred by reason of a
breach by it of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law
would be adequate.
(b) Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities
pursuant to the Registration Statement.
(c) Discontinued Disposition. Each Holder agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in Section
3(c), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such
Holder's receipt of the copies of the supplemented Prospectus and/or
amended Registration Statement or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement. The Company will
use its best efforts to ensure that the use of the Prospectus may be
resumed as promptly as is commercially practicable. The Company agrees and
acknowledges that any periods during which the Holder is required to
discontinue the disposition of the Registrable Securities hereunder shall
be subject to the provisions of Section 2(c).
(d) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall determine
to prepare and file with the Commission a registration statement relating
to an offering for its own account or the account of others under the
Securities Act of any of its equity securities, other than on Form S-4 or
Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity
securities issuable in connection with the stock option or other employee
benefit plans, then the Company shall send to each Holder a written notice
of such determination and, if within fifteen days after the date of such
notice, any such Holder shall so request in writing, the Company shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered, subject to customary
underwriter cutbacks applicable to all holders of registration rights.
(e) No Piggyback on Registration Statement. Except as set forth in
Schedule 6(e), neither the Company nor any of its security holders (other
than the Holders in such capacity pursuant hereto) may include securities
of the Company in a Registration Statement other than the Registrable
Securities, and the Company shall not after the date hereof enter into any
agreement providing any such right to any of its security holders.
11
(f) Amendments and Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed by the Company and
the Investors holding a majority of the Registrable Securities. No waiver
of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or
a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either
party to exercise any right hereunder in any manner impair the exercise of
any such right.
(g) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be made in
accordance with the provisions of the Purchase Agreement.
(h) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of
each of the parties and shall inure to the benefit of each Holder. Each
Holder may assign their respective rights hereunder in the manner and to
the Persons as permitted under the Purchase Agreement. The Company may not
assign its rights or obligations hereunder.
(i) Execution and Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed
to be an original and, all of which taken together shall constitute one
and the same Agreement. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature were the original thereof.
(j) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be
determined with the provisions of the Purchase Agreement.
(k) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their reasonable best efforts to find and employ
an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
12
(n) Independent Nature of Holders' Obligations and Rights. The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be
responsible in any way for the performance of the obligations of any other
Holder hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Holder
pursuant hereto or thereto, shall be deemed to constitute the Holders as a
partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Holders are in any way acting in concert
with respect to such obligations or the transactions contemplated by this
Agreement. Each Holder acknowledges that no other Holder has acted as
agent for such Holder in connection with executing this Agreement and that
no Holder will be acting as agent of such Holder in connection with
monitoring the registration of the Registrable Securities or enforcing its
rights under this Agreement. Each Holder shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of
this Agreement, and it shall not be necessary for any other Holder to be
joined as an additional party in any Proceeding for such purpose. The
Company acknowledges that each of the Investors has been provided with the
same Transaction Documents and will likely have their respective
Registrable Securities included on the same Registration Statement, for
the purpose of closing a transaction with multiple Investors and not
because it was required or requested to do so by any Investor.
*************************
13
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
DOR BIOPHARMA, INC.
By:________________________________
Name:
Title:
[SIGNATURE PAGE OF HOLDERS FOLLOWS]
14
[INVESTOR SIGNATURE PAGE TO DOR RRA]
Name of Investing Entity: __________________________
Signature of Authorized Signatory of Investing entity: ________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________
[SIGNATURE PAGES CONTINUE]
15
[INVESTOR SIGNATURE PAGE TO DOR RRA]
Name of Investing Entity: __________________________
Signature of Authorized Signatory of Investing entity: _________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________
[SIGNATURE PAGES CONTINUE]
16
SCHEDULE 6(E)
Elan Pharmaceutical Investments Ltd. and the University of Texas System and
their respective assigns have piggyback registration rights for 376,886 shares
and 48,886 shares respectively.
17
ANNEX A
Plan of Distribution
The selling stockholders and any of their pledgees, donees, transferees,
assignees and successors-in-interest may, from time to time, sell any or all of
their shares of common stock on any stock exchange, market or trading facility
on which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The selling stockholders may use any one or more of
the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits investors;
o block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
o an exchange distribution in accordance with the rules of the applicable
exchange;
o privately negotiated transactions;
o to cover short sales and other hedging transactions made after the date
that the registration statement of which this prospectus is a part is
declared effective by the Securities and Exchange Commission;
o broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the investor of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling stockholders may from time to time pledge or grant a security
interest in some or all of the Shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell shares of common stock from time to time under this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
18
Upon our being notified in writing by a selling stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
common stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such selling stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such shares of common stock were sold, (iv) the commissions
paid or discounts or concessions allowed to such broker-dealer(s), where
applicable, (v) that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in this prospectus,
and (vi) other facts material to the transaction. In addition, upon our being
notified in writing by a selling stockholder that a donee or pledge intends to
sell more than 500 shares of common stock, a supplement to this prospectus will
be filed if then required in accordance with applicable securities law.
The selling stockholders also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, that can be attributed to the
sale of securities will be paid by the selling stockholders and/or the
purchasers of the securities.
Each selling stockholder that is affiliated with a registered
broker-dealer has confirmed to us that, at the time it acquired the securities
subject to the registration statement of which this prospectus is a part, it did
not have any agreement or understanding, directly or indirectly, with any person
to distribute any of such securities. The Company has advised each selling
stockholder that it may not use shares registered on the registration statement
of which this prospectus is a part to cover short sales of our common stock made
prior to the date on which such registration statement was declared effective by
the SEC.
We are required to pay certain fees and expenses incident to the
registration of the shares. We have agreed to indemnify the selling stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act. We agreed to keep this prospectus effective until the
earlier of (i) the date on which the shares may be resold by the selling
stockholders without registration and without regard to any volume limitations
by reason of Rule 144(e) under the Securities Act or any other rule of similar
effect and (ii) such time as all of the shares have been publicly sold.
19
Annex B
DOR BIOPHARMA, INC.
SELLING SECURITYHOLDER QUESTIONNAIRE
The undersigned beneficial owner of shares of Common Stock (including shares
that may be acquired upon exercise of warrants) (the "REGISTRABLE SECURITIES")
of DOR BioPharma, Inc. (the "COMPANY") understands that the Company has filed or
intends to file with the Securities and Exchange Commission a registration
statement (the "REGISTRATION STATEMENT") for the registration and resale under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), of the
Registrable Securities. This Questionnaire is delivered pursuant to the terms of
the Registration Rights Agreement, dated as of March 3, 2004 (the "REGISTRATION
RIGHTS AGREEMENT"), among the Company and the Investors named therein. A copy of
the Registration Rights Agreement is available from the Company upon request at
the address set forth below. All capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling securityholder in
the Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus.
The undersigned beneficial owner (the "SELLING SECURITYHOLDER") of Registrable
Securities hereby elects to include the Registrable Securities owned by it and
listed below in Item 3 (unless otherwise specified under such Item 3) in the
Registration Statement.
The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
1. NAME.
(a) Full Legal Name of Selling Securityholder
--------------------------------------------------------------------
(b) Full Legal Name of Registered Holder (if not the same as (a) above)
through which Registrable Securities Listed in Item 3 below are
held:
--------------------------------------------------------------------
(c) Full Legal Name of each Control Person (which means a natural person
that directly or indirectly has power to vote or dispose of the
securities covered by this Questionnaire):
--------------------------------------------------------------------
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2. ADDRESS FOR NOTICES TO SELLING SECURITYHOLDER:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Telephone:
----------------------------------------------------------------------
Fax:
---------------------------------------------------------------------------
Contact Person:
-----------------------------------------------------------------
3. BENEFICIAL OWNERSHIP OF REGISTRABLE SECURITIES:
(a) Type and Principal Amount of Registrable Securities beneficially
owned:
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
4. BROKER-DEALER STATUS:
(a) Are you a broker-dealer?
Yes / / No / /
Note: If yes, the Commission's staff has indicated that you should be
identified as an underwriter in the Registration Statement.
(b) Are you an affiliate of a broker-dealer?
Yes / / No / /
(c) If you are an affiliate of a broker-dealer, do you certify that you
bought the Registrable Securities in the ordinary course of
business, and at the time of the purchase of the Registrable
Securities to be resold, you had no agreements or understandings,
directly or indirectly, with any person to distribute the
Registrable Securities?
Yes / / No / /
Note: If no, the Commission's staff has indicated that you should be
identified as an underwriter in the Registration Statement.
21
5. BENEFICIAL OWNERSHIP OF OTHER SECURITIES OF THE COMPANY OWNED BY THE
SELLING SECURITYHOLDER.
Except as set forth below in this Item 5, the undersigned is not the
beneficial or registered owner of any securities of the Company other than
the Registrable Securities listed above in Item 3.
(a) Type and Amount of Other Securities beneficially owned by the
Selling Securityholder:
--------------------------------------------------------------------
--------------------------------------------------------------------
6. RELATIONSHIPS WITH THE COMPANY:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (owners of 5%
of more of the equity securities of the undersigned) has held any position
or office or has had any other material relationship with the Company (or
its predecessors or affiliates) during the past three years.
State any exceptions here:
--------------------------------------------------------------------------
--------------------------------------------------------------------------
The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein (other than changes in beneficial
ownership of Common Stock after the effectiveness of the Registration Statement)
that may occur subsequent to the date hereof at any time prior to the
effectiveness of the Registration Statement or while the Registration Statement
remains effective.
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers hereto and the inclusion of such information in
the Registration Statement and the related prospectus. The undersigned
understands that such information will be relied upon by the Company in
connection with the preparation or amendment of the Registration Statement and
the related prospectus.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.
Dated: Beneficial Owner:
-------------------- ---------------------------
By:
-----------------------------------------
Name:
Title:
22
