Exhibit 4.6
Registration Rights Agreement
dated as of December 26, 2003
among
PROVECTUS PHARMACEUTICALS, INC.
a Nevada corporation
and
THE RESEARCH FOUNDATION OF STATE UNIVERSITY OF NEW YORK,
a New York education corporation
Table of Contents
Page
Table of Contents..............................................................i
................................................................................1
1. Definitions and Interpretation..............................................1
---------------------------------
1.01. Certain Definitions..............................................1
1.02. Other Definitions................................................2
1.03 Rules of Interpretation..........................................3
1.04. Construction.....................................................3
2. Piggyback Registration......................................................4
2.01 Right to Piggyback...............................................4
2.02. Piggyback Expenses...............................................4
2.03. Priority on Piggyback Registrations..............................4
2.04. Selection of Underwriters........................................4
3. Registration Procedures.....................................................5
3.01 Obligations of Corporation.......................................5
3.02. Information to be Provided.......................................8
3.03. Duties of Holder.................................................8
4. Indemnification; Contribution...............................................9
4.01 Indemnification by the Corporation...............................9
4.02. Indemnification by Holders......................................10
4.03. Conduct of Indemnification Proceedings..........................10
4.04. Contribution....................................................11
4.05. Survival of Provisions..........................................11
5. Rule 144 Reporting.........................................................12
6. Transfer of Shares.........................................................12
6.01. Restrictions....................................................12
6.02. Legends.........................................................12
6.03. Transfer of Rights to Subsequent Holders........................13
7. Representations and Warranties.............................................13
7.01. Representations and Warranties of the Research Foundation.......13
7.02. Effect of Representations and Warranties........................14
8. General Provisions.........................................................14
8.01. Amendments and Waivers..........................................14
8.02. Successors and Assigns..........................................14
8.03. Specific Performance............................................15
8.04. Notices.........................................................15
8.05. Governing Law; Venue of Actions.................................15
8.06. Entire Agreement................................................16
8.07. Severability....................................................16
8.08. Counterparts....................................................16
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of December 26, 2003 (the "Effective Date"), among PROVECTUS
PHARMACEUTICALS, INC., a Nevada corporation (the "Corporation") and THE RESEARCH
FOUNDATION OF STATE UNIVERSITY OF NEW YORK (the "Research Foundation").
RECITALS
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A. The Research Foundation and the Corporation have entered into a
Settlement Agreement dated as of December 26, 2003 (the "Settlement
Agreement"), pursuant to which the Research Foundation and the Corporation
have agreed to settle certain claims relating to Interference No. 105,133
which was declared by the U.S. Patent and Trademark Office between U.S.
Patent No. 5,829,448, owned by Xantech Pharmaceuticals, Inc., a
wholly-owned subsidiary of the Corporation, and U.S. Patent Application
Serial Number 09/265,625, owned by the Research Foundation.
B. As a portion of the consideration for the Settlement Agreement, the
Corporation has or will issue to the Research Foundation 10,000 Common
Shares (as defined in Section 1.01).
C. As a condition to the Settlement Agreement, the parties have agreed
to enter into this Agreement.
AGREEMENT
---------
THEREFORE, the parties hereto, in consideration of the foregoing, the
mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
1.
DEFINITIONS AND INTERPRETATION
1.01.Certain Definitions
As used in this Agreement, the following capitalized terms shall have the
following meanings:
(a) "Affiliate" has the meaning ascribed to it in the Exchange Act.
(b) "Common Shares" means the Corporation's common shares, par value $.001
per share.
(c) "Exchange Act" means the Securities Exchange Act of 1934.
(d) "Holder" means the Research Foundation and its successors, assigns and
transferees.
(e) "Person" means an individual, partnership, corporation, trust,
unincorporated organization or other legal entity or a government or agency or
political subdivision thereof.
(f) "Prospectus" means the prospectus included in any Registration
Statement, including any preliminary prospectus, and any amendment or supplement
thereto and all material incorporated by reference therein.
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(g) "Registrable Securities" means the Research Foundation Shares, and any
shares or other securities of the Corporation issued or issuable with respect
thereto upon any stock split, stock dividend, recapitalization or similar event,
excluding shares or other securities (i) sold or transferred pursuant to an
effective registration statement, (ii) sold or otherwise transferred pursuant to
Rule 144 under the Securities Act, (iii) sold or otherwise transferred pursuant
to a transfer not requiring registration under the Securities Act, (iv) held by
Holder who at such time is not an Affiliate of the Corporation and that are
eligible for sale pursuant to Rule 144(k) under the Securities Act, and (v) held
by Holder who at such time is an Affiliate of the Corporation if all of such
shares or other securities are eligible for sale pursuant to Rule 144 under the
Securities Act and could be sold in one transaction in accordance with the
volume limitations contained in Rule 144(e)(1)(i) under the Securities Act.
(h) "Research Foundation Shares" means the Common Shares issued to the
Research Foundation pursuant to the Settlement Agreement.
(i) "Registration Expenses" means any and all expenses incident to
performance of or compliance with this Agreement, including (i) all applicable
registration and filing fees imposed by the SEC and any securities exchange or
market on which the Registrable Securities are required to be listed and/or
quoted, as the case may be, (ii) all fees and expenses incurred in connection
with compliance with state securities or "blue sky" laws (including reasonable
fees and disbursements of counsel in connection with qualification of any of the
Registrable Securities under any state securities or blue sky laws and the
preparation of a blue sky memorandum) and compliance with the rules of the
National Association of Securities Dealers, Inc. ("NASD"), (iii) all expenses of
any Persons in preparing or assisting in preparing, word processing, printing
and distributing the Registration Statement, any Prospectus, certificates and
other documents relating to the performance of and compliance with this
Agreement, (iv) all fees and expenses incurred in connection with the listing,
if any, of any of the Registrable Securities on any securities exchange or
exchanges pursuant to Section 3.01(k) hereof, and (v) the fees and disbursements
of counsel for the Corporation and of the independent public accountants of the
Corporation. Registration Expenses shall specifically exclude underwriting
discounts and commissions, the fees and disbursements of counsel representing
Holder or any underwriter or agent acting on behalf of Holder, and transfer
taxes, if any, relating to the sale or disposition of Registrable Securities by
Holder, all of which shall be borne by Holder in all cases.
(j) "Registration Statement" mean a registration statement of the
Corporation (and any other entity required to be a registrant pursuant to the
requirements of the Securities Act) covering all or a part of the Registrable
Securities under the Securities Act for which the Corporation is eligible,
including all amendments (including post-effective amendments), exhibits and
materials incorporated by reference therein.
(k) "SEC" means the United States Securities and Exchange Commission.
(l) "Securities Act" means the Securities Act of 1933.
(m) "Shelf Registration Statement" shall mean a Registration Statement on
Form S-3 (or any successor form) filed pursuant to Rule 415 of Regulation C
promulgated under the Securities Act (or any successor rule).
1.02. Other Definitions
Terms defined in other provisions of this Agreement have the meanings given
in those provisions.
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1.03. Rules of Interpretation
(a) Each term defined in the singular form in Section 1.01 or elsewhere in
this Agreement means the plural thereof whenever the plural form is used, and
each term defined in the plural form means the singular thereof whenever the
singular form is used. The use of a pronoun of any gender is applicable to all
genders.
(b) Unless otherwise specified therein, all terms defined in this Agreement
have the meanings as so defined herein when used in any other certificate,
report or document made or delivered pursuant hereto.
(c) The words "hereof," "herein," "hereunder" and similar terms when used
in this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, subsection, schedule and
exhibit references herein are references to articles, sections, subsections,
schedules and exhibits to this Agreement unless otherwise specified.
(d) A reference to any agreement, document or instrument refers to the
agreement, document or instrument as amended or modified and in effect from time
to time in accordance with the terms thereof and as permitted herein.
(e) Except as otherwise specified, a reference to any applicable law refers
to the law as amended, modified, codified, replaced or reenacted, in whole or in
part, and in effect from time to time, and to any rules and regulations
promulgated thereunder; and a reference to any section or other provision of any
applicable law refers to that provision of the law from time to time in effect
and constituting the substantive amendment, modification, codification,
replacement or reenactment of the referenced section or other provision.
(f) The words "including" and "include" means including without limiting
the generality of any description preceding such term, the phrase "may not" is
prohibitive and not permissive, and the word "or" is not exclusive.
(g) All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the Uniform Commercial
Code as enacted in the State of Nevada and not specifically defined herein are
used herein as defined therein.
(h) Unless otherwise stated in this Agreement, in the computation of a
period of time from a specified date to a later specified date, the word "from"
means "from but excluding" and the words "to" and "until" each means "to and
including."
1.04. Construction
The headings preceding the text of the sections of this Agreement and the
exhibits hereto are for convenience only and shall not be deemed part of this
Agreement. The language used in this Agreement shall be deemed to be the
language chosen by the parties to this Agreement to express their mutual intent,
and no rule of strict construction shall be applied against any party.
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2.
PIGGYBACK REGISTRATION
2.01. Right to Piggyback
Any time during the period beginning on the Effective Date and ending on
the second anniversary thereof, if the Corporation proposes to register any of
its securities under the Securities Act (other than a registration pursuant to
(a) a registration on Form S-4 or any successor form or (b) an offering of
securities by the Corporation in connection with an employee benefit, share
dividend, share ownership or dividend reinvestment plan) and the registration
form to be used may be used for the registration of Registrable Securities (a
"Piggyback Registration"), the Corporation will give prompt written notice (but
in no event less than 15 days before the anticipated filing date of a
registration statement filed to register such securities) to all Holders of its
intention to effect such a registration (each, a "Piggyback Notice") and,
subject to Section 2.03, the Corporation will include in such registration, on
such terms and conditions as the other securities to be included therein, all
Registrable Securities with respect to which the Corporation has received
written requests for inclusion therein within 10 days after the date of sending
of the Piggyback Notice.
2.02. Piggyback Expenses
A Holder shall not be liable for the Registration Expenses in connection
with the registration pursuant to Section 2.01.
2.03. Priority on Piggyback Registrations
If a Piggyback Registration is an underwritten registration, and the
managing underwriters advise the Corporation in writing that in their opinion
the number of securities requested to be included in such registration exceeds
the number which can be sold in such offering without adversely affecting the
market or the price for the Common Shares to be registered by the Corporation,
the Corporation will include in such registration the number of securities that
in the opinion of such managing underwriters can be sold without adversely
affecting the market or the price for such Common Shares. In such event, the
Registration Statement will include (a) all the securities proposed to be sold
by the Corporation and (b) the aggregate amount of shares of other capital stock
of the Corporation upon which contractual registration rights have been granted
("Other Securities") and Registrable Securities requested to be included in such
registration that in the opinion of such managing underwriters can be sold
without adversely affecting the market or the price for such Common Shares, with
such aggregate amount of securities to be allocated among each holder of such
Other Securities and Registrable Securities in proportion to the number of
shares requested for inclusion in such registration by each such holder, but in
no event shall the amount of Registrable Securities be reduced to less than 5%
of the total amount of securities included in the offering.
2.04. Selection of Underwriters
In the case of an underwritten Piggyback Registration, the Corporation will
have the right to select the investment banker(s) and manager(s) to administer
the offering, if any.
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3.
REGISTRATION PROCEDURES
3.01. Obligations of Corporation
In connection with the obligations of the Corporation with respect to the
registration of the Registrable Securities contemplated herein, the Corporation
shall:
(a) prepare and file with the SEC a Registration Statement as soon as
reasonably practicable after receipt of a written request pursuant to Section 2,
which Registration Statement, in each case, shall (i) be available for the sale
of the Registrable Securities in accordance with the intended method or methods
of distribution by the selling Holders thereof and (ii) comply as to form in all
material respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith, and will use its
best efforts to cause such Registration Statement to be declared effective by
the SEC as soon thereafter as is commercially practicable and, upon the request
of the Holders of a majority of the Registrable Securities registered
thereunder, keep such Registration Statement effective for a period of up to one
hundred twenty (120) days or, if earlier, until the distribution contemplated in
the Registration Statement has been completed; provided, however, that (i) such
120-day period shall be extended for a period of time equal to the the period
the Holder refrains from selling any Registrable Securities included in such
Registration Statement pursuant to Section 3.03(a) or 3.03(b) and, in the case
of any registration of Registrable Securities on Form S-3 which are intended to
be offered on a continuous or delayed basis, such 120-day period shall be
extended for up to ninety (90) additional days, if necessary, to keep the
Registration Statement effective until all such Registrable Securities are sold;
(b) subject to the last three sentences of this Section 3.01(b) and to
Section 3.01(i) hereof: prepare and file with the SEC such amendments and
supplements (including required periodic reporting filings under the Exchange
Act) to such Registration Statement and Prospectus included therein as may be
necessary to keep such Registration Statement effective for the applicable
period; cause the Prospectus to be amended or supplemented as required and to be
filed as required by Rule 424 or any similar rule that may be adopted under the
Securities Act; respond as promptly as practicable to any comments received from
the SEC with respect to the Registration Statement or any amendment thereto; and
(iv) comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the selling Holders thereof. Notwithstanding anything to the
contrary contained herein, the Corporation shall not be required to take any of
the actions described in clauses (i), (ii) or (iii) of this Section 3.01(b),
Section 3.01(d) or Section 3.01(i) with respect to each Holder of Registrable
Securities (A)to the extent that the Corporation is in possession of material
non-public information that it deems advisable not to disclose or is engaged in
active negotiations or planning for a material merger, acquisition or
disposition transaction and it delivers written notice to each such Holder of
Registrable Securities to the effect that such selling Holder may not make
offers or sales under the Registration Statement for a period not to exceed 60
days from the date of such notice; provided, however, that the Corporation may
deliver only two such notices within any 12-month period, (B)to the extent that
such registration would require initial or continuing disclosure of events or
proceedings yet unreported that, in the opinion of the Board of Directors of the
Corporation, would not be in the best interests of the Corporation and its
stockholders and such disclosure is not otherwise required under applicable law
(including applicable securities laws), and the Corporation delivers written
notice to each such Holder of Registrable Securities to the effect that such
selling Holder may not make offers or sales for a period not to exceed 60 days
from the date of such notice; provided, however, that the Corporation
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may deliver only one such notice within any 365-day period, or (C) upon written
notice by the Corporation to each Holder of the need to take any action
described in clauses (i), (ii) or (iii) of this Section 3.01(b), unless and
until the Corporation has received a written notice (a "Registration Notice")
from a Holder that such Holder intends to make offers or sales under such
Registration Statement as specified in such Registration Notice, except in the
case of a Shelf Registration Statement, in which case such Registration Notice
shall not be required; provided, however, that the Corporation shall have 10
business days to prepare and file any such amendment or supplement after receipt
of the Registration Notice or such longer period as is reasonably necessary if
such preparation and filing are not commercially practicable within 10 business
days. Once a Holder has delivered a Registration Notice to the Corporation, such
Holder shall promptly provide to the Corporation such information as the
Corporation reasonably requests in order to identify such Holder and the method
of distribution in a post-effective amendment to the Registration Statement or a
supplement to the Prospectus. Such Holder also shall notify the Corporation in
writing upon completion of such offer or sale or at such time as such Holder no
longer intends to make offers or sales under the Registration Statement;
(c) furnish to each Holder of Registrable Securities, without charge, as
many copies of each Prospectus and any amendment or supplement thereto as such
Holder may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities; the Corporation consents to the use
of the Prospectus and any amendment or supplement thereto by each such Holder of
Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or amendment or supplement
thereto;
(d) use its best efforts to register or qualify the Registrable Securities
by the time the Registration Statement is declared effective by the SEC under
all applicable state securities or blue sky laws of such jurisdictions in the
United States and its territories and possessions as any Holder of Registrable
Securities covered by the Registration Statement shall reasonably request in
writing and keep each such registration or qualification effective during the
period such Registration Statement is required to be kept effective or during
the period offers or sales are being made by a Holder that has delivered a
Registration Notice to the Corporation, whichever is shorter; provided, however,
that in connection therewith, the Corporation shall not be required to (i)
qualify as a foreign corporation to do business or to register as a broker or
dealer in any such jurisdiction where it would not otherwise be required to
qualify or register but for this Section 3.01(d), (ii) subject itself to
taxation in any such jurisdiction, or (iii) file a general consent to service of
process in any such jurisdiction;
(e) notify each selling Holder of Registrable Securities promptly and, if
requested by such Holder, confirm in writing, (i) when the Registration
Statement and any post-effective amendments thereto have become effective, (ii)
when any amendment or supplement to the Prospectus has been filed with the SEC,
(iii) of the issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of the Registration Statement or any part
thereof or the initiation of any proceedings for that purpose, (iv) if the
Corporation receives any notification with respect to the suspension of the
qualification of the Registrable Securities for offer or sale in any
jurisdiction or the initiation of any proceeding for such purpose, and of the
happening of any event during the period the Registration Statement is effective
as a result of which such Registration Statement contains any untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or the
Prospectus as then amended or supplemented contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the Corporation shall not be obligated
to prepare and furnish any prospectus supplements or amendments relating to any
material nonpublic information at any
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such time as the Board of Directors of the Corporation has determined that, for
good business reasons, the disclosure of such material nonpublic information at
that time would be materially detrimental to the Corporation in the
circumstances and is not otherwise required under applicable law (including
applicable securities laws); provided, further, that the Corporation may only
delay its obligations pursuant to the aforementioned proviso for a period of 60
days in any 365-day period;
(f) use its best efforts to obtain the withdrawal of any order suspending
the effectiveness of the Registration Statement or any part thereof as promptly
as possible;
(g) upon request, furnish to each Holder of Registrable Securities that has
delivered a Registration Notice to the Corporation, without charge, at least one
conformed copy of the Registration Statement and any post-effective amendment
thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);
(h) cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of unlegended certificates
representing Registrable Securities to be sold; and enable unlegended
certificates for such Registrable Securities to be issued for such numbers of
shares and registered in such names as the selling Holders may reasonably
request at least two business days prior to any sale of Registrable Securities;
(i) subject to the last three sentences of Section 3.01(b), upon the
occurrence of any event contemplated by clauses (A) or (B) of Section 3.01(b) or
clause (v) of and the proviso to Section 3.01(e), use its best efforts promptly
to prepare and file an amendment or a supplement to the Prospectus or any
document incorporated therein by reference or prepare, file and obtain
effectiveness of a post-effective amendment to the Registration Statement, or
file any other required document, in any such case to the extent necessary so
that, as thereafter delivered to the purchasers of the Registrable Securities,
such Prospectus as then amended or supplemented will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading;
(j) within a reasonable time prior to the filing of any Registration
Statement or any amendment thereto, or any Prospectus or any amendment or
supplement thereto, provide copies of such document (not including any documents
incorporated by reference therein unless requested) to the Holders of
Registrable Securities that have provided a Registration Notice to the
Corporation;
(k) use its best efforts to maintain the listing of the Common Shares on
the securities market on which the Common Shares are now listed or on another
national securities exchange or national market system, as those terms are used
under the Exchange Act;
(l) use its best efforts to cause all Registrable Securities to be listed
on any securities market or exchange on which similar securities issued by the
Corporation are then listed;
(m) provide a transfer agent and registrar for all Registrable Securities
registered hereunder and a CUSIP number for all Registrable Securities, not
later than the effective date of the Registration Statement;
(n) in the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering (each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement); and
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(o) use its best efforts to furnish, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are
being sold through underwriters, (i) an opinion, dated as of such date, of the
counsel representing the Corporation for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and (ii) a letter dated
as of such date, from the independent certified public accountants of the
Corporation, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering
addressed to the underwriters.
3.02. Information to be Provided
The Corporation may require each Holder of Registrable Securities to
furnish to the Corporation in writing such information regarding itself, the
securities of the Corporation held by such Holder, and the proposed distribution
by such Holder of such Registrable Securities as the Corporation may reasonably
require to effect the registration of such Holder's Registrable Securities.
3.03. Duties of Holder
In connection with and as a condition to the Corporation's obligations with
respect to any Registration Statement pursuant to Section 2 of this Agreement
and this Section 3, each Holder covenants and agrees that:
(a) it will not offer or sell any Registrable Securities under the
Registration Statement until it has provided a Registration Notice if required
pursuant to Section 3.01(b) and has received copies of the Prospectus as then
amended or supplemented as contemplated by Section 3.01(c) and notice from the
Corporation that the Registration Statement and any post-effective amendments
thereto have become effective as contemplated by Section 3.01(e);
(b) upon receipt of any notice from the Corporation contemplated by Section
3.01(b) (in respect of the occurrence of an event contemplated by clauses (A) or
(B) of Section 3.01(b)) or Section 3.01(e) (in respect of the occurrence of an
event contemplated by clause (v) of Section 3.01(e)), such Holder shall not
offer or sell any Registrable Securities pursuant to the Registration Statement
until, in the sole discretion of the Corporation, the event no longer precludes
sale or such Holder receives copies of the supplemented or amended Prospectus
contemplated by Section 3.01(i) and receives notice that any post-effective
amendment has become effective, and, if so directed by the Corporation, such
Holder will deliver to the Corporation (at the expense of the Corporation) all
copies in its possession, other than permanent file copies then in such Holder's
possession, of the Prospectus as amended or supplemented at the time of receipt
of such notice; and
(c) the Holder and any of its officers, directors or affiliates, if any,
(i) shall comply with the provisions of Regulation M under the Exchange Act, or
any successor regulations, as applicable to them in connection with sales of
Registrable Securities pursuant to the Registration Statement and (ii) shall
enter into such written agreements as the Corporation shall reasonably request
to ensure compliance with this Section 3.03(c).
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4.
INDEMNIFICATION; CONTRIBUTION
4.01. Indemnification by the Corporation
The Corporation agrees to indemnify and hold harmless each Holder and its
officers, directors and trustees, legal counsel and accountants for any Holder,
any underwriter for any Holder and each Person, if any, who controls any of the
foregoing Persons within the meaning of Section 15 of the Securities Act as
follows:
(a) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to which such Holder, officer, director or controlling
Person may become subject under the Securities Act, under any other federal or
state law or otherwise (i) that arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or any amendment thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) that arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (iii) that arise out
of or are based upon any violation or alleged violation of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law by the
Corporation or any of its officers or directors or any Person who controls the
Corporation within the meaning of Section 15 of the Securities Act;
(b) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or incurred in connection with any investigation
or proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any of the matters identified in clauses (i),
(ii) or (iii) or Section 4.01(a), unless such settlement is effected without the
written consent of the Corporation (which consent has not been unreasonably
withheld); and
(c) subject to the limitations set forth in Section 4.03, against any and
all expense whatsoever, as incurred (including reasonable fees and disbursements
of counsel), reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, in each case whether or not a party, or
any claim whatsoever based upon any of the matters identified in clauses (i),
(ii) or (iii) or Section 4.01(a), to the extent that any such expense is not
paid under Sections 4.01(a) or 4.01(b);
(d) any violation by the Corporation of any rule or regulation promulgated
under the Securities Act applicable to the Corporation in connection with any
registration, qualification, or compliance of the Registrable Securities or any
other capital stock of the Corporation;
provided, however, that the indemnity provided pursuant to this Section 4.01
shall not apply (i) to any amounts paid in settlement of any such loss,
liability, claim, damage or expense if such settlement is effected without the
consent of the Corporation (which consent shall not be unreasonably delayed or
withheld), or (A) to any Holder with respect to any of the foregoing in this
Section 4.01 that arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Corporation by such Holder
expressly for use in any Registration Statement or any amendment thereto or the
Prospectus or any
9
amendment or supplement thereto, or the Holder's failure to
deliver a copy of any Registration Statement or Prospectus or any amendments or
supplements thereto after the Corporation has furnished the Holder with the
requested number of copies of the same.
4.02. Indemnification by Holders
Each Holder severally agrees to indemnify and hold harmless the Corporation
and the other selling holders of securities included in any Registration
Statement covering any Registrable Securities being sold by such Holder, and
each of their respective directors and officers (including each director and
officer of the Corporation who signed the Registration Statement), and each
Person, if any, who controls the Corporation or any other selling holder within
the meaning of Section 15 of the Securities Act, to the same extent as the
indemnity contained in Section 4.01, but only insofar as such loss, liability,
claim, damage or expense arises out of or is based upon (a) any untrue statement
or alleged untrue statement or omission or alleged omission made in any
Registration Statement or any amendment thereto or the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Corporation by such selling Holder for use therein
relating to the Holder's status as a selling security holder, (b) Holder's
failure to deliver a copy of any Registration Statement or Prospectus or any
amendments or supplements thereto, to the extent such delivery is required to be
made by Holder and after the Corporation has furnished Holder with the requested
number of copies of the same, (c) the breach of any covenant contained in
Section 3, or (d) the breach of any representation or warranty contained in
Section 7; and provided, that in no event shall any Holder's liability pursuant
to this Section 4.02, when combined with amounts paid or payable by such Holder
pursuant to Section 4.04, exceed the proceeds from the offering of the
Registrable Securities (net of underwriting discounts and commissions) received
by such Holder, except in the case of fraud by such Holder.
4.03. Conduct of Indemnification Proceedings
Each indemnified party shall give reasonably prompt notice to each
indemnifying party of any action or proceeding commenced against the indemnified
party in respect of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party (a) shall not relieve it from any liability which
it may have under the indemnity agreement provided in Sections 4.01 or 4.02,
unless and to the extent it did not otherwise learn of such action and the lack
of notice by the indemnified party materially prejudices the indemnifying party
or results in the forfeiture by the indemnifying party of substantial rights and
defenses and (b) shall not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided under Sections 4.01 or 4.02. After receipt of such notice,
the indemnifying party shall be entitled to participate in and, at its option,
jointly with any other indemnifying party so notified, to assume the defense of
such action or proceeding at such indemnifying party's own expense with counsel
chosen by such indemnifying party and approved by the indemnified party, which
approval shall not be unreasonably withheld; provided, however, that, if the
defendants in any such action or proceeding include both the indemnified party
and the indemnifying party and the indemnified party reasonably determines, upon
advice of counsel, that a conflict of interest exists or that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, then the indemnified
party shall be entitled to one separate counsel, the reasonable fees and
expenses of which shall be paid by the indemnifying party. If the indemnifying
party does not assume the defense of any such action or proceeding, after having
received the notice referred to in the first sentence of this paragraph, the
indemnifying party will pay the reasonable fees and expenses of counsel (which
shall be limited to a single law firm) for the indemnified party. In such event,
however, the indemnifying party will not be liable for any settlement effected
without the written consent of such indemnifying party. If the
10
indemnifying party assumes the defense of any such action or proceeding in
accordance with this paragraph, such indemnifying party shall not be liable for
any fees and expenses of counsel for the indemnified party incurred thereafter
in connection with such action or proceeding except as set forth in the proviso
in the second sentence of this Section 4.03.
4.04. Contribution
(a) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section 4 is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Corporation and the selling Holders shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Corporation and the
selling Holders, in such proportion as is appropriate to reflect the relative
fault of and benefits to the Corporation on the one hand and the selling Holders
on the other (in such proportions that the selling Holders are severally, not
jointly, responsible for the balance), in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits to the indemnifying party and indemnified parties shall be determined
by reference to, among other things, the total proceeds received by the
indemnifying party and indemnified parties in connection with the offering to
which such losses, claims, damages, liabilities or expenses relate. The relative
fault of the indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether the action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or the indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action.
(b) The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 4.04 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph;
provided, however, that in no event shall any contribution by Holder under this
Section 4.04, when combined with amounts paid or payable by such Holder pursuant
to Section 4.02, exceed the net proceeds from the offering received by such
Holder, except in the case of fraud by such Holder. Notwithstanding the
provisions of this Section 4.04, no selling Holder shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities of such selling Holder were offered to the public
exceeds the amount of any damages which such selling Holder would otherwise have
been required to pay by reason of such untrue statement or omission.
(c) Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 4.04, each Person, if
any, who controls a Holder within the meaning of Section 15 of the Securities
Act and directors and officers of a Holder shall have the same rights to
contribution as such Holder, and each director of the Corporation, each officer
of the Corporation who signed the Registration Statement and each Person, if
any, who controls the Corporation within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as the Corporation.
4.05. Survival of Provisions
The obligations of the Corporation and Holders under this Section 4 shall
survive completion of any offering of Registrable Securities in a registration
statement and the termination of this agreement. No indemnifying party, in the
defense of any such claim or litigation, shall, except with the consent
11
of each indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
5.
RULE 144 REPORTING
With a view to making available to each Holder the benefits of certain
rules and regulations of the SEC which may permit the sale of the Registrable
Securities to the public without registration, the Corporation agrees to use its
best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act;
(b) file with the SEC, in a timely manner, all reports and other documents
required of the Corporation under the Exchange Act; and
(c) so long as a Holder owns any Registrable Securities, furnish to such
Holder forthwith upon request (i) a copy of the most recent annual and/or
quarterly report of the Corporation (ii) and such other reports and documents as
a Holder reasonably may request in availing itself of any rule or regulation of
the SEC allowing it to sell any such securities without registration.
6.
TRANSFER OF SHARES
6.01. Restrictions
Holder agrees not to make any disposition of all or any portion of the
Registrable Securities unless and until:
(a) there is then in effect a registration statement under the Securities
Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) the Holder shall have (i) notified the Corporation of the proposed
disposition and (ii) if reasonably requested by the Corporation, furnished the
Corporation with an opinion of counsel reasonably satisfactory to the
Corporation and its counsel that such disposition will not require registration
of such Registrable Securities under the Securities Act.
6.02. Legends
(a) Unless otherwise permitted by the provisions of this Agreement, each
certificate representing Registrable Securities shall be stamped or otherwise
imprinted with a legend substantially similar to the following (the "Private
Placement Legend"), in addition to any legend required under applicable state
securities laws:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED(THE "SECURITIES ACT"),
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL SUCH SHARES ARE REGISTERED UNDER THE
SECURITIES ACT OR AN OPINION OF
12
COUNSEL REASONABLY SATISFACTORY TO THE COPRORATION IS OBTAINED TO
THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
(b) Upon the exchange or replacement of Registrable Securities bearing the
Private Placement Legend, the Corporation shall deliver only Common Shares, that
bear the Private Placement Legend, unless: (i) such transfer or exchange is
effected pursuant to an effective registration statement under the Securities
Act or (ii) there is delivered to the Corporation an opinion of counsel
reasonably satisfactory to the Corporation and its counsel that such disposition
will not require registration of such Shares under the Securities Act.
(c) Any legend endorsed on an instrument pursuant to applicable state
securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Corporation of an order of the
appropriate blue sky authority authorizing such removal.
6.03. Transfer of Rights to Subsequent Holders
Subject to the foregoing restrictions, the Corporation and the Holder
hereby agree that any transferee and/or subsequent Holder of Registrable
Securities shall be entitled to all benefits and subject to all obligations
hereunder as a Holder of Registrable Securities. By its acceptance of any
Registrable Securities bearing the Private Placement Legend, each Holder
acknowledges the restrictions on transfer of the Registrable Securities, as
applicable, set forth in this Agreement and agrees that it shall transfer the
Registrable Securities, as applicable, only as provided in this Agreement.
7.
REPRESENTATIONS AND WARRANTIES
7.01. Representations and Warranties of the Research Foundation.
The Research Foundation understands and acknowledges that the Research
Foundation Shares are being offered and sold in a transaction exempt from
registration under the Securities Act and applicable state securities laws
pursuant to one or more applicable exemptions therefrom. The Research Foundation
understands that the issuance of the Research Foundation Shares has not been
reviewed or approved by the SEC or by any state regulatory authority charged
with the administration of the securities laws of any state. The Research
Foundation has not been offered or furnished any formal offering literature or
prospectus. Accordingly, The Research Foundation confirms, represents and
warrants to the Corporation as follows:
(a) Reliance. The Research Foundation, in making the decision to accept the
Research Foundation Shares, has relied solely upon independent investigations
made by the Research Foundation.
(b) Speculative Nature of Investment. The Research Foundation has reviewed
the section entitled "Risk Factors" in the Corporation's Annual Report on Form
10-KSB for the year ending December 31, 2002 and understands that the
Corporation is a development stage entity, has a minimal net worth and is an
extremely speculative investment.
(c) Suitability. The Research Foundation understands and has fully
considered the risks associated with the Research Foundation Shares and
understands that (i) this investment is suitable only for a Person who is able
to bear the economic consequences of losing his, her or its entire investment;
(ii) the purchase of the Research Foundation Shares is a speculative investment
which involves a high degree of risk; and (iii) there are substantial
restrictions on the transfer of, and there will be no immediate
13
public market for, the Research Foundation Shares, and accordingly it may not be
possible for the Research Foundation to liquidate its investment in case of
emergency.
(d) Lack of Liquidity. The Research Foundation is able (i) to bear the
economic risk of accepting the Research Foundation Shares, and (ii) to hold the
Research Foundation Shares for an extended period of time. The Research
Foundation has sufficient liquid assets so that the illiquidity associated with
this investment will not cause any undue financial difficulties or affect the
Research Foundation's ability to provide for his, her or its current needs and
possible financial contingencies. The Research Foundation's commitment to all
speculative investments is reasonable in relation to the Research Foundation's
net worth and annual income.
(e) Brokers. The Research Foundation is under no obligation to pay any
broker's fee or commission in connection with this investment.
(f) Entity Acknowledgements. The Research Foundation is authorized and
otherwise duly qualified to purchase and hold the Common Shares and Registrable
Securities of the Corporation, has its principal place of business as set forth
in the signature page hereof, and has not been formed for the specific purpose
of acquiring the Common Shares of the Corporation.
7.02. Effect of Representations and Warranties.
(a) Continuing Effect. The representations and warranties of the Research
Foundation contained in Section 7.01 are true and accurate as of the date of
this Agreement and shall survive such delivery and acceptance of the Common
Shares. If such representations and warranties shall not be true and accurate in
every respect prior to such delivery or such acceptance, the Research Foundation
shall give immediate written notice of such fact to the Corporation, specifying
which representations, warranties or acknowledgements are not true and accurate
and the reasons therefor.
(b) Reliance on Representations. The Research Foundation understands and
intends that the Corporation and its officers, directors, employees, agents and
attorneys will rely upon the representations, warranties, covenants and
agreements made by the Research Foundation in this Agreement and that such
parties are entitled to rely upon each and all of the same without further
inquiry.
8.
GENERAL PROVISIONS
8.01. Amendments and Waivers
The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified, supplemented or waived, nor may consent
to departures therefrom be given, without the written consent of the Corporation
and the Holders of a majority of the outstanding Registrable Securities,
provided, however, that no amendment, modification, supplement or waiver of, or
consent to the departure from, the provisions of Sections 2, 4, 6 or 8 of this
Agreement shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder of Registrable Securities. Notice
of any such amendment, modification, supplement, waiver or consent adopted in
accordance with this Section 8.01 shall be provided by the Corporation to each
Holder of Registrable Securities at least 30 days prior to the effective date of
such amendment, modification, supplement, waiver or consent.
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8.02. Successors and Assigns
This Agreement shall inure to the benefit of and be binding upon the
successors, assigns and transferees of each of the parties, including subsequent
Holders without the need for an express assignment. If any successor, assignee
or transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
Registrable Securities such Person shall be conclusively deemed to have agreed
to be bound by all of the terms and provisions hereof.
8.03. Specific Performance
The parties hereto acknowledge that there would be no adequate remedy at
law if any party fails to perform any of its obligations hereunder, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of any other party under this Agreement in
accordance with the terms and conditions of this Agreement in any court of the
United States or any State thereof having jurisdiction.
8.04. Notices
All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been made (x) upon actual receipt, when
given by hand or confirmed facsimile or electronic mail transmission, (y) one
day after delivery to the carrier, when given by overnight delivery service or
(z) two days after mailing, when given by first-class registered or certified
mail, postage prepaid, return receipt requested; in any case to the following
address, or to such other address as a party, by notice to the other parties
given pursuant to this Section 8.04, may designate from time to time:
a. If to the Research Foundation, to: With a copy to:
The Research Foundation of State Xxxxx Xxxxxxx LLP
University of New York Attn: Xxxxxxx Xxxxxxx, Esq.
University at Buffalo Clinton Square
Office of Science, Technology Transfer XX Xxx 00000
and Economic Outreach Xxxxxxxxx, XX 00000
Intellectual Property Division Facsimile: 585.261.1600
UB Technology Incubator, Xxxxx 000
0000 Xxxxx Xxxx Xxxx
Xxxxxxx, Xxx Xxxx 00000
Facsimile: 716.645.3436
b. If to the Corporation, to: With a copy to:
Provectus Pharmaceuticals, Inc. Baker, Donelson, Bearman, Xxxxxxxx
Attention: President & Xxxxxxxxx, PC
0000 Xxx Xxxxx Xxxxxxx, Xxxxx X Attention:Wm.Xxxxxxx Xxxx, Jr.,Esq.
Xxxxxxxxx, XX 00000 Riverview Tower, Suite 2200
Facsimile: 865.539.9654 000 Xxxxx Xxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: 865.525.8569
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8.05. Governing Law; Venue of Actions
(a) This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York as applied to contracts made and
performed within the State of New York, without regard to the principles thereof
regarding resolution of conflicts of law.
(b) The Corporation and each Holder hereby (i) submit to the jurisdiction
of any state court of competent jurisdiction in and for Xxxx County, Tennessee,
or in the United States District Court for the Eastern District of Tennessee
sitting at Knoxville in any action or proceeding arising out of or relating to
this Agreement and agree that all claims in respect of the action or proceeding
may be heard and determined in any such court; (ii) agree not to bring any
action or proceeding arising out of or relating to this Agreement in any other
court; (iii) waive any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waive any bond, surety, or other security
that might be required of any other Party with respect thereto; and (iv) agree
that a final judgment in any action or proceeding so brought shall be conclusive
and may be enforced by suit on the judgment or in any other manner provided by
law or in equity.
8.06. Entire Agreement
This Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
8.07. Severability
In the event one or more of the provisions of this Agreement should, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other
provisions of this Agreement, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
8.08. Counterparts
This Agreement may be executed in any number of counterparts and by the
parties hereto in separate 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.
* signatures appear on following page *
16
Signatures
----------
IN WITNESS WHEREOF, the Corporation and the Holders have executed this
Agreement to be as of the Effective Date.
PROVECTUS PHARMACEUTICALS, INC., a
Nevada corporation
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
THE RESEARCH FOUNDATION OF STATE
UNIVERSITY OF NEW YORK, a New York
education corporation
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
17
