Exhibit 4
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of February
28, 1997 by and between XXXX/Biophile International Corporation, a Delaware
corporation, with headquarters located at 0000 X.X. 00xx Xxxx, Xxxxxxxxxxx,
Xxxxxxx 00000 (the "Company"), and Clearwater Fund IV, LLC, a Delaware limited
liability company ("Clearwater IV") and Clearwater Offshore Fund Ltd., a
corporation organized under the International Business Companies Act of the
Commonwealth of the Bahamas ("Clearwater Offshore") (Clearwater IV and
Clearwater Offshore are hereinafter sometimes collectively referred to as the
"Buyers").
WHEREAS:
A. In connection with the Securities Purchase Agreement by and among
the parties hereto of even date herewith (the "Securities Purchase Agreement"),
the Company has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, to issue and sell to the Buyers shares of the
Company's 5% Cumulative Convertible Preferred Stock, Series D, $10 par value per
share (the "Preferred Shares"), which will be convertible into shares of the
Company's common stock (the "Common Stock"), par value $.01 per share, (as
converted, the "Conversion Shares"), and pursuant to which certain shares of
Common Stock may be issued to the Buyers in accordance with the Certificate of
Designation therefor (the "Damage Shares"); and
B. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"), and
applicable state securities laws;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and the
Buyers hereby agree as follows:
1. DEFINITIONS.
a. As used in this Agreement, the following terms shall have
the following meanings:
(i) "Investor" or collectively "Investors" means the
Buyers and any transferees or assignees thereof who agree to become bound by the
provisions of this Agreement in accordance with Section 10 hereof.
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(ii) "register," "registered," and "registration"
refer to a registration effected by preparing and filing a Registration
Statement or Statements in compliance with the 1933 Act and pursuant to Rule 415
under the 1933 Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(iii) "Registrable Securities" means (i) the
Conversion Shares and the Damage Shares, (ii) shares of stock issued with
respect to or in any exchange for or in replacement of the Conversion Shares or
the Damage Shares, which have not been resold to the public in a registered
public offering, and/or (iii) shares of stock issued in respect of the stock
referred to in (i) or (ii) as a result of a stock split, stock dividend or the
like, which have not been resold to the public in a registered public offering.
(iv) "Registration Statement" means a registration
statement of the Company under the 0000 Xxx.
b. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Securities Purchase
Agreement.
2. MANDATORY REGISTRATION.
a. Mandatory Registration. The Company shall prepare, and, on
or before March 31, 1997, file with the SEC a Registration Statement on Form S-3
(or, if such form is unavailable for such a registration, on such other form as
is available for such a registration) covering the resale of the Registrable
Securities, which Registration Statement shall state that, in accordance with
Rule 416 promulgated under the 1933 Act, such Registration Statement also covers
such indeterminate number of additional shares of Common Stock as may become
issuable upon conversion of the Preferred Shares to prevent dilution resulting
from stock splits, stock dividends or similar transactions. The Registration
Statement (and each amendment or supplement thereto, and each request for
acceleration of effectiveness thereof) shall be provided to and approved by the
Buyers and its counsel prior to its filing or other submission, such approval
not to be unreasonably withheld.
b. Eligibility for Form S-3. The Company represents and
warrants that it meets the requirements for the use of Form S-3 for registration
of the sale by the Buyers and any other Investors of the Registrable Securities
and the Company shall file all reports required to be filed by the Company with
the SEC in a timely manner so as to maintain such eligibility for the use of
Form S-3. In the event that Form S-3 is not available for sale by the Investors
of the Registrable Securities, the Company shall register the sale on another
appropriate form.
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3. PIGGYBACK REGISTRATION.
a. Notice to Buyers. If at any time or from time to time,
prior to the filing by the Company of the Registration Statement pursuant to
Section 2, above, the Company proposes to register any of its securities, for
its own account or the account of any of its shareholders other than the
Investors (other than a registration relating solely to employee stock option or
purchase plans, or a registration on Form S-4 relating solely to an SEC Rule 145
transaction, or any successor to such form), the Company will:
(i) promptly give to the Investors written notice
thereof (which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify any securities under applicable blue sky or other
state securities laws); and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance requirement), and in any
underwriting involved therein, all the Registrable Securities of the Investors
and specified in a written request or requests by the Investors, made within
thirty (30) days after receipt of such written notice from the Company, to be
included in any such registration, except as set forth in subsection 3(b),
below.
b. Underwriting. If the registration of which the Company
gives notice pursuant to Section 3(a) is for a registered public offering
involving an underwriting, the Company shall so advise the Buyers as a part of
the written notice given pursuant to subsection 3(a)(i). In such event, the
right of each Investor to registration pursuant to Section 3 shall be
conditioned upon the Investor's participation in such underwriting and the
inclusion of the Investor's Registrable Securities acquired pursuant to this
Agreement in the underwriting to the extent provided herein. If the Investor
proposes to distribute its Registrable Securities through such underwriting it
shall (together with the Company and the other shareholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company (which shall be qualified nationally recognized
underwriter(s)). Notwithstanding any other provision of this Section 3, if the
underwriter(s) shall notify the Company in writing that in their good faith
opinion, marketing factors require a limitation of the number of Registrable
Securities to be underwritten, the number of Registrable Securities that may be
included in the underwriting shall be allocated, first, to the Company for its
own account; second, to any shareholders (other than the Buyers) invoking
contractual rights to have their securities registered on the registration
statement pursuant to which Investors are invoking their rights under this
Section 3, if any, on a pro rata basis, and third, to the Investors. In the
event of such a limitation by the underwriters of the number of Registrable
Securities of the Investors to be included in the registration and underwriting,
the Company shall so advise the Investors. Any Registrable Securities excluded
or withdrawn from such underwriting shall be withdrawn from such registration.
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4. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities
pursuant to Sections 2 or 3, the Company shall have the following obligations:
a. In connection with registration of the Registrable
Securities pursuant to Section 2, the Company shall prepare promptly, and file
with the SEC not later than thirty (30) days after the Closing Date, a
Registration Statement with respect to the number of Registrable Securities
provided in Section 2(a). In connection with any registration of the Registrable
Securities pursuant to Sections 2 or 3, the Company shall subsequent to the
filing of the Registration Statement use its best efforts to cause such
Registration Statement relating to the Registrable Securities to become
effective as soon as possible after such filing, and keep the Registration
Statement effective pursuant to Rule 415 at all times until the earlier of (i)
the date as of which the Investors may sell all of the Registrable Securities
without restriction pursuant to Rule 144(k) promulgated under the 1933 Act (or
successor thereto), or (ii) the date on which (A) the Investors have sold all
the Registrable Securities and (B) none of the Preferred Shares is outstanding
(the "Registration Period"), which Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not
contain any 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 in which they were made, not misleading. The
Investors shall give notice to the Company when they have sold all of the
Registrable Securities.
b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement.
c. The Company shall furnish to each Investor whose
Registrable Securities are included in the Registration Statement and its legal
counsel (i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company, one copy of the Registration Statement
and any amendment thereto, each preliminary prospectus and prospectus and each
amendment or supplement thereto, and (ii) such number of copies of a prospectus,
including a preliminary prospectus, and all amendments and supplements thereto
and such other documents as such Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Investor.
d. The Company shall furnish to the counsel of each Investor
each letter written by or on behalf of the Company to the SEC or the staff of
the SEC, and each item of correspondence from the SEC or the staff of the SEC,
in each case relating to the Registration Statement (other than any portion of
any thereof which contains information for which the Company has sought
confidential treatment).
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e. The Company shall use reasonable efforts to (i) register
and qualify the Registrable Securities covered by the Registration Statement
under such other securities or "blue sky" laws of such jurisdictions in the
United States as the Investors who hold a majority in interest of the
Registrable Securities being offered reasonably request, (ii) prepare and file
in those jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (a) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 4(e), (b) subject itself
to general taxation in any such jurisdiction, (c) file a general consent to
service of process in any such jurisdiction, (d) provide any undertakings that
cause more than nominal expense or burden to the Company, or (e) make any change
in its charter or bylaws, which in each case the Board of Directors of the
Company determines to be contrary to the best interests of the Company and its
stockholders.
f. As promptly as practicable after becoming aware of such
event, the Company shall notify each Investor of the happening of any event, of
which the Company has knowledge, as a result of which the prospectus included in
the Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission 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, and use its best efforts promptly to
prepare a supplement or amendment to the Registration Statement to correct such
untrue statement or omission, and deliver such number of copies of such
supplement or amendment to each Investor as such Investor may reasonably
request.
g. The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify each
Investor who holds Registrable Securities being sold (or, in the event of an
underwritten offering, the managing underwriters) of the issuance of such order
and the resolution thereof.
h. The Company shall make available for inspection by (i) any
Investor and (ii) one firm of attorneys and one firm of accountants or other
agents retained by the Investors (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "Records"), as shall be reasonably deemed
necessary by each Inspector to enable each Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request
for purposes of such due diligence; provided, however, that each Inspector shall
hold in confidence and shall not make any disclosure (except to an Investor) of
any Record or other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (b) the release of such
Records is ordered pursuant
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to a subpoena or other final, non-appealable order from a court or government
body of competent jurisdiction, or (c) the information in such Records has been
made generally available to the public other than by disclosure in violation of
this or any other agreement. The Company shall not be required to disclose any
confidential information in such Records to any Inspector until and unless such
Inspector shall have entered into confidentiality agreements (in form and
substance satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section. Each Investor agrees that it shall,
upon learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential.
i. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this or any other agreement. The
Company agrees that it shall, upon learning that disclosure of such information
concerning an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to such
Investor and allow such Investor, at the Investor's expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.
j. The Company shall use its best efforts to (i) secure the
inclusion for quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") SmallCap Market of all Registrable
Securities covered by the Registration Statement and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register with the National Association of Securities Dealers, Inc. ("NASD") as
such with respect to such Registrable Securities, or (ii) cause all such
Registrable Securities to be listed on a national securities exchange and on
each additional national securities exchange on which securities of the same
class or series issued by the Company are then listed, if any, if the listing of
such Registrable Securities is then permitted under the rules of such exchange,
or (iii) secure designation and quotation of such Registrable Securities on the
National Market of NASDAQ.
k. The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities, and shall provide
CUSIP numbers for the Registrable Securities, not later than the effective date
of the Registration Statement.
l. The Company shall cooperate with the Investors who hold
Registrable Securities being offered to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to the Registration Statement and
enable such certificates to be in such denominations or amounts as the Investors
may reasonably request and registered in such names as the Investors may
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request. Not later than the date on which any Registration Statement registering
the resale of Registrable Securities is declared effective, the Company shall
deliver to its transfer agent instructions, accompanied by any reasonably
required opinion of counsel, that permit sales of unlegended securities in a
timely fashion that complies with then mandated securities settlement procedures
for regular way market transactions.
m. At the request of the Investors, furnish on the effective
date of the Registration Statement and, if such registration includes an
underwritten public offering, at the closing provided for in the underwriting
agreement, (i) an opinion, dated each such date, of the counsel representing the
Company for the purposes of such registration, addressed to the underwriters, if
any, and to the Investors, covering such matters with respect to the
Registration Statement, the prospectus and each amendment or supplement thereto,
proceedings under state and federal securities laws, other matters relating to
the Company, the securities being registered and the offer and sale of such
securities as are customarily the subject of opinions of issuer's counsel
provided to underwriters in underwritten public offerings, and (ii) a letter
dated each such date, from the independent certified public accountants of the
Company, addressed to the underwriters, if any, and to the Investors, stating
that they are independent certified public accountants within the meaning of the
Securities Act and that in the opinion of such accountants the financial
statements and other financial data of the Company included in the Registration
Statement or the prospectus or any amendment or supplement thereto comply in all
material respects with the applicable accounting requirements of the Securities
Act, and additionally covering such other financial matters, including
information as to the period ending not more than five (5) business days prior
to the date of such letter with respect to the Registration Statement and
prospectus, as the underwriters or the Investors may reasonably request.
n. The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investors of Registrable
Securities pursuant to the Registration Statement.
5. OBLIGATIONS OF THE INVESTORS.
In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:
a. It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding it, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least five (5) days prior
to the first anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires from each
such Investor if such Investor elects to have any of such Investor's Registrable
Securities included in the Registration Statement.
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b. Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder.
c. Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 4(f)
or 4(g), such Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 4(f) or 4(g) and, if so directed by
the Company, such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
6. EXPENSES OF REGISTRATION.
All reasonable expenses incurred in connection with registrations,
filings or qualifications pursuant to Sections 2 and 3, including all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company shall be borne by the Company.
7. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
a. To the extent permitted by law, the Company will indemnify,
hold harmless and defend (i) each Investor who holds such Registrable
Securities, and (ii) the directors, officers and each person who controls any
Investor within the meaning of the 1933 Act or the Securities Exchange Act of
1934, as amended (the "1934 Act"), if any (each, an "Indemnified Person"),
against any losses, claims, damages, liabilities or expenses (joint or several)
(collectively, "Claims") to which any of them may become subject insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or the omission
or alleged omission to state a material fact therein required to be stated or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, or (iii) any breach by the Company
of any of its representations, warranties, covenants or agreements in this
Agreement (the matters in the foregoing clauses (i) and (ii) being,
collectively, "Violations"). Subject to the restrictions set forth in Section
6(c) with respect to the number of legal counsel, the Company shall
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reimburse the Investors and each such controlling person, promptly as such
expenses are incurred and are due and payable, for any legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 7(a): (i) shall
not apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by any Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available to such
Indemnified Person by the Company pursuant to Section 4(c) hereof; (ii) with
respect to any preliminary prospectus, shall not inure to the benefit of any
such person from whom the person asserting any such Claim purchased the
Registrable Securities that are the subject thereof (or to the benefit of any
person controlling such person) if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected in the prospectus, as
then amended or supplemented, if such prospectus was timely made available by
the Company pursuant to Section 3(c) hereof; (iii) shall not be available to the
extent such Claim is based on a failure of the Investor to deliver or to cause
to be delivered the prospectus made available by the Company; and (iv) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 10.
b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to indemnify, hold harmless
and defend, to the same extent and in the same manner set forth in Section 7(a),
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person, if any, who controls the Company within
the meaning of the 1933 Act or the 1934 Act (collectively, an "Indemnified
Party"), against any Claim to which any of them may become subject, under the
1933 Act, the 1934 Act or otherwise, insofar as such Claim arises out of or is
based upon, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with
such Registration Statement; and such Investor will reimburse any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 7(b) shall not apply to amounts paid in settlement of
any Claim if such settlement is effected without the prior written consent of
such Investor, which consent shall not be unreasonably withheld; provided,
further, however, that the Investor shall be liable under this Section 7(b) for
only that amount of a Claim as does not exceed the net proceeds to such Investor
as a result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 10. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 7(b) with respect to any
preliminary prospectus shall not inure to the benefit of any Indemnified Party
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented.
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c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 7 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to made against any
indemnifying party under this Section 7, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses to be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. The Company shall pay reasonable fees for only one
separate legal counsel for the Investors, and such legal counsel shall be
selected by the Investors holding a majority in interest of the Registrable
Securities included in the Registration Statement to which the Claim relates;
provided, that legal fees of such firm shall be reasonable. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 7,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action. The indemnification required by this Section 7 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.
8. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 7 to the fullest extent permitted by law; provided, however, that
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 7, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of such fraudulent misrepresentation, and (iii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.
9. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investors the benefits of Rule
144 promulgated under the 1933 Act or any other similar rule or regulation of
the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:
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a. make and keep public information available, as those terms
are understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements (it being understood that
nothing herein shall limit the Company's obligations under Section 4(c) of the
Securities Purchase Agreement) and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and
c. furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the investors to sell such securities pursuant to Rule 144 without
registration.
10. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights to have the Company register Registrable Securities pursuant
to this Agreement shall be automatically assignable by the either or both Buyers
to any transferee which is an "affiliate" of the either or both Buyers, as that
term is defined under the 1934 Act, of all or any portion of Registrable
Securities if: (i) the assigning Buyer(s) agree(s) in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment, (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned, (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act and applicable state securities laws,
(iv) at or before the time the Company receives the written notice contemplated
by clause (ii) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein, (v) such
transfer shall have been made in accordance with the applicable requirements of
the Securities Purchase Agreement, (vi) such transferee shall be an "accredited
investor" as that term defined in Rule 501 of Regulation D promulgated under the
1933 Act; and (vi) in the event the assignment occurs subsequent to the date of
effectiveness of the Registration Statement required to be filed pursuant to
Section 2(a), the transferee agrees to pay its all reasonable expenses of
amending or supplementing such Registration Statement to reflect such
assignment.
11. AMENDMENT OF REGISTRATION RIGHTS; WAIVER.
This Agreement may be amended only by a written agreement duly executed
by the Company and Investors who hold a majority in interest of the Registrable
Securities. No term or condition of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
without the prior written consent of the Company and Investors who hold a
majority in interest of the Registrable Securities, which written consent sets
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forth in detail the subject matter of the waiver. No failure to enforce any term
or condition of this Agreement or right or remedy hereunder, or delay by a party
in exercising such right or remedy, shall operate as or be deemed a waiver
thereof, and no waiver of any breach of any term or condition herein shall be
construed as a waiver of any other breach of the same or other term or condition
of this Agreement. Any amendment or waiver effected in accordance with this
Section 11 shall be binding upon each Investor and the Company.
12. MISCELLANEOUS.
a. A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
b. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by registered or certified mail, return
receipt requested, or delivered personally or by courier and shall be effective
five days after being placed in the mail, if mailed, or upon receipt, if
delivered personally or by courier or telefacsimile, in each case addressed to a
party. The addresses for such communications shall be:
If to the Company:
0000 X.X. 00xx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Xx.
With copy to:
Marks & Murase, L.L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
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If to Clearwater IV, at the address on the signature page.
With copy to:
Rosenman & Colin, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
If to Clearwater Offshore, at the address on the signature page.
With copy to:
Rosenman & Colin, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Each party shall provide notice to the other party of any change in
address.
c. This Agreement shall be enforced, governed by and construed
in accordance with the laws of the State of Delaware applicable to agreements
made and to be performed entirely within such State. In the event that any
provision of this Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid
or unenforceable under any law shall not affect the validity or enforceability
of any other provision hereof.
d. This Agreement and the Securities Purchase Agreement
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement and the Securities Purchase Agreement supersede all
prior agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
e. Subject to the requirements of Section 10 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
f. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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g. This Agreement may be executed in two or more identical
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
h. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
XXXX/BIOPHILE INTERNATIONAL CORPORATION
By: /s/
-----------------------
Name:
Its:
CLEARWATER FUND IV, LLC
By: /s/
-----------------------
Name:
Its:
Address: 000 Xxxxx Xxxx Xxxx - Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
CLEARWATER OFFSHORE FUND, LTD.
By: /s/
--------------------
Name:
Its:
Address: c/o New World Trust (Bahamas) Limited
Xxxx-Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxx Xxxxxx
P.O. Box N 4465
Nassau, Bahamas
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Page 54 of 89
