REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.2
This
Registration Rights Agreement (“Agreement”) is
entered into as of June ___, 2010, by and among Bacterin International Holdings,
Inc., f/k/a K-Kitz, Inc. (the “Company”) and the
Holders (as defined below).
WITNESSETH:
WHEREAS, the Company has
entered into an agreement and plan of merger (the “Merger Agreement”)
pursuant to which Bacterin International Inc., a Nevada corporation (“Bacterin”), will
become a wholly-owned subsidiary of the Company (the “Reverse Merger”) and,
contingent upon the closing of the Reverse Merger, the Investors have agreed to
acquire from the Company (the “Offering”), either
for cash or upon conversion of certain existing promissory notes (“Bridge Notes”) of
Bacterin, (i) shares of Company common stock (the “Common Stock”) and
(ii) warrants (“Warrants”) to
purchase additional shares of the Common Stock, subject to the terms and
conditions set forth in that certain Subscription Agreement dated on or about
June __, 2010 between Bacterin and each of the Investors (the “Subscription
Agreement”); and
WHEREAS, it is a condition
precedent to the consummation of the transactions contemplated by the
Subscription Agreement that the Company execute this Agreement; and
WHEREAS, certain terms used in
this Agreement are defined in Section 3 hereof.
NOW, THEREFORE, in
consideration of the mutual promises, representations, warranties, covenants and
conditions set forth in the Subscription Agreement, the Appendices thereto and
the other documents to be entered into and/or delivered in connection therewith
(the “Transaction
Documents”), the Company and each Holder agree as follows:
1. Certain
Definitions. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Subscription
Agreement. As used in this Agreement, the following terms shall have
the following respective meanings:
“Closing” and “Closing Date” shall have the
meanings ascribed to such terms in the Subscription Agreement.
“Commission” or “SEC” shall mean the Securities
and Exchange Commission or any other federal agency at the time administering
the Securities Act.
“Demand Registrable Securities”
shall mean (i) the Registrable Securities, (ii) securities issued or issuable in
respect of the foregoing upon any stock split, stock dividend, recapitalization
or similar event; and (iii) any other security issued as a dividend or other
distribution with respect to, in exchange for or in replacement of the
securities referred to in the preceding clauses; provided that all such shares
shall cease to be Demand Registrable Securities at such time as they have been
sold under a Registration Statement or pursuant to Rule 144 under the Securities
Act or otherwise or at such time as they are eligible to be sold pursuant to
Rule 144(b)(1).
“Harborview Shareholders” shall
mean The Xxxxxxx LLC, Harborview Master Fund, L.P., Harborview Value Master
Fund, L.P. and Chex Associates LLC and any permitted transferee
or transferees of a Harborview Shareholder’s Registrable
Securities.
“Harborview Shares” shall mean
the 1,177,196 shares of common stock of the Company owned in
the aggregate by the Harborview Shareholders (which shall be in addition to any
other Registrable Securities that may be registered by any of the Harborview
Shareholders pursuant to clauses (i), (ii) and (iv) of the definition of
Registrable Securities).
“Holder” and “Holders” shall be used to
refer to the Harborview Shareholders, Investors and Placement Agent
collectively.
“Investor” and “Investors” shall include each
Investor, the Placement Agent and any permitted transferee or transferees of an
Investor’s Registrable Securities.
“Permitted Free Writing
Prospectus” means a free writing prospectus authorized for use by the
Company in connection with any offering of Registrable Securities that has been
filed with the SEC in accordance with Rule 433 under the Act .
“Placement Agent” means
Middlebury Securities, LLC and any authorized sub placement agents.
The terms
“register,” “registered” and “registration” shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
“Registrable Securities” shall
mean: (i) the Common Stock or other securities issued or issuable to
each Investor and to the Placement Agent or any of their respective permitted
transferees or designees (a) in connection with the Offering (including upon
conversion or tender of any Bridge Notes), (b) in connection with Investor’s
exercise of Warrants received in connection with the Offering, (c) in connection
with the exercise of warrants received by the Placement Agent pursuant to the
placement agent agreement, as amended, between Bacterin and the Placement Agent
(the “Placement Agent
Agreement”), (d) upon any distribution with respect to, any exchange for
or any replacement of, any shares of Common Stock, or (e) upon any
conversion, exercise or exchange of any securities issued in connection with any
such distribution, exchange or replacement; (ii) securities issued or issuable
in respect of the foregoing upon any stock split, stock dividend,
recapitalization or similar event; (iii) the Harborview Shares; and
(iv) any other security issued as a dividend or other distribution with respect
to, in exchange for or in replacement of the securities referred to in the
preceding clauses; provided that all such shares shall cease to be Registrable
Securities at such time as they have been sold under a Registration Statement or
pursuant to Rule 144 under the Securities Act or otherwise or at such time as
they are eligible to be sold pursuant to Rule 144(b)(1).
“Registration Expenses” shall
mean all expenses to be incurred in connection with each Holder’s registration
rights under this Agreement not included in Selling Expenses, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company and one counsel for the Holders, blue
sky fees and expenses, and the expense of any special audits incident to or
required by any such registration (but excluding the compensation of regular
employees of the Company, which shall be paid in any event by the
Company).
“Registration Statement” shall
have the meaning set forth in Section 2(a) herein.
“Regulation D” shall mean
Regulation D as promulgated pursuant to the Securities Act, and as subsequently
amended.
“Securities Act” or “Act” shall mean the Securities
Act of 1933, as amended.
“Selling Expenses” shall mean
all underwriting discounts and selling commissions applicable to the sale of
Registrable Securities or Demand Registrable Securities, as the case may
be.
“Special Counsel” means the
single attorney selected by Holders holding a majority in interest of the Common
Stock (which attorney shall be reasonably acceptable to the Company) to
represent the Holders’ interests in connection with the registrations
contemplated by this Agreement.
“Time of Sale Information”
means any preliminary prospectus together with each Permitted Free Writing
Prospectus, if any, used in connection with any offering of Registrable
Securities.
2. Registration
Requirements. The Company shall use its best efforts to effect
the registration of the Registrable Securities (including, without limitation,
the execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the Securities
Act) as would permit or facilitate the sale or distribution of all the
Registrable Securities in the manner (including manner of sale) and in all
states reasonably requested by the Holders. Such best efforts by the
Company shall include, without limitation, the following:
(a) The
Company shall, as expeditiously as possible after the Closing
Date:
(i)
But in any event no later than ninety (90) days after the Closing Date
(the “Required Filing
Date”), prepare and file a registration statement with the Commission
pursuant to Rule 415 under the Securities Act (“Rule 415”) on Form
S-1 or Form S-3 under the Securities Act (or in the event that the Company is
ineligible to use such form, such other form as the Company is eligible to use
under the Securities Act provided that any other form shall be converted into a
Form S-3 as soon as Form S-3 becomes available to the Company) covering resales
by the Holders as selling stockholders (not underwriters) of the Registrable
Securities (a “Registration
Statement”) and such additional securities as are permitted under Rule
416 under the Securities Act. The number of shares of Common Stock initially
included in such Registration Statement shall be no less than 100% of the
maximum number of Registrable Securities. If at any time
the Commission takes the position that the offering of some or all of the
Registrable Securities in a registration statement is not eligible to be made on
a delayed or continuous basis under the provisions of Rule 415 under the
Securities Act or requires any Holder to be named as an “underwriter,” the
Company shall use its best efforts to persuade the Commission that the offering
contemplated by the registration statement is a valid secondary offering and not
an offering “by or on behalf of the issuer” as defined in Rule 415 and that none
of the Holders is an “underwriter.” The Holders shall have the right
to participate or have their Special Counsel participate in any meetings or
discussions with the Commission regarding the Commission’s position and to
comment or have their Special Counsel comment on any written submission made to
the Commission with respect thereto. No such written submission shall
be made to the Commission to which the Special Counsel reasonably
objects. In the event that, despite the Company’s best efforts and
compliance with the terms of this Section 2(a)(i), the Commission refuses to
alter its position, the Company shall (i) remove from the registration statement
such portion of the Registrable Securities (the “Cut Back Shares”)
and/or (ii) agree to such restrictions and limitations on the registration and
resale of the Registrable Securities as the Commission may require to assure the
Company’s compliance with the requirements of Rule 415 (collectively, the “Commission
Restrictions”); provided, however, that the Company shall not agree to
name any Holder as an “underwriter” in such registration statement without the
prior written consent of such Holder. Thereafter, the Company shall
use its best efforts to cause such Registration Statement and other filings to
be declared effective, as soon as possible, and in any event no later than the
150th day following the Closing Date (or not later than the 180th day following
the Closing Date if the SEC reviews such Registration Statement) (the “Required Effective
Date”). In the event that less than all of the Registrable
Securities are included in a Registration Statement as a result of the
limitations described in this paragraph, then the Company will (i) reduce on a
proportionate basis the number of Registrable Securities of each Holder included
in such Registration Statement and (ii) file additional Registration Statements,
each registering the maximum number of Cut Back Shares permitted as a result of
Commission Restrictions, seriatim, until all
of the Registrable Securities have been registered. The Required Filing Date and
the Required Effective Date of each such additional Registration Statement shall
be thirty (30) days and ninety (90) days, respectively, after the first day such
Registration Statement may be filed without objection by the SEC based on Rule
415. Without limiting the foregoing, the Company will promptly
respond to all SEC comments, inquiries and requests, and shall request
acceleration of effectiveness at the earliest possible date.
(ii) Prepare
and file with the SEC such amendments and supplements to such Registration
Statement and the prospectus used in connection with such Registration Statement
as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement and notify the Holders of the filing and effectiveness of such
Registration Statement and any amendments or supplements.
(iii) Furnish
to each Holder that has Registrable Securities included in a Registration
Statement such numbers of copies of a current prospectus conforming with the
requirements of the Securities Act, copies of such Registration Statement, any
amendment or supplement thereto and any documents incorporated by reference
therein and such other documents as such Holder may reasonably require in order
to facilitate the disposition of Registrable Securities owned by such
Holder.
(iv) Register
and qualify the securities covered by such Registration Statement under the
securities or “Blue Sky” laws of all U.S. domestic jurisdictions; provided that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service
of process in any such states or jurisdictions.
(v) Notify
promptly each Holder that has Registrable Securities included in a Registration
Statement of the happening of any event (but not the substance or details of any
such event) of which the Company has knowledge as a result of which the
prospectus (including any supplements thereto or thereof) included in such
Registration Statement, as then in effect, includes an untrue statement of
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing (each an “Event”), and use its
best efforts to promptly update and/or correct such prospectus. Each Holder will
hold in confidence and will not make any disclosure of any such Event and any
related information disclosed by the Company.
(vi) Notify
each Holder of the issuance by the Commission or any state securities commission
or agency of any stop order suspending the effectiveness of any Registration
Statement or the threat or initiation of any proceedings for that
purpose. The Company shall use its best efforts to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible time.
(vii) List
the Registrable Securities covered by such Registration Statement with all
securities exchange(s) and/or markets on which the Common Stock is then listed
and prepare and file any required filings with any exchange or market where the
Common Shares are traded.
(viii) Take
all steps reasonably necessary to enable Holders to avail themselves of the
prospectus delivery mechanism set forth in Rule 153 (or successor thereto) under
the Act.
(b) Notwithstanding
the obligations under Section 2(a)(v) or any other provision of this Agreement,
if (i) in the good faith judgment of the Company, following consultation with
legal counsel, it would be detrimental to the Company and its stockholders for
resales of Registrable Securities to be made pursuant to a Registration
Statement due to the existence of a material development or potential material
development involving the Company that the Company would be obligated to
disclose in the Registration Statement, which disclosure would be premature or
otherwise inadvisable at such time or would have a material adverse effect upon
the Company and its stockholders, or (ii) in the good faith judgment of the
Company, it would adversely affect or require premature disclosure of the filing
of a Company-initiated registration of any class of its equity securities, then
the Company will have the right to suspend the use of the Registration Statement
for one period of not more than 30 calendar days in any 12 month period, but
only if the Company reasonably concludes, after consultation with outside legal
counsel, that the failure to suspend the use of the Registration Statement as
such would create a material liability or violation under applicable securities
laws or regulations.
(c) Set
forth below in this Section 2(c) are (I) events that may arise that the Holders
consider will interfere with the full enjoyment of their rights under this
Agreement, the Subscription Agreement and the other Transaction Documents (the
“Interfering
Events”), and (II) certain remedies applicable in each of these
events.
(i) Payments by the
Company. If (i) at any time after effectiveness of a
Registration Statement, sales thereunder during the registration period (as
described in Section 6) cannot be made for any reason, other than by reason of
the operation of Section 2(b), for a period of more than 30 consecutive business
days, (ii) at any time after effectiveness of the Registration Statement, sales
thereunder during the registration period cannot be made for a period of time
that exceeds the limitations set forth in Section 2(b), or (iii) at any
time after the Registrable Securities are listed in accordance with Section
2(a)(vii), for a period of more than 30 consecutive calendar days the Common
Stock is not listed or included for quotation on the OTC Bulletin Board or, if
the Common Stock is then listed or traded on a U.S. national securities
exchange, such securities exchange where the Common Stock is then traded, then
the Company will make a payment as liquidated damages to each Holder as set
forth below. The amount of the payment made to each Holder will be equal to 1%
of the Purchase Price (defined below) paid for (i) the shares of Common Stock
then held by the Holder and (ii) shares of Common Stock obtained upon exercise
of the Warrants, for each 30 calendar days that sales cannot be made under
an effective Registration Statement or the Shares are not listed or included for
quotation on the OTC Bulletin Board or other exchange or market where the Common
Stock is then traded (but any day on which both conditions exist shall count as
a single day and no day taken into account for purposes of determining whether
any payment is due under Section 2 (c)(ii) shall be taken into account for
purposes of determining whether any payment is due under this Section 2(c)(i) or
the amount of such payment). The number of shares of Common Stock held for
purposes of clause (ii) of the preceding sentence shall be determined as of the
end of the respective 30-day period. In no event shall payments
pursuant to this Section exceed 12% in the aggregate of the Purchase Price
paid for the shares of Common Stock purchased in the Offering for the entire
registration period (as described in Section 6). For purposes
of this Section, the Purchase Price of shares of Common Stock acquired upon
conversion or tender of Bridge Notes shall be the principal amount plus accrued
and unpaid interest deemed to have been tendered or converted. These
payments will be prorated on a daily basis during the 30-day period and will be
paid to each Holder within ten business days following the end of each 30-day
period as to which payment is due hereunder. The Holders may make a
claim for additional damages as a remedy for the Company’s failure to comply
with the timelines set forth in this Section, but acknowledgement of such right
in this Agreement shall not constitute an admission by the Company that any such
damages exist or may exist. Nothing contained in the preceding sentence shall be
read to limit the ability of the Holders to seek specific performance of this
Agreement.
(ii) Effect of Late
Registration. Subject to the last sentence of this Section 2(c)(ii), if
any Registration Statement has not been filed by the Required Filing Date or
declared effective by the Required Effective Date other than by reason of the
operation of Section 2(b), then the Company will make a payment to each Holder
as liquidated damages for such delay (each a “Late Registration
Payment”). Each Late Registration Payment will be equal to 1% of the
Purchase Price paid for (i) the shares of Common Stock then held by the Holder
and (ii) shares of Common Stock obtained upon exercise of the Warrants for the
first 30 calendar days after the Required Filing Date or Required Effective
Date, as applicable, and 1% of such Purchase Price for each period of 30
calendar days thereafter (but no day taken into account for purposes of
determining whether any payment is due under Section 2(c)(i) shall be taken into
account for purposes of determining whether any payment is due under this
Section 2(c)(ii) or the amount of such payment). In no event shall
payment pursuant to this Section exceed 12% in the aggregate of the Purchase
Price paid for (i) the shares of Common Stock and (ii) shares obtained upon
exercise of the Warrants (including such Holder’s predecessors and successors),
as applicable, for the entire registration period (as described in Section
6). The Late Registration Payments will be prorated on a daily basis
during the 30-day period and will be paid to the Holders within ten business
days following the end of each 30-day period as to which payment is due
hereunder. The Holders may make a claim for additional damages as a
remedy for the Company’s failure to comply with the timelines set forth in this
Section, but acknowledgement of such right in this Agreement shall not
constitute an admission by the Company that any such damages exist or may
exist. Nothing contained in the preceding sentence shall be read to
limit the ability of the Holders to seek specific performance of this
Agreement. Notwithstanding the foregoing, no penalties shall be
payable by the Company with respect to the Registrable Securities which are not
covered by an effective Registration Statement if the sole reason for such
failure is the application of Rule 415 by the SEC; provided, however, that the
Company shall use commercially reasonable efforts to cause such Registration
Statement to be declared effective. For purposes of Section 2(c) of
this Agreement, “Purchase Price” shall mean $0.80 per share regardless of the
actual price per share paid by Holder.
(d) During
the registration period, the Company will make available, upon reasonable
advance notice during normal business hours, for inspection by any Holder whose
Registrable Securities are being sold pursuant to a Registration Statement, all
pertinent financial and other records, pertinent corporate documents and
properties of the Company (collectively, the “Records”) as
reasonably necessary to enable each such Holder to exercise its due diligence
responsibility in connection with or related to the contemplated offering. The
Company will cause its officers, directors and employees to supply all
information that any Holder may reasonably request for purposes of performing
such due diligence.
(e) Each
Holder will hold in confidence, use only in connection with the contemplated
offering and not make any disclosure of all Records and other information that
the Company determines in good faith to be confidential, and of which
determination the Holders are so notified, unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (ii) the release of such Records is ordered pursuant to
a subpoena or other order from a court or government body of competent
jurisdiction, (iii) 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 (to the knowledge of the relevant Holder), (iv) the Records or
other information were developed independently by the Holder without breach of
this Agreement, (v) the information was known to the Holder before receipt of
such information from the Company, or (vi) the information was disclosed to the
Holder by a third party not under an obligation of confidentiality. However, a
Holder may make disclosure of such Records and other information to any
attorney, adviser, or other third party retained by it that needs to know the
information as determined in good faith by the Holder (the “Holder
Representative”), if the Holder advises the Holder Representative of the
confidentiality provisions of this Section 2(e), but the Holder will be liable
for any act or omission of any of its Holder Representatives relative to such
information as if the act or omission was that of the Holder. The Company is not
required to disclose any confidential information in the Records to any Holder
unless and until such Holder has entered into a confidentiality agreement (in
form and substance satisfactory to the Company) with the Company with respect
thereto, substantially to the effect of this Section 2(e). Unless legally
prohibited from so doing, each Holder will, upon learning that disclosure of
Records containing confidential information 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 the Company’s expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, the Records deemed confidential. Nothing herein will be deemed to
limit the Holder’s ability to sell Registrable Securities in a manner that is
otherwise consistent with applicable laws and regulations.
(f) The
Company shall file a Registration Statement with respect to any newly authorized
and/or reserved Registrable Securities consisting of Shares described in clause
(i) of the definition of Registrable Securities within ten (10) business days of
any stockholders’ meeting authorizing same and shall use its best efforts to
cause such Registration Statement to become effective within ninety (90) days of
such stockholders’ meeting. If the Holders become entitled, pursuant
to an event described in clause (ii) and (iii) of the definition of Registrable
Securities, to receive any securities in respect of Registrable Securities that
were already included in a Registration Statement, subsequent to the date such
Registration Statement is declared effective, and the Company is unable under
the securities laws to add such securities to the then effective Registration
Statement, the Company shall promptly file, in accordance with the procedures
set forth herein, an additional Registration Statement with respect to such
newly Registrable Securities. The Company shall use its best efforts
to (i) cause any such additional Registration Statement, when filed, to become
effective within 30 days of that date that the need to file the Registration
Statement arose. All of the registration rights and remedies under
this Agreement shall apply to the registration of such newly reserved shares and
such new Registrable Securities.
(g) If
at any time during the term of this Agreement, a registration statement
described herein is not effective with respect to some or all of the Demand
Registrable Securities, each Holder shall have the following “piggyback”
registration rights. If the Company at any time following the Closing Date
proposes for any reason to register Common Shares under the Securities Act
(other than registrations on Form S-4 or Form S-8 promulgated under
the Securities Act or any successor forms thereto), it shall promptly give
written notice to each Holder of its intention to so register such equity
securities and, upon the written request, given within 20 days after delivery of
such notice by the Company, of each Holder to include in such registration
Demand Registrable Securities held by the Holder (which request shall specify
the number of Demand Registrable Securities proposed to be included in such
registration by the Holder and shall state the intended method of disposition of
such Demand Registrable Securities by the Holder), the Company shall use its
best efforts to cause all such Demand Registrable Securities to be included in
such registration on the same terms and conditions as the securities otherwise
being sold in such registration; provided, however, that if the
managing underwriter advises the Company in writing that the inclusion of all
Demand Registrable Securities proposed to be included in such registration would
interfere materially with the successful marketing (including pricing) of
primary shares (the “Primary Shares”)
proposed to be registered by the Company, then the number of Primary Shares and
Demand Registrable Securities proposed to be included in such registration shall
be included in the following order:
(i)
first, the
Demand Registrable Securities requested to be included in such registration
pursuant to this Section 2(g); and
(ii) second, the Primary
Shares
provided, that, in the case of
any such underwritten offering of Common Stock by the Company that is in
satisfaction of a demand registration pursuant to Section 2(h), the order
for inclusion of Primary Shares and Demand Registrable Securities shall be as
set forth in that section.
(h) If
at any time during the term of this Agreement, a registration statement
described herein is not effective with respect to some or all of the Demand
Registrable Securities, each Holder shall have the following demand registration
rights. If the Company shall be requested in writing by a Holder to
effect a registration on Form S-1 under the Securities Act of Demand
Registrable Securities (which request shall specify the number of Demand
Registrable Securities proposed to be included in such registration by the
Holder and shall state the intended method of disposition of such Demand
Registrable Securities), then the Company shall promptly and in any event within
three (3) business days give written notice (“Demand Notice”) to
the other Holders of such request and use its best efforts to file within ten
(10) business days of providing the Demand Notice such Registration Statement
registering such Demand Registrable Securities which the Company has been so
requested to register by the Holder and any other Holders responding to such
notice during such ten (10) business days following delivery of the Demand
Notice pursuant to this Section 2(h); provided, however, that the
Company shall not be obligated to effect any registration under this Section
2(h) except in accordance with the following provisions:
(i)
The Company shall not be obligated to use its best efforts to file and
cause to become effective (x) more than two registration
statements on Form S-1 with respect to Demand Registrable Securities
initiated by any or all of the Holders pursuant to this
Section 2(h);
(ii) The
Company may delay the filing or effectiveness of any registration statement for
a period of up to 30 days after the date of a request for registration pursuant
to this Section 2(h) if the Company determines in good faith that (A) it is in
possession of material, non-public information concerning an acquisition,
merger, recapitalization, consolidation, reorganization or other material
transaction by or of the Company or concerning pending or threatened litigation
and (B) disclosure of such information would jeopardize any such transaction or
litigation or otherwise materially harm the Company; provided, however, that the
Company may not exercise such deferral right more than once in any twelve
month-period.
(iii) The
number of shares of Common Stock initially included in such registration
statement shall be no less than 100% of the maximum number of shares of Common
Stock which may be included in a Registration Statement without exceeding
registration limitations imposed by the SEC pursuant to Rule 415 described in
Section 2(a)(i). In the event that less than all of the Demand
Registrable Securities are included in a registration statement as a result of
the limitations described in this paragraph and Section 2(a)(i), then the
Company will (i) reduce on proportionate basis the number of Demand Registrable
Securities of each Holder included in such registration statement and (ii) file
additional registration statements, each registering the maximum number of Cut
Back Shares permitted as a result of Commission Restrictions, seriatim, until all
of the Demand Registrable Securities have been registered.
(i)
At such time as the Company shall have qualified for the use
of Form S-3 promulgated under the Securities Act or any successor form thereto,
each Holder shall have the right to request in writing registrations on Form S-3
or such successor form of Registrable Securities held by each Holder in the
manner described in Section 2(a), which request or requests shall (i) specify
the number of Registrable Securities held by each Holder intended to be sold or
disposed of, (ii) state the intended method of disposition of such Registrable
Securities held by such Holders and (iii) relate to Registrable Securities
having an anticipated aggregate offering price of at least
$500,000. A requested registration on Form S-3 or any such successor
form in compliance with Section 4 shall not count as a registration statement
initiated pursuant to Section 2(h) but shall otherwise be treated as a
registration statement initiated pursuant to, and shall, except as otherwise
expressly provided in Section 4, be subject to
Section 2.
3.
Expenses of
Registration. All
Registration Expenses in connection with any registration, qualification or
compliance with registration pursuant to this Agreement shall be borne by the
Company, and all Selling Expenses of a Holder shall be borne by such
Holder.
4.
No Other
Registration Rights. Without the prior written consent of all
Holders who hold Demand Registrable Securities, the Company will not grant any
registration rights which are senior to the registration rights granted
hereby. The Company represents and warrants to each Holder that,
other than as set forth on Schedule 4 hereto, there is not in effect on the date
of this Agreement any agreement by the Company pursuant to which any holders of
securities of the Company have a right to cause the Company to register or
qualify such securities under the Securities Act or any securities or blue sky
laws of any jurisdiction.
5.
Registration on
Form S-3. The Company shall use its reasonable best efforts to
meet the “registrant eligibility” requirements for a secondary offering set
forth in the general instructions to Form S-3 or any comparable or successor
form or forms, or in the event that the Company is ineligible to use such form,
such form as the Company is eligible to use under the Securities Act, provided
that if such other form is used, the Company shall convert such other form to a
Form S-3 as soon as the Company becomes so eligible.
6.
Registration
Period. In the case of the registration effected by the
Company pursuant to this Agreement, the Company shall keep such registration
effective and current until the earlier of (a) the date on which all the Holders
have completed the sales or distribution described in the Registration Statement
relating thereto or, if earlier until such Registrable Securities may be sold by
the Investors under Rule 144(b)(1) (provided that the Company’s transfer agent
has accepted an instruction from the Company to such effect) and (b) the
eighteen (18) month anniversary of the Closing Date.
7.
Indemnification.
(a) Company
Indemnity. The Company will indemnify each Holder, each of its
officers, directors, agents, members and partners, and each person controlling
each of the foregoing, within the meaning of Section 15 of the Securities Act
and the rules and regulations thereunder with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls, within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, any
underwriter, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any Time of Sale Information,
final prospectus (as amended or supplemented if the Company files any amendment
or supplement thereto with the SEC), Registration Statement filed pursuant to
this Agreement or any post-effective amendment thereof or based on any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances under which they were made, or any violation by the Company of
the Securities Act or any state securities law or in either case, any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each Holder, each of its
officers, directors, agents, members and partners, and each person controlling
each of the foregoing, for any reasonable legal fees of a single counsel and any
other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to a Holder to the extent that any
such claim, loss, damage, liability or expense arises out of or is based on (i)
any untrue statement or omission based upon written information furnished to the
Company by such Holder or underwriter (if any) therefor and stated to be
specifically for use therein, (ii) any failure by any Holder to comply with
prospectus delivery requirements of the Securities Act (other than a failure
resulting from an act or omission on the part of the Company) or any other law
or legal requirement applicable to them or any covenant or agreement contained
in the Subscription Agreement or this Agreement or (iii) an offer or sale of
Registrable Securities or Demand Registrable Securities occurring during a
period in which sales under a Registration Statement are suspended as permitted
by this Agreement; provided that notice
has been properly provided to the Holder. The indemnity agreement
contained in this Section 7(a) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent will not be unreasonably
withheld).
(b) Holder
Indemnity. Each Holder will, severally but not jointly, if
Registrable Securities or Demand Registrable Securities held by it are included
in the securities as to which such registration, qualification or compliance is
being effected, indemnify the Company, each of its directors, officers, agents
and partners, and any other stockholder selling securities pursuant to the
Registration Statement and any of its directors, officers, agents, partners, and
any person who controls such stockholder within the meaning of the Securities
Act or Exchange Act and each underwriter, if any, of the Company’s securities
covered by such a Registration Statement, each person who controls the Company
or such underwriter within the meaning of Section 15 of the Securities Act and
the rules and regulations thereunder, each other Holder (if any), and each of
their officers, directors and partners, and each person controlling such other
Holder(s) against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on (i) any untrue statement (or alleged
untrue statement) of a material fact contained in any Time of Sale Information,
final prospectus (as amended or supplemented if the Company files any amendment
or supplement thereto with the SEC), Registration Statement filed pursuant to
this Agreement or any post-effective amendment thereof or based on any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statement therein not misleading in light of
the circumstances under which they were made or (ii) failure by such Holder to
comply with prospectus delivery requirements of the Securities Act (other than a
failure resulting from an act or omission on the part of the Company or any
other law or legal requirement applicable to them or any covenant or agreement
contained in the Subscription Agreement or this Agreement, and will reimburse
the Company and such other Holder(s) and their directors, officers and partners,
underwriters or control persons for any reasonable legal fees or any other
expenses reasonably incurred in connection with investigating and defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such Time of Sale Information, final
prospectus (as amended or supplemented if the Company files any amendment or
supplement thereto with the SEC), Registration Statement filed pursuant to this
Agreement or any post-effective amendment thereof in reliance upon and in
conformity with written information furnished to the Company by such Holder and
stated to be specifically for use therein, and provided that the maximum amount
for which such Holder shall be liable under this indemnity shall not exceed the
net proceeds received by such Holder from the sale of the Registrable Securities
or Demand Registrable Securities, as the case may be, pursuant to the
registration statement in question. The indemnity agreement contained
in this Section 7(b) shall not apply to amounts paid in settlement of any such
claims, losses, damages or liabilities if such settlement is effected without
the consent of such Holder (which consent shall not be unreasonably
withheld).
(c) Procedure. Each
party entitled to indemnification under this Section 7 (the “Indemnified Party”)
shall give notice to the party required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim in any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at its own expense, and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 7 except to the extent that the Indemnifying Party is
materially and adversely affected by such failure to provide
notice. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent 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. Each Indemnified Party shall furnish such non-privileged
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting
therefrom.
8.
Contribution. If
the indemnification provided for in Section 7 herein is unavailable to the
Indemnified Parties in respect of any losses, claims, damages or liabilities
referred to herein (other than by reason of the exceptions provided therein),
then each such Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages or liabilities as between the
Company on the one hand and any Holder(s) on the other, in such proportion as is
appropriate to reflect the relative fault of the Company and of such Holder(s)
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and
of any Holder(s) on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder(s).
In no
event shall the obligation of any Indemnifying Party to contribute under this
Section 8 exceed the amount that such Indemnifying Party would have been
obligated to pay by way of indemnification if the indemnification provided for
under Section 7(a) or 7(b) hereof had been available under the
circumstances.
The
Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Holders were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraphs shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section, no
Holder shall be required to contribute any amount in excess of the amount of the
net proceeds received by such Holder from the sale of Registrable Securities
pursuant to the registration statement in question. 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.
9.
Survival. The
indemnity and contribution agreements contained in Sections 7 and 8 shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, the Subscription Agreement or the Placement Agent Agreement and (ii)
the consummation of the sale or successive resales of the Registrable
Securities.
10.
Information by
Holders. As a condition to the obligations of the Company to
complete any registration pursuant to this Agreement with respect to the
Registrable Securities of each Holder, such Holder will furnish to the Company
such information regarding itself, the Registrable Securities held by it and the
intended methods of disposition of the Registrable Securities held by it as is
reasonably required by the Company to effect the registration of the Registrable
Securities. At least five business days prior to the first anticipated filing
date of a Registration Statement for any registration under this Agreement, the
Company will notify each Holder of the information the Company requires from
that Holder whether or not such Holder has elected to have any of its
Registrable Securities included in the Registration Statement. If the Company
has not received the requested information from a Holder by the business day
prior to the anticipated filing date, then the Company may file the Registration
Statement without including Registrable Securities of that Holder.
11.
Further
Assurances. Each Holder will cooperate with the Company, as reasonably
requested by the Company, in connection with the preparation and filing of any
Registration Statement hereunder, unless such Holder has notified the Company in
writing of such Holder’s irrevocable election to exclude all of such Holder’s
Registrable Securities from such Registration Statement.
12.
Suspension of
Sales. Upon receipt of any notice from the Company under Section 2(a)(v)
or 2(b), each Holder will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until (i) it receives copies of a supplemented or amended prospectus
contemplated by Sections 2(a)(v) or (ii) the Company advises the Holder that a
suspension of sales under Section 2(b) has terminated. If so directed by the
Company, each Holder will deliver to the Company (at the expense of the Company)
or destroy all copies in the Holder’s possession (other than a limited
number of file copies) of the prospectus covering such Registrable Securities
that is current at the time of receipt of such notice.
13. Replacement
Certificates. The certificate(s) representing the Registrable
Securities held by the Holder may be exchanged by the Holder at any time and
from time to time for certificates with different denominations representing an
equal aggregate number of Registrable Securities of the same tenor, as
reasonably requested by such Holder upon surrendering the same. No
service charge will be made for such registration or transfer or
exchange. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of certificates
evidencing any Registrable Securities, and, in the case of loss, theft or
destruction, of indemnity reasonably satisfactory to it, or upon surrender and
cancellation of such certificate if mutilated, the Company will make and deliver
a new certificate of like tenor and dated as of such cancellation at no charge
to the holder.
14. Transfer or
Assignment. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the
Holder by the Company under this Agreement to cause the Company to register
Registrable Securities may be transferred or assigned (in whole or in part) to a
transferee or assignee of the shares of Common Stock, Warrants or Registrable
Securities, and all other rights granted to the Holder by the Company hereunder
may be transferred or assigned to any transferee or assignee of the shares of
Common Stock, Warrants or Registrable Securities; provided in each case that (i)
the Company is given written notice by the Holder at the time of or within a
reasonable time after such transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned; and provided
further that the transferee or assignee of such rights agrees in writing to be
bound by the registration provisions of this Agreement, (ii) such transfer or
assignment is not made under the Registration Statement or Rule 144, (iii) such
transfer is made according to the applicable requirements of the Subscription
Agreement, and (iv) the transferee has provided to the Company an investor
questionnaire (or equivalent document) evidencing that the transferee is a
“qualified institutional buyer” as defined in Rule 144A under the Securities Act
or an “accredited investor” as defined in Rule 501(a) of Regulation
D.
15. Miscellaneous.
(a) Remedies. The
Company and the Holders acknowledge and agree that irreparable damage may occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to seek an injunction
or injunctions to prevent or cure breaches of the provisions of this Agreement
and to enforce specifically the terms and provisions hereof, this being in
addition to any other remedy to which any of them may be entitled by law or
equity.
(b) Jurisdiction. The
Company and each Holder (i) hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court, the New York state courts and
other courts of the United States sitting in New York County, New York for the
purposes of any suit, action or proceeding arising out of or relating to this
Agreement and (ii) hereby waives, and agrees not to assert in any such suit
action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper. The Company and the Holder consent to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing in this paragraph shall affect or limit any right to
serve process in any other manner permitted by law.
(c) Notices. Any
notice or other communication required or permitted to be given hereunder shall
be in writing by facsimile, mail or personal delivery and shall be effective
upon actual receipt of such notice. The addresses for such
communications shall be:
to the
Company:
[Pubco]
000
Xxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxx 00000
Attn: Chief
Financial Officer
with a
copy to:
Xxxxxxxxx
Xxxxxxx, LLP
0000
00xx
Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxxxxx 00000
Attn: Xxxx
X. Xxxxx
If to the
Investors, to the addresses set forth on Schedule I to the Subscription
Agreement:
with a
copy to:
Xxxxxxxx
Xxxxx Deutsch LLP
000 Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Facsimile: (000)
000-0000
Attention: Xxxxxx
Xxxxxxxx
If to any of the Harborview
Shareholders:
Harborview Advisors, LLC
000 Xxxxx Xxxxxx, Xxxxx
0000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Chief Financial
Officer
with a copy to:
Xxxxxx and Xxxxx LLP
0000 Xxxxxx xx xxx
Xxxxxxxx
00xx
Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx,
Esq.
Any party
hereto may from time to time change its address for notices by giving at least
five days’ written notice of such changed address to the other parties
hereto.
(d) Waivers. No
waiver by any party of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right accruing to it
thereafter. The representations and warranties and the agreements and
covenants of the Company and each Holder contained herein shall survive the
Closing.
(e) Execution in
Counterpart. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same
counterpart.
(f)
Signatures. Facsimile
signatures shall be valid and binding on each party submitting the
same.
(g) Entire Agreement;
Amendment. This Agreement, together with the Subscription
Agreement, the Warrants, and the agreements and documents contemplated hereby
and thereby, contains the entire understanding and agreement of the parties, and
may not be amended, modified or terminated except by a written agreement signed
by the Company plus Investors and holders of the Harborview Shares
who hold not less than 67% of the Demand Registrable Securities (determined on a
fully-diluted, as converted basis, if applicable); provided, however, that any
amendment that pertains to the right and/or obligations of the Harborview
Shareholders shall require the written consent of the holders of a majority of
the Harborview Shares.
(h) Governing
Law. This Agreement and the validity and performance of the
terms hereof shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts executed and to be performed
entirely within such state, except to the extent that the law of the State of
Delaware regulates the Company’s issuance of securities.
(i)
Jury
Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY
JURY.
(j)
Titles. The
titles used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
(k) No Strict
Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction will be applied against any
party.
IN WITNESS WHEREOF, the
undersigned have caused this Agreement to be executed as of the date first
written above.
COMPANY:
f/k/a
K-KITZ, INC.
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By:
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Name:
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Xxx
Xxxx
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Title:
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President
and Chief Executive
Officer
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COUNTERPART
SIGNATURE PAGE
DATED
JUNE __, 2010,
AMONG
BACTERIN INTERNATIONAL, INC. AND
THE
“HOLDERS” IDENTIFIED THEREIN
The
undersigned hereby executes and delivers the Registration Rights Agreement to
which this Signature Page is attached, which, together with all counterparts of
the Registration Rights Agreement and Signature Pages of the Company and other
“Holders” under the Registration Rights Agreement, shall constitute one and the
same document in accordance with the terms of the Registration Rights
Agreement.
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HOLDER:
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By:
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Name:
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Title:
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