EXHIBIT 10.20.1
EXHIBIT Q
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
March 12, 1996, by and among UNIGENE LABORATORIES, INC., a Delaware corporation,
("Company"), Swartz Investments, LLC., a Georgia limited liability corporation
("Swartz Investments") and the subscribers ("Subscribers") to the Company's
offering ("Offering") of up to $9,080,000 of Debentures pursuant to Regulation S
Subscription Agreements between the Company and the Subscribers of even date
herewith ("Subscription Agreement").
1. Definitions. For purposes of this Agreement:
(a) The terms "register", "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act of 1933, as
amended (the "Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means the shares of
Common Stock issuable or issued upon (i) conversion of the Debentures issued to
Subscribers in the Offering and (ii) exercise of the Warrant; provided, however,
that (x) after the expiration of the Restricted Period, shares of Common Stock
obtainable on conversion of the Debentures (in whole or in part), and (y) after
two years from the date of this Agreement, shares of Common Stock obtainable on
exercise of the Warrant (the "Warrant Shares"), shall not constitute Registrable
Securities, if those shares of Common Stock may be resold in a public
transaction without registration under the Act, including without limitation
pursuant to Rule 144 under the Act. Upon request of any Holders of Common Stock
issued or issuable upon conversion of the Debentures or exercise of the Warrant,
the Company shall cause legal counsel, reasonably acceptable to such Holder, to
issue an opinion addressed to the holders, stating that such Common Stock may be
sold without registration and without restriction on resale under the Act as
described in the provisions of the immediately preceding sentence, in form and
substance reasonably satisfactory to such Holder.
(c) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock which
have been issued or are issuable upon conversion of the Debentures and exercise
of the Warrant at the time of such determination;
(d) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any permitted assignee thereof; and
(e) The term "Warrant" means the warrant granted to Swartz
Investments in connection with the Offering.
(f) "Restricted Period" has the meaning ascribed to that term
in the Subscription Agreement.
2. Demand Registration.
(a) At any time beginning after the end of the Restricted
Period, the Holders of Registrable Securities obtained or obtainable upon
conversion of at least 25% in principal amount of the Debentures then
outstanding ("Initiating Holders") may notify the Company in writing that they
demand that the Company file a registration statement under the Act covering the
registration of all of the Registrable Securities then outstanding (other than
Registrable Securities held by any Holder who does not want to be included
therein). Upon receipt of such notice, the Company shall, within ten (10) days,
give written notice of such request to all Holders and shall, subject to the
limitations of subsection 2(b), file within 60 days of receipt of such request a
registration statement to effect the registration under the Act of all
Registrable Securities which the Holders request, by notice given to the Company
within (10) days of receipt of the Company's notice, and use its best efforts to
cause such registration statement to become effective as soon as possible (a
"Demand Registration"). The Company may include in such registration statement
any other securities of the Company which the holders thereof are entitled to
have so included pursuant to any agreement entered into by the Company prior to
the date hereof (the "Additional Shares").
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 2 and the Company shall include such information in the written
notice referred to in subsection 2(a). In such event, the right of any Holder to
include his Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities covered by the registration statement in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder). All Holders proposing to distribute their
securities through such underwriting shall (together with the Company as
provided in subsection 6(f)) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by a
majority in interest of the Initiating Holders, and reasonably acceptable to the
Company.
(c) The Company is obligated to effect only one Demand
Registration pursuant to Section 2 of this Agreement. The Company agrees to
include all Registrable Securities held by all Holders in such registration
statement; provided that, in the event that (i) the Registrable Securities
covered by such registration statement are to be distributed pursuant to an
underwriting and (ii) the managing underwriter determines, and advises the
Company in writing, that marketing factors require a limitation on the number of
shares (including Additional Shares) to be underwritten, the managing
underwriter may require the exclusion from the underwriting of the excess
shares, with the shares to be excluded allocated among the Registrable
Securities and all Additional Shares in respect of which the exclusion of such
Additional Shares on any other basis would violate the contractual rights of the
holders of such Additional Shares, in the proportion that the number of such
Registrable Securities or Additional Shares which each holder thereof seeks to
register bears to the total number of Registrable Securities and Additional
Shares sought to be included by all holders of Registrable Securities and
Additional Shares. In the event the Company breaches its obligation of the
preceding sentence, or Registrable Securities are excluded from the registration
statement by reason of the proviso thereof, any Holders of the Registrable
Securities which were not included in such registration statement shall be
entitled to a Demand Registration for such excluded securities on the same terms
as the Demand Registration described in this Agreement.
(d) The Company is not obligated to effect a Demand
Registration under this Section 2 if, in the written opinion of counsel to the
Company reasonably acceptable to the person or persons from whom written request
for registration has been received (and satisfactory to the Company's transfer
agent to permit the transfer), registration under the Act is not required for
the immediate public transfer of the Registrable Securities, with no
restrictions on resale, pursuant to Rule 144 or any other applicable exemption
from registration.
(e) The Company represents that it is eligible to effect the
registration contemplated hereby on Form S-3 and will use commercially
reasonable efforts to maintain such eligibility.
3. Piggyback Registration. If (but without any obligation to
do so) the Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the Holders)
any of its Common Stock under the Act in connection with the public offering of
such securities (other than a registration relating solely to the sale of
securities to participants in a Company employee benefit plan or a registration
on Form S-4 promulgated under the Act or any successor or similar form
registering stock issuable upon a reclassification, upon a business combination
involving an exchange of securities or upon an exchange offer for securities of
the issuer or another entity), the Company shall, at such time, promptly give
each Holder written notice of such registration. Upon the written request of
each Holder given within ten (10) days after mailing of such notice by the
Company, which request shall state the intended method of disposition of such
shares by such Holder, the Company shall cause to be registered under the Act
all of the Registrable Securities that each such Holder has requested to be
registered (a "Piggyback Registration"). The Company may elect not to proceed
with, or suspend the effectiveness of, a Piggyback Registration at any time in
its sole discretion and without prior consultation with any Holder.
4. Limitation on Obligations to Register.
(a) In the case of a Piggyback Registration on an underwritten
public offering by the Company, if the managing underwriter determines and
advises in writing that the inclusion in the registration statement of all
Registrable Securities proposed to be included would interfere with the
successful marketing of the securities proposed to be offered and sold by the
Company, then the number of such Registrable Securities, if any, to be included
in the registration statement as determined by the managing underwriter shall be
allocated among all Holders who had requested Piggyback Registration, in the
proportion that the number of Registrable Securities which each such Holder,
including Swartz Investments, seeks to register bears to the total number of
Registrable Securities sought to be included by all Holders, including Swartz
Investments.
(b) Notwithstanding anything to the contrary herein, the
Company shall have the right (i) to defer the filing of a registration statement
(or any amendment thereto) or any request for acceleration of effectiveness of
any Demand Registration and (ii) after effectiveness, to suspend effectiveness
of any such registration statement, if, in the good faith judgment of the board
of directors of the Company and upon the advice of counsel to the Company, such
delay in filing or requesting acceleration of effectiveness or such suspension
of effectiveness is necessary in light of the existence of material non-public
information (financial or otherwise) concerning the Company, the disclosure of
which at the time is not, (A) otherwise required and (B) in the best interests
of the Company; provided however that the Company will use its best efforts to
terminate such delay or suspension as soon as practicable and, in any event,
will not delay effectiveness of such Demand Registration for more than three
months from the date of the demand or suspend effectiveness for more than 60
days, unless it is then engaged in an acquisition that would make such
registration impracticable, in which case it will use its best efforts to
eliminate such impracticability as soon as possible.
5. Obligations to Increase Available Shares. If after a
registration statement is filed pursuant to Section 2 the shares of Common Stock
issuable upon the conversion of the Debentures is change by reason of the
adjustment of the Conversion Rate, the number of Registrable Securities covered
by the registration statement shall be proportionally adjusted. If required, the
Company shall amend that registration statement, or file a new registration
statement, or both, so as to cover such additional Registrable Securities. The
Company shall use commercially reasonable efforts to effect such new
registration within ninety days.
6. Obligations of the Company. Whenever required under this
Agreement to effect the registration of any Registrable Securities, but subject
to the limitations on the obligations of the Company set forth herein, the
Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use commercially reasonable
efforts to cause such registration statement to become effective.
(b 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 Act with respect to the disposition of the Registrable
Securities covered by such registration statement.
(c) With respect to any Demand Registration, use commercially
reasonable efforts to keep such registration statement effective for a period of
at least 180 days or, if earlier until the Holders of Registrable Securities
covered by such registration statement have completed the distribution described
in the registration statement.
(d) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, as they may reasonably request
in order to facilitate the disposition of Registrable Securities covered by the
registration statement.
(e) Use commercially reasonable efforts to register and
qualify the Registrable Securities covered by such registration statement under
such other securities or Blue Sky laws of such of the United States as shall be
reasonably requested by the Holders of the Registrable Securities covered by
such registration statement, 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.
(f) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement that is in
usual and customary form with the managing underwriter of such offering. Each
Holder participating in such underwriting shall also enter into and perform its
obligations under such underwriting agreement.
(g) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.
(h) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Agreement, on the date
that Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Agreement, if such Registrable
Securities are being sold through underwriters, or, if such Registrable
Securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (i) an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders of such Registrable Securities and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent public
accountants to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders of such Registrable Securities.
(i) Use commercially reasonable efforts to maintain the
listing of the Common Stock on NASDAQ Small Cap Market, NASDAQ National Market
System or a national securities exchange for as long as any of the Registrable
Securities are still outstanding.
7. Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Agreement
that the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities or to determine that registration is not
required by reason of the availability of Rule 144 or other applicable provision
of the Act.
8. Future Grants.
(a) The Company represents and warrants to the Holders that
the number of securities constituting Additional Shares are the 100,000 shares
of Common Stock initially issuable upon the exercise of certain warrants issued
by the Company prior to the date hereof (warrants for 50,000 shares were issued
on March 15, 1995 and warrants for 50,000 shares were issued on April 15, 1995,
collectively the "Existing Warrants") and such additional number of shares of
Common Stock as may be issued, pursuant to certain anti-dilution provisions set
forth in the Existing Warrants, upon exercise thereof.
(b) During the period commencing on the date hereof and ending
on the date of termination of this Agreement, the Company shall not grant to any
person registration rights with respect to Common Stock that are senior to the
registration rights granted herein.
9. Expenses of Demand Registration. All expenses, other than
underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Section 2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company, and
including the reasonable fees and disbursements incurred of only one counsel for
the selling Holders, shall be borne by the Company; provided, however, if the
registration request is subsequently withdrawn at the request of the Holders of
a majority of the Registrable Securities to be registered, the Company shall not
be required to pay for any expenses of any registration proceeding begun
pursuant to Section 2 (in which case all Holders who had requested such
registration shall by jointly and severally liable for such expenses and the
Holders of Registrable Securities shall have no further rights to a Demand
Registration); provided further, however, that if at the time of such
withdrawal, the Holders have learned of a material adverse change in the
condition, business, or prospects of the Company from that which was publicly
known at the time of their request, then the Holders shall not be required to
pay any of such expenses and shall retain their rights pursuant to Section 2.
10. Expenses of Company Registration. The Company shall bear
and pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 3 for each Holder, including (without limitation) all
registration, filing, and qualification fees, printers and accounting fees
relating or apportionable thereto (and including the reasonable fees and
disbursements incurred by only one counsel for the selling Holders selected by
them), but excluding underwriting discounts and commissions relating to the sale
of Registrable Securities.
11. 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
and hold harmless each "Holder Indemnified Person" (defined for purposes of this
Section 11 as each Holder of registrable securities included in the registration
statement, the officers and directors of each such Holder acting in their
capacity as such, any underwriter (as defined in the Act) for such Holder and
each person, if any, who controls such Holder or underwriter within the meaning
of the Act or the Securities Exchange Act of 1934, as amended (the "1934 Act")),
against any losses, claims, damages, expenses, or liabilities (joint or several)
("Losses") to which they may become subject under the Act, the 1934 Act or other
federal or state law, insofar as such Losses (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement, or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission, or alleged omission,
to state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation by the
Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will reimburse each such Holder Indemnified Person for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such Loss or action; provided, however, that the indemnity
agreement contained in this subsection 11(a) shall not apply to amounts paid in
settlement of any such Loss or action if such settlement is effected without the
prior written consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any such Loss or
action to the extent that it arises out of or is based upon a Violation which
occurs in either (i) in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by any such
Holder Indemnified Person or any of its directors, officers, agents or
affiliates or (ii) based upon a prospectus which included a Violation, after the
Company has advised the Holder not to sell pursuant to such prospectus, and has
made available an amended or supplemental prospectus that corrects such
Violation.
(b) To the extent permitted by law, each selling Holder of
Registrable Securities included in the registration statement will indemnify and
hold harmless the "Company Indemnified Persons" (defined for the purpose of this
Section 11 as the Company, each of its officers and directors in their capacity
as such, each person, if any, who controls the Company within the meaning of the
Act or the 1934 Act, any underwriter and any person who controls such
underwriter within the meaning of the Act or the 1934 Act and any other Holder
Indemnified Person selling securities in such registration statement), against
any Loss (joint or several) to which the Company or any such director, officer,
controlling person, or underwriter or controlling person, or other such Holder
Indemnified Person may become subject, under the Act, the 1934 Act or other
federal or state law, insofar as such Loss (or actions in respect thereto) arise
out of or are based upon any Violation, 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 by such Holder or any of its directors, officers,
employees, agents or affiliates expressly for use in connection with such
registration; and each such Holder will reimburse any legal or other expenses
reasonably incurred by the Company and any such Company Indemnified Person in
connection with investigating or defending any such Loss or action; provided,
however, that the indemnity agreement contained in this subsection 11(b) shall
not apply to amounts paid in settlement of any such Loss or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, that, in no event shall any indemnity
under this subsection 11(b) exceed the gross proceeds from the offering received
by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 11 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 11, 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 the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the reasonably incurred fees and
expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 11.
(d) The obligations of the Company and Holders under this
Section 11 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Agreement, and otherwise.
12. Reports Under Securities Exchange Act of 1934. With a view
to making available to the Holders the benefits of Rule 144 promulgated under
the Act and any other rule or regulation of the Securities and Exchange
Commission ("SEC") that may at any time permit a Holder to sell shares of Common
Stock of the Company to the public without registration, the Company agrees to
use commercially reasonable efforts to:
(a) whether or not the Company is required to file reports
required by Section 13(a) of the 1934 Act, make and keep public information
available, as those terms are understood and defined in SEC Rule 144, at all
times;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company, if true, that it has complied with the reporting requirements of
Section 13(a) or 15(d) of 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 under Section 13(a) or 15(d) of the 1934 Act, and (iii) such other
information as may be reasonably requested in availing any Holder of any rule or
regulation of the SEC which permits the selling of any Registrable Securities
without registration.
13. Amendment of Registration Rights. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders of
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
Holder, each future Holder, and the Company; provided that no amendment or
waiver that materially and adversely affects the rights of any Holder shall be
effective against such Holder unless such Holder agrees thereto.
14. Notices. All notices required or permitted under this
Agreement shall be made in writing signed by the party making the same, shall
specify the section under this Agreement pursuant to which it is given, and
shall be addressed if to (i) the Company at: President, Unigene Laboratories,
Inc., 110 Little Falls Road, Fairfield, New Jersey 07004, Telephone No. (201)
882-0860, Telecopy No. (201) 227-6088 and (ii) the Holders at their respective
addresses on the books of the Company. Any notice, except as otherwise provided
in this Agreement, shall be made by fax and shall be deemed given at the time of
transmission of the fax.
15. Termination. This Agreement shall terminate on the later
to occur of (a) the date that is two years from the date of this Agreement and
(b) the date any distribution of Registrable Securities described in a
registration statement filed pursuant to this Agreement is completed; but
without prejudice to (i) the parties' rights and obligations arising from
breaches of this Agreement occurring prior to such termination or (ii) the
indemnification obligations under Section 11 of this Agreement.
16. Assignment. No assignment, transfer or delegation, whether
by operation of law or otherwise, of any rights or obligations under this
Agreement by the Company or any Holder, respectively, shall be made without the
prior written consent of the majority in interest of the Holders or the Company,
respectively; provided that the rights of a Holder may be transferred to a
subsequent holder of the Holder's Registrable Securities (provided such
transferee shall provide to the Company, together with or prior to such
transferee's request to have such Registrable Securities included in a Demand
Registration or Piggyback Registration, a writing executed by such transferee
agreeing to be bound as a Holder by the terms of this Agreement); and provided
further that the Company may transfer its rights and obligations under this
Agreement to a purchaser of all or a substantial portion of its business if the
obligations of the Company under this Agreement are assumed in connection with
such transfer, either by merger or other operation of law (which may include
without limitation a transaction whereby the Registrable Securities are
converted into securities of the successor in interest) or by specific
assumption executed by the transferee.
17. Governing Law. This Registration Rights Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
applicable to agreements made in and wholly to be performed in that
jurisdiction, except for matters arising under the Act or the 1934 Act, which
matters shall be construed and interpreted in accordance with such laws. Any
action brought to enforce, or otherwise arising out of, this Agreement shall be
heard and determined only in a federal court sitting in the county of New Castle
in the State of Delaware.
IN WITNESS WHEREOF, the undersigned have executed this Registration
Rights Agreement as of the date first above written.
UNIGENE LABORATORIES, INC.
By: ________________________________
_________________________, President
Address: 110 Little Falls Road
Fairfield, New Jersey 07004
SUBSCRIBER(S)
____________________________________
Subscriber's Name
By:_________________________________
(Signature)
Address: ____________________________________
____________________________________
SWARTZ INVESTMENTS, LLC
By:_________________________________
(Signature)
Title:______________________________