EXHIBIT 10.65
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
January 6th, 2000, by and among Techniclone Corporation. a corporation duly
incorporated and existing under the laws of the State of Delaware ("Company"),
and the Subscribers (hereinafter referred to as "Subscribers") to the Company's
Offering ("Offering") of up to Six Hundred Thousand Dollars ($600,000) of Units,
with an Option to purchase an additional Three Hundred Thousand Dollars of Units
as stated in the Subscription Agreement, (the "Units"), each Unit consisting of
one share of Common Stock (the "Unit Shares") and a Warrant ("Unit Warrant") to
purchase one share of Common Stock, all pursuant to the Regulation D
Subscription Agreement between the Company and the Subscribers ("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 (the
"Act"), and pursuant to Rule 415 under the Act or any successor rule, and the
declaration or ordering of effectiveness of such registration statement or
document;
(b) For purposes hereof, the term "Registrable Securities"
means the shares of the Company's Common Stock together with any capital stock
issued in replacement of, in exchange for or otherwise in respect of such Common
Stock, issuable or issued (i) as Unit Shares, and (ii) upon exercise of the Unit
Warrants.
Notwithstanding the above:
1. Common Stock which would otherwise be deemed to be
Registrable Securities shall not constitute Registrable
Securities if and to the extent that those shares of Common
Stock may be resold in a public transaction pursuant to Rule
144(k) under the Act; and
2. any Registrable Securities resold in a public transaction
shall cease to constitute Registrable Securities.
(c) [Intentionally Left Blank].
(d) The term "Holder" means any person owning or having the
right to acquire Registrable Securities;
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(e) The term "Filing Date" means the date which is sixty (60)
days after the Closing Date (as defined in the Subscription Agreement) and the
term "Due Date" means either (i) the date which is one hundred fifty (150) days
after such Closing Date, if the Registration Statement is not filed by the
Filing Date, or (ii) the date which is one hundred twenty (120) days after such
Closing Date, if the Registration Statement is filed by the Filing Date, or.
2. REQUIRED REGISTRATION.
(a) The Company shall use its best efforts to file, by the
Filing Date, a registration statement ("Registration Statement") on Form S-3 (or
other suitable form, at the Company's discretion, but subject to the reasonable
approval of the Holders), covering no more than 7,200,000 shares for holders of
piggyback rights at the time of this Agreement, plus covering the resale of all
of the Registrable Securities, which Registration Statement, to the extent
allowable under the Securities Act and the Rules promulgated thereunder
(including Rule 416), shall state that such Registration Statement also covers
such indeterminate number of additional shares of Common Stock as may become
issuable upon the exercise of the Warrants to prevent dilution resulting from
stock splits, stock dividends or similar transactions. The Company shall use its
best efforts to have the Registration Statement declared effective as soon as
possible. In the event that the Company is notified by a Holder of Registrable
Securities relating to the Units that the Registration Statement does not cover
a sufficient number of shares of Common Stock to effect the resales of a number
of shares of Common Stock equal to at least (i) one hundred fifty percent (150%)
of the number of shares of Common Stock that would be issuable to such Holder (a
"Registration Shortfall"), the Company shall, within seven (7) business days,
amend the Registration Statement or file a new Registration Statement (an
"Amended" or "New" Registration Statement, respectively), as appropriate, to add
such number of additional shares as would be necessary to effect the resales of
a number of shares of Common Stock equal to at least two hundred percent (200%)
of the number of shares of Common Stock that would be issuable to such Holder.
If for any reason or for no reason, the Registration Statement is not declared
effective under the Securities Act on or prior to the Due Date or is not
available for resales of all Registrable Securities at anytime thereafter
("Registration Failure Period"), the Company shall make payments to each Holder
("Registration Failure Payments") which shall accrue at the rate of 2% per
month, accruing daily, on the principal amount of $600,000, or the actual amount
invested, until the later of (a) the end of such Registration Failure Period ,
payable, at the option of the Holder (i) in shares of Common Stock ("Additional
Shares"), valued at the closing bid price of the Common Stock on the business
day immediately prior to the delivery of the Additional Shares or (ii) in cash,
in each case payable within 5 business days of the last day of the calendar
month in which they accrue
Notwithstanding the above, no Registration Failure Payments shall
accrue prior to the Due Date.
Such Additional Shares shall also be deemed "Registrable Securities" as
defined herein. The Company covenants to use its best efforts to use Form S-3
for the registration required by this Section during all applicable times
contemplated by this Agreement.
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(b) The Registration Statement shall be prepared as a "shelf"
registration statement under Rule 415, and shall be maintained effective until
all Registrable Securities cease to exist.
(c) The Company represents that it is presently eligible to
effect the registration contemplated hereby on Form S-3 and will use its best
efforts to continue to take such actions as are necessary to maintain such
eligibility.
(d) Notwithstanding anything contained herein to the contrary,
the Company shall not be required to register additional shares hereunder if
such shares are not available for issuance as a result of the unavailability of
authorized but unreserved shares of Common Stock.
(e) [Intentionally Left Blank].
3. PIGGYBACK REGISTRATION. If the Registration Statement
described in Section 2 is not effective and 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 solely for cash (other than a registration relating solely for the
sale of securities to participants in a Company stock 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 (a "Piggyback Registration Statement"). Upon
the written request of each Holder given by fax within ten (10) days after
mailing of such notice by the Company, the Company shall cause to be included in
such registration statement under the Act all of the Registrable Securities that
each such Holder has requested to be registered ("Piggyback Registration") to
the extent such inclusion does not violate the registration rights of any other
security holder of the Company granted prior to the date hereof; nothing herein
shall prevent the Company from withdrawing or abandoning the registration
statement prior to its effectiveness. The election of initiating Holders to
participate in a Piggyback Registration Statement shall not impact the amount
payable to investors pursuant to Section 2(a) herein except that the
Registration Failure Payment shall cease to accrue as of the date of
effectiveness of the Piggyback Registration Statement.
4. LIMITATION ON OBLIGATIONS TO REGISTER.
(a) In the case of a Piggyback Registration involving 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 registered by the
Company, then the number of such Registrable Securities to be included in the
registration statement, to the extent such Registrable Securities may be
included in such Piggyback Registration Statement, shall be allocated among all
Holders who had requested Piggyback Registration pursuant to the terms hereof,
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in the proportion that the number of Registrable Securities which each such
Holder seeks to register bears to the total number of Registrable Securities
sought to be included by all Holders. If required by the managing underwriter of
such an underwritten public offering, the Holders shall enter into a reasonable
agreement limiting the number of Registrable Securities to be included in such
Piggyback Registration Statement and the terms, if any, regarding the future
sale of such Registrable Securities.
(b) In the event the Company believes that shares sought to be
registered under Section 2 or Section 3 by Holders do not constitute
"Registrable Securities" by virtue of Section 1(b) of this Agreement, and the
status of those shares as Registrable Securities is disputed, the Company shall
provide, at its expense, an Opinion of Counsel, reasonably acceptable to the
Holders of the Securities at issue (and satisfactory to the Company's transfer
agent to permit the sale and transfer) that those securities may be sold
immediately, without volume limitation without registration under the Act, by
virtue of Rule 144 or similar provisions.
5. OBLIGATIONS OF THE COMPANY. Whenever required under this
Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Securities and Exchange
Commission ("SEC") a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective and to remain effective for the applicable period.
(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 all securities covered
by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions 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 or jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
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(f) As promptly as practicable after becoming aware of such
event, notify each Holder of Registrable Securities 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 omits 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 promptly prepare
and file a supplement or amendment to the registration statement to correct such
untrue statement or omission, and deliver a number of copies of such supplement
or amendment to each Holder as such Holder may reasonably request.
(g) Provide Holders with written notice within one (1)
business day of the date that a registration statement and any amendment thereto
registering the resale of the Registrable Securities is declared effective by
the SEC, and the date or dates when the Registration Statement is no longer
effective.
(h) Provide Holders and their representatives the opportunity
to conduct a reasonable due diligence inquiry of Company's pertinent financial
and other records and make available its officers, directors and employees for
questions regarding such information as it relates to information contained in
the registration statement.
(i) Provide Holders and their representatives the opportunity
to review the registration statement and all amendments thereto a reasonable
period of time prior to their filing with the SEC if so requested by Holder in
writing.
(j) Provide each Holder with prompt notice of the issuance by
the SEC or any state securities commission or agency of any stop order
suspending the effectiveness of the registration statement or the initiation of
any proceeding for such purpose. The Company shall use its best efforts to
prevent the issuance of any stop order, and, if any is issued, to obtain the
removal thereof at the earliest possible dates.
(k) Use its best efforts to list the Registrable Securities
covered by the registration statement with all securities exchanges or markets
on which the Common Stock is then listed and prepare and file any required
filing with the NASD or any such exchange or market.
6. BLACK OUT. In the event that, during the time that the
Registration Statement is effective, the Company reasonably determines, based
upon advice of counsel, that due to the existence of material non-public
information, disclosure of such material non-public information would be
required to make the statements contained in the Registration Statement not
misleading, and the Company has a bona fide business purpose for preserving as
confidential such material non-public information, the Company shall have the
right to suspend the use of the Registration Statement (a "Registration Black
Out"), and no Holder shall be permitted to sell any Registrable Securities
pursuant thereto, until such time as such suspension is no longer required
hereunder; provided, however, that such time shall not exceed a period of sixty
(60) days. As soon as such suspension is no longer required hereunder, the
Company shall, if required, promptly, but in no event later than the date the
Company files any documents with the Securities and Exchange Commission ("SEC")
referencing such material information, file with the SEC an amendment to the
Registration Statement disclosing such information and use its best efforts to
have such amendment declared effective as soon as possible.
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In the event that the use of the Registration Statement is
suspended by the Company, the Company shall promptly notify all Holders whose
securities are covered by the Registration Statement of such suspension, and
shall promptly notify each such Holder as soon as use of the Registration
Statement may be resumed. Notwithstanding anything to the contrary, the Company
shall cause the Transfer Agent to deliver unlegended shares of Common Stock to a
transferee of a Holder in accordance with the terms of the Subscription
Agreement in connection with any sale of Registrable Securities with respect to
which such Holder has entered into a contract for sale prior to receipt of
notice of such Registration Black Out and for which such Holder has not yet
settled. The Company shall be entitled to effect no more than one Registration
Black Out during any twelve- (12) month period.
7. FURNISH INFORMATION. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Agreement
with regard to each selling Holder that such selling Holder shall timely furnish
to the Company such information regarding Holder, the Registrable Securities
held by it, and the intended method of disposition of such securities as shall
be required to effect the registration of its Registrable Securities or to
determine that registration is not required pursuant to Rule 144 or other
applicable provision of the Act.
8. EXPENSES. All expenses other than underwriting discounts
and commissions and fees and expenses of counsel to the selling Holders incurred
in connection with registrations, filings or qualifications pursuant hereto,
including (without limitation) all registration, filing and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the
Company, shall be borne by the Company.
9. INDEMNIFICATION. In the event any Registrable Securities
are included in a Registration Statement or a Piggyback Registration Statement
under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the officers, directors and agents of each
Holder, 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, or liabilities (joint or several) to which they may
become subject under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements or
omissions: (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, or (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, and the Company will reimburse each such Holder, officer
or director, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this subsection 9(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 shall
not be unreasonably withheld), nor shall the Company be liable in any such case
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for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a statement which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, officer, director, underwriter or
controlling person.
(b) To the extent permitted by law, each selling Holder,
severally and not jointly, will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the registration statement,
each person, if any, who controls the Company within the meaning of the Act, any
underwriter and any other Holder selling securities in such registration
statement or any of its directors or officers or any person who controls such
Holder, against any losses, claims, damages, or liabilities (joint or several)
to which the Company or any such director, officer, controlling person, or
underwriter or controlling person, or other such Holder or director, officer or
controlling person may become subject, under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any statement or
omission in each case to the extent (and only to the extent) that such statement
or omission is made in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such registration
statement; and each such Holder will reimburse any legal or other expenses
reasonably incurred by the Company and any such director, officer, controlling
person, underwriter or controlling person, other Holder, officer, director, or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection 9(b) 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 Holder, which consent shall
not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 9 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 9, 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 of one such counsel 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 conflicting
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
9, but the omission so to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 9.
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(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 9 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and each Holder agree to
contribute to the aggregate claims, losses, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Holder may be subject in such proportion as is appropriate to reflect the
relative fault of the Company and the Holders in connection with the statements
or omissions which resulted in such Losses. Relative fault shall be determined
by reference to whether any alleged untrue statement or omission relates to
information provided by the Company or by the Holders. The Company and the
Holders agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 10(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 9,
each person who controls a Holder of Registrable Securities within the meaning
of either the Securities Act or the Exchange Act and each director, officer,
partner, employee and agent of a Holder shall have the same rights to
contribution as such holder, and each person who controls the Company within the
meaning of either the Act or the Exchange Act and each director of the Company,
and each officer of the Company who has signed the registration statement, shall
have the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
(e) The obligations of the Company and Holders under this
Section 9 shall survive the completion of any offering of Registrable Securities
in a Registration Statement under this Agreement, and otherwise.
10. 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 SEC that may at any time permit
a Holder to sell securities of the Company to the public without registration,
the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
(b) use its best efforts to 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
11. 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 provided that the amendment treats all
Holders equally. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each Holder, each future Holder, and the
Company.
12. 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 the address, telephone number and
facsimile number set forth on the signature pages of this Agreement and (ii) the
Holders at their respective last address and facsimile number of the party as
shown on the records 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.
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13. TERMINATION. This Agreement shall terminate on the date
all Registrable Securities cease to exist; but without prejudice to (i) the
parties' rights and obligations arising from breaches of this Agreement
occurring prior to such termination (ii) other indemnification obligations under
this Agreement.
14. ASSIGNMENT. 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 Piggyback
Registration, a writing executed by such transferee agreeing to be bound as a
Holder by the terms of this Agreement), and the Company hereby agrees to file a
new registration statement or an amended registration statement including such
transferee or a selling security holder thereunder.
15. GOVERNING LAW. This 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 Securities Exchange Act of 1934, which
matters shall be construed and interpreted in accordance with such laws.
16. EXECUTION IN COUNTERPARTS PERMITTED. This Agreement may be
executed in any number of counterparts, each of which shall be enforceable
against the parties actually executing such counterparts, and all of which
together shall constitute one (1) instrument.
17. SPECIFIC PERFORMANCE. The Holder shall be entitled to the
remedy of specific performance in the event of the Company's breach of this
Agreement, the parties agreeing that a remedy at law would be inadequate.
18. ENTIRE AGREEMENT. This Agreement, including the Exhibits
attached hereto, the Subscription Agreement, , the Irrevocable Instructions to
Transfer Agent, and the other documents delivered pursuant hereto constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
this 6th day of January, 2000.
TECHNICLONE CORPORATION
By: /S/ JOHN N. BONFIGLIO
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President
Address:
14282 Franklin Avenue
Tustin, CA 92780-7017
Phone (714) 838-0500
Fax (714)838-4094
INVESTOR(S)
SWARTZ INVESTMENTS, LLC
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Investor's Name
BY: /S/ ERIC S. SWARTZ, MANAGER
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(Signature)
Address: 200 Roswell Summit, Suite 285
1080 Holcomb Bridge Road
Roswell, Georgia 30076
BIOTECHNOLOGY DEVELOPMENT LTD.
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Investor's Name
BY: /S/ EDWARD J. LEGERE
------------------------------
(Signature)
Address: 222 South Rainbow, Suite 218
Las Vegas, NV 89128
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