Exhibit 10.106
Execution Version
SECURITIES PURCHASE AND REGISTRATION RIGHTS
AGREEMENT
Between
STAR SCIENTIFIC, INC.,
as Issuer,
And
The Investors Set Forth on Schedule I hereto
May 12, 2008
TABLE OF CONTENTS
Page
1.
AGREEMENT TO SELL AND PURCHASE THE SHARES AND WARRANT
1
2.
DELIVERY OF THE SHARES AND WARRANT AT CLOSING
1
3.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
2
3.1
ORGANIZATION
2
3.2
DUE AUTHORIZATION
2
3.3
NON-CONTRAVENTION
2
3.4
SEC FILINGS
3
3.5
ABSENCE OF CERTAIN CHANGE
3
3.6
CAPITALIZATION
4
3.7
CONDUCT OF BUSINESS/REGULATORY PERMITS
4
4.
REPRESENTATIONS AND WARRANTIES OF INVESTOR
5
4.1
DUE AUTHORIZATION
5
4.2
NON-CONTRAVENTION
5
4.3
PRIVATE PLACEMENT
5
4.4
CERTAIN TRADING ACTIVITIES
6
4.5
NO ADVICE
6
4.6
ACCREDITED INVESTOR
6
4.7
LIMITED REPRESENTATIONS
6
4.8
NO RECOMMENDATION
7
4.9
RESTRICTIVE LEGEND
7
4.10
RESIDENCE
7
4.11
NO MARKET
7
4.12
NO COMMISSIONS
7
4.13
TRANSACTIONAL EXEMPTION
7
4.14
TRANSFER OR RESALE
7
4.15
CERTAIN INFORMATION
8
4.16
S-3 ELIGIBILITY
8
5.
REGISTRATION RIGHTS
8
5.1
CERTAIN DEFINITIONS
8
5.2
REGISTRATION REQUIREMENTS
9
5.3
EXPENSES OF REGISTRATION
13
5.4
REGISTRATION ON FORM S-3/ REPORTING STATUS
13
5.5
REGISTRATION PERIOD
14
5.6
INDEMNIFICATION
14
5.7
CONTRIBUTION
15
5.8
SURVIVAL
16
5.9
INFORMATION BY HOLDERS
16
i
6.
COVENANTS
17
6.1
STOCK LEGEND
17
6.2
TRANSFER AGENT INSTRUCTIONS
18
6.3
DISCLOSURE OF TRANSACTIONS AND OTHER MATERIAL INFORMATION
18
7.
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS
18
8.
NOTICES
18
9.
CHANGES
19
10.
HEADINGS
19
11.
SEVERABILITY
19
12.
GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS
19
13.
ENTIRE AGREEMENT
20
14.
FINDERS FEES
20
15.
COUNTERPARTS
20
16.
SUCCESSORS AND ASSIGNS
20
17.
EXPENSES
20
18.
INDEPENDENT NATURE OF INVESTORS' OBLIGATIONS AND RIGHTS
20
ii
This SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
entered into effective as of May 12, 2008 between Star Scientific, Inc., a
Delaware corporation (the "Company"), and the several investors set forth on
Schedule I hereto (each an "Investor" and collectively, the "Investors").
WHEREAS, the Company and each Investor desire that Investor will purchase from
the Company and the Company will issue and sell to each Investor, upon the terms
and conditions set forth in this Agreement: (a) the aggregate amount of shares
of the Company's common stock, par value $0.0001 per share ("Common Stock"), set
forth next to each Investor's name on Schedule I hereto, for a per share
purchase price of $1.62 per share (the "Shares"); and (b) a warrant
substantially in the form attached hereto as Exhibit A (the "Warrant"), to
purchase (i) the amount of shares of Common Stock set forth next to each
Investor's name on Schedule I hereto, (the "Warrant Shares") and (ii) having an
exercise price of $2.00 per Warrant Share (the "Exercise Price"), in each of
(i) and (ii) subject to the terms of the Warrant; and
WHEREAS, the Investors will have registration rights with respect to the Shares,
Warrant Shares and other Registrable Securities (as defined herein) pursuant to
the terms of this