REGISTRATION RIGHTS AGREEMENT

 

                                                                    Exhibit 4.5

 

 

 

                          REGISTRATION RIGHTS AGREEMENT

 

 

     This REGISTRATION   RIGHTS AGREEMENT (this   "Agreement") is made and entered

into   as   of   June   25,    2004    (the    "Effective    Date"),    among    PROVECTUS

PHARMACEUTICALS,    INC.,   a   Nevada    corporation    (the    "Company")   and   A.I.

INTERNATIONAL   CORPORATE HOLDINGS,   LTD.;   AMERICAN EQUITY CONSULTING   SERVICES,

INC.; AND CASTLERIGG MASTER INVESTMENTS,   LTD. (the   "Purchasers").   Capitalized

terms not otherwise   herein defined shall have the meanings   ascribed to them in

the Securities   Purchase   Agreement between the Company and the Purchasers dated

June 25, 2004 (the "Purchase Agreement").

 

                                     RECITALS

                                    --------

 

     A. The   Purchasers   have entered   into a   Subscription   Agreement   with the

Company pursuant to which the Purchasers have agreed to purchase Common Stock in

the amount set forth in such Subscription   Agreements.   Pursuant to the Purchase

Agreement,   the Company has agreed to issue   Warrants to the   Purchasers   in the

amount set forth in the Purchase Agreement.

 

     B. As a condition   to the   purchase of the Common   Stock and the   potential

exercise of Warrants by the   Purchasers,   the parties   have agreed to enter into

this Agreement.

 

                                    AGREEMENT

                                    ---------

 

     THEREFORE,   the parties   hereto,   in   consideration   of the foregoing,   the

mutual   covenants   and   agreements   hereinafter   set   forth,   and other good and

valuable   consideration,   the   receipt   and   sufficiency   of   which   are   hereby

acknowledged, agree as follows:

 

                                        1.

                         DEFINITIONS AND INTERPRETATION

 

1.01.     Certain Definitions

 

     As used in this Agreement,   the following   capitalized terms shall have the

following meanings:

 

     (a)   "Prospectus"   means   the   prospectus    included   in   any   Registration

Statement, including any preliminary prospectus, and any amendment or supplement

thereto and all material incorporated by reference therein.

 

     (b)   "Purchase   Price"   means   the   aggregate   purchase   price   paid by the

Purchasers   for the   Common   Stock   issued   to the   Purchasers   pursuant   to the

Subscription Agreements. Notwithstanding the foregoing, the Purchase Price shall

exclude the value of any shares sold or otherwise   disposed of by the Purchasers

prior the Required Filing Date.

 

     (c)   "Registrable   Securities"   means the Shares and the   Warrants   and any

shares or other   securities   of the   Company   issued or   issuable   with   respect

thereto upon any stock split, stock dividend, recapitalization or similar event,

 

 

<PAGE>

 

excluding   shares   or   other   securities   sold   or   transferred   pursuant   to an

effective registration statement, sold or otherwise transferred pursuant to Rule

144 under the 1933 Act, sold or otherwise transferred pursuant to a transfer not

requiring   registration under the 1933 Act, held by a Purchaser who at such time

is not an Affiliate   of the Company and that are   eligible for sale   pursuant to

Rule 144(k) under the 1933 Act,   and held by a Purchaser   who at such time is an

Affiliate of the Company if all of such shares or other   securities are eligible

for sale   pursuant   to Rule   144   under   the   1933 Act and   could be sold in one

transaction   in   accordance   with   the   volume   limitations   contained   in   Rule

144(e)(1)(i) under the 1933 Act.

 

     (d)   "Registration   Expenses"   means   any   and   all   expenses   incident   to

performance   of or compliance   with this   Agreement,   including   all   applicable

registration   and filing fees imposed by the SEC and any securities   exchange or

market on which the   Registrable   Securities   are   required to be listed   and/or

quoted,   as the case may be, all fees and expenses   incurred in connection   with

compliance with state   securities or "blue sky" laws (including   reasonable fees

and   disbursements   of counsel in connection   with   qualification   of any of the

Registrable   Securities   under   any   state   securities   or blue sky laws and the

preparation   of a blue sky   memorandum)   and   compliance   with the   rules of the

National Association of Securities Dealers,   Inc. ("NASD"),   all expenses of any

Persons in preparing or assisting in preparing,   word   processing,   printing and

distributing the Registration Statement, any Prospectus,   certificates and other

documents relating to the performance of and compliance with this Agreement, all

fees and expenses incurred in connection with the listing, if any, of any of the

Registrable Securities on any securities exchange or exchanges, and the fees and

disbursements   of   counsel   for   the   Company   and   of   the   independent   public

accountants of the Company.   Registration   Expenses shall   specifically   exclude

underwriting   discounts and commissions,   the fees and   disbursements of counsel

representing Purchaser or any underwriter or agent acting on behalf of Purchaser

(other than the Broker),   and transfer   taxes,   if any,   relating to the sale or

disposition of Registrable Securities by Purchaser,   all of which shall be borne

by Purchaser in all cases.

 

     (e) "Registration   Statement" means a registration statement of the Company

(and any other entity required to be a registrant   pursuant to the   requirements

of the 1933 Act) covering all or a part of the Registrable   Securities under the

1933 Act for which the Company is eligible,   including all amendments (including

post-effective   amendments),   exhibits and materials   incorporated   by reference

therein.

 

     (f) "SEC" means the United States Securities and Exchange Commission.

 

     (g) "Shelf Registration   Statement" shall mean a Registration   Statement on

Form S-3 (or any   successor   form) filed   pursuant to Rule 415 of   Regulation   C

promulgated under the 1933 Act (or any successor rule).

 

1.02.   Rules of Interpretation

 

     (a) Each term defined in the singular   form in Section or elsewhere in this

Agreement   means the plural   thereof   whenever the plural form is used, and each

term defined in the plural form means the singular thereof whenever the singular

form is used. The use of a pronoun of any gender is applicable to all genders.

 

 

                                        2

<PAGE>

 

     (b) Unless otherwise specified therein, all terms defined in this Agreement

have the   meanings   as so   defined   herein   when used in any other   certificate,

report or document made or delivered pursuant hereto.

 

     (c) A reference   to any   agreement,   document or   instrument   refers to the

agreement, document or instrument as amended or modified and in effect from time

to time in accordance with the terms thereof and as permitted herein.

 

     (d) Except as otherwise specified, a reference to any applicable law refers

to the law as amended, modified, codified, replaced or reenacted, in whole or in

part,   and in   effect   from   time to   time,   and to any   rules   and   regulations

promulgated thereunder; and a reference to any section or other provision of any

applicable   law refers to that   provision of the law from time to time in effect

and   constituting   the   substantive    amendment,    modification,    codification,

replacement or reenactment of the referenced section or other provision.

 

     (e) All accounting terms not specifically defined herein shall be construed

in accordance   with GAAP. All terms used in Article 9 of the Uniform   Commercial

Code as enacted in the State of Nevada and not   specifically   defined herein are

used herein as defined therein.

 

1.03.   Construction

 

     The headings   preceding the text of the sections of this   Agreement and the

exhibits   hereto are for   convenience   only and shall not be deemed part of this

Agreement.   The   language   used in this   Agreement   shall   be   deemed   to be the

language chosen by the parties to this Agreement to express their mutual intent,

and no rule of strict construction shall be applied against any party.

 

                                       2.

                               REQUIRED REGISTRATION

 

2.01.   Required Registration

 

     Within   forty-five   (45)   days   after the final   Installment   Payment   made

pursuant to the payment schedule set forth in Annex I of the Purchase   Agreement

(the "Final   Installment   Payment")   is received by the Company   (the   "Required

Filing Date"), the Company shall be required to file a Registration Statement to

register the Registrable   Securities (a "Required   Registration")   and shall use

its best efforts to cause such Registration   Statement to be declared   effective

by the SEC within   one-hundred   and five   (105)   days   after the   receipt by the

Company of the Final Installment   Payment (the "Required   Effectiveness   Date").

The Company may elect, at its option, to file such   Registration   Statement as a

shelf   registration   pursuant to Rule 415 of Regulation C promulgated   under the

1933 Act (or any successor rule).   Thereafter,   the Company may elect to include

in such registration   additional   Common Stock to be issued by the Company.   The

Company represents that as of the date of this agreement, it will be required to

register   approximately Three Million Seven Hundred Thousand   (3,700,000) shares

on the Registration Statement, including the Registrable Securities.

 

 

                                        3

<PAGE>

 

2.02.   Exercise of Option

 

If the Purchasers   exercise all or any part of the Option   provided in Section 9

of the Purchase   Agreement prior to the time that the Registration   Statement is

declared effective by the SEC, the Company will amend the Registration Statement

to include the shares being purchased pursuant to the exercise of the Option and

the shares underlying the warrants related thereto.

 

2.03.   Effective Registration and Expenses

 

     The Company shall   promptly   notify the   Purchasers of the date and time of

declaration of effectiveness of such Registration   Statement.   In a registration

initiated as a Required   Registration,   the Company   shall pay the   Registration

Expenses incurred in connection therewith.

 

2.04.   Penalties

 

     (a) If the Registration   Statement   covering the Registrable   Securities is

not filed   with the SEC by the   Required   Filing   Date,   or if the   Registration

Statement   covering the Registrable   Securities is not declared effective by the

SEC by the Required   Effectiveness   Date,   the Company shall pay penalties   (the

"Penalties"   and   respectively   the   "Filing   Penalty"   and   the   "Effectiveness

Penalty") as described   below.   Such Penalties shall be paid in shares of Common

Stock valued at $.75 per share (the "Penalty Shares") and a warrant identical to

the   Warrant   for the   purchase   of a number   of shares   equal to the   number of

Penalty Shares.

 

     (b) If the Registration   Statement   covering the Registrable   Securities is

not filed with the SEC by the   Required   Filing Date,   the Filing   Penalty to be

paid by the   Company to the   Purchaser   shall be   determined   as of each   Filing

Computation Date (as defined below) and such amount shall be equal to the Filing

Penalty   Percentage (as defined below) of the Purchase Price for the period from

the date   following   the   Required   Filing   Date to the   first   relevant   Filing

Computation   Date, and thereafter to each   subsequent   Filing   Computation   Date

(prorated   on a daily basis if such   period is less than thirty (30) days).   The

"Filing Penalty Percentage" means (A) two percent (2%) of the Purchase Price for

the first Filing   Computation   Date after the   Required   Filing Date and (B) two

percent (2%) of the Purchase Price for each Filing   Computation Date thereafter.

By way of illustration and not in limitation,   if the Registration   Statement is

not filed before the Required Filing Date but is instead filed 60 days after the

Required   Filing Date,   the Filing   Penalty will be an aggregate of four percent

(4%) of the   Purchase   Price for the   Shares (2% for the first 30 days after the

Required   Filing   Date and 2% for the second 30 days after the   Required   Filing

Date).

 

     (c) If the Registration   Statement   covering the Registrable   Securities is

not   declared   effective   by the SEC by the   Required   Effectiveness   Date,   the

Effectiveness   Penalty   to be paid by the   Company   to the   Purchaser   shall   be

determined as of each Effectiveness Computation Date (as defined below) and such

amount shall be equal to the Effectiveness Penalty Percentage (as defined below)

of the   Purchase   Price for the   period   from the date   following   the   Required

Effectiveness   Date to the first relevant   Effectiveness   Computation   Date, and

thereafter to each   subsequent   Effectiveness   Computation   Date   (prorated on a

daily basis if such period is less than   thirty (30) days).   The   "Effectiveness

 

 

                                       4

<PAGE>

 

Penalty   Percentage"   means (A) two percent (2%) of the   Purchase   Price for the

first Effectiveness   Computation Date after the Required   Effectiveness Date and

(B) two percent (2%) of the Purchase   Price for each   Effectiveness   Computation

Date thereafter.

 

     (d) "Filing   Computation Date" means (A) the date which is thirty (30) days

after the   Required   Filing   Date,   and (B) each date which is thirty   (30) days

after the previous Filing Computation Date.

 

     (e)   "Effectiveness   Computation   Date"   means (A) the date which is thirty

(30) days   after the   Required   Effectiveness   Date,   and (B) each date which is

thirty (30) days after the previous Effectiveness Computation Date.

 

     (f)   Notwithstanding   the   foregoing,   the   amounts   payable by the Company

pursuant to this   provision   shall not be payable to the extent any delay in the

filing or effectiveness   of the Registration   Statement occurs because of an act

of, or a failure to act or to act timely by the Purchasers or their counsel.

 

 

                                       3.

                              REGISTRATION PROCEDURES

 

3.01.   Obligations of Company

 

     In   connection   with the   obligations   of the Company   with   respect to the

registration   of the Registrable   Securities   contemplated   herein,   the Company

shall:

 

      (a)   prepare   and   file   with   the   SEC   such   amendments   and   supplements

(including   required   periodic   reporting   filings   under   the 1934 Act) to such

Registration   Statement and Prospectus   included   therein as may be necessary to

keep such Registration   Statement effective for the applicable period; cause the

Prospectus to be amended or supplemented as required and to be filed as required

by Rule 424 or any similar rule that may be adopted under the 1933 Act;   respond

as promptly as practicable to any comments received from the SEC with respect to

the   Registration   Statement   or any   amendment   thereto;   and   comply   with the

provisions   of the 1933 Act with respect to the   disposition   of all   securities

covered   by   such   Registration    Statement   during   the   applicable   period   in

accordance   with the intended   method or methods of   distribution by the selling

Purchasers thereof. The Company shall keep the Registration   Statement effective

at all times during the period continuing until the earlier of (i) the date when

the Purchasers may sell all Registrable Securities under Rule 144 without volume

or other   restrictions   or limits or (ii) the date the   Purchasers no longer own

any of the   Registrable   Securities.   Notwithstanding   anything to the   contrary

contained   herein,   the Company shall not be required to take any of the actions

described   in the   sentence   above   (i) to the   extent   that the   Company   is in

possession of material non-public   information (such that it has been advised by

counsel that a failure to disclose such information   would constitute a material

omission   from the   prospectus)   and it   delivers   written   notice   to each such

 

 

                                       5

<PAGE>

 

Purchaser of   Registrable   Securities to the effect that such selling   Purchaser

may not make offers or sales under the   Registration   Statement for a period not

to exceed   30 days from the date of such   notice,   or has   executed   a letter of

intent for a material   merger,   acquisition   or disposition   transaction   and it

delivers written notice to each such Purchaser of Registrable   Securities to the

effect   that such   selling   Purchaser   may not make   offers   or sales   under the

Registration   Statement for a period not to exceed 60 days from the date of such

notice;   provided,   however,   that the Company may deliver only two such notices

within any 12-month period, or (ii) to the extent that such   registration   would

require initial or continuing disclosure of events or proceedings yet unreported

that,   in the opinion of the Board of Directors of the Company,   would not be in

the best interests of the Company and its   stockholders   and such   disclosure is

not otherwise   required under   applicable law (including   applicable   securities

laws),   and the   Company   delivers   written   notice   to each such   Purchaser   of

Registrable   Securities   to the effect that such selling   Purchaser may not make

offers or sales for a period not to exceed 60 days from the date of such notice;

provided,   however, that the Company may deliver only one such notice within any

365-day   period.   The   Purchasers   shall   promptly   provide to the Company   such

information   as the   Company   reasonably   requests   in   order to   identify   such

Purchaser and the method of   distribution in a   post-effective   amendment to the

Registration   Statement or a supplement to the   Prospectus.   Such Purchaser also

shall notify the Company in writing upon   completion of such offer or sale or at

such time as such   Purchaser no longer intends to make offers or sales under the

Registration Statement;

 

     (b) use its best efforts to register or qualify the Registrable   Securities

by the time the   Registration   Statement is declared   effective by the SEC under

all applicable   state   securities or blue sky laws of such   jurisdictions in the

United   States   and   its    territories   and   possessions   as   any   Purchaser   of

Registrable   Securities   covered by the Registration   Statement shall reasonably

request in writing and keep each such   registration or   qualification   effective

during the period such   Registration   Statement is required to be kept effective

or during the   period   offers or sales are being   made by a   Purchaser   that has

delivered a Registration Notice to the Company,   whichever is shorter; provided,

however,   that in   connection   therewith,   the Company   shall not be required to

qualify as a foreign   corporation   to do   business or to register as a broker or

dealer in any such   jurisdiction   where it would not   otherwise   be   required to

qualify or register,   subject   itself to taxation in any such   jurisdiction,   or

file a general consent to service of process in any such jurisdiction;

 

     (c) notify each selling Purchaser of Registrable   Securities   promptly and,

if   requested   by such   Purchaser,   confirm in   writing,   when the   Registration

Statement and any post-effective   amendments thereto have become effective, when

any amendment or supplement   to the   Prospectus   has been filed with the SEC, of

the   issuance   by the SEC or any state   securities   authority   of any stop order

suspending the   effectiveness of the Registration   Statement or any part thereof

or the initiation of any proceedings for that purpose,   if the Company   receives

any   notification   with respect to the   suspension of the   qualification   of the

Registrable   Securities for offer or sale in any   jurisdiction or the initiation

of any proceeding for such purpose, and of the happening of any event during the

period   the   Registration   Statement   is   effective   as a result   of which   such

Registration Statement contains any untrue statement of a material fact or omits

to state any material   fact   required to be stated   therein or necessary to make

the   statements   therein not   misleading   or the   Prospectus   as then amended or

supplemented   contains any untrue statement of a material fact or omits to state

any material fact necessary in order to make the statements therein, in light of

the circumstances under which they were made, not misleading; provided, however,

 

 

                                        6

<PAGE>

 

that the Company   shall not be obligated