Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
DATED AS OF MAY 17, 2000
among
NEPHROS, INC.,
the HOLDERS,
and the
INVESTORS IDENTIFIED HEREIN
TABLE OF CONTENTS
Page
Section 1. Definitions.......................................................1
Section 2. Required Registration.............................................3
Section 3. Piggyback Registration............................................4
Section 4. Registrations on Form S-3.........................................5
Section 5. Holdback Agreement................................................5
Section 6. Preparation and Filing............................................6
Section 7. Expenses..........................................................9
Section 8. Indemnification...................................................9
Section 9. Underwriting Agreement...........................................11
Section 10. Information......................................................12
Section 11. Exchange Act Compliance..........................................12
Section 12. No Conflict of Rights............................................12
Section 13. Termination......................................................12
Section 14. Successors and Assigns...........................................12
Section 15. Assignment.......................................................12
Section 16. Entire Agreement.................................................13
Section 17. Notices..........................................................13
Section 18. Modifications; Amendments; Waivers...............................14
Section 19. Counterparts; Facsimile Signatures...............................14
Section 20. Headings.........................................................14
Section 21. Governing Law....................................................14
i
REGISTRATION RIGHTS AGREEMENT,
dated as of May 17, 2000, between NEPHROS,
INC., a Delaware corporation (the
"Corporation"), and the INVESTORS (as herein
defined).
The Investors own or have the right to purchase or otherwise acquire
shares of the Common Stock (as hereinafter defined) of the Corporation. The
Corporation and the Investors deem it to be in their respective best interests
to set forth the rights of the Investors in connection with public offerings and
sales of the Common Stock.
NOW, THEREFORE, in consideration of the premises and mutual
covenants and obligations hereinafter set forth, the Corporation and the
Investors hereby agree as follows:
Section 1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
(a) "Commission" means the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
(b) "Common Stock" means the common stock, $.001 par value per
share, of the Corporation.
(c) "Counsel" shall have the meaning ascribed to such term in
Section 6(b).
(d) "Exchange Act" means the Securities Exchange Act of 1934 or any
successor Federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect from time to time.
(e) "Information" shall have the meaning ascribed to such term in
Section 6(i).
(f) "Initial Public Offering" shall mean an initial public offering
pursuant to a registration statement on Form S-1 under the Securities Act (or
any equivalent successor form) pursuant to a bona fide firm commitment
underwriting.
(g) "Inspectors" shall have the meaning ascribed to such term in
Section 6(i).
(h) "Investors" means the Person set forth on Schedule I and each
additional Person who shall execute a counterpart signature page hereto, and
includes any successor to, or assignee or transferee of, any such Person who or
which agrees in writing to be treated as an Investor hereunder and to be bound
by the terms and comply with all applicable provisions hereof.
(i) "Other Shares" means at any time those shares of Common Stock
which do not constitute Primary Shares or Registrable Shares.
(j) "Person" means any individual, partnership, corporation, group,
trust, limited liability company or other legal entity.
(k) "Primary Shares" means at any time the authorized but unissued
shares of Common Stock and shares of Common Stock held by the Corporation in its
treasury.
(l) "Records" shall have the meaning ascribed to such term in
Section 6(i).
(m) "Registrable Shares" means Common Stock which constitutes
Restricted Shares.
(n) "Restricted Shares" means, in the aggregate, the Series B
Restricted Shares and Series C Restricted Shares. As to any particular
Restricted Shares, once issued, such Restricted Shares shall cease to be
Restricted Shares when (i) they have been registered under the Securities Act,
the registration statement in connection therewith has been declared effective
and they have been disposed of pursuant to such effective registration
statement, (ii) they are eligible to be sold or distributed pursuant to Rule 144
within any consecutive three month period (including, without limitation, Rule
144(k)) without volume limitations, or (iii) they shall have ceased to be
outstanding.
(o) "Registration Date" means the date upon which the registration
statement pursuant to which the Corporation shall have initially registered
shares of Common Stock under the Securities Act for sale to the public shall
have been declared effective.
(p) "Rule 144" means Rule 144 promulgated under the Securities Act
or any successor rule thereto or any complementary rule thereto (such as Rule
144A).
(q) "Securities Act" means the Securities Act of 1933 or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
(r) "Securities Purchase Agreement" means the Securities Purchase
Agreement dated the date hereof, among the Corporation and the Investor party
thereto.
(s) "Series B Preferred" means the Series B Convertible Preferred
Stock, $.001 per value per share of the Corporation, issued to the Investors
pursuant to the Securities Purchase Agreement dated as of February 8, 2000.
(t) "Series C Preferred" means the Series C Convertible Preferred
Stock, $.001 par value per share of the Corporation, issued to the Investor
pursuant to the Securities Purchase Agreement dated the date hereof.
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(u) "Series B Restricted Shares" means shares of Common Stock issued
or issuance upon conversion of the Series B Preferred or any other securities of
the Company issued from time to time to the Investors.
(v) "Series C Restricted Shares" means shares of Common Stock issued
or issuable upon conversion of the Series C Preferred or any other securities of
the Company issued from time to time to the Investors.
Section 2. Required Registration.
(a) At any time after six months after the Registration Date, if
holders of not less than 20% of the Series B Restricted Shares and Series C
Restricted Shares, in the aggregate, then outstanding shall, in writing, state
that such holders desire to sell Registrable Shares in the public securities
markets and request the Corporation to effect the registration under the
Securities Act of Registrable Shares, the Corporation shall promptly use its
best efforts to effect the registration under the Securities Act of the
Registrable Shares which the Corporation has been so requested to register.
(b) Anything contained in Section 2(a) to the contrary
notwithstanding, the Corporation shall not be obligated to effect any
registration under the Securities Act pursuant to Section 2(a) except in
accordance with the following provisions:
(i) The Corporation shall not be obligated to use its best
efforts to file and cause to become effective (A) more than two
registration statements initiated pursuant to this Section 2 on Form
S-1 promulgated under the Securities Act or any successor forms
thereto, (B) any registration statement with respect to which the
reasonably anticipated proceeds shall not exceed $5,000,000 or (C)
any registration statement during any period in which any other
registration statement (other than on Form S-4 or Form S-8
promulgated under the Securities Act or any successor forms thereto)
pursuant to which Primary Shares are to be or were sold has been
filed and not withdrawn or has been declared effective within the
prior 90 days.
(ii) The Corporation may delay the filing or effectiveness of
any registration statement for a period of up to 90 days after the
date of a request for registration pursuant to this Section 2 if at
the time of such request (A) the Corporation is engaged, or has
fixed plans to engage within 90 days of the time of such request, in
a firm commitment underwritten public offering of Primary Shares in
which the holders of Registrable Shares may include Registrable
Shares pursuant to Section 3 or (B) the Corporation reasonably
determines that such registration and offering would interfere with
any material transaction involving the Corporation, as approved by
the Board of Directors.
(iii) With respect to any registration pursuant to this
Section 2, the Corporation shall give notice of such registration to
any Investor who does not request registration hereunder and to the
holders of all Other Shares which are entitled to piggy back
registration rights and the Corporation may include in such
registration any other Registrable Shares, Primary Shares or Other
Shares; provided, however, that if the managing underwriter advises
the Corporation that the inclusion of all Registrable Shares,
Primary Shares and/or Other Shares proposed to be included in such
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registration would interfere with the successful marketing
(including pricing) of the Registrable Shares proposed to be
included in such registration, then the number of Registrable
Shares, Primary Shares and/or Other Shares proposed to be included
in such registration shall be included in the following order:
(A) first, the Registrable Shares requested to be
included in such registration (or, if necessary, such
Registrable Shares pro rata among the holders thereof based
upon the number of Registrable Shares requested to be
registered by each such holder);
(B) second, the Primary Shares; and
(C) third, the Other Shares which are entitled to piggy
back registration rights.
(c) At any time before the registration statement covering
Registrable Shares becomes effective, the holders of a majority of the Series B
Restricted Shares and Series C Restricted Shares, in the aggregate, requested to
be included in such registration may request the Corporation to withdraw or not
to file the registration statement. In that event, if such request of withdrawal
shall not have been caused by, or made in response to, the material adverse
effect of an event on the business, properties, condition, financial or
otherwise, or operations of the Corporation, the holders shall have used one of
their demand registration rights under this Section 2 and the Corporation shall
no longer be obligated to register Registrable Shares pursuant to the exercise
of such one registration right pursuant to this Section 2 unless the remaining
holders shall pay to the Corporation the expenses incurred by the Corporation
through the date of such request. A registration will not count as a demand
registration for purposes of Section 2 hereof unless the Investors requesting
registration are able to register at least 85% of the Registrable Shares
requested to be included in such registration.
Section 3. Piggyback Registration.
If the Corporation at any time proposes for any reason to register
Primary Shares or Other Shares under the Securities Act (other than on Form S-4
or Form S-8 promulgated under the Securities Act or any successor forms
thereto), it shall give written notice to the Investors of its intention to so
register such Primary Shares or Other Shares at least 30 days before the initial
filing of such registration statement and, upon the written request, delivered
to the Corporation within 20 days after delivery of any such notice by the
Corporation, of the Investors to include in such registration Registrable Shares
(which request shall specify the number of Registrable Shares proposed to be
included in such registration and shall state that such Investors desire to sell
such Registrable Shares in the public securities markets), the Corporation shall
use its best efforts to cause all such Registrable Shares to be included in such
registration on the
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same terms and conditions as the securities otherwise being sold in such
registration; provided, however, that if the managing underwriter advises the
Corporation that the inclusion of all Registrable Shares requested to be
included in such registration would interfere with the successful marketing
(including pricing) of the Primary Shares or Other Shares proposed to be
registered by the Corporation, then the number of Primary Shares, Registrable
Shares and Other Shares proposed to be included in such registration shall be
included in the following order:
(a) if the Corporation proposes to register Primary Shares:
(i) first, the Primary Shares;
(ii) second, the Registrable Shares requested by the
Investors to be included in such registration (or, if
necessary, such Registrable Shares pro rata among the holders
thereof based upon the number of Registrable Shares requested
to be registered by each such holder);
(iii) third, the Other Shares held by the parties
demanding such registration.
(b) The number of requests permitted by the Investors pursuant to
this Section 3 shall be unlimited.
Section 4. Registrations on Form S-3.
Anything contained in Section 2 to the contrary notwithstanding, at
such time as the Corporation shall have qualified for the use of Form S-3
promulgated under the Securities Act or any successor form thereto, the
Investors holding Registrable Shares then outstanding shall have the right to
request in writing that the Corporation effect the registration of Registrable
Shares on Form S-3 or such successor form, which request or requests shall (i)
specify the number of Registrable Shares intended to be sold or disposed of and
the holders thereof and (ii) state the intended method of disposition of such
Registrable Shares. A requested registration on Form S-3 or any such successor
form in compliance with this Section 4 shall not count as a registration
statement initiated pursuant to Section 2 but the provisions of Section 2 shall
otherwise apply to a registration initiated pursuant to this Section 4. The
number of requests permitted pursuant to this Section 4 shall be unlimited;
provided, however, that requests may only be made pursuant to this Section 4 if
the reasonably anticipated proceeds therefrom shall be at least $500,000.
Section 5. Holdback Agreement.
(a) If the Corporation at shall effect an Initial Public Offering or
if at any time thereafter, the Corporation shall register its shares of Common
Stock under the Securities Act for sale to the public on a registration
statement under which the Investors are given the opportunity to have their
Registrable Shares registered (including any such registration in accordance
with Sections 2, 3 or 4 hereof), the Investors shall not sell publicly, make any
short sale of, grant any option for the purchase of, or otherwise
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dispose publicly of, any Registrable Shares (other than those shares of Common
Stock included in such registration pursuant to such Initial Public Offering or
in accordance with Sections 2, 3 or 4 hereof) without the prior written consent
of the Corporation, for a period as shall be determined by the relevant managing
underwriters, which period shall begin not more than 10 days prior to the
effectiveness of the registration statement pursuant to which such public
offering shall be made and shall not last more than 180 days after the effective
date of such registration statement. The Corporation shall obtain the agreement
of any Person permitted to sell shares of stock in a registration to be bound by
and to comply with this Section 5 as if such Person were an Investor hereunder.
(b) If the Corporation at any time pursuant to Sections 2 or 3 of
this Agreement shall register under the Securities Act Registrable Shares held
by the Investors for sale to the public pursuant to an underwritten offering,
the Corporation shall not effect any public sale or distribution of securities
similar to those being registered, or any securities convertible into or
exercisable or exchangeable for such securities, for such period as shall be
determined by the managing underwriters.
Section 6. Preparation and Filing.
If and whenever the Corporation is under an obligation pursuant to
the provisions of this Agreement to use its best efforts to effect the
registration of any Registrable Shares, the Corporation shall, as expeditiously
as practicable:
(a) use its best efforts to cause a registration statement that
registers such Registrable Shares to become and remain effective until the
earlier of 90 days after such registration statement becomes effective or such
time as all of such Registrable Shares are eligible to be sold or distributed
pursuant to Rule 144 (including, without limitation, Rule 144(k)) within any
consecutive three-month period without volume limitations;
(b) furnish, at least five business days before filing a
registration statement that registers such Registrable Shares, a prospectus
relating thereto or any amendments or supplements relating to such a
registration statement or prospectus, to one counsel selected by the Investors
("Counsel") copies of all such documents proposed to be filed (it being
understood that such five-business-day period need not apply to successive
drafts of the same document proposed to be filed so long as such successive
drafts are supplied to Counsel in advance of the proposed filing by a period of
time that is customary and reasonable under the circumstances);
(c) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
at least a period of 90 days or until all of such Registrable Shares have been
disposed of (if earlier) and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of such Registrable Shares;
(d) promptly notify Counsel in writing (i) of the receipt by the
Corporation of any notification with respect to any comments by the Commission
with respect to such
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registration statement or prospectus or any amendment or supplement thereto or
any request by the Commission for the amending or supplementing thereof or for
additional information with respect thereto, (ii) of the receipt by the
Corporation of any notification with respect to the issuance by the Commission
of any stop order suspending the effectiveness of such registration statement or
prospectus or any amendment or supplement thereto or the initiation or
threatening of any proceeding for that purpose and (iii) of the receipt by the
Corporation of any notification with respect to the suspension of the
qualification of such Registrable Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purposes;
(e) use its best efforts to register or qualify such Registrable
Shares under such other securities or blue sky laws of such jurisdictions as the
holders of the Registrable Shares reasonably request and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
holders to consummate the disposition in such jurisdictions of such holders'
Registrable Shares; provided, however, that the Corporation will not be required
to qualify generally to do business, subject itself to general taxation or
consent to general service of process in any jurisdiction where it would not
otherwise be required to do so but for this paragraph (e) or to provide any
material undertaking or make any changes in its by-laws or amended and restated
certificate of incorporation which the Board of Directors determines to be
contrary to the best interests of the Corporation or to modify any of its
contractual relationships then existing;
(f) furnish to the holders of such Registrable Shares such number of
copies of a summary prospectus, if any, or other prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as such holders may reasonably request in order to
facilitate the public sale or other disposition of such Registrable Shares;
(g) without limiting subsection (e) above, use its best efforts to
cause such Registrable Shares to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Corporation to enable the holders of such
Registrable Shares to consummate the disposition of such Registrable Shares;
(h) notify the holders of such Registrable Shares on a timely basis
at any time when a prospectus relating to such Registrable Shares is required to
be delivered under the Securities Act within the appropriate period mentioned in
subparagraph (a) of this Section 6, of the happening of any event as a result of
which the prospectus included in such 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
not misleading in light of the circumstances then existing and, at the request
of such holders, prepare and furnish to such holders a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary
so that, as thereafter delivered to the offerees of such shares, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to
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be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
(i) subject to the execution of confidentiality agreements in form
and substance satisfactory to the Corporation, make available upon reasonable
notice and during normal business hours, for inspection by the holders of such
Registrable Shares any underwriter participating in any disposition pursuant to
such registration statement and any attorney, accountant or other agent retained
by the Investors or underwriter (collectively, the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents and properties of the
Corporation (collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
Corporation's officers, directors and employees to supply all information
(together with the Records, the "Information") reasonably requested by any such
Inspector in connection with such registration statement. Any of the Information
which the Corporation determines in good faith to be confidential, and of which
determination the Inspectors are so notified, shall not be disclosed by the
Inspectors unless (i) the disclosure of such Information is necessary to avoid
or correct a misstatement or omission in the registration statement, (ii) the
release of such Information is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction or (iii) such Information has been made
generally available to the public; the Investors agree that they will, upon
learning that disclosure of such Information is sought in a court of competent
jurisdiction, give notice to the Corporation and allow the Corporation, at the
Corporation's expense, to undertake appropriate action to prevent disclosure of
the Information deemed confidential;
(j) use its best efforts to obtain from its independent certified
public accountants "cold comfort" letters in customary form and at customary
times and covering matters of the type customarily covered by cold comfort
letters;
(k) use its best efforts to obtain from its counsel an opinion or
opinions in customary form;
(l) provide a transfer agent and registrar (which may be the same
entity and which may be the Corporation) for such Registrable Shares;
(m) issue to any underwriter to which the holders of such
Registrable Shares may sell shares in such offering certificates evidencing such
Registrable Shares;
(n) list such Registrable Shares on any national securities exchange
on which any shares of the Common Stock are listed or, if the Common Stock is
not listed on a national securities exchange, use its best efforts to qualify
such Registrable Shares for listing on the Nasdaq Stock Market, or such other
national securities exchange as the holders of a majority of such Registrable
Shares shall reasonably request;
(o) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission and make available to its
securityholders, as soon as reasonably practicable, earnings statements (which
need not be audited) covering a period
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of 12 months beginning within three months after the effective date of the
registration statement, which earnings statements shall satisfy the provisions
of Section 11(a) of the Securities Act; and
(p) subject to all the other provisions of this Agreement, use its
best efforts to take all other steps necessary to effect the registration of
such Registrable Shares contemplated hereby.
Each holder of the Registrable Shares upon receipt of any notice
from the Corporation of any event of the kind described in Section 6(h) hereof,
shall forthwith discontinue disposition of the Registrable Shares pursuant to
the registration statement covering such Registrable Shares until such holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 6(h) hereof, and, if so directed by the Corporation, such holder shall
deliver to the Corporation all copies, other than permanent file copies then in
such holder's possession, of the prospectus covering such Registrable Shares at
the time of receipt of such notice.
Section 7. Expenses.
All expenses (other than underwriting discounts and commissions
relating to the Registrable Shares, as provided in the last sentence of this
Section 7) incurred by the Corporation in complying with Section 6, including,
without limitation, all registration and filing fees (including all expenses
incident to filing with the National Association of Securities Dealers, Inc.),
fees and expenses of complying with securities and blue sky laws, printing
expenses, fees and expenses of the Corporation's counsel and accountants and
reasonable fees and expenses of Counsel shall be paid by the Corporation;
provided, however, that all underwriting discounts and selling commissions
applicable to the Registrable Shares shall be borne by the holders selling such
Registrable Shares, in proportion to the number of Registrable Shares sold by
each such holder.
Section 8. Indemnification.
(a) In connection with any registration of any Registrable Shares
under the Securities Act pursuant to this Agreement, the Corporation shall
indemnify and hold harmless the holders of Registrable Shares, each underwriter,
broker or any other Person acting on behalf of the holders of Registrable Shares
and each other Person, if any, who controls any of the foregoing Persons within
the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several (or actions in respect thereof), to which any of
the foregoing Persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or allegedly untrue
statement of a material fact contained in the registration statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein or otherwise filed
with the Commission, any amendment or supplement thereto or any document
incident to registration or qualification of any Registrable Shares, or arise
out of or are based upon 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, with respect to any prospectus, necessary to make the
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statements therein in light of the circumstances under which they were made not
misleading, or any violation by the Corporation of the Securities Act or state
securities or blue sky laws applicable to the Corporation and relating to action
or inaction required of the Corporation in connection with such registration or
qualification under such state securities or blue sky laws; and shall reimburse
the holders of Registrable Shares, such underwriter, such broker or such other
Person acting on behalf of the holders of Registrable Shares and each such
controlling Person for any legal or other expenses reasonably incurred by any of
them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Corporation shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action (including any legal or other expenses incurred) arises out of or is
based upon an untrue statement or allegedly untrue statement or omission or
alleged omission made in said registration statement, preliminary prospectus,
final prospectus, amendment, supplement or document incident to registration or
qualification of any Registrable Shares in reliance upon and in conformity with
written information furnished to the Corporation through an instrument duly
executed by the holders of Registrable Shares specifically for use in the
preparation thereof.
(b) In connection with any registration of Registrable Shares under
the Securities Act pursuant to this Agreement, each holder of Registrable Shares
shall severally and not jointly indemnify and hold harmless (in the same manner
and to the same extent as set forth in the preceding paragraph of this Section
8) the Corporation, each director of the Corporation, each officer of the
Corporation who shall sign such registration statement, each underwriter, broker
or other Person acting on behalf of the holders of Registrable Shares and each
Person who controls any of the foregoing Persons within the meaning of the
Securities Act with respect to any statement or omission from such registration
statement, any preliminary prospectus or final prospectus contained therein or
otherwise filed with the Commission, any amendment or supplement thereto or any
document incident to registration or qualification of any Registrable Shares if
such statement or omission was made in reliance upon and in conformity with
written information furnished by such holder to the Corporation or such
underwriter specifically for use in connection with the preparation of such
registration statement, preliminary prospectus, final prospectus, amendment,
supplement or document; provided, however, that the maximum amount of liability
in respect of such indemnification shall be limited, in the case of each seller
of Registrable Shares to an amount equal to the net proceeds actually received
by such seller from the sale of Registrable Shares effected pursuant to such
registration.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 8, such indemnified party will, if a claim in respect
thereof is made against an indemnifying party, give written notice to the latter
of the commencement of such action. The failure of any indemnified party to
notify an indemnifying party of any such action shall not (unless such failure
shall have a material adverse effect on the indemnifying party) relieve the
indemnifying party from any liability in respect of such action that it may have
to such indemnified party on account of this Section 8. In case
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any such action is brought against an indemnified party, the indemnifying party
will be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be responsible
for any legal or other expenses subsequently incurred by the indemnified party
in connection with the defense thereof; provided, however, that if any
indemnified party shall have reasonably concluded that there may be one or more
legal or equitable defenses available to such indemnified party which are
additional to or conflict with those available to the indemnifying party, or
that such claim or litigation involves or could have an effect upon matters
beyond the scope of the indemnity agreement provided in this Section 8, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party (but shall have the right to participate
therein with counsel of its choice) and such indemnifying party shall reimburse
such indemnified party and any Person controlling such indemnified party for
that portion of the fees and expenses of any counsel retained by the indemnified
party which is reasonably related to the matters covered by the indemnity
agreement provided in this Section 8. If the indemnifying party is not entitled
to, or elects not to, assume the defense of a claim, it will not be obligated to
pay the fees and expenses of more than one counsel with respect to such claim.
(d) If the indemnification provided for in this Section 8 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, claim, damage, liability or action referred to herein, then
the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amounts paid or payable by such indemnified
party as a result of such loss, claim, damage, liability or action in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions which resulted in such loss, claim, damage,
liability or action as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties agree that it would not be just and equitable if contribution
pursuant hereto were determined by pro rata allocation or by any other method or
allocation which does not take account of the equitable considerations referred
to herein. No Person guilty of fraudulent misrepresentation shall be entitled to
contribution from any Person.
Section 9. Underwriting Agreement.
Notwithstanding the provisions of Sections 5, 6, 7 and 8, to the
extent that the Investors shall enter into an underwriting or similar agreement,
which agreement contains provisions covering one or more issues addressed in
such Sections, the provisions contained in such agreement addressing such issue
or issues shall control. No
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holder may participate in any underwritten registration hereunder unless such
holder (a) agrees to sell such holder's securities on the basis provided in any
underwriting arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably and customarily required under the terms of such underwriting
arrangements.
Section 10. Information.
Each Investor shall furnish to the Corporation such written
information regarding such Person and the distribution proposed by such Person
as the Corporation may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Agreement.
Section 11. Exchange Act Compliance.
From the Registration Date or such earlier date as a registration
statement filed by the Corporation pursuant to the Securities Act relating to
any class of the Corporation's securities shall have become effective, the
Corporation shall comply with all of the reporting requirements of the Exchange
Act applicable to it (whether or not it shall be required to do so, but
specifically excluding Section 14 of the Exchange Act if not then applicable to
the Corporation) and shall comply with all other public information reporting
requirements of the Commission which are conditions to the availability of Rule
144 for the sale of the Common Stock. The Corporation shall cooperate with the
Investors in supplying such information as may be necessary for the Investors to
complete and file any information reporting forms presently or hereafter
required by the Commission as a condition to the availability of Rule 144.
Section 12. No Conflict of Rights.
The Corporation has not in the past, and shall not, after the date
hereof, grant any registration rights which conflict with or impair the
registration rights granted hereby.
Section 13. Termination.
This Agreement shall terminate and be of no further force or effect
when there shall no longer be any Registrable Shares outstanding.
Section 14. Successors and Assigns.
This Agreement shall bind and inure to the benefit of the
Corporation and the Investors and, subject to Section 15, the respective
successors and assigns of the Corporation and the Investors.
Section 15. Assignment.
Each Investor may assign its rights hereunder to any purchaser or
transferee of Registrable Shares; provided, however, that such purchaser or
transferee
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shall, as a condition to the effectiveness of such assignment, be required to
execute a counterpart to this Agreement agreeing to be treated as an Investor,
whereupon such purchaser or transferee shall have the benefits of, and shall be
subject to the restrictions contained in, this Agreement as if such purchaser or
transferee was originally included in the definition of an Investor herein and
had originally been a party hereto.
Section 16. Entire Agreement.
This Agreement, the Securities Purchase Agreement, and the
Stockholders' Agreement (as defined in the Securities Purchase Agreement), each
dated as of the date hereof, and the other writings referred to herein or
therein or delivered pursuant hereto or thereto, contain the entire agreement
among the Investors and the Corporation with respect to the subject matter
hereof and supersede all prior and contemporaneous arrangements or
understandings with respect thereto, all of which are hereby automatically
terminated in their entirety and of no further force or effect, without any
action by the parties thereto.
Section 17. Notices.
All notices, requests, consents and other communications hereunder
to any party shall be deemed to be sufficient if contained in a written
instrument delivered in person or sent by telecopy, nationally-recognized
overnight courier or first class registered or certified mail, return receipt
requested, postage prepaid, addressed to such party at the address set forth
below or such other address as may hereafter be designated in writing by such
party to the other parties:
(i) if to the Corporation, to:
Nephros, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇, Esq.
(ii) if to the Investors, to their respective addresses set
forth on Schedule I hereto.
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All such notices, requests, consents and other communications shall be deemed to
have been delivered (a) in the case of personal delivery or delivery by
telecopy, on the date of such delivery, (b) in the case of dispatch by
nationally-recognized overnight courier, on the next business day following such
dispatch and (c) in the case of mailing, on the fifth business day after the
posting thereof.
Section 18. Modifications; Amendments; Waivers.
The terms and provisions of this Agreement may not be modified or
amended, nor may any provision be waived, except pursuant to a writing signed by
the Corporation and the holders of at least a majority of the Registrable Shares
then outstanding.
Section 19. Counterparts; Facsimile Signatures.
This Agreement may be executed in any number of counterparts, and
each such counterpart hereof shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement. Facsimile
counterpart signatures to this Agreement shall be acceptable at the Closing (as
defined in the Securities Purchase Agreement) if the originally executed
counterpart is delivered within a reasonable period thereafter.
Section 20. Headings.
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
Section 21. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed wholly therein.
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IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement on the date first written above.
NEPHROS, INC.
By: ______________________________
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement on the date first written above.
INVESTOR
------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement on the date first written above.
▇▇▇▇▇▇▇ PARTNERS, LTD
By: ______________________________
Name:
Title:
▇▇▇▇▇▇▇ PARTNERS, LTD
By: ______________________________
Name:
Title:
SCHEDULE I
Investors