EXHIBIT 4.3
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement dated as of the ___ day of August,
2001 by and between Able Laboratories, Inc., a Delaware corporation (the
"Company"), and the Purchasers listed on the execution page of this Agreement
(the "Purchasers").
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Purchasers are purchasing from the Company, pursuant to the Stock
Purchase Agreement dated the date hereof (the "Purchase Agreement"), shares of
Series Q Convertible Preferred Stock, $.01 par value per share, of the Company
that are convertible into shares of Common Stock, $.01 par value per share, of
the Company; and
WHEREAS, the Company desires to grant to each Purchaser the
registration rights set forth herein with respect to the Registrable Securities
(as defined below).
NOW THEREFORE, the parties agree as follows:
1. DEFINITIONS. For all purposes of this Agreement, all of the words
and expressions used herein which are not defined herein, but which are defined
in the Purchase Agreement, shall have the same respective meanings herein as the
meanings specified therein. As used in this Agreement:
(a) the term "Business Day" shall mean any day other than
Saturday, Sunday or a day on which banking institutions are not
required to be open in The Commonwealth of Massachusetts.
(b) the term "Commission" shall mean the Securities and Exchange
Commission;
(c) the term "Common Stock" shall mean the Common Stock, par
value $0.01 per share, of the Company or any other security into which
the Preferred Stock may, by its terms, be converted;
(d) the term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, or any federal statute or code which is a
successor thereto;
(e) the term "Form S-3" shall mean the form so designated,
promulgated by the Commission for registration of securities under the
Securities Act, and any forms succeeding to the functions of such
form, whether or not bearing the same designation;
(f) the term "Holder" shall mean any Purchaser;
(g) the term "Preferred Stock" shall mean the shares of Series Q
Convertible Preferred Stock, par value $0.01 per share, of the Company
issued to the original Purchasers pursuant to the Purchase Agreement;
(h) the terms "register", "registered" and "registration" shall
refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities
Act and the declaration or ordering by the Commission of effectiveness
of such registration statement;
(i) the term "Registrable Securities" shall mean, in relation to
a Holder at any particular time: (i) all shares of Common Stock
issuable upon conversion of the Preferred Stock held of record by the
Holder at such time; (ii) all shares of Common Stock held of record at
such time by the Holder as a result of such conversion or exercise;
and (iii) shall not include any other shares of capital stock of the
Company without the consent of the Holder; PROVIDED, HOWEVER, that
with respect to any particular Registrable Security, such security
shall cease to be a Registrable Security when, as of the date of
determination, (A) it has been effectively registered under the
Securities Act and disposed of pursuant thereto, (B) registration
under the Securities Act is no longer required for the immediate
public distribution within a 90-day period of such security together
with all other Registrable Securities held by the Holder pursuant to
the provisions of Rule 144 thereunder, or (C) it has ceased to be
outstanding;
(j) the term "Registration Expenses" shall mean all expenses
incident to the Company's performance of or compliance with Section 4
and 5, including, without limitation, all registration, filing,
listing, and NASD fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating,
printing and engraving expenses, messenger and delivery expenses, the
fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any audits
or comfort letters required by or incident to such performance and
compliance, the fees and disbursements of a single counsel retained by
the Holder or Holders of more than 50.1% of the Registrable
Securities, not to exceed $5,000, premiums and other costs of policies
of insurance against liabilities arising out of the public offering of
the Registrable Securities being registered, and any fees and
disbursements of underwriters customarily paid by issuers or sellers
of securities, but excluding underwriting discounts and commissions
and transfer taxes, if any.
(k) the term "Registration Statement" shall mean the registration
statement and any additional registration statements contemplated by
Section 4, including (in each case) the prospectus, amendments and
supplements to such registration statement or prospectus, all exhibits
thereto, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
(l) the term "Rule 144" shall mean Rule 144 issued by the
Commission under the Securities Act, or any subsequent rule pertaining
to the disposition of securities without registration; and
(m) the term "Securities Act" shall mean the Securities Act of
1933, as amended, or any federal statute or code which is a successor
thereto.
2. CONVERSION SHARES. Each Holder shall, for all purposes of this
Agreement, unless the context shall otherwise require, be deemed to hold, at any
particular time, all shares of Common Stock issued or issuable upon conversion
of the Preferred Stock held of record by the Holder at such time.
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3. RESTRICTION ON TRANSFER. Each Holder acknowledges and understands
that prior to the registration of the Registrable Securities as provided herein,
the Registrable Securities are "restricted securities" as defined in Rule 144
and that no disposition or transfer of the Registrable Securities may be made by
the Holder in the absence of (i) an opinion of counsel to the Holder that such
transfer may be made without registration under the Securities Act (which shall
be reasonably acceptable to the Company), or (ii) such registration.
4. REGISTRATION ON FORM S-3. The Company will, as soon as practical,
but in no event later than 180 days following the date hereof (the "Registration
Period"), prepare and file with the Commission a Registration Statement on Form
S-3 to permit a public offering and resale of the Registrable Securities under
the Securities Act on a continuous basis under Rule 415. Subject to receipt of
necessary information from the Holders, the Company will use commercially
reasonable efforts to cause the Registration Statement to be declared effective
by the Commission within the Registration Period. To the extent not unlawful,
the Company will pay all Registration Expenses of each registration of
Registrable Securities pursuant to this Section 3. The number of shares of
Common Stock designated in the Registration Statement to be registered shall be
equal to the number of shares of Common Stock issuable upon conversion of the
Preferred Stock. If at the time the Company files the Registration Statement the
maximum number of shares of Common Stock issuable upon conversion of the
Preferred Stock is not yet determinable pursuant to the conversion provisions of
the Preferred Stock, the Company agrees that it will register a reasonable
estimate of the number of shares of Common Stock issuable upon conversion of the
Preferred Stock The Company agrees that it will file such amendments and/or
supplements to the Registration Statement, and also agrees to file such
additional Registration Statements, as is necessary in order to ensure that at
all times at least 100% of the number of shares of Common Stock issuable upon
conversion of the Preferred Stock are included in a Registration Statement.
5. REGISTRATION PROCEDURES. The Company will use commercially
reasonable efforts in good faith to effect promptly the registration of the
Registrable Securities under the Securities Act and to permit the public
offering and resale of the Registrable Securities in accordance with the
intended method of disposition thereof, and, in connection therewith, the
Company, as expeditiously as shall be reasonably possible, will:
(a) prepare and file with the Commission a Registration Statement
with respect to the Registrable Securities, and thereafter use its
commercially reasonable efforts to cause such registration statement
to become and remain effective until the date that is two years after
the date such Registration Statement is declared effective by the
Commission or such earlier date when all Registrable Securities
covered by such Registration Statement have been sold (the
"Effectiveness Period"); PROVIDED, HOWEVER, that before filing such
Registration Statement or any amendments thereto, the Company will
furnish to the Holders and their counsel copies of all such documents
proposed to be filed.
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus included
in such Registration Statement as may be necessary or advisable to
comply in all material respects with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
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Registration Statement or as may be necessary to keep such
Registration Statement effective and current during the Effectiveness
Period;
(c) prepare and file with the Commission additional Registration
Statements if the number of Registrable Securities at any time exceeds
100% of the number of shares of Common Stock then registered in a
Registration Statement within 30 days of such occurrence.
(d) furnish to each seller of Registrable Securities such number
of copies of such Registration Statement, each amendment and
supplement thereto (in each case including all exhibits thereto), the
prospectus included in such Registration Statement (including each
preliminary prospectus) in conformity with the requirements of the
Securities Act, and such other documents as any such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities held by such seller;
(e) enter into such customary agreements and take all such other
customary actions in connection therewith in order to expedite or
facilitate the disposition of the Registrable Securities;
(f) use its commercially reasonable efforts to register and
qualify the Registrable Securities covered by such registration
statement under such securities or Blue Sky laws of such jurisdictions
as any seller shall reasonably request and do any and all such other
acts and things as may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities held by such seller; PROVIDED, HOWEVER that the
Company shall not be required in connection therewith to qualify to do
business or file a general consent to service of process in any such
jurisdiction;
(g) notify each seller of Registrable Securities at any time when
a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the
prospectus included in a 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 use its reasonable efforts to amend or supplement such
prospectus in order to cause such prospectus not to include any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; and
(h) use reasonable efforts to cause all Registrable Securities to
be listed on such securities exchange on which similar securities of
the Company are then listed and to be qualified for trading on each
system on which the securities issued by the Company are from time to
time qualified.
Notwithstanding the foregoing, if at any time or from time to time
after the date of effectiveness of the Registration Statement, the Company
notifies the Holders in writing of the existence of a Potential Material Event,
the Holders shall not offer or sell any Registrable
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Securities, or engage in any other transaction involving or relating to the
Registrable Securities, from the time of the giving of notice with respect to a
Potential Material Event until such Holders receive written notice from the
Company that such Potential Material Event either has been disclosed to the
public or no longer constitutes a Potential Material Event; PROVIDED, HOWEVER,
that the Company may not so suspend the right of such Holders of Registrable
Securities for more than two twenty (20) Business Day periods in the aggregate
during any period of 12 consecutive months, during the periods the Registration
Statement is required to be in effect ("Permitted Suspension Period") and;
PROVIDED, FURTHER, that the Effectiveness Period shall be extended by any
Permitted Suspension Period;
"Potential Material Event" shall mean any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
Registration Statement, which shall be evidenced by determination in good faith
by the Board of Directors of the Company that disclosure of such information in
the Registration Statement would be detrimental to the business and affairs of
the Company; or (ii) any material engagement or activity by the Company that
would, in the good faith determination of the Board of Directors of the Company,
be adversely affected by disclosure in a Registration Statement at such time,
which determination shall be accompanied by a good faith determination by the
Board of Directors of the Company that the registration statement would be
materially misleading absent the inclusion of such information.
6. COOPERATION BY PROSPECTIVE SELLERS, ETC.
(a) The Holders will furnish to the Company in writing such
information as the Company may reasonably require from the Holders or
as required by the Commission, and otherwise reasonably cooperate with
the Company in connection with any Registration Statement with respect
to such Registrable Securities.
(b) The Holders of Registrable Securities included in any
Registration Statement will not (until further notice) effect sales
thereof after receipt of telegraphic or written notice from the
Company to suspend sales to permit the Company to correct or update
such Registration Statement or prospectus.
(c) Each Holder agrees that it will deliver a prospectus in
accordance with the provisions of the Securities Act and all
applicable rules of the Commission in connection with each sale and
will notify the Company when it has sold all of its Registrable
Securities.
7. INDEMNIFICATION.
(a) Indemnification by the Company. The Company will indemnify
the Holders, the officers, directors, and partners of each such
Holder, and each person who controls any thereof (within the meaning
of the Securities Act), against any and all claims, losses, damages,
and liabilities (or actions in respect thereof), joint or several, to
which such Holder or any such officer, director, partner, or
controlling persons may become subject under the Securities Act or
otherwise arising out of or based on any untrue statement (or alleged
untrue statement) of any material fact contained in any Registration
Statement, prospectus, offering circular, or other document, or any
amendment or supplement
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thereto, incident to any registration, qualification, or compliance
(or in any related registration statement, notification or the like)
or any omission (or alleged omission) to state therein any material
fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of any rule or
regulation promulgated under the Securities Act applicable to the
Company and relating to any action or inaction required of the Company
in connection with any such registration, qualification, or
compliance, and the Company will reimburse each such Holder, officer,
director, partner, and controlling person for any legal or other
expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability, or action;
PROVIDED, HOWEVER, that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, or liability
arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company in an instrument
duly executed by such Holder, officer, director, partner, or
controlling person and stated to be exclusively and specifically for
use therein. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Holder,
officer, director, partner, or controlling person.
(b) Indemnification by the Holders. Each Holder will indemnify
the Company, its officers and directors, and each person, if any, who
controls any thereof (within the meaning of the Securities Act) and,
if required by the underwriter effecting the related registration,
such underwriter, and their respective successors in title and assigns
against any and all claims, losses, damages, and liabilities (or
actions in respect thereof) with respect to any untrue statement (or
alleged untrue statement) of any material fact contained in any
Registration Statement, prospectus, offering circular, or other
document incident to any registration, qualification or compliance (or
in any related registration statement, notification or the like) or
any omission (or alleged omission) to state therein any material fact
required to be stated therein or necessary to make the statement
therein not misleading, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company through
an instrument duly executed by such Holder specifically stating that
it is for use in the preparation of such Registration Statement,
prospectus, offering circular, or other document; and each Holder will
reimburse the Company and each other person indemnified pursuant to
this paragraph (b) for any legal and any other expenses reasonably
incurred in connection with investigating or defending any such claim,
loss, damage, liability or action; PROVIDED, HOWEVER, that such
Holder's liability under such indemnification shall be limited to the
net sales proceeds actually received by such Holder from the sale of
Registrable Securities pursuant to such Registration Statement,
prospectus, offering circular, or other document.
(c) Indemnification Proceedings. Each party entitled to
indemnification pursuant to this Section 6 (the "indemnified party")
shall give notice to the party required to provide indemnification
pursuant to this Section 6 (the "indemnifying party") promptly after
such indemnified party acquires actual knowledge of any claim as to
which indemnity may be sought, and shall permit the indemnifying party
(at its expense) to assume the defense of any claim or any litigation
resulting therefrom; PROVIDED that counsel for the indemnifying party,
who shall conduct the defense of such claim or litigation, shall be
reasonably acceptable to the indemnified party, and the indemnified
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party may participate in such defense at such party's expense; and
PROVIDED, FURTHER, that the failure by any indemnified party to give
notice as provided in this paragraph (c) shall not relieve the
indemnifying party of its obligations under this Section 6 except to
the extent that the indemnifying party is damaged as a result of the
failure to give notice. No indemnifying party, in the defense of any
such claim or litigation, shall, except with the consent of each
indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation. The
reimbursement required by this Section 6 shall be made by periodic
payments during the course of the investigation or defense, as and
when bills are received or expense, loss, damage, or liability is
incurred.
8. RULE 144 REQUIREMENTS. The Company will make publicly available
and available to the Holders of Registrable Securities, pursuant to Rule 144 of
the Commission under the Securities Act, such information as shall be necessary
to enable the Holders of Registrable Securities to make sales of Registrable
Securities pursuant to such rule. The Company will furnish to any Holder of
Registrable Securities, upon request made by such Holder at any time, a written
statement signed by the Company, addressed to such Holder, describing briefly
the action the Company has taken or proposes to take to comply with the current
public information requirements of Rule 144. The Company will, at the request of
any Holder of Registrable Securities, upon receipt from such Holder of a
certificate certifying (i) that such Holder has held such Registrable Securities
for a period of not less than one (1) year, (ii) that such Holder has not been
an affiliate (as defined in Rule 144) of the Company for more than the ninety
(90) preceding days, and (iii) as to such other matters as may be appropriate in
accordance with such rule, remove from the stock certificates representing such
Registrable Securities that portion of any restrictive legend which relates to
the registration provisions of the Securities Act, PROVIDED, HOWEVER, in the
event that ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP is no longer counsel to Company, counsel to
Holder may provide such instructions to the transfer agent regarding the removal
of the restrictive legend.
9. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Company will not, at any time
after the date of the Purchase Agreement, enter into any agreement or
contract (whether written or oral) with respect to any of its
securities that prevents the Company from complying in any respect
with the registration rights granted by the Company to the Holders of
Registrable Securities pursuant to this Agreement.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this paragraph (b), may not be amended,
modified, or supplemented, and any waiver or consent to or any
departure from any of the provisions of this Agreement may not be
given and shall not become or be effective, unless and until (in each
case) the Company shall have received the prior written consent of the
Holders of a majority of the Registrable Securities for any such
amendment, modification, supplement, waiver, or consent.
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(c) Permitted Transferees. All of the agreements contained in,
and all of the rights granted by the Company pursuant to this
Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, successors, and assigns. In
addition, whether or not an express assignment shall have been made,
the provisions of this Agreement that are for the benefit of the
parties hereto other than the Company shall also benefit of and be
enforceable by any subsequent holder of any Registrable Securities,
PROVIDED, that the transfer Registrable Secutities to such subsequent
holder shall have been made in accordance with applicable laws and
regulations and all applicable provisions of the Purchase Agreement.
(d) Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be
delivered by hand, sent via overnight courier, sent by facsimile, or
mailed by first class certified or registered mail, return receipt
requested, postage prepaid:
if to the Company, to:
Able Laboratories, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
with a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
or to such other person at such other place as the Company shall designate to
the Holders in writing; and if to the Holders, at its address as set forth in
Exhibit A to the Purchase Agreement, or at such other address or addresses as
may have been furnished to the Company in writing.
Notices provided in accordance with this Section 9(d) shall be deemed delivered
(i) upon personal delivery with signature required, (ii) one Business Day after
they have been sent to the recipient by reputable overnight courier service
(charges prepaid and signature required) (iii) upon confirmation, answer back
received, of successful transmission of a facsimile message containing such
notice if sent between 9 a.m. and 5 p.m., local time of the recipient, on any
Business Day, and as of 9 a.m. local time of the recipient on the next Business
Day if sent at any other time, or (iv) three Business Days after deposit in the
mail.
(e) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but both of
which, when taken together, shall constitute but one instrument, and
shall become effective when one or more counterparts have been signed
by each party hereto and delivered to the other party.
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(f) Term. The agreements of the Company contained in this
Agreement shall continue in full force and effect so long as any
Holder holds any Registrable Securities.
(g) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal, or unenforceable, the
validity, legality, and enforceability of any such provision in every
other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(h) Remedies. The parties agree that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach
and hereby agrees to waive the defense in any action for specific
performance of such an obligation that a remedy at law would be
adequate.
(i) Governing Law. The provisions of this Agreement shall be
governed by and construed in accordance with the laws (other than the
choice-of-law rules) of the State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written by their duly authorized
representatives shown below:
ABLE LABORATORIES, INC.
By:
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Name:
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Title:
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