For Execution
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT is made as of September 30,
1998 by and between Electropharmacology, Inc., a Delaware corporation (the
Company"), and Elan International Services, Ltd., a Bermuda corporation
("EIS"). Capitalized terms used herein and not defined shall have the meanings
ascribed to them in the securities purchase agreement dated as of the date
hereof, by and between the parties hereto (the "Purchase Agreement").
R E C I T A L S:
A. Pursuant to the Purchase Agreement, the Company has issued to EIS
(x) shares of convertible preferred stock, par value $.01 per share (the
"Preferred Stock"), and (y) a warrant (the "Warrant"), to purchase up to
1,000,000 shares of common stock, par value $.01 per share (the "Common Stock")
of the Company, and (z) in the event that EIS shall undertake the Subsequent
Funding, the Company will issue to EIS, on the Subsequent Closing Date, a
certain number of shares of Common Stock (the "Subsequent Common Stock";
together with the Preferred Stock and the Warrant, the "Securities").
B. The Initial Closing under the Purchase Agreement has occurred on the
date hereof, it being a condition to such closing that the parties execute and
deliver this Agreement.
C. The parties desire to set forth herein their agreement related to
the granting of certain registration rights to the Holders (as defined below) of
the Securities issued pursuant to the Purchase Agreement, Common Stock issuable
upon conversion, repayment, exercise or exchange of any of the Securities, and
any other Common Stock hereinafter acquired by EIS or its Affiliates.
A G R E E M E N T:
The parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
"Affiliate" of any Person shall mean any other Person controlling,
controlled by or under common control with such particular Person. In the case
of a natural Person, his Affiliates include members of such Person's immediate
family, natural lineal descendants of such Person or a trust for the exclusive
benefit of such Person and his immediate family and natural lineal descendants.
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"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Holders", "holders" or "Holders of Registrable Securities" shall mean
EIS and any Person who shall have acquired Registrable Securities from EIS as
permitted herein, either individually or jointly as the case may be.
"Person" shall mean an individual, a partnership, a company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental quasi-governmental entity or any department,
agency or political subdivision thereof.
"Registrable Securities" means (i) any Common Stock issued or issuable
upon conversion of or in connection with the Securities or otherwise acquired by
any Holders, and (ii) any Common Stock issued or issuable in respect of the
Securities upon any stock split, stock dividend, recapitalization or similar
event; excluding in all cases, however, any Registrable Securities sold by a
Person in a transaction (including a transaction pursuant to a registration
statement under this Agreement and transaction pursuant to Rule 144 promulgated
under the Securities Act) in which registration rights are not transferred
pursuant to Section 9 hereof.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, other than Selling
Expenses, incurred by the Company in complying with Sections 2 or 3 hereof,
including without limitation, all registration, qualification and filing fees,
exchange listing fees, printing expenses, escrow fees, fees and disbursements of
counsel for the Company, blue sky fees and expenses, the expense of any special
audits incident to or required by any such registration and the reasonable fees
and disbursements of one counsel for the Holders, such counsel to be selected by
Holders holding a majority of the Registrable Securities held by the Holders and
included in such registration.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders and the costs of any accountants, counsel or other experts retained
by the Holders.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended,
or any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
2. Demand Registrations. (a) Requests for Registration. Any Holder
which holds
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Registrable Securities representing at least 1,250,000 shares of Common
Stock (subject to the anti-dilution adjustments as described in Section 4
of the Warrant) has the right at any time from time to time, to request
registration under the Securities Act of all or part of their Registrable
Securities on Form ▇-▇, ▇-▇ or S-3 (if available) or any similar registration
(each, a "Demand Registration"). Each written request for a Demand Registration
(as defined below) shall specify the approximate number of Registrable
Securities requested to be registered. Within 10 days after receipt of any such
request, the Company will give written notice of such requested registration to
all other Holders of Registrable Securities and, if they request to be included
in such registration, the Company shall include such Holders' Registrable
Securities in such offering if they have responded affirmatively within 15 days
after the receipt of the Company's notice. The Holders in aggregate will be
entitled to request two Demand Registrations. A registration will not count as
one of the permitted Demand Registrations until it has become effective (unless
such Demand Registration has not become effective due solely to the fault of the
Holders requesting such registration, including a request by such Holders that
such registration be withdrawn). The Company will pay all Registration Expenses
in connection with any Demand Registration whether or not it has become
effective.
(b) Priority on Demand Registrations. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering,
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in such offering without adversely affecting the marketability of
the offering, the Company will include in such registration:
(i) first, the Registrable Securities requested to
be included in such registration by the Holders (or, if necessary, such
Registrable Securities prorata among the Holders thereof based upon the number
of Registrable Securities owned by each such Holder); and
(ii) thereafter, other securities requested to be
included in such registration.
(c) Restrictions on Demand Registrations. The Company may
postpone for up to three months in any 12 month period, the filing or the
effectiveness of a registration statement for a Demand Registration if the
Company determines in good faith that such Demand Registration would reasonably
be expected to have a material adverse effect on any proposal or plan by the
Company to engage in any acquisition of assets (other than in the ordinary
course of business) or any merger, consolidation, tender offer or similar
transaction; provided, that in such event, the Holders initially requesting such
Demand Registration will be entitled to withdraw such request and, if such
request is withdrawn, such Demand Registration will not count as one of the
permitted Demand Registrations hereunder and the Company will pay all
Registration Expenses in connection with such registration.
(d) Selection of Underwriters. The Holders will have the right
to select the investment banker(s) and manager(s) to administer an offering
pursuant to a Demand
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Registration, subject to the Company's approval, which will not be unreasonably
withheld or delayed.
3. Piggyback Registrations. (a) Right to Piggyback. The Company shall
include all Registrable Securities beneficially owned by the Holder in its
Registration Statement on Form S-1 (the "S-1") currently contemplated to be
filed with the U.S. Securities and Exchange Commission on or about October 15,
1998. To the extent the S-1 is not declared effective, or such effectiveness
shall lapse, whenever the Company proposes to register any of its securities
under the Securities Act (each, a "Piggyback Registration"), the Company will
give prompt written notice to all Holders of Registrable Securities of its
intention to effect such a registration and, subject to Section 3(b) and the
other terms of this Agreement, will include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 15 days after the receipt of the Company's notice.
(b) Priority on Piggyback Registrations. If a Piggyback
Registration is an underwritten registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering without adversely affecting the
marketability of the offering, the Company will include in such registration:
(i) first, the securities the Company proposes to sell;
and
(ii) second, the Registrable Securities requested to be
included in such registration by the Holders and any securities requested to be
included in such registration by any other Person, pro rata among the Holders
of such Registrable Securities and such other Persons, on the basis of the
number of shares owned by each of such Holders.
(c) Right to Terminate Registration. If, at any time after
giving written notice of its intention to register any of its securities as set
forth in Section 3(a) and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register such securities, the Company may, at
its election, give written notice of such determination to each Holder of
Registrable Securities and thereupon be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not from
its obligation to pay the Registration Expenses in connection therewith as
provided herein).
(d) Selection of Underwriters. The Company will have the
right to select the investment banker(s) and manager(s) to administer an
offering pursuant to a Piggyback Registration.
4. Additional Rights. (a) Registration Requirement. To the extent that
shares of Common Stock have not been sold pursuant to a registration statement
effected in accordance with Sections 2 or 3 above, the Company shall cause to be
registered Common Stock:
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(i) issuable upon conversion of the Preferred Stock within 60
days of the date of conversion thereof;
(ii) issuable upon exercise of the Warrant within 60 days of
the initial exercise thereof; and
(iii) issuable as Subsequent Common Stock within 15 months of
the Subsequent Closing Date.
(b) Seniority. Except as provided in this Agreement, so long
as any Holder owns any Registrable Securities, the Company will not grant to any
Persons the right to request the Company to register any equity securities of
the Company, or any securities convertible or exchangeable into or exercisable
for such securities, which is superior to or in conflict with the rights granted
to the Holders hereunder, without the prior written consent of the Holders of at
least 50% of the Registrable Securities held by the Holders; it being understood
that the Company may grant rights to other Persons to (i) participate in
Piggyback Registrations so long as such rights are subordinate or pari passu to
the rights of the holders of Registrable Securities with respect to such
Piggyback Registrations and (ii) request registrations so long as the Holders of
Registrable Securities are entitled to participate in any such registrations
with such Persons pro rata on the basis of the number of shares owned by each
such Holder.
(c) Limitation. The Registration Rights described in Sections
2 and 3 above and this Section 4 shall be of no force and effect in the event
that all Registrable Securities issued pursuant to the Purchase Agreement,
including Registrable Securities issued upon exercise of the Warrants, are
registered; provided, that any Registration Statement covering the Registrable
Securities so registered, remains current and in effect, and upon such
Registration Statement's lapse of effectiveness, the Registration Rights
described herein shall have force and effect.
5. Expenses of Registration. Except as otherwise provided herein, all
Registration Expenses incurred in connection with all registrations pursuant to
Sections 2, 3 and 4 shall be borne by the Company. Unless otherwise stated, all
Selling Expenses relating to securities registered on behalf of the Holders of
Registrable Securities shall be borne by such holders.
6. Holdback Agreements. (a) The Company agrees (i) not to effect any
public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and during the 60-day period beginning on the effective date
of any underwritten Demand Registration or any underwritten Piggyback
Registration (except as part of such underwritten registration or pursuant to
registrations on Form S-8 or any successor form), unless the underwriters
managing the registered public offering otherwise agree, and (ii) to use
commercially reasonable efforts to cause each holder of at least 5% (on a
fully-diluted basis) of its Common Stock, or any securities convertible into or
exchangeable or exercisable for Common Stock, purchased from the Company at any
time after the date of this Agreement (other than in a registered public
offering) to agree not to effect any public sale or distribution (including
sales pursuant to Rule 144) of any
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such securities during such periods (except as part of such underwritten
registration, if otherwise permitted), unless the underwriters managing the
registered public offering otherwise agree.
(b) Each holder of Registrable Securities whose Registrable
Securities are eligible for inclusion in a Registration Statement filed pursuant
to Sections 2 or 4 hereof agrees, if requested by the managing underwriter or
underwriters in an underwritten offering of any Registrable Securities, not to
effect any public sale or distribution of Registrable Securities, including a
sale pursuant to Rule 144 (or any similar provision then effect) under the
Securities Act (except as part of such underwritten registration), during the
seven-day period prior to, and during the 90-day period or such shorter period
as may be agreed to by the parties hereto) following the effective date of such
Registration Statement to the extent timely notified in writing by the Company
or the managing underwriter or underwriters.
6. Registration Procedures. Whenever the Holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company will use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of distribution thereof, and pursuant thereto the Company will
as expeditiously as possible:
(a) prepare and file with the Commission a registration
statement on any form for which the Company qualifies with respect to such
Registrable Securities and use commercially reasonable efforts to cause such
registration statement to become effective (provided, that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company will (i) furnish to the counsel selected by the Holders copies of
all such documents proposed to be filed, which documents will be subject to the
reasonable review of such counsel, and (ii) notify each holder of Registrable
Securities covered by such registration of any stop order issued or threatened
by the Commission);
(b) 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
a period of not less than nine months and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement;
(c) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use commercially reasonable efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of such
jurisdiction as any seller reasonably requests and do any and all other acts and
things which may be reasonably necessary
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or advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller (provided that
the Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 6(d), (ii) subject itself to taxation in any jurisdiction or (iii)
consent to general service of process in any such jurisdiction);
(e) notify each seller of such 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 such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company will prepare
a supplement of amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use commercially
reasonable efforts to secure designation of all such Registrable Securities
covered by such registration statement as a NASDAQ National Market System
security within the meaning of Rule 11Aa2-1 of the Commission or, failing that,
to secure NASDAQ authorization for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two market
makers to register as such with respect to such Registrable Securities with the
NASD;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities;
(i) make available for inspection by a representative of the
Holders of Registrable Securities included in the registration statement, any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonable requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission, and make
available to its security holders, as
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soon as reasonably practicable, an earnings statement covering the period of at
least 12 months beginning with the first day of the Company's first full
calendar quarter after t he effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder.
(k) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company will use its commercially reasonable efforts promptly
to obtain the withdrawal of such order;
(l) in the event that an offering is underwritten, use
commercially reasonable efforts to obtain a so-called "cold comfort" letter from
the Company's independent public accountants in customary form and covering such
matters of the type customarily covered by cold comfort letters; and
(m) undertake such other actions and do all other things which
the Holders shall reasonably request and which shall be customary at the time
for such registrations.
7. Indemnification. (a) The Company agrees to indemnify, to the fullest
extent permitted by applicable law, each Holder of Registrable Securities, its
officers and directors and each Person who controls such Holder (within the
meaning of the Securities Act) against all losses, claims, damages, liabilities,
expenses or any amounts paid in settlement of any litigation, investigation or
proceeding commenced or threatened (collectively, "Claims") to which each such
indemnified party may become subject under the Securities Act insofar as such
Claim arose in connection with any registration effected pursuant to this
Agreement, and out of (i) any untrue or alleged untrue statement of material
fact contained, on the effective date thereof, in any registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto, (ii) any 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 (iii) any violations by the
Company of any federal, state or common law rule or regulation applicable to the
Company and relating to action required of or inaction by the Company in
connection with any such registration, except insofar as the same are caused by
or contained in any information furnished in writing to the Company by such
Holder expressly for use therein or by such Holder's failure to deliver a copy
of the registration statement or prospectus or any amendments or supplements
thereto after the Company has furnished such Holder with a sufficient number of
copies of the same. In connection with an underwritten offering, the Company
will indemnify such underwriters, their officers and directors and each Person
who controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the holders
of Registrable Securities.
(b) In connection with any registration statements in which a
Holder of Registrable Securities is participating, each such Holder will furnish
to the Company in writing such customary information and affidavits as the
Company reasonably requests for use in
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connection with any such registration statement or prospectus (the
"Seller's Information") and, to the fullest extent permitted
by applicable law, will indemnify the Company, its directors and
officers and each Person who controls the Company (within the meaning of the
Securities Act) against any and all Claims to which each such indemnified party
may become subject under the Securities Act insofar as such Claim arose in
connection with such Registration Statement or prospectus, and out of (i) any
untrue or alleged untrue statement of material fact contained, on the effective
date thereof, in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto, (ii) any 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 (iii) any
violations by such Person of any federal, state or common law rule or regulation
applicable to such Person and relating to action required of or inaction by such
Person in connection with any such registration; provided that with respect to a
Claim arising pursuant to clause (i) or (ii) above, the material misstatement or
omission is contained in such Seller's Information; provided, further, that the
obligation to indemnify will be individual to each Holder and will be limited to
the net amount of proceeds received by such Holder from the sale of Registrable
Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (but the failure to provide such notice shall
not release the indemnifying party of its obligation under paragraphs (a) and
(b), unless and then only to the extent that, the indemnifying party has been
prejudiced by such failure to provide such notice) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for
all parties indemnified by such indemnifying party with respect
to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim.
(d) The indemnifying party shall not be liable to indemnify an
indemnified party for any settlement, or consent to judgment of any such action
effected without the indemnifying party's consent (but such consent will not be
unreasonably withheld). Furthermore, the indemnifying party shall not, except
with the approval 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 each indemnified party of a
release from all liability in respect to such claim or litigation without any
payment or consideration provided by each such indemnified party.
(e) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under clauses (a) and (b) above in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
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result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the Company,
the underwriters, the sellers of Registrable Securities and any other sellers
participating in the registration statement from the sale of shares pursuant to
the registered offering of securities to which indemnity is sought but also the
relative fault of the Company, the underwriters the sellers of Registrable
Securities and any other sellers participating in the registration statement in
connection with the statement or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the underwriters,
the sellers of Registrable Securities and any other sellers participating in the
registration statement shall be deemed to be based on the relative relationship
of the total net proceeds from the offering (before deducting expenses) to the
Company, the total underwriting commissions and fees from the offering (before
deducting expenses) to the underwriters and the total net proceeds from the
offering (before deducting expenses) to the sellers of Registrable Securities
and any other sellers participating in the registration statement. The relative
fault of the Company, the underwriters, the sellers of Registrable Securities
and any other sellers participating in the registration statement 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 Company and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(f) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling person
of such indemnified party and will survive the transfer of securities.
8. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements, (b) as expeditiously as possible notifies the
Company of the occurrence of any event as a result of which such prospectus
contains an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (c) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
9. Transfer of Registration Rights. The rights granted to any Person
under this Agreement may be assigned to a transferee or assignee in connection
with any transfer or assignment of Registrable Securities by a Holder; provided,
that: (a) such transfer may otherwise be effected in accordance with applicable
securities laws, (b) if not already a party hereto, the assignee or transferee
agrees in writing prior to such transfer to be bound by the provisions of this
Agreement applicable to the transferor, (c) such transferee shall own
Registrable Securities representing at least 1,250,000 shares of Common Stock
(subject to the anti-dilution adjustments as described in Section 4 of the
Warrant), and (d) EIS shall act as agent and representative for such Holder for
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the giving and receiving of notices hereunder.
10. Information by Holder. Each Holder shall furnish the Company such
written information regarding such Holder and any distribution proposed by such
Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration qualification or
compliance referred to in this Agreement.
11. Exchange Act Compliance. The Company shall comply with all of the
reporting requirements of the 1934 Act applicable to it 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 Registrable
Securities. The Company shall cooperate with each Purchaser in supplying such
information as may be necessary for such Purchaser to complete and file any
information reporting forms presently or hereafter required by the Commission as
a condition to the availability of Rule 144.
12. Limitation on Registration. The Company shall not be obligated to
effect a registration of any Holder's Registrable Securities pursuant to
Sections 2 or 3 hereof (a) if all of the Registrable Securities have been sold
under Rule 144, Regulation S or similar provision under the Securities Act so
that there is no further restriction on the transfer by the transferee, or (b)
in accordance with Section 4(c) hereof.
13. Miscellaneous. (a) No Inconsistent Agreements. The Company will
not hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the Holders of Registrable
Securities in this Agreement.
(b) Remedies. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
(c) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only upon the
prior written consent of the Company and Holders of at least 50% of the
Registrable Securities; provided, that without the prior written consent of all
the Holders, no such amendment or waiver shall reduce the foregoing percentage.
(d) Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
Holders of Registrable Securities are also for the benefit of, and enforceable
by, any
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subsequent holder of Registrable Securities.
(e) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(f) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
will constitute one and the same Agreement.
(g) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
(h) Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement and the exhibits and schedules
hereto will be governed by the internal law, and not the law of conflicts, of
New York.
(i) Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient or by facsimile, one day after being
sent to the recipient by reputable overnight courier service
(charges prepaid) or three days after being mailed to the recipient
by certified or registered mail, return receipt requested and postage
prepaid. Such notices, demands and other communications will be sent to the
parties hereto at the addresses indicated on the signature page hereto and to
the Company at the address indicated below:
Electropharmacology, Inc.
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Attention: President
(j) Termination. This Agreement shall terminate on the date as
of which each Holder has sold all remaining Registrable Securities in a
transaction or transactions of the type described in Section 12 hereof.
[Signature page follows]
12
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
Electropharmacology, Inc.
By:____/s/ Arup Sen_______________
Name: ▇▇▇▇ ▇▇▇
Title: President, Chairman & CEO
Elan International Services, Ltd.
By:___/s/ ▇▇▇▇▇ Insley______________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President & CFO
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Attention: Director
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇