REGISTRATION RIGHTS AGREEMENT
Exhibit
10.85
This
REGISTRATION RIGHTS AGREEMENT (this
“Agreement”), dated as of July 6, 2011, is by
and among Emisphere Technologies, Inc., a Delaware corporation with headquarters located at 000
Xxxxx Xxxxxx Xx, Xxxxx 000, Xxxxx Xxxxxx, Xxx Xxxxxx 00000 (the “Company”), and each of the
undersigned buyers (each, a “Buyer,” and collectively, the “Buyers”).
RECITALS
A. In connection with the Securities Purchase Agreement by and among the parties hereto, dated
as of June 30, 2011 (the “Securities Purchase Agreement”), the Company has agreed, upon the terms
and subject to the conditions of the Securities Purchase Agreement, to issue and sell to each Buyer
(i) shares (the “Common Shares”) of the Company’s common stock, $0.01 par value (the “Common
Stock”) and (ii) the Warrants (as defined in the Securities Purchase Agreement) which will be
exercisable to purchase Warrant Shares (as defined in the Securities Purchase Agreement) in
accordance with the terms of the Warrants.
B. To induce the Buyers to consummate the transactions contemplated by the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under the Securities Act
of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute
(collectively, the “1933 Act”), and applicable state securities laws.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and each of the Buyers hereby agree as follows:
1. Definitions.
Capitalized terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement. As used in this Agreement, the following
terms shall have the following meanings:
(a) “Business Day” means any day other than Saturday, Sunday or any other day on which
commercial banks in New York, New York are authorized or required by law to remain closed.
(b) “Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.
(c) “Effective Date” means the date that the applicable Registration Statement has been
declared effective by the SEC.
(d) “Effectiveness Deadline” means (i) with respect to the initial Registration Statement
required to be filed pursuant to Section 2(a), the earlier of the (A) 60th calendar day
after the Closing Date (or the 90th calendar day after the Closing Date in the event
that such
Registration Statement is subject to review by the SEC) and (B) 2nd Business Day
after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that
such Registration Statement will not be reviewed or will not be subject to further review and (ii)
with respect to any additional Registration Statements that may be required to be filed by the
Company pursuant to this Agreement, the earlier of the (A) 40th calendar day following
the date on which the Company was required to file such additional Registration Statement (or the
90th calendar day after such date in the event that such Registration Statement is
subject to review by the SEC) and (B) 2nd Business Day after the date the Company is
notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement
will not be reviewed or will not be subject to further review.
(e) “Filing Deadline” means (i) with respect to the initial Registration Statement required to
be filed pursuant to Section 2(a), the 20th calendar day after the Closing Date and (ii)
with respect to any additional Registration Statements that may be required to be filed by the
Company pursuant to this Agreement, the date on which the Company was required to file such
additional Registration Statement pursuant to the terms of this Agreement.
(f) “Investor” means a Buyer or any transferee or assignee of any Registrable Securities or
Warrants, as applicable, to whom a Buyer assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or
assignee thereof to whom a transferee or assignee of any Registrable Securities or Warrants, as
applicable, assigns its rights under this Agreement and who agrees to become bound by the
provisions of this Agreement in accordance with Section 9.
(g) “Person” means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization or a government or any department or agency
thereof.
(h) “Register,” “Registered,” and “Registration” refer to a registration effected by preparing
and filing one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule
415 and the declaration of effectiveness of such Registration Statement(s) by the SEC.
(i) “Registrable Securities” means (i) the Common Shares, (ii) the Warrant Shares and (iii)
any capital stock of the Company issued or issuable with respect to the Common Shares, the Warrant
Shares or the Warrants, including, without limitation, (1) as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise and (2) shares of capital stock
of the Company into which the shares of Common Stock are converted or exchanged and shares of
capital stock of a Successor Entity (as defined in the Warrants) into which the shares of Common
Stock are converted or exchanged, in each case, without regard to any limitations on exercise of
the Warrants.
(j) “Registration Statement” means a registration statement or registration statements of the
Company filed under the 1933 Act covering Registrable Securities.
(k) “Required Holders” means the holders of at least a majority of the Registrable Securities.
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(l) “Required Registration Amount” means the sum of (i) the Common Shares issued and (ii) the
maximum number of Warrant Shares issued and issuable pursuant to the Warrants as of the Trading Day
(as defined in the Warrants) immediately preceding the applicable date of determination (without
taking into account any limitations on the exercise of the Warrants set forth therein), all subject
to adjustment as provided in Section 2(d).
(m) “Rule 144” means Rule 144 promulgated by the SEC under the 1933 Act, as such rule may be
amended from time to time, or any other similar or successor rule or regulation of the SEC that may
at any time permit the Investors to sell securities of the Company to the public without
registration.
(n) “Rule 415” means Rule 415 promulgated by the SEC under the 1933 Act, as such rule may be
amended from time to time, or any other similar or successor rule or regulation of the SEC
providing for offering securities on a continuous or delayed basis.
(o) “SEC” means the United States Securities and Exchange Commission or any successor thereto.
2. Registration.
(a) Mandatory Registration. The Company shall prepare and, as soon as practicable,
but in no event later than the Filing Deadline, file with the SEC an initial Registration Statement
on Form S-3 covering the resale of all of the Registrable Securities, provided that such initial
Registration Statement shall register for resale at least the number of shares of Common Stock
equal to the Required Registration Amount as of the date such Registration Statement is initially
filed with the SEC, provided further that if Form S-3 is unavailable for such a registration, the
Company shall use such other form as is required by Section 2(c). Such initial Registration
Statement, and each other Registration Statement required to filed pursuant to the terms of this
Agreement, shall contain (except if otherwise directed by the Required Holders) the “Selling
Stockholders” and “Plan of Distribution” sections in substantially the form attached
hereto as Exhibit A. The Company shall use its reasonable best efforts to have such initial
Registration Statement, and each other Registration Statement required to filed pursuant to the
terms of this Agreement, declared effective by the SEC as soon as practicable, but in no event
later than the applicable Effectiveness Deadline for such Registration Statement.
(b) Legal Counsel. Subject to Section 5 hereof, the Investor holding the largest
amount of Registrable Securities to be registered on the applicable Registration Statement (the
“Lead Investor”) shall have the right to select one (1) legal counsel to review and oversee, solely
on its behalf, any registration pursuant to this Section 2 (the “Legal Counsel”).
(c) Ineligibility to Use Form S-3. In the event that Form S-3 is not available for the
registration of the resale of Registrable Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on another appropriate form reasonably acceptable to the
Required Holders and (ii) undertake to register the resale of the Registrable Securities on Form
S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness
of all Registration Statements then in effect until such time as a Registration Statement on Form
S-3 covering the resale of all the Registrable Securities has been declared effective by the SEC.
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(d) Sufficient Number of Shares Registered. In the event the number of shares
available under any Registration Statement is insufficient to cover all of the Registrable
Securities required to be covered by such Registration Statement, the Company shall amend such
Registration Statement (if permissible), or file with the SEC a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover at least the Required
Registration Amount as of the Trading Day immediately preceding the date of the filing of such
amendment or new Registration Statement, in each case, as soon as practicable, but in any event not
later than fifteen (15) days after the necessity therefor arises (but taking account of any
position of the staff of the SEC (the “Staff”) with respect to the date on which the Staff will
permit such amendment to the Registration Statement and/or such new Registration Statement (as the
case may be) to be filed with the SEC). The Company shall use its reasonable best efforts to cause
such amendment to such Registration Statement and/or such new Registration Statement (as the case
may be) to become effective as soon as practicable following the filing thereof with the SEC, but
in no event later than the applicable Effectiveness Deadline for such Registration Statement. For
purposes of the foregoing provision, the number of shares available under a Registration Statement
shall be deemed “insufficient to cover all of the Registrable Securities” if at any time the number
of shares of Common Stock available for resale under the applicable Registration Statement is less
than the product determined by multiplying (i) the Required Registration Amount as of such time by
(ii) 0.90. The calculation set forth in the foregoing sentence shall be made without regard to any
limitations on exercise of the Warrants (and such calculation shall assume that the Warrants are
then fully exercisable for shares of Common Stock at the then-prevailing applicable Exercise
Price).
(e) Registrable Securities. Any security issued by the Company that constitutes a
Registrable Security shall cease to be a Registrable Security upon the earlier to occur of (i) the
sale of such security pursuant to a Registration Statement or (ii) the first date on which such
security may be sold without restriction pursuant to Rule 144 (including, without limitation,
volume restrictions) and without the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) (assuming, for purposes of the foregoing determination,
“cashless exercise” of all Warrants).
(f) Offering. Notwithstanding anything to the contrary contained in this Agreement, in
the event the Staff or the SEC seeks to characterize any offering pursuant to a Registration
Statement filed pursuant to this Agreement as constituting an offering of securities by, or on
behalf of, the Company, or in any other manner, such that the Staff or the SEC do not permit such
Registration Statement to become effective and used for resales in a manner that does not
constitute such an offering and that permits the continuous resale at the market by the Investors
participating therein (or as otherwise may be acceptable to each Investor) without being named
therein as an “underwriter,” then the Company shall reduce the number of shares to be included in
such Registration Statement by all Investors until such time as the Staff and the SEC shall so
permit such Registration Statement to become effective as aforesaid. In making such reduction, the
Company shall reduce the number of shares to be included by all Investors on a pro rata basis
(based upon the number of Registrable Securities otherwise required to be included for each
Investor) unless the inclusion of shares by a particular Investor or a particular set of Investors
are resulting in the Staff or the SEC’s “by or on behalf of the Company” offering position, in
which event the shares held by such Investor or set of Investors shall be the only shares subject
to reduction (and if by a set of Investors on a pro rata basis by such Investors or on such other
basis
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as would result in the exclusion of the least number of shares by all such Investors). In
addition, in the event that the Staff or the SEC requires any Investor seeking to sell securities
under a Registration Statement filed pursuant to this Agreement to be specifically identified as
an “underwriter” in order to permit such Registration Statement to become effective, and such
Investor does not consent to being so named as an underwriter in such Registration Statement, then,
in each such case, the Company shall reduce the total number of Registrable Securities to be
registered on behalf of such Investor, until such time as the Staff or the SEC does not require
such identification or until such Investor accepts such identification and the manner thereof. Any
reduction pursuant to this paragraph will first reduce all Registrable Securities other than those
issued pursuant to the Securities Purchase Agreement. In the event of any reduction in Registrable
Securities pursuant to this paragraph, an affected Investor shall have the right to require, upon
delivery of a written request to the Company signed by such Investor, the Company to file a
registration statement within thirty (30) days of such request (subject to any restrictions imposed
by Rule 415 or required by the Staff or the SEC) for resale by such Investor in a manner acceptable
to such Investor, and the Company shall following such request cause to be and keep effective such
registration statement in the same manner as otherwise contemplated in this Agreement
for registration statements hereunder, in each case until such time as: (i) all Registrable
Securities held by such Investor have been registered and sold pursuant to an effective
Registration Statement in a manner acceptable to such Investor or (ii) all Registrable Securities
may be resold by such Investor without restriction (including, without limitation, volume
limitations) pursuant to Rule 144 (taking account of any Staff position with respect to “affiliate”
status) and without the need for current public information required by Rule 144(c)(1) (or Rule
144(i)(2), if applicable) (assuming, for purposes of the foregoing determination, “cashless
exercise” of all Warrants), or (iii) such Investor agrees to be named as an underwriter in any such
Registration Statement in a manner acceptable to such Investor as to all Registrable Securities
held by such Investor and that have not theretofore been included in a Registration Statement under
this Agreement (it being understood that the special demand right under this sentence may be
exercised by an Investor multiple times and with respect to limited amounts of Registrable
Securities in order to permit the resale thereof by such Investor as contemplated above).
(g) [Intentionally Omitted]
(h) Allocation of Registrable Securities. The initial number of Registrable Securities
included in any Registration Statement and any increase in the number of Registrable Securities
included therein shall be allocated pro rata among the Investors based on the number of Registrable
Securities held by each Investor at the time such Registration Statement covering such initial
number of Registrable Securities or increase thereof is declared effective by the SEC. In the event
that an Investor sells or otherwise transfers any of such Investor’s Registrable Securities, each
transferee or assignee (as the case may be) that becomes an Investor shall be allocated a pro rata
portion of the then-remaining number of Registrable Securities included in such Registration
Statement for such transferor or assignee (as the case may be). Any shares of Common Stock included
in a Registration Statement and which remain allocated to any Person which ceases to hold any
Registrable Securities covered by such Registration Statement shall be allocated to the remaining
Investors, pro rata based on the number of Registrable Securities then held by such Investors which
are covered by such Registration Statement.
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3. Related Obligations.
The Company shall use its reasonable best efforts to effect the registration of the
Registrable Securities in accordance with the intended method of disposition thereof, and, pursuant
thereto, the Company shall have the following obligations:
(a) The Company shall promptly prepare and file with the SEC a Registration Statement with
respect to all the Registrable Securities (but in no event later than the applicable Filing
Deadline) and use its reasonable best efforts to cause such Registration Statement to become
effective as soon as practicable after such filing (but in no event later than the Effectiveness
Deadline). Subject to Allowable Grace Periods (as defined below), the Company shall keep each
Registration Statement effective (and the prospectus contained therein available for use) pursuant
to Rule 415 for resales by the Investors on a delayed or continuous basis at then-prevailing market
prices (and not fixed prices) at all times until the earlier of (i) the date as of which all of the
Investors may sell all of the Registrable Securities required to be covered by such Registration
Statement (disregarding any reduction pursuant to Section 2(f)) without restriction pursuant to
Rule 144 (including, without limitation, volume restrictions) and without the need for current
public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) (assuming, for
purposes of the foregoing determination, “cashless exercise” of all Warrants) or (ii) the date on
which the Investors shall have sold all of the Registrable Securities covered by such Registration
Statement (the “Registration Period”). Notwithstanding anything to the contrary contained in this
Agreement, the Company shall ensure that, when filed and at all times while effective, each
Registration Statement (including, without limitation, all amendments and supplements thereto) and
the prospectus (including, without limitation, all amendments and supplements thereto) used in
connection with such Registration Statement (1) shall not contain 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 (in the case of prospectuses, in the light of the circumstances in which
they were made) not misleading and (2) will disclose (whether directly or through incorporation by
reference to other SEC filings to the extent permitted) all material information regarding the
Company and its securities. The Company shall submit to the SEC, within one (1) Business Day after
the later of the date that the Company learns that no review of a particular Registration Statement
will be made by the Staff or that the Staff has no further comments on a particular Registration
Statement (as the case may be) a request for acceleration of effectiveness of such Registration
Statement to a time and date not later than forty-eight (48) hours after the submission of such
request.
(b) Subject to Section 3(r) of this Agreement, the Company shall prepare and file with the SEC
such amendments (including, without limitation, post-effective amendments) and supplements to each
Registration Statement and the prospectus used in connection with each such Registration Statement,
which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep each such Registration Statement effective at all times during the Registration
Period for such Registration Statement, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the Company required to
be covered by such Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in such Registration Statement; provided, however, by 8:30 a.m. (New
York time) on the Business Day immediately following
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each Effective Date, the Company shall file with the SEC in accordance with Rule 424(b) under
the 1933 Act the final prospectus to be used in connection with sales pursuant to the applicable
Registration Statement (whether or not such a prospectus is technically required by such rule). In
the case of amendments and supplements to any Registration Statement which are required to be filed
pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason
of the Company filing a report on Form 10-Q or Form 10-K or any analogous report under the
Securities Exchange Act of 1934, as amended (the “1934 Act”), the Company shall have incorporated
such report by reference into such Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC promptly after the 1934 Act report is filed which created
the requirement for the Company to amend or supplement such Registration Statement.
(c) The Company shall permit Legal Counsel to review and comment upon (i) each Registration
Statement at least three (3) calendar days prior to its filing with the SEC and (ii) all amendments
and supplements to each Registration Statement (including, without limitation, the prospectus
contained therein) (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, and any similar or successor reports) within a reasonable number of days prior
to their filing with the SEC. The Company shall promptly furnish to Legal Counsel, without charge,
(i) copies of any correspondence from the SEC or the Staff to the Company or its representatives
relating to each Registration Statement, provided that such correspondence shall not contain any
material, non-public information regarding the Company, (ii) at the written request of any
Investor, after the same is prepared and filed with the SEC, one (1) copy of each Registration
Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by reference, if requested by such
Investor, and all exhibits and (iii) upon the effectiveness of each Registration Statement, one (1)
copy of the prospectus included in such Registration Statement and all amendments and supplements
thereto. The Company shall reasonably cooperate with Legal Counsel in performing the Company’s
obligations pursuant to this Section 3.
(d) The Company shall promptly furnish to any Investor whose Registrable Securities are
included in any Registration Statement, without charge, upon the written request of such Investor,
(i) after the same is prepared and filed with the SEC, at least one (1) copy of each Registration
Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by reference, if requested by such
Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of each
Registration Statement, ten (10) copies of the prospectus included in such Registration Statement
and all amendments and supplements thereto (or such other number of copies as such Investor may
reasonably request from time to time) and (iii) such other documents, including, without
limitation, copies of any preliminary or final prospectus, as such Investor may reasonably request
from time to time in order to facilitate the disposition of the Registrable Securities owned by
such Investor.
(e) The Company shall use its reasonable best efforts to (i) register and qualify, unless an
exemption from registration and qualification applies, the resale by Investors of the Registrable
Securities covered by a Registration Statement under such other securities or “blue sky” laws of
all applicable jurisdictions in the United States, (ii) prepare and file in those
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jurisdictions, such amendments (including, without limitation, post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify
the Registrable Securities for sale in such jurisdictions; provided, however, the Company shall not
be required in connection therewith or as a condition thereto to (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y)
subject itself to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and
each Investor who holds Registrable Securities of the receipt by the Company of any notification
with respect to the suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United
States or its receipt of actual notice of the initiation or threatening of any proceeding for such
purpose.
(f) The Company shall notify Legal Counsel and each Investor in writing of the happening of
any event, as promptly as practicable after becoming aware of such 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 omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material, non-public
information regarding the Company), and, subject to Section 3(r), promptly prepare a supplement or
amendment to such Registration Statement and such prospectus contained therein to correct such
untrue statement or omission and deliver ten (10) copies of such supplement or amendment to Legal
Counsel and each Investor (or such other number of copies as Legal Counsel or such Investor may
reasonably request). The Company shall also promptly notify Legal Counsel and each Investor in
writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been
filed, when a Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel and each Investor by
facsimile or e-mail on the same day of such effectiveness and by overnight mail), and when the
Company receives written notice from the SEC that a Registration Statement or any post-effective
amendment will be reviewed by the SEC, (ii) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related information, (iii) of the Company’s
reasonable determination that a post-effective amendment to a Registration Statement would be
appropriate; and (iv) of the receipt of any request by the SEC or any other federal or state
governmental authority for any additional information relating to the Registration Statement or any
amendment or supplement thereto or any related prospectus. The Company shall respond as promptly as
practicable to any comments received from the SEC with respect to each Registration Statement or
any amendment thereto.
(g) The Company shall (i) use its reasonable best efforts to prevent the issuance of any stop
order or other suspension of effectiveness of each Registration Statement or the use of any
prospectus contained therein, or the suspension of the qualification, or the loss of an exemption
from qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such
an order or suspension is issued, to obtain the withdrawal of such order or suspension at the
earliest possible moment and (ii) notify Legal Counsel and each Investor who holds Registrable
Securities of the issuance of such order and the resolution thereof or its receipt of
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actual notice of the initiation or threat of any proceeding for such purpose.
(h) If any Investor may be required under applicable securities law to be described in any
Registration Statement as an underwriter and such Investor consents to so being named an
underwriter, at the request of any Investor, the Company shall furnish to such Investor, on the
date of the effectiveness of such Registration Statement and thereafter from time to time on such
dates as an Investor may reasonably request (i) a letter, dated such date, from the Company’s
independent certified public accountants in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten public offering,
addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the
Company for purposes of such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the Investors.
(i) If any Investor may be required under applicable securities law to be described in any
Registration Statement as an underwriter and such Investor consents to so being named an
underwriter, upon the written request of such Investor, the Company shall make available for
inspection by (i) such Investor, (ii) legal counsel for such Investor and (iii) one (1) firm of
accountants or other agents retained by such Investor (collectively, the “Inspectors”), all
pertinent financial and other records, and pertinent corporate documents and properties of the
Company (collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector,
and cause the Company’s officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, each Inspector shall agree in writing to hold
in strict confidence and not to make any disclosure (except to such Investor) or use of any Record
or other information which the Company’s board of directors determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless (1) the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (2) the release of such Records is ordered
pursuant to a final, non-appealable subpoena or order from a court or government body of competent
jurisdiction, or (3) the information in such Records has been made generally available to the
public other than by disclosure in violation of this Agreement or any other Transaction Document
(as defined in the Securities Purchase Agreement). Such Investor agrees that it shall, upon
learning that disclosure of such Records is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to the Company and allow the
Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. Nothing herein (or in any other
confidentiality agreement between the Company and such Investor, if any) shall be deemed to limit
any Investor’s ability to sell Registrable Securities in a manner which is otherwise consistent
with applicable laws and regulations.
(j) The Company shall hold in confidence and not make any disclosure of information concerning
an Investor provided to the Company unless (i) disclosure of such information is necessary to
comply with federal or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement or is otherwise
required to be disclosed in such Registration Statement pursuant to the 1933 Act, (iii) the release
of such information is ordered pursuant to a subpoena or other final, non-appealable order from a
court or governmental body of competent jurisdiction, or (iv) such information has been made
generally available to the public other than by disclosure in violation
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of this Agreement or any other Transaction Document. The Company agrees that it shall, upon
learning that disclosure of such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt written notice to
such Investor and allow such Investor, at such Investor’s expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, such information.
(k) Without limiting any obligation of the Company under the Securities Purchase Agreement,
the Company shall use its reasonable best efforts either to (i) cause all of the Registrable
Securities covered by each Registration Statement to be listed on each securities exchange on which
securities of the same class or series issued by the Company are then listed, if any, if the
listing of such Registrable Securities is then permitted under the rules of such exchange, (ii)
secure designation and quotation of all of the Registrable Securities covered by each Registration
Statement on the OTC Bulletin Board, or (iii) if, despite the Company’s reasonable best efforts to
satisfy the preceding clauses (i) or (ii) the Company is unsuccessful in satisfying the preceding
clauses (i) or (ii), without limiting the generality of the foregoing, to use its reasonable best
efforts to arrange for at least two market makers to register with the Financial Industry
Regulatory Authority (“FINRA”) as such with respect to such Registrable Securities. In addition,
the Company shall cooperate with each Investor and any broker or dealer through which any such
Investor proposes to sell its Registrable Securities in effecting a filing with FINRA pursuant to
FINRA Rule 5110 as requested by such Investor. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 3(k).
(l) The Company shall cooperate with the Investors who hold Registrable Securities being
offered and, to the extent applicable, facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be in such
denominations or amounts (as the case may be) as the Investors may reasonably request from time to
time and registered in such names as the Investors may request.
(m) If requested by an Investor, the Company shall as soon as practicable after receipt of
notice from such Investor and subject to Section 3(r) hereof, (i) incorporate in a prospectus
supplement or post-effective amendment such information as an Investor reasonably requests to be
included therein relating to the sale and distribution of Registrable Securities, including,
without limitation, information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the offering of the
Registrable Securities to be sold in such offering; (ii) make all required filings of such
prospectus supplement or post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or
make amendments to any Registration Statement or prospectus contained therein if reasonably
requested by an Investor holding any Registrable Securities.
(n) The Company shall use its reasonable best efforts to cause the Registrable Securities
covered by a Registration Statement to be registered with or approved by such other governmental
agencies or authorities as may be necessary to consummate the disposition of such Registrable
Securities.
(o) The Company shall make generally available to its security holders as soon as
10
practical, but not later than ninety (90) days after the close of the period covered thereby,
an earnings statement (in form complying with, and in the manner provided by, the provisions of
Rule 158 under the 0000 Xxx) covering a twelve-month period beginning not later than the first day
of the Company’s fiscal quarter next following the applicable Effective Date of each Registration
Statement.
(p) The Company shall otherwise use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC in connection with any registration hereunder.
(q) Within one (1) Business Day after a Registration Statement which covers Registrable
Securities is declared effective by the SEC, the Company shall deliver, and shall cause legal
counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with
copies to the Investors whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the SEC.
(r) Notwithstanding anything to the contrary herein (but subject to the last sentence of this
Section 3(r)), at any time after the Effective Date of a particular Registration Statement, the
Company may delay the disclosure of material, non-public information concerning the Company the
disclosure of which at the time is not, in the good faith opinion of the board of directors of the
Company, in the best interest of the Company and, in the opinion of counsel to the Company,
otherwise required (a “Grace Period”), provided that the Company shall promptly notify the
Investors in writing of the (i) existence of material, non-public information giving rise to a
Grace Period (provided that in each such notice the Company shall not disclose the content of such
material, non-public information to any of the Investors) and the date on which such Grace Period
will begin and (ii) date on which such Grace Period ends, provided further that (I) no Grace Period
shall exceed thirty (30) consecutive days and during any three hundred sixty five (365) day period
all such Grace Periods shall not exceed an aggregate of ninety (90) days, and (II) the first day of
any Grace Period must be at least five (5) Trading Days after the last day of any prior Grace
Period (each, an “Allowable Grace Period”). For purposes of determining the length of a Grace
Period above, such Grace Period shall begin on and include the date the Investors receive the
notice referred to in clause (i) above and shall end on and include the later of the date the
Investors receive the notice referred to in clause (ii) above and the date referred to in such
notice. The provisions of Section 3(g) hereof shall not be applicable during the period of any
Allowable Grace Period. Upon expiration of each Grace Period, the Company shall again be bound by
the first sentence of Section 3(f) with respect to the information giving rise thereto unless such
material, non-public information is no longer applicable. Notwithstanding anything to the contrary
contained in this Section 3(r), the Company shall cause its transfer agent to deliver unlegended
shares of Common Stock to a transferee of an Investor in accordance with the terms of the
Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to
which such Investor has entered into a contract for sale, and delivered a copy of the prospectus
included as part of the particular Registration Statement to the extent applicable, prior to such
Investor’s receipt of the notice of a Grace Period and for which the Investor has not yet settled.
(s) If at any time after the date hereof the Company shall become eligible to use Form S-3 for
the registration of the resale of all the Registrable Securities, thereafter the
11
Company shall use its reasonable best efforts to maintain eligibility for use of Form S-3 (or
any successor form thereto) for the registration of the resale of all the Registrable Securities.
(t) The Company shall take all other reasonable actions necessary to expedite and facilitate
disposition by each Investor of its Registrable Securities pursuant to each Registration Statement.
4. Obligations of the Investors.
(a) At least five (5) Business Days prior to the first anticipated filing date of each
Registration Statement under this Agreement, the Company shall notify each Investor in writing of
the information the Company requires from each such Investor with respect to such Registration
Statement. It shall be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable Securities of a particular
Investor that such Investor shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the Registrable
Securities held by it, as shall be reasonably required to effect and maintain the effectiveness of
the registration of such Registrable Securities and shall execute such documents in connection with
such registration as the Company may reasonably request.
(b) Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection with the
preparation and filing of each Registration Statement hereunder, unless such Investor has notified
the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable
Securities from such Registration Statement.
(c) Each Investor agrees that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 3(g) or the first sentence of 3(f), such Investor will
immediately discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of
the supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of
Section 3(f) or receipt of notice that no supplement or amendment is required. Notwithstanding
anything to the contrary in this Section 4(c), the Company shall cause its transfer agent to
deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the
terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities
with respect to which such Investor has entered into a contract for sale prior to the Investor’s
receipt of a notice from the Company of the happening of any event of the kind described in Section
3(g) or the first sentence of Section 3(f) and for which such Investor has not yet settled.
(d) Each Investor covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it in connection with sales of Registrable Securities
pursuant to a Registration Statement.
5. Expenses of Registration.
All reasonable expenses, other than underwriting discounts and commissions, incurred in
connection with registrations, filings or qualifications pursuant to Sections 2 and 3,
12
including, without limitation, all registration, listing and qualifications fees, printers and
accounting fees, FINRA filing fees (if any) and fees and disbursements of counsel for the Company
shall be paid by the Company. The Company shall also reimburse the Lead Investor for the fees and
disbursements of Legal Counsel in connection with registration, filing or qualification pursuant to
Sections 2 and 3 of this Agreement which amount shall be limited to $10,000.
6. Indemnification.
(a) In the event any Registrable Securities are included in any Registration Statement under
this Agreement, to the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Investor and each of its directors, officers,
shareholders, members, partners, employees, agents, advisors, representatives (and any other
Persons with a functionally equivalent role of a Person holding such titles notwithstanding the
lack of such title or any other title) and each Person, if any, who controls such Investor within
the meaning of the 1933 Act or the 1934 Act and each of the directors, officers, shareholders,
members, partners, employees, agents, advisors, representatives (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding the lack of such title
or any other title) of such controlling Persons (each, an “Indemnified Person”), against any
losses, obligations, claims, damages, liabilities, contingencies, judgments, fines, penalties,
charges, costs (including, without limitation, court costs, reasonable attorneys’ fees and costs of
defense and investigation), amounts paid in settlement or expenses, joint or several,
(collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency, body or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified
Damages”), to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement
or any post-effective amendment thereto or in any filing made in connection with the qualification
of the offering under the securities or other “blue sky” laws of any jurisdiction in which
Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the statements therein not
misleading or (ii) any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus if used prior to the effective date of such Registration Statement, or
contained in the final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein
any material fact necessary to make the statements made therein, in light of the circumstances
under which the statements therein were made, not misleading (the matters in the foregoing clauses
(i) through (ii) being, collectively, “Violations”). Subject to Section 6(c), the Company shall
reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable,
for any legal fees or other reasonable expenses incurred by them in connection with investigating
or defending any such Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by such Indemnified Person for such
Indemnified Person expressly for use in
13
connection with the preparation of such Registration Statement or any such amendment thereof
or supplement thereto and (ii) shall not be available to a particular Investor to the extent such
Claim is based on a failure of such Investor to deliver or to cause to be delivered the prospectus
made available by the Company (to the extent applicable), including, without limitation, a
corrected prospectus, if such prospectus or corrected prospectus was timely made available by the
Company pursuant to Section 3(d) and then only if, and to the extent that, following the receipt of
the corrected prospectus no grounds for such Claim would have existed; and (iii) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity
shall remain in full force and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of any of the Registrable Securities by any of
the Investors pursuant to Section 9.
(b) In connection with any Registration Statement in which an Investor is participating, such
Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors,
each of its officers who signs the Registration Statement and each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against
any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the
1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon
any Violation, in each case, to the extent, and only to the extent, that such Violation occurs in
reliance upon and in conformity with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and, subject to Section 6(c) and
the below provisos in this Section 6(b), such Investor will reimburse an Indemnified Party any
legal or other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such Claim; provided, however, the indemnity agreement contained in
this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably withheld or delayed,
provided further that such Investor shall be liable under this Section 6(b) for only that amount of
a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of
the applicable sale of Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any investigation made by or on
behalf of such Indemnified Party and shall survive the transfer of any of the Registrable
Securities by any of the Investors pursuant to Section 9.
(c) Promptly after receipt by an Indemnified Person or Indemnified Party (as the case may be)
under this Section 6 of notice of the commencement of any action or proceeding (including, without
limitation, any governmental action or proceeding) involving a Claim, such Indemnified Person or
Indemnified Party (as the case may be) shall, if a Claim in respect thereof is to be made against
any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of
the commencement thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to
the indemnifying party and the Indemnified Person or the Indemnified Party (as the case may be);
provided, however, an Indemnified Person or Indemnified Party (as
14
the case may be) shall have the right to retain its own counsel with the fees and expenses of
such counsel to be paid by the indemnifying party if: (i) the indemnifying party has agreed in
writing to pay such fees and expenses; (ii) the indemnifying party shall have failed promptly to
assume the defense of such Claim and to employ counsel reasonably satisfactory to such Indemnified
Person or Indemnified Party (as the case may be) in any such Claim; or (iii) the named parties to
any such Claim (including, without limitation, any impleaded parties) include both such Indemnified
Person or Indemnified Party (as the case may be) and the indemnifying party, and such Indemnified
Person or such Indemnified Party (as the case may be) shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent such Indemnified
Person or such Indemnified Party and the indemnifying party (in which case, if such Indemnified
Person or such Indemnified Party (as the case may be) notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying party, then the
indemnifying party shall not have the right to assume the defense thereof and such counsel shall be
at the expense of the Indemnifying Party, provided further that in the case of clause (iii) above
the indemnifying party shall not be responsible for the reasonable fees and expenses of more than
one (1) separate legal counsel for such Indemnified Person or Indemnified Party (as the case may
be). The Indemnified Party or Indemnified Person (as the case may be) shall reasonably cooperate
with the indemnifying party in connection with any negotiation or defense of any such action or
Claim by the indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person (as the case may be) which
relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or
Indemnified Person (as the case may be) reasonably apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable
for any settlement of any action, claim or proceeding effected without its prior written consent;
provided, however, the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the Indemnified Party
or Indemnified Person (as the case may be), consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party or Indemnified Person (as the case may be)
of a release from all liability in respect to such Claim or litigation, and such settlement shall
not include any admission as to fault on the part of the Indemnified Party. Following
indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights
of the Indemnified Party or Indemnified Person (as the case may be) with respect to all third
parties, firms or corporations relating to the matter for which indemnification has been made. The
failure to deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party (as the case may be) under this Section 6, except to the
extent that the indemnifying party is materially and adversely prejudiced in its ability to defend
such action.
(d) No Person involved in the sale of Registrable Securities who is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) in connection with such
sale shall be entitled to indemnification from any Person involved in such sale of Registrable
Securities who is not guilty of fraudulent misrepresentation.
(e) The indemnification required by this Section 6 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense, as and when
15
bills are received or Indemnified Damages are incurred, provided that each Indemnified Person
shall promptly reimburse the Company for all such payments received by such Indemnified Person to
the extent (but only to the extent) that a court of competent jurisdiction determines that such
Indemnified Person was not entitled to such payments.
(f) The indemnity and contribution agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified Person against the
indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to
pursuant to the law.
7. Contribution.
To the extent any indemnification by an indemnifying party is prohibited or limited by law,
the indemnifying party agrees to make the maximum contribution with respect to any amounts for
which it would otherwise be liable under Section 6 to the fullest extent permitted by law;
provided, however: (i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in Section 6 of this
Agreement, (ii) no Person involved in the sale of Registrable Securities which Person is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) in connection
with such sale shall be entitled to contribution from any Person involved in such sale of
Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution
by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds
received by such seller from the applicable sale of such Registrable Securities pursuant to such
Registration Statement. Notwithstanding the provisions of this Section 7, no Investor shall be
required to contribute, in the aggregate, any amount in excess of the amount by which the net
proceeds actually received by such Investor from the applicable sale of the Registrable Securities
subject to the Claim exceeds the amount of any damages that such Investor has otherwise been
required to pay, or would otherwise be required to pay under Section 6(b), by reason of such untrue
or alleged untrue statement or omission or alleged omission.
8. Reports Under the 1934 Act.
With a view to making available to the Investors the benefits of Rule 144, the Company agrees
to:
(a) make and keep public information available, as those terms are understood and defined in
Rule 144;
(b) file with the SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such
requirements (it being understood and agreed that nothing herein shall limit any obligations of the
Company under the Securities Purchase Agreement) and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and
(c) furnish to each Investor so long as such Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company, if true, that it has complied with the
reporting, submission and posting requirements of Rule 144 and the 1934 Act, (ii) a copy of
16
the most recent annual or quarterly report of the Company and such other reports and documents
so filed by the Company with the SEC if such reports are not publicly available via XXXXX, and
(iii) such other information as may be reasonably requested to permit the Investors to sell such
securities pursuant to Rule 144 without registration.
9. Assignment of Registration Rights.
All or any portion of the rights under this Agreement shall be automatically assignable by
each Investor to any transferee or assignee (as the case may be) of all or any portion of such
Investor’s Registrable Securities or Warrants if: (i) such Investor agrees in writing with such
transferee or assignee (as the case may be) to assign all or any portion of such rights, and a copy
of such agreement is furnished to the Company within a reasonable time after such transfer or
assignment (as the case may be); (ii) the Company is, within a reasonable time after such transfer
or assignment (as the case may be), furnished with written notice of (a) the name and address of
such transferee or assignee (as the case may be), and (b) the securities with respect to which such
registration rights are being transferred or assigned (as the case may be); (iii) immediately
following such transfer or assignment (as the case may be) the further disposition of such
securities by such transferee or assignee (as the case may be) is restricted under the 1933 Act or
applicable state securities laws if so required; (iv) at or before the time the Company receives
the written notice contemplated by clause (ii) of this sentence such transferee or assignee (as the
case may be) agrees in writing with the Company to be bound by all of the provisions contained
herein; (v) such transfer or assignment (as the case may be) shall have been made in accordance
with the applicable requirements of the Securities Purchase Agreement and the Warrants (as the case
may be); and (vi) such transfer or assignment (as the case may be) shall have been conducted in
accordance with all applicable federal and state securities laws.
10. Amendment of Registration Rights.
Provisions of this Agreement may be amended only with the written consent of the Company and
the Required Holders. Any amendment effected in accordance with this Section 10 shall be binding
upon each Investor and the Company. No waiver shall be effective unless it is in writing and signed
by an authorized representative of the waiving party. No consideration shall be offered or paid to
any Person to amend or consent to a waiver or modification of any provision of this Agreement
unless the same consideration also is offered to all of the parties to this Agreement.
11. Miscellaneous.
(a) Solely for purposes of this Agreement, a Person is deemed to be a holder of Registrable
Securities whenever such Person owns, or is deemed to own, of record such Registrable Securities.
If the Company receives conflicting instructions, notices or elections from two or more Persons
with respect to the same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from such record owner of such Registrable Securities.
(b) Any notices, consents, waivers or other communications required or permitted to be given
under the terms of this Agreement must be in writing and will be deemed to have been
17
delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile or electronic mail (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); (iii) with respect to Section
3(c), by electronic mail (provided confirmation of transmission is electronically generated and
kept on file by the sending party); or (iv) one (1) Business Day after deposit with a nationally
recognized overnight delivery service with next day delivery specified, in each case, properly
addressed to the party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Emisphere Technologies, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
Email: xxxxxxx@xxxxxxxxx.xxx
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
Email: xxxxxxx@xxxxxxxxx.xxx
With a copy (for informational purposes only) to:
Xxxxx Xxxxxxx LLP
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Email: xxxxxxxx@xxxxxxxxxxxx.xxx
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Email: xxxxxxxx@xxxxxxxxxxxx.xxx
If to the Transfer Agent:
The Bank of New York Mellon – Shareowner Services
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxx Xxxxxxx, Xxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx
Email:
The Bank of New York Mellon – Shareowner Services
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxx Xxxxxxx, Xxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx
Email:
If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers attached to
the Securities Purchase Agreement, with copies to such Buyer’s representatives as set forth on the
Schedule of Buyers, or to such other address and/or facsimile number and/or to the attention of
such other Person as the recipient party has specified by written notice given to each other party
five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given
by the recipient of such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine or electronic mail transmission
containing the time, date, recipient facsimile number or electronic mail address and an image of
the first page of such transmission or (C) provided by a courier or overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally
18
recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.
(c) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or
delay by a party in exercising such right or remedy, shall not operate as a waiver thereof. The
Company and each Investor acknowledge and agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that each party hereto shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement by
any other party hereto and to enforce specifically the terms and provisions hereof (without the
necessity of showing economic loss and without any bond or other security being required), this
being in addition to any other remedy to which any party may be entitled by law or equity.
(d) All questions concerning the construction, validity, enforcement and interpretation of
this Agreement shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the State of New York
or any other jurisdictions) that would cause the application of the laws of any jurisdictions other
than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity
or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.
(e) This Agreement, the other Transaction Documents, the schedules and exhibits attached
hereto and thereto and the instruments referenced herein and therein constitute the entire
agreement among the parties hereto and thereto solely with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement, the other Transaction Documents, the
schedules and exhibits attached hereto and thereto and the instruments referenced herein and
therein supersede all prior agreements and understandings among the parties hereto solely with
respect to the subject matter hereof and thereof; provided, however, nothing contained in this
Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect
19
on any agreements any Investor has entered into with the Company prior to the date hereof with
respect to any prior investment made by such Investor in the Company, (ii) waive, alter, modify or
amend in any respect any obligations of the Company or any rights of or benefits to any Investor or
any other Person in any agreement entered into prior to the date hereof between or among the
Company and any Investor and all such agreements shall continue in full force and effect or (iii)
limit any obligations of the Company under any of the other Transaction Documents.
(f) Subject to compliance with Section 9 (if applicable), this Agreement shall inure to the
benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.
This Agreement is not for the benefit of, nor may any provision hereof be enforced by, any Person,
other than the parties hereto, their respective permitted successors and assigns and the Persons
referred to in Sections 6 and 7 hereof.
(g) The headings in this Agreement are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof. Unless the context clearly indicates otherwise, each
pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural
forms thereof. The terms “including,” “includes,” “include” and words of like import shall be
construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the
provision in which they are found.
(h) This Agreement may be executed in two or more identical counterparts, all of which shall
be considered one and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party. In the event that any signature is delivered
by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of
an executed signature page, such signature page shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as
if such signature page were an original thereof.
(i) Each party shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements, certificates, instruments and
documents as any other party may reasonably request in order to carry out the intent and accomplish
the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(j) The language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent and no rules of strict construction will be applied against
any party. Notwithstanding anything to the contrary set forth in Section 10, terms used in this
Agreement but defined in the other Transaction Documents shall have the meanings ascribed to such
terms on the Closing Date in such other Transaction Documents unless otherwise consented to in
writing by each Investor.
(k) All consents and other determinations required to be made by the Investors pursuant to
this Agreement shall be made, unless otherwise specified in this Agreement, by the Required
Holders.
20
(l) The obligations of each Investor under this Agreement and the other Transaction Documents
are several and not joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other Investor under this
Agreement or any other Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Investor pursuant hereto or thereto, shall be deemed to
constitute the Investors as, and the Company acknowledges that the Investors do not so constitute,
a partnership, an association, a joint venture or any other kind of group or entity, or create a
presumption that the Investors are in any way acting in concert or as a group or entity with
respect to such obligations or the transactions contemplated by the Transaction Documents or any
matters, and the Company acknowledges that the Investors are not acting in concert or as a group,
and the Company shall not assert any such claim, with respect to such obligations or the
transactions contemplated by this Agreement or any of the other the Transaction Documents. Each
Investor shall be entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and
it shall not be necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. The use of a single agreement with respect to the obligations of the
Company contained herein was solely in the control of the Company, not the action or decision of
any Investor, and was done solely for the convenience of the Company and not because it was
required or requested to do so by any Investor. It is expressly understood and agreed that each
provision contained in this Agreement and in each other Transaction Document is between the Company
and an Investor, solely, and not between the Company and the Investors collectively and not between
and among Investors.
[signature pages follow]
21
IN WITNESS WHEREOF, Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written above.
| COMPANY: | ||||
| EMISPHERE TECHNOLOGIES, INC. | ||||
| By: | /s/
Xxxxxxx X. Xxxxxx |
|||
| Name: Xxxxxxx X. Xxxxxx | ||||
| Title: Chief Financial Officer | ||||
IN WITNESS WHEREOF, Buyer and the Company have caused their respective signature page to
this Registration Rights Agreement to be duly executed as of the date first written above.
| BUYERS: | ||||
| XXXXXXXX XXXX | ||||
| By: | /s/ Xxxxxxxx Xxxx | |||
| Title: | ||||
| XXXXXXX & XXXXXXX LLP | ||||
| PROFIT SHARING RETIREMENT TRUST | ||||
| FBO XXXXX X. XXXXX | ||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Title: | ||||
| HF H VICTOR UW XXXXXX ART 7 | ||||
| By: | /s/ Xxxxxxxx Xxxxxx | |||
| Title: Authorized Signatory | ||||
| FREESTONE ADVANTAGE PARTNERSHIP | ||||
| By: | /s/ Xxxxx Xxxxxxx | |||
| Title: Authorized Signatory | ||||
| CRANSHIRE CAPITAL LP | ||||
| By: | /s/ Xxxxx Xxxxxxx | |||
| Title: COO-Downsview Capital, Inc. | ||||
| The General Partner | ||||
| BAI YE FENG | ||||
| By: | /s/ Bai Ye Feng | |||
| Title: | ||||
| KINGSBROOK OPPORTUNITIES MASTER FUND LP | ||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Title: Managing Member | ||||
| PINE LODGE CAPITAL COMPANY LTD. | ||||
| By: | /s/ Xxxxx Xxxxxxx | |||
| Title: Director | ||||
| EOS HOLDINGS LLC | ||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Title: Director | ||||
| SON XXX XXXXXX | ||||
| By: | /s/ Son Xxx Xxxxxx | |||
| Title: | ||||
| IROQUOIS MASTER FUND LTD. | ||||
| By: | /s/ Xxxxxx Xxxxxxxxx | |||
| Title: Authorized Signatory | ||||
| ANSON INVESTMENTS MASTER FUND LP | ||||
| By: | /s/ Xxxx Xxxxxx | |||
| Title: Portfolio Manager | ||||
EXHIBIT A
SELLING STOCKHOLDERS
The shares of common stock being offered by the selling stockholders are those previously
issued to the selling stockholders and those issuable to the selling stockholders upon exercise of
the warrants. For additional information regarding the issuance of common stock and the warrants,
see “Private Placement of Common Shares and Warrants” above. We are registering the shares of
common stock in order to permit the selling stockholders to offer the shares for resale from time
to time. Except for the ownership of the common stock and the warrants issued pursuant to the
Securities Purchase Agreement, the selling stockholders have not had any material relationship with
us within the past three years.
The table below lists the selling stockholders and other information regarding the beneficial
ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder) of the shares of common stock held by each of the selling
stockholders. The second column lists the number of shares of common stock beneficially owned by
the selling stockholders, based on their respective ownership of shares of common stock and
warrants, as of ________, 2011, assuming exercise of the warrants held by each such selling
stockholder on that date but taking account of any limitations on exercise set forth therein.
The third column lists the shares of common stock being offered by this prospectus by the
selling stockholders and does not take in account any limitations on exercise of the warrants set
forth therein.
In accordance with the terms of a registration rights agreement with the holders of the common
stock and the warrants, this prospectus generally covers the resale of the sum of (i) the number of
shares of common stock issued in connection with the Securities Purchase Agreement and (ii) maximum
number of shares of common stock issuable upon exercise of the warrants, in each case, determined
as if the outstanding warrants were exercised in full (without regard to any limitations on
exercise contained therein) as of the trading day immediately preceding the date this registration
statement was initially filed with the SEC. Because the exercise price of the warrants may be
adjusted, the number of shares that will actually be issued may be more or less than the number of
shares being offered by this prospectus. The fourth column assumes the sale of all of the shares
offered by the selling stockholders pursuant to this prospectus.
Under the terms of the warrants, a selling stockholder may not exercise the warrants to the
extent (but only to the extent) such selling stockholder or any of its affiliates would
beneficially own a number of shares of our common stock which would exceed 4.99%. The number of
shares in the second column reflects these limitations. The selling stockholders may sell all, some
or none of their shares in this offering. See “Plan of Distribution.”
| Maximum Number of | ||||||
| Number of Shares of | Shares of Common Stock to | Number of Shares of | ||||
| Common Stock Owned | be Sold Pursuant to this | Common Stock of Owned | ||||
| Name of Selling Stockholder | Prior to Offering | Prospectus | After Offering | |||
PLAN OF DISTRIBUTION
We are registering the shares of common stock previously issued and the shares of common stock
issuable upon exercise of the warrants to permit the resale of these shares of common stock by the
holders of the common stock and warrants from time to time after the date of this prospectus. We
will not receive any of the proceeds from the sale by the selling stockholders of the shares of
common stock. We will bear all fees and expenses incident to our obligation to register the shares
of common stock.
The selling stockholders may sell all or a portion of the shares of common stock held by them
and offered hereby from time to time directly or through one or more underwriters, broker-dealers
or agents. If the shares of common stock are sold through underwriters or broker-dealers, the
selling stockholders will be responsible for underwriting discounts or commissions or agent’s
commissions. The shares of common stock may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of the sale, at varying prices determined at the time of sale
or at negotiated prices. These sales may be effected in transactions, which may involve crosses or
block transactions, pursuant to one or more of the following methods:
| • | on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; | ||
| • | in the over-the-counter market; | ||
| • | in transactions otherwise than on these exchanges or systems or in the over-the-counter market; | ||
| • | through the writing or settlement of options, whether such options are listed on an options exchange or otherwise; | ||
| • | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | ||
| • | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; | ||
| • | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | ||
| • | an exchange distribution in accordance with the rules of the applicable exchange; | ||
| • | privately negotiated transactions; | ||
| • | short sales made after the date the Registration Statement is declared effective by the SEC; | ||
| • | agreements entered into between broker-dealers and a selling securityholder to sell a specified number of such shares at a stipulated price per share; |
| • | a combination of any such methods of sale; and | ||
| • | any other method permitted pursuant to applicable law. |
The selling stockholders may also sell shares of common stock under Rule 144 promulgated under
the Securities Act of 1933, as amended, if available, rather than under this prospectus. In
addition, the selling stockholders may transfer the shares of common stock by other means not
described in this prospectus. If the selling stockholders effect such transactions by selling
shares of common stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts, concessions or
commissions from the selling stockholders or commissions from purchasers of the shares of common
stock for whom they may act as agent or to whom they may sell as principal (which discounts,
concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess
of those customary in the types of transactions involved). In connection with sales of the shares
of common stock or otherwise, the selling stockholders may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the shares of common stock in the course
of hedging in positions they assume. The selling stockholders may also sell shares of common stock
short and deliver shares of common stock covered by this prospectus to close out short positions
and to return borrowed shares in connection with such short sales. The selling stockholders may
also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.
The selling stockholders may pledge or grant a security interest in some or all of the
warrants or shares of common stock owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the shares of common stock
from time to time pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending, if necessary, the list of
selling stockholders to include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus. The selling stockholders also may transfer and donate the
shares of common stock in other circumstances in which case the transferees, donees, pledgees or
other successors in interest will be the selling beneficial owners for purposes of this prospectus.
To the extent required by the Securities Act and the rules and regulations thereunder, the
selling stockholders and any broker-dealer participating in the distribution of the shares of
common stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any
commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed
to be underwriting commissions or discounts under the Securities Act. At the time a particular
offering of the shares of common stock is made, a prospectus supplement, if required, will be
distributed, which will set forth the aggregate amount of shares of common stock being offered and
the terms of the offering, including the name or names of any broker-dealers or agents, any
discounts, commissions and other terms constituting compensation from the selling stockholders and
any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
Under the securities laws of some states, the shares of common stock may be sold in such
states only through registered or licensed brokers or dealers. In addition, in some states the
shares of common stock may not be sold unless such shares have been registered or qualified
for sale in such state or an exemption from registration or qualification is available and is
complied with.
There can be no assurance that any selling stockholder will sell any or all of the shares of
common stock registered pursuant to the registration statement, of which this prospectus forms a
part.
The selling stockholders and any other person participating in such distribution will be
subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder, including, without limitation, to the extent applicable, Regulation M
of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of
common stock by the selling stockholders and any other participating person. To the extent
applicable, Regulation M may also restrict the ability of any person engaged in the distribution of
the shares of common stock to engage in market-making activities with respect to the shares of
common stock. All of the foregoing may affect the marketability of the shares of common stock and
the ability of any person or entity to engage in market-making activities with respect to the
shares of common stock.
We will pay all expenses of the registration of the shares of common stock pursuant to the
registration rights agreement, estimated to be $[ ] in total, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with state securities or
“blue sky” laws; provided, however, a selling stockholder will pay all underwriting discounts and
selling commissions, if any. We will indemnify the selling stockholders against liabilities,
including some liabilities under the Securities Act in accordance with the registration rights
agreements or the selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under the Securities Act
that may arise from any written information furnished to us by the selling stockholder specifically
for use in this prospectus, in accordance with the related registration rights agreements or we may
be entitled to contribution.
Once sold under the registration statement, of which this prospectus forms a part, the shares
of common stock will be freely tradable in the hands of persons other than our affiliates.
