REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of
October 18, 1999 by and between Sheffield Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and Elan International Services, Ltd., a Bermuda
exempted limited liability company incorporated under the laws of Bermuda
("EIS").
R E C I T A L S:
A. Pursuant to a Securities Purchase Agreement (the "Purchase
Agreement") by and between EIS and the Company, dated as of the date hereof, the
Company has issued to EIS (i) shares of Series D Preferred Stock; (ii) shares of
Series F Preferred Stock; and (iii) a Warrant to acquire up to 150,000 shares of
the Common Stock.
B. In addition, pursuant to the Purchase Agreement, the Company may
require that EIS purchase shares of Series E Preferred Stock with an aggregate
stated value of up to $4,005,000.
C. The closings under the Purchase Agreement have occurred on the date
hereof; it being a condition to such closings that the parties execute and
deliver this Agreement.
D. The parties desire to set forth herein their agreement relating to
the granting of certain resale registration rights to the Holders (as defined
below) of the Common Stock issuable upon conversion, exercise or exchange of any
of the other Securities. All capitalized terms used in this Agreement and not
otherwise defined herein shall have the meaning ascribed to such terms in the
Purchase Agreement.
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.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the common stock, par value $0.01 per share
of the Company.
"Holder", "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 or quasi-governmental entity or any department,
agency or political subdivision thereof.
"Preferred Stock" shall mean, collectively, the Series D Preferred
Stock, the Series E Preferred Stock and the Series F Preferred Stock.
"Registrable Securities" means (i) any Common Stock issued or issuable
upon conversion, exchange or exercise of the Securities held or otherwise
acquired by any Holders, and (ii) any Common Stock issued or issuable in respect
of the securities referred to in clause (i) above 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 a
transaction pursuant to Rule 144 promulgated under the Securities Act) in which
registration rights are not transferred pursuant to Section 9 hereof.
"Register," "Registered" and "Registration" shall refer to a resale
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.
2
"Requisite Holders" shall mean Holders holding at least 50% of the
authorized and outstanding Preferred Stock.
"Securities" shall mean shares of Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock and the Warrant, in each case issued
to EIS pursuant to the Purchase Agreement.
"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 Registration. (a) Request or exercise for Registration.
Requisite Holders shall have the right at any time and on one occasion to
request registration under the Securities Act of all or part of the Registrable
Securities held by such Holder on Form S-3, or if such form is unavailable for
such a registration, such other form as is available for such a registration
(the "Demand Registration"). A Demand Registration 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 the
Registrable Securities held by such Holders 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 one Demand
Registration. A registration will not count as the permitted Demand Registration
until it has become effective (unless the 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 the Demand
Registration whether or not it has become effective.
(b) Priority on Demand Registration. If the Demand Registration
is an underwritten offering and the managing underwriter or 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:
3
(i) first, the Registrable Securities requested to be
included in such registration by the Holders (or, if necessary,
such Registrable Securities pro rata 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 Registration. The Company may postpone
for up to three months in any 12 month period, the filing or the effectiveness
of a registration statement for the 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 the Demand
Registration 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 the Demand Registration, subject to the Company's approval, which
will not be unreasonably withheld.
(e) Other Registration Rights. 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, exchangeable 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 Requisite Holders; it being understood, however, that the Company may grant
rights to other Persons to (i) participate in Piggyback Registrations (as
defined below) 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.
3. Piggyback Registrations. (a) Right to Piggyback. 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
4
notice. Notwithstanding the foregoing, a Piggyback Registration shall not
include any registration statement (i) on Form S-8 or any successor form to such
form, (ii) on Form S-4 or any successor form to such form, (iii) filed in
connection with an exchange offer or an offering of Common Stock or of
securities convertible or exchangeable into Common Stock made solely to its
existing stockholders in connection with a rights offering or solely to the
Company's employees, or a post-effective amendment to any then effective
registration statement.
(b) Priority on Piggyback Registrations. If a Piggyback
Registration is an underwritten registration on behalf of the Company, and the
managing underwriter(s) 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;
(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 that
is entitled to registration rights that are not subordinate to the
rights of the Holders, 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; and
(iii) thereafter, other securities requested to be included
in such registration.
(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. Expenses of Registration. Except as otherwise provided herein, all
Registration Expenses incurred in connection with all registrations pursuant to
Sections 2 and 3 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.
5
5. Holdback Agreements. (a) The Company agrees (i) not to effect any
public sale or distribution for its own account 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 90-day period beginning on the
effective date of the 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
underwriter(s) managing the registered public offering otherwise agree, and (ii)
to use 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 such securities during such periods (except
as part of such underwritten registration, if otherwise permitted), unless the
underwriter(s) 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 Section 2 hereof agrees, if requested by the managing underwriter(s) 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 its best 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 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
6
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 its best 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 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) Use its best efforts to 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 its best 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;
7
(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 underwriter(s), 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(s) participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter, subject to a confidentiality agreement in customary form,
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 reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such registration statement;
(j) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as 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 the 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
Common Stock included in such registration statement for sale in any
jurisdiction, the Company will use its reasonable best efforts promptly to
obtain the withdrawal of such order;
(l) 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 such 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, the "Claims") to which each
such indemnified party may become subject under the Securities Act insofar as
such Claim(s) arose out of (i) any untrue or alleged untrue statement of
material fact contained, on the effective date thereof, in any registration
8
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 underwriter(s), their officers and directors and each Person who controls
such underwriter(s) (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 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(s) arose 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
Claim(s) 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
9
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 the 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 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 underwriter(s), 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 underwriter(s), 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
underwriter(s), 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 underwriter(s) 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 underwriter(s),
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 or by registration statement 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
10
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 250,000 shares of Common Stock
(subject to the anti-dilution adjustments contained in the Purchase Agreement),
and (d) EIS shall act as agent and representative for such Holder for the giving
and receiving of notices hereunder. In the event that such assignment occurs
subsequent to the date of effectiveness of a Registration Statement filed
pursuant to this Agreement, the transferee agrees to pay all reasonable expenses
necessary to amend or supplement such Registration Statement to reflect such
assignment.
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.
11
12. Limitation on Registration. Notwithstanding anything to the
contrary in this Agreement, the Company shall not be obligated to effect a
registration of any Holder's Registrable Securities pursuant to Sections 2 or 3
hereof 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 if the Holders may sell
the Registrable Securities without restriction pursuant to Rule 144(k) under the
Securities Act (or any successor statute thereto).
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 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.
12
(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. Each of the Parties hereby irrevocably submits to the jurisdiction of
any New York State or United States Federal court sitting in the county, city
and state of New York over any action or proceeding arising out of or relating
to this Agreement or the Transaction Documents; and each hereby waives the
defense of an inconvenient forum for the maintenance of such an action.
(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
or by hand to the recipient, one day after being sent to the recipient by an
internationally recognized overnight delivery 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:
Sheffield Pharmaceuticals, Inc.
South Xxxxxx Court
0000 Xxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Chairman
and
Sheffield Pharmaceuticals, Inc.
000 Xxxxx Xxxxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attention: Chief Executive Officer
(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.
13
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
Sheffield Pharmaceuticals, Inc.
By:/s/
---------------------------------------
Name:
Title:
Elan International Services, Ltd.
By:/s/
---------------------------------------
Name:
Title:
000 Xx. Xxxxx Xxxxx
Xxxxxx, Xxxxxx Xxxxxx
Xxxxxxx, XX00
Attention: Director
Facsimile: (000) 000-0000
