EXHIBIT 2.6
REGISTRATION RIGHTS AGREEMENT
Dated as of
October 21, 1998
by and among
Ethical Holdings plc
and
Monksland Holdings B.V.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as of
October 21, 1998 by and among Ethical Holdings plc (the "Company") and Monksland
Holdings B.V. ("Monksland" or the "Purchaser").
This Agreement is made pursuant to the Convertible Term Loan
Agreement, dated as of October 21, 1998, among the Company and the Purchaser
(the "Convertible Term Loan Agreement"). The execution of this Agreement is a
condition precedent to the drawdown provisions of the Convertible Term Loan
Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
Capitalized terms used herein without definition shall have the
meanings given such terms in the Convertible Term Loan Agreement. As used in
this Agreement, the following terms shall have the following meanings:
"Affiliate" of any specified person shall mean any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control," when used with respect to any person, means the power to direct or
cause the direction of the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" shall mean this Registration Rights Agreement, as the same
may be amended, supplemented or modified from time to time in accordance with
the terms hereof.
"Business Day" shall mean any day except Saturday, Sunday and any day
which shall be a legal holiday in the United States or a day on which banking
institutions in the state of New York generally are authorized or required by
law or other government actions to close.
"Company" shall mean Ethical Holdings plc, a corpora-
tion organized and existing under the laws of England.
"Debenture" shall have the meaning given to it in the Convertible Loan
Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated pursuant thereto.
"Holders" shall mean any person owning or having the right to acquire
Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section 6(c)
hereof.
"Indemnifying Party" shall have the meaning set forth in Section 6(c)
hereof.
"Losses" shall have the meaning set forth in Section 6(a) hereof.
"Ordinary Shares" or "ADSs" shall mean the Ordinary Shares, par value
10p each, of the Company or American Depositary Shares therefor.
"Proceeding" shall mean an action, claim, suit or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" shall mean the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated pursuant to the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"Registrable Securities" shall mean the Ordinary Shares issuable upon
conversion of the Debenture purchased by the Purchaser pursuant to the
Convertible Term Loan Agreement, until, in the case of any such ADS, (A) it has
been registered
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effectively pursuant to the Securities Act and disposed of in accordance with a
Registration Statement covering it, (B) subject to Section 7 hereof, it is sold
by the Holder thereof pursuant to Rule 144, (C) subject to Section 8 hereof, it
shall have been otherwise transferred and a new certificate or certificates for
such security not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent disposition of such security shall not
require registration or qualification of such security under the Securities Act
or (D) it ceases to be outstanding.
"Registration Statement" shall mean the registration statement
contemplated by Section 2 hereof, including the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
"Rule 144" shall mean Rule 144 promulgated by the SEC pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC having substantially the same
effect as such rule.
"Rule 144A" shall mean Rule 144A promulgated by the SEC pursuant to
the Securities Act, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC having substantially the
same effect as such rule.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Underwritten registration" or "underwritten offering" shall mean a
registration in connection with which securities of the Company are sold to an
underwriter for reoffering to the public pursuant to an effective registration
statement.
2. REGISTRATION RIGHTS
(a) FILING OF REGISTRATION STATEMENT. Within sixty days of receipt of
a letter of demand from Monksland, the
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Company shall cause to be filed the Registration Statement with the SEC under
the Securities Act covering the offering and sale of the Registrable Securities,
PROVIDED, HOWEVER, that the Company shall not be obligated to file more than
three such Registration Statements on behalf of Monksland.
(b) EFFECTIVENESS; AMENDMENTS. The Company will use best efforts to
cause the Registration Statement to be declared effective as promptly as
practicable after such filing but in no event more than 60 days after the date
upon which it was filed and, except as set forth below, to keep such
Registration Statement continuously effective for a period of at least one year
following the date on which such Registration Statement is declared effective or
such shorter period which will terminate when all of the Registrable Securities
covered by the Registration Statement have been sold by the Stockholders
pursuant to the registration (the "Effectiveness Period"). The Company further
agrees, if necessary, to supplement or amend the Registration Statement, if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Registration or by the Securities
Act or by any other rules and regulations thereunder for such registration or,
if reasonably requested by the Holders of a majority of the Registrable
Securities covered by such Registration Statement or by any underwriter of such
Registrable Securities in order to comply with such rules and regulations, and
the Company agrees to furnish the Holders of Registrable Securities copies of
any such supplement or amendment prior to its being used or filed with the SEC.
The Company will promptly notify such Holders in writing of the date on which
the Registration Statement is declared effective. Notwithstanding the foregoing,
the Company shall not be obligated to keep the Registration Statement or the
prospectus included therein (the "Prospectus") current during any period of up
to 60 days per calendar year if the Company's chief executive officer advises
Monksland that he has determined in good faith that valid business reasons make
doing so inadvisable.
(c) SUPPLEMENTS AND AMENDMENTS. The Company shall promptly supplement
and amend the Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used for such registration, if
required by the Securities Act, or if reasonably requested by the Holders of a
majority in aggregate principal amount of the Registrable Securities covered by
such Registration Statement or by any underwriter of such Registrable
Securities.
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3. HOLD-BACK AGREEMENTS
(a) RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTRABLE SECURITIES.
Subject to Section 3(b), the registration rights of the Purchaser pursuant to
this Agreement and the ability to offer and sell Registrable Securities pursuant
to a Registration Statement are subject to the following conditions and
limitations, and the Purchaser agrees with the Company that:
(i) If the Company determines in its good faith judgment that the
filing of a Registration Statement under Section 2 hereof or the use of any
Prospectus would require the disclosure of important information which the
Company has a bona fide business purpose for preserving as confidential or
the disclosure of which would impede the Company's ability to consummate a
significant transaction, upon written notice of such determination by the
Company, the rights of the Purchaser to offer, sell or distribute any
Registrable Securities pursuant to such Registration Statement or to
require the Company to take action with respect to the registration or sale
of any Registrable Securities pursuant to such Registration Statement
(including any action contemplated by Section 4 hereof) will for up to 60
days in any 12-month period be suspended until the date upon which the
Company notifies the Holders of Registrable Securities in writing that
suspension of such rights for the grounds set forth in this Section 3(a)(i)
is no longer necessary.
(ii) If consummation of any business combination by the Company has
occurred or is probable for purposes of Rule 3-05 or Article 11 of
Regulation S-X under the Securities Act, upon written notice thereof by the
Company to the Purchaser, the rights of the Purchaser to offer, sell or
distribute any Registrable Securities pursuant to a Registration Statement
or to require the Company to take action with respect to the registration
or sale of any Registrable Securities pursuant to such Registration
Statement (including any action contemplated by Section 4 hereof) will for
up to 60 days in any 12-month period be suspended until the date on which
the Company has obtained the financial information required by Rule 3-05 or
Article 11 of Regulation S-X to be included in such Registration Statement.
(iii) In the case of the registration of any underwritten primary
offering of capital stock of the Company
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(other than any registration by the Company on Form S-8, or a successor or
substantially similar form, of (I) an employee stock option, stock purchase
or compensation plan or of securities issued or issuable pursuant to any
such plan, or (II) a dividend reinvestment plan), each holder of
Registrable Securities agrees, if requested in writing by the managing
underwriter or underwriters administering such offering, not to effect any
offer, sale or distribution of Registrable Securities (or any option or
right to acquire Registrable Securities) during the period commencing on
the 10th day prior to the effective date of the registration statement
covering such underwritten primary offering and ending on the date
specified by such managing underwriter or underwriters in such written
request.
(b) LIMITATION ON BLACKOUTS. Notwithstanding the provisions of
paragraph (a) of this Section 3 or the last paragraph of Section 4, the
aggregate number of days (whether or not consecutive) during which the Company
may delay the filing or the effectiveness of a Registration Statement under
Section 2 hereof or prevent offerings, sales or distributions by the Purchaser
pursuant to paragraph (a) of this Section 3 or paragraph (b) of Section 2 or the
last paragraph of Section 4 shall in no event exceed 60 days during any 12-month
period.
4. REGISTRATION PROCEDURES
In connection with the Company's registration obligations pursuant to
Section 2 hereof, the Company will use its best efforts to effect such
registration to permit the sale of such Registrable Securities in accordance
with the intended method or methods of distribution thereof, and pursuant
thereto, the Company shall:
(a) Prepare and file with the SEC a Registration Statement on the
appropriate form available for the sale of such Registrable Securities as
prescribed by Section 2 and use its reasonable efforts to cause such
Registration Statement to become effective and remain effective as provided
herein; PROVIDED, HOWEVER, that no less than 5 days prior to the filing of
a Registration Statement under Section 2 hereof, or any related Prospectus
or any amendment or supplement thereto (including any document that would
be incorporated or deemed to be incorporated therein by reference), the
Company shall furnish to the Holders whose Registrable Securities will be
or are included in such Registration Statement, Prospectus or amendment or
supplement thereto, copies of all such documents in draft form
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proposed to be filed, which documents (other than those incorporated or
deemed to be incorporated by reference) will be subject to the reasonable
review of such Holders, and cause the officers and directors of the
Company, counsel to the Company and independent chartered accountants to
the Company to respond to such inquiries as shall be necessary to conduct a
reasonable investigation within the meaning of the Securities Act. The
Company shall not file a Registration Statement under Section 2 hereof, or
any such Prospectus or any amendments or supplements thereto to which the
Holders of a majority of the Registrable Securities shall reasonably object
on a timely basis;
(b) Prepare and file with the SEC such amendments, including
post-effective amendments, to a Registration Statement as may be necessary
to keep such Registration Statement continuously effective for the
Effectiveness Period, or such shorter period which will terminate when all
Registrable Securities covered by such Registration Statement have been
sold; cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule
424 (or any similar provisions then in force) under the Securities Act; and
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement as so amended or
in such Prospectus as so supplemented;
(c) At any time that a prospectus is required to be delivered under
the Securities Act, notify the Holders of Registrable Securities to be sold
immediately (i) when a Registration Statement or any post-effective
amendment thereto has become effective, (ii) of any request by the SEC or
any other Federal or state governmental authority for amendments or
supplements to a Registration Statement or Prospectus or for additional
information, (iii) of the issuance by the SEC of any stop order suspending
the effectiveness of a Registration Statement covering any or all of the
Registrable Securities or the initiation of any proceedings for that
purpose, (iv) if at any time any of the representations and warranties of
the Company contained in any underwriting agreement contemplated hereby
cease to be true and correct in all material respects, (v) of the receipt
by the Company of any notification with respect to the suspension of the
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qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening
of any proceeding for such purpose, and (vi) of the happening of any event
that makes any statement made in a Registration Statement or Prospectus or
any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes
in a Registration Statement, Prospectus or documents so that, in the case
of a Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, not misleading, and
that in the case of a Prospectus, it will not contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(d) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of any order suspending the effectiveness of a
Registration Statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable
moment;
(e) Furnish to each Holder of Registrable Securities, without charge,
at least one conformed copy of each Registration Statement and each
amendment thereto, including financial statements and schedules, all
documents incorporated or deemed to be incorporated therein by reference,
and all exhibits (other than exhibits to documents incorporated by
reference into such Registration Statement) to the extent requested by such
person (including those previously furnished or incorporated by reference)
as soon as practicable after the filing of such documents with the SEC;
(f) Deliver to each Holder of Registrable Securities a reasonable
number of copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto; and the Company
hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders of Registrable Securities
in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto;
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(g) Prior to any public offering of Registrable Securities pursuant to
a Registration Statement, use all commercially reasonable efforts to
register or qualify such Registrable Securities for offer and sale under
the securities or Blue Sky laws of the United States PROVIDED THAT, the
Company may only be required to register and qualify the Registrable
Securities in a reasonable number of jurisdictions as is customary for
offerings of such type; use all commercially reasonable efforts to keep
each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept
effective and do any and all other acts or things in the opinion of the
Company necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by such Registration
Statement; PROVIDED, HOWEVER, that the Company shall not be required to
qualify generally to do business as a foreign corporation in any
jurisdiction where it is not then so qualified or to take any action that
would subject it to general service of process in any such jurisdiction
where it is not then so subject or subject the Company to any tax in any
such jurisdiction where it is not then so subject;
(h) Upon the occurrence of any event contemplated by Section 4(c)(vi),
as promptly as practicable, prepare a supplement or amendment, including a
post-effective amendment, to a Registration Statement or a supplement to
the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference, and file any other required document so
that, as thereafter delivered, such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading;
(i) Use all commercially reasonable efforts to cause all Registrable
Securities relating to such Registration Statement to be listed on each
securities exchange, if any, on which similar securities issued by the
Company are then listed;
(j) Enter into such agreements in form, scope and substance as is
customary in underwritten offerings and reasonably acceptable to the
Company and take all such other reasonable actions in connection therewith
(including those reasonably requested by the managing underwriter or
underwriters, if any, or the Holders of a majority of
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the Registrable Securities being sold) in order to expedite or facilitate
the disposition of such Registrable Securities, and in such connection in
the event of an underwritten offering, whether or not an underwriting
agreement is entered into, (i) make such representations and warranties to
the Holders of such Registrable Securities and the underwriters, if any,
with respect to the business of the Company, its subsidiaries, and a
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested; (ii)
obtain opinions of Xxxxxxx, Xxxxxxx & Xxxxxx or such other counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing underwriter or
underwriters, if any), addressed to each of the underwriters, if any,
covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such underwriters; (iii) obtain "cold comfort" letters and
updates thereof from the independent chartered accountants of the Company
(and, if necessary, any other independent chartered accountants of any
subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data is, or is required to be,
included in a Registration Statement), addressed to each of the
underwriters, if any, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings; (iv) if an underwriting agreement
is entered into, the same shall contain indemnification provisions and
procedures no less favorable to the underwriters, if any, than those set
forth in Section 6 hereof (or such other provisions and procedures
acceptable to the managing underwriters); and (v) deliver such documents
and certificates as may be reasonably requested by the managing underwriter
or underwriters, if any, to evidence the continued validity of the
representations and warranties made pursuant to subparagraph (i) of this
Section 4(j) and to evidence compliance with any customary conditions
contained in the underwriting agreement or other agreement entered into by
the Company;
(k) Make available for inspection by a representative of the Holders
of Registrable Securities being sold,
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any underwriter participating in any such disposition of Registrable
Securities, if any, and any attorney or accountant retained by such selling
Holders or underwriters, at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and
cause the officers, directors, agents and employees of the Company and its
subsidiaries to supply all information in each case requested by any such
representative, underwriter, attorney or accountant in connection with a
Registration Statement; PROVIDED, HOWEVER, that to minimize disruption and
expense to the Company during the course of the registration process, such
Holders shall, to the extent practicable, and at their own expense,
coordinate their investigation and due diligence efforts hereunder and, to
the extent practicable, will act through a single firm of attorneys and a
single accounting firm; PROVIDED FURTHER, HOWEVER, that any information
that is designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons,
unless (i) disclosure of such information is required by court or
administrative order or is necessary to respond to inquiries of regulatory
authorities, (ii) disclosure of such information is required by law, (iii)
such information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by such person, (iv)
disclosure of such information, in the written opinion of counsel to the
Company or counsel to the Holders acceptable to the Company in form and
substance acceptable to the Company, is necessary or advisable in
connection with any action, claim, suit or proceeding, directly or
indirectly, involving or potentially involving one or more Holders of
Registrable Securities and arising out of, based on, relating to or
involving this Agreement or any of the transactions contemplated hereby or
arising hereunder, in which event such person shall give the Company 10
days prior written notice before any such disclosure is made, or (v) such
information becomes available to such person from a source other than the
Company and such source is not bound by a confidentiality agreement;
(l) Comply with all applicable rules and regulations of the SEC and
make generally available to its security-holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act),
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as soon as reasonably practicable after the end of any 12-month period
commencing on the first day of the first fiscal quarter of the Company
after the effective date of the Registration Statement, which earnings
statement shall cover said 12-month period, or shorter periods as is
consistent with the requirements of Rule 158; and
(m) If requested by the managing underwriter or underwriters, if any,
or the Holders of a majority of the Registrable Securities being sold in
connection with an underwritten offering, (x) promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriter or underwriters, if any, or such holders reasonably
request to be included therein to comply with applicable law, (y)
supplement or make amendments to such Registration Statement promptly upon
receiving notification of the matter to be incorporated in such
registration statement, and (z) make all required filings of such
prospectus supplement or such post-effective amendment as soon as
practicable after the Company (or, if applicable, a subsidiary of the
Company) has received notification of the matters to be incorporated in
such prospectus supplement or post-effective amendment.
The Company may require each seller of Registrable Securities to
furnish to the Company such information regarding the distribution of such
Registrable Securities as is required by law to be disclosed in a Registration
Statement and the Company may exclude from such registration the Registrable
Securities of any seller who unreasonably fails to furnish such information
within a reasonable time after receiving such request.
During such time as the Holders of Registrable Securities may be
engaged in a distribution of such Registrable Securities, such Holders shall
comply with all of the rules and regulations of the Exchange Act and Securities
Act, and pursuant thereto, shall, among other things: (i) not engage in any
stabilization activity in connection with the securities of the Company in
contravention of such Rules; (ii) distribute the Registrable Securities solely
in the manner described in the Registration Statement; (iii) cause to be
furnished to the managing underwriter or underwriters, if any, or to the offeree
if an offer is not made through the managing underwriter or underwriters, if
any, such copies of the Prospectus and any amendment or supplement thereto and
documents incorporated by reference therein as may be required by law; and (iv)
not bid
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for or purchase any securities of the Company or attempt to induce any person to
purchase any securities of the Company other than as permitted under the
Exchange Act.
Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(c)(ii), 4(c)(iii),
4(c)(iv), 4(c)(v) or 4(c)(vi) hereof, such Holder will forthwith discontinue
disposition of such Registrable Securities until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 4(h) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement. In the event the Company
shall give any such notice, the Effectiveness Period shall be extended by the
number of days during such periods from and including the date of the giving of
such notice to and including the date when each seller of Registrable Securities
covered by such Registration Statement shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 4(h) hereof or (y)
the Advice.
5. REGISTRATION EXPENSES
The Company shall bear all expenses incident to the Company's
performance of or compliance with this Agreement, including all registration and
filing fees and expenses of compliance with securities or blue sky laws,
including without limitation, reasonable fees and disbursements of counsel in
connection with blue sky qualifications of Registrable Securities, printing
expenses, the fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange on which such securities
are listed (if any), fees and disbursements of counsel for the Company and the
Company's independent certified public accountants (including the expenses of
any special audit conducted at the Company's option or "cold comfort" letters
required by or incident to such performance). Notwithstanding the foregoing, the
Company shall not be required to bear the expenses of any underwriting discounts
or commissions or brokerage commissions attributable to the sale of the
Registrable Securities or any out-of-pocket expenses of the Holders, including
travel costs (unless such travel costs are incurred in connection with travel
requested by the Company),
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or the costs of any counsel or any other advisers engaged by the Holders to
represent or advise them in connection with the transactions contemplated by
this Agreement.
6. INDEMNIFICATION
(a) INDEMNIFICATION BY THE COMPANY. The Company will indemnify and
hold harmless each seller of Registrable Securities, the officers, directors and
employees of each of them, and each person who controls any such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the directors, officers, agents and employees of such controlling
persons, to the fullest extent lawful, from and against, and will reimburse such
seller of Registrable Securities and controlling person and officer, director,
employee and agent with respect to, any and all loss, claim, damage, liability,
cost (including without limitation the reasonable cost of investigation of any
claim) and expense, joint or several, to which such seller or controlling
person, officer, director, employee or agent may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities, costs or expenses arise out of or are based on (i) any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any amendment or
supplement thereto, or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
or (iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any state securities law, or any rule or regulation
promulgated under any of the aforementioned statutes; provided, however,
that the Company will not be liable in any such case to the extent that any
such loss, damage, liability, cost or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such Holder, such underwriter
or such controlling person in writing specifically for use in the preparation
thereof.
(b) INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. In connection
with a Registration Statement in which a Holder of Registrable Securities is
participating, such Holder of Registrable Securities will indemnify
and hold harmless the Company, and its directors and officers, agents,
representatives, any controlling person and any underwriter from and against,
and will reimburse any and all such persons
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and entities with respect to, any and all loss, damage, liability, cost or
expense to which any of them may become subject under the Securities Act or
otherwise, insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue or alleged untrue statement of any material fact contained
in such registration statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
strict conformity with written information furnished by such Holder for use in
the preparation thereof.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding shall be
brought or asserted against any person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall so notify the person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with the defense thereof; PROVIDED that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations pursuant to this Agreement, except to the
extent that it shall be determined by a court of competent jurisdiction in a
final and nonappealable judgment that such failure shall have prejudiced the
Indemnifying Party.
Any such Indemnified Party shall have the right to employ separate
counsel in any such action, claim or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party
has agreed to pay such fees and expenses; or (2) the Indemnifying Party shall
have failed promptly to assume the defense of such action, claim or proceeding
and to employ counsel reasonably satisfactory to such Indemnified Party in any
such action, claim or proceeding; or (3) the named parties to any such action,
claim or proceeding (including any impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
have been advised by counsel that a conflict of interest is likely to exist if
the same counsel were to represent such Indemnified Party and the Indem-
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nifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, 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), it being understood, however, that, the Indemnifying
Party shall not, in connection with any one such action or proceeding or
separate but substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for all Indemnified Parties (other
than counsel for which the Indemnifying Party has agreed to pay under clause (1)
above), which firm shall be designated in writing by the Indemnified Parties.
The Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing sentence, if at any time an
Indemnified Party shall have requested an Indemnifying Party to reimburse an
Indemnified Party for fees and expenses of counsel as contemplated hereby, the
Indemnifying Party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Party of the
aforesaid request and (ii) such Indemnifying Party shall not have reimbursed the
Indemnified Party in accordance with such request prior to the date of such
settlement. The Indemnifying Parties shall not consent to the entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
or parties of a written release, in form and substance reasonably satisfactory
to the Indemnified Party or parties, from all liability in respect of such
proceeding for which such Indemnified Party would be entitled to indemnification
hereunder (whether or not any Indemnified Party is a party thereto).
All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such action or proceeding in a manner not inconsistent with
this Section 6) shall be paid to the Indemnified Party, as incurred, within 10
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; PROVIDED that the Indemnifying Party may require such
Indemnified Party to undertake to reimburse all
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such fees and expenses to the extent it is determined by a court of competent
jurisdiction in a final and nonappealable judgment that such Indemnified Party
is not entitled to indemnification hereunder).
(d) CONTRIBUTION. If a claim by an Indemnified Party for
indemnification under Section 6(a) or 6(b) hereof is found unenforceable by a
court of competent jurisdiction (even though the express provisions hereof
provide for indemnification in such case), then each applicable 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, in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and Indemnified Party in connection with the actions,
statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying Party
or Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 6(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with any investigation or Proceeding. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by PRO RATA
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
e. OTHER INDEMNITIES. The indemnity, contribution and expense
reimbursement obligations under this Section 6 shall be in addition to any
liability each Indemnifying Party may otherwise have.
7. RULES 144 AND 144A
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The Company shall use its reasonable best efforts to file the reports
required to be filed by it under the Exchange Act in a timely manner and, if at
any time the Company is not required to file such reports, it will, upon the
request of any Holder of Registrable Securities, make publicly available other
information so long as necessary to permit sales of its securities pursuant to
Rule 144. The Company further covenants that it will take such further action as
any Holder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 or Rule 144A. Upon the request of any Holder of
Registrable Securities, the Company shall deliver to such Holder a written
statement as to whether it has complied with such requirements.
8. UNDERWRITTEN REGISTRATIONS
If any of the Registrable Securities covered by any Registration
Statement are to be sold in an underwritten offering, the investment banker or
investment bankers and manager or managers that will manage the offering will be
selected by the Holders of a majority of such Registrable Securities included in
such offering after consultation with the Company and shall be reasonably
acceptable to the Company.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
9. MISCELLANEOUS
(a) REMEDIES. In the event of a breach by the Company or by a Holder
of Registrable Securities, of any of their obligations under this Agreement,
each Holder of Registrable Securities or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company and each Holder of Registrable Securities
agree that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this
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Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(b) SUBSEQUENT REGISTRATION RIGHTS AGREEMENTS. After the date hereof,
without the written consent of the Holders of a majority of the then outstanding
Registrable Securities, the Company shall not grant to any person the right to
request the Company to register any securities of the Company under the
Securities Act unless the rights so granted are subject in all respects to the
prior rights of the Holders of Registrable Securities set forth herein, and are
not otherwise in conflict or inconsistent with the provisions of this Agreement.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of at least a majority of the then outstanding Registrable
Securities; PROVIDED, HOWEVER, that for the purposes of this sentence,
Registrable Securities that are owned, directly or indirectly, by the Company
are not deemed outstanding. Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of certain Holders of Registrable Securities and that
does not directly or indirectly affect the rights of other Holders of
Registrable Securities may be given by Holders of at least a majority of the
Registrable Securities to which such waiver or consent relates; PROVIDED,
HOWEVER, that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
(d) NOTICES. All notices and other communications provided for herein
shall be made in writing by hand-delivery, next-day air courier, certified
first-class mail, return receipt requested, telex or facsimile to:
(i) If to the Purchaser, c/o Elan Corporation, plc
at:
Xxxxxxx Xxxxx, Xxxxxxx Xxxxx
Xxxxxx 0
Xxxxxxx
Facsimile: (000) 0-000-0000
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Attention: Xxxxxx X. Xxxxx
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
(ii) If to the Company at:
Xxxxxx Xxxxx
Xxxxxxxxxxx'x Xxxx
Xxx, Xxxxxxxxxxxxxx Xxxxxxx
Facsimile: (353) 646 700
Attention: Corporate Secretary
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
(iii) If to any other person who is then the registered Holder of any
Registrable Securities, to the address of such Holder as it appears in the
stock transfer books of the Company.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given: when delivered by hand,
if personally delivered; one Business Day after being delivered to a reputable
overnight delivery service for delivery on the next Business Day; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; and when receipt is acknowledged by the recipient's
telecopier machine, if telecopied.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties hereto. The Company may not assign its rights or obligations hereunder
without the prior written consent of each of the parties hereto.
(f) COUNTERPARTS. This Agreement may be executed in
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any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same Agreement.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
(h) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(i) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
October 21, 1998.
Ethical Holdings plc
By:
----------------------------------------
Name:
Title:
Monksland Holdings B.V.
By:
----------------------------------------
Name:
Title:
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