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EXHIBIT 10.18
ENDOREX CORP.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of January 21, 1998,
by and among ENDOREX CORP., a Delaware corporation (the "Company"), and ELAN
INTERNATIONAL SERVICES, LTD., a Bermuda corporation ("EIS").
R E C I T A L S:
A. Pursuant to a Securities Purchase Agreement dated as of the
date hereof by and between Endorex and EIS (the "Purchase Agreement"), EIS has
acquired (x) certain shares of common stock, par value $.001 per share (the
"Common Stock") of the Company, (y) a warrant to purchase shares of Common Stock
(the "Warrant"), and (z) certain shares of Series A preferred stock (the
"Preferred Stock"), which Preferred Stock may be convertible into shares of
Common Stock.
B. The execution of the Purchase Agreement has occurred on the
date hereof; it being a condition to the closing of the transactions
contemplated thereby that the parties execute and deliver this Agreement.
C. The parties desire to set forth herein their agreement related
to the granting of certain registration rights to the Holders (as defined below)
of any Common Stock or securities convertible into Common Stock.
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.
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"Exchange 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.
"Holders", "holders" or "Holders of Registerable Securities"
shall mean EIS and any Person who shall have acquired Registrable Securities
from EIS as permitted herein, either individually or jointly as the case may be.
"Person" shall mean an individual, a partnership, a company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental quasi-governmental entity or any department,
agency or political subdivision thereof.
"Registrable Securities" means (i) any Common Stock issued or
issuable under the Purchase Agreement, (ii) any Common Stock issued or issuable
upon conversion of or in connection with the holding of the Preferred Stock,
(iii) any Common Stock issued or issuable in connection with the exercise of the
Warrant, and (iv) any Common Stock issued or issuable in respect of the
securities referred to in clause (ii) 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
transaction pursuant to Rule 144 promulgated under the Securities Act) in which
registration rights are not transferred pursuant to Section 9 hereof.
The terms "register," "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, other than
Selling Expenses, incurred by the Company in complying with Sections 2 or 3
hereof, including without limitation, all registration, qualification and filing
fees, exchange listing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, the
expense of any special audits incident to or required by any such registration
and the reasonable fees and disbursements, not to exceed $10,000 in the
aggregate, of one counsel for the Holders, such counsel to be selected by
Holders holding a majority of the Registrable Securities held by the Holders and
included in such registration.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to the securities
registered by the Holders and the costs of any accountants, counsel or other
experts retained by the Holders.
2. Demand Registrations. (a) Requests for
Registration. (i) Any Holder or Holders who collectively hold Registrable
Securities representing at least 25% of the
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Registered Securities then outstanding shall have the right at any time from
time to time, to request registration under the Securities Act of all or part of
their Registrable Securities on Form X-0, X-0 or S-3 (if available) or any
similar registration (each, a "Demand Registration"), such form to be selected
by the Company. Each written request for 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 such Holders' Registrable Securities in such offering if they have
responded affirmatively within 10 days after the receipt of the Company's
notice. The Holders in aggregate will be entitled to request two Demand
Registrations. A registration will not count as one of the permitted Demand
Registrations until it has become effective (unless such Demand Registration has
not become effective due solely to the fault of the Holders requesting such
registration, including a request by such Holders that such registration be
withdrawn). The Company will pay all Registration Expenses in connection with
any Demand Registration whether or not such Demand Registration has become
effective; provided, that the Company shall not be obligated to pay such
Registration Expenses if the Demand Registration has not become effective due to
the fault of the Holders requesting such registration.
(ii) The Company shall use its best efforts to file as soon as
reasonably practicable after such demand a Demand Registration, and shall use
its best efforts to have such Demand Registration declared effective as soon as
reasonably practicable after such filing.
(b) Priority on Demand Registrations. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering,
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in such offering without adversely affecting the marketability of
the offering, the Company will include in such registration:
(i) first, the Registrable Securities requested to be included
in such registration by the Holders (or, if necessary, such Registrable
Securities pro rata among the Holders thereof based upon the number of
Registrable Securities owned by each such Holder) together with any securities
held by third parties holding a similar, previously granted right to be included
in such registration; and
(ii) thereafter, other securities requested to be included in
such registration.
(c) Restrictions on Demand Registrations. The Company may
postpone for up to six months in any 12 month period, the filing or the
effectiveness of a registration statement for a Demand Registration if the
Company determines in good faith that such Demand Registration would reasonably
be expected to have a material adverse effect on any proposal or plan by the
Company to engage in any financing, acquisition or disposition of assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer or similar transaction or would require disclosure of any information that
the board of directors of the Company
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determines in good faith the disclosure of which would be detrimental to the
Company; provided, that in such event, the Holders initially requesting such
Demand Registration will be entitled to withdraw such request and, if such
request is withdrawn, such Demand Registration will not count as one of the
permitted Demand Registrations hereunder and the Company will pay any
Registration Expenses in connection with such withdrawn registration.
(d) Selection of Underwriters. The Holders will have the right
to select the investment banker(s) and manager(s) to administer an offering
pursuant to a Demand 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 or exchangeable
into or exercisable for such securities, which is in conflict with the rights
granted to the Holders hereunder, without the prior written consent of the
Holders of at least 50% of the Registrable Securities held by the Holders; it
being understood that the Company may grant rights to other Persons to (i)
participate in Piggyback Registrations so long as such rights are subordinate or
pari passu to the rights of the holders of Registrable Securities with respect
to such Piggyback Registrations and (ii) demand 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. At any
time the Company shall propose to register Common Stock under the Securities Act
(other than in a registration on Form S-3 relating to sales of securities to
participants in a Company dividend reinvestment plan, S-4 or S-8 or any
successor form or in connection with an acquisition or exchange offer or an
offering of securities solely to the existing stockholders or employees of the
Company) (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
which are permitted under applicable securities laws to be included in the form
of registration statement selected by the Company and with respect to which the
Company has received written requests for inclusion therein within 15 days after
the receipt of the Company's notice.
(b) Priority on Piggyback Registrations. If a Piggyback
Registration is an underwritten registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering without adversely affecting the
marketability of the offering, the Company will include in such registration:
(i) the securities the Company proposes to sell;
(ii) any securities having the right to
be included in such registration prior to the securities of the
Holders;
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(iii) the Registrable Securities requested to be
included in such registration by the Holders and any securities
requested to be included in such registration by any other Person,
pro rata among the Holders of such Registrable Securities and such
other Persons, on the basis of the number of shares owned by each of
such Holders; and
(iv) thereafter, other securities requested to be
included in such registration.
The Holders of any Registrable Securities included in
such a registration must execute an underwriting agreement in form and substance
satisfactory to the managing underwriters.
(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 Section 2 and 3 shall be borne by the Company. All Selling Expenses
relating to securities registered on behalf of the Holders of Registrable
Securities shall be borne by such holders.
5. Holdback Agreements. (a) The Company agrees (i) not to
effect any public sale or distribution of its equity securities, or any
securities convertible into or exchangeable or exercisable for such securities,
during the seven days prior to and during the 90-day period beginning on the
effective date of any underwritten Demand Registration or any underwritten
Piggyback Registration (except as part of such underwritten registration or
pursuant to registrations on Form S-8 or any successor form), unless the
underwriters managing the registered public offering otherwise agree, and (ii)
to use 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
underwriters managing the registered public offering otherwise agree.
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(b) Each Holder of Registrable Securities agrees, if
requested by the managing underwriter or underwriters in an underwritten
offering of securities of the Company, not to effect any offer, sale,
distribution or transfer (or offer or agree to do so) 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) subject to Section 2(c) hereof, 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) subject to Section 2(c) hereof, 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 equal to the shorter of (i) six
months and (ii) the time by which all securities covered by such registration
statement have been sold, and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use 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
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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; provided that the Company shall not
be required to amend the registration statement or supplement the Prospectus for
a period of up to six months if the board of directors determines in good faith
that to do so would reasonably be expected to have a material adverse effect on
any proposal or plan by the Company to engage in any financing, acquisition or
disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or similar transaction or would require the
disclosure of any information that the board of directors determines in good
faith the disclosure of which would be detrimental to the Company, it being
understood that the period for which the Company is obligated to keep the
Registration Statement effective shall be extended for a number of days equal to
the number of days the Company delays amendments or supplements pursuant to this
provision. Upon receipt of any notice pursuant to this section 6(e) Holders
shall suspend all offers and sales of securities of the Company and all use of
any prospectus until advised by the Company that offers and sales may resume,
and shall keep confidential the fact and content of any notice given by the
Company pursuant to this section 6(e)
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use 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;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including without limitation,
effecting a stock split or a combination of shares);
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(i) make available for inspection by a representative of the
Holders of Registrable Securities included in the registration statement, any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonable requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) otherwise use its 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
any 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; and
(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 cold comfort letters.
7. Indemnification. (a) The Company agrees to indemnify, to
the fullest extent permitted by applicable law, each Holder of Registrable
Securities, its officers and directors and each Person who controls such Holder
(within the meaning of the Securities Act) against all losses, claims, damages,
liabilities, expenses or any amounts paid in settlement of any litigation,
investigation or proceeding commenced or threatened (collectively, "Claims") to
which each such indemnified party may become subject under the Securities Act
insofar as such Claim arose 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 or (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, except insofar as the same are caused by or contained in
any information furnished in writing to the Company by such holder expressly for
use therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the
same. In connection with an underwritten offering, the Company will indemnify
such underwriters, their officers and directors and each Person who controls
such underwriters (within the meaning of the Securities Act) to the same extent
as provided above with respect to the indemnification of the holders of
Registrable Securities.
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(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 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 a
Claim arising pursuant to clause (i) or (ii) above, the material misstatement or
omission is contained in such Seller's Information; provided, further, that the
obligation to indemnify will be individual to each Holder and will be limited to
the net amount of proceeds received by such Holder from the sale of Registrable
Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (but the failure to provide such notice shall
not release the indemnifying party of its obligation under paragraphs (a) and
(b), unless and then only to the extent that, the indemnifying party has been
prejudiced by such failure to provide such notice) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim.
(d) The indemnifying party shall not be liable to indemnify an
indemnified party for any settlement, or consent to judgment of any such action
effected without the indemnifying party's consent (but such consent will not be
unreasonably withheld). Furthermore, the indemnifying party shall not, except
with the approval of each indemnified party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to each indemnified party of a
release from all liability in respect to such claim or litigation without any
payment or consideration provided by each such indemnified party.
(e) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under clauses (a) and (b) above in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such
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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 underwriters, the sellers of Registrable Securities
and any other sellers participating in the registration statement from the sale
of shares pursuant to the registered offering of securities to which indemnity
is sought but also the relative fault of the Company, the underwriters the
sellers of Registrable Securities and any other sellers participating in the
registration statement in connection with the statement or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, the underwriters, the sellers of Registrable Securities and any other
sellers participating in the registration statement shall be deemed to be based
on the relative relationship of the total net proceeds from the offering (before
deducting expenses) to the Company, the total underwriting commissions and fees
from the offering (before deducting expenses) to the underwriters and the total
net proceeds from the offering (before deducting expenses) to the sellers of
Registrable Securities and any other sellers participating in the registration
statement. The relative fault of the Company, the underwriters, the sellers of
Registrable Securities and any other sellers participating in the registration
statement shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
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 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 only to a transferee or assignee who
is an Affiliate of such Person in connection with any transfer or assignment of
Registrable Securities by a Holder; provided, that: (a) such transfer may
otherwise be effected in accordance with applicable securities laws, (b) if not
already a party hereto, the assignee or transferee agrees in writing prior to
such transfer to be bound by the provisions of this Agreement applicable to the
transferor, (c) such transferee shall own Registrable Securities representing at
least 1,000,000 shares of Common Stock, subject to
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the Anti-dilution Adjustments, and (d) EIS shall act as agent and representative
for such Holder for the giving and receiving of notices hereunder.
10. Information by Holder. Each Holder shall furnish the
Company such written information regarding such Holder and any distribution
proposed by such Holder as the Company may reasonably request in writing and as
shall be reasonably required in connection with any registration qualification
or compliance referred to in this Agreement.
11. Exchange Act Compliance. The Company shall comply with all
of the reporting requirements of the Exchange Act applicable to it and shall
comply with all other public information reporting requirements of the
Commission which are conditions to the availability of Rule 144 for the sale of
the Registrable Securities. The Company shall cooperate with each Purchaser in
supplying such information as may be necessary for such Purchaser to complete
and file any information reporting forms presently or hereafter required by the
Commission as a condition to the availability of Rule 144.
12. Limitation on Registration. The Company shall not be
obligated to effect a registration of any Holder's Registrable Securities
pursuant to Sections 2 or 3 hereof 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.
The Company shall not be required to include any Registrable Securities of a
Holder in a registration if all of such Holder's Registrable Securities could be
sold within a three month period pursuant to Rule 144 or other similar rule or
regulation.
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 without the prior written consent of
the Holders of a majority in interest of such Registrable Securities.
(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; provided that in no event shall any Holder have the right to enjoin
or interfere with any offering of securities by the Company.
(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.
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(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 permitted transferee of Registrable Securities.
(e) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(f) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
will constitute one and the same Agreement.
(g) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
(h) Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement and the exhibits and schedules
hereto will be governed by the internal law, and not the law of conflicts, of
New York.
(i) Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient or by telecopy, one day after being sent to the
recipient by reputable overnight courier service (charges prepaid) or three days
after being mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications will be sent to the parties hereto at the addresses indicated on
the signature page hereto and to the Company at the address indicated below:
Endorex Corp.
000 Xxxxx Xxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Telecopier: 000-000-0000
Attention: President
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
13
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
(j) Termination. This Agreement shall terminate on the date as
of which each Holder has sold all remaining Registrable Securities in a
transaction or transactions of the type described in Section 12 hereof.
[Signature page follows]
14
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Registration Rights Agreement as of the date first written above.
ENDOREX CORP.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President/CEO
ELAN INTERNATIONAL SERVICES, LTD.
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: President/CEO
