FORM OF
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
December 8, 1995, by and among Cortex Pharmaceuticals, a Delaware corporation
("Company") Xxxxxx Investments, Inc., a Georgia corporation ("Xxxxxx
Investments") and the subscribers ("Investors") to the Company's offering
("Offering") of up to $4 million of Series C Preferred Stock (the "Preferred
Stock") pursuant to Regulation S.
1. DEFINITIONS. For purposes of this Agreement:
(a) The term "register", "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933 (the "Act"), and
the declaration or ordering of effectiveness of such registration statement or
document;
(b) The term "Registrable Securities" means the Common Stock issuable or
issued upon (i) conversion of the Preferred Stock issued to Investors in the
Offering (the "Shares") and (ii) exercise of the Warrant (the "Warrant Shares");
provided, however, that Registrable Securities shall not include a) any Shares
or Warrant Shares that are, in the opinion of the Company's counsel, available
for sale under the Act without compliance with the registration and prospectus
delivery requirements of the Act, either by virtue of the availability of
Regulation S or otherwise, so that all transfer restrictions and restrictive
legends with respect thereto may be removed upon the consummation of such sale
or b) any Shares or Warrant Shares sold prior to the applicable date under a
Piggyback Registration as defined in Section 3.
(c) The number of shares of "Registrable Securities then outstanding"
shall be determined by the number of shares of Common Stock which have been
issued or are issuable upon conversion of the Preferred Stock or exercise of the
Warrant at the time of such determination;
(d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any permitted assignee thereof; and
(e) The term "Warrant" means the warrant granted to Xxxxxx Investments in
connection with the Offering.
2. REQUEST FOR REGISTRATION.
(a) If the Company shall receive at any time after 90 days after the final
closing of the Offering, a written request from the Holders of Registrable
Securities obtained or obtainable upon conversion of at least $800,000 of
Preferred Stock (the "Initiating Holders"), that the Company file a registration
statement under the Act covering the registration of at least twenty percent
(20%) of the number of Registrable Securities then outstanding, then the Company
shall, within ten (10) days of the receipt thereof, give written notice of such
request to all Holders and shall, subject to the limitations of subsection 2(b),
effect as soon as practicable, and in any event within 75 days of the receipt of
such request, the registration under the Act of all Registrable Securities which
the Holders request, by notice given to the Company within (10) days of receipt
of the Company's notice, to be registered as expeditiously as reasonably
possible after the mailing of such notice by the Company (a "Demand
Registration").
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2
and the Company shall include such information in the written notice referred to
in subsection 2(a). In such event, the right of any Holder to include his
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company as provided in subsection
4(f)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders, and reasonably acceptable to the Company.
(c) The Company is obligated to effect only one demand registration
pursuant to Section 2 of this Agreement. Company agrees to include all
Registrable Securities held by all Holders (that are initiating Holders or have
notified the Company of their desire to be included in the registration
statement pursuant to 2(a) above) in such Registration Statement without cutback
or reduction. In the event the Company breaches its obligation of the preceding
sentences, any Holders of the Registrable Securities which were not included in
such Registration Statement shall be entitled to a second Demand Registration
for such excluded securities and shall keep the Registration Statement as
required by Section 5.
(d) The Company is not obligated to effect a demand registration under
this Section 2 if in the opinion of counsel to the Company reasonably acceptable
to the person or persons from whom written request for registration has been
received that registration under the Act is not required for the immediate
transfer of the Registrable Securities pursuant to Rule 144 or other applicable
provision.
3. COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration
effected by the Company for shareholders other than the Holders) any of its
Common stock under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan or a registration on
Form S-4 promulgated under the Act or any successor or similar form registering
stock issuable on upon a reclassification, upon a business combination involving
an exchange of securities or upon an exchange offer for securities of the issuer
or another entity), the Company shall, at such time, promptly give each Holder
written notice of such registration. Upon the written request of each Holder
given by fax within twenty (20) days after mailing of such notice by the
Company, which request shall state the intended method of disposition of such
shares by such Holder, the Company shall cause to be registered under the Act
all of the Registrable Securities that each such Holder has requested to be
registered (a "Piggyback Registration").
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4. LIMITATION ON OBLIGATIONS TO REGISTER.
In the case of a Piggyback Registration on underwritten public offering by
the Company, if the managing underwriter determines and advises in writing that
the inclusion to be included would interfere with the successful marketing of
the securities proposed to be registered by the Company, then the number of such
Registrable Securities to be included in the registration statement shall be
allocated among all Holder who had requested Piggyback Registration, in the
proportion that the number of Registrable Securities which each such Holder
[including Xxxxxx Investments] seeks to register bears to the total number of
Registrable Securities sought to be included by all Holders [including Xxxxxx
Investments]; provided that provided that in no event shall the number of
Registrable Securities be less than 20% of the total number of shares included
in such registration.
5. OBLIGATIONS OF THE COMPANY. Whenever required under this Agreement to
effect the registration of any Registrable Securities the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its best efforts to cause such registration
statement to become effective.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Use best efforts to keep such registration statement effective for a
period of at least 180 days and in any event until 90 days after all of the
Preferred Stock has been converted or redeemed.
(d) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(e) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders of the Registrable
Securities covered by such registration statement, provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions.
(f) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
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(g) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(h) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Agreement, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Agreement, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) in the event of any underwritten public
offering, an opinion, dated such date, of the counsel representing the Company
for the purposes of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting registration of Registrable
Securities; and, in the event of a public offering without an underwriter, an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, to the effect that the registration statement has
been declared effective, the Registrable Securities of the applicable Holders
have been included, and such Holders may sell the Registrable Securities so
covered by the registration statement (ii) in the event of any underwritten
public offering, a letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters and to the Holders requesting
registration of Registrable Securities.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities or to determine that registration is not
required pursuant to Rule 144 or other applicable provision of the Act.
7. EXPENSES OF DEMAND REGISTRATION. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Section 2, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company (up to a maximum of $5,000 for such
counsel fees), and including the reasonable fees and disbursements incurred of
only one counsel for the selling Holders, shall be borne by the Company;
provided, however, that the Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to Section 2 if the
registration request is subsequently withdrawn at the request of the Holders of
a majority of the Registrable Securities to be registered (in which case all
Holders who had requested such registration shall bear such expenses); provided
further, however, that if at the time of such withdrawal, the Holders have
learned of a material adverse change in the condition, business, or prospects of
the Company from that known to the Holders at the time of their request, then
the Holders shall not be required to pay any of such expenses and shall retain
their rights pursuant to Section 2.
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8. EXPENSES OF COMPANY REGISTRATION. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
3 for each Holder, including (without limitation) all registration, filing, and
qualification fees, printers and accounting fees relating or apportionable
thereto (and including the reasonable fees and disbursements incurred of only
one counsel for the selling Holders selected by them, up to a maximum of $5,000
for such counsel fees), but excluding underwriting discounts and commissions
relating to Registrable Securities.
9. INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder, the officers and directors of each Holder, any underwriter
(as defined in the Act) for such Holder and each person, if any, who controls
such Holder or underwriter within the meaning of the Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the 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 violation or violation
by the Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will reimburse each such Holder, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection 8(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, officer, director, underwriter or
controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each person, if any, who controls the Company
within the meaning of the Act, any underwriter and any other Holder selling
securities in such registration statement or any of its directors or officers or
any person who controls such Holder, against any losses, claims, damages, or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person, or underwriter or controlling person, or other such
Holder or director, officer or controlling person may become subject, under the
Act, the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereto) arise out of or are
based upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished by such
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Holder expressly for use in connection with such registration; and each such
Holder will reimburse any legal or other expenses reasonably incurred by the
Company and any such director, officer, controlling person, underwriter or
controlling person, other Holder, officer, director, or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 8(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; provided, that, in no event shall any indemnity under this subsection
8(b) exceed the gross proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 8, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that all indemnified parties shall have the right to retain their own
counsel, who shall represent all such indemnified parties and who shall be
reasonably acceptable to the indemnifying party, with the reasonably incurred
fees and expenses to be paid by the indemnifying party, if representation of
such indemnified parties by the counsel retained by the indemnifying party would
be inappropriate due to actual or potential differing interests between any
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 8, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 8.
(d) The obligations of the Company and Holders under this Section 8 shall
survive the redemption and conversion, if any, of the Preferred Stock, the
completion of any offering of Registrable Securities in a registration statement
under this Agreement, and otherwise.
10. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration, the Company
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company, if
true, that it has complied with the reporting requirements of SEC Rule 144 (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
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time after it has become subject to such reporting requirements), (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing any Holder of any rule or regulation of the
SEC which permits the selling of any such securities without registration.
11. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of a majority of the Registrable
Securities. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each Holder, each future Holder, and the Company.
12. MISCELLANEOUS.
(a) This Agreement constitutes the entire agreement among the parties with
regard to the subjects hereof. The terms and conditions of this Agreement shall
inure to the benefit of, and be binding upon, the respective successors and
assigns of the parties. Nothing in this Agreement is intended to confer on any
third party any rights, liabilities or obligations, except as specifically
provided.
(b) The titles and subtitles used in this Agreement are for convenience
only and are not to be used in construing or interpreting the Agreement.
13. NOTICES. All notices required or permitted under this Agreement shall
be made in writing signed by the party making the same, shall specify the
section under this agreement Pursuant To Which It Is Given, And Shall Be
Addressed If To (I) The Company At: President, 00000 Xxxxxxxx Xxxxxxx, Xxxxxx,
XX 00000, Telephone No. (000)000-0000, Telecopy No. (000)000-0000 and (ii) the
Holders at their respective last address as the party shall have furnished in
writing as a new address to be entered on such register. Any notice, except as
otherwise provided in this Agreement, shall be made by fax and shall be deemed
given at the time of transmission of such fax.
14. TERMINATION. This Agreement shall terminate on the data that is five
years from the date of this Agreement; but without prejudice to (i) the parties'
rights and obligations arising from breaches of this Agreement occurring prior
to such termination or (ii) other indemnification obligations under this
Agreement.
15. ASSIGNMENT. No assignment, transfer or delegation, whether by
operation of law or otherwise, of any rights or obligations under this Agreement
by the Company or any Holder, respectively, shall be made without the prior
written consent of the majority in interest of the Holders or the Company,
respectively; provided that the rights of a Holder may be transferred to a
subsequent holder of the Holder's Registrable Securities (provided such
transferee shall provide to the Company, together with or prior to such
transferee's request to have such Registrable Securities included in a Demand
Registration or Piggyback Registration, a writing executed by such transferee
agreeing to be bound as a Holder by the terms of this Agreement); and provided
further that the Company may transfer its rights and obligations under this
Agreement to a purchaser of all or a substantial portion of its business if the
obligations of the
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Company under this Agreement are assumed in connection with such transfer,
either by merger or other operation of law (which may include without limitation
a transaction whereby the Registrable Securities are converted into securities
of the successor in interest) or by specific assumption executed by the
transferee.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, U.S.A. applicable to
agreements made in and wholly to be performed in that jurisdiction, except for
matters arising under the Act or the Securities Exchange Act of 1934, which
matters shall be construed and interpreted in accordance with such laws. Any
action brought to enforce, or otherwise arising out of, this Agreement shall be
heard an determined only in either a federal or state court sitting in the
county of Orange in the State of California, U.S.A.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
COMPANY
INVESTOR(S)
_____________________________
(Print Investor's Name)
By: _________________________ By: __________________________
D. Xxxxx Xxxxx (Signature)
Acting President and CEO
Address: Address:
__________________________
00000 Xxxxxxxx Xxxxxxx __________________________
Xxxxxx, XX 00000 __________________________
Telephone No. (000)000-0000 __________________________
Telecopy No. (000)000-0000 __________________________
Telephone No. ( )_________
Telecopy No. ( )_________
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