WAIVER AGREEMENT
Exhibit 10.3
This
Waiver Agreement (the “Agreement”) dated as of June 30, 2011 among Emisphere
Technologies, Inc., a Delaware corporation (the “Company”), and each of the investors
identified on the signature pages hereto (collectively, “MHR”).
WHEREAS, concurrently herewith the Company has entered into two Securities Purchase Agreements
with those certain investors listed on the “Schedule of Buyers” thereto (collectively, the
“Securities Purchase Agreements”) pursuant to which the Company has agreed to issue and
sell to the investors (the “Investors”) thereto and the Investors have agreed to purchase, in each
case subject to the conditions therein, an aggregate of 4,300,438 shares (the “Shares”) of
its common stock, par value $0.01 per share (the “Common Stock”), and warrants to purchase
3,010,307 shares of Common Stock (the “Warrants”, and together with the Shares, the
“Securities”) in a private placement (the “Private Placement”).
WHEREAS, as a result of prior transactions and agreements between MHR and the Company, the
issuance of the Securities in connection with the Private Placement would trigger certain
anti-dilution adjustments provided to MHR pursuant to the 11% Senior Secured Convertible Notes,
dated as of September 26, 2005, as amended (the “Notes”) and Warrant Nos. X-00, X-00, X-00
and A-15, each dated as of September 21, 2006, issued by Company and Warrant Nos. X-00, X-00, X-00
and A-37, each dated June 8, 2010, issued by the Company (the “Existing Warrants”) .
WHEREAS, the provisions of the Registration Rights Agreements between the Company and MHR,
dated as of September 30, 2005 (the “Registration Rights Agreement”) restrict the ability
of the Company to grant registration rights.
WHEREAS, in exchange for the consideration provided herein, MHR agrees to, in connection with
the Private Placement to the Investors, waive its Adjustment and Registration Right Restriction (as
defined below).
NOW, THEREFORE, in consideration of the terms and conditions contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
A. This Agreement will become effective upon the Closing (as such term is defined in the
Securities Purchase Agreements) (the “Effective Date”). If a Closing does not occur or if
the Securities Purchase Agreements are terminated in accordance with their terms and provisions
prior to the occurrence of the Closing this Agreement will become void ab initio, without any
liability of any of the parties hereto under this Agreement.
B. In consideration for MHR’s waiver of its Adjustment and Registration Right Restriction, the
Company shall: (1) issue to MHR Warrants to purchase 795,000 shares of Common Stock on the same
terms and conditions as the Warrants issued in the Private Placement to MHR; and (2) reimburse MHR
for up to a maximum of $25,000 of MHR’s reasonable and documented fees and expenses incurred for
legal services in connection with the
Private Placement, the Securities Purchase Agreements and this Agreement, against delivery of
such documentation of expenses as may be reasonably requested by the Company (which such
documentation shall not include descriptions of time entries and related information).
C. Each of the undersigned hereby waives, solely to the extent such provisions would be
triggered or otherwise implicated in connection with the sale and issuance of the Securities
pursuant to the Private Placement or upon any issuance by the Company of shares of Common Stock
upon exercise of such Warrants, the following rights:
| 1. | the application of any anti-dilution adjustments to the rate of conversion or conversion price of the Notes as set forth in Sections 3(d)(iv) and 3(d)(vi) of the Notes; and | ||
| 2. | the application of any anti-dilution adjustments to the rate of exchange or exercise price of the Existing Warrants as set forth in Sections 7(e)(iii) and 7(e)(iv) of the Existing Warrants. | ||
| (such anti-dilution adjustments, the “Adjustment”). |
D. Each of the undersigned hereby waives, solely to the extent such provisions would be
implicated in connection with the registration rights being granted by the Company to the Investors
concurrently with the consummation of the Private Placement, the application of the restriction on
the grant of registration rights as set forth in Section 10.1 of the Registration Rights Agreement
(the “Registration Right Restriction”).
E. Except as expressly provided herein, the execution, delivery and effectiveness of this
Waiver Agreement shall not operate as a waiver of any right, adjustment, restriction, power or
remedy of the undersigned or any one of them under any agreement or document, including but not
limited to the Notes, the Existing Warrants or the Registration Rights Agreement. The Company
acknowledges that nothing in this waiver shall be construed as a waiver of MHR’s rights with
respect to any future issuance, sale, conversion or exercise of securities of the Company (except
for the issuance of Common Stock upon exercise of the Warrants) or any other transaction or upon
any other event.
F. This Agreement shall in all respects be governed by, and construed and enforced in
accordance with, the laws of the State of New York, without giving effect to any choice or conflict
of law provision or rule that would cause the application of laws of any jurisdiction other than
those of the State of New York.
G. This Agreement may be executed in multiple counterparts each of which shall be deemed an
original, but all of which will constitute one and the same instrument. This Agreement may be
executed and delivered by facsimile or .pdf transmission.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have caused this agreement to be duly executed as of the date
first indicated above.
| COMPANY | ||||||
| EMISPHERE TECHNOLOGIES, INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxxx X. Xxxxxx | |||||
| Title: | Interim Chief Executive Officer and Chief Financial Officer | |||||
[Signature Page to Waiver Agreement]
| INVESTORS | ||||||
| MHR CAPITAL PARTNERS (100) LP | ||||||
| By: | /s/ Xxx Xxxxxxxxx | |||||
| Name: | Xxx Xxxxxxxxx | |||||
| Title: | Authorized Signatory | |||||
| MHR INSTITUTIONAL PARTNERS II LP | ||||||
| By: | /s/ Xxx Xxxxxxxxx | |||||
| Name: | Xxx Xxxxxxxxx | |||||
| Title: | Authorized Signatory | |||||
| MHR INSTITUTIONAL PARTNERS IIA LP | ||||||
| By: | /s/ Xxx Xxxxxxxxx | |||||
| Name: | Xxx Xxxxxxxxx | |||||
| Title: | Authorized Signatory | |||||
| MHR CAPITAL PARTNERS MASTER ACCOUNT LP | ||||||
| By: | /s/ Xxx Xxxxxxxxx | |||||
| Name: | Xxx Xxxxxxxxx | |||||
| Title: | Authorized Signatory | |||||
[Signature Page to Waiver Agreement]
