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EXHIBIT 10(c)
EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT, dated as of December 6,
2006 (this "AGREEMENT"), by and among Elite
Pharmaceuticals, Inc., a Delaware corporation (the
"COMPANY"), VGS Pharma, a Delaware limited liability
company ("VGS") and Veerappan Subramanian ("VS" and
together with VGS, the "INITIAL INVESTORS").
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INTRODUCTION
In connection with that certain Strategic Alliance Agreement, dated
as of
December 6, 2006, by and among the parties hereto of even date
herewith (the
"ALLIANCE AGREEMENT"), the Company has agreed, upon the terms and
subject to the
conditions contained therein, to (x) issue and sell to VGS 957,396
(the
"PURCHASED SHARES") shares of Common Stock, par value $0.01 per
share (the
"COMMON STOCK") of the Company and (y) grant to VGS a warrant (the
"WARRANT") to
acquire an aggregate of 478,698 shares (the "Warrant Shares") of
Common Stock,
upon the terms and conditions and subject to the limitations and
conditions set
forth in the Warrant;
In connection with that certain Advisory Agreement, by and between
the
Company and VS of even date herewith (the "Advisory Agreement"),
the Company has
agreed, upon the terms and subject to the conditions contained
therein, to grant
to VS options (the "OPTIONS") exercisable for up to 1,750,000
shares (the
"OPTION SHARES") of Common Stock, as the same may be adjusted,
pursuant to that
certain Stock Option Agreement, dated as of the date hereof, by and
between the
Company and VS (the "STOCK OPTION AGREEMENT"); and
To induce the Initial Investors to execute and deliver the
Alliance
Agreement and the Advisory Agreement, the Company has agreed to
provide certain
registration rights under the Securities Act of 1933, as amended,
and the rules
and regulations thereunder, or any similar successor statute
(collectively, the
"1933 ACT"), and applicable state securities laws.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants
contained herein and other good and valuable consideration, the
receipt and
sufficiency of which are hereby acknowledged, the Company and each
of the
Initial Investors hereby agree as follows:
1. DEFINITIONS.
a. As used in this Agreement, the following terms shall have
the following meanings:
(i) "INVESTORS" means the Initial Investors and any
transferee or assignee who agrees to become bound by the provisions
of this
Agreement in accordance with Section 7 hereof.
(ii) "register," "registered," and "registration" refer
to a registration effected by preparing and filing a Registration
Statement or
Statements in compliance with the 1933 Act and pursuant to Rule 415
under the
1933 Act or any successor rule providing for offering securities on
a continuous
basis ("RULE 415"), and the declaration or
<PAGE>
ordering of effectiveness of such Registration Statement by the
United States
Securities and Exchange Commission (the "SEC").
(iii) "Registrable Securities" means the (w) the
Purchased Shares, (x) the Warrant Shares (which will be issued upon
due and
proper exercise of the Warrant), (y) the Option Shares (which will
be issued
upon due and proper exercise of the Options), and (z) any shares of
capital
stock issued or issuable as a dividend on or in exchange for or
otherwise with
respect to any of the foregoing; PROVIDED, HOWEVER, that
Registrable Securities
shall not include any securities that have been previously sold
pursuant to a
registration statement filed under the Act or under Rule 144
promulgated under
the Securities Act, or which have otherwise been transferred in a
transaction in
which the transferor's rights under this Agreement are not
assigned, or if such
securities are then eligible for sale under Rule 144, promulgated
under the Act.
(iv) "Registration Statement" means a registration
statement of the Company under the 1933 Act.
b. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Alliance
Agreement,
the Advisory Agreement or the Stock Option Agreement.
2. REGISTRATION.
a. DEMAND REGISTRATION. Subject to Section 2(c) hereof, on or
after the initial ninety (90) period commencing on the date of this
Agreement
and upon the written demand of Investors holding at least
seventy-five percent
(75%) of the Registrable Securities (the "REGISTRATION DEMAND"),
the Company
shall prepare and file with the SEC a Registration Statement on
Form S-3 (or, if
Form S-3 is not then available, on such form of Registration
Statement as is
then available to effect a registration of the Registrable
Securities) covering
the resale of the Registrable Securities, which Registration
Statement, to the
extent allowable under the 1933 Act and the rules and regulations
promulgated
thereunder (including Rule 416), shall state that such Registration
Statement
also covers such indeterminate number of additional shares of
Common Stock as
may become issuable upon exercise of the Warrant and/or the Options
to prevent
dilution resulting from stock splits, stock dividends or similar
transactions.
The registration rights of the Investors under this Section 2(a)
may only be
exercised on one occasion by the Investors and upon the SEC
declaring the
Registration Statement covering such securities effective, the
rights of the
Investors under this Section 2(a) shall terminate; PROVIDED,
HOWEVER, that the
rights of the Investors under this Section 2(a), if exercised but
delayed
pursuant to Section 2(c), shall not terminate (but shall only be
delayed) by the
delay of exercise of such rights pursuant to Section 2(c).
b. PIGGY-BACK REGISTRATIONS. Subject to Section 2(c) hereof,
if at any time prior to the expiration of the Registration Period
(as
hereinafter defined) the Company shall determine to file with the
SEC a
Registration Statement relating to an offering for its own account
or the
account of others under the 1933 Act of any of its equity
securities (other than
on Form S-4 or Form S-8 or their then equivalents relating to
equity securities
to be issued solely in connection with any acquisition of any
entity or business
or equity securities issuable in
<PAGE>
connection with stock option or other BONA FIDE, employee benefit
plans), the
Company shall send to each Investor who is entitled to registration
rights under
this Section 2(b) written notice of such determination and, if
within fifteen
(15) days after the effective date of such notice, such Investor
shall so
request in writing, the Company shall include in such Registration
Statement all
or any part of the Registrable Securities such Investor requests to
be
registered, except that if, in connection with any underwritten
public offering
for the account of the Company the managing underwriter(s) thereof
shall impose
a limitation on the number of shares of Common Stock which may be
included in
the Registration Statement because, in such underwriter(s)'
judgment, marketing
or other factors dictate such limitation is necessary to facilitate
public
distribution, then the Company shall be obligated to include in
such
Registration Statement only such limited portion of the Registrable
Securities
with respect to which such Investor has requested inclusion
hereunder as the
underwriter shall permit. Any exclusion of Registrable Securities
shall be made
pro rata among the Investors seeking to include Registrable
Securities in
proportion to the number of Registrable Securities sought to be
included by such
Investors; PROVIDED, HOWEVER, that the Company shall not exclude
any Registrable
Securities unless the Company has first excluded all outstanding
securities, the
holders of which are not entitled to inclusion of such securities
in such
Registration Statement or are not entitled to pro rata inclusion
with the
Registrable Securities; and PROVIDED, FURTHER, HOWEVER, that, after
giving
effect to the immediately preceding proviso, any exclusion of
Registrable
Securities shall be made pro rata with holders of other securities
having the
right to include such securities in the Registration Statement
other than
holders of securities entitled to inclusion of their securities in
such
Registration Statement by reason of demand registration rights. No
right to
registration of Registrable Securities under this Section 2(b)
shall be
construed to limit any registration required under Section 2(a)
hereof, except
as specifically set forth in Section 2(a) above. If an offering in
connection
with which an Investor is entitled to registration under this
Section 2(b) is an
underwritten offering, then each Investor whose Registrable
Securities are
included in such Registration Statement shall, unless otherwise
agreed by the
Company, offer and sell such Registrable Securities in an
underwritten offering
using the same underwriter or underwriters and, subject to the
provisions of
this Agreement, on the same terms and conditions as other shares of
Common Stock
included in such underwritten offering.
c. RESTRICTION ON REGISTRATION. In the event that the Company
has agreed, as a condition to any sale by the Company of securities
the proceeds
of which shall, in whole or in part, be used to fund the
obligations of the
Company under the Alliance Agreement (each, a "SUBSEQUENT
OFFERING"), to file a
Registration Statement with the SEC covering the securities sold,
or underlying
the securities sold, in such Subsequent Offering and the investors
purchasing
securities in such Subsequent Offering require, as a condition to
such
investment, that the Investors' registration rights under this
Agreement be
delayed, the rights of the Investors under the Section 2(a) and
Section 2(b)
shall be delayed, at the option of the Company, on one or more
occasions for a
total period not to exceed ninety (90) days, in the aggregate, from
the
effective date of the Registration Statement covering the
securities issued in
the Subsequent Offering.
3. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities,
the
Company shall have the following obligations:
<PAGE>
a. The Company shall prepare promptly, and file with the SEC
not later than forty-five (45) days of the receipt of the
Registration Demand, a
Registration Statement with respect to the number of Registrable
Securities
provided in Section 2(a), and thereafter use its best efforts to
cause such
Registration Statement relating to Registrable Securities to become
effective as
soon as possible after such filing and keep the Registration
Statement effective
pursuant to Rule 415 at all times until such date as is the earlier
of (i) the
date on which all of the Registrable Securities have been sold and
(ii) the date
on which the Registrable Securities (in the opinion of counsel to
the Initial
Investors) may be immediately sold to the public without
registration or
restriction under the 1933 Act (the "REGISTRATION PERIOD"), which
Registration
Statement (including any amendments or supplements thereto and
prospectuses
contained therein) shall not contain any untrue statement of a
material fact or
omit to state a material fact required to be stated therein, or
necessary to
make the statements therein not misleading.
b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to
the
Registration Statements and the prospectus used in connection with
the
Registration Statements as may be necessary to keep the
Registration Statements
effective at all times during the Registration Period, and, during
such period,
comply with the provisions of the 1933 Act with respect to the
disposition of
all Registrable Securities of the Company covered by the
Registration Statements
until such time as all of such Registrable Securities have been
disposed of in
accordance with the intended methods of disposition by the seller
or sellers
thereof as set forth in the Registration Statements.
c. The Company shall furnish to each Investor whose
Registrable Securities are included in a Registration Statement and
its legal
counsel (i) promptly after the same is prepared and publicly
distributed, filed
with the SEC, or received by the Company, one copy of each
Registration
Statement and any amendment thereto, each preliminary prospectus
and prospectus
and each amendment or supplement thereto, and (ii) promptly after
the
Registration Statement is declared effective by the SEC, such
number of copies
of a prospectus, including a preliminary prospectus, and all
amendments and
supplements thereto and such other documents as such Investor may
reasonably
request in order to facilitate the disposition of the Registrable
Securities
owned by such Investor. The Company will immediately notify each
Investor of the
effectiveness of each Registration Statement or any post-effective
amendment.
The Company will promptly respond to any and all comments received
from the SEC,
with a view towards causing each Registration Statement or any
amendment thereto
to be declared effective by the SEC as soon as practicable, shall
promptly file
an acceleration request as soon as practicable following the
resolution or
clearance of all SEC comments or, if applicable, following
notification by the
SEC that any such Registration Statement or any amendment thereto
will not be
subject to review and shall promptly file with the SEC a final
prospectus as
soon as practicable following receipt by the Company from the SEC
of an order
declaring the Registration Statement effective.
d. The Company shall use reasonable efforts to (i) register
and qualify the Registrable Securities covered by the Registration
Statements
under such other securities or "BLUE SKY" laws of such
jurisdictions in the
United States as the Investors who hold a majority in interest of
the
Registrable Securities being offered reasonably request, (ii)
prepare and file
in those jurisdictions such amendments (including post-effective
amendments) and
supplements to such registrations and qualifications as may be
necessary to
maintain the effectiveness thereof
<PAGE>
during the Registration Period, (iii) take such other actions as
may be
necessary to maintain such registrations and qualifications in
effect at all
times during the Registration Period, and (iv) take all other
actions reasonably
necessary or advisable to qualify the Registrable Securities for
sale in such
jurisdictions; PROVIDED, HOWEVER, that the Company shall not be
required in
connection therewith or as a condition thereto to (a) qualify to do
business in
any jurisdiction where it would not otherwise be required to
qualify but for
this Section 3(d), (b) subject itself to general taxation in any
such
jurisdiction, (c) file a general consent to service of process in
any such
jurisdiction, (d) provide any undertakings that cause the Company
undue expense
or burden, or (e) make any change in its charter or bylaws, which
in each case
the Board of Directors of the Company determines to be contrary to
the best
interests of the Company and its shareholders.
e. As promptly as practicable after becoming aware of such
event, the Company shall notify each Investor of the happening of
any event, of
which the Company has knowledge, as a result of which the
prospectus included in
any Registration Statement, as then in effect, includes an untrue
statement of a
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