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EXHIBIT 10.6
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of April 14, 1999, among Senetek
P.L.C., a corporation organized under the laws of England (the "Company"), and
SILVER CREEK INVESTMENTS, LTD., a British Virgin Islands company ("Silver
Creek"), BOMOSEEN INVESTMENTS, LTD., a British Virgin Islands company
("Bomoseen"), ELSTREE HOLDINGS, LTD., a British Virgin Islands company
("Elstree") and DANDELION INVESTMENTS, LTD., a British Virgin Islands company
("Dandelion").
W I T N E S S E T H:
WHEREAS, on the date hereof, Silver Creek, Bomoseen, Elstree and
Dandelion have been issued (i) Senior Notes due 2002 in an aggregate principal
amount of $7,388,570 (collectively, the "Notes") and (ii) Warrants (as defined
herein);
WHEREAS, as a condition to the issuance of the Securities (as
hereinafter defined) to Silver Creek, Bomoseen, Elstree and Dandelion, the
Company has agreed to provide certain registration rights pursuant to the terms
of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Definitions. For purposes of this Agreement, capitalized terms used
herein shall have the meanings set forth in the preambles hereto and in this
Section 1.
1.1 "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
1.2 "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar federal statute enacted hereafter, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect from time to time.
1.3 "Form S-3" means such form under the Securities Act as in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the Commission which permits inclusion or incorporation
of substantial information by reference to other documents filed by the Company
with the Commission.
1.4 "Holder" shall mean any holder of Registrable Securities;
provided, however, that any Person who acquires any of the Registrable
Securities in a distribution pursuant to a registration statement filed by the
Company under the Securities Act or pursuant to a sale under Rule 144 under the
Securities Act shall not be considered a Holder.
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1.5 "Initiating Holders" shall mean Holders representing (on a
fully diluted basis) at least twenty percent (20%) of the total number of
Registrable Securities.
1.6 "Ordinary Shares" shall mean the ordinary shares, par value
(5p) per share, of the Company which may be represented by American Depository
Shares represented by American Depository Receipts, or, in the case of a
conversion, reclassification or exchange of such shares of such Ordinary Shares,
shares of the stock into or for which such shares of Ordinary Shares shall be
converted, reclassified or exchanged, and all provisions of this Agreement shall
be applied appropriately thereto and to any stock resulting from any subsequent
conversion, reclassification or exchange therefor.
1.7 "Person" shall mean any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind.
1.8 "Register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement with the
Commission in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement by the Commission.
1.9 "Registrable Securities" shall mean (i) the Warrant Shares
and (ii) all Ordinary Shares now owned or issued (or committed by the Company to
be issued) on the date hereof to the Holders; provided, however, that the
Ordinary Shares shall only be treated as Registrable Securities hereunder if and
so long as they have not been sold pursuant to a registration statement under
the Securities Act or those shares shall not have been sold pursuant to Rule 144
under the Securities Act or any similar or successor rule and provided, further,
that the Company shall not be required to register Warrants. Registrable
Securities shall not include any of the foregoing securities held by any Holder
who is not an affiliate of the Company within the meaning of Rule 144 under the
Securities Act and that may be sold pursuant to Rule 144(k) under the Securities
Act.
1.10 "Registration Expenses" shall mean all expenses incurred by
the Company in compliance herewith, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, and, in connection with a registration pursuant to
Section 2 hereof, the reasonable fees and expenses (subject to documentation
thereof) of one counsel for all Holders, blue sky fees and expenses, and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company, which shall
be paid in any event by the Company).
1.11 "Securities" shall mean the Warrants.
1.12 "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
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1.13 "Securities Purchase Agreement" shall mean that certain
Securities Purchase Agreement, dated as of the date hereof, among the Company
and Silver Creek, Bomoseen, Elstree and Dandelion, as amended from time to time.
1.14 "Selling Expenses" shall mean all underwriting discounts and
commissions applicable to the sale of Registrable Securities.
1.15 "Warrants" shall mean all the warrants issued pursuant to
the Securities Purchase Agreement.
1.16 "Warrant Shares" shall mean the Ordinary Shares issued or
issuable upon exercise of the Warrants, as such number of shares may be adjusted
in accordance with the terms of the Warrants.
2. Requested Registration.
2.1 Request for Registration. At any time from and after the date
hereof if the Company shall receive from Initiating Holders a written request
that the Company effect a registration with respect to Registrable Securities
the Company will:
(a) promptly give written notice of the proposed
registration to all other Holders; and
(b) as soon as practicable, use its best efforts to
effect such registration (including, without limitation, the execution
of an undertaking to file post-effective amendments, appropriate
qualification under the blue sky or other state securities laws
requested by Initiating Holders and appropriate compliance with
applicable regulations issued under the Securities Act) as may be so
requested and as would permit or facilitate the sale and distribution of
all or such portion of such Registrable Securities as are specified in
such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are
specified in a written request given within twenty-one (21) days after
receipt of such written notice from the Company; provided, that the
Company shall not be obligated to effect, or to take any action to
effect, any such registration pursuant to this Section 2 after the first
such registration pursuant to this Section 2.1 has been declared or
ordered effective.
2.2 Additional Shares to be Included. The registration statement
filed pursuant to the request of the Initiating Holders may, subject to the
provisions of Section 2.4 below, include (a) other securities of the Company
(the "Additional Shares") which are held by (i) officers or directors of the
Company who, by virtue of agreements with the Company, are entitled to include
their securities in any such registration or (ii) other persons who, by virtue
of agreements with the Company, are entitled to include their securities in any
such registration (the "Other Stockholders"), and (b) securities of the Company
being sold for the account of the Company.
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2.3 Underwriting.
(a) 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 to other Holders referred to in Section 2.1 above. The right of any
Holder to registration pursuant to this Section 2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein and
subject to the limitations provided herein. A Holder may elect to include in
such underwriting all or a part of the Registrable Securities he holds.
(b) The Company shall (together with all Holders,
officers, directors and Other Stockholders proposing to distribute their
securities through such underwriting) negotiate and enter into an underwriting
agreement in customary form with the representative of the underwriter or
underwriters selected for such underwriting by a majority in interest of the
Initiating Holders, which underwriter(s) shall be reasonably acceptable to the
Company.
2.4 Limitations on Shares to be Included. Notwithstanding any
other provision of this Section 2, if the representative of the underwriters
advises the Initiating Holders in writing that marketing factors require a
limitation on the number of shares to be underwritten in the registration
requested pursuant to Section 2.1 hereof, first the Additional Shares shall be
excluded from such registration to the extent so required by such limitation,
second securities being sold for the account of the Company shall be excluded
from such registration thereafter, and if a limitation on the number of shares
is still required, the number of shares that may be included in the registration
and underwriting shall be allocated among all Holders, including Initiating
Holders, in proportion, as nearly practicable, to the respective amounts of
Registrable Securities which they have requested to be included in such
registration statement. If the Company or any Holder, officer, director or Other
Stockholder who has requested inclusion in such registration as provided above
disapproves of the terms of any such underwriting, such person may elect to
withdraw such person's Registrable Securities or Additional Shares therefrom by
written notice to the Company and the underwriter and the Initiating Holders.
Any Registrable Securities or other securities excluded shall also be withdrawn
from such registration. No Registrable Securities or Additional Shares excluded
from such registration by reason of such underwriters' marketing limitation
shall be included in such registration. To facilitate the allocation of shares
in accordance with this Section 2.4, the Company or underwriter or underwriters
selected as provided above may round the number of Registrable Securities of any
Holder which may be included in such registration to the nearest 100 shares.
3. Company Registration.
3.1 Piggy-Back Rights. If the Company shall determine to register
under the Securities Act any of its equity securities or securities convertible
into equity securities either for its own account or the account of a security
holder or holders exercising any demand registration rights, other than a
registration relating
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solely to employee benefit plans, or a registration relating solely to a
Commission Rule 145 transaction, or a registration on Form S-4 or S-8 (or any
successor forms thereto), the Company will:
(a) promptly give to each Holder written notice thereof
(which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue
sky or other state securities laws); and
(b) include in such registration (and, subject to Section
6.3(a), any related qualification under blue sky laws), and in any
underwriting involved therein, all the Registrable Securities specified
in a written request or request, made by any Holder within twenty-one
(21) days after receipt of the written notice from the Company described
in clause (a) above, except as set forth in Section 3.3 below. Such
written request may specify all or a part of a Holder's Registrable
Securities.
3.2 Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3.1(a). The right of any Holder to registration pursuant to
this Section 3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company and
any officers, directors or Other Stockholders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected by the
Company.
3.3 Limitations on Shares to be Included. Notwithstanding any
other provision of this Section 3, if the representative of the underwriters
advises the Company in writing that marketing factors require a limitation or
elimination on the number of shares to be underwritten, the Company may (subject
to the allocation priority set forth below) limit the number of or eliminate the
Registrable Securities to be included in the registration and underwriting. The
Company shall so advise all holders of securities requesting registration, and
the number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated as follows: first, to the
Company for securities being sold for its own account; second, the Registrable
Securities which have been requested to be included by the Holders, pro rata
based upon the aggregate number of Registrable Securities held by the respective
Holders; and thereafter, the number of shares that may be included in the
registration statement and underwriting shall be allocated among all officers,
directors or Other Stockholders in each case in proportion, as nearly as
practicable, to the respective amounts of Additional Shares which they had
requested to be included in such registration at the time of filing the
registration statement. If any Holder of Registrable Securities or any officer,
director or Other Stockholder disapproves of the terms of any such underwriting,
he may elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall also be withdrawn from such registration.
The Company shall have the right to terminate or withdraw any registration
initiated by it under this
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Section 3 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
4. Registration on Form S-3. In addition to their rights set forth in
Sections 2 and 3 above, if at any time (i) Initiating Holders request that the
Company file a registration statement on Form S-3 (or any successor form
thereto) for a public offering of all or any portion of the Registrable
Securities held by such Initiating Holder or Holders (such request shall be in
writing and shall state the number of Registrable Securities to be disposed of
and, to the extent practicable, the intended methods of disposition of the
Registrable Securities by such Initiating Holder or Holders), and (ii) the
Company is a registrant entitled to use Form S-3 (or any successor form thereto)
to register such securities, then the Company shall use its best efforts to
register (including by means of a shelf registration pursuant to Rule 415 under
the Securities Act if so requested in such request) under the Securities Act on
Form S-3 (or any successor form thereto), for public sale in accordance with the
method of disposition specified in such notice, the number of shares of
Registrable Securities specified in such notice. Registrations effected pursuant
to this Section 4 shall not be counted as demands for registration or
registrations effected pursuant to Section 2 or 3, respectively.
5. Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 2, 3 or 4 of this Agreement shall be borne by the Company. Selling
Expenses shall be borne pro rata by each Holder in accordance with the number of
shares sold.
6. Registration Procedures.
6.1 Procedure. In the case of each registration effected by the
Company pursuant to this Agreement, the Company will keep each Holder advised in
writing as to the initiation of each registration and as to the completion
thereof and will, at its expense:
(a) use its best efforts to keep such registration
effective for a period of 180 days or until the Holder or Holders have completed
the distribution described in the registration statement relating thereto,
whichever first occurs; and provided, that in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such 180-day period shall, at the cost and expense
of the Company, be extended, if necessary, to keep the registration statement
effective until all such Registrable Securities are sold, provided that Rule
415, or any successor rule under the Securities Act, permits an offering on a
continuous or delayed basis, and provided, further, that applicable rules and
regulations under the Securities Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective amendment
which (y) includes any prospectus required by Section 10(a)(3) of the Securities
Act or (z) reflects facts or events representing a material or fundamental
change in the information set forth in the registration statement, the
incorporation by reference of information otherwise required to be included in
such post-effective amendment covered by (y) and (z) above to be contained in
periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in
the registration statement;
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(b) Subject to the limitations set forth in Section
6.1(a) hereof, prepare and file with the Commission 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 Securities Act with respect to the disposition of all
securities covered by such registration statement;
(c) Furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as a Holder from time to time may reasonably request;
(d) Notify each seller of Registrable Securities covered
by such registration statement 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, 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 or incomplete in the light of the
circumstances then existing (in which case each person entitled to sell under
such registration statement will immediately suspend use of such registration
statement until it is supplemented or amended as provided herein), and at the
request of any such seller, prepare and furnish to such seller a reasonable
number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such shares,
such prospectus shall not include an 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 or incomplete in the light of the
circumstances then existing;
(e) List all such Registrable Securities registered in
such registration on each securities exchange or automated quotation system on
which the Ordinary Shares of the Company are then listed;
(f) Provide a transfer agent and registrar for all
Registrable Securities and a CUSIP number for all such Registrable Securities,
in each case not later than the effective date of such registration;
(g) The Company will give the Holders on whose behalf
such Registrable Securities are to be registered and their underwriters, if any,
and their respective counsel and accountants, the opportunity to review such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
such Holder such access to the Company's books, financial and other records,
pertinent corporate documents and such opportunities to discuss the business of
the Company with its officers, its counsel and the independent public
accountants who have certified the Company's financial statements, as shall be
necessary, in the opinion of such Holders or such underwriters or their
respective counsel, in order to conduct a reasonable and diligent investigation
within the meaning of the Securities Act, provided that such seller,
underwriter, attorney or accountant shall agree to hold in confidence and trust
all information so provided;
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(h) Furnish to each selling Holder upon request a signed
counterpart, addressed to each such selling Holder, of
(i) an opinion of counsel for the Company, dated
the effective date of the registration statement in form reasonably
acceptable to the Company and such counsel, and
(ii) "comfort" letters signed by the Company's
independent public accountants who have examined and reported on the
Company's financial statements included in the registration statement,
to the extent permitted by the standards of the American Institute of
Certified Public Accountants or other relevant authorities,
covering such matters as are customarily covered in opinions of issuer's counsel
and accountants' "comfort" letters delivered to underwriters in underwritten
public offerings of securities;
(i) Furnish to each selling Holder upon request a copy of
all documents filed with and all correspondence from or to the Commission in
connection with any such offering; and
(j) Make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least
twelve months, but not more than eighteen months, beginning with the first month
after the effective date of the Registration Statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act.
6.2 Holder Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the Holders proposing to register Registrable Securities shall furnish to the
Company such information regarding themselves, the Registrable Securities held
by them, and their intended method of distribution of such Registrable
Securities as the Company shall reasonably request and as shall be required in
connection with the action to be taken by the Company.
6.3 Limitations on Obligations of the Company. Notwithstanding
any other provision in this Agreement to the contrary, the Company shall not be
obligated to take any action:
(a) pursuant to Sections 2, 3 or 4 of this
Agreement (A) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process unless the Company
is already subject to service in such jurisdiction, (B) in any non-U.S.
jurisdiction in which the Company would be required to qualify as a foreign
corporation eligible to do business in such jurisdiction, if the Company shall
not then be so qualified in that jurisdiction or (C) in any non-U.S.
jurisdiction that would subject the Company to taxation where it would not
otherwise be subject to tax;
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(b) pursuant to Section 2 or 4 of this Agreement if the
Company, within ten (10) days of the receipt of the request of the Initiating
Holders, gives notice of its bona fide intention to file a registration
statement with the Commission within sixty (60) days of receipt of such request
(other than a registration statement on Form S-8);
(c) pursuant to Section 2 or 4 of this Agreement with
respect to any request for registration made by Initiating Holders during the
period starting with the date of filing of, and ending on the date ninety (90)
days immediately following the effective date of, any registration statement
pertaining to equity securities of the Company (other than a registration
statement on Form S-8);
(d) pursuant to Section 2 or 4 of this Agreement if the
Company shall furnish to Holders requesting registration a certificate signed by
the President or Chief Executive Officer of the Company (the "Certificate")
stating that the negotiation or consummation of a transaction by the Company is
pending or an event has occurred, which negotiation, consummation or event would
require additional disclosure by the Company in the registration statement of
material information which the Company (in the good faith judgment of its Board
of Directors) has a bona fide business purpose for keeping confidential and the
nondisclosure of which in the registration statement would cause the
registration statement to fail to comply with applicable disclosure
requirements, in which case the Company's obligation hereunder to file a
registration statement, pursue its effectiveness or maintain its effectiveness,
shall be deferred for a period or periods not to exceed one hundred and eighty
(180) consecutive days in any 12-month period; and the Company may suspend after
providing a Certificate the use of any effective registration statement filed
pursuant to Section 2, 3 or 4 of this Agreement during any period the Company's
obligation to file a registration statement or to pursue or maintain its
effectiveness would be deferred as provided herein; or
(e) pursuant to Section 2 or 4 of this Agreement if the
Holder requires an audit of the Company's financial statements in connection
with the registration of the Registrable Securities other than any audit
required by the Securities Act or any rules or regulations thereunder.
7. Indemnification.
7.1 Indemnification by the Company. The Company will indemnify
each Holder, each of its officers, directors and partners, and each person
controlling such Holder, with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls any underwriter, against all claims,
losses, damages and liabilities (or actions, proceedings or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on 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, and will reimburse each such Holder, each of its
officers, directors and partners, and each person
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controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending or settling any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission (or alleged untrue
statement or omission) made in reliance upon and based upon written information
furnished to the Company by such Holder or underwriter and stated to be
specifically for use therein.
7.2 Indemnification by the Holders. Each Holder will, if
Registrable Securities held by him are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company (other than such Holder) or such underwriter within the
meaning of the Securities Act and the rules and regulations thereunder, each
other such Holder and each of their officers, directors and partners, and each
person controlling such Holder or other stockholder, against all claims, losses,
damages, expenses and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, or 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, and will reimburse the Company, each of its directors
and officers, each underwriter and control person, each other Holder and each of
their officers, directors and partners and each person controlling such Holder
or other stockholder for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use
therein.
7.3 Notices of Claims, Procedures, etc. Each party entitled to
indemnification under this Section 7 (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at the Indemnified Party's
sole expense, and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 7 unless such failure is prejudicial to the
ability of Indemnifying Party to defend such claim or action. Notwithstanding
the foregoing, such Indemnified Party shall have the right to employ its own
counsel in any such litigation, proceeding or other action if (i) the employment
of such counsel has been authorized by the Indemnifying Party, in its sole and
absolute discretion, or (ii) the named parties in any such claims (including any
impleaded parties) include
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any such Indemnified Party and the Indemnified Party and the Indemnifying Party
shall have been advised in writing (in suitable detail) by counsel to the
Indemnified Party either (A) that there may be one or more legal defenses
available to such Indemnified Party which are different from or additional to
those available to the Indemnifying Party, or (B) that there is a conflict of
interest by virtue of the Indemnified Party and the Indemnifying Parties having
common counsel, in any of which events, the legal fees and expenses of a single
counsel for all Indemnified Parties with respect to each such claim, defense
thereof, or counterclaims thereto shall be borne by Indemnifying Party. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent 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 such Indemnified Party
of a release from all liability in respect to such claim or litigation. Each
Indemnified Party shall cooperate to the extent reasonably required and furnish
such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom.
8. Information by Holder. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
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 and shall promptly
advise the Company in writing of any material changes to such information while
the registration is in effect.
9. Transfer or Assignment of Registration Rights. The rights to cause
the Company to register securities granted by the Company under this Agreement
may be transferred or assigned by a Holder to a transferee or assignee of any
Registrable Securities, provided that the Company is given written notice at or
prior to the time of said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned, and provided
further that the transferee or assignee of such rights assumes in writing the
obligations of a Holder under this Agreement to the Company and other Holders in
effect at the time of transfer under all effective agreements.
10. Exchange Act Compliance. The Company shall file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the Commission thereunder, to enable holders of
Registrable Securities to sell such securities without registration under the
Securities Act within the limitation of the provisions of (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rules or regulations hereunder adopted by the Commission. Upon the
request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such
requirements.
11. Exercise of Warrants.
(a) Notwithstanding anything in this Agreement to the
contrary, no
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Holder shall be required to exercise its Warrant prior to the closing date of a
registration in order for the Warrant Shares to be included in such
registration.
(b) The Company agrees to make promptly upon request, and
at its expense, such state "blue sky" filings as it deems necessary or
appropriate to effectuate the exercise of the Warrants. No exercise shall be
effectuated until the necessary "blue sky" filings have been made; provided,
however, that no Holder of a Warrant shall be deprived of any of its rights
under this Agreement due to the Company's failure to timely make its "blue sky"
filings and such Holder's rights to participate in any registration under this
Agreement shall be deemed to be perfected from the date such Holder notifies the
Company of its intention to exercise or convert all or a portion of its Warrants
or Notes and to participate in such registration.
12. Liquidated Damages.
(a) In the event that the Company fails to use best
efforts to comply with any provision of Section 2, 3 or 4 hereof upon written
request of a Holder, the Company shall within 45 days after the date of receipt
by the Company of a demand from such Holder for payment (the "Payment Demand"),
pay to such Holder as liquidated damages for its noncompliance an amount equal
to the Current Market Price (as defined in subparagraph (b) below) multiplied by
(x) the number of Ordinary Shares proposed to be sold pursuant to the
registration or qualification in question or (y) in the case of a request in
accordance with Section 4 hereof for a shelf registration pursuant to Rule 415
under the Securities Act, such lesser number of Ordinary Shares as may be
specified by the Initiating Holder(s) in such demand for payment; provided,
however, that the election of the Initiating Holder(s) to demand payment of
liquidated damages hereunder with respect to less than all of the Ordinary
Shares proposed to be sold pursuant to such shelf registration shall not prevent
the Initiating Holder(s) from any subsequent exercise of registration rights
under this Agreement with respect to the shares of Ordinary Shares for which
payment was not demanded. Payment of such amount shall be made in immediately
available funds. Upon payment to such Holder of such liquidated damages, such
Holder shall assign to the Company the Registrable Securities proposed to be
sold pursuant to the registration or qualification (or such lesser number of
Ordinary Shares as specified in the Payment Demand) in question without any
representation or warranty (other than that the Holder owns all of the right,
title and interest in the Registrable Securities and has not taken any action
which would impair its ownership of or right to transfer to the Company the
Registrable Securities). If such liquidated damages are to be paid with respect
to less than all of the Ordinary Shares issuable upon the exercise of a Warrant,
the Company shall cancel the Warrants and issue in the name of, and deliver to,
the Holder, pursuant to the terms of the Warrants, a new Warrant for the
Ordinary Shares issuable upon the exercise of a Warrant, not required to be
assigned to the Company pursuant to the provisions of the preceding sentence.
The Company agrees that the amount of actual damages that would be sustained by
the Holder of Warrants and/or the Ordinary Shares issuable upon the exercise
thereof as a result of the failure of the Company to use its best efforts to
comply with any provisions of Section 2, 3 or 4 hereof is not capable of
ascertainment on any other basis.
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(b) "Current Market Price" shall mean (i) the average
closing price per share of Ordinary Shares represented by American Depository
Shares for the forty-five (45) consecutive trading days beginning on the
Determination Date. "Determination Date" shall mean, with respect to a requested
registration pursuant to Section 2 or 3 of this Agreement, the date which is
forty-five (45) days after the date of such request, and with respect to a
requested registration pursuant to Section 4 of this Agreement, the date which
is thirty (30) days after the date of such request. The closing price for each
day shall be as reported in The Wall Street Journal or, if not reported therein,
as reported in another newspaper of national circulation chosen by the Board of
Directors of the Company, the average of the last reported sales price for such
shares in the over-the-counter market, as reported on the National Association
of Securities Dealers Automated Quotation System, or, if such sales prices shall
not be reported thereon, the average of the closing bid and asked prices so
reported, or, if such bid and asked prices shall not be reported thereon, as the
same shall be reported by the National Quotation Bureau Incorporated, or, if
such firm at the time is not engaged in the business of reporting such prices,
as furnished by any similar firm then engaged in such business and selected by
the Company or, if there is no such firm, as furnished by any member of the
National Association of Securities Dealers, Inc., selected by the Company or
(ii) if the Company shall no longer have a class of equity securities registered
under the Securities Exchange Act of 1934, as amended, "Current Market Price"
shall be determined as follows: first, by a nationally recognized investment
banking firm selected by the holders of a majority of the Registrable Securities
requested to be included in such registration, which determination shall be made
within thirty (30) days after the delivery of the demand for payment, second, if
such determination shall not be satisfactory to the Company, as evidenced by a
written objection by the Company to the holders of the Registrable Securities
requested to be included in such registration, within ten (10) days of receipt
by the Company of such determination, the Company shall be entitled to select a
nationally recognized investment banking firm which shall make its own
determination within thirty (30) days of its appointment, and if such
determination shall differ by less than 10% from the determination of the
nationally recognized investment banking firm selected by the holders of a
majority of the Registrable Securities requested to be included in such
registration, the Current Market Price shall be the average of such
determinations and third, if such determinations shall differ by 10% or more,
such investment banking firms shall appoint a third nationally recognized
investment banking firm which shall make its own determination within two weeks
of its appointment, which determination shall be binding upon the Company and
the holders of the Registrable Securities requested to be included in such
registration. Any and all determinations made pursuant to this Section 12(b)(ii)
shall be performed by an investment banking firm experienced in the conduct of
corporate valuations and shall be based upon the fair market value of 100% of
the Company on a consolidated basis if sold as a going concern, without giving
effect to any discount for lack of liquidity of the Ordinary Shares or to the
fact that the Ordinary Shares are privately held or that the Company has no
class of equity securities registered under the Securities Exchange Act of 1934,
as amended, or to any discount relating to, the right of any stockholder or
warrant holder of the Company to receive payment pursuant to this Section 12. In
addition, in making such determination, the investment banking firm shall take
into account the valuations associated with recent public offerings of Ordinary
Shares by companies engaged in businesses and with capital structures similar to
the Company and such other matters as are relevant to the valuation of the
Company.
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13. No Conflict of Rights.
(a) The Company will not hereafter enter into any
agreement with respect to its securities which is inconsistent with the rights
(including, but not limited to, priority rights) granted to the Holders in this
Agreement. Without limiting the generality of the foregoing, the Company will
not hereafter enter into any agreement with respect to its securities which
grants or modifies any existing agreement with respect to its securities to
grant to the holder of its securities in connection with an incidental
registration of such securities equal or higher priority to the rights granted
to the Holders under Sections 2, 3 and 4 of this Agreement.
(b) In addition, the Company hereby covenants and agrees
to cause all of its stockholders to which it grants registration rights after
the date hereof to acknowledge in writing the priorities and limitations of
inclusion of securities set forth in this Agreement.
14. Benefits of Agreement; Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns, legal representatives and heirs. This
Agreement does not create, and shall not be construed as creating any rights
enforceable by any other Person.
15. Complete Agreement. This Agreement constitutes the complete
understanding among the parties with respect to its subject matter and
supersedes all existing agreements and understandings, whether oral or written,
among them. No alteration or modification of any provisions of this Agreement
shall be valid unless made in writing and signed, on the one hand, by the
Holders of a majority of the Registrable Securities then outstanding and, on the
other, by the Company.
16. Section Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
17. Notices. (a) All notices, offers, acceptances and other
communications required or permitted to be given or to otherwise be made to any
party to this Agreement shall be deemed to be sufficient if contained in a
written instrument delivered by hand, first class mail (registered or certified,
return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, if to the Company, at 000 Xxxxxxx Xxxx, Xxxx,
Xxxxxxxxxx, Attention: Chief Executive Officer, and if to any Holder, at the
address of such Holder as set forth in the stock transfer books of the
Corporation.
(b) All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if personally delivered;
five business days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt acknowledged, if
telecopied; and the next business day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery. Any party may
change the address to
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which each such notice or communication shall be sent by giving written notice
to the other parties of such new address in the manner provided herein for
giving notice.
18. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York without
giving effect to the provisions, policies or principles thereof respecting
conflict or choice of laws.
19. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original but all of which taken
together shall constitute one and the same agreement.
20. Severability. Any provision of this Agreement which is determined to
be illegal, prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such illegality, prohibition or
unenforceability without invalidating the remaining provisions hereof which
shall be severable and enforceable according to their terms and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first set forth above.
SENETEK PLC
By: /s/ XXXXX XXXXXXX
------------------------------
Xxxxx X. Xxxxxxx
President
PURCHASERS:
SILVER CREEK INVESTMENTS, LTD.
By:
------------------------------
Name:
Title:
BOMOSEEN INVESTMENTS, LTD.
By:
------------------------------
Name:
Title:
ELSTREE HOLDINGS, LTD.
By:
------------------------------
Name:
Title:
DANDELION INVESTMENTS, LTD.
By:
------------------------------
Name:
Title:
(Signature page to Registration Rights Agreement)
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first set forth above.
SENETEK PLC
By: /s/
------------------------------
Xxxxx X. Xxxxxxx
President
PURCHASERS:
SILVER CREEK INVESTMENTS, LTD.
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
BOMOSEEN INVESTMENTS, LTD.
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
ELSTREE HOLDINGS, LTD.
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Attorney-in-fact
DANDELION INVESTMENTS, LTD.
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Attorney-in-fact
(Signature page to Registration Rights Agreement)
