REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of ______, 1997 by and
between Prologica International, Inc., a Delaware corporation (the "Company"),
and the person whose name appears on the signature page attached hereto
(individually a "Holder" and collectively, with the holders of other securities
issued in the Offering, the "Holders").
WHEREAS, pursuant to a Offering Memorandum dated September l,
1997 (Memorandum) and Subscription Agreement (the "Subscription Agreement"), the
Holder has offered to purchase shares of the Company's Common Stock, no par
value ("Common Stock") from the Company;
WHEREAS, in order to induce the Holders to enter into the Subscription
Agreement and to purchase the Common Stock, the Company and the Holders have
agreed to enter into this Agreement;
WHEREAS, it is intended by the Company and the Holders that this
Agreement shall become effective immediately upon the acquisition by the Holders
of the Common Stock;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company hereby agrees as follows:
A. REGISTRATION RIGHTS
1. Registration Rights
(a) Option to Include Securities in Registration Statement.
The Company agrees to file a registration statement, seeking to register all
shares of Common Stock, Warrants, and shares of Common Stock underlying the
Warrants (as defined in the Memorandum)(the Common Stock, Warrants and Common
Stock underlying the Warrants are collectively referred to herein as the
"Shares") on Form S-l or other comparable form, with the Securities and Exchange
Commission no later than 90 days from the initial closing of the sale of the
Minimum Units, (as defined in the Memorandum)("Registration Statement"). The
Company agrees to use its best efforts to have the Registration Statement
declared effective. The Holders agree to execute and/or deliver such documents
in connection with such registration as the Company may request. If the Holders'
Shares are so registered, the Company's obligations under Article 1 herein will
be deemed satisfied in full.
(b) Cooperation with Company. The Holders will cooperate with
the Company in all respects in connection with this Agreement, including, timely
supplying all information reasonably requested by the Company and executing and
returning all documents reasonably requested in correction with the registration
and sale of the Shares.
2. Registration Procedures. If and whenever the Company is required by
any of the provisions of this Agreement to use its best efforts to effect the
registration of any of the Shares under the Securities Act of 1933, as amended
("Acts), the Company shall (except as otherwise provided in this Agreement), as
expeditiously as possible:
(a) prepare and file with the Commission a Registration
Statement and shall use its best efforts to cause such Registration Statement to
become effective and remain effective until all the Shares are sold or become
capable of being publicly sold without registration under the Act.
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Act with respect to the sale or other
disposition of all securities covered by such Registration Statement whenever
the Holder or Holders of such securities shall desire to sell or otherwise
dispose of the same (including prospectus supplements with respect to the sales
of securities or the exercise of the Shares from time to time in connection with
a Registration Statement pursuant to Rule 415 of the Commission);
(c) notify each Holder of Shares covered by such Registration
Statement, at any time when a prospectus relating thereto covered by such
Registration Statement is required to be delivered under the Act, of the
happening of any event of which it has knowledge as a result of which the
prospectus included in such Registration Statement, as then in effect, includes
any 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; and
(d) take such other actions as shall be reasonably requested
by any Holder to facilitate the registration and sale of the Shares; provided,
however, that the Company shall not be obligated to take any actions not
specifically required elsewhere herein which in the aggregate would cost in
excess of $5,000.
3. Expenses. All expenses incurred in any registration of the Holders'
Shares under this Agreement shall be paid by the Company, including, without
limitation, printing expenses, fees and disbursements of counsel for the Company
and each participating Holder, expenses of any audits to which the Company shall
agree or which shall be necessary to comply with governmental requirements in
connection with any such registration, all registration and filing fees for the
Holders' Shares under federal and state securities laws; provided, however, the
Company shall not be liable for (a) any discounts or commissions to any
underwriter or broker/dealer; (b) any stock transfer taxes incurred with respect
to Shares sold in the Offering; or (c) the fees and expenses of counsel for any
Holder, provided that the Company will pay the costs and expenses of Company
counsel when the Company's counsel is representing any or all selling Holders.
4. Indemnification. In the event arty included in a Registration
Statement pursuant to this Agreement:
(a) Company Indemnity. Without limitation of any other
indemnity provided to any Holder, either in connection with the Offering or
otherwise, to the extent permitted by law, the Company shall indemnify and hold
harmless each Holder, the affiliates, officers, directors and partners 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 ("Exchange Act"), against any
losses, claims, damages or liabilities (joint or several) to which they may
become subject under the Act, the Exchange 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
alleged untrue statement of a material fact contained in such Registration
Statements, 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, in light of the circumstances under
which they were made, not misleading, (iii) any violation or alleged violation
by the Company of the Act or the Exchange Act, or (iv) any state securities law
or any rule or regulation promulgated under the Act, the Exchange Act or any
state securities law. The Company shall reimburse each such Holder, affiliate,
officer or director or partner, underwriter or controlling person for any legal
or other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
Company shall not be liable to any Holder 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 or any other officer, director or controlling
person thereof.
(b) Holder Indemnity. Each Holder shall indemnify and hold harmless the
Company, its affiliates, its counsel, officers, directors, shareholders and
representatives, any underwriter (as defined in the Act), against any losses,
claims, damages, or liabilities Joint or several) to which they may become
subject under any federal or state securities law, and the Holder shall
reimburse the Company, its affiliates, counsel, officers, directors,
shareholders, representatives, underwriters or controlling persons for any legal
or other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any statements or information provided by such Holder to the
Company in connection with the offer or sale of Shares.
(c) Notice; Right to Defend. Promptly after receipt by an
indemnified party under this ss.4, of notice of the commencement of any action
(including any governmental action), such indemnified party shall, if a claim in
respect thereof is to be made against any indemnifying party under this ss.4,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party agrees that it will be responsible for any costs,
expenses, judgments, damages and losses incurred by the indemnified party with
respect to such clam, jointly with any other indemnifying party similarly
noticed, and to assume the defense thereof with counsel mutually satisfactory to
the parties; provided, however, that an indemnified party shall have the right
to retain its own counsel, with the fees and expenses to be paid by the
indemnifying party, if the indemnified party reasonably believes that
representation of the indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such 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 shall relieve such indemnifying party of any liability to the indemnified
party under this Agreement only if and to the extent that such failure is
prejudicial to its ability to defend such action, and the omission 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 Agreement.
(d) Contribution. If the indemnification provided for in this
Agreement is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the indemnifying party and the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the amount any Holder shall be obligated to
contribute pursuant to the Agreement shall be limited to an amount equal to the
proceeds to such Holder of the Shares sold pursuant to the Registration
Statement which gives rise to such obligation to contribute (less the aggregate
amount of any damages which the Holder has otherwise been required to pay in
respect of such loss, claim, damage, liability or action or any substantially
similar loss, claim, damage, liability or action arising from the sale of such
Shares).
(e) Survival of Indemnity. The indemnification provided by
this Agreement shall be a continuing right to indemnification and shall survive
the registration and sale of any registrable securities by any person entitled
to indemnification hereunder and the expiration or termination of this
Agreement.
5. Assignment of Registration Rights. The rights of the Holders under
this Agreement, including the rights to cause the Company to register Shares may
not be assigned without the written prior consent of the Company.
6. Remedies.
(a) Time is of Essence. The Company agrees that time is of the
essence for each of the covenants contained herein and that, in the event of a
dispute hereunder, this Agreement is to be interpreted and construed in a manner
that will enable the Holders to sell their Shares as quickly as possible after
such Holders have indicated to the Company that they desire their Shares to be
registered. Any delay on the part of the Company not expressly permitted under
this Agreement, whether material or not, shall be deemed a material breach of
this Agreement.
(b) Remedies Upon Default or Delay. The Company acknowledges
that the breach of any part of this Agreement may cause irreparable harm to a
Holder and that monetary damages alone may be inadequate. The Company therefore
agrees that the Holder shall be entitled to injunctive relief or such other
applicable remedy as a court of competent jurisdiction may provide. Nothing
contained herein will be construed to limit a Holder's right to any remedies at
law, including recovery of damages for breach of any part of this Agreement.
7. Notices.
(a) All communications under this Agreement shall be in
writing and shall be mailed by first class mail, postage prepaid, or telegraphed
or telexed with conflation of receipt or delivered by hand or by overnight
delivery service,
(i). If to the Company, at:
Elite Laboratories, Inc.
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▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
or at such other address as it may have furnished in writing to the Holders
of Shares at the time outstanding, or
(ii) if to any Holder of any Shares, to the
address of such Holder as it appears in the stock or warrant ledger of
the Company.
(b) Any notice so addressed, when mailed by registered or
certified mail shall be deemed to be given three days after so mailed, when
telegraphed or telexed shall be deemed to be given when transmitted, or when
delivered by hand or overnight shall be deemed to be given when delivered.
8. Successors and Assigns. Except as otherwise expressly provided
herein, this Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of the Company and each of the Holders.
9. Amendment and Waiver. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, but only with the
written consent of the Company and the Holders of securities representing a
majority of the Shares; provided, however, that no such amendment or waiver
shall take away any registration right of any Holder of Shares or reduce the
amount of reimbursable costs to any Holder of Shares in connection with any
registration hereunder without the consent of such Holder; further provided,
however, that without the consent of any other Holder of Shares, any Holder may
from time to time enter into one or more agreements amending, modifying or
waiving the provisions of this Agreement if such action does not adversely
affect the rights or interest of any other Holder of Shares. No delay on the
part of any party in the exercise of any right, power or remedy shall operate as
a waiver thereof, nor shall any single or partial exercise by any party of any
right, power or remedy preclude any other or further exercise thereof, or the
exercise of any other right, power or remedy.
10. Counterparts. One or more counterparts of this Agreement may be
signed by the parties, each of which shall be an original but all of which
together shall constitute one and same instrument.
11. Governing Law. This Agreement shall be construed in accordance with
and governed by the internal laws of the State of New York, without giving
effect to conflicts of law principles.
12. Invalidity of Provisions. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validly and
enforceability of the remaining provisions contained herein shall not be
affected thereby.
13. Headings. The headings in this Agreement are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
IN WITNESS WHEREOF, undersigned have executed this Agreement as of
the ___, day of ______, 1997
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Signature of Holder
PROLOGICA INTERNATIONAL, INC.
By:___________________________ _________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Print Name of Holder
President
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Print Address of Holder
